It's the economy, stupid: The New York Times'  John Harwood writes on how the GOP is pushing a one-word answer when it comes to hitting Obama and the Democrats on the economy: jobs. "Republicans entered the age of Obama with hope in the traditional pattern of midterm election losses by a president's party. But now unemployment trends have heightened their confidence that their political luck has turned more sharply and rapidly than most Republicans had expected." Harwood also spotlights the White House's potential decision to propose a new package of tax cuts to spur job growth: "Mr. Obama's economic advisers are sifting options for a new package of tax cuts and other job creation measures to be unveiled in next year's State of the Union address— or earlier if pressure for action becomes irresistible."

An early audit of the $700 billion TARP program doesn't make Fed Chair Bernanke or Bush Treasury Secretary Hank Paulson look good. "TARP Special Inspector General Neil Barofsky says senior government officials and Wall Street regulators, including Mr. Bernanke and Mr. Paulson, had "affirmative concerns" that several of  the nine institutions were financially shaky. "By stating expressly that the 'healthy' institutions would be able to increase overall lending, Treasury may have created unrealistic expectations about the institutions' condition and their ability to increase lending," the audit says.

"Treasury and the TARP program lost credibility when lending at those institutions did not in fact increase and when subsequent events - the further assistance needed by Citigroup and Bank of America being the most significant examples - demonstrated that at least some of those institutions were not in fact healthy." The report makes no recommendations but argues that Treasury, the Federal Reserve and other federal agencies "should take more care in publicly characterizing the nature and objectives of their initiatives."

More: "The Treasury Department, which at times has clashed with the TARP special inspector's office, took some issue with the audit's accusation that the agency lacks sufficient transparency.

"While people may differ today on how the contemporaneous announcements about the reasons for selecting the initial nine recipients should have been phrased, any review of such announcements must be considered in light of the unprecedented circumstances in which they were made," Assistant Treasury Secretary Herb M. Allison Jr., who oversees TARP, said in a written response to Mr. Barofsky. However, the Federal Reserve generally agreed with the report's findings."

It appears what Barofsky had the biggest problem with was the statements of doom and gloom Paulson and Bernanke made.

Senator Barbara Boxer (D-CA) said that a climate bill introduced last week that she cosponsored would "draw billions of private investments into the economy," not in federal funds, but private funds. "She said that venture capitalists in her home state of California have told her that the bill would signal a good time to invest in green technologies, which Boxer said she hoped would create jobs." Senator Jon Kyl (R-AZ) linked climate change with health care legislation, "arguing that it would result in higher taxes on Americans: 'First of all, don't be pushing bills like cap and trade, which are big job killers. Don't be pushing a huge, expensive health- care bill that will cause jobs to be lost, especially in the small business sector, because of all the taxes that are imposed in that certificate,'" Kyl said he would advise the president.

OLYMPICS FALLOUT: Senior Obama adviser Valerie Jarrett says she received assurances from folks in Chicago and on the US Olympic Committee that an Obama lobbying effort would put the city over the top. "The intelligence that we had from the U.S. Olympic Committee and Chicago bid team was that it was very close and therefore well worth our efforts," said Valerie Jarrett, a senior White House advisor. "The message was that . . . a personal appeal from the president would make a huge difference."

Many folks will read Jarrett's statement different ways: a CYA for her own credibility inside the White House? A White House message to Chicago officials who may have gone over the line in their attempts to convince the White House to let the president go to Copenhagen. Either way, it's a fascinating public statement.

Video: A Morning Meeting Panel discusses Obama's declining approval rating as well as SNL poking fun at his agenda over the weekend.

CHINA: The White House has agreed to delay a meeting between Obama and the Dalai Lama until after the president travels to China in November. "The U.S. decision to postpone the meeting appears to be part of a strategy to improve ties with China that also includes soft-pedaling criticism of China's human rights and financial policies as well as backing efforts to elevate China's position in international institutions, such as the International Monetary Fund. Obama administration officials have termed the new policy "strategic reassurance," which entails the U.S. government taking steps to convince China that it is not out to contain the emerging Asian power."

LOBBYIST REFORM: A new Obama administration policy limiting the roles of lobbyists on federal advisory committees is stirring up "absolute fury," a lobbyist is quoted as saying. K Street veterans argue that because understand policy, Washington politics and business needs, they are the best equipped to sit on the panels, which were created by Congress in the 1970s to "provide private-sector advice to the government... The instructions will decimate the ranks of lobbyists on the trade committees, which help guide U.S. negotiators' objectives as they pursue trade deals with other countries. One source estimated that about 130 of 330 people on the trade committees are lobbyists. Other federal agencies affected by the new policy continue to consider how they will implement it." 
 
SUPREME COURT WATCH: This USA Today piece about Sandra Day O'Connor worrying about the direction of the Roberts court should get a LOT of blog play on both sides of the ideological spectrum.

As the Supreme Court begins its new term, "all eyes will be on Sonia Sotomayor," the newest addition to the high court. Court-watchers will be looking to see how she votes and interacts with her colleagues. Columbia law Prof. Daniel Richman predicted Sotomayor will strive not to be "'pigeonholed from the get-go as being a sure vote for any particular side.'" 

Politico has a fascinating yarn about Congressional GOP leaders lecturing RNC Chair Michael Steele about policy statements.

"The congressional leaders were particularly miffed that Steele had in late August unveiled a seniors' "health care bill of rights" without consulting with them. The statement of health care principles, outlined in a Washington Post op-ed, began with a robust defense of Medicare that puzzled some in a party not known for its attachment to entitlements."

This is more proof that the relationship between the RNC and Congressional GOPers is about as bad as the relationship ex-DNC Chair Howard Dean had with Pelosi and Reid when they were in a similar situation. There's lots of distrust.

NEW JERSEY :  Remember when a Wall Street resume was a good thing for a candidate for office? Not anymore, so Jon Corzine is learning.

The health care debate has hit the New Jersey gubernatorial race, as the nominees dispute over whether to make insurance companies cover common screening tests, such as mammograms for women and prostate screenings for men. Gov. Jon S. Corzine (D) is in favor of forcing the mandates, while his challenger Chris Christie (R) opposes such strong mandates. The 45 mandates being debated "add an estimated 5 percent to the cost of health care in the state," the Philadelphia Inquirer reports.

VIRGINIA:  The Democratic National Committee is expected to send another $1 million in support of Creigh Deeds, Virginia Democratic gubernatorial candidate, Politico reports. This additional money will be in added to the $5 million the DNC has already given to the race in Virginia. Deeds' challenger, Republican candidate Bob McDonnell, is expected to receive a total of $7 million from the Republican National Committee by the end of the race.

A Washington Post editorial takes on Virginia's redistricting system, saying it creates anything but a competitive two-party system. Creigh Deeds, the Democratic gubernatorial candidate, is "a longstanding champion of redistricting reform designed to minimize partisan considerations," the Washington Post writes. His Republican opponent, Bob McDonnell, has opposed redistricting reform in the past, but recently endorsed "the creation of a bipartisan commission with a nonpartisan leader to redraw the state's electoral districts every 10 years with extensive public input." With agreement on both sides, Virginia looks to have fair, uninfluenced elections in the future, the Washington Post suggests.

NYC MAYOR: Is Bloomberg starting to find himself in a competitive race? Sure seems like it.

The Boston Globe examines how the prospect of 2010 elections is starting to become a bigger concern for the Obama White House.

CALIFORNIA GOV: One of the deans of the California press corps, the L.A. Times' Skelton, isn't impressed with ex-EBAY CEO Meg Whitman.

CONNECTICUT SENATE: Linda McMahon, wife of WWE founder Vince McMahon, is making quite the first impression to Republicans in both Connecticut and in DC and this New York Times piece should only add to the buzz.

BOBBY JINDAL: The Louisiana governor has a new Washington Post op-ed on health care praising Congressional GOP leaders for trying to kill Obama's health care plan but also encouraging them to start unveiling their own ideas more clearly; He then offers 10 suggestions.

JOHN THUNE: Last week the South Dakota Senator was writing memos on nuclear arms talks with Russia. This week, it's about a TARP exit strategy. Did someone advising Thune tell him he needed to start stepping up his profile?

House Speaker Nancy Pelosi is finishing up a weekend tour of 2010 battleground states, heading to New York today to "hold political meetings, tape an appearance on the "Charlie Rose Show" and attend the Americans for the Arts Annual Awards, a spokesman said." She stumped in Cleveland, Michigan and St. Louis, speaking on behalf of the latter state's Representative Russ Carnahan (D-MO). "Carnahan challenger Ed Martin, a Republican [countered] the event with a "Pelosi Pork and Beans" party at his campaign headquarters."

New York City mayor Mike Bloomberg received the endorsement of the Hotel and Motel Trades Council, "a key city union with a voter-turnout arm powerful enough to affect elections" that last year "fought to block the term limits extension that enabled the billionaire mayor to run." In backing Bloomberg, the Trades Council has split for the first time this election season from its ally, the labor-backed Working Families Party. The WFP endorsed [Bloomberg's opponent William] Thompson by a four-vote margin in July, handing Bloomberg his biggest loss of the campaign to date.

By NBC's Chuck Todd and Ali Weinberg
Senator Finance Commitee Chairman Max Baucus, whose health care proposal has been panned by both Democrats and Republicans, received more criticism today from the American Federation of State, County and Municipal Employees, the largest public employee and health care workers union in the United States, which said his proposal to tax insurance would affect an unfair percentage of Americans.

The union's critique comes as more than 100 Democrats sent House Speaker Nancy Pelosi a letter today opposing the tax on high cost insurance, arguing that the tax would fall on middle-class union members with comprehensive health plans.

Video: An overview of the Senate Finance Committee health care reform bill.

Baucus' proposal to tax insurance companies offering plans worth more than $21,000 for families working in the private sector "will slap a 40% excise tax on one quarter of all family health plans within three years," and affect half of all family plans within ten years, an AFSCME representative said in an email, citing data compiled by the Census Bureau.

The analysis, the rep said,assumes a "bending of the cost curve" so that premiums rise by a mere 6% a year, about three-fourths of the average rate of increase in premiums over the past decade. 

From NBC's Norah O'Donnell and Adam Verdugo
Ex-Alaskan Governor Sarah Palin is holding her fire now for former running mate John McCain's advisors but there are hints that she'll have plenty to share in her forthcoming book, "Going Rogue." Palin's spokesman, Meg Stapleton, suggested there will be plenty of material to respond to former McCain campaign manager Steve Schmidt's comments today that a Palin presidential nomination in 2012 would be catastrophic.

Stapleton tells NBC, "The Governor will write about all of this in her book. There will be plenty of time to talk about it then."

At the Atlantic's "First Draft of History" event at the Newseum today, Schmidt said, "I think she has talents," adding, "My honest view is that she would not be a winning candidate for the Republican Party and in fact were she to be the nominee, we could have a catastrophic result."

Schmidt, who during the campaign was in favor of adding Palin to the McCain ticket, conceded that Palin has a great deal of support among the base of the party, referring to advance sales of her memoir, but added that, "she has done nothing to expand her appeal beyond the base into the middle of the electorate where elections are decided."

By NBC's Ali Weinberg and Kelly Paice
Despite the efforts of the First Family and Oprah Winfrey, Chicago was the first city to be eliminated from consideration for the 2016 Olympic Games, followed by Tokyo, the AP reports. Madrid and Rio are now the two cities still in the running for consideration. A crowd of thousands, gathered in downtown Chicago to watch the IOC results, gave an "audible gasp" when the results were announced. "The city was eliminated so quickly that some of the would-be revelers weren't sure what had happened. Some started asking if they had heard what they thought they heard," the AP writes. Reacting to the news on MSNBC, Obama's senior advisor David Axelrod defended the president's decision to travel to Copenhagen for his Olympics pitch: "Anytime you are making the case for the United States of America, you are doing the right thing," he said, adding that, upon his return to the White House this afternoon, the president will address the "bracing" September unemployment figures released by the Bureau of Labor Statistics today.

****UPDATE****
And the winner is...Rio de Janeiro! Upon the decision in Copenhagen today, "a Carnival-style celebration" broke out, the AP writes, as President Luiz Inacio Lula da Silva rejoiced with members of the Rio campaign and the beaches and hills of Brazil "erupted with joy." 2016 will be the first time South America will hold the Olympic Games. The AP reports that the International Olympic Committee was "persuaded by the argument...that Rio needs the Games to help it overcome" some of its social problems, such as poorly funded hospitals and schools.

By NBC's Ken Strickland and Ali Weinberg
As the Senate Finance Committee neared the completion of its amendment process late last night, Senator Jay Rockefeller, a champion of the poor and their issues, recounted an emotional story of his effort long ago to help a poor man in West Virginia secure a job, linking the experience to the importance of government health care programs.
 
Rockefeller brought the man, Eddie, from his remote village into a larger town for a job interview. Eddie had "never crossed a street, he'd never seen a red light. He was confused by that," Rockefeller said. Inside the building, "he got claustrophobic from the elevator. But I was with him and he was steady," Rockefeller said, as his voice started to crack.
 
Inside the interviewers' office sunlight streamed through the window directly into Eddie's eyes, Rockefeller said. "The interviewer, who was sensitive to Eddie, said why don't you let the blinds down, son, and the sun won't be in your eyes?" Rockefeller recalled. 
 
After Eddie, who had never seen window blinds before, tried unsuccessfully to close them, he was so "humiliated and embarassed" that he couldn't even give his name to the interviewer. "He'd been stripped of all self-worth," Rockefeller said. "What I'd done to him was substantially damaging to him. A year later he was gone from evans and I have no idea where he is today."
 
"But," Rockefeller continued, tears in his eyes, "he had Medicaid. He had me by his side and it didn't work. He had Medicaid by his side and it did work. So I'd like to keep poor people where they have health care benefits. I don't wish to see them handed over to the tender mercies of a private exchange or whatever. And I think you will understand the spirit in which I tell this story."
 
Rockefeller ended the tale on a light note, saying he was simply vamping to cover for Committee Chairman Max Baucus while he "worked some things out... But actually I don't care about that because I feel the way I feel and I am who I am. Thus ended the reading of the evening lecture," leading the committee first to laughter, then applause.

From Chuck Todd, Domenico Montanaro, Ali Weinberg and Kelly Paice
*** Power Of The Presidency: Two moments that have already taken place, only serve to underscore the power of the office. While most of America slept, the president was in Copenhagen making a last minute push for Chicago's bid to host the 2016 Olympics. But it was the meeting the president held just before takeoff FROM Copenhagen BACK to the states that served as the reminder: the commander on the ground in Afghanistan, Gen. Stanley McCrystal, hopped over a mere 600 miles from London to Copenhagen, to meet face-to-face with his Commander-in-Chief. The 25-minute meeting aboard Air Force One could not have taken place this week unless the president was in the vicinity, immediately insulating him from GOP attacks about the trip. The meeting between the two was planned on Wednesday when the White House learned McCrystal would be in London. The general brought his wife along and she got a tour of Air Force One. The president is now over the Atlantic Ocean and will land back at Andrews early this afternoon, in time to make some remarks in the Rose Garden (probably about unemployment and the Olympics) around 4.

*** Health Care Messaging: And NOW, finally, it's the beginning of the end of the health care debate. The Senate Finance Committee wrapped up its mark-up very early this morning (about 2am ET) but Chairman Max Baucus decided to hold off on a final committee vote even as he said he had the votes. There's only one reason to delay the committee vote; you guessed it, it's about GOP Senator Olympia Snowe, the only GOPer who could vote with the 13-10 Dem majority on the committee. Since the bill does NOT have a public option, one would assume Snowe will vote with the majority but we're still awaiting a final scoring from the Cong. Budget Office so we shall see. Needless to say, we're guessing that if there's any concession Snowe has EVER wanted to get out of the White House or Senate Majority Leader Harry Reid on, well, just about any issue, she's never been in a more powerful position to ask. Meanwhile, in losing, the GOP seemed to have another winning day on the messaging front. The final day of markup was about whether the fines on those who do not get insurance would be classified as a tax increase on the middle class. It's how just about every Senate GOPer on that committee framed the issue. It's likely a preview of what many Senate GOPers will say on the floor of the Senate when the bill is finally debate.  Privately, quite a few Dems have been wringing their hands over how the White House lost control of this health care debate. Some senators fear that the party now owns EVERYONE's health care. And so instead of Americans hating insurance companies, going forward, they'll blame the Democrats (even if unfairly).

*** More Fun From Finance? Per NBC's Ken Strickland, some fun By the Numbers:

-- 107: Number of amendments the committee has considered;
-- 15: Number of years it's been since this committee has worked this long "marking up" a bill;
-- 7: Number of days it has been marking up, or voting on amendments.

*** Jobs, Jobs, Jobs:  Today's September jobs report has unemployment is now 9.8% and 263,000 jobs were shed last month, slightly worse than expected. While much of the focus this week has been on foreign policy, poll after poll has shown jobs are the top issue for Americans. We've said it before, and we'll say it again, the jobless rate is going to be the single biggest political number in next year's elections.

*** Stay Thuned: Foreign Policy gets its hands on a Senate GOP memo, authored by Republican John Thune, laying out a strategy to push the Obama administration into taking a harder line with the Russians on the issue of the START talks (nuclear arms treaty). While it's not surprising to hear about the opposition party putting together a strategy to combat the president on a policy issue, what makes this effort noteworthy is Thune himself. A rising star in the GOP, Thune's potential 2012 presidential resume is a tad thin on foreign affairs. Taking a high profile role on this issue is an interesting way for him to win over some conservatives, get him some important face time on conservative media outlets and most importantly, allow him to expand his issue Rolodex.

*** Senate 2010 Sidebars: Two important 2010 developments involving the two most VULNERABLE Democratic incumbents seeking re-election. Senator Chris Dodd (D-CT) announced that later this month the president would travel to Connecticut for a fundraiser. While not surprising to see Obama support an incument running for re-election, it is a signal that, perhaps, national Democrats have given up hope of talking Dodd into retirement. Also yesterday, Republicans have, perhaps, the best candidate they are going to get in their effort to topple Senate Majority Leader Harry Reid in Nevada. Former state GOP chair Sue Lowden made her bid official. While she's no John Thune (remember, he's the GOPer who upset then Senate Dem Leader Tom Daschle in 2004), she's probably a good enough candidate to give Reid fits.

*** Daggett In Christie's Heart? Last night's 3-way NJ GOV debate probably couldn't have gone better for Jon Corzine, considering who made the news. Independent candidate Christopher Daggett ended up garnering quite a bit of the coverage and got lots of play, equal to Republican Chris Christie. Considering the polls we've seen this week, it's clear Corzine's ONLY path to victory is if some of the anti-Corzine vote is split. It appears the number Corzine needs out of Daggett on election day is something about 10 percent. Corzine appears to have an ability to nab 44-46% of the vote, based mostly on his ability to turn out Dems.  If Daggett nabs 10%, the winning number for Corzine is suddenly 45%+1. Still, the history of underfunded indie candidates is not on Corzine's side. That said, why do we suspect we'll see Corzine come up with some sort of attack TV ad that goes after BOTH Christie and Daggett. Hmmm. Stay tuned.

*** Let's Make Some News: There are plenty of newsmakers left at The Atlantic's First Draft of History event at the Newseum, which continues today. We'll see if there's any news out of former Fed Chair Alan Greenspan (9:40 am ET), TimeWarner's CEO (10:30 am ET), Montana Gov. Brian Schweitzer (10:50 am ET), NYC Mayor Michael Bloomberg (11:20 am ET), National Economic Council Director Larry Summers (11:50 am ET), Google's CEO (2:00 pm ET), or the administration's climate change and energy czar Carol Browner (2:40 pm ET)

Countdown to Election Day 2009: 32 days
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Countdown to MA Special Election: 109 days
Countdown to Election Day 2010: 396 days

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The Washington Post adds to the growing conventional wisdom that there is a strong contingent inside the White House pushing against adding any new troops.

Cautious optimism: probably the best way to describe how the Obama administration is spinning the Geneva talks. "Iran agreed to transfer the bulk of its known nuclear fuel to other countries to enrich it, Western officials said. The officials said the surprise move could temporarily reduce Tehran's potential to make bombs, but analysts cautioned that the Iranians merely may be seeking to defuse pressure for sanctions while continuing their nuclear program."

"The parties also agreed to more talks this month. The steps had the potential to lead to a diplomatic shift after many years of bitter stalemate. But critics warned the apparent concessions offered by Iran could represent a strategy to play for time and dodge sanctions or other repercussions, while avoiding any pledge to generally scale back its nuclear ambitions."

More: "President Barack Obama said the progress in Geneva, while limited, warranted a second round of meetings with Tehran later this month. "Today's meeting was a constructive meeting, but it must be followed by constructive action," Mr. Obama said in a televised address. "We've made it clear that we will do our part to engage the Iranian government on the basis of mutual interest and mutual respect, but our patience is not unlimited."  

The Washington Post's take: "The sudden show of cooperation by Tehran reduces for now the threat of additional sanctions, which has been made repeatedly by the United States and others over the past week after the revelation of a secret Iranian nuclear facility. The United States will need to keep the pressure on Iran to avoid being dragged into a process without end. "

The New York Times: "Iran's agreement in principle to export most of its enriched uranium for processing — if it happens — would represent a major accomplishment for the West, reducing Iran's ability to make a nuclear weapon quickly and buying more time for negotiations to bear fruit. If Iran has secret stockpiles of enriched uranium, however, the accomplishment would be hollow, a senior American official conceded."

The New York Post on the outcome of yesterday's U.S.-Iran talks in Geneva: "The sudden show of cooperation by Tehran reduces for now the threat of additional sanctions, which has been made repeatedly by the United States and others over the past week following the revelation of a secret Iranian nuclear facility. The United States will need to keep the pressure on Iran to avoid being dragged into a process without end." But "the difficulties that lie ahead were illustrated when the chief Iranian negotiator, Saeed Jalili, held a triumphant news conference at which he denounced "media terrorism." He insisted that Iran has always fully met its international commitments, and refused even to acknowledge a question from an Israeli reporter."

The New York Daily News writes that "U.S. and Iranian officials met eyeball to eyeball for the time in 30 years on Thursday, and Iran blinked," citing Iran's agreement to allow inspectors access to a secret nuclear facility, and also that it "caved to the demands of the U.S. and its allies for open-ended future meetings on weapons programs and human rights after dramatic negotiations in Geneva.

And so the lobbying for Senator Olympia Snowe begins again. With the Finance Committee done considering amendments, Chairman Max Baucus decided to wait until next week to hold the final vote. Part of the delay is to get the Congressional Budget Office to re-score this final bill with the marked-up amendments "though he said he has enough support to pass the package out of committee. The bill, which Senate Majority Leader Harry M. Reid (D-Nev.) will merge with a Senate health committee measure, appears to meet the reform criteria Obama laid out last month in an address to Congress." The big issue that Republicans want to turn into a tax issue is this: "Beginning in 2013, the finance panel's package would require people to buy insurance or face penalties ranging up to $1,900, to be assessed on their income tax returns. It also would make it harder for taxpayers younger than 65 to deduct catastrophic medical expenses. Both provisions would fall heavily on the very taxpayers that Obama has vowed to protect, according to congressional tax analysts."

Senate GOPers on the Finance Committee were on message on the issue of taxes yesterday.  They claimed the health care bill in general is "riddled" with "tax increases that would violate President Obama's campaign pledge not to raise taxes on middle-class Americans. Republicans cited that vow in attempting to strip billions of dollars in fees and taxes from the package."

"By a vote of 12 to 11, the Finance Committee defeated Crapo's proposal to exempt middle-class taxpayers from fees and taxes in the bill. Baucus called it "a killer amendment," and said that it would have starved the legislation of needed revenue. Ensign's amendment, which targeted only the penalty for not buying insurance, failed with the same vote total." Bottom line, the GOP was united on that committee and all on the same message calling any change a tax hike.

"The Senate Finance Committee health care markup appeared headed into the home stretch," Roll Call reported yesterday, "with Chairman Max Baucus (D-Mont.) still hopeful that the process of amending his $900 billion bill might finish Thursday evening." Baucus has "tried to keep the debate on amendments short, with an eye on the finish line," although "even if the markup is completed on Baucus' timetable, a vote to report the bill out of committee would not occur until next week, most likely on Tuesday."

House Speaker Nancy Pelosi (D-CA) has indicated she is "shifting to the center" on a public health insurance option, "warming to a version supported by some Blue Dog Democrats" in which the public option is tied not to Medicare rates plus 5 percent, as many House liberals want, but instead negotiated individually with providers.  "Pelosi and Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) on Thursday were promoting the savings from the version with negotiated rates, saying there's more than $25 billion." Her shift comes at a "critical time in the healthcare debate, when both chambers are struggling to find enough votes" to pass health care reform. "In a sign of that trouble, House Majority Leader Steny Hoyer (D-Md.) announced Thursday that there won't be a floor vote on the healthcare bill in the next two weeks." 

Senate Finance Committee members Chuck Schumer (D-NY) and Olympia Snowe (R-ME) "joined forces on an amendment that would significantly lessen the burden on people who cannot afford health insurance," during a late-night session yesterday. Their amendment would exempt more people from the individual mandate to get health coverage or face financial penalties. "Under the changes proposed by Schumer and Snowe, there would no penalty during the first year the healthcare reform bill took effect [2013]. In 2014, the penalty would be $200 and would slide up to $750, or a family maximum of $1,500, in 2017. Those penalties also would be indexed to income." The two senators said that "the result of the amendment would be insurance companies reducing the prices of their basic health plans so that people who are exempt from the mandate would buy coverage anyway."

Senator Maria Cantwell (D-WA) introduced a proposal yesterday to "enable states to form their own public options." Under her amendment, based on a program in the senator's home state, "people with incomes between 133 percent and 200 percent of the federal poverty level who do not get insurance at work would enroll in these state-based programs. The federal tax credits that would otherwise have been given to those individuals would instead be paid to states to finance the plan." Senator Max Baucus, who has resisted adding a public option of any kind to his bill based on the argument that there is not enough support in the Senate, was enthusiastic about Cantwell's proposal. 'This is a great amendment,' he said."

Republicans have beaten up the Obama administration over government stimulus but check this out... without cash for clunkers, auto sales went to heck.

The Obama administration chief econ nemesis from the left, Paul Krugman, is calling for more government stimulus.

New Jersey: Based on the New York Times coverage of the NJ GOV debate last night, it couldn't have gone better for Jon Corzine. Why? Because the third candidate in the race -- independent Christopher Daggett -- became THE story.

And another NJ GOV poll indicates Corzine needs Daggett to surge.

Corzine and Christie "went right at each other in a 90-minute forum at New Jersey Network's Trenton studios--with independent candidate Chris Daggett making his own points amid the verbal crossfire." Christie "criticized Corzine for raising taxes and said the incumbent has failed to live up to his campaign promises," while Corzine said Christie "was vague on issues and holds himself to a standard of behavior more lenient than what he expects from others, including those he prosecuted as the state's top federal prosecutor." Dagget, meanwhile, criticized both of them: "Two days after unveiling a plan he says would reduce local property taxes by up to 25 percent for homeowners in exchange for expanding the sales tax, Daggett said his proposal "balances the tax system out" and called on both Christie and Corzine to offer more details about what they would do to fix a broken government system." He told the audience at the debate: '"The tooth fairy is not going to come and solve this problem," Daggett said. "Mr. Christie: all fluff no plan. Mr. Corzine: raising taxes." Christie and Corzine also traded barbs on Corzine's assertion that Christie would "end mandated coverage" of mammograms. Christie says his health coverage plan will lower costs, but "Corzine says that would let insurers skirt requirements to provide mammograms, 48-hour hospital stays for new mothers and autism screenings." The Star-Ledger wrote, "The atmosphere was so heated, Christie even threw a barb at panelist Michael Aron of NJN News in responding to a question seeking budget-planning specifics. "I understand you've been down in here in Trenton a long time," Christie said."

The Wall Street Journal on Chris Christie's campaign strategy:  "Mr. Christie is running as the anticorruption candidate. Given that we're talking about New Jersey, this has merit. But it's not enough, and other than his record as a prosecutor, the Christie campaign has been largely content-free." Citing the astronomic income taxes in much of New Jersey, the Journal writes that "Mr. Christie's reluctance to run on more than his personal virtues is even more curious when you consider how vocal Garden State voters have been about the issue that matters most to them: taxes." Christie, the Journal continues, is "losing supporters to [Christopher] Daggett," an independent candidate, whose "appeal has grown because he's offering voters precisely what Mr. Christie isn't: A specific plan for controlling runaway taxes and spending." And: "Even if Mr. Christie ekes out a win because Mr. Corzine is so unpopular, the Republican will arrive in Trenton with a mandate to do what he campaigned on—nothing."

Connecticut: The president coming in for Dodd this early in the campaign cycle might put an end to the quiet hope among some DC Democrats that the White House convince Dodd to retire.

"For the first time in months, Democratic strategists are voicing optimism about their chances in the New Jersey and Virginia governors' race," with some saying nominees' negative attacks on their Republican opponents are working. New Jersey Governor Jon Corzine has taken shots at former U.S. Attorney Chris Christie, decrying "everything from his policies to his record to his personal behavior and weight." Combined with Virginia Democratic nominee Creigh Deeds' attacks on Republican Bob McDonnell's controversial graduate thesis, The Hill writes, "the negative attacks appear to have borne fruit for the Democratic candidate." New polling shows that "as many voters have an unfavorable impression of Christie as have a favorable image of him," versus his 16-point net favorable rating two months ago. Some operatives are not as sanguine, however, with one saying "it would be "a cold day in hell" before the party wins in both states."

Virginia: Both gubernatorial nominees picked up endorsements yesterday; "The Virginia chapter of the Sierra Club and the League of Conservation Voters endorsed [Democrat Creigh] Deeds, saying his voting record on environmental matters was far superior to that of [Republican Bob] McDonnell. The Northern Virginia Technology Council, through its TechPAC, endorsed McDonnell, calling him "a strong leader with specific proposals to ensure Virginia remains a competitive and innovative global technology center."

The Washington Post reports, "Republican Robert F. McDonnell and his supporters are outspending Democrat R. Creigh Deeds and his backers nearly 2 to 1 on TV ads in the closely watched race for Virginia governor.' The RGA has donated $2 million directly to McDonnell and spent almost $4 million more since late August on ads that accuse Deeds, a state senator from Bath County, of supporting large government spending and tax increases. The DGA has contributed $1 million to Deeds and spent slightly more than $3 million in the spring on ads that criticized McDonnell for opposing federal stimulus money. The DGA has spent more on this year's Virginia race than on any other contest in the group's history -- and more than three times as much as it spent on Gov. Timothy M. Kaine's race in 2005."

In an interview with NBC's Brian Williams yesterday at The Atlantic's "First Draft of History" event, General David Petraeus addressed issues ranging from the future of Afghanistan, what's ahead for Iraq, and offered his take on the happenings in the Middle East--including talks with Iran yesterday. He stressed the importance of reevaluating U.S. goals and objectives in Afghanistan and said, "We're not yet at the point of talking about resources or numbers," and added that he has "not yet endorsed the resources" requested by General Stanley McChrystal, the U.S. commander in Afghanistan. He also made clear the importance of understanding the unique culture of the Afghan people and land while fighting extremist forces there compared to fighting in Iraq: "You cannot transfer everything that we learned in Iraq by any means to Afghanistan without, again, applying it with a very, very careful and granular appreciation of local circumstances." In describing the differences in leadership style between Presidents George W. Bush and Barack Obama, Gen. Petraeus said, "I would just say that both of them are absolutely intent on understanding situations and on doing the absolute best they can for our men and women in uniform and for their families--and obviously for our country."

Later at the Forum, House Minority Whip Eric Cantor (R-VA) told NBC's Chuck Todd that he believes Iran is an "outlaw regime" whose participation at the so-called P1+5 meeting yesterday in Geneva should not be taken as a signal that Tehran is willing to be transparent with its nuclear activities. Cantor told Todd that he believed the U.S. was entering its first direct discussions with Iran in thirty years "with the illusion that we can trust this regime." He added that Congress should "act as swiftly as possible to force a regime of sanctions" against it, in response to recent disclosures of a covert nuclear facility at Qom. When asked by Todd whether Cantor's exhortations for increased sanctions--even as President Obama moves forward with direct talks--was "politics on the waters' edge," Cantor responded: "The executive branch is the one to determine the posture of this country vis-a-vis others. It's his prerogative," adding, however: "we shouldn't be engaging with the regime."

Interesting to see that GOP Sen. John Thune is leading the Senate GOP effort on pushing the Obama admin in its attempt to re-negotiate the START treaty with the Russians. This could be as much about Thune beginning to flex his foreign policy credentials as it is about the GOP challenging the president yet again on another foreign policy issue.

From Foreign Policy: "The differences between administration plans and GOP demands are likely to complicate the push for ratification in the Senate, which is expected early next year. The core strategy for the Senate Republicans will be to try to frame the nuclear reductions as a unilateral concession that President Obama is making to the Russians.

"The United States should not pay for what is free," the memo states. "Russia's nuclear numbers will decline dramatically in the coming years with or without an arms control treaty. The United States should not make important concessions in return for something that will happen in any event."

SENATE SHENANIGANS: The Washington Post has the details of a fascinating feud between Dem Sen. John Kerry and GOP Sen. Jim DeMint. Kerry is blocking DeMint's ability to visit Honduras on a fact-finding trip until DeMint lifts his hold on two Obama appointees.

From NBC's Athena Jones
WASHINGTON -- President Obama delivered an ultimatum to Iran Thursday, saying it must allow international inspectors "unfettered access" to its recently disclosed nuclear facility at Qom in two weeks or face increased pressure from the international community.

That pressure would likely come in the form of tougher sanctions on the Iranian government and on Iranian firms operating internationally. Such measures could target the country's oil and gas sector, as well as firms that insure shipments to Iran.

The president's statement came after a meeting of the so-called P5 plus 1 -- Germany and the five permanent members of the U.N. Security Council, the U.S., Britain, France, China, Russia -- with Iran in Geneva, Switzerland.

"Today's meeting was a constructive beginning, but it must be followed by constructive action by the Iranian government," Obama said. "Earlier this month, we presented clear evidence that Iran has been building a covert nuclear facility in Qom. Since Iran has now agreed to cooperate fully and immediately with the International Atomic Energy Agency, it must grant unfettered access to IAEA inspectors within two weeks."

Obama also spoke of a proposal to transfer Iran's low enriched uranium to a third country for further enrichment into fuel as part of measures to show Iran's interest is in nuclear power not in building weapons.

"The IAEA proposal that was agreed to in principle today with regard to the Tehran research reactor is a confidence-building step," he said. "As I've said before, we support Iran's right to peaceful nuclear power. Taking the step of transferring its low enriched uranium to a third country would be a step towards building confidence that Iran's program is in fact peaceful."

The president reiterated that the U.S. was not interested in talk for talk's sake and would not negotiate indefinitely.

The White House believes its pursuit of "meaningful engagement" with Iran on the nuclear issue, through diplomacy, means it will have more support from the international community to impose tough sanctions on Iran should they fail to comply with their obligations under international treaties.

The U.S. and Iran held their first direct talks in 30 years during a lunch break in the group session at the meetings today.

From NBC's Ken Strickland
Senators voted on opposing amendments as to whether Gen. Stanley McChrystal should come and testify before Congress and the situation in Afghanistan.

The amendment offered by Carl Levin (D) says he should testify after President Obama has made a decision about strategy. Levin's passed -- along party lines -- 60-39.

The amendment by John McCain said McChrystal should testify before Nov. 15. McCain's failed 40-59 -- along party lines.

The votes follow a spirited debate between Levin and McCain on the floor:

McCain:

"So it's ok with the administration for general McChrystal to go on "60 minutes", it's ok for him to give a speech at the institute for strategic studies in london, but the administration does not want general mcchrystal and general petraeus before the senate armed services committee. how does that work?"

Levin:

"Indeed general petraeus did testify relative to the iraq surge, but he only testified after the decision was made relative to that surge by the president of the united states [Bush]. and the person who was the commander in iraq at that time while the deliberative process was under way in the white house as to whether or not a surge should take place did not testify, was not asked to testify. there was no pressure placed on the president [Bush] of the united states during those three months when he was deliberating on whether or not to surge troops."

From NBC's Andrea Mitchell
GENEVA -- A senior U.S. official tells NBC News that the significance of the proposal to farm out Iran's enrichment is that if it is done it would remove most of their stockpiles of enriched uranium.

Although they could always produce more that takes time and the official says it could extend by at least a year the time frame before they could produce a bomb.

Officials in Geneva are trying to avoid overplaying the proposal because, one said, "We don't want to spook the Iranians. But if they end up doing this, it would be a very big deal."

If they now refuse, it raises serious questions about whether they their nuclear program is really peaceful as they claim.

More on the talks from NBC's Michelle Perry, also in Geneva:
A U.S. official said the talks in Geneva today represent the beginning in a process to move on practical steps that will address the international communitiy's request that Iran be transparent on the Qom site and in allowing IAEA inspections.

The Oct. 18th talks will be held at an "expert level" and will be an opportunity for confidence building measures that will serve to allay concerns aboput Iran's intent regarding their nuclear program.

The talks today were "sober" in terms of a first step, but there needs to be "practical implementation" now.

There was the bilateral talk between the Iranians and the U.S., as had been reported during the lunch, and there were "several other encounters" between U.S. and Iran during the rest of the afternoon. They discussed "specific issues" such as Iran's nuclear program and U.S. concerns over human rights in Iran -- the three American hikers being held in Iran also came up. The U.S. official said the Iranians recognize this is an important issue for us.

From NBC's Luke Russert
House Minority Leader John Boehner went off on a whole array of issues today, here are some of the highlights:

OBAMA GOING TO COPENHAGEN: "While the President is in Copenhagen tomorrow, the American people are going to wake up and find out that hundreds and thousands more Americans have lost their job. The Administration's trillion dollar stimulus plan clearly isn't working."

DEMOCRATS AND MEDICARE: "Democrats take over of healthcare is going to cut Medicare benefits for millions of seniors and by drastic amounts so how they can stand there and claim they are saving Medicare…just doesn't pass a straight face test."

CHARLIE RANGEL: "It's improper for Chairman Rangel to remain in his position with all the influence that he has while these serious allegations remain hanging."

He advocated that Rangel step down: "He knows it would be the right thing to do, he has not done so and his fellow Democrats have voted time and time again to protect him every step of the way."

AFGHANISTAN: "If the White House could approve his trip to London to speak to a think tank yesterday, he clearly could come to the United States Congress and testify in the House and Senate and help members of Congress understand the challenges we are facing in Afghanistan."

ALAN GRAYSON: "I think it's time for Democrat leaders and the Speaker of the House herself to reign in some the rhetoric that she decried just several weeks ago. If he's not going to apologize to the American people and Republicans as he should, really it is the Democratic Leadership's responsibility to have that conversation with their own member."

GOP RELATIONSHIP WITH THE WHITE HOUSE: "We have not been to the White House since late April or early May. There have been no conversations about Afghanistan, no conversations about healthcare, no conversations about anything. It is pretty clear they have made a conscious decision to go it alone."

LAST TIME HE SPOKE TO RAHM: "Oh it's been months and months and months."

PUBLIC OPTION: "I'm still trying to find the first American who's in favor of the public option other than a member of Congress or the Administration."

"This is about as unpopular as a garlic milkshake."

From NBC's Kelly Paice
Maryland Gov. Martin O'Malley (D) pushed for health reform today and addressed the impact such reform would have on his state's budget, saying it would have a positive, healthy one on the many currently financially strained state budgets across the nation.

"It is the single largest part of our budget that continues to grow every year," O'Malley said in a conference call with reporters today. He added that his state's health-care costs will continue grow at a rate of seven or eight percent annually unless health-care reform is passed. "If nothing is done, it's going to be impossible for us to keep up with the costs."

President Obama has vowed that any health reform bill will to be deficit-"neutral," but it's unclear what savings what be seen state-by-state.

"One of the big drivers [of increased costs] is Medicaid," O'Malley continued. He also said that from his understanding of the happenings on the Hill, many cost-saving provisions are built into the legislation currently being debated by Congress, bringing overall health-care costs down for states. Also, O'Malley hopes to see the costs of uncompensated care come down and looks forward to the institution of some of the initiatives the Obama administration has suggested, such as health-care information technology, to help decrease costs.

"We're at a point in this nation where we need our federal government to step up," O'Malley said, suggesting that states can't go it alone on health reform. And the Maryland governor said he's "very encouraged" by what has come out of Congress so far, saying changes need to made and they're happening on the Hill.

"It is utterly fiscally irresponsible to cling to the status quo and allow ourselves to be pummeled" by the costs of health care, O'Malley insisted. "I personally find and professionally find that the status quo is the scariest thing we're looking at."

He added: "There is no way that any of us is going to be able to sustain this escalation of costs without impacting the other parts of the budget." And: "Two months ago, all of us [governors] -- Democrats and Republicans alike -- acknowledged the need for health-care reform."

From NBC's Courtney Kube
Two senior defense officials confirm that a U.S. Army headquarters unit and a U.S. Marine Expeditionary Force now serving in Iraq will have their deployments extended, so they can be in place during and after the Iraqi national elections in January. 

The II Marine Expeditionary Force (MEF) is due out in January, but will now be extended for up to 11 weeks. This affects up to 800 marines serving in Anbar Province. They are the last group of marines serving in a combat role in Iraq, rather than a train and assist mission. 

The First Cavalry Division Headquarters will also be extended, but only for about three weeks. This is roughly 250 to 400 soldiers. 

Gen. Ray Odierno spoke about the importance of the national elections during his House Armed Services testimony yesterday, saying, "The national elections in January 2010 are critical to determining the path that Iraq will take into the future."