WASHINGTON – The House's chief Democratic headcounter said Sunday he hadn't rounded up enough votes to pass President Barack Obama's health care overhaul heading into a make-or-break week, even as the White House's top political adviser said he was "absolutely confident" in its prospects.
The administration gave signs of retreating on demands that senators jettison special home-state deals sought by individual lawmakers that have angered the public.
White House spokesman Robert Gibbs predicted House passage this week, before Obama travels to Asia, a trip he postponed to push for the bill.
"This is the week where we will have this important vote," Gibbs said. "I do think this is the climactic week for health care reform."
Political strategist David Axelrod said Democrats will persuade enough lawmakers to vote "yes." The House GOP leader, Ohio Rep. John Boehner, took up the challenge, acknowledging Republicans alone can't stop the measure, but pledging to do "everything we can to make it difficult for them, if not impossible, to pass the bill." Republicans believe they may get help from Democrats facing tough re-election campaigns.
Axelrod said it will be a struggle, taking aim at insurance industry lobbyists who "have landed on Capitol Hill like locusts" and Republicans who see being on the losing side of the vote as a political victory.
"I am absolutely confident that we are going to be successful. I believe that there is a sense of urgency on the part of members of Congress," given recent news about insurance plan rate increases, Axelrod said.
A dose of reality came from Rep. James Clyburn, the third-ranking House Democrat and main vote counter. "No, we don't have them as of this morning, but we've been working this thing all weekend," said Clyburn, D-S.C.
Clyburn said he was confident the measure would pass, echoing comments from Speaker Nancy Pelosi, D-Calif., on Saturday.
Axelrod also indicated the White House was backing down on an attempt to get senators to rid the legislation of a number of lawmakers' special deals.
Taking a new position, he said the White House only objects to state-specific arrangements, such as an increase in Medicaid funding for Nebraska, ridiculed as the "Cornhusker Kickback." That's being cut, but provisions that could affect more than one state are OK, Axelrod said.
That means that deals sought by senators from Montana and Connecticut would be fine — even though Gibbs last week singled them out as items Obama wanted removed. There was resistance, however, from two powerful committee chairman, Democratic Sens. Max Baucus of Montana and Chris Dodd of Connecticut, and the White House has apparently backed down.
"The principle that we want to apply is that are these — are these applicable to all states? Even if they do not qualify now, would they qualify under certain sets of circumstances," Axelrod said.
That's the argument made by aides to Baucus and Dodd. The measure to give Medicare coverage to asbestos-sickened residents of Libby, Mont., could apply to other places where public health emergencies are declared — even though Libby is the only place where that's happened so far. Dodd's deal would leave it up to the health secretary to decide where to spend $100 million for construction of a hospital, though Dodd has made clear he hopes the University of Connecticut would be the beneficiary.
Trying to increase public pressure on Congress to pass the legislation, Obama planned to travel on Monday to Strongsville, Ohio, the home of cancer patient Natoma Canfield, who wrote the president that she gave up her health insurance premium after it rose to $8,500 a year. Canfield is a self-employed cleaning worker who lives in the Cleveland suburb.
Gibbs said she had to decide between keeping her health insurance or her house, and chose to keep her house.
Boehner said Democrats never made a serious attempt to incorporate GOP ideas in the measure, saying they took only "a couple of Republican bread crumbs and put them on top of their 2,700-page bill."
The legislation would provide health insurance to tens of millions who currently have none and would ban insurance companies from denying coverage on the basis of pre-existing conditions. It would require most people to obtain insurance and would subsidize premiums for poor and middle-income Americans.
The health care bill appeared close to passage in January, before Republican Scott Brown won the Massachusetts special election to fill the seat of the late Edward M. Kennedy, which cost the Democrats a fillibuster-proof majority in the Senate.
Since then, the White House and Democrats have tried to rescue the effort. Besides Republican opposition, Democrats still are face resistance in their own party from anti-abortion lawmakers worried about how and whether insurance plans should pay for abortions. The bill needs 216 votes to clear the House.
Axelrod was on ABC's "This Week," NBC's "Meet the Press," and CNN's "State of the Union." Gibbs appeared on "Fox News Sunday" and CBS' "Face the Nation." Clyburn was on NBC and Boehner on CNN.
WASHINGTON – Federal Reserve policymakers may signal at their meeting this week how and when the improving economy will lead them to start raising record-low interest rates.
Higher rates are still months away, Chairman Ben Bernanke and other Fed officials have signaled in appearances on Capitol Hill and in speeches. They've indicated that low rates are still required to foster the economic rebound.
Yet once the recovery is firmly entrenched, Fed policymakers will need to raise rates to keep inflation in check. Before they do, they first will want to signal that credit will soon be tightened. The trick is doing so without jolting investors and borrowers, who would face higher rates on certain credit cards, some mortgages and other loans.
How best to telegraph the approach of higher rates is likely to dominate discussions when Bernanke and his colleagues meet Tuesday. In particular, the Fed will decide whether to keep, or water down, its year-long pledge to keep rates at "exceptionally low" levels for an "extended period." Economists generally think "extended period" means at least six more months.
The Fed could drop that commitment altogether. Or it could pledge to keep rates low for "some time," which is viewed as briefer than an extended period. Or it could change its language in some other way to stress that credit will be tightened when the time is right. Any such step would send a signal that the days of easy money are fading.
The push for change is already under way inside the Fed. At its last meeting in late January, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, favored changing the language to say rates would stay low for "some time," according to the meeting's minutes.
Hoenig said he thought such a change would give the Fed more flexibility to start raising rates, the minutes said. And he said a move toward "modestly higher" rates should happen soon.
Hoenig and other "hawks" on the Fed worry more about inflation heating up because of record-low rates than about keeping rates low to try to reduce the unemployment rate, now at 9.7 percent.
The fact that the jobless rate, though high, hasn't budged for two months and fewer jobs are being lost than a year ago suggests the recovery is on track. Factory and service-sector activity is picking up. Consumers and businesses are spending enough to keep the economy growing moderately.
Chris Rupkey, an economist at the Bank of Tokyo-Mitsubishi, doesn't rule out a change in the "extended period" language at Tuesday's meeting. Others think a wording change is more likely at the Fed's next scheduled meeting, April 27-28. By then, the Fed would have another reading on the employment climate.
"Markets are not ready for a change yet," said Terry Connelly, dean of Golden Gate University's Ageno School of Business in San Francisco.
Though the economy is healing from the worst recession since the 1930s, "the economic recovery is still very fragile," William Dudley, president of the Federal Reserve Bank of New York, said in a March 11 speech.
Investors also will be looking to see if the Fed makes any changes to an economic-support program that's lowered mortgage rates and bolstered the housing market. Under that program, the Fed is scheduled to end its mortgage-securities purchases from Fannie Mae and Freddie Mac at the end of this month.
Some analysts fear that once the program ends, mortgage rates could rise. That could weaken the recovery in housing and the overall economy. The Fed has left the door open to extending the program if the economy weakens.
The average rate on 30-year fixed mortgages dipped to 4.95 percent in the week that ended March 11, from 4.97 percent a week earlier, according to mortgage finance company Freddie Mac. Rates have been hovering around 5 percent.
It is all but certain that the Fed will keep its key interest rate at a record low Tuesday. It's held its target range for its bank lending rate at zero to 0.25 percent since December 2008. In response, commercial banks' prime lending rate, used to peg rates on certain credit cards and consumer loans, has remained about 3.25 percent — its lowest in decades.
Super-low rates benefit borrowers who qualify for loans and are willing to take on more debt. But they hurt savers. Low rates are especially hard on people living on fixed incomes who are earning measly returns on savings accounts and certificates of deposit.
When will the Fed boost rates? No earlier than June — and more likely sometime this fall, Rupkey and others said. Some investors don't think it will be until about November, said T.J. Marta, a market strategist.
The timing is a tough challenge for Bernanke. If he and other Fed policymakers raise rates too soon, they risk derailing the recovery. But if they wait too long, they could unleash inflation or fuel speculative bubbles in assets such as stocks.
SAN DIEGO – Investigators with Toyota Motor Corp. and the federal government could not replicate the runaway speeding reported by a Prius owner who said his car's accelerator stuck as he drove on a California freeway, according to a memo drafted for a congressional panel.
The memo, obtained Saturday by The Associated Press, said the experts who examined and test drove the car could not replicate the sudden, unintended acceleration James Sikes said he encountered. A backup mechanism that shuts off the engine when the brake and gas pedals are floored also worked properly during tests.
Sikes, 61, called 911 on Monday to report losing control of his 2008 Prius as the hybrid reached speeds of 94 mph. A California Highway Patrol officer helped Sikes bring the vehicle to a safe stop on Interstate 8 near San Diego.
The incident happened at the worst possible time for Toyota, which has recalled millions of cars because of floor mats that can snag gas pedals or accelerators that can sometimes stick. Just hours before the incident, Toyota had called reporters to its Torrance, Calif. office to hear experts refute claims that the company had not identified — or fixed — what might be causing its cars to speed out of control.
Sikes' car was covered by the floor mat recall but not the one for sticky accelerators. He later told reporters that he tried to pull on the gas pedal during his harrowing ride, but it didn't "move at all."
During two hours of test drives of Sikes' car Thursday, technicians with Toyota and the National Highway Traffic Safety Administration failed to duplicate the same experience that Sikes described, according to the memo written by the Republican staff of the House Committee on Oversight and Government Reform. One congressional staff member observed the investigation of Sikes' Prius.
"Every time the technician placed the gas pedal to the floor and the brake pedal to the floor the engine shut off and the car immediately started to slow down," the memo said.
Also, the Prius is designed to shut down if the brakes are applied while the gas pedal is pressed to the floor. If it doesn't, the engine would "completely seize," according to the report that cited Toyota's "residential Hybrid expert."
"It does not appear to be feasibly possible, both electronically and mechanically that his gas pedal was stuck to the floor and he was slamming on the brake at the same time," according to the memo.
The memo did say that investigators found the front brake pads were spent.
"Visually checking the brake pads and rotor it was clearly visible that there was nothing left," it said.
But the wear was not consistent with the brakes being applied at full force for a long period, the Wall Street Journal reported Saturday, citing three people familiar with the probe, whom it did not name. The newspaper said the brakes may have been applied intermittently.
Toyota Corp. spokesman Mike Michels declined to confirm the Journal's report. He said the investigation was continuing and the company planned to release technical findings soon.
Jill Zuckman, spokeswoman for the U.S. Transportation Department that oversees the highway safety agency, said investigators "are still reviewing data and have not reached any conclusions."
The findings raise questions about "the credibility of Mr. Sikes' reporting of events," said Kurt Bardella, a spokesman for California Rep. Darrell Issa, the top Republican on the oversight committee.
Sikes could not be reached to comment. However, his wife, Patty Sikes, said he stands by his story.
"Everyone can just leave us alone," she said. "Jim didn't get hurt. There's no intent at all to sue Toyota. If any good can come out of this, maybe they can find out what happened so other people don't get killed."
Mrs. Sikes said the couple's lives have been turned upside down since Monday and they are getting death threats.
"We're just fed up with all of it," she said. "Our careers are ruined and life is just not good anymore."
Monday's incident appeared to be another blow to Toyota, which has had to fend off intense public backlash over safety after recalls of some 8.5 million vehicles worldwide — more than 6 million in the United States — because of acceleration and floor mat problems in multiple models and braking issues in the Prius. Regulators have linked 52 deaths to crashes allegedly caused by accelerator problems.
Sikes called 911 from the freeway on Monday and reported that his gas pedal was stuck. In two calls that spanned 23 minutes, a dispatcher repeatedly told him to throw the car into neutral and turn it off. Sikes later said he had put down the phone to keep both hands on the wheel and was afraid the car would flip if he put it in neutral at such high speed.
The officer eventually pulled alongside the car and told Sikes over a loudspeaker to push the brake pedal to the floor and apply the emergency brake.
Once the car slowed to 50 mph, Sikes shut off the engine, the officer said.
The congressional memo obtained by the AP describes a series of tests conducted by Toyota and the NHTSA on Wednesday and Thursday. A full diagnostics was conducted, followed an inspection of the brakes and a test drive. Investigators also compared the Sikes vehicle to a 2008 Prius provided by a Toyota dealership.
NHTSA told congressional staff that the results "were the same on both vehicles and within the manufactures specifications," according to the memo.
Following the tests, NHTSA paid Sikes $2,500 for the gas pedal, throttle body and the two computers from his vehicle, the memo said.
Drivers of two other Toyota vehicles that crashed last week said those incidents also resulted from the vehicles accelerating suddenly.
NHTSA is sending experts to a New York City suburb where the driver of a 2005 Prius said she crashed into a stone wall Monday after the car accelerated on its own.
And in Fort Wayne, Indiana, the driver of a 2007 Lexus said it careened through a parking lot and crashed into a light pole Thursday after its accelerator suddenly dropped to the floor. That car was the subject of a floor mat recall. Driver Myrna Cook of Paulding, Ohio, said it had been repaired.
Thomas reported from Washington, D.C.