From NBC's Domenico Montanaro

AP reports that "former top Democratic fundraiser Norman Hsu has told a federal judge in Manhattan he will plead guilty to 10 counts of wire and mail fraud. The 58-year-old Hsu was indicted in 2007 on charges of cheating investors of at least $20 million in what prosecutors say was a huge Ponzi scheme. He had been scheduled to go on trial Monday. ... Prosecutors say he pressured his victims to contribute to political candidates as a way to raise his public profile so he could attract more investors."

Hsu's contributions to the Hillary Clinton campaign became political fodder during last year's Democratic primary. It resulted in the Clinton campaign giving back money donated by Hsu and a national search to Hsu.

From NBC's Ken Strickland

In an apparent effort to to ease the tension over Arlen Specter's bumpy transition into the Senate Democratic caucus, Sen. Dick Durbin is willing to voluntarily relinquish his chairmanship on a Judiciary subcommittee to Specter, sources tell NBC News.

Specter will become the Chairman of the Crime and Drug Subcommittee. The committee is an important one, as it has substantial oversight over the Department of Justice. The vaunted Crime Bill was written in that committee.

As for Durbin, he will become chairman of a reconstituted subcommittee called Human Rights and the Law.

"I have offered the gavel of the Crime and Drugs Subcommittee to Senator Specter who has been a leader on criminal justice issues for decades," Durbin said in a written statement. He added that over the past few days Democratic leaders "have had a number of conversations about ways to best utilize Senator Specter's talents and experience in our Caucus."

Earlier this week, Majority Leader Harry Reid stripped Specter of all of his seniority within the committees. Reid has previously said that Specter's seniority would not allow him to leapfrog over others to claim a chairmanship post unless someone voluntarily stepped down.

*** UPDATE *** This post has been updated with Durbin's statement and context.

From Chuck Todd, Mark Murray, and Domenico Montanaro

*** Back to the economy: While the Af-Pak summit continues for another day, President Obama and his administration turn their focus today to the economy and domestic affairs. At 9:00 am ET, the administration unveils its full budget (the one it released back in February was an overview; this one goes program by program), and Obama delivers remarks about it at 10:35 am. The White House says it's cutting $17 billion in spending by reducing 121 programs, but Republicans -- as they did when Team Obama instructed cabinet secretaries to find $100 million in savings -- say these cuts are miniscule compared with the $3.5 trillion budget. Today's BIG event, however, is the release of those bank stress tests, which will come after the markets close at 4:00 pm. On "Charlie Rose," Treasury Secretary Tim Geithner said none of the biggest 19 banks is at risk for insolvency. But some will need more money. They'll have 30 days to develop a plan and six months to implement it. The administration hopes they find the money from private sources. "I think the results will be, on balance, reassuring," Geithner said. Also today, the president meets with Al Sharpton, Michael Bloomberg, and Newt Gingrich to discuss education reform, and he also sits down with Secretary of State Clinton and Russian Foreign Minister Sergey Lavrov.

*** Cuts you can believe in? Regarding those relatively small budget cuts, Team Obama can clearly read the polls because they are trying -- yet again -- to look like budget-cutters, especially since the public is concerned about government spending. In our NBC/WSJ poll, nearly seven in 10 respondents said that the budget deficit is a real and important number, and spending was one of the top concerns about the Obama administration. As a result, it's no wonder the White House is trying to overshadow the release of the line-by-line budget today with spending cuts. The public may be leery of the administration's spin on this one. Their employer is talking 5%-10% cuts, and the government is at one half of one percent.

*** The two big questions: Turning to Af-Pak, there are two questions hanging over the summit. One, can Pakistan stabilize without U.S. troops? And two, can they keep their nukes safe? Well, the purpose of the summit was to prevent the need from having to answer yes to the first question and no to the second. As one smart observer said, this summit comes at a pre-crisis moment. It could be the last best hope we have before being faced with a direr situation in Pakistan.

*** Good news for Cornyn? There has been lots of discussion about the dire straits of the Republican Party -- and with good reason. But very quietly, as the Washington Post's Cillizza notes, the GOP is putting together a decent Senate recruiting class. They already got Rob Portman in Ohio, and Roy Blunt and/or Sarah Steelman in Missouri (although all of them will face tough Dem candidates, and a recent Quinnipiac poll showed Dems with a clear advantage in Ohio). But if Republicans add Charlie Crist in Florida and Tom Ridge in Pennsylvania -- and both could happen in the next week or two -- then Republicans will have some good news to cheer. Mark Kirk in Illinois and Mike Castle in Delaware are real possibilities, too. It's still uphill, and still very early, but John Cornyn might be the only Republican having a decent first 100-plus days.

*** Mr. Low Key: And finally, don't miss today's Washington Post profile of national security adviser Jim Jones, which notes that he's been an outsider so far in this administration, although things appear to be getting better. Jones held his first reporter briefing on camera yesterday, and it's clear the low-key former marine isn't interested in being a Kissinger or a Rice. In fact, low-key is a generous description. If he is this way in private meetings, then he may not be fitting in with the styles of Clinton, Gates, Biden, or Rahm. 
 
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The Washington Post says the results from the stress tests of the country's 19 biggest bank will "show that nearly all, including several that verged on collapse during the financial crisis, now have enough money to weather the recession."

Video: As some of the nation's biggest banks await the results of tests designed to gauge whether they need more capital to survive a deeper recession, NBC's Chuck Todd examines the White House's handling of the assessments.

More: "The report is expected to show clear distinctions among the nation's largest banks, according to sources familiar with the findings. J.P. Morgan Chase will not require additional capital, clearing the way for the bank to repay the government's investment. Bank of America and Wells Fargo also do not need more money, but will be required to strengthen their reserves, potentially by converting tens of billions of dollars of other forms of capital to common equity, the most dependable form of capital. Bank of America will need to increase these holdings by about $34 billion and Wells Fargo by $15 billion, sources said. Citigroup, the weakest of the giants, will be required to raise about $5 billion in new capital and take additional steps to strengthen its reserves."

The Wall Street Journal: "The Federal Reserve directed at least seven of the nation's biggest banks to bolster their capital levels by $65 billion while effectively blessing the stability of six others, marking for the first time a bold line between some of the nation's stronger and weaker banks."

The New York Times: "The results so far seem to suggest that the 19 institutions that underwent these exams will need less than $100 billion in additional equity to cope with a deep recession, far less than some investors had feared. The question now is, where will banks get that capital? Most of them would prefer to raise money privately, either by selling shares to the public or a big investor, or by selling some of their businesses. But if that is not enough, the odds are the government will step in."

In a New York Times op-ed, Treasury Secretary Tim Geithner describes how the government conducted these stress tests. "The Federal Reserve marshaled hundreds of supervisors to spend 45 days rigorously reviewing the banks' detailed loan data. They applied exacting estimates of potential losses over two years, along with conservative estimates of potential earnings over the same period, and compared them with existing reserves and capital. The results were then evaluated against strict minimum capital standards, in terms of both overall capital and tangible common equity."

The AP reports, "Officials said Wednesday that Obama's promised line-by-line scrub of the federal budget had produced a roster of 121 budget cuts totaling $17 billion -- or about one-half of 1 percent of the $3.4 trillion budget Congress has approved for next year. The details were being unveiled Thursday. Those savings are far exceeded by a phone-book-sized volume detailing Obama's generous increases for domestic programs that will accompany the call for cuts."

The Washington Post on the budget cuts: "The plan is less ambitious than the hit list former president George W. Bush produced last year, targeting 151 programs for $34 billion in savings. And like most of the cuts Bush sought, congressional sources and independent budget analysts yesterday predicted that Obama's, too, would be a tough sell."

USA Today: "Obama's proposed cuts are about one-fiftieth the size of this year's $787 billion economic stimulus package — all of which was added to the deficit. The overall budget is $3.6 trillion."

The New York Times: "The $17 billion would be saved through terminating or reducing 121 federal programs, ranging from $632,000 to eliminate the post of an attaché for the Education Department in the American Embassy in Paris to $142 million by ending a program to clean up abandoned mines."

"But the money for abandoned mines as well as proposed cuts in farm subsidies illustrate the difficulties the administration will face in Congress, where, as administration officials acknowledged, every program has its patrons. When Mr. Obama proposed cuts in the mine and farm programs as part of his budget outline, lawmakers from rural and Western states objected." 

The New York Times notes that Obama might have to engage on gay-rights issues. "Two of Mr. Obama's potential Supreme Court nominees are openly gay; some advocates, irked that there are no gay men or lesbians in his cabinet, are mounting a campaign to influence his choice to replace Justice David H. Souter, who is retiring. Same-sex marriage is advancing in states — the latest to allow it is Maine — and a new flare-up in the District of Columbia could ultimately put the controversy in the lap of the president."

And the health-care reform advocacy group, Health Care for America Now, or HCAN, is releasing a TV ad later this morning hitting Rick Scott, a former CEO of Columbia/Hospital Corporation of America, who is running ads against Democrats' reform attempts. Scott has formed the group Conservatives for Patients' Rights. The ad will be running in DC and Naples, FL, where Scott lives.

The Boston Globe's centerpiece front-page photo is Obama with Afghanistan's Karzai and Pakistan's Zardari with the headline, "United front against insurgents."

Video: As Pakistan's military went on the offensive against the Taliban Wednesday, President Barack Obama met with leaders of Afghanistan and Pakistan, who said they are equally committed to defeating al-Qaida and its extremist allies. NBC Chief Foreign Correspondent Richard Engel reports.

The New York Times: "The three-way meeting with Mr. Zardari and Mr. Karzai was intended by the White House, in part, to press both men to do more to crack down on the rising threat from the Taliban and Al Qaeda in both countries. "We meet today as three sovereign nations joined by a common goal: to disrupt, dismantle and defeat Al Qaeda and its extremist allies in Pakistan and Afghanistan and to prevent their ability to operate in either country in the future," Mr. Obama said."

"There are no plans to deploy U.S. ground troops to Pakistan, U.S. Defense Secretary Robert Gates said Thursday, despite concerns over increasing violence between Pakistani troops and Taliban militants," the AP writes. 

"President Barack Obama has promised to restart Russian relations, but as Russia's foreign minister visits Washington on Thursday, old tensions are emerging," the AP reports. "Sergey Lavrov has appointments with Obama and Secretary of State Hillary Rodham Clinton after canceling a May 19 meeting at NATO to protest the alliance's military exercises this week in Georgia."

The Washington Post profiles national security adviser Jim Jones, who it says has been an outsider in the new administration. But it adds that things have been getting better. "White House officials who cited early misgivings, more stylistic than substantive, insisted they have now disappeared. But Jones acknowledges that the road has not always been smooth, and he appears more comfortable than some of his administration colleagues in saying they still have some distance to travel. It is 'absolutely' fair to say that it has taken some time for him and his colleagues to get used to each other, Jones said in an interview Tuesday. 'From this West Wing, in particular, because this is Obama Nation, right? True? This is where the Obama election campaign came, landed, en masse.'"

The Los Angeles Times notes how Obama's decision to close Gitmo "is putting fellow Democrats on the political hot seat as word spreads that terrorism suspects and other detainees would be relocated to the U.S. or transferred to domestic prisons. States and municipalities around the country are saying "not in my backyard," and Republicans are raising the prospect of relocated detainees putting Americans in danger."

The AP looks at Obama's efforts on immigration, including ramping up "border security" efforts.

The Washington Post profiles 2nd Circuit Court of Appeals Judge Sonia Sotomayor, saying that she "presents a contradiction, say those who know her. Her detractors have said she can be short-tempered, tough on the bench and at odds with the amicability that President Obama has often sought in his appointments. But her supporters -- former Yale classmates, law firm colleagues and former clerks -- say she meets the definition of what Obama has said he is looking for: a qualified nominee with legal and real world experience, as well as an appreciation for the impact of court decisions on everyday life.

"'I think her life experience gives her exactly the kind of perspective the court needs,' said Robert H. Klonoff, dean of Lewis & Clark Law School in Portland, Ore., and a classmate and friend of Sotomayor's from Yale Law School's class of 1979. 'When I read [Obama's] description of what he thinks of as an ideal justice, she just fits it to a T.' Besides her background, he said, 'her credentials are unbelievable.'"

Karl Rove devotes his Thursday Wall Street Journal column to the upcoming SCOTUS battle. "Senate Republicans may not be able to stop Mr. Obama's nominee, but they can explain to the public the party's reasons for opposing judges who think of themselves as legislators with life tenure. GOP senators appear to be comfortable making this argument, believing that the country favors judges who strictly apply the law. They're right. This confirmation battle will remind people that elections have consequences, few of which are as important or lasting as a Supreme Court nomination."

First Read's Speculation List
The short list:
-- Johnnie Rawlinson (9th Circuit Court of Appeals, African American woman). Univ. of the Pacific, McGeorge, J.D., 1979
-- Leah Ward Sears, (chief justice of the Georgia Supreme Court, African American woman). Emory JD, 1980; Univ. of Virginia, LL.M, 1995
-- Sonia Sotomayor (2nd Circuit Court of Appeals, Hispanic woman), Yale JD, 1979
-- Kim McLane Wardlaw, 9th Circuit, Hispanic woman), UCLA JD, 1979
-- Diane Wood, (7th Circuit, woman, knows Obama from her time teaching at the University of Chicago), Univ. Texas JD, 1975
-- Jennifer Granholm (Michigan governor, woman), Harvard, JD, 1987
-- Merrick Garland (U.S. Court of Appeals, DC Circuit), Harvard JD (magna cum laude), 1977
-- Deval Patrick (Massachusetts governor, African American, Obama friend) Harvard JD, 1982
-- Cass Sunstein (University of Chicago law professor, Obama friend), Harvard JD, 1978, magna cum laude
 
Others on the radar:
-- Yale Law School Dean Harold Hongju Koh, Harvard J.D., 1980
-- Judge Ruben Castillo (U.S. District Court for the Northern District of Illinois), Northwestern JD, 1979
-- U.S. Solicitor General Elena Kagan (a former Harvard University law professor), Harvard J.D., 1986
-- Pam Karlan (professor at Stanford Law School), JD, Yale Law School, 1984
-- Judge Margaret McKeown (9th U.S. Circuit Court of Appeals in San Francisco), Georgetown JD, 1975
-- Kathleen Sullivan (former dean of Stanford Law School), Harvard JD, 1981
-- Harvard Law School professor Charles Ogletree, Harvard J.D., 1978
-- John Echohawk
-- Sen. Amy Klobuchar (D-MN): (Downside: Republican governor in MN would appoint replacement)
-- Sen. Claire McCaskill (D-MO)
-- Janet Napolitano: With swine flu, etc, as Homeland Security Secretary not sure Obama would want to pull her off those duties
-- DNC Chair/VA Gov. Tim Kaine: Harvard law, no judicial experience.
-- Ruth Wedgewood, Johns Hopkins scholar, specializes in international law
-- Sandra Lynch, chief judge of the 1st U.S. Circuit Court of Appeals in Boston

"Congress is close to putting its final stamp on a new commission to examine the financial crisis, but Democrats and Republicans already are tussling over its membership," The Hill reports. "The House on Wednesday passed legislation on a strong 367-59 vote that would set up a financial markets inquiry commission. More Republicans supported the formation of the commission than opposed it, but the party's leadership was split… The panel's 10 members would hold subpoena power and would report back with findings and possibly recommendations by Dec. 15, 2010… What drew Republican ire was that Democrats get to appoint more members than Republicans to the commission. Democrats get six appointments, while the GOP gets four."

The Washington Post's Balz writes that Arlen Specter bucking his new party – the Democrats – shouldn't be surprising. "For years Specter has driven his minders mad. Independent barely describes his modus operandi. Predictably unpredictable might be the better description. Specter has intellect and experience, but a team player he is not. Democrats knew all this when the switch was in the works, but in case some forgot, Specter has gone out of his way to remind them."

Al Franken was at the White House yesterday to chat with Joe Biden.

"Trying to curb home foreclosures, the Senate voted on Wednesday to make it easier for homeowners with risky credit to switch to a lower-cost mortgage backed by the government," the AP says. "The bill, passed 91-5, also would give banks a break by encouraging reduced fees they must pay for the government to insure deposits. While both steps put taxpayer money on the line, lawmakers say the legislation is needed to prevent the economy from getting worse."

And: "Democratic centrists are pressing House Speaker Nancy Pelosi to set aside a flagging climate change bill to focus on what they think is a more achievable goal: overhauling the nation's healthcare system," The Hill writes.

"For those writing Republican centrism's obituary after Arlen Specter's party switch, holster your quills," The Hill reports. "In fact, if the next few weeks go well for the GOP, it might pave the way for a whole new chapter in the left flank of the right-leaning party. The month of May will be huge, recruiting-wise, for Senate Republicans, with decisions expected from several big-name candidates, including Florida Gov. Charlie Crist, former Pennsylvania Gov. Tom Ridge, Rep. Mark Kirk (Ill.) and possibly Rep. Mike Castle (Del.)."

Stu Rothenberg, writing in Roll Call, looks at places where the national committees are trying to "stir the pot" in this off year.

FLORIDA: Republicans tell First Read they are hopeful Florida Gov. Charlie Crist will announce he's getting into the race for the open Florida Senate seat. "But [NRSC Chairman John] Cornyn added that he will not intervene in a contested primary, in which Crist would be facing former Florida House Speaker Marco Rubio. Rubio, a conservative Republican, announced his candidacy Tuesday and has been critical of Crist for supporting President Barack Obama's stimulus proposal," Politico writes.

OREGON: Politico: "National Republicans have landed a top-tier recruit to run against Rep. Peter DeFazio (D-Ore.). Springfield Mayor Sid Leiken announced Tuesday that he would run against DeFazio, who was elected to the seat in 1986 and has never won reelection with less than 61 percent. But DeFazio may not even run for a 13th term; the Oregon Democrat has spoken openly about the prospect of waging a campaign for governor in 2010."

From NBC's Athena Jones
The United States, Afghanistan, and Pakistan must work together to defeat Islamic extremism, President Obama said today at the close of the first day of a trilateral summit.

The administration brought together Afghan President Hamid Karzai and Pakistani President Asif Ali Zardari in what it called an "unprecedented" series of meetings over two days that are meant to encourage greater cooperation with all three countries in fighting Al Qaeda, the Taliban, and other extremists along their shared border.

The two leaders met individually with the president, and then all three of them met for trilateral talks. During brief remarks following the meeting, Obama -- flanked by Zardari and Karzai -- said there was a great deal of work to be done on the military and economic fronts.

"Along the border where insurgents often move freely, we must work together with a renewed sense of partnership to share intelligence and to coordinate our efforts to isolate, target, and take out our common enemy," he said. "But we must also meet the threat of extremism with a positive program of growth and opportunity and that why my administration is working with members of Congress to create opportunity zones to spark development."

Obama made a point of saying the United States would make every effort to avoid civilian casualties -- a reference to reports of dozens of deaths in two villages in western Afghanistan that have been attributed to a U.S. bombing run there.

The increasing instability in a region that has been ravaged by war, poverty, and lawlessness presents one of the toughest challenges facing the Obama administration, and the president has sought repeatedly to make the argument that America has a stake in helping to establish secure, democratic governments in both countries, especially because Pakistan is a nuclear-armed nation.

He and other administration officials have stressed the need for a comprehensive, "whole of government" approach to the challenges in the region, one that would focus not just on military action but on aid.

This week's meetings mark the second set of trilateral discussions, and the administration hopes to hold these trilateral meetings up to four times a year. Today, the president stressed America's commitment to the region.

"The United States has made a lasting commitment to defeat al Qaeda, but also to support the democratically elected sovereign governments of both Pakistan and Afghanistan," he said. "That commitment will not waiver. And that support will be sustained."

He went on to say that no matter what happens, American would not be deterred.

"We will sustain our cooperation," he said. "And we will work for the day when our nations are linked not by a common enemy, but by a shared peace and prosperity, mutual interests and mutual respect, not only among governments but among our people."

From NBC's Harry Enten

With NBA Hall of Famer Dave Bing's
victory last night in the Detroit mayoral election, we wanted to
mention some other American professional athletes-turned-politicians.

Here are 10 (in alphabetical order), but if you think of anyone we missed, let us know:

Bill Bradley
led the New York Knicks to their only two NBA Championships in 1970 and
1973. After a career as a shooting guard and small forward that lasted
from 1967-1977, this NBA Hall of Famer became a Democratic United
States Senator from New Jersey from 1979-1997. A policy wonk, Bradley
led the fight for federal tax and campaign finance reform. In 2000,
Bradley ran against Al Gore for the Democratic nomination. Advocating
for universal health care and stricter gun control, he didn't win a
primary. 

Jim Bunning was the first
pitcher to pitch no-hitters -- including a perfect game -- in both the
American and National Leagues. A seven-time All-Star over a career that
lasted from 1955-1971, Bunning was elected to the Baseball Hall of Fame
in 1996. Later, he became a Republican congressman from Kentucky from
1987-1999 and was elected to the United States Senate in 1998. Over his
20-year career in Washington, Bunning has been known as a staunch
conservative. Lately, though his career seems in jeopardy, as he has
feuded with Republican leadership.

Kevin Johnson was one of the best NBA point guards of the 1990s. A three-time All-Star and named to the All-NBA team five times, Johnson also led the Phoenix Suns to the NBA Finals (1993) in a career that lasted 1987-2000. He has recently turned his eyes to politics. In 2008, he became the first African-American Mayor of Sacramento.

Jack Kemp led the Buffalo Bills as quarterback to back-to-back AFL Championships in 1964 and 1965. For his efforts, he earned seven trips to the AFL All-Star Game and was named AFL MVP in 1965. Serving in the congress from Buffalo from 1971 to 1989, Kemp was best known for arguing for supply-side economics and racial equality. Later, he served as HUD secretary under George H.W. Bush from 1989-1993. Kemp also unsuccessfully ran for the Republican nomination for president in 1988 and was Bob Dole's Vice Presidential running mate in 1996.

Steve Largent retried from the NFL in 1989 holding six major reception records including most receptions, touchdowns and yards. After his 14-year NFL Hall of Fame career with the Seattle Seahawks from 1976-1989, Largent was elected Republican congressman from Oklahoma from 1994-2002. A Christian Conservative, Largent introduced bills to curb abortion rights and shut down the IRS. In 2002, he ran unsuccessfully for governor of Oklahoma, losing by less than 7,000 votes.

Tom McMillan had a successful 10-year career from 1975-1986 as center and power forward for four NBA teams before running for Congress in 1986. A Democrat, he served three terms as a representative from Maryland from 1987-1993. Not surprisingly, he is thought to be one of the tallest members of Congress of all time standing 6-foot-11 inches tall.

Tom Osborne is best remembered for his years as head football coach of the Nebraska Cornhuskers, but he also played professionally as a wide receiver from 1960-1962 for Washington and San Francisco. Osborne was elected to the U.S. House in 2001 and stepped down in 2007 after seeking and losing a bid to become Nebraska's governor in 2006.

Alan Page was a nine-time NFL Pro Bowler, six-time All-Pro, and the first-ever defensive player to be named MVP in 1971. Retiring after a 15-year career as defensive lineman that lasted from 1967-1981, Page was elected to the NFL Hall of Fame in 1981. Page became the first-ever African-American to serve on the Minnesota Supreme Court in 1993. Recently, he appointed the three judges on the district court panel that declared Al Franken the winner in the 2008 Minnesota Senate race.

Heath Shuler is regarded as one of the greatest busts in NFL draft history. Picked third by the Washington Redskins in the 1994 draft, Shuler languished as a quarterback before retiring in 1998. Elected to the U.S. House as a Democrat from western North Carolina in 2006, he has voted against his party on many issues, including the Obama stimulus package.

Byron "Whizzer" White ran over NFL defenses as a halfback in 1938 and 1940-1941. He led the league in rushing in 1938 and was named to the NFL's 1940 All-Decade team. He went on to become a deputy attorney general in the Kennedy administration and was named to the U.S. Supreme Court in 1962. Over his 30-year stint on the court that lasted until 1993, White disappointed many liberals by dissenting in such cases as Roe v. Wade and Miranda v. Arizona.

[EDITOR'S NOTE: An earlier version of this post initially indicated that Page was one of the members of the three-judge panel in Minnesota. That was incorrect. He appointed the three judges who sat on that panel.]

From NBC's Doug Adams

Kathleen Sebelius testified in the House today on health-care reform, her first appearance before Congress since becoming HHS Secretary. Insisting that "health-care reform cannot and will not wait another year," she said President Obama is committed to doing health-care reform this year.

"Now is the time," she said. "As we're fixing the economy, we have to fix health care as part of overall strategy."

Sebelius spent much of the hearing trying to reassure skeptical Republicans that a public insurance option would not undermine the existing private system and was not a "prelude" to a single-payer, government-run system. But she repeatedly said the playing field now is not level -- because private insurers can "cherry pick" the healthiest patients to make a profit while declining coverage to the sickest.

Sebelius said the administration was committed to ensuring that Americans who are happy with their coverage now would not be forced to switch companies or switch doctors. She also implied that changing the payment system to focus more on "outcome" -- i.e. does the care make people healthier? -- was a philosophy that any reform plan should embrace. 

Asked about how to pay for health-care reform, Sebelius was vague, but said the president is opposed to making employer-provided health insurance subject to taxes (an idea favored by some Democrats to generate revenue.) She called that a "huge destabilizing" proposal, but said the administration would be willing to discuss all options.

From NBC's Ken Strickland

Newly-turned Democrat Arlen Specter today hinted that that Senate Majority Leader Harry Reid reneged on his word to allow Specter to keep his seniority on committees on which he sits. "Sen. Reid assured me that I would keep my committee assignments, and that I would have the same seniority as if I had been elected as a Democrat in 1980," Specter said in a written statement today.

Last night on the Senate floor, Reid shepherded a resolution that put Specter at the back of the line on every committee he sits -- most importantly, the powerful Appropriations Committee. Seniority on that panel is instrumental in securing millions of dollars for home state projects. 

Last week when Specter announced his party switch, Reid said in a news conference that Specter would keep his seniority. According to a transcript, a reporter asked Reid, "Can you talk about Sen. Specter's seniority now? He said he would be coming in as if he were elected, in 1980, a Democrat." Reid responded, "That's right."

With almost 30 years in the Senate, Specter now sits on committees behind Democratic freshmen like Gillibrand, Burris, and Kaufman. When the Supreme Court nominee is questioned by the Judiciary Committee later this year, Specter's new rank makes him the last senator to quiz the nominee.

"Some members of the caucus have raised concerns about my seniority, so the caucus will vote on my seniority at the same time subcommittee chairmanships are confirmed after the 2010 election," Specter said. "I am confident my seniority will be maintained under the arrangement I worked out with Sen. Reid."

From NBC's Mike Viqueira

Senior Republicans in Congress today continue to work to formulate a policy and political response to the currently popular president.

It seems that the last time the president had GOP leaders to the White House he challenged them to come up with their own cuts in government spending, consistent with his edict requiring administration agencies to find $100 million in savings over the next 90 days.

That level of cuts was widely derided as less than a drop in the ocean.

So today, House GOP leaders gathered around a table up in Eric Cantor's office, shed their suit coats and invited in the press for a photo-op of them working to cut.

Cantor says that there is $18 billion alone in government-held real estate that should but cannot be sold due to "regulatory burdens." Meanwhile, the government is spending millions a year in acquiring new properties, he said.

Rep. Darrell Issa added, citing GAO calculations, that there is $23.7 billion a year in mis-payments in Medicare and Medicaid. Another example Issa offered is $152 million worth of land held by the Bureau of Land Management that is not being maintained and could be sold.

Cantor, as he is wont of late, reminded everyone that Republicans seek to be "constructive and not obstructive," -- not simply the party of "no."

They say they will have a list of their final recommendations by Memorial Day recess.

From NBC's Chuck Todd
As folks know, President Obama today met personally with two more Republicans who serve on the Senate Judiciary Committee: Tom Coburn and Chuck Grassley.

In addition, the president has telephoned the new ranking Republican on the committee, Jeff Sessions. No official readouts on any of the meetings. But for those keeping score, it's worth noting we can now confirm he's telephoned or met personally with four of the seven remaining Republicans on Judiciary since the Souter vacancy became public: Coburn, Grassley, Sessions and Hatch.

No word on when he'll reach out to Lindsey Graham, Jon Kyl, and John Cornyn specifically on the court vacancy.

From NBC's Domenico Montanaro
Maine's Gov. John Baldacci signed a bill into law allowing same-sex marriage in his state. Maine becomes the fifth state to do so. The other four: Connecticut, Iowa, Massachusetts and Vermont.

"In the past, I opposed gay marriage while supporting the idea of civil unions," Baldacci said in a statement. "I have come to believe that this is a question of fairness and of equal protection under the law, and that a civil union is not equal to civil marriage."

There is serious legislative activity to approve gay marriage in DC (where last night the city council voted to recognize same-sex marriages performed elsewhere), New Jersey, New Hampshire and New York.

Also, in California, there's a state Supreme Court challenge to Prop. 8.

As we wrote this morning, it's example #457 that we're long removed from 2004.

Here's Baldacci's full statement:

I have followed closely the debate on this issue. I have listened to both sides, as they have presented their arguments during the public hearing and on the floor of the Maine Senate and the House of Representatives. I have read many of the notes and letters sent to my office, and I have weighed my decision carefully. I did not come to this decision lightly or in haste.

I appreciate the tone brought to this debate by both sides of the issue. This is an emotional issue that touches deeply many of our most important ideals and traditions. There are good, earnest and honest people on both sides of the question.

In the past, I opposed gay marriage while supporting the idea of civil unions. I have come to believe that this is a question of fairness and of equal protection under the law, and that a civil union is not equal to civil marriage.

Article I in the Maine Constitution states that 'no person shall be deprived of life, liberty or property without due process of law, nor be denied the equal protection of the laws, nor be denied the enjoyment of that person's civil rights or be discriminated against.'

This new law does not force any religion to recognize a marriage that falls outside of its beliefs. It does not require the church to perform any ceremony with which it disagrees. Instead, it reaffirms the separation of Church and State," Governor Baldacci said. It guarantees that Maine citizens will be treated equally under Maine's civil marriage laws, and that is the responsibility of government. Even as I sign this important legislation into law, I recognize that this may not be the final word. Just as the Maine Constitution demands that all people are treated equally under the law, it also guarantees that the ultimate political power in the State belongs to the people.

While the good and just people of Maine may determine this issue, my responsibility is to uphold the Constitution and do, as best as possible, what is right. I believe that signing this legislation is the right thing to do.

From NBC's Mike Viqueira

House Speaker Nancy Pelosi does not endorse setting performance benchmarks for Afghanistan and Pakistan and tying it to aid. That puts her in conflict with a senior Democratic chairman in the House, who has written just such a requirement into the funding bill now pending in Congress.

Appropriations Chairman David Obey said Monday that by this time next year, the administration must come up with an assessment of whether Afghanistan and Pakistan "are, or are not, demonstrating the necessary commitment, capability, conduct and unity of purpose to warrant the continuation of the President's policy… ."

Obey's benchmarks include the level of political consensus, commitment to fighting corruption, and performance in fighting insurgency.

Obey has been roundly criticized from both sides of the aisle for the requirements.

"He was just speaking his own view," Pelosi said today. Translation: It's not MY view.

"I support the president's plan," she added.

Obey's committee will take up the funding bill tomorrow, which includes $2.3 billion for non-military aid to Pakistan and Afghanistan and $810 million in military aid.

From NBC's Athena Jones

Important clarification from the White House on our reporting about vaccines.

The lower press office says no decision has been made on a vaccination plan yet, despite what the Washington Post had wrote today.

This press official, who was watching MSNBC this morning, said there is no White House vaccination "plan" as of yet and therefore any reference to a plan that would "cost trillions" is inaccurate.

He said reports -- on television or in newspapers -- suggesting there is a White House plan are "getting substantially ahead of where we are."

From NBC's Andrea Mitchell and Libby Leist
Secretary of State Clinton and envoy Richard Holbrooke went to the Willard Hotel in DC this morning for an hour-long private meeting with Pakistan President Zardari and his ambassador to the U.S.

Their breakfast was not announced publicly -- and it wasn't on her schedule. They have been pressing Zardari hard to do more to fight the Taliban.

Clinton then returned to the State Department, where she met with Afghan President Karzai as scheduled.

Now she's meeting with both Karzai and Zardari together, also as scheduled.

From Chuck Todd, Mark Murray, and Domenico Montanaro
*** Obama's doctrine on display: The start of today's two-day Af-Pak summit is perhaps as good of an early example of what President Obama believes can be done on the international front. It may be seen some day as "quintessential Obama": bringing people together, holding numerous meetings on various levels (including non-military meetings with cabinet secretary equivalents), and talking -- then, like shampoo directions, rinse, wash, repeat, and (in this case) never stop. The administration is hoping to hold these trilateral meetings with Afghanistan and Pakistan multiple times a year. The next meeting will take place after Afghanistan's elections in August. Here's today's agenda: Presidents Karzai and Zardari begin their day at the State Department for private bilateral and trilateral meetings with Secretary of State Clinton. The two men then head to the White House for afternoon meetings with Obama -- first one-on-one (Karzai's is at 2:00 pm ET; Zardari's is at 2:40 pm), and then the trilateral at 3:30 pm. Obama will then deliver remarks at 4:15 pm. The day ends at the Naval Observatory, with Vice President Biden hosting a dinner for the two presidents, which will include key members of Congress. The summit continues Thursday with a slew of cabinet-level meetings led by Agriculture's Tom Vilsack, DOJ's Holder, FBI's Mueller, and CIA's Panetta.

Video: Obama is set to meet with Presidents Karzai and Zardari at the White House today.

*** It's tricky… tricky, tricky, tricky: Today's meetings are a tricky affair. The administration has sent numerous signals about its unease with both leaders, and yet it's giving Karzai and Zardari the red-carpet treatment as if they are America's two most important allies. And you know what, they just might be... What's the alternative at this point? If this summit gives Karzai and Zardari political strength at home to make decisions in the U.S. interests, then it will be a success. The bigger focus today and tomorrow will be Pakistan and not Afghanistan. The issue in Pakistan is as much about its military strategy (will they stop focusing on India and start focusing on the Taliban?) as its political strategy. There are too many leaders in the country who aren't on the same page when it comes to the idea that all three nations share a common enemy: Islamic extremism. The mixed signals some in Pakistan have sent by negotiating truces with Taliban in certain parts of the country are what have led to the Taliban's renewed strength in the country, the U.S. believes. For what it's worth, the Obama administration dismisses the various threats from Capitol Hill about future funding for either country. Why? It believes everyone in Congress believes instability in either country is a U.S. national security threat. That said, there will be healthy debate about how many strings get attached to funding decisions.

*** Specter's tough week: Life as a Democrat hasn't been that easy for Arlen Specter so far. He twice voted against Democratic measures, including last week's budget vote. Then came his interview on "Meet the Press," in which he said he wouldn't be a loyal Democrat. And now there's an upcoming New York Times magazine interview, in which Specter says he wants Norm Coleman to win in his recount battle against Al Franken. (Specter tells CQ that he misspoke to the NYT mag. "In the swirl of moving from one caucus to another, I have to get used to my new teammates," he said. "I'm ordinarily pretty correct in what I say. I've made a career of being precise. I conclusively misspoke.") All of these moves/remarks have infuriated the liberal blogosphere, which is now conducting a straw poll to determine whether there should be a Draft Joe Sestak movement to challenge Specter in a Dem primary. As Specter is undoubtedly finding out, it's sometimes lonely being stuck in the middle. Just ask Joe Lieberman. By the way, considering Specter's moderate tendencies, doesn't it actually make sense that he'd be supportive of Coleman? Does the quick back-track show he's more concerned already about his Democratic prospects than his supposed moderate principles? 

*** Give Geithner credit? Assuming there truly are no surprises tomorrow with the OFFICIAL release of the bank stress test results, it seems as if the Treasury Department and the Fed are managing the rollout of these results pretty well. The leaks feel selective and purposeful -- as if coordinated with the banks. And the market appears to be responding well to it. Again, there could be hidden bombs somewhere tomorrow, but one would assume we would have already heard about it. Plenty of critics on the left will say the stress tests were never designed to find the really BAD news, and that the government is working too closely with the banks to make sure the public doesn't see the really bad news. But assuming the critiques on this front are more about conspiracy theories than fact, then Treasury and Geithner in particular ought to feel good about how the start of HIS second 100 days is going.

*** Some backlash: With her upcoming book and her appearance on "Oprah" this Thursday, it was inevitable that Elizabeth Edwards would begin to receive some backlash -- given that she campaigned so aggressively for her husband in 2007 and 2008, despite her book's claim that she begged him to drop out of the race after she learned about his affair. Today, Maureen Dowd writes, "John Edwards's political career is over… Nobody -- except Rielle -- has any interest in hearing from him again... But now Saint Elizabeth has dragged him back into the public square for a flogging on 'Oprah' and in Time and at bookstores near you." And Politico's Ben Smith has this quote in a piece about how the Edwardses are back in the spotlight: "'Assuming the timeline that has been made public is accurate, I think both Elizabeth and John are to blame -- both of them carried on this facade,' said David Redlawsk, a professor at the University of Iowa who was a prominent Edwards supporter in the key state. 'For the good of the country, he certainly shouldn't have run. For the good of the country, she should have said something.'"

Video: Elizabeth Edwards talks about her husband's affair for the first time.

*** Don't miss this nugget: The Washington Post reports Chief of Staff Rahm Emanuel is running the Supreme Court search, in conjunction with the White House counsel's office and the Vice President's office. Is this a case where the White House realizes the SCOTUS pick needs a political vet more than a judicial one? Also today, Sen. Tom Coburn  is meeting with Obama in the Oval Office. Coburn's a member of the Judiciary committee -- and the second Republican he's talked/met with before Jeff Sessions?

*** I'm a survivor, I'm going to make it: The Democratic National Committee today has some Wednesday fun with a new Web video featuring the current leaders of the GOP -- Michael Steele, Mitch McConnell, Newt, Rush, Cheney, etc. -- in a "Survivor"-like contest. "Which one will win the battle for the heart and soul of the GOP?" the video asks. 

*** Example #457 that we're long removed from 2004: DC yesterday voted to recognize same-sex marriages performed elsewhere, and the Maine House passed legislation that would legalize gay marriage. As of now, four states have legalized gay marriage (CT, IA, MA, VT), and serious legislative activity to approve gay marriage is occurring in DC, ME, NJ, NH, and NY. Also, in CA, there's a state Supreme Court challenge to Prop. 8.

*** Bing scores: Former NBA great Dave Bing beat Kenneth Cockrel Jr. in Detroit's mayoral race yesterday, 52%-47%. "Mr. Bing, the longtime owner of a local auto parts business, will serve the final eight months of former Mayor Kwame M. Kilpatrick's second term," the New York Times says. "He will have to begin campaigning to keep his job almost immediately. The regularly scheduled election, for a four-year term, is in November, and the filing deadline for the August nonpartisan primary is next Tuesday. Mr. Cockrel is expected to be among those trying to unseat Mr. Bing in the fall." This is a big win for the so-called Detroit outsiders; it's a "change" win. Now, can Bing handle America's toughest mayoral job? 

*** Steny eyes social security: Also today, House Majority Leader Steny Hoyer gives the keynote address at the Bipartisan Policy Center's symposium in DC on putting the country's fiscal house back in order. According to excerpts of his speech, Hoyer will call for enacting Social Security reform. "Of our entitlement programs, I believe we would have the easiest challenge in reforming Social Security… We can bring in more revenues. We can restrain the growth of benefits, particularly for higher-income workers, while we strengthen the safety net for lower-income workers. And/or we can raise the retirement age… What is missing here is not ideas -- it is political will." He also will call for reining in health-care spending. "We have pledged that, in the healthcare reform bill we will debate this session, we will pay for expanded access, so that healthcare reform does not add to the short-term deficit. But that is not enough. It is imperative that we slow the growth of healthcare spending over the long term." Hoyer speaks at 12:30 pm ET.

Countdown to NJ GOP primary: 27 days
Countdown to VA Dem primary: 34 days
Countdown to Election Day 2009: 181 days
Countdown to Election Day 2010: 545 days

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Obama holds a trilateral with Afghan President Hamid Karzai and Pakistani President Asif Ali Zardari. "The president is pressing Zardari to stand up to the threat of a wider war by Taliban and al-Qaida forces inside Pakistan. He's also seeking broader cooperation between Zardari and Karzai, who blames the Taliban's resurgence in his country on its havens across the border," the AP writes.

How do you solve a riddle like Karzai? The Washington Post says "the consensus view among State Department, Pentagon and CIA officials is that Karzai almost certainly will win reelection to another five-year term this August. Vexed by the challenge of stabilizing Afghanistan with a partner they regard as less than reliable, Obama's advisers have crafted a two-pronged strategy that amounts to a fundamental break from the avuncular way President George W. Bush dealt with the Afghan leader."

"Obama intends to maintain an arm's-length relationship with Karzai in the hope that it will lead him to address issues of concern to the United States, according to senior U.S. government officials. The administration will also seek to bypass Karzai by working more closely with other members of his cabinet and by funneling more money to local governors."  

The Washington Post's editorial might as well have been headlined: "If you can't be with the one you love, honey, love the one you're with." 
 
And the NYT's editorial might as well have been headline: "Rock and Hard a place." "We have long worried that Pakistanis see this fight as America's and not their own. But Congress must remember that this is also this country's fight. Afghanistan cannot be ceded to the Taliban and Al Qaeda. Nor can Pakistan -- its ungoverned border regions or its dozens of nuclear weapons."

In other news… The AP: "The Obama administration says it is inching closer to a deal that would send an estimated 100 Yemeni detainees at Guantanamo Bay to Saudi terrorist rehabilitation centers and speed the closing of the Navy prison. The Yemeni prisoners make up the largest nationality among the 241 detainees left at Guantanamo. But deep-seated tensions among Yemen, Saudi Arabia and the United States have held up decisions on where to send them as U.S. President Barack Obama prepares to shutter Guantanamo by January 2010."

The Washington Post front-pages, "The Obama administration's plan to 'stress-test' 19 large banks is yielding benefits even before the findings are released tomorrow.  The announcement of the tests in February roiled the markets initially. But the 12-week wait for results has since provided a respite, allowing investors to breathe deeply and giving time for a raft of federal rescue programs to start showing results."

"The banks, eager to demonstrate that they don't need more federal aid, have spent the time racing to get stronger. The healthiest banks, such as Goldman Sachs and J.P. Morgan Chase, have tried to show that they can walk without government crutches, for example by issuing debt without federal assistance. Weaker banks such as Citigroup have agreed to sell valuable business units and moved with greater urgency to offload troubled assets." 

The New York Times: "The government has told Bank of America it needs $33.9 billion in capital to withstand any worsening of the economic downturn, according to an executive at the bank. If the bank is unable to raise the capital cushion by selling assets or stock, it would have to rely on the government, which has provided $45 billion in capital through the Troubled Asset Relief Program."  

Bringing in another message specialist to Treasury? Politico says Jake Siewert's heading over there. "The decision to send such a political heavyweight to Geithner's aid seems to reflect a belief on the part of the White House that Geithner, like many of the banks he is working with, is too big to fail. In essence, Emanuel and other Obama aides are doubling down on Geithner, betting that with the right staff reinforcement he can succeed as the administration's top economic policymaker."

Meanwhile, this Washington Times piece about health care and energy hits on a developing C.W. about the president's efforts: He has more issues on his left than on his right when it comes to health care and energy. Think cap-and-trade and single-payer.

Last night in New York, First Lady Michelle Obama announced that her husband's budget next year will ask for $50 million to help expand nonprofit programs to promote national service, the Washington Post says. "The White House initiative, known as the Social Innovation Fund, is a component of the new Serve America Act. Mrs. Obama said that it would provide capital to support innovative nonprofit organizations and to help social entrepreneurs expand "their successful approaches to tackling our most pressing national challenges." 

"First lady Michelle Obama had quite the day in New York, meeting Elmo, talking to diplomats, and tonight appearing at Time magazine's swanky event for the world's most influential people" -- though she professed to be more impressed by Sesame Street.

The Washington Post has the type of story that suggests it may know more than it reported. "The selection of a small and very senior group of administration officials to help manage the nomination is designed, in part, to avoid the kinds of leaks that angered several Cabinet nominees during Obama's transition."

"Running the selection are White House Chief of Staff Rahm Emanuel, counsel Gregory B. Craig and deputy counsel Cassandra Q. Butts, a classmate of Obama's at Harvard Law. Obama has reached out to Republican and Democratic Senate leaders, seeking their recommendations. But the chance that he would veer from his own list, which began taking shape in December, is slim."
 
Now, infer away... Rahm's in charge... not the lawyers. Discuss.

Politico profiles the man who it says will be the GOP's chief inquisitor during any confirmation hearing: Alabama Sen. Jeff Sessions. "By elevating Alabama Sen. Jeff Sessions to their top spot on the Senate Judiciary Committee, Republicans have selected their chief inquisitor for President Barack Obama's first Supreme Court nominee: a Southern, white conservative man who has drawn fire for racially insensitive comments in the past. Democrats like how this is looking. 'Sessions will help galvanize and crystallize why we need a filibuster-proof majority in the Senate,' a Democratic senator, speaking on the condition of anonymity, told POLITICO Tuesday."

But: "Sessions, who easily won reelection to a third term in November, wins praise from both Democrats and Republicans for his cordiality and integrity in his dealings with them. Senate Judiciary Committee Chairman Pat Leahy (D-Vt.) notes that Sessions was one of the few Republicans to support Eric Holder's nomination as the nation's first African-American attorney general." 

The New York Post on the criticism that Sonia Sotomayor is receiving: "In addition to mangling the most basic lesson about the three branches of government, Sotomayor's claim raises the hackles of conservatives who accuse liberal judges of trying to legislate from the bench. 'Court of Appeals is where policy is made,' Sotomayor says on the tape. 'I know -- I know this is on tape and I should never say that, because we don't make law,' she continued, to nervous laughter from the crowd. 'I know, OK, I know.'" She adds, "I'm not promoting it and I'm not advocating it."

First Read's Speculation List
The short list:
-- Johnnie Rawlinson (9th Circuit Court of Appeals, African American woman). Univ. of the Pacific, McGeorge, J.D., 1979
-- Leah Ward Sears, (chief justice of the Georgia Supreme Court, African American woman). Emory JD, 1980; Univ. of Virginia, LL.M, 1995
-- Sonia Sotomayor (2nd Circuit Court of Appeals, Hispanic woman), Yale JD, 1979
-- Kim McLane Wardlaw, 9th Circuit, Hispanic woman), UCLA JD, 1979
-- Diane Wood, (7th Circuit, woman, knows Obama from her time teaching at the University of Chicago), Univ. Texas JD, 1975
-- Jennifer Granholm (Michigan governor, woman), Harvard, JD, 1987
-- Merrick Garland (U.S. Court of Appeals, DC Circuit), Harvard JD (magna cum laude), 1977
-- Deval Patrick (Massachusetts governor, African American, Obama friend) Harvard JD, 1982
-- Cass Sunstein (University of Chicago law professor, Obama friend), Harvard JD, 1978, magna cum laude
 
Others on the radar:
-- Yale Law School Dean Harold Hongju Koh, Harvard J.D., 1980
-- Judge Ruben Castillo (U.S. District Court for the Northern District of Illinois), Northwestern JD, 1979
-- U.S. Solicitor General Elena Kagan (a former Harvard University law professor), Harvard J.D., 1986
-- Pam Karlan (professor at Stanford Law School), JD, Yale Law School, 1984
-- Judge Margaret McKeown (9th U.S. Circuit Court of Appeals in San Francisco), Georgetown JD, 1975
-- Kathleen Sullivan (former dean of Stanford Law School), Harvard JD, 1981
-- Harvard Law School professor Charles Ogletree, Harvard J.D., 1978
-- John Echohawk
-- Sen. Amy Klobuchar (D-MN): (Downside: Republican governor in MN would appoint replacement)
-- Sen. Claire McCaskill (D-MO)
-- Janet Napolitano: With swine flu, etc, as Homeland Security Secretary not sure Obama would want to pull her off those duties
-- DNC Chair/VA Gov. Tim Kaine: Harvard law, no judicial experience.
-- Ruth Wedgewood, Johns Hopkins scholar, specializes in international law
-- Sandra Lynch, chief judge of the 1st U.S. Circuit Court of Appeals in Boston

"The Senate adopted by voice vote Tuesday evening a resolution adding Sen. Arlen Specter as a Democrat to five committees, giving Democrats an extra seat on Appropriations, Environment and Public Works, Judiciary, Veterans' Affairs and the Special Committee on Aging," The Hill writes. "Republicans did not get any extra seats on those committees to make up for the loss of Specter." 
 
Politico writes of the unlikely unified front of Pelosi and Hoyer: "Far from friends but no longer enemies, this long-feuding pair has forged a once-unthinkable partnership, leveraging their former rivalry -- and the ideological divide that separates them -- for a tighter grip on the party they lead.
 
"To get the most out of their members, each leader caters to a separate constituency within the party. Pelosi, the California liberal who opposed the war in Iraq and has ambitious plans to cap carbon emissions, handles the party's progressives. Hoyer, the self-proclaimed budget hawk who brokered a deal to let intelligence officials continue eavesdropping on suspected terrorists, serves as the conduit between the leadership and the moderates in the Blue Dog and New Democrat coalitions. The divide-and-conquer approach has paid off, most recently in last week's passage of the budget with only a handful of Democratic defections."

The Hill writes that Republican Sen. Chuck Grassley is plotting a backup health-care plan. "Grassley and his close friend, Finance Committee Chairman Max Baucus (D-Mont.), have been working for months to strike what could prove an unattainable compromise."
 
MoveOn will be releasing a health care ad later today that will run in DC as well as the home states of the Senate Finance Committee Chairman Max Baucus (Montana) and ranking Republican Chuck Grassley (Iowa).

The Washington Times reports that RNC Chair Michael Steele has agreed to certain restrictions on how he handles the party's finances. "The 'good governance' agreement revives checks and balances Mr. Steele resisted implementing for RNC contracts, fees for legal work and other expenditures that were not renewed after the 2008 presidential nominating contest. The agreement, proposed by several current and former RNC officials, goes further, making 33-year RNC veteran Jay Banning, who was fired by Mr. Steele along with his deputy last month, an on-call adviser to the RNC treasurer. Mr. Banning was seen as a trusted liaison to RNC members critical of Mr. Steele's tenure and financial management."

NEW JERSEY: "Allies of New Jersey's Democratic governor, Jon S. Corzine, are so worried about his re-election prospects that they are going to start spending and advertising heavily -- in the Republican primary," the New York Times writes. "Mr. Corzine's allies plan to attack the Republican they consider more formidable, the former federal prosecutor Christopher J. Christie, in an attempt to knock him out in the June primary, according to people briefed on the matter."

More: "That would leave Mr. Corzine facing Steven M. Lonegan, a former small-town mayor from the party's right wing, whose support for a flat income tax and a ban on abortion are popular with conservative voters, but could be a problem in the general election." 

Corzine is taking a page out of Gray Davis' successful 2002 playbook: defeat your toughest GOP foe in his own primary.

OHIO: Democrats remain in a strong position in the Buckeye State, according to a new Quinnipiac poll. Obama's approval is at 62%, while Gov. Ted Strickland's approval is at 57%. In hypothetical 2010 match-ups, Strickland easily defeats Mike DeWine (48%-36%) and John Kasich (51%-32%).

Turning to the 2010 Senate race, both Democratic candidates -- Lt. Gov. Lee Fisher and Secretary of State Jennifer Brunner -- are in a strong position, too. Fisher tops GOPer Rob Portman, 42%-31%, while Brunner would defeat Portman 40%-32%, per the poll.

VIRGINIA: The Hill looks at how the Virginia Democrats running for governor have adopted Obama and Clinton campaign strategies. 
 
"Common Sense Virginia, a group funded by the Democratic Governors Association (DGA), on Tuesday will launch a television ad with more than $550,000 behind it, aimed at cutting down former Attorney General Bob McDonnell (R)," The Hill reports. The ads were seen at least in the DC-Northern Virginia market during prime-time broadcast programming last night.