House Democrats will likely be forced to delay plans to unveil their final bill to overhaul the nation’s healthcare system after a group of conservative Democrats demanded significant changes to the proposed legislation. In a letter sent last night, forty members of the Blue Dog Coalition said the bill “lacks a number of elements essential to preserving what works and fixing what is broken.” House leaders had been preparing to unveil the legislation today. The conservative Democrats expressed major reservations about establishing a government-run public health insurance program. The Blue Dogs also said the bill needs more cost containment measures, protections for small businesses, and a focus on rural healthcare. Meanwhile, Rep. Lynn Woolsey (D-CA) said the eighty-member Progressive Caucus will only support a bill that includes a public plan.

In business news, the bailed-out insurance giant AIG is preparing to pay out millions of dollars more in bonuses to several dozen top corporate executives. The Wall Street Journal reports the previously agreed-to retention bonuses include about $235 million for employees at the insurer’s controversial financial products unit. Other news outlets put the size of the bonuses at just $2.4 million. In an attempt to avoid public outrage, AIG has been quietly seeking approval to pay out the bonuses from the new federal compensation czar.

Talks between the ousted Honduran president Manuel Zelaya and the leaders of last week’s military coup began on Thursday in Costa Rica. Zelaya and the military-backed president of Honduras, Roberto Micheletti, met separately with Costa Rican President Oscar Arias, but there were no face-to-face meetings between the two sides. Zelaya maintained his demand to be reinstated as head of state of Honduras. Micheletti argued Zelaya was lawfully ousted last month, because he violated Honduras’s constitution by trying to lift presidential term limits. Dozens of Costa Ricans protested outside the Honduran embassy in San Jose in support of ousted president Manuel Zelaya.

Jorge Hernandez: “We came here to protest in a peaceful and democratic way to support President Zelaya, and also to support President Arias, asking that he not fall into the trap of the militarists and coup plotters by recognizing Micheletti and treating him as a head of state.”

The Guardian newspaper reports Rupert Murdoch’s News Corp. has paid out about $1.6 million to settle lawsuits that would have revealed that dozens of Murdoch’s reporters in Britain had worked with private investigators to spy on numerous public figures. Reporters at the News of the World and the Sun reportedly hacked into cellphones and accessed confidential personal data, including tax records, Social Security files, bank statements and itemized phone bills. The list of targeted individuals included politicians, sports stars and entertainers. British officials said thirty-one journalists working for the tabloid newspapers were involved in the scandal.

Newsweek is reporting CIA Director Leon Panetta has ordered an internal inquiry into the agency’s handling of a contentious and still highly classified intelligence program that was kept secret from members of Congress for eight years. CIA and congressional officials have refused to describe the nature of the covert program, but insisted it is not connected to the CIA’s use of controversial “enhanced” interrogation techniques. The Washington Post reports the secret program was related to the collection of information on suspected terrorists that was instituted after the September 11, 2001 attacks. The program’s existence erupted into a major political dispute this week when seven Democrats on the House Intelligence Committee released a letter charging that the agency had “misled” members of Congress by failing to inform the oversight committees about the program until last month.

At the G8 meeting in Italy, world leaders pledged $12 billion for a “food security initiative” for the world’s poorest countries. The total committed falls $3 billion short of the $15 billion promised by President Obama.

Patrick Watt of World Vision: “We welcome that in principle, but I think there are a lot of unanswered questions about how much of that’s new money, how much of it is going to be loaned through the World Bank and other institutions, and how much of it is actually going to be going to tackle hunger in the poorest countries.”

Ariane Arpa of Oxfam called on the G8 nations to do more to address world hunger.

Ariane Arpa: “The eight richest countries in the world have the responsibility to address the problem of hunger in an integral way, in all its aspects, from climate change, from development aid, investment in agriculture, and give a solution that is sustainable and that is fair to all people in the world.”

Greenpeace activists occupied four coal-fired power stations around Italy on Thursday for a second day, as world leaders met for the G8 summit. The activists broke into the plants in the early hours of the morning to demand G8 heads of state take leadership on climate change.

The era of a new General Motors began today as the carmaker officially left bankruptcy and sold its most desirable assets to a new government-backed company. The move is seen as a major step in GM’s turnaround. The federal government will hold nearly 61 percent of the new company, with the Canadian government, a healthcare trust for the United Auto Workers union and bondholders owning the balance. GM filed for Chapter 11 on June 1.

In Iran, thousands of protesters defied a ban on demonstrations and marched in Tehran on Thursday. Security forces fired tear gas and charged the protesters with batons. The protest came on the tenth anniversary of a student uprising at Tehran University.

Meanwhile, Canada has summoned Iran’s top diplomat in Ottawa to demand the release of an Iranian Canadian journalist being detained by Iranian authorities. Maziar Bahari has been held for three weeks. He is a reporter for Newsweek.

In Iraq, the US military has unexpectedly released five Iranians after holding them for two-and-a-half years. After their release, the men personally met with Iraqi Prime Minister Nouri Kamal al-Maliki before being handed over to the Iranian embassy. The US had accused the men of orchestrating deadly attacks in Iraq.

The United Nations has launched a project to remove half-a-million tons of concrete rubble from Gaza Strip districts bombed and bulldozed by Israeli forces. Jens-Anders Toyberg-Frandzen of the United Nations Development Program said the residents of Gaza face an uphill battle in their attempt to rebuild from the war.

Jens-Anders Toyberg-Frandzen: “Well, at the moment we cannot rebuild. That is, of course, very sad. We don’t have access to cement, we don’t have access to construction material, because of the borders being closed. So we cannot build houses. But what we have to do is we have to remove the rubble before houses can be built, and there is nothing to prevent us from removing the rubble now that we have got the funds available to do so.”

Israel prohibits the import of cement and steel, which Gazans need to rebuild their homes, on the grounds that they could be used for military purposes by Hamas.

In Washington, twenty-seven AIDS activists were arrested inside the Capitol Rotunda Thursday while protesting President Obama’s AIDS policies. The activists decried the Obama administration’s failure to lift the federal ban on funding syringe exchange, to fully fund lifesaving global AIDS programs, and to fully fund AIDS housing programs in this year’s budget.

Here in New York, the Democrats have regained control of the State Senate after Pedro Espada returned to the party. Espada set off a standstill five weeks ago when he and another Democrat defected and joined with the Republicans. Under a new leadership arrangement, Espada will become the new majority leader in the Senate.

In political news from Washington, Illinois Senator Roland Burris is expected to announce today that he will not seek election to a full Senate term. Burris was appointed to his seat by former Illinois Governor Rod Blagojevich over initial objections from top Democrats.

Meanwhile, Republican Senator John Ensign of Nevada has disclosed that his parents gave almost $100,000 to a female staffer who was then his mistress and to her family. The disclosure came a day after it was revealed the woman was also paid $25,000 in severance pay.