Obama admin. asks judge to clarify health ruling (AP)

PENSACOLA, Fla. – The Justice Department asked a federal judge in Florida on Thursday to tell states that they must continue to enact the Obama administration's health care overhaul despite the judge's ruling that the law is unconstitutional.
In a motion to clarify, administration attorneys asked U.S. District Judge Roger Vinson to make clear that states cannot ignore the new health care laws while his ruling is being appealed.
At stake, according to the government's motion, are provisions of the new law that will create chaos if ignored by the states.
Those provisions include 2011 changes in Medicare payment rates. Delaying those changes "could cause major delays and errors in the payment of the roughly 100 million Medicare claims processed each month," the motion states.
Florida and 25 other states filed the lawsuit that said Congress exceeded its authority by requiring all citizens to purchase health insurance or face tax penalties.
Vinson agreed, ruling on Jan. 31 that President Barack Obama's entire health care overhaul law is unconstitutional. The broad challenge seems certain to be resolved only by the Supreme Court.
He declared the law "a plain case of judicial overreaching." Some states, citing Vinson's ruling, have refused to cooperate with the health care law.
The Justice Department in effect is saying in its filing that it does not need to argue that the judge temporarily suspend his ruling.
The administration says that even with it, all states in the lawsuit already have an obligation to comply with all the provisions of the Affordable Care Act while the case is being appealed.
In his original opinion, the judge said otherwise, arguing that he did not need to issue an order stopping the law from being implemented because he declared it unconstitutional.
"We believe it is important to put to rest any doubts about the ability of states and other parties to continue to implement these critical programs and consumer protections provided under this statute," said Justice Department spokeswoman Tracy Schmaler.
The issue is expected to be resolved by the Supreme Court. Two other U.S. district judges previously upheld the law, both Democratic appointees to the federal bench.
A Republican appointee in Virginia also ruled against the law. Vinson's ruling is considered the most sweeping against the health overhaul. He was appointed by Republican President Ronald Reagan.
E-mails to Florida Attorney General Pam Bondi's office were not immediately answered late Thursday.
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Obama Stimulus Success: Competition for Taxpayer Dollars (Time.com)

Workers erect a fence along the Lincoln Memorial Reflecting Pool, which is being restored using funds from the stimulus and other sources

Bill O'Leary / Washington Post / Getty Images

President Obama is often mocked for failing to change Washington, and clearly, his lofty campaign vision of post-partisan cooperation hasn't come true. But behind the scenes of the Beltway perpetual-conflict machine, Obama has made quiet progress toward reforming Washington — not politically, but bureaucratically. The most important reform, launched two years ago on Thursday, was tucked inside his unpopular stimulus package, and inside his new budget, he's trying to expand it.

The reform is a simple concept that certainly ought to be post-partisan: harnessing the power of competition in the spending of taxpayer dollars. Most federal programs spread cash around the country like peanut butter through rote check-the-boxes, everybody-wins formulas. Obama has tried to divert funds into competition-based, peer-reviewed, results-oriented grant programs that reward only the worthiest applications. The best known is the Race to the Top education program, but the stimulus hatched similar competitions in energy, transportation, housing, health care and broadband. And Obama's 2012 budget proposes new races to the top in everything from juvenile justice to workforce development to agricultural research. (See TIME's report card on President Obama's first year in office.)

At a Cabinet meeting on Thursday to commemorate the second anniversary of the stimulus, Vice President Joe Biden will release a lessons-learned report that includes a section titled "Competition Brings Results." (His aides gave me an exclusive copy of the report, titled "A New Way of Doing Business: How the Recovery Act Is Leading the Way to 21st Century Government," because I was already writing about the topic. And perhaps because I'm the only journalist in America who keeps writing nice things about the stimulus.) At the meeting, Education Secretary Arne Duncan, Energy Secretary Steven Chu and Transportation Secretary Ray LaHood are all expected to talk about the power of competition to promote good government, encourage innovation and get better returns on taxpayer investments. Biden is sure to gush about the stimulus' successes and the various ways the budget aims to build on them.

But their self-congratulation probably won't get much attention, because bureaucratic progress is a lot less dramatic than political warfare. And it's quite possible that the progress will end with the stimulus; in not-yet-post-partisan Washington, the only thing House Republicans consider more dead on arrival than an Obama budget initiative is an Obama budget initiative inspired by the stimulus.

Still, the $4.35 billion Race to the Top program does have some bipartisan support — Jeb Bush, George Will and Arnold Schwarzenegger love it — and it does show how competition can create laboratories for change. By setting clear goals and guidelines — the cash was reserved for states that carefully measured student and teacher performance, promoted charter schools and adopted other accountability-oriented reforms — the program encouraged 41 states to change laws or policies before the feds even spent a nickel. The application process also put a premium on cooperation among school leaders, teachers' unions, parent groups and elected officials. So the impact of a program that amounts to less than 1% of the education budget will extend well beyond the 12 states that won grants. The stimulus also financed a separate $650 million competition to identify innovative evidence-based school programs; it received more than 1,000 applications for 49 grants, a vivid illustration of pent-up demand for something different. (See pictures of homeschooling in America.)

Now Obama wants to pour another $1.4 billion into education competitions, including an Early Learning Challenge Fund to encourage reforms in early-childhood education, a First in the World program to improve outcomes in higher education and an additional Race to the Top targeting school districts instead of states. "By introducing competition, you get a much better bang for your buck," says Jared Bernstein, Biden's top economic adviser. "You can't do it with every federal program, but it's one way to reinvent government for the 21st century."

There were grant competitions scattered all over the stimulus, and almost all of them were dramatically oversubscribed. A $2 billion program seeking innovative approaches to stabilizing foreclosure-ravaged neighborhoods received $15 billion worth of applications. Obama's $8 billion high-speed rail initiative received $55 billion worth of applications. The Department of Energy received an astonishing 3,700 responses to its solicitation for radical blue-sky ideas that would transform the clean-energy landscape if they worked; only 37 received first-round funding. But the department's seal of approval apparently meant something to private funders; a half-dozen of those projects have already attracted additional venture capital.

Meanwhile, with $35 billion in stimulus cash to distribute through a slew of competitive programs — for everything from energy-efficiency programs to battery factories to advanced biorefineries — the Energy Department itself became the world's largest venture fund. To help evaluate the applications, Chu recruited more than 3,000 independent experts, who devoted about 50 person-years to the task. That kind of scrutiny isn't required for formula programs that distribute cash to all qualified applicants, much less earmarks that simply dump the money into congressional pet projects. (Watch TIME's video "Q&A with Energy Secretary Steven Chu.")

Obama's budget includes $100 million for a Race to Green competition for innovative state and local building codes, and $200 million for a similar race for communities that invest in electric vehicles and charging stations. There's $380 million for a Workforce Innovation Fund to reward successful approaches to job training, and $120 million for "a new performance-based, Race to the Top–style Juvenile Justice System Incentive Grant Program." And there's $32 billion for competitive transportation grants designed to promote safety, livability and innovative approaches to reducing congestion, along with a $30 billion national infrastructure bank that would provide merit-based loans and grants.

It's hard to overstate how radical this approach is, especially in the world of transportation. Aside from earmarks, almost all transportation funding is formula-based, where every state is entitled to a slice, and any project is acceptable as long as it fits into a neat silo (highway, airport, etc.) and provides all the necessary paperwork (traffic studies, minority hiring plans, etc.). It's nobody's job to ask whether the project actually makes any sense or serves any national purpose. But the stimulus included $1.5 billion in competitive grants for major projects that wouldn't necessarily fit into a neat stovepipe but would provide significant economic and environmental benefits, from public-private partnerships to expand freight-rail capacity in seven states to new streetcars in Tucson, Ariz., Dallas and New Orleans to a green-themed revitalization of a tough Kansas City neighborhood.

The Department of Transportation was inundated with nearly 1,400 applications for its first 51 grants. And DOT officials say the program galvanized their bureaucracy; it turns out that civil servants work a lot harder when they're assigned to help evaluate whether projects would be good for America rather than whether projects have submitted all their paperwork. "Republicans ought to love this stuff," said one senior Administration official who requested anonymity. "It's evidence-based, it's merit-based, it's results-based. It's not government telling you what to do; it's setting the goals and letting the applicants figure out how to get there."

There could be legitimate nonpartisan concerns about the Race-to-the-Top-ification of federal spending. Rigid formulas provide certainty and a measure of equality; competition introduces subjectivity and opportunities for political shenanigans. Rigid formulas are determined by Congress; competition introduces flexibility and additional power for the Executive Branch. And some programs don't lend themselves to competition; formulas work just fine for Social Security benefits and food stamps. (Comment on this story.)

But legitimate nonpartisan concerns won't drive the debate over Obama's budget, especially where stimulus-related initiatives are concerned. At his Cabinet meeting on Thursday, Biden will present the good news of the Recovery Act, which helped avoid a depression; reduced the unemployment rate by 2%; cut taxes for 95% of Americans; bailed out the states to prevent mass layoffs; funded more than 75,000 projects to upgrade roads, parks, sewers and just about everything else; and made unprecedented investments in renewable energy, health-information technology, broadband, the smart grid and much, much more — with no earmarks and virtually no fraud. But to Washington Republicans, it's the "failed stimulus." That was their story in 2009, when they opposed it en masse, and after their sweeping victories in November, it's hard to see why they would want to change it. Anyway, most Americans believe it.

Obama wasn't the first presidential candidate to promise a new era of bipartisanship; his polarizing predecessor, after all, was supposed to be a uniter, not a divider. But it's a silly promise to make, because your opponents can break it for you by refusing to cooperate. Washington is remarkably resistant to this kind of cultural change. On the other hand, bureaucratic change ought to be genuinely achievable, if only because the 24-hour cable yappers don't really care about bureaucracy and because the sillier aspects of government are obvious across party lines. Obama's stimulus did begin to usher in a new era of rationality through competition, in which you had to do more than just check the right boxes and extend your hand to qualify for a federal check.

But the most important competition took place in November, and Obama's team lost. It's possible to change Washington, but Washington can change back too.

See TIME's Pictures of the Week.

See the Cartoons of the Week.

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Obama to go to West Coast, visit Intel Corp. (AP)

WASHINGTON – President Barack Obama will travel to Oregon next week to visit Intel Corp., yet another step in the president's effort to draw attention to the role of education in preparing Americans for new high-tech jobs.

During the trip to Hillsboro, Ore., on Friday, Obama will tour Intel's semiconductor manufacturing facility with Intel CEO Paul Otellini. Intel has its own education program, including curriculum, competition and online resources to encourage studies in science, technology, engineering and math.

Otellini was among 20 business CEOs who met privately with Obama in December. The Intel executive has been a critic of Obama administration policies, saying they have created too much uncertainty for the business community. He told CNN in September that the policies had not resulted in either job growth of increased consumer confidence.

Since then, Obama has stressed the role of innovation as a key component of his job-creation plans.

Oregon is a solidly Democratic state. Its governor and two senators are Democrats and Obama won the state handily in 2008. Obama was last in Oregon in October, when he attended a rally for Democratic gubernatorial candidate John Kitzhaber, the eventual winner.

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Obama says budget will feature cuts, investment (AFP)

WASHINGTON (AFP) – US President Barack Obama said on Saturday he was determined to carry out budget cuts needed to improve America's balance sheet, but insisted on making key investments in the country's future.

The president unveils his spending blueprint on Monday, with White House officials saying it will freeze annual domestic spending for the next five years and help the United States reduce the budget deficit by more than $400 billion over the next decade.

"We?ve stripped down the budget by getting rid of waste," Obama said in his weekly radio address.

"For example, we?re getting rid of thousands of government-owned buildings that sit empty because they aren?t needed," the president explained.

"I?ve also proposed freezing salaries for hard-working government employees, because everyone has to do their part. And I?m going to make sure politics doesn?t add to our deficit, by vetoing any bill that contains earmarks."

But Obama said his administration was determined to continue making what he called "job-creating investments" in roads, high-speed speed trains, and broadband Internet connections.

He also emphasized the need of creating new industries like clean energy and biotechnology, improving schools and making college more affordable.

"So, after a decade of rising deficits, this budget asks Washington to live within its means, while at the same time investing in our future," the president stressed. "It cuts what we can?t afford to pay for what we cannot do without."

The comments came after the US Treasury Department reported Thursday that the budget deficit in January was $49.8 billion, a 16.8 percent rise from a year earlier but less than had been expected.

The number was encouraging as analysts had forecast a figure in the range of $59.5 billion.

Nevertheless, expenditures grew 11.3 percent year-on-year in January, faster than receipts, which increased only 10.2 percent.

It was the 28th consecutive month that Washington spent more than it took in in taxes.

Overall, the US national debt has now reached $14 trillion with a $1.5 trillion yearly government deficit.

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Obama likens budget to family pocketbook choices (AP)

WASHINGTON – Portraying his fiscal choices as kitchen table budgeting, President Barack Obama says he is making difficult cuts to allow needed spending increases in education, technology and basic infrastructure like roads and bridges.

In a broad preview of his administration's budget for fiscal 2012, Obama says the combination of cuts and new spending will result in an overall freeze in annual domestic spending for the next five years.

"This budget asks Washington to live within its means, while at the same time investing in our future," the president said Saturday in his weekly radio and Internet address. The White House plans to release his budget on Monday.

With public opinion turning against increased spending, Obama is making a concerted sales pitch to cast his initiatives as fiscally prudent. But the dual goal of taming deficits while adding dollars to selected projects comes as the government faces a projected $1.5 trillion deficit this budget year, which ends in September. Republicans are demanding greater deficit reduction efforts and members of the House GOP say they want to cut the current 2011 budget year by $61 billion.

Obama, in his address, recounted the struggles of a Missouri family — David and Brenda Breece — who have faced difficult financial times by living frugally so they can continue to pay for their daughter's college tuition.

"So Brenda and her husband know what they can do without," Obama said. "But they also know what investments are too important to sacrifice."

The White House projects that the five-year freeze will save $400 billion over 10 years. Cost-saving measures include a two-year freeze on wages for civilian federal workers. The budget also would make cuts in some cherished programs such as the Low-Income Home Energy Assistance Program, which could be trimmed in half — by about $2.5 billion. The Energy Department plans to propose cutting the Office of Fossil Energy by 45 percent, or $418 million.

The Pentagon's budget would see reductions of $78 billion.

Obama said the government also is getting rid of unused government-owned buildings and he said he would also save money by vetoing legislation that contains earmarks, congressionally inserted spending measures for special projects.

At the same time, Obama has proposed a series of new spending initiatives: Education Secretary Arne Duncan said Friday the administration is looking to spend on new early learning programs, on educational overhauls and on making college more affordable.

Obama also has a plan to raise $30 billion over 10 years by auctioning off space on the radio spectrum to commercial wireless carriers. The money would be used to develop a $10 billion national broadband network for public safety agencies and $5 billion for infrastructure to help rural areas access high-speed wireless.

And he wants to spend $53 billion over six years on high-speed rail.

"I'm proposing that we invest in what will do the most to grow the economy in the years to come," he said.

In the Republican address, Sen. Orrin Hatch, R-Utah, argued Obama's reduction plans are too timid.

"The president's proposal for a freeze in government spending might give the White House a nice talking point," he said. "But it is a totally inadequate solution to our nation's spending problems."

Hatch, who is facing re-election this year, is eager to display a tough line on fiscal issues to dissuade a strong tea party challenge like the one that defeated his former Utah colleague, Republican Sen. Bob Bennett.

Hatch called for an overhaul of the tax code, fewer regulations, the start of a debate about changing Social Security and Medicare, and new trade deals with South Korea, Panama and Colombia.

"The bottom line is we are a nation working on borrowed time; we have to make some significant changes in order to compete," he said.

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Online:

Obama address: www.whitehouse.gov

GOP address: http://www.youtube.com/gopweeklyaddress

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Online:

http://www.whitehouse.gov

http://www.youtube.com/gopweeklyaddress

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Obama makes sales pitch for his 2012 budget (Reuters)

WASHINGTON (Reuters) – President Barack Obama made a sales pitch on Saturday for his forthcoming fiscal year 2012 budget, pledging that it would help the United States "live within our means while investing in our future."

The budget, due to be unveiled on Monday, contains a mix of cost cuts and targeted spending to achieve Obama's twin goals of reducing the deficit and boosting U.S. competitiveness.

But Republicans, who control the House of Representatives, have balked at any spending increases and accused the Democratic president of not being serious about reining in the deficit, which is forecast to reach $1.48 trillion this fiscal year.

The 2012 fiscal year begins on October 1.

In his weekly radio and Internet address, Obama highlighted his plan to freeze non-security discretionary spending for five years, which the White House says will reduce the deficit by $400 billion over the next 10 years.

"We've stripped down the budget by getting rid of waste," he said in the address, adding that the government would get rid of thousands of empty buildings and freeze salaries on "hard-working government employees" as part of the push.

Obama said the budget proposes to invest in roads, high-speed trains, broadband Internet, clean energy and education. After a decade of rising deficits, Obama said, "I'm proposing a new budget that will help us live within our means while investing in our future," he said.

Republicans, who have a sales pitch of their own to make, said Obama's budget was not taking the deficit problem seriously enough.

"The president's proposal for a freeze in government spending might give the White House a nice talking point. But it is a totally inadequate solution to our nation's spending problems," Senator Orrin Hatch, the top Republican on the Senate Finance Committee, said in his party's weekly address.

"If the president's new budget simply freezes his last budget, he'll stifle job growth by continuing to spend too much, tax too much, and borrow too much."

(Editing by Will Dunham)

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Obama urges 'genuine democracy' in Egypt (AFP)

WASHINGTON (AFP) – US President Barack Obama has called on the now-ruling Egyptian military to ensure a transition towards "genuine democracy," saying that the people of Egypt had spoken.

Obama gave a statement Friday, soon after it emerged from a euphoric Cairo that President Hosni Mubarak, a 30-year US ally who America subtly helped push towards the exit, had resigned after days of raging street protests.

"The people of Egypt have spoken -- their voices have been heard and Egypt will never be the same," Obama said.

"Egyptians have made it clear that nothing less than genuine democracy will carry the day," Obama said, praising the military for safeguarding the state, but also calling on them to secure a credible political transition.

The US administration had struggled for days to find ways of making an impact on the 18-day crisis, as Mubarak had defied pressure to end his long authoritarian rule.

Obama had ratcheted up calls for a peaceful, swift transition to democracy, and on Friday pledged that the United States would stand with the people of Egypt -- one of America's staunchest allies and a recipient of some two billion dollars in annual aid.

"By stepping down, President Mubarak responded to the Egyptian peoples' hunger for change," Obama said in his brief statement.

On taking power Friday, the military moved quickly to reassure the citizens whose street revolt toppled Mubarak that it would respect the popular will.

And the White House called on the new authorities in Egypt to honor existing peace agreements with Israel.

"It is important the next government of Egypt recognize the accords that have been signed with the government of Israel," White House spokesman Robert Gibbs said.

Mubarak's hurried departure Friday -- a day after he said he would stay until September's elections -- will have brought relief in Washington, facing a dearth of options to force an end to the crisis.

But Mubarak's exit also posed searching questions about future US Middle East policy, with a possible power vacuum in Egypt.

Obama nevertheless hailed the toppling of the Arab strongman, brought down by two weeks of mass protests in Cairo's Tahrir Square, as a defining moment in world history.

"The word Tahrir means liberation. It's a word that speaks to that something in our souls that cries out for freedom," Obama said.

The president also drew parallels to other tumultuous world events, referring to the fall of the Berlin Wall, the Indonesian revolt against president Suharto, and Indian independence icon Mahatma Gandhi.

He called on the armed forces to ensure a political transition that was "credible in the eyes of the Egyptian people," warning of "difficult days ahead."

"Over the last few weeks, the wheel of history turned at a blinding pace, as the Egyptian people demanded their universal rights," he said.

And he emphasized the peaceful nature of the uprising.

"Egyptians have inspired us and they've done so by putting the lie to the idea that justice is best gained through violence," Obama said.

"For Egypt, it was the moral force of non-violence, not terrorism, not mindless killing, but non-violence, moral force, that bent the arc of history towards justice one more."

The Pentagon announced that the top US military commander will visit Israel and Jordan Sunday and Monday to reaffirm US support following the collapse of the Mubarak presidency.

Mike Mullen, Chairman of the Joint Chiefs of Staff, will begin his trip in Amman where he will meet with King Abdullah II and his Jordanian counterpart, Lieutenant General Meshaal Al-Zabn.

"He will discuss security issues of mutual concern and reassure both these key partners of the US military's commitment to that partnership," Pentagon spokesman Captain John Kirby said.

In Israel, Mullen will hold talks with Prime Minister Benjamin Netanyahu, President Shimon Peres and the country's military leaders.

US lawmakers on Friday were also weighing tighter controls on exports that can help repressive regimes cling to power.

"We continue to watch and have concerns about the misuse of any equipment that the United States provides or sells to another nation," said a spokesman for the House of Representatives Armed Services Committee, Josh Holly.

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