In The Headlines - Bailout Main Street Now -

Healthcare overhaul comes down to Pelosi and Obama

The bill's fate depends on whether the House speaker can land enough votes - and whether the president can take control of the debate, which Democrats say he has not done.

Reporting from Washington - The fate of healthcare legislation turns on the endgame skills of two Democrats who bring vastly different assets to the task: President Obama and House Speaker Nancy Pelosi.

Obama's signature ability to inspire fellow Democrats and Pelosi's well-honed ability to read their parochial needs will be tested as they tackle the job of finding the last stubborn votes for the healthcare bill.

The final push is giving Obama a chance to redeem himself among Democrats who have complained that he has been too detached from the nitty-gritty of crafting the healthcare bill. In recent weeks, he has taken control of the debate, giving his party a second chance after a string of setbacks.

And Pelosi, while notably lacking in Obama's public communications skills, has displayed her ability to corral votes in the Capitol's inner sanctums, which will be a crucial asset.

Under the Democrats' strategy, the House would pass the Senate's version of the bill. Then both chambers would approve changes under the budget reconciliation process, which could pass the Senate with a simple 51-vote majority. Democrats hope to finish by the end of the month.

Obama holds a weak grip on one of the traditional tools of presidential persuasion: promising to personally campaign for nervous Democrats. His recent record has not been encouraging; Democrats have lost elections in Virginia, New Jersey and Massachusetts despite his efforts.

Pelosi (D-San Francisco) will have less latitude to lure support by slipping in special benefits for key lawmakers and their districts. That kind of horse-trading has been discredited since the outrage over a special deal for Nebraska's Medicaid program in the Senate healthcare bill.

Not a single Republican vote is at hand -- as the Sunday talk shows underscored.

"What the American people would like us to do is not make this gargantuan mistake," Senate Republican leader Mitch McConnell of Kentucky said on ABC's "This Week." "Every election this fall will be a referendum on this bill."

Health and Human Services Secretary Kathleen Sebelius predicted it would pass, but probably without GOP support.

"I think the president would love to have Republican votes," she said on ABC. "We're hopeful that there will be Republican votes, but I'm not sure there will be."

Within the Democratic majority, Obama and Pelosi face the daunting task of swaying conservatives while not losing liberals who are disappointed with concessions already made.

"A lot of people feel they have been taken for granted," said Rep. Anthony Weiner (D-N.Y.), one of the disappointed liberals. "It doesn't take much to start a brush fire. You've got a lot of dry brush and cigarette butts dropping."

For months, as the healthcare legislation lumbered through Congress, many Democrats complained that Obama should have been more forceful and specific in his leadership. He did not open the process with a legislative proposal of his own, and declined to take an unequivocal position as Democrats split over what taxes to raise to pay for the bill and whether or not it should include a "public option" -- a government insurance program to compete with private companies.

That above-the-fray strategy began to change in January. Obama offered a comprehensive proposal in his own name and made high-profile gestures to Republicans. He endorsed the use of the reconciliation process and helped Democrats frame it not as a heavy-handed ploy but as a call for an up-or-down vote.

Last week, Obama summoned leaders of House Democratic liberal groups to the White House.

"He told us, 'This is not the end of the road. This is the beginning,' " said Rep. Lynn Woolsey (D-Petaluma), who added that she would support the bill.

Republicans are trying to make the impending vote as fearsome as possible, objecting to the reconciliation process and threatening dire political consequences for Democrats who face reelection in November.

"They're going to abuse the reconciliation rules," Sen. Orrin G. Hatch (R-Utah) said Sunday on NBC's "Meet the Press." The process has "never been used for such sweeping social legislation like this."

However, Republicans have used the process to pass major legislation, including welfare changes and President George W. Bush's tax cuts.

Read full article

Interest in buying state offices in California is building

The 24 buildings being offered, including two in L.A., are drawing global investors. The sale is also being criticized for the loss of long-term capital assets in favor of short-term gains.
Efforts to sell 24 state office buildings have drawn lots of interest from potential buyers -- as well as the ire of some former public officials who labored to get them built years ago in the belief that public ownership of the buildings would bring long-term financial benefits to taxpayers.

"This seems to be very shortsighted economics," said Richard Rowe, a retired executive of the Los Angeles Community Redevelopment Agency, after he heard about plans to sell the Ronald Reagan State Building in downtown Los Angeles and other offices to investors.

State officials last week began accepting bids on 24 office buildings on 11 sites in Los Angeles, Sacramento, San Francisco, Oakland and Santa Rosa.

Investors may buy the properties en masse or individually. Gov. Arnold Schwarzenegger and the Legislature approved the sale in June.

California officials hope to raise $2 billion to pay some of the cash-strapped state's long-term debt and help plug a deep hole in the state budget by selling the occupied buildings and then leasing space in them for at least 20 years. The plan is to pay off the bonds used to finance the buildings and put the remaining $660 million or so into the state general fund.

State officials say the planned sales are in the taxpayers' best interests.

"California's fiscal crisis requires the state to reassess its role in real estate and look for ways to generate immediate revenue and reduce future costs," said Ron Diedrich, acting director of the state's Department of General Services.

"This is exactly what Fortune 500 companies are doing around the world when their balance sheets are lacking -- looking internally for savings, shedding risks and cutting future costs," Diedrich said. "Sale-lease-back agreements are not unusual and can be exceedingly successful in raising needed cash."

Response from investors has been strong; Hundreds of potential buyers have registered to receive detailed information on the properties, said real estate broker Kevin Shannon of CB Richard Ellis, who is handling the sales for the state.

"The initial reaction to this offering has been overwhelming," Shannon said. "Interest is coming from all around the world."

The endeavor dismays some who helped put those buildings on the map.

"Everyone understands there are great cost pressures in Sacramento today," former state official Dan Rosenfeld said. "However, selling long-term capital assets to cover short-term operating losses is not a sustainable strategy."

Rosenfeld was the state's deputy director for real estate and buildings under Gov. Pete Wilson and oversaw the renovation of the Junipero Serra State Building that was completed in 1999. He is now a senior director in charge of economic development for Los Angeles County Supervisor Mark Ridley-Thomas.

The bonds the state plans to pay off are tax exempt with a low 4% interest rate, and it makes fiscal sense to keep them and reap the benefits -- such as not paying rent, Rosenfeld said. "God created tax-exempt financing for government buildings," he quipped.

Architect William Fain, whose Los Angeles firm Johnson Fain designed some of the buildings for sale, said the state should be wary of letting them go, especially in a down market.

"If they had sold these properties about three or four years ago it might have been a good deal," he said. "It's a fire sale at this point."

Corporate clients of the firm do sale-lease-back transactions sometimes, Fain acknowledged. "If the leases are reasonable and you can get a high price for a facility, it may be a very good business decision."

But state buildings belong to taxpayers and should probably stay in public hands, he said.

One of the men most responsible for construction of the state's downtown office buildings, Jerry Epstein, is skeptical about the move to sell them. Epstein, president of a little-known commission called the Los Angeles State Building Authority, has hired an attorney to review the state's plans.

"I have a fiduciary responsibility to the bondholders," he said, "to make sure the buildings are well maintained."