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Morning Bulletin – Friday, Jan. 9, 2009

A roundup of news, schedules, and key stories from CBS News Political Director Steve Chaggaris:

President-elect Obama will officially announce Leon Panetta as his choice for CIA Director and retired Adm. Dennis Blair as his choice to be Director of National Intelligence at a 10:30 a.m. news conference in Washington, D.C.

He is also expected to announce John Brennan, who was reportedly seriously considered for CIA Director, to be Mr. Obama's top counterrorism adviser, reports CBS News' Bob Orr.

The Barack Obama's economic speech Thursday, the New York Times Peter Baker and David M. Herszenhorn report that Mr. Obama's "plan ran into crossfire from his own party in Congress on Thursday, suggesting that quick passage of spending programs and tax cuts could require more time and negotiation than Democrats once hoped.

"Senate Democrats complained that major components of his plan were not bold enough and urged more focus on creating jobs and rebuilding the nation's energy infrastructure rather than cutting taxes. ... Further complicating the picture, Democratic senators said Thursday that they would try to attach legislation to the package that would allow bankruptcy courts to modify home loans, a move Republicans have opposed."

After a meeting with incoming White House economic adviser Larry Summers and Obama adviser David Axelrod, Senate Democrats expressed "frustration", according to the Times.

"'There is only one thing we have got to do in the stimulus, and that is how can we create jobs,' said Senator Tom Harkin, Democrat of Iowa, as he left the meeting. 'I am a little concerned by the way that Mr. Summers and others are going at this in that, to me, it still looks like a little more of this trickle-down, if we just put it in at the top, it's going to trickle down.

"A number of people in there said, 'Look, we have got to have programs that actually create jobs and put people to work.'' Senator Kent Conrad, Democrat of North Dakota and chairman of the Budget Committee, said lawmakers and the incoming administration had differences over how to focus the huge federal spending in a recovery bill. 'Investment, investment, investment has got to be the central focus: energy, roads, bridges, waterways, housing,' he said. 'Job creation is Job One.' Mr. Conrad, who described the meeting as extremely positive, said Mr. Summers ended it by telling the senators, 'Message received, loud and clear.'"

Politico's David Rogers adds, "A proposed jobs creation tax credit was ridiculed by senators as ineffective in today's economy. Leading Democrats even challenged Obama's signature plan to provide a $500 tax credit to offset the cost of payroll taxes that hit hardest among lower income workers.

"'I just don't think it works. I don't think that's going to give much lift to the economy, as well intended as it is,' said Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat who also sits on the tax writing panel. 'From a fairness standpoint and a distribution of burden, I can understand it completely. But in terms of lifting the economy?'

"The meeting with Axelrod and Summers followed an earlier closed door executive session of the Senate Finance Committee Thursday morning at which many of the same complaints were heard. In each case, the tone was described as businesslike, more questioning than hostile and even Republicans said later that a plan could jell for all sides. But at this stage Democrats are in too many different places to proceed quickly despite a common belief that action is needed.

"'There were a lot of questions asked about the efficiency of the tax provisions,' said [Finance Committee Chairman Sen. Max] Baucus [D-Montana]. 'When all is said and done we'll pass legislation that's fairly close to the proposal we've been discussing. However it's going to be improved upon. It's going to take a lot of intense vigorous discussion in a mutual search for what's right… We've got to do this right.'"

And the Wall Street Journal's Greg Hitt reports that one Democrat is skeptical of how effective Mr. Obama's idea for a business tax credit would be. "Sen. Ron Wyden (D., Ore.) questioned Obama's proposal to reward businesses with a $3,000 tax credit for every job they create.

"'There's just not a lot of history of that working very well,' said Sen. Wyden, a member of the Senate Finance Committee, which will be a starting point for the stimulus package on Capitol Hill. He suggested that infrastructure spending would have a 'much bigger economic' impact, and cited a specific need for investments in high-speed rail."

Politico's Jim VandeHei and Mike Allen's analysis of Obama's current situation is a must-read: "Congressional Democrats are firing a surprising number of unexpectedly sharp brush-back pitches at President-elect Obama and his staff over policy plans and personnel picks, making him look embattled during what was to be a triumphant debut week in Washington. The honeymoon isn't over – the president-elect remains widely popular, even among some Republicans – and his inauguration on Jan. 20 will be a signature event in the lifetime of most Americans, giving his opening days a greater lift and pop than any president since at least Ronald Reagan.

"But as Obama buckled down his week as a shadow government across Lafayette Park from the waning one in the White House, Democrats hit him with daily fast balls reflecting two realities: His team is smart but not perfect, and Democrats are supportive but not supine."

Meantime, Mr. Obama's nominee for Treasury Secretary, Tim Geithner, is "overhauling" how to spend the remaining $350 billion of the $700 billion financial rescue program passed last fall to help Wall Street. "Geithner has been working night and day on the eighth floor of the transition team office in downtown Washington with Lawrence H. Summers and other senior economic advisers to hash out a new approach that would expand the program's aid to municipalities, small businesses, homeowners and other consumers," reports the Washington Post's David Cho.

"With lawmakers stewing over how Bush administration officials spent the first $350 billion, Geithner has little chance of winning congressional approval for the second half without retooling the program, the sources added. ...

"With Geithner leading the discussions along with Summers, who will head the National Economic Council in the White House, the group is devising plans that would use rescue funds to help homeowners avoid foreclosure and unclog the credit markets that finance loans to consumers, small businesses and municipalities. The team is also planning to have the government take more stakes in financial firms, but companies receiving federal aid would have to submit to greater restrictions on executive compensation than were imposed by the Bush administration.

"Geithner is also considering creating a new bureau within the Treasury to manage the Troubled Asset Relief Program, or TARP, in an attempt to improve the program's operations and oversight. Although the timing has not been settled, one source said details of this new approach may be laid out before Geithner's confirmation hearing, which is likely to be held late next week."

Labor Secretary nominee Hilda Solis goes before the Senate Health, Labor, Education and Pension Committee for her confirmation hearing today, which is expected to be sans fireworks or drama, much like yesterday's confirmation hearing for Health and Human Services Secretary nominee Tom Daschle.

"Daschle Treated Gently in Confirmation Hearing," writes The Washington Post's Ceci Connolly. "In a session that resembled a homecoming more than a congressional grilling, former senator Thomas A. Daschle yesterday glided through the first of two Senate confirmation hearings to be secretary of health and human services. ... Though Daschle will control nearly one-quarter of all federal spending as HHS secretary, he encountered few probing questions on his plans for programs such as Medicare, Medicaid and the State Children's Health Insurance Program, which is set to expire at the end of March.

"House leaders said they hope to vote next week on renewal of the program. Absent, too, was any mention of the lobbying work by Daschle's wife or how the former senator has earned a living since his defeat in 2004. ... Nor did lawmakers delve into the substantive policy differences that exist between Obama and many on Capitol Hill on such issues as the tax treatment of health insurance, the question of an individual mandate requiring all Americans to have coverage, and whether the federal government should create an optional public insurance plan."

Upcoming Obama cabinet confirmation hearings: Secretary of State nominee Hillary Clinton, Jan. 13; Education Secretary nominee Arne Duncan, Jan. 13; Energy Secretary nominee Steven Chu, Jan. 13; HUD Secretary nominee Shaun Donovan, Jan. 13; OMB Director nominee Peter Orszag, Jan. 13; Veterans Affairs Secretary nominee Eric Shinseki, Jan. 14; Agriculture Secretary nominee Tom Vilsack, Jan 14; Attorney General nominee Eric Holder, Jan 15; Interior Secretary nominee Ken Salazar, Jan. 15; UN Secretary nominee Susan Rice, Jan. 15; Treasury Secretary nominee Tim Geithner, Jan. 15. TBA: HUD Transportation Secretary nominee Ray LaHood, Homeland Security Secretary nominee Janet Napolitano, CIA Director nominee Leon Panetta. Defense Secretary Robert Gates does not need to be reconfirmed.

In Illinois, the clock is ticking for Gov. Rod Blagojevich, D-Ill., as the Illinois House meets at 10am ET to debate and most likely vote on an article of impeachment. If passed, the House would send the article to the Senate, which would then hold an impeachment trial. Thursday, an Illinois House investigative committee recommended the impeachment of the embattled governor.

"A House vote in favor of impeachment—as predicted by Speaker Michael Madigan—would be the first ever for an Illinois governor and would send the issue to the Senate for a trial. The panel's action was another step toward ending the nearly six years of government turmoil and paralysis that has marked Blagojevich's reign, with a distrusted Democratic governor battling a fractured Democratic-controlled General Assembly," report Rick Pearson and Ray Long in the Chicago Tribune.

Roland Burris, who was appointed by Blagojevich to fill Mr. Obama's vacant Senate seat, testified before the investigative committee Thursday and the Chicago Tribune's Ray Long and Ashley Rueff report that he had a surprise for the committee.

"Even as he sought to allay concerns about how Gov. Rod Blagojevich picked him for the U.S. Senate, Roland Burris disclosed Thursday he relayed his interest in the job to one of the governor's lobbyist fundraising friends whose activities are under federal scrutiny. The former Illinois attorney general said he raised the idea of going to Washington if Barack Obama was elected president in a July or September conversation with Lon Monk, the Democratic governor's former chief of staff.

"Burris said he mentioned it as he was asking Monk to steer him lobbying clients. The revelation didn't seem to hurt Burris—Illinois Democratic House Speaker Michael Madigan predicted Burris would be the state's next U.S. senator—but it served as another example of the intersection between Burris, Blagojevich and the governor's inner circle. Burris is touting his clean record of public service as a reason the U.S. Senate should seat him despite Democratic leadership's criticism that anyone Blagojevich picked would be tainted following the governor's arrest last month on federal corruption charges."

"US vice president-elect Joe Biden Friday met Pakistan's president to discuss tensions with India and the anti-terror fight in South Asia, 11 days before he takes office with Barack Obama, an aide said," reports Susan Stumme of the Agence France-Presse.

"Biden, outgoing chairman of the Senate Foreign Relations Committee, sat down with President Asif Ali Zardari at the start of a regional tour with Republican senator Lindsey Graham. ... An aide to the Pakistani president said the Biden-Zardari talks focused on strained relations between India and Pakistan following the Mumbai attacks, as well as Islamabad's ongoing contribution to the US-led 'war on terror'." Biden and Graham are expected to visit Afghanistan on this trip as well.

Colin Powell will hold a news conference with the Presidential Inaugural Committee today at 12:15pm ET to talk about "President-elect Obama's call to national service."


Wall Street Journal's Christopher Cooper and Brody Mullins, "Wall Street Is Big Donor to Inauguration": "President-elect Barack Obama has banned corporations and big donors from funding his Jan. 20 inauguration. But 90% of donations received so far have been raised by well-heeled fund-raisers, including Wall Street executives whose companies have received billions of dollars in federal bailout money. A total of 207 fund-raisers have collected $24.8 million of the $27.3 million in contributions disclosed by Mr. Obama through Thursday, according to an analysis by nonpartisan campaign finance group Public Citizen commissioned by The Wall Street Journal."

Washington Post's David Nakamura, "Inaugural Renters Begging for Takers": "Across the Washington region, homeowners' dreams of a quick and easy payday are evaporating as the days tick down to President-elect Barack Obama's swearing-in ceremony Jan. 20: The inaugural housing market has gone bust in record time. Those who listed their properties within a week or two of Obama's Nov. 4 election victory were able to score deals, but those who jumped on the bandwagon after that have largely been left without offers."

USA Today's Thomas Frank and Kevin Johnson, "D.C. subway braces for Inauguration Day crush"


AP's Michael Gormley, "Paterson: Kennedy lacks some experience for Senate": "'Caroline Kennedy obviously does have a tremendous relationship with (President-elect Barack Obama) that's certainly a plus,' Paterson said Thursday. 'She does not have much political, I mean, legislative experience, which is a minus.'"

NY Daily News' Kenneth Lovett, "Caroline Kennedy's inexperience weighs big on Gov. Paterson's mind": "'We're looking at legislative experience, we're looking at the ability to make things happen; we're looking at relationships that can be developed,' Paterson told The News. 'She has areas where's she's stronger and areas where she's not, just like the other candidates.' Paterson, who plans to interview Kennedy within the next week, described her as 'demure, almost shy,' but also 'a very gracious person.' He told the Buffalo News that Kennedy is helped by the 'tremendous attention' the media give her."


Politico's Glenn Thrush, "ReFi": "If Dianne Feinstein is known as 'DiFi,' maybe Norm Coleman should be called 'ReFi.' In the 14 years since The Minnesota Senator-in-Limbo and wife Laurie purchased a home in St. Paul, he has refinanced or otherwise revised the terms of his mortgage 12 times, according to records obtained by a Coleman foe."


Washington Post's Howard Kurtz, "Online, Sarah Palin Has Unkind Words for the Press": "Sarah Palin, still smarting over coverage of her vice presidential run, calls the media's reporting on her family "very scary" and says there may be "a class issue" that explains the more sympathetic treatment of Caroline Kennedy."

Politico's Jonathan Martin, "Lei-off: Obama snubs Dean": "The conspicuous absence of Howard Dean from Thursday's press conference announcing Tim Kaine's appointment as Democratic National Committee chair was no accident, according to Dean loyalists. Rather, they say, it was a reflection of the lack of respect accorded to the outgoing party chairman by the Obama team."

St. Louis Post-Dispatch's Tony Messenger and Bill Lambrecht, "Sen. Christopher 'Kit' Bond announces he will not run in 2010"

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