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The Obama administration is sending out its strongest signs yet that it's willing to scrap a public option in order to move a health care bill forward. White House adviser David Axelrod tells ABC News that what remains of Obama's desire for a public option is largely theoretical. "The spirit that led him to support a public option is still very much at play here and so you know he wants competition. He wants choice."

And an anonymous White House official tells Politico "We have been saying all along that the most important part of this debate is not the public option, but rather ensuring choice and competition."

If the administration has concluded that a public option won't fly (or has at least decided not to fight for it) it will be implicitly siding with the Senate in the congressional fight over the direction health care reform should take.

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The SEC attorney who failed, despite numerous red flags, to catch Bernie Madoff's colossal fraud received the highest possible performance rating from the agency -- citing her "ability to understand and analyze the complex issues of the Madoff investigation" -- soon after the probe closed in 2006.

That's according to an SEC inspector general report on the Madoff fiasco, whose executive summary (pdf) was released this afternoon. The full report will be made available in the coming days.

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Sen. Blanche Lincoln (D-AR) has been tepidly supportive of a public option in the past, so her comments to reporters today come as a bit of a head-scratcher. "I would not support a solely government-funded public option. We can't afford that," Lincoln said.

This sounds to me like a hedge: there's a difference between a government-funded public option, and one that's financed by consumer premiums, which is what the House's health care reform bill will call for. Lincoln's office wasn't immediately available for comment to clarify this point, but we'll post her response when we get it.

Florida Republican chairman Jim Greer is warning of a new menacing initiative by President Obama: To indoctrinate our children into his grand socialist agenda!

The source of Greer's ire, as expressed in a new press release, is that the Department of Education has recently announced a September 8 national address by President Obama to America's students, in which the department says Obama "will challenge students to work hard, set educational goals, and take responsibility for their learning." This would appear to be a pretty much non-partisan message on personal responsibility and character.

Greer sees it differently, though:

"As the father of four children, I am absolutely appalled that taxpayer dollars are being used to spread President Obama's socialist ideology. The idea that school children across our nation will be forced to watch the President justify his plans for government-run health care, banks, and automobile companies, increasing taxes on those who create jobs, and racking up more debt than any other President, is not only infuriating, but goes against beliefs of the majority of Americans, while bypassing American parents through an invasive abuse of power."

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The Arkansas News is reporting that Sen. Blanche Lincoln will not support health reform that demands a public option because it would be "too expensive."

In a speech at the University of Arkansas, Lincoln, in what may be something of a hedge, reportedly said that, "I would not support a solely government-funded public option. We can't afford that."

Lincoln's press office was not immediately available for comment. We'll keep trying.

A new Rasmussen poll of the Virginia gubernatorial race finds that Republican candidate Bob McDonnell -- who was recently revealed to have written a thesis when he was 34, laying out a hard-right political program -- still leads Democrat Creigh Deeds.

The numbers: McDonnell 51%, Deeds 42%. This is essentially unchanged from the 49%-41% McDonnell lead from a month ago.

The pollster's analysis points out that that the thesis story may not have fully sink in yet to its fullest potential extent: "To this point, just 49% of Likely Voters say they've followed news stories on this topic even somewhat closely ... It is possible that the thesis itself or the views expressed in the document could become a bigger factor in the campaign this fall."

Former Ohio Rep. James Traficant -- a Democrat perhaps best known for his wild hair and overuse of the Star Trek phrase "Beam me up" -- was released from prison this morning after serving a seven-year sentence on corruption charges.

The AP reported that, upon his release, Traficant "had his famously wild hair pulled back."

Traficant was sent to prison in 2002 after being convicted of federal racketeering, bribery and fraud charges. Traficant took bribes and kickbacks from businessmen and members of his own staff. He was only the second congressman expelled from the U.S. House since the Civil War.

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Rep. Phil Gingrey (R-GA), a leading public spokesman for House conservatives, appeared on MSNBC today and made a striking recommendation: That not only should President Obama admit defeat and no longer back a public option or even a co-op -- but he should personally kill it by promising a veto if Congress were to pass it.

"I think what the President ought to do is say, look, you know, I understand, we've heard the people," said Gingrey. "We let the Congress draft a bill, both in the House and the Senate, at least through committee, and present it to the American public. They are rejecting the public option. Let's don't let the perfect be the enemy of the good. Let's remove the public option, and also anything that smacks of a public option, like a co-op. And indeed, I will veto that if it comes to my desk with that in there. And let's go ahead and try to pass a good bill that we can all agree on."

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White House adviser David Axelrod says Sen. Chuck Grassley's attempt to raise funds by attacking "Obama-care" was a bridge too far.

"If you're sitting at a table negotiating in good faith, then you probably don't send out mailers saying, 'Help me stop Obama-care.' That's just common sense," Axelrod told the Wall Street Journal, adding that Grassley's actions, along with those of Sen. Mike Enzi, suggest "they don't want to participate" in constructive health care negotiations.

"They're satisfied with the status quo. We are not," Axelrod said.

Earlier this week, White House Press Secretary Robert Gibbs said that, by lending credence to the "death panel" attack, Enzi had turned over his cards and walked away from the table.

Sen. Max Baucus (D-MT), who chairs the Senate Finance Committee will likely have the ultimate say in who's allowed to negotiate for health care reform, and who won't. But as far as the White House is concerned, the gang of six is down to four, and they're now looking to more moderate Republicans like Olympia Snowe for support.

After months of trying to compromise with Republicans on health care, Democratic leaders are preparing to move forward with a Democrat-only health care bill after. The GOP is predictably pulling out all the stops--warning Dems that going it alone will cost them dearly, and drafting as many procedural hurdles as possible to stymie those efforts. But how are the conservative Democrats reacting? They're calling for bipartisanship, too.

"In my view, bipartisan legislation translates to better legislation and incorporates broader policy solutions to today's health care problems. Many people are rightfully leery of government. It will be difficult to achieve a bipartisan bill. But it will be even harder to push through a purely partisan bill," wrote Sen. Ben Nelson (D-NE) in an opinion piece for the Lincoln Journal Star. "When Congress reconvenes next week, I hope colleagues return from home with a greater sense that this target is within reach. By shedding disagreements and focusing on practical health care reforms we also can cast aside lingering fears of a government takeover, runaway deficit spending, tax increases, or coverage for abortions or illegal immigrants."

Democrats have addressed most of those fears already--though the House has called for a small surtax on wealth Americans so that health care reform doesn't entail "runaway deficit spending."

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