The Note: Special Attention on 2.7%

— -- WASHINGTON, March 24

NEWS SUMMARY
The pathos and drama of the Schiavo case continues to dominant the minds of America's political observers, but it appears that the nation is approaching the denouement.

But spread some of America's leading newspapers before you this morning, and you will see some serious rising action on the President's top domestic priority.

For whatever reason(s), on the day the trustees who oversee Social Security (and Medicare) delivered their report on the fiscal future, two key players spoke out in interviews -- the White House's National Economic Council director Allan Hubbard and the powerful chairman of the powerful Senate Budget Committee, Judd Gregg.

We have dealt with the phenomenon before in which (many) of you would rather read about pretty much anything than the nuances of Social Security policy and politics.

But this important debate -- with implications for the nation's retirement security, the 2006 elections, and President Bush's legislation momentum and legacy -- has taken some eye-popping turns.

So as we all wait for the Supreme Court's expected decision on Schiavo, go study these must-reads:

(a) the Wall Street Journal's Ip and Calmes on how the President might alter his personal accounts plan in a key way, and Sen. Gregg's extraordinary pronouncements.

(b) the Washington Post's Weisman on the dissent of the outside trustees on Medicare versus Social Security. LINK

(c) the New York Times' Rosenbaum on the disability portion of the program, and on Robert Pozen. LINK

(d) the Boston Globe's Kranish on conservative unrest cross-pressuring the White House to move the final plan more to the right. LINK

See the Social Security must-read section for more on all this.

The Supreme Court has the Schiavo case and a ruling could come at any time. Judge Greer in Tampa says he'll rule soon whether any of the new medical evidence he's seen is enough to allow the Florida Department of Children and Families to take custody of Terri Schiavo.

Gov. Jeb Bush still seems to have the eye of the tiger and steely determination on this matter.

It's a slow, cloudy day in Washington, and a balmy, sunny 83 in Crawford. Perfect for a President to clear the brush and not face the press at all.

The heavy public lifting is left to Vice, who is in Battle Creek, Michigan at a 10:30 am ET town hall meeting with Rep. Joe Schwarz, who until today hasn't signaled his strong support for the President's Social Security principles.

At 1:30 pm ET, Mr. Cheney and Rep. Melissa Hart, host a second town hall meeting in Pittsburgh.

The Federal Election Commission has given us our first look at new proposed rules for Internet political activity. The full commission will discuss the rulemaking draft today; final rules won't be cemented until months from now after a period of comment. See below for more.

Big Draw Ken Mehlman, the RNC chairman, continues his aggressive personal outreach to African Americans. He speaks today to a political science class at Virginia State College in Petersburg and has yet another event planned at Howard University. And today he also attends an Eric Cantor for Congress breakfast, hoping to help raise many thousands of dollars for the chief deputy whip's campaign account.

Rev. Al Shaprton has a 2:00 pm ET meeting with two FCC commissioners to talk about violent lyrics.

White House Chief of Staff Andrew Card guests on Charlie Rose tonight.

Social Security: the must-reads:
To again sum up yesterday's developments, in BBC headline style. (Hum the theme song as you read along.)

(a) The White House floats a variety of new ideas, such as a lower offset for private/personal accounts (perhaps 2.7 percent), the President's embrace of progressive indexing, and on-the-record vows to not reduce benefits for the disabled.

(b) Hubbard says Congress will pass Social Security legislation by August.

(c) Republican Judd Gregg of New Hampshire says he might go for a solvency fix over personal accounts.

(d) Gregg "criticized the White House for 'tactical mistakes' in not taking time to enlist Democratic support, dating back to the president's first term and his 2001 Commission to Strengthen Social Security."

(e) And Gregg said this amazing thing about the White House: "They chose to run the thing up the flagpole and then to stuff it down the throats of the Democrats." (Harry Reid couldn't have said it better himself.)

(f) Trustees say Social Security goes "broke" one year earlier, in 2041. (We add the quotation marks so we don't get spam from Josh Marshall's readers, and we're aware that the system still has money in it to pay about three-fourths of present benefit levels then.) Benefits exceed revenues in 2017, not 2018, the trustees project.

(g) Liberal bloggers pore through the data, looking for flawed assumptions, and finding some interesting things. LINK

(h) Economic and budget reporters notice that Medicare's fate is still more problematic and choose to emphasize that program's looming insolvency in their stories and charts. (Per the Wall Street Journal: "Syracuse University economist John Palmer, a public trustee since 2000, said that in that time, 'What's changed is Social Security has improved marginally and Medicare has gone in the tank.'")

From Rosenbaum in the Times: "In an interview at the White House on Wednesday, Allan B. Hubbard, chairman of the president's National Economic Council, insisted that Mr. Bush's plan did not envision any reduction in the Social Security benefits now received by the disabled. The administration has never been so explicit on this point." LINK

"Mr. Hubbard also stressed the favorable view the White House takes of an idea called 'progressive indexation' developed by Robert Pozen, an investment executive who served on Mr. Bush's advisory commission on Social Security in 2001. Mr. Pozen's proposal would give lower-income retirees an advantage in computing benefits over retirees who were better off."

"On the question of disability, Mr. Hubbard, the White House policy coordinator, went much further than anyone else in the White House in insisting that disabled workers would have no reduction in benefits under the president's plan, even if retirement benefits were cut."

The Wall Street Journal's Greg Ip and Jackie Calmes write that "the Bush administration is weighing a change in its proposal for private Social Security accounts that would make them more attractive to workers, though potentially more costly to the government."

"President Bush wants to let workers divert some payroll taxes to personal investment accounts in exchange for accepting lower Social Security benefits at retirement than workers who shun private accounts. The White House has said the formula for calculating benefit reductions would make private accounts a better deal for workers who choose them, as long as the stocks and bonds in the accounts earn at least 3% a year above inflation."

"The White House is reconsidering that formula, say people familiar with its deliberations. A lower number would give an account-holder a bigger benefit, thereby making the option more attractive to workers. National Economic Council director Allan Hubbard said in an interview yesterday that the administration is 'open-minded' about a lower percentage 'offset" than 3%.'"

The Washington Post's Jonathan Weisman leads with Medicare, Medicare, Medicare, with the independent trustees arguing that Medicare is in far worse shape than Social Security, having deteriorated since 2000 while Social Security has remained largely stable, and needs attention stat. Meanwhile, Treasury Secretary John Snow, HHS Secretary Mike Leavitt, and Labor Secretary Elaine Chao focused almost entirely on the portions of the report dealing with Social Security. LINK

"In the past five years, the date when Social Security would begin taking in less in taxes than it pays in benefits has actually slipped, from 2015 to 2017, the public trustees wrote, while the date of Social Security trust fund exhaustion has been pushed back from 2037 to 2041. Looking 75 years into the future, Social Security's cost, measured against the size of the economy, has also improved, from 6.8 percent of the gross domestic product projected in 2000 to 6.4 percent projected in yesterday's report."

"In contrast, Medicare's financial outlook has deteriorated on all fronts. The year [trustees] Saving and Palmer joined the board, Medicare's hospital insurance trust fund was projected to begin paying more in benefits than it collects in taxes in 2010. Instead, it reached that point last year. The point of trust fund exhaustion has moved up from 2025 to 2020."

"Total Medicare expenditures are expected to approach 14 percent of the economy in 75 years, nearly the total tax take today. That is nearly triple the cost of Medicare projected in 2000."

Democrats are sure to jump all over the fact that the two outside trustees claim to have been not invited to the press conference.

But even as the White House seems to be ALMOST negotiating with itself in some baby-step moves to the left, the private account devotees are pushing back.

President Bush's declaration that he'd be willing to consider benefit cuts or raising the cap on wages subject to Social Security tax is bringing arguments from conservatives that he's getting too far away from his main message of private accounts, writes the Boston Globe's Michael Kranish. Former House Speaker Newt Gingrish had some ominous words about how the Republican Party could be hurt by both solutions. LINK

Social Security and Medicare:
The Los Angeles Times' Joel Havemann looks at the ammunition both sides have drawn from the trustees' report. LINK

The Washington Post's Robert Samuelson argues that the Social Security debate isn't about "entitlements," but instead about a form of welfare, and the only way to deal with it properly, i.e., control the amount that government spends on retirement benefits, is to talk about benefit cuts. LINK

The Wall Street Journal's Christopher Cooper writes that even if Social Security reform doesn't pass, the President may reap a political benefit from his relentless campaigning.

"While pressing the case for changes in Social Security's structure, Mr. Bush and his aides have been reaching out to a range of constituencies Republicans have targeted in their effort to cement their national majority for the long term. For African-Americans such as Mr. Brandon, they argue that personal accounts offer a better deal; blacks' shorter life expectancy, the argument goes, means they collect traditional Social Security benefits for a shorter period and thus would help their families more with personal accounts they could leave to heirs."

Generations Together is touting a new poll of union members they say shows that the AFL-CIO is out of step with its members.

"In fact, nearly 60 percent of union members showed interest in creating a personal retirement account if given the option, according to the survey of 600 non-retired union members," according to a press release.

"'This survey clearly shows that union members have significantly different views on Social Security reform and on personal retirement accounts than do the leaders of their unions,' said Dr. Q. Whitfield Ayres, president of Ayres, McHenry & Associates, which conducted the survey. 'Union members believe Congress should act now to fix Social Security and a majority of union members want to start personal retirement accounts.'" http://www.generationstogether.com has more data on the poll.

GT president John J. Castellani writes to AFL-CIO President John J. Sweeney today: "I urge you to reconsider your opposition to fixing Social Security and to advocate what is in the best interests of your members, their children and their grandchildren."

We doubt it. The AFL has a major March 31 mobilization planned against financial services firms who are part of the Alliance for Worker Retirement Security.

The Los Angeles Times' Tom Hamburger previews the poll, which the unions are calling biased and unrepresentative of their members' views. Hamburger Notes that the results of the survey of 600 union members differs from independent polls -- just in case there was any confusion. LINK

Bob Novak says the Schiavo debate is as intense as anything he has seen in Washington in years, and writes about a dinner party, from which he correctly divines near unanimous elite media views of this case. LINK

Schiavo in the courts:
Some of the better "Schiavo Moves to SCOTUS" coverage:. LINK ; LINK ; LINK

President Bush and congressional leaders said Wednesday they've exhausted their options, writes the Chicago Tribune's Jeff Zeleny. LINK

The Washington Post's Manuel Roig-Franzia wraps the efforts by Florida Gov. Jeb Bush to intervene in the Schiavo case, threatening to bring the state's adult protective services in to intervene -- which a circuit judge stopped, and a measure defeated in the state Senate that aimed to prevent the removal of feeding tubes from vegetative patients. "Jeb Bush has spoken about the case repeatedly and emotionally. But his storied mastery of legislative arm-twisting failed Wednesday," Roig-Franzia writes. LINK

The St. Petersburg Times' David Karp has an in-depth look at who remembers what about what Terri Schiavo actually wanted. LINK

"The legal struggle over the fate of Terri Schiavo is exposing what some see as a credibility gap for the Bush administration, Republicans in Congress and social conservatives who want to rid the federal judiciary of so-called activist judges and even strip them of authority," writes Richard Schmitt of the Los Angeles Times. LINK

The New York Times' Adam Liptak seems to say one thing in his news analysis: judges interpret law, not politicians. LINK

The Wall Street Journal's Gintautas Dumcius looks at the efforts of six states to clarify their futile care laws.

Schiavo: politics and religion::
The New York Times' John Schwartz and Denise Grady write on Dr. William P. Chesire in such a way that suggests to that the Times reporters aimed to challenge his credibility and that his religious views somehow trump (rather than inform) his diagnoses. One might ask: so what if Dr. Arthur Caplan never heard of him? And an ABC News producer yesterday found numerous peer-reviewed articles Dr. Chesire has written, lending credence to the idea that the guy at least has neurological bonafides. And as for religion trumping doctoring, well, a solid case can be made that a rather secular worldview influences those who are quick to declare patients brain dead, or who dismiss opponents as "pro-life fanatics." LINK

We're not saying that Chesire's opinion is better, only that the criteria used by the Times to criticize him don't strike us as that relevant.

These two articles from Florida papers do the same job in a more respectful, balanced way: LINK and LINK

But we're delighted to report that the New York Times' Laurie Goodstein redeems the paper with a thoughtful look at the alliance between evangelicals and Catholics, which isn't new and is quite multi-layered. LINK

The Los Angeles Times' Ron Brownstein writes that President Bush's response to the Schiavo case and his lack of comment on the school shooting in Minnesota track with the beliefs of his core constituencies -- i.e., a clear political agenda for one group when it suits their purposes to be out in front, and the effort to shy away from one when it means that its mission could face criticism. LINK

The Washington Post's Mike Allen explores the conservative groups, such as Right to Life, involved in supporting the case of Robert and Mary Schindler, Terri Schiavo's parents. LINK

Mike finds good narrative and some shoddy bookkeeping, but not necessarily big money.

Maureen Dowd opines thusly: "Republicans easily abandon their cherished principles of individual privacy and states rights when their personal ambitions come into play. The first time they snatched a case out of a Florida state court to give to a federal court, it was Bush v. Gore. This time, it's Bush v. Constitution." LINK

There's a small poke at Sen. Hillary Rodham Clinton in the column, too.

The Washington Post's Richard Cohen writes that Republican lawmakers went overboard with their bill getting involved in the Schiavo case, but that Democrats were even worse with their meekness and refusal to oppose it. LINK

Cohen hits Hillary Clinton (and John Kerry) for not speaking out, while Deborah Orin in the New York Post paints the whole issue for the Democrats (surprise) as really bad news, and says that New York's two Senators are hiding out on this one. LINK

The Wall Street Journal's editorial board's lead offering today contains begins with this head-scratching paragraph: "Of all the opinions being expressed about the Terri Schiavo case, the hardest to understand is cynicism about the politics of Congressional intervention. Only phony 'federalists' question Washington's competence on matters of fundamental rights. And whether you side with Mrs. Schiavo's parents or husband, it is hard not to be impressed by the spectacle of the nation's highest legislative body convening over the fate of a single person."

Bush agenda:
When it comes to Congress, the President seems more pessimistic publicly about immigration that he does about Social Security.

"'You don't have my pledge that Congress will act, because I'm not a member of the legislative branch,' Mr. Bush continued. 'But you will have my pledge that I will continue to push our Congress to come up with rational, common-sense immigration policy.'" LINK

"Republicans are divided over immigration, with some conservatives seeking stricter border controls and moderates supporting the administration's call to give some illegal immigrants amnesty if they have been in the country at least three years. Many of the immigrants who would qualify are Mexican, and the proposal has long been sought by Mr. Fox."

The Washington Times picked up what Lou Dobbs obsessed about last night: the President's calling of volunteer border patrollers "vigilantes." LINK

The Washington Post's Peter Baker wraps the summit, which focused on common borders and security, as well as immigration and trade. LINK

USA Today's Judy Keen has more detail on what exactly the leaders' partnership agreement entails. LINK

Rep. Tom Tancredo opines in USA Today: "When Mexico gets serious about helping us protect our borders instead of encouraging its citizens to break our immigration laws, we can have a serious discussion about guest-worker programs. Until then, forget it." LINK

Good news: students are doing better on standardized tests required by NCLB.

Bad news: states say they're having trouble following the letter of the law and don't know what higher test scores mean, anyway. LINK

Good news: Tim Adams, nominated for top Treasury position.

Bad news: A third of the senior Treasury staff remains vacant, according to the New York Times. LINK

Good news: Wolfowitz sealed the deal: LINK

Bad news: If you don't like Wolfowitz, see "Good news:"

Leader DeLay:
In a Wall Street Journal op-ed, Jonathan Gurwitz urges Leader DeLay to go back to his Sugar Land roots."The recent swirl of ethics charges surrounding Rep. DeLay plays just about the same here in Texas as it does anywhere else outside the Beltway. 'Tom was stupid for messing with corporate money,' a prominent Houston GOP leader told me, referring to allegations that a political action committee founded by Mr. DeLay may have violated state law by misusing corporate donations. 'If he's not careful, he'll end up like Gingrich.'"

Internet and politics:
Tread lightly and carefully. That's the message we get out of the FEC's recommended rules for Interent campaigning. (We defer entirely to Bob Bauer's analysis: LINK

Most significantly, the Commission proposes to exempt Internet communications like most political blogs and most independent political websites from federal spending and disclosure laws, so long as they're not paid by the campaign or party they support.

"No contribution results where an individual, acting independently or as a volunteer, without receiving compensation, performs Internet activities using computer equipment and services that he or she personally owns for the purpose of influencing any Federal election, whether or not the individual's activities are known to or coordinated with any candidate, authorized committee or party committee." LINK

"No contribution results where an individual, acting independently or as a volunteer, without receiving compensation, performs Internet activities using computer equipment and services available at any public facility for the purpose of influencing any Federal election, whether or not the individual's activities are known to or coordinated with any candidate, authorized committee or party committee. The term 'public facility' within the meaning of this section shall include, but is not limited to, public libraries, public schools, community centers, and Internet cafes."

"No contribution results where an individual, acting independently or as a volunteer, without receiving compensation, performs Internet activities using computer equipment and services in his or her residential premises for the purpose of influencing any Federal election, whether or not the individual's activities are known to or coordinated with any candidate, authorized committee or party committee."

So if a blogger like Red State wanted to put up a banner from the Rick Santorum Senate campaign's site, he could do so without penalty or notice or scrutiny unless the Santorum's campaign paid him for it.

The FEC staff also tries to exempt Internet political activity that's endorsed by the campaign but disseminated by un-paid volunteers. And it would expand the definition of "journalist" to include reporters for online newspapers. It isn't sure whether bloggers are also journalists, though.

A quick check of blogs yesterday and this morning.shows cautious optimism that the FEC won't quash their freedom but plenty of skepticism abounds.

RedState says: "The FEC's NPRM is flawed because it tries to impose the classical metrics of campaign finance regulation on the Internet. Not only do the metrics not exist on the Internet, there is a distinct lack of apropos criteria on which to regulate. There are plenty of subjective ways to determine coordination and monetary value -- but few concrete, measurable methods with today's technology." LINK

Eugene Volokh wonders whether the new proposed rules would apply only to people who on their own content, computers and distribution mode. LINK

But ZDNet sees blog reaction as "cautiously positive." LINK

2008 Democrats:
"A federal judge dismissed a criminal charge against the former finance director of Sen. Hillary Rodham Clinton's 2000 election campaign who is charged with filing false campaign statements," the AP reports. LINK

But three charges remain.

And it turns out the Perry campaign DID film Sen. Hillary Rodham Clinton with Sen. Kay Bailey Hutchison and did have a hand in the distribution of an e-mail showing a nice air kiss. LINK and LINK

As you can imagine, Deb Orin is all over this too. LINK

2008 Republicans:
The Massachusetts Democratic Party, proving once again that the Bay State political culture is as forward-looking as it gets, continues its campaign to make fun of (and therefore delegitimize) Gov. Mitt Romney's out-of-state political schedule. Ani-Mitt is their animated, Web-based equivalent of the governor, and he has some interesting things to say. LINK

New Hampshire:
Felicity Barrenger previews the New Hampshire Senate's vote on mercury emissions. LINK

The AP looks at meth hitting the other first-in-the-nation state too. " LINK

John DiStaso's Granite Status has nothing presidential of Note, but read it anyway. LINK

2006:
SUNY might be Gov. George Pataki's real legacy, suggests the New York Times in a loooong piece. LINK

Dr. Dean and the Democrats:
Dr. Dean, back from Kansas, Mississippi and Tennessee, has new ideas, he says, about how to lead the party. LINK

Clairifcation: We're told that the Center for American Progress's health care plan proposes to expand health coverage most significantly from by expanding subsidized employer coverage and from expanded benefits under the Federal Employee Health Benefits plan. And the plan hold individual premiums to between five and seven percent of income. A previous Note on the plan suggested otherwise.

The Republicans:
Dan Allen must be wondering wistfully: If only Jim Bunning got this kind of coverage six months ago . . . LINK

Karl Rove did his stump speech in Jacksonville, FL last night. LINK

Free Matt Cooper and Judith Miller:
The Washington Post's Dan Eggen looks at the 40-page brief filed yesterday by news organizations and journalism groups reasoning that before prosecutors can push testimony from journalists in the case of the Valerie Plame leak, they should first figure out whether a crime was committed. Time magazine and the New York Times on Tuesday filed a petition asking for a review of the case by the full appeals court. LINK

Schwarzenegger:
The Los Angeles Times' Robert Salladay reports that a state judge sided with Gov. Schwarzenegger in the fund-raising activities that have brought criticism to Sacramento, ruling that California politicians are unlimited in the funds they can raise to promote ballot initiatives. LINK

The Los Angeles Times' Jordan Rau takes a closer look at what opponents of Schwarzenegger's initiatives are doing to counteract his campaign. LINK