**President Obama
*In an interview with ABC this morning, Obama said he "absolutely" expects to achieve health care reform by the end of this year because he believes the American people share his urgency. "The reason it's going to get done is because the American people understand it has to get done," Obama told Diane Sawyer.

*Bloomberg reports that the administration is signaling it's open to compromise on the public option. Sen. Kent Conrad (D-N.D.) said the message came from Rahm Emanuel, who told Democrats that the president is "open to alternatives." "His message was, it's critical that you do this," Conrad said.

*WaPo: "Even as senators make strides in reducing the emerging legislation's overall cost, the notion of disrupting the private insurance market by injecting federal competition has stoked passions on both sides and created the kind of wedge that President Obama and Democratic leaders had sought to avoid in the debate."

*Dan Balz on the Obama press conference yesterday: "Obama may have bottom lines in mind, for both Iran and health care. But he was not prepared on Tuesday to signal to publicly what they may be. ... For now, despite pressure, the president is moving both to keep his critics at bay and to preserve as much room as possible for whatever comes next."

*Mitt Romney is giving Obama "higher marks now for his response to civil unrest and a government crackdown in Iran," AP notes. Romney, on the "Early Show" this morning: "I'm very pleased that the president is getting the message out."

*AP reports on the GOP's new tack in fighting the Sotomayor nomination, "questioning her commitment to constitutional guarantees on the right to keep and bear arms and equal treatment under the law regardless of race or gender." Judiciary Ranking member Jeff Sessions "even questioned whether Sotomayor sufficiently opposes terrorism, citing what he said was the 'extensive work' she had done for a group formerly named the Puerto Rican Legal Defense and Education Fund."

*Former Justice Sandra Day O'Connor, on "The Late Show" last night: "I am very happy we're getting another woman on the court." She noted that Canada's nine-member Supreme Court has four women.

*The U.S. will send an ambassador back to Syria for the first time in four years, "a dramatic sign of reconciliation between the two countries, senior administration officials tell CNN."

*The Washington Times: "Prior to this month's disputed presidential election in Iran, the Obama administration sent a letter to the country's supreme leader, Ayatollah Ali Khamenei, calling for an improvement in relations, according to interviews and the leader himself. Ayatollah Khamenei confirmed the letter toward the end of a lengthy sermon last week."

**Congress
*Roll Call: "Speaker Nancy Pelosi (D-Calif.) has shown repeatedly that she can rally her troops on tough votes, but she faces her toughest test yet this week in passing her signature cap-and-trade energy package. Pelosi laid down the gauntlet late Monday, announcing plans to bring the 1,200-plus-page bill to the floor on Friday."

*Politico: "They still call it the Waxman-Markey climate-energy bill -- but it's Nancy's bill now. By saying she would pass the massive -- and massively controversial -- cap-and-trade bill by the start of the July 4 recess, the House speaker took a big gamble, setting herself up for a daring political victory or the biggest defeat of her six months as President Barack Obama's legislative ramrod."

*The Hill: "At press time, Waxman and Peterson emerged from a meeting with the Blue Dog Coalition and announced that they reached an agreement. 'We have something that I think works for agriculture,' Peterson said. The crux of the deal is a concession from Waxman to allow the Department of Agriculture -- not the Environmental Protection Agency -- to develop and monitor offset and land use provisions the legislation creates. Waxman said he would not only retain the votes of the environmentalists, but also gain votes from those who represent the agriculture community."

**Campaign Stuff
*AR Sen: "The 2010 U.S. Senate election in Arkansas will be close, the campaign manager of the incumbent senator said," Benton County Daily Record reports. "Republicans see a possible political opportunity in Arkansas' 2010 Senate race because GOP presidential candidate John McCain ran ahead of Democratic candidate Barack Obama in the 2008 presidential election in Arkansas, Patterson said. Lincoln has 'one to five (Republican) opponents, depending on what day it is,' he said."

One opponent is Searcy businessman Fred Ramey, who told the AP Tuesday "that he plans to file federal papers later this week to make his Senate candidacy official. Ramey, 39, owns a real estate investment company in Searcy and is a driver for Federal Express in Little Rock,"

*SC Gov: "Coverage of the South Carolina governor's race has been dominated by three Republicans who have announced or are planning to run: Attorney General Henry McMaster, lieutenant governor Andre Bauer, and congressman Gresham Barrett. But a fourth announced candidate, state representative Nikki Haley, has the potential to make some waves in Palmetto State politics," Politico reports.

--Mike Memoli and Kyle Trygstad