WASHINGTON (CNN) -- The health care reform debate reached a new milestone Tuesday as a key congressional committee passed an $829 billion plan projected to extend coverage to an additional 29 million Americans.
"Now's not the time to pat ourselves on the back," President Obama says at the White House on Tuesday.

"Now's not the time to pat ourselves on the back," President Obama says at the White House on Tuesday.
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The Senate Finance Committee's bill would subsidize insurance for poorer Americans, establish nonprofit health care cooperatives, and create health insurance exchanges to make it easier for small groups and individuals to purchase coverage.

Among other things, it would cap annual out-of-pocket expenses and prevent insurance companies from denying coverage for pre-existing conditions.

The plan is financed by a combination of reductions in spending for Medicare and other government programs, as well as higher taxes on expensive insurance policies and new fees on the health industry.

The committee passed its long-awaited plan Tuesday with a 14-9 vote. Sen. Olympia Snowe, R-Maine, was the lone committee member to cross party lines, breaking with other Republicans to vote for the measure. All the committee's Democrats supported the bill. Video Watch why there was applause after the vote »

The Finance Committee was the last of five congressional panels to consider health care legislation before formal debate begins in the full House and Senate.

President Obama expressed satisfaction, but said more work remains.
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"We are now closer than ever before to passing health reform, but we're not there yet," he told reporters in the White House Rose Garden. "Now's not the time to pat ourselves on the back."

Instead, he said, it is time to "dig in and work even harder to get this done." Video Watch Obama laud action, call for more work »

Obama singled out Snowe "for both the political courage and the seriousness of purpose that she's demonstrated throughout this process."

Democratic leaders in each chamber have now started the politically delicate task of melding together five pieces of legislation -- two in the Senate and three in the House.

Last week, the nonpartisan Congressional Budget Office estimated the Finance Committee's bill would cut the national deficit by roughly $80 billion over the next 10 years while expanding coverage to 94 percent of the country's non-elderly population.

"Ours is a balanced plan," said committee Chairman Max Baucus, D-Montana. "Now is the time that will tell whether things are merely said, or whether something is actually done. Now is the time to get this done."

Iowa Sen. Charles Grassley, the committee's top Republican, said he wished he "felt better about the substance of the bill," which is "moving on a slippery slope to more and more government control of health care." Video Watch what Grassley had to say about health care reform before the vote »

Snowe indicated she has concerns with several aspects of the bill, but didn't want to see the reform process derailed.

"Is this bill all that I would want? Far from it," she said. "Is it all that it can be? No. But when history calls, history calls. And I happen to think that the consequences of inaction dictate the urgency of Congress [taking] every opportunity to demonstrate its capacity to solve the monumental issues of our time."

On Monday, an insurance industry trade group questioned several of the assumptions underpinning the bill. America's Health Insurance Plans released a report stating that, if enacted, the bill would increase premiums for families by an extra $4,000 by 2019. It said premiums for individuals would rise by an additional $1,500.

The analysis, conducted by the firm PricewaterhouseCoopers, threatens to undermine Obama's assertion that it is possible to expand coverage while slowing the rate of medical inflation.

A Finance Committee spokesman slammed the analysis, calling it "a health insurance company hatchet job, plain and simple." Snowe said it was "surprising" the insurance industry "would issue that kind of condemnation when you are trying to create a constructive approach" potentially worth billions of dollars to private companies.

The committee's plan, initially drafted by Baucus, is the only one under serious consideration that excludes a government-run public health insurance option. Several top Democrats, including House Speaker Nancy Pelosi, have questioned whether it is possible to contain costs without creating a public option to serve as a check on private insurers.

Republicans and some conservative Democrats oppose the government-run insurance option, saying it would drive private insurers from the market and eventually bring a government takeover of the health care system.

Baucus has said the more conservative Senate lacks the votes to pass a public option; Pelosi has repeatedly insisted the more liberal House will pass a bill that includes one.

The Finance Committee plan was partly the result of months of negotiations between Baucus and five other panel members -- three Republicans and two Democrats. The proposal from the "Gang of Six" has been widely viewed as the only one with the potential of attracting any Republican support.

The vote came after the committee spent two weeks debating 130 amendments. Committee members boosted the bill's overall price by more than $50 billion in part by expanding insurance subsidies for individuals and families with lower incomes.

They also voted to exempt senior citizens from higher taxes on medical expenses.

The sweeping bill would be paid for in part by cutting spending on several health care programs -- including Medicare -- by roughly $400 billion. Another $200 billion would be generated by imposing a new tax on high-end health care policies, dubbed "Cadillac" plans by critics.

At the same time, new fees would be imposed on drug and insurance companies, medical device manufacturers and other industries tied to the health care sector.

Individuals would be required to purchase coverage or face a fine of up to $750.

Senate Majority Leader Harry Reid's goal is to emerge with a single bill that can overcome a potential filibuster by winning at least 60 votes in the Senate. He wants to meet Obama's goal of designing a bill that will cost no more than $900 billion over the next decade.

Senate aides expect that effort to take a couple of weeks.

Joining Reid in the decision-making will be Baucus; Sens. Christopher Dodd of Connecticut and Tom Harkin of Iowa; senior Democrats on the Health, Education, Labor and Pensions Committee; and Rahm Emanuel, the White House chief of staff.

Other key senators -- including Snowe, one of the Gang of Six -- are also expected to be involved.

Aside from wrestling with the public option, Democratic leaders have to resolve sharp differences over how to pay for a reform plan. Top House Democrats oppose a tax on high-cost policies, which they fear would affect many union members. They have instead proposed a tax surcharge on individuals with annual incomes over $500,000, or families earning more than $1 million.

To get a bill passed, Reid could implement a legislative option known as reconciliation, which would require only 50 votes instead of 60. However, Republicans have promised a "minor revolution," in the words of GOP Sen. Lamar Alexander of Tennessee, if Democrats resort to that rarely used tactic.
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Republican leaders, who have criticized the various Democratic plans for their size and scope, won't be involved in the upcoming negotiations. One senior Republican leadership aide recently quipped that she would be in her office with her feet on her desk during the talks because she wasn't going to be invited to offer suggestions.

If the House and Senate manage to pass health care reform bills, a conference committee would then negotiate a final version requiring approval from both chambers before going to Obama for his signature.

WASHINGTON (CNN) -- The Inter-American Court of Human Rights has been asked to investigate whether Panama tortured an Ecuadorian citizen who was being held as an illegal immigrant, an official hemispheric human rights organization said.

Jesus Tranquilino Velez Loor was arrested November 11, 2002, and deported to Ecuador on September 10, 2003. During that time, he was held without receiving procedural guarantees, the right to be heard and the right to present a defense, said the Inter-American Commission on Human Rights.

"The case also involves the lack of investigation of complaints of torture presented by Mr. Velez Loor before the Panamanian authorities, as well as the inhumane conditions of detention under which he was held in several Panamanian penitentiaries," the human rights commission said in a release Tuesday.

The human rights panel, which is part of the 35-nation Organization of American States, said it referred the case to the court last week because Panama did not adopt sufficient measures to address issues raised in a previous commission report.

Velez Loor "was sentenced to a prison term for having repeatedly entered Panama illegally. ... Panamanian law provides that foreign nationals, who repeatedly enter Panama, without the necessary papers, will be imprisoned for two years and then deported," Panama said in a 2006 report.

Velez Loor admitted he had gone into Panama without proper papers or visas.

The commission said it received an e-mailed complaint from Velez Loor on February 10, 2004, "in which he claims to have undergone torture, forced isolation, and mistreatment at the hands of Panamanian police officers at two Panamanian detention centers without being given the opportunity to defend himself, without the benefit of any court of law, without being allowed to make a telephone call and while being deprived of all medical care."

Panama denied those allegations in the 2006 human rights commission report.

Officials at the Panamanian embassy in Washington did not return a telephone request Tuesday from CNN for comment on the latest development.

The human rights commission consists of seven members who act in a personal capacity, without representing any country, and who are elected by the OAS General Assembly.

MOSCOW, Russia (CNN) -- U.S. Secretary of State Hillary Clinton stressed Tuesday that Washington and Moscow are working together to ensure Iran's nuclear program is strictly for peaceful purposes, but Russia has stopped short of committing to Iranian sanctions.
Russian President Dmitry Medvedev greets U.S. Secretary of State Hillary Clinton on Tuesday outside Moscow.

Russian President Dmitry Medvedev greets U.S. Secretary of State Hillary Clinton on Tuesday outside Moscow.

Speaking to reporters after a closed-door meeting, Clinton and Russian Foreign Minister Sergey Lavrov indicated there has been no agreement between the countries on any sort of sanctions plan, even though Russia is not opposed to sanctions in principle.

The United States is using a two-track approach, pursuing diplomacy with Iran and going on to stronger measures -- such as sanctions -- if that effort fails.

"We are aware that we might not be as successful as we need to be," Clinton said. "So we have always looked at the potential of sanctions in the event that we are not successful, that we cannot assure ourselves and others that Iran has decided not to pursue nuclear weapons."

Clinton quoted Russian President Dmitry Medvedev's recent comment that sanctions might be "inevitable" but not at this stage. Video Watch as Clinton stresses the importance of the diplomatic track with Iran »

While the Obama administration has been cautiously optimistic about the "inevitable" comment, Russia has long believed that sanctions are not yet necessary, even though they may be a factor to consider down the road.

Lavrov said that sometimes sanctions theoretically need to be imposed when all diplomatic efforts are exhausted -- but not in the case of Iran.
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"Threats, sanctions and threats of pressure in the current situation, we are convinced, would be counterproductive," he said.

World powers have long been concerned that Iran wants to build a nuclear weapon, and those suspicions were heightened by the discovery of a secret uranium enrichment plant near Qom. However, Iran has consistently said it is developing nuclear power for peaceful purposes.

"Iran's nuclear program remains a matter of serious concern. We're working closely with Russia through the P5 and 1 process," Clinton said, referring to the diplomacy with Iran conducted by Germany and the five permanent members of the U.N. Security Council -- the United States, Britain, France, China and Russia.

"We are working to ensure that Iran moves forward with us on this engagement track," said Clinton, who added that Iran must show without any doubt it is pursuing unequivocally only a peaceful use of nuclear power.

Clinton also met with Medvedev at his residence outside Moscow. Other items on Clinton's agenda included Afghanistan, arms control and the new U.S.-Russia bilateral presidential commission.
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Clinton spoke about surmounting historical difficulties in U.S.-Russian relations, changing a relationship "once defined by the shadow of mutually assured destruction into that based on mutual respect and over time increasingly mutual trust."

"We are different countries; we have different historical experiences, different perspectives," she said. "But we are planting those disagreements in a much broader field of cooperation, and hopefully we are enriching the earth in which this cooperation can take root."

The federal pay czar is trying to force the American International Group to reduce $198 million in bonuses promised to employees of its trading unit, where problems posed a threat to the global financial system last year.
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But the Treasury’s special master for compensation, Kenneth Feinberg, is running into legal hurdles because those bonuses fall outside new rules against bonus payments at companies receiving government assistance. The bonus agreements at issue were struck before last year’s emergency rescues by the Treasury and the Federal Reserve, and thus are not directly covered by the new rules.

The problem is a recurring one. A.I.G. payments early this year to the same employees elicited public outrage, though government officials said then that they had little legal authority to rescind pre-existing contracts.

To strengthen his hand, Mr. Feinberg is threatening to reduce the compensation packages he does control, according to a person close to the talks. That could mean shrinking the pay of other A.I.G. executives — including its new chief, Robert Benmosche — if the firm does not claw back part of the bonuses for the people in its trading unit, known as A.I.G. Financial Products.

At companies that received extraordinary government support, Mr. Feinberg’s task is to monitor and enforce rules governing new pay packages. He can approve or reject cash pay that exceeds $500,000 for top executives.

Mr. Benmosche, hired by A.I.G. late this summer, received a compensation package that includes $3 million initially and about $4 million in stock that he must hold for five years, as well as annual bonuses based on performance.

A.I.G. has a variety of employee bonus programs. The Financial Products group began a two-year retention program in January 2008, before its government rescue, designed to keep skilled employees from leaving and jeopardizing its derivatives portfolio .

After A.I.G. paid $165 million in retention bonuses to that group in March, it promised to try to recover much of the money to quell the uproar that ensued.

But the insurance company has recovered only $19 million of the $45 million it asked the recipients to repay, according to an audit of its compensation program and the government’s oversight.

A company spokeswoman, Christina Pretto, said in a statement that the people who had received that money had “until the end of the year to fulfill their commitments,” and that the company believed those people would honor them.

But the special inspector general for the Troubled Asset Relief Program, Neil M. Barofsky, who conducted the audit, said some of the money appeared to be unrecoverable, because the employees had resigned rather than return the pay.

Other people are still weighing tax issues arising from those bonuses, and some have asked the insurer to dock their paychecks in the future, rather than make a single payment now.

The inspector general’s audit will be the subject of a hearing Wednesday by the House Oversight and Government Reform Committee.

The report stated that Mr. Feinberg had “informally advised A.I.G. not to pay the full $198 million,” scheduled for payment next March, but did not reveal how sharply Mr. Feinberg hoped to pare the bonuses.

The amount of the bonuses at A.I.G. is quite small relative to the record amount of government assistance received by the firm over the last year, roughly $182 billion.

The $165 million in bonus pay made last March coincided with the news that A.I.G. had just posted the biggest loss in American history and would need a bigger rescue package. That led to stormy Congressional hearings and tours of the suburbs where some bonus recipients lived.

Company officials argued at the time that only a handful of the employees of financial products bore responsibility for the disastrous derivatives trading, and it was unfair to blame everybody for the harm caused by a few. The company also said it wanted to honor its commitments because skilled people might resign en masse if bonuses were rescinded.

The new audit pointed out that the bonus program for the Financial Products unit was unusual because it included payments to unessential people. It cited a $7,700 bonus for a kitchen assistant, a $7,000 bonus for a mailroom assistant and $700 for a file administrator.

The audit also described the lack of coordination between the Federal Reserve and the Treasury over A.I.G.’s compensation program. It said Fed officials had their own conversations with company officials about compensation last fall, and were further briefed over the winter by compensation specialists at Ernst & Young brought in to help.

But the Fed did not convey any of the information it had gathered to the Treasury until just before the bonuses were scheduled to be paid in March. Then, the Fed sent an e-mail message to the general counsel at the Treasury, the report stated, warning that the looming bonuses had “garnered press and congressional attention” and would “not be easy for Treasury and the Fed to defend.”

That message promised to supply more detail, but nothing followed for about a week.

“Despite the strong language” of the Fed’s messages, the audit found “that the e-mail did not raise any flags in Treasury.”

Stephen Labaton contributed reporting.