oil prices below $83 a barrel has more to do with what happened with the inventory report. >> john harwoodk to me about cold state democrats with respect to cap and trade. is john still there, i don't see him? >> yes. >> i know, i'm not saying you, i know the obamas are trying to pick off the republican for cap and trade, i don't believe that is going to be very possible, but the cold state democrats that stand in the way of cap and trade, is it not? >> oh, yes, they have problems with the energy state democrats and mary landrieu and also people like bob byrd and jay rockefeller and others on call. the house energy bill did make some concessions to those cold state democrats and i think you're going to see the same thing in the process with the bipartisan senate bill, if, in fact, it moves. but they, because of those fractures within the democratic party, that's why you need more republicans. lindsey graham believes he can bring six to ten republicans for some sort of pricing mechanism for carbon to offset the loss of some of those cold states. >> what are we talk about here, john? a lot o

borrowers who are up employed or underwater. >> joining us now john harwood and steve liesman.akes here. how is it that an unemployed folks, are the banks really going to do this? we were told the banks were going to modify mortgages a year ago. >> they've been reluctant to play so far. i think that will mood has changed somewhat. the administration is putting $14 billion on the table of t.a.r.p. money to try to encourage them to do this. >> no new taxpayer dollars right now. >> that's right. they want to take people who are out of work and try to get them assistance for three months on their mortgages if unemployed. a broader effort to assist people whose mortgages are underwater. not just people who are in financial distress but broadly speaking trying to lift up the housing market a little bit. unemployment rates is not the only thing that is an indicator of the economic distress we're feeling. housing is a big key. >> it is. i want to pick up on that larger point. and play you something that happened at a hearing yesterday. somebody representing housing, national community

cnbc's chief washington correspondent john harwood joins us with more. hey, john. >> hey, trish. you know the consequences of the health care victory extend beyond that issue alone. you saw that today when barney frank and chris dodd, the two lead players in congress on financial reform met with the president at the white house, and chris dodd came out later and said in wake of the victory on health care, the democrats have not had much of this year, the democrats are feeling the financial regulation g yulation negotiations they have the upper hand. >> some of the republicans say no policy on the initiatives, and they want to be part of the debate and offer constructive ideas to the proposal and i am much more optimistic in this rather than health care, because health care has strengthened the hand to reach out to people who want to be part of the solution. >> you saw the evidence of that a couple of blocks away, a couple of hours later when neil wall and the deputy secretary treasury got in the face of the head of commerce and said, look, guys, we are ready to rumble. >> despite

john harwood in washington with the latest. good morning, john. >> hey, larry. these negotiations are continuing and it's really about a fill soffic question and how should they be protected and is there a collision between the need to protect consumers and the financial practices that firms can engage in and the need for those firms to be safe and sound. the prudential regulator versus the consumer regulator, so the highlights of that discussion are that dodd and corker negotiations which are the continuing bipartisan negotiations look like they may drag into next week. there are three potential homes for that consumer finance protection agency. one is the federal reserve which is a proposal that bob corker of tennessee is pushing right now. richard shelby, the ranking republican is using the fdic. the administration is more inclined to house that with treasury if it's want going to be a stand alone agency. >> probably some time next week the come they will mark this thing up in two weeks and we expect it to go to the senate floor and then things will percolate

with all do respect to john harwood, you know what, lbj tactics still work.ent of the united states and had carried connecticut with 65%, 66% of the vote and joe lieberman was standing in my way of comprehensive health care reform, i would not hold town hall meetings across america. we started saying this last july, by the way. i would call joe lieberman and others in my office and say, joe, okay, i'm not good with math, but i get 65%, 66% in your state of connecticut, they like me up there, joe. and i'll tell you what, you can keep voting against this or we can strike a deal. tell me what you need and i'll give it to you, but if you stop health care, i'm going up to your state and i'm going to grind your political bones to dust. and if you don't believe me, look over your shoulder. you're going to see me in connecticut every week. you're going to see my people up there. we're going to primary you, we're going to pour hundreds of -- >> he's scary. >> no! listen, that's how you do it! >> can we come back to this. >> i think it's a point well taken. i agree wit

john harwood, i have to give them credit. i've been behind this thing and i think they're damping down too big to fail bailout nation and i think that is a terrific free market reform. how do you read it, my friend? >> larry, i think this is fundamentally different from health care in that this is going to happen with or without republican support, although they do need to get 60 votes in the senate. the question is, how do you get them? do you get a big compromise with richard shelby or other senior republicans, mitch mcconnell and pass a bill with 70, 89 votes or do you pass it through? republicans will have to choose which one of those things will happen. as barney frank and chris dodd just alluded to, this is like trying to count on the new orleans levees to hold back katrina. this is popular with the public. it's not mixed like health care. >> you're right. >> bailout nation, john. the public hates bailout nation and they hate too big to fail. i want to add, i've interviewed senator judd gregg and senator shelby just in

cnbc's chief washington correspondent john harwood joins us now with the fallout. it's like nuclear fallout. hello, john. >> reporter: well, i don't know if it's nuclear, larry. i think the white house has got to be encouraged that the market's up slightly today. and a sign that maybe businesses aren't all going to shut down. in trish's favor, french restaurants aren't all going to close because they passed this health care bill. still got some action in the senate. you even had some republicans this morning like bill frist, the former senate majority leader on the republican side who is a physician saying he saw some merit in this plan even though he has concerns about the cost. take a listen. >> 32 million people over ten years, that was about the same size as medicare. my real concern with it, i think the coverage aspect, i am probably to the left of where most republicans are. because i do think we ought to have every american have affordable access with insurance in this country. but this bill fails from the cost standpoint, from the spending standpoint. >> rep

let us bring in john harwood on this now. john, good morning. >> reporter: hey, mark! >> what do you think? >> reporter: well, i think since chris dodd broke down in those negotiations with bob corker a couple weeks ago, we've known that fundamentally, this was going to be a partisan fight. now, it can't be like health care in the sense that you must have some republican support to pass financial regulation because you can't do it through budget reconciliation. so, they're going to need at least one republican. what the white house has been counting on, mark, is that the unpopularity of wall street, the popularity of what the president's fundamentally trying to do in contrast to health care will force at least some republicans to go along, and they're trying to escalate that process now. >> do you think it ultimately succeeds? >> reporter: yes. and i think republicans generally think so. bob corker told me when the negotiations broke down that this is going to be very, very difficult for republicans to hold the line against. he was trying to negotiate and get it done.

john harwood joins me. , what else specifically, john, can congress do to improve the employment situation? >> first of all, it is not a moment too soon if you're a democratic strategist because places like nevada, 13% unemployment rate. record level. harry reid's running for re-election. you've got a house member endangered as well. ohio, more than 10% unemployment. five house seats on the line. evan bayh, he's retiring. a couple of house seats there. all of those things put imperative on democrats to do two things. one is to talk about it and demonstrate to voters they're focusing on it and the second, to figure out what tangible things they can to to help. you saw some of that with the president and his mortgage modification program today which is targeted twarkd people who have been out of work. you saw that in the tax credit bill, which is targeted to people out of work for 60 days. more to come from the administration and congress on things like green jobs. president obama has talked about that and pus

washington correspondent john harwood joins us live. ricans still aren't sure if the obama stimulus plan has created jobs. is that the main factor driving the president's trip to savannah today? is. >> reporter: absolutely. what they're trying to do is make the argument that his stimulus package and

he is with our chief washington correspondent john harwood in washington. >> well, maria, regulatory reform is expected to pass, but the president today put the pet al to the metal on energy, and the way to do that was to challenge his own base. >> ultimately, we need to move beyond the tired debates of the left and the right, between business leaders and environmentalists, and between those who could claim that drilling is a cure-all and those who claim it has no place. because this issue is too important to allow the progress to languish while we fight the same old battles over and over again. >> reporter: the way he challenged the base was with this decision to open up 40 million more acres to offshore drilling, and still keeping 125 mile buffer off of the east coast of the gulf of mexico. you had a cool reception from house speaker nancy pelosi who put out a statement today saying that any initiative must go forward in an environmentally and fiscally responsible manner, and an indication that he succeeded at least in trying to strike a middle ground with the environmentalists on

in this morning's "harwood file," john's looking at the political climate following that astounding victorythe white house. john, good morning. >> good morning, simon. and it's important to separate what did and did not happen politically speaking when health care passed. what did happen was democrats averted a catastrophe. had they not been able to pass that legislation, it would have diminished credibility in obama's administration and in the congress and made their political problems, which are principally over the economy, a whole lot worse. but it hasn't transformed the environment. now, democrats, as you mentioned, are eager to challenge the republicans on the issue of repeal. you had president obama out in iowa city yesterday saying, essentially to republicans, bring it on. >> if these congressmen in washington want to come here in iowa and tell small business owners that they plan to take away their tax credits and essentially raise their taxes, be my guest. if they want to look lauren gallagher in the eye and tell her they plan to take away her father's health insurance, that's the

controversy over health care and the state of the environment, we're joined this morning by our own john harwood taking a look at politics. >> good morning, john. >> good morning, carl. i think it's important to make a distinction between what did and didn't happen in terms of the health care debate. if they had failed, it would have undercut the credibility of their government. but everybody dmt democratic party, as they look ahead to the november elections, understands that they're going to lose seats, it's going to be a difficult year for them. and these numbers that we're about to show you are some of the reasons why. the pure of labor statistics is going to highlight state by state unemployment figures. nevada, for example, 13% unemployment rate. this is a heavy foreclosure state. and harry reid, the senate leader who pushed through this health care plan is in deep trouble in that race. could we know, but he has a deep fight ahead in that re-election. now over to the midwest, look at indiana. evan bahy is a retiring member. you're looking at 11% unemployment in the state of indiana. you've