**President Obama
*The National Journal Insiders Poll finds Democrats more optimistic than Republicans that health care will pass this year; 62 percent of Democrats say it's "very likely" to pass, compared to just 13 percent of Republicans. Only a third of Dems and just 5 percent of Republicans felt the same about cap-and-trade.

*The New York Times reports that Obama and Congressional Democrats "are deeply split" over how to pay for health care. "House and Senate leaders do not like his ideas but cannot agree on alternatives. Other proposals that could reduce health care spending would take too long to show savings for purposes of Congress's budget scorekeeping, and many would require big investments initially, such as for research into cost-effective treatments. Meanwhile, special interests like insurance companies, employers and even sugar beet and corn growers are on alert to oppose anything that could hurt them."

*Immigration: "President Obama told congressional lawmakers Thursday that he would push for a sweeping overhaul of the nation's immigration system by early next year. But during the White House meeting, a new political obstacle came into view: how to regulate the future influx of foreign workers," the Tribune reports. "McCain challenged Obama and other Democrats to stand up to labor unions that are pushing a plan business groups fear could be overly restrictive in admitting future immigrant workers."

*Joe Biden tried to claim progress on the stimulus front, saying yesterday that all 50 states easily beat a June 29 deadline to have half of their road and bridge projects approved. Per AP, more than 5,300 projects worth more than $19 billion have been approved, and states have broken ground or taken bids in 1,900 of those, he said.

*Biden spoke at a GLBT fundraiser to benefit the DNC last night. AP notes that the gay community is increasingly frustrated that the Obama administration has not lived up to its promises. "I hope you don't doubt the president's commitment," Biden said, adding that the president would keep the nation focused on "the unfinished business of true equality for all our people." "I don't blame you for your impatience."

*"Straw huts, hula dancers and kids playing with hula hoops were all on display Thursday evening in the White House's backyard -- not the typical congressional picnic," AP reports.

*And Ben Feller, who took down Gibbs in the dunk tank, explains the levity yesterday, " another slice of life inside the off-and-on relationship between the press secretary and the press corps. The White House tries to keep up good relations, as do reporters, and this was a moment to put aside the contentiousness for 15 minutes."

**Congress
*Yesterday, Democratic leaders said they have enough votes to pass cap-and-trade in the House, the Post reports. "Any talk of confidence is a sign of a remarkable turnabout for Democrats. Since this bill passed the House Energy and Commerce Committee last month, Democrats have been bogged down in an internal feud between coastal liberals, who supported a hard cap, and legislators from the Rust Belt and farm states."

*Politico: "Democratic leaders are working furiously to corral votes for a controversial climate change measure, hoping to build a big enough margin so that vulnerable Democrats can be freed to vote against it. At the White House on Thursday, President Barack Obama declared: "Now is the time to act." Former Vice President Al Gore, who had planned to rally Democrats en masse in Washington, stayed home in Tennessee so he could press members one by one via telephone."

*Roll Call: "It may have been Thursday, but it was hump day in the House for the landmark climate change bill. With critical backing from the White House, Democratic leaders leaned into their push to round up support for the package ahead of a scheduled Friday vote. They broadcast cautious confidence while acknowledging work remains to win over some holdouts, many of them moderates. 'We're in striking distance,' said one senior Democratic aide.

*Obey-Waters Fight on House Floor: "House Appropriations Chairman David Obey (D-Wis.) and Rep. Maxine Waters (D-Calif.) engaged in a shoving match on the House floor early Thursday evening that ended with Obey raising his voice and bellowing, 'I'm not going to approve that earmark!'"

**Sanford Fallout
*Mark Sanford spent Thursday with his family, as calls began to mount for him to resign. "He was saying our elected leaders need to stand firm on principles and values, and one of those is strong family values," Glenn McCall, a member of the Republican National Committee, told CNN. "What he said is hypocritical if he doesn't step down, because he was right with what he said about Clinton and others. When you are an elected leader, we hold you to higher standards."

*The State: "A flood of calls for Sanford's resignation from the state's political class might not materialize because of the impact such a move would have on next year's race to replace him.

*AP: "State Republican Party Chairwoman Karen Floyd had an online meeting with the party's top leaders Thursday night to listen to their concerns and brief them on developments, but closed it to reporters. She said it was too early to call for a resignation, but the party could take that action when it meets in a July 6 conference call."

*Mike writes about that 2010 race, yet another contest that will be impacted by scandal.

*From last night's "Top 10 List" of surprising facts about Governor Mark Sanford, #5: "Was sick and tired of Eliot Spitzer holding title of 'Lov Gov.'"

**Campaign Stuff
*At yesterday's Monitor breakfast, Rahm Emanuel explained the White House role in helping Kirsten Gillibrand in the New York Senate race. He said they told Rep. Steve Israel, "We're going to be involved, helping her, and I don't want you to get in the race and find out after the fact." But a strategist for Rep. Carolyn Maloney say no similar conversation has happened with her.

*Emanuel also explained efforts to woo Lisa Madigan into the Illinois Senate race, with the chief of staff calling her simply "the most popular political figure in Illinois." "There's no doubt by any -- by even people who are in the race, in the primary, people who are thinking about it, they all know, she's the 800-pound gorilla here, because of how popular she is and how good a job she's done as the attorney general."

*A Research2000/Daily Kos poll finds all potential Democrats leading the potential Republican candidates for Oregon governor. They tested former Gov. John Kitzhaber (D) and Rep. Peter DeFazio (D) on the Dem side, former Sen. Gordon Smith (R) and Rep. Greg Walden (R) for the Rs.

*Rick Lazio is closer to making a formal entrance into the New York gubernatorial race. More: "In a letter to be sent Friday, Republican Lazio tries to insert himself into the Capitol hullabaloo by suggesting he, Democratic Gov. Paterson and former Republican Mayor Rudy Giuliani get together to discuss how to reform state government. 'In all likelihood, one of the three of us will be the next elected governor of New York,' Lazio wrote in the letter obtained by the Daily News. 'We should come together in the spirit of bipartisanship to change the way our government works. It's the right thing to do.' "

*Chris Christie's visit to a Congressional committee room is being described as "testy" by both the New York Times and the Newark Star-Ledger. The Times reports that the New Jersey Republican gubernatorial nominee "aggressively defended his decision to award his political allies lucrative contracts to monitor corrupt corporations," and "also brushed aside suggestions that the monitoring contract he gave John Ashcroft ... was an example of cronyism."

*Don Cunningham, the Lehigh County Executive, announced he will not run for governor in Pennsylvania in 2010. "In recent weeks, Democratic insiders had expressed quiet but increasing doubts about Cunningham's candidacy," PA2010.com reports.

*Other Gov Race Updates: Secretary of State Terry Lynn Land (R) surprisingly says no in Michigan. Former Senate candidate Jim Pederson (D) says no to AZ Gov. Tom Schieffer (brother of Bob) will run in Texas.

*Democrats are eager for Rep. Charlie Melancon (D-La.) to run for Senate, but they're also worried about holding that House seat, The Hill reports. "Recruitment will be tough since the seat could disappear in 2012, after redistricting. The new district could tilt even further to the right since Republicans, particularly [since] GOP Gov. Bobby Jindal, will exert their influence over the redistricting process.

*Cillizza reports that Sen. John Thune (R-S.D.) is wading into the Kansas Senate primary, backing Rep. Jerry Moran over Rep. Todd Tiahrt. We reported this week about how Tiahrt was trying to claim the conservative higher ground.

*John Sununu, the former New Hampshire governor and current state GOP chairman, says he expects his son, the former senator, to make an announcement soon on running in 2010. "I think, if my son runs, there will not be a primary," he told the Portsmouth Herald. And he added, he "will use my warmth and charm to make sure that if there is a primary, it is a constructive primary, or if a primary can be avoided, I will do that."

--Mike Memoli and Kyle Trygstad