In the end the 2009 elections in North Carolina told us very little about 2010.

There were good signs for Republicans:

-Energized conservatives turned out in large numbers for the Wake County School Board races, electing all of their candidates and defeating an incumbent Democratic Raleigh City Councilman in the process.

-Defeated Democratic Mayor Yvonne Johnson in Greensboro, the first incumbent ever to lose that office. Johnson’s loss is the continuation of Republican gains on the Greensboro City Council that began in 2007.

But there were also good signs for Democrats:

-Anthony Foxx turned out more Obama wave voters in the Charlotte Mayoral race than we had anticipated, pushing him over the top and bringing David Howard as a third Democratic City Councilman along with him. The lesson there is that the new voters will come back out- with a good candidate. Foxx was a good candidate. Creigh Deeds in Virginia and Jon Corzine in New Jersey were not.

-Democrats swept the Asheville City Council race, dispatching controversial conservative and 2008 Republican Congressional nominee Carl Mumpower.

Ultimately these races were decided by local issues and the strengths of the candidates involved. It was a good night for the GOP nationally but the lesson in North Carolina is that if Democrats have good candidates who run effective campaigns they may be able to overcome the national tide.

WASHINGTON  – Top House Democrats sought to minimize the impact of a near-certain missed deadline for health care legislation on Tuesday as the leadership struggled to ease the concerns of rank-and-file critics.

“I’m disappointed of course because I really hoped that we could have gotten a bill out of here by the end of this month,” said Rep. Charles Rangel, D-N.Y., and chairman of one of the three committees at work on the measure.

“The issue is critical. Whether we do it at the end of July or not, I don’t think that’s critical except the perception in terms that the Congress didn’t respond to the request of the president.”

President Barack Obama had asked Congress to advance legislation through both houses by the time lawmakers leave on a monthlong summer vacation, a plea that now appears unlikely to be met.

Obama has worked intensively to reassure the public about his health care proposals at a time when Republicans have stepped up their criticism and polls suggest a leveling in public support. Making his pitch to a crucial constituency, Obama went to the headquarters of AARP, the huge advocacy group for seniors, for a town-hall style event.

“Sometimes I get a little frustrated because this is one of those situations where it is so obvious that the system we have isn’t working well for too many people and that we could just be doing better,” Obama said to close the hourlong question-and-answer session. “We got to have the courage to be willing to change things.”

The president looked to ease seniors’ concerns about changes to care, costs and other issues.

“The costs of doing nothing are trillions of dollars in costs over the next couple of decades – trillions, not billions – but trillions of dollars in costs without anybody getting any better care,” Obama said. “Now, here’s the problem, that in order for us to save money, in some cases, we’ve got to spend some money up front.”

Among the problems facing Speaker Nancy Pelosi and the House leadership is a rebellious group of conservative and moderate Democrats demanding changes in legislation as the price for voting it out of the House Energy and Commerce Committee.

The fiscally conservative Blue Dogs were at odds with the leadership over setting rates for the payments to doctors and other health care providers under a proposed government-run health plan that would compete with private insurance. The House bill models the payments based on Medicare, but Blue Dogs want a negotiated rate similar to private insurance.

“We’re not ready to support a bill yet,” said Rep. Baron Hill, D-Ind., a member of the Blue Dog group, who added: “We’ll get there. We are going to pass a health care bill, whether it’s now or in the fall remains to be seen.”

Without the backing of the 52-member Blue Dogs, it would be difficult for Democratic leaders to pass a bill, especially since no Republican supports the legislation.

After weeks of secretive talks, three Democrats and three Republicans on the Senate Finance Committee were edging closer to a compromise that excludes a requirement many congressional Democrats seek for large businesses to offer coverage to their workers. Nor would there be a provision for a government insurance option, despite Obama’s support for such a plan, officials said.

The Finance senators were considering a tax of as much as 35 percent on very high-cost insurance policies, part of an attempt to rein in rapid escalation of costs. Also likely to be included in any deal was creation of a commission charged with slowing the growth of Medicare.

Obama has outlined two broad goals for legislation he is struggling to win from Congress: expansion of health insurance coverage to millions who lack it, and controlling costs.

The president’s top domestic priority has suffered numerous setbacks in recent weeks and a Senate vote has been postponed until September. Administration and Democratic leaders hope to show significant progress before lawmakers begin their monthlong August recess.

In the Senate, officials speaking on condition of anonymity because they were not authorized to discuss private negotiations said any legislation that emerges from the talks is expected to provide for a nonprofit cooperative to sell insurance in competition with private industry, rather than giving the federal government a role in the marketplace.

Obama and numerous Democrats in Congress have called for a government option to provide competition to private companies and hold down costs, and the House bill includes one – another concern for the Blue Dogs.

Officials also said a bipartisan compromise in the Senate would not subject large companies to a penalty if they declined to offer coverage to their workers. Instead, these businesses would be required to reimburse the government for part or all of any federal subsidies designed to help lower-income employees obtain insurance on their own.

The legislation in the House includes both a penalty and a requirement for large companies to share in the cost of covering employees.

RALEIGH, N.C.  – Democratic leaders at the General Assembly still weren’t on the same page on taxes Monday night as lawmakers tried to regroup after Gov. Beverly Perdue balked on their revenue deal.

House Democrats want to get back to the bargaining table on taxes with Senate Democrats as soon as possible by modifying a $982 million tax package hammered out with the Senate last week, rather than start from scratch.

Perdue rattled fellow Democrats when she announced last Thursday she wouldn’t accept the plan because it contained a 2 percent income tax surcharge paid on all wage earners with tax bills, not just the wealthiest.

House Speaker Joe Hackney, D-Orange, said his chamber’s preferred option is “try to see if we can resurrect that (plan) in some way.”

Working out a tax plan nearly all Democrats and Perdue can support is a key element in passing a permanent two-year state government budget that’s already four weeks late.

“We’re going to present the Senate with a new proposal and try to be flexible and try to figure out something so we can get this thing finished up,” Hackney told reporters.

But Senate leaders seemed content with going their own way – for now – by seeking to revive their own plan to overhaul the tax system that would expand dramatically the number of services subject to the sales tax, while reducing tax rates overall.

A bipartisan coalition of business and former government leaders have pushed the idea for years as a way to tap into a tax base that has shifted from manufacturing to services.

The Senate Finance Committee will meet Tuesday to talk about “why we really need to fix the tax system rather than raise just a lot of taxes,” said Sen. Dan Clodfelter, D-Mecklenburg, one of the architects of the overhaul plan.

Hackney said it’s too late in the legislative session to work on such a dramatic change to the tax system, but Clodfelter said it was the House that had delayed discussions.

“We’ve been waiting for the House folks to sort of pick up the challenge with us,” he said. “If it’s late, it’s because we’ve been waiting on them.”

The $982 million package agreed to by legislative Democrats, who have the majority in both chambers, also contained a one-cent increase in the sales tax and higher taxes for cigarettes and alcohol.

RALEIGH, N.C.  – House and Senate Democrats in North Carolina have signed off on a plan that would raise nearly $1 billion in taxes and help them reach an agreement on the state budget very soon.

House Speaker Joe Hackney said Wednesday fellow Democrats in his chamber are ready to support the deal reached with Senate counterparts. Democrats in both chambers held separate caucus meetings to discuss the $982 million plan.

The deal would raise the sales tax rate by a penny, add an extra 2 percent onto income tax bills and increase the cost of a pack of cigarettes by 10 cents. Alcohol taxes also would go up.

Hackney said a family making between $30,000 to $60,000 would see their tax bill go up by $66 a year under the deal.

Gov. Beverly Perdue still isn’t satisfied with the state budget and suggested more money is needed for public schools. She said school starts back in about a month and education leaders still don’t know how much money to expect for their classrooms.

Perdue’s written statement didn’t specifically mention a plan hammered out by House and Senate Democrats to raise nearly $1 billion in new taxes. The governor has said she wants more revenue.

Perdue told legislators to “find a way to protect public schools and the core services of safety and public health, period.”

A look at $982M tax plan agreed to by NC Democrats
A glance at the tax package tentatively agreed to Wednesday by North Carolina House and Senate Democrats that would raise $982 million during the 2009-10 fiscal year, with the amount raised by each provision:

- 1 percentage point increase in sales tax, raising rate most consumers pay to 7.75 percent: $803.5 million.
- 2 percent surcharge on individual income tax bills: $197 million.
- 2 percent surcharge on corporate income tax bills: $15.4 million.
- Applying sales tax to digital items purchased online and
transactions involving other Internet sales: $8.4 million.

- Increasing beer excise tax by about 5 cents per six-pack: $12.6 million.
- Increasing liquor excise tax by 5 percent: $20.1 million.
- Increasing wine excise tax by 4 cents per bottle: $2.9 million.
- Raising cigarette tax by 10 cents per pack to 45 cents: $33.3million.
- Increasing excise tax on cigars, smokeless tobacco and other tobacco products by 2.8 percent: $5 million.

The state will lose $116.3 million as it conforms state revenue law to federal law that exempts the first $2,400 of unemployment benefits from state taxes during 2009 as well as other changes.

The same plan would generate $1.32 billion in the 2010-11 fiscal year.

WASHINGTON  – House Democrats narrowly won a key test vote Friday on sweeping legislation to combat global warming and usher in a new era of cleaner energy. Republicans said the bill included “the largest tax increase in American history.”

The vote was 217-205 to advance the White House-backed legislation to the floor, and 30 Democrats defected, a reflection of the controversy the bill sparked.

The legislation would impose limits for the first time on carbon dioxide and other greenhouse gas pollution from power plants, factories and refineries. It also would force a shift from coal and other fossil fuels to renewable and more efficient forms of energy. Supporters and opponents agreed the result would be higher energy costs, but disagreed widely on the impact on consumers.

President Barack Obama has made the measure a top priority of his first year in office. The president, along with White House aides and House Democratic leaders, scrambled for the votes to assure passage. Speaker Nancy Pelosi, D-Calif., has pledged to get the legislation passed before lawmakers leave on their July 4 vacation.

The Senate has yet to act on the measure, and a major struggle is expected.

In the House, the bill’s fate depended on the decisions of a few dozen fence-sitting Democrats, mainly conservatives and moderates from contested districts who feared the political ramifications of siding with the White House and their leadership on the measure.

Democrats left little or nothing to chance. Rep. Ellen Tauscher, D-Calif., confirmed by the Senate on Thursday to an administration post, put off her resignation from Congress until after the final vote on the climate change bill.

“The bill contains provisions to protect consumers, keep costs low, help sensitive industries transition to a clean energy economy and promote domestic emission reduction efforts,” the White House in a statement of support for the legislation.

Republicans saw it differently.

This “amounts to the largest tax increase in American history under the guise of climate change,” said Rep. Mike Pence, R-Ind.

While the bill would impose a “cap-and-trade” system that would force higher energy costs, Republicans for weeks have branded it an energy tax on every American.

But Rep. Jim McGovern, D-Mass., said there was a “moral imperative to be good stewards of the earth.”

The legislation, totaling about 1,200 pages, would require the U.S. to reduce carbon dioxide and other greenhouse gas emissions by 17 percent from 2005 levels by 2020 and about 80 percent by the next century.

U.S. carbon dioxide emissions from the burning of fossil fuels are rising at about 1 percent a year and are predicted to continue increasing without mandatory caps.

Under the bill, the government would limit heat-trapping pollution from factories, refineries and power plants. It would distribute pollution allowances that could be bought and sold, depending on whether a facility exceeds the cap or makes greater pollution cuts than are required.

Obama on Thursday called it “a vote of historic proportions … that will open the door to a clean energy economy” and green jobs. “It will create millions of new jobs,” Pelosi insisted.

Both Obama and Pelosi preferred to focus on the economic issues rather than on what environmentalists view as the urgency of reducing carbon emissions blamed for global warming.

The Rust Belt coal-state Democrats who have been sitting on the fence worry about how to explain their vote for higher energy prices to people back home – and how the vote might play out in elections next year.

Republicans have been quick to exploit those concerns.

“Democratic leaders are poised to march many moderate Democrats over a cliff … by forcing them to vote for a national energy tax that is unpopular throughout the heartland,” Republican leader John Boehner of Ohio said.

There was widespread agreement that under this cap-and-trade system, the cost of energy would almost certainly increase. But Democrats argued that much of the impact on taxpayers would be offset by other provisions in the bill. Low-income consumers would qualify for credits and rebates to cushion the impact on their energy bills.

Two reports issued this week – one from the nonpartisan Congressional Budget Office and the other from the Environmental Protection Agency – seemed to support that argument.

The CBO analysis estimated that the bill would cost an average household $175 a year; the EPA put it at between $80 and $110 a year.

Republicans questioned the validity of the CBO study and noted that even that analysis showed actual energy production costs increasing $770 per household. Industry groups have cited other studies showing much higher cost to the economy and to individuals.

RALEIGH, N.C. – House Democratic leaders took criticism from both within and outside their party Tuesday for their roughly $18 billion budget proposal for state government and a tax package that would raise revenues at the cash register, online and every April 15.

The chamber’s two largest committees debated the two-year spending and tax plans that are seeking to close a more than $4 billion budget gap for the fiscal year starting July 1. The additional taxes – which include higher rates on sales taxes, income taxes and alcohol – would generate more than $815 million next year.

House Democrats were still aiming to get both the budget and related tax changes approved by the end of the week.

“This is the least painful thing that we could come up with,” Rep. Pryor Gibson, D-Anson, co-chairman of the House Finance Committee, said of the tax plan. “There’s no pride in this document.”

Under the plan, the sales tax rate most consumers pay would rise from 6.75 percent to 7 percent and be expanded to cover warranties and repairs. Two new income tax brackets would be created for the highest wage earners. A couple making $400,000, for example, would pay an additional $1,000 in income taxes.

Business taxes also would change, with more firms having to pay franchise taxes and corporations filing tax returns differently because the state believes they are hiding profits in out-of-state subsidiaries.

Both Republicans and some Democrats complained the taxes would discourage companies from setting up operations in North Carolina and hurt citizens who are already struggling to make it as the state’s jobless rate nears 11 percent.

“We are mandating cuts in the profits of small businesses and workers across this state,” said Rep. Thom Tillis, R-Mecklenburg. “You are absolutely through these tax increases going to cut out some of the very things that we need to happen to get this economy going on the right track.”

House Democrats wanted the finance committee to vote on the tax package and the House Appropriations Committee on the budget later Tuesday. The tax plan would be used to soften what lawmakers and public service advocates called some of the more onerous cuts in education, health care and courts and prison systems and probably save jobs.

For example, a provision to increase class sizes in public schools by two students next year and three the following year would exempt classes in kindergarten through third grade, saving almost 2,600 teacher positions next fall, according to legislative staff.

“Without the package, there can be no restoration of the cuts,” said Rep. Paul Luebke, D-Durham, the chief architect of the tax plan.

The taxes, however, only would account for 20 percent of the current spending reductions – angering some Democrats who want more taxes to reverse more cuts. The $17.8 billion budget plan could still eliminate thousands of vacant and filled state positions.

“This plan is weak and it is not bold and not aggressive enough,” said Rep. Earl Jones, D-Guilford, who said he would vote against it. “It does not provide a real recovery.”

The tax package was designed to generate $940 million, but the finance committee trimmed it by eliminating a proposed 25-cent-per-pack increase in the state cigarette tax, which means the tax would remain at the current 35 cents.

Rep. Van Braxton, D-Lenoir, the amendment sponsor, said the tobacco industry already has been hit enough this year by a federal cigarette tax increase and a ban on smoking in restaurants and bars.

Still, Braxton said he and other conservative Democrats are having a hard time deciding whether they can live with higher taxes, deeper spending cuts, or a little of both. He said he may not be willing to vote for the budget, which is scheduled to come to the floor next week.

“Right now, there’s not enough consensus,” Braxton said.

The uncertainty doesn’t bode well for House Democrats, who need 61 of their 68 members to vote for the budget and taxes to get a majority, since no Republicans are likely to vote for new taxes. Eliminating the cigarette tax increase may persuade more Democrats from tobacco-growing areas to accept the deal.

In addition to the taxes and other fees, the House closes a budget gap with $2.2 billion in cuts as well as $1.3 billion in federal stimulus money, said House Majority Leader Hugh Holliman, D-Davidson.

The Senate already approved a budget plan in April that called for raising $500 million more taxes. But that was before lawmakers found out that tax collections fell dramatically this spring, requiring the House to seek additional reductions and taxes.

Democrats in both chambers, along with input from Gov. Beverly Perdue’s office, will negotiate a final budget bill this summer for Perdue to sign into law.

WASHINGTON – The White House scrambled Wednesday to get Democrats behind a unified message of affordability and choice on health legislation amid concerns that Republicans could scare the public with images of a health care system run by bureaucrats.

President Barack Obama used his bully pulpit for the third straight day to reinforce his commitment to reshaping the nation’s health care system to bring down costs and extend coverage to 50 million uninsured people.

At his side, House Speaker Nancy Pelosi reiterated her pledge to bring a health care overhaul bill to the House floor before August.

The White House dispatched top political adviser David Axelrod to Capitol Hill to meet behind closed doors with Senate Democrats on selling health care reform to voters.

Senators emerged from the meeting in agreement that messaging was key. Affordability and choice would be emphasized. The issue of coverage for the uninsured would be tied to affordability for all. The message, for example, would be that uninsured people drive up costs when they go to emergency rooms for routine care.

“Message is important,” Sen. Ben Nelson, D-Neb., told reporters after the Axelrod meeting. “How you express things. Whether it’s ‘universal’ or ‘everybody gets coverage.”‘

Last week political strategist Frank Luntz gave Republicans detailed advice on how to attack the Democrats’ health plan, even though it doesn’t yet exist in anything approaching final form.

Luntz’s advice included the use of lines like “a committee of Washington bureaucrats will establish the standard of care for all Americans.”

Luntz’s memo to Republicans served as “an interesting catalyst for us,” said Sen. Dick Durbin, D-Ill., the No. 2 Senate Democrat.

“This is an effort to coordinate our messaging so we present a health care reform effort that the American people trust,” Durbin said.

Sen. Evan Bayh, D-Ind., said, “There was some unease that we didn’t have a strategy so (Axelrod) was coming up to reassure senators that they do have a strategy.”

As part of that strategy the White House has streamlined its health reform goals, repackaging eight principles Obama outlined in February into three that he touts now: lowering costs, giving people more choices in health coverage and providing affordable care for all).

Obama and his congressional supporters want to avoid the mistakes that President Bill Clinton and his wife, Hillary Rodham Clinton, made during the 1990s when their health care bill failed after opponents defined it in a way that caused voters to fear they might lose the health coverage they already had.

Obama appeared at the White House on Monday with health industry officials who once opposed an overhaul to proclaim their commitment to reining in their own costs. On Tuesday, it was a meeting with business leaders to hear their health strategies for their employees.

But Tuesday also saw the release of a report showing looming deficits in the Medicare government health insurance program for the elderly – providing Republicans fresh ammunition to attack Obama’s health care goals as too costly amid ballooning government spending and deficits.

Obama was quick to address such criticism Wednesday.

“We’ve had a lot of discussions in this town about deficits, and people across the political spectrum like to throw barbs back and forth about debt and deficits,” the president said.

“The fact of the matter is the most significant driver by far of our long-term debt and our long-term deficits is ever-escalating health care costs,” he said. “And if we don’t reform how health care is delivered in this country, then we are not going to be able to get a handle on that.”

Pelosi voiced the same message.

“Health care reform is entitlement reform, and this is about cost – taking down the cost of health care to the Americans, to our economy and to our budget,” she said after she met with Obama along with the chairmen of the three House committees with jurisdiction over health care.

But Democrats are also confronting divisions in their own party. Hundreds of nurses swarmed Capitol Hill on Wednesday to call for “single payer” – or government-run – health care, and demand “no” votes from liberal lawmakers on anything falling short. Congressional leaders on health care have taken single payer off the table as politically impractical.

WASHINGTON  – Congressional Democrats pushed to wrap up negotiations on a budget plan that would help President Barack Obama’s ambitious goal of overhauling the health care system.

Negotiators from the House and Senate met Monday, and Senate Budget Committee Chairman Kent Conrad, D-N.D., confirmed details of a tentative pact reached last week that would prevent Senate Republicans from delaying or blocking Obama’s plan to vastly expand government-subsidized health care.

The $3.5 trillion plan for the budget year starting Oct. 1 embraces several of Obama’s key goals, including health care reform, funds for domestic programs and clean energy, and a tax increase for individuals making more than $200,000 a year or couples making more than $250,000.

But the plan would allow Obama’s signature $400 tax cut for most workers to expire at the end of next year. Even after squeezing the defense and war budgets to levels that are probably unrealistic, the plan would cause a deficit of $523 billion in five years.

“I think this is a good budget,” Conrad said. But, he added, “Much more will have to be done to get us on a more sustainable course,” including slowing the growth of benefit programs like Medicare and overhauling the tax code.

The plan would patch the alternative minimum tax for three years to prevent more than 20 million taxpayers from getting socked with increases averaging $2,000 or so. The estate tax would be kept at current levels and allow for estates up to $7 million to be exempt from the tax with a 45 percent rate applying to inheritances above that.

It would cut Obama’s request of about $50 billion worth of increases for non-defense agency operating budgets by about $10 billion, lowering the increases from 10 percent on average to 8 percent.

Under Capitol Hill’s arcane rules, the annual congressional budget produces an outline for follow-up tax and spending legislation. Most importantly, the measure would allow Obama’s health plan to pass the Senate by a simple majority instead of the 60 votes that are needed for plenty of other legislation.

Democrats and independent allies control 58 Senate seats.

Democrats hope the House will adopt the budget on Tuesday and the Senate on Wednesday, which marks Obama’s 100 days in office.

Obama and his Democratic allies say they still want support from Republicans for health care legislation but need the option of expedited action in case the debate becomes overly partisan.

“For this bipartisan process to take root, Republicans must demonstrate a sincere interest in legislating,” Senate Majority Leader Harry Reid, D-Nev., wrote in a letter Monday to GOP Leader Mitch McConnell of Kentucky. “Rather than just saying no, you must be willing to offer concrete and constructive proposals.”

The fast-track rules also would apply to Obama’s plan to eliminate lender subsidies on banks and other lenders presently participating in the federal student loan program. Direct lending by the government would replace the program, with the savings dedicated to boosting Pell Grants for lower-income college students.

While handing Obama a victory, there is still an extraordinary amount of work before Obama’s vision of health care reform becomes a reality, including raising taxes and cutting spending to generate $1 trillion or more over the next decade to fund the health care initiative.

The budget plan also anticipates the expiration of former President George W. Bush’s tax cuts on wealthier people’s income and investments at the end of next year. But it ignores Obama’s calls for raising taxes to help pay for his health care initiative by reducing the benefits wealthier people take on itemizeddeductions like charitable gifts and mortgage interest.

RALEIGH — Republican Sen. Richard Burr says he has little doubt that this is the calm before the storm and that next year North Carolina once again will be the focus of a national battle for control of the U.S Senate.