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Morning Bulletin – Wednesday, Jan. 14, 2009

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

(AP Photo/Ian Barrett)
Another bump in the road was revealed late yesterday when the Wall Street Journal's Jonathan Weisman broke the news that Treasury Secretary nominee Tim Geithner failed to pay Social Security and Medicare taxes when he worked for the International Monetary Fund and that he had employed a housekeeper whose immigration paperwork expired while she worked for him.

Mr. Obama's aides said these were "honest mistakes" – the housekeeper was legal when Geithner hired her and she eventually did get a green card; the taxes, the Obama folks explained, were the result of common confusion for IMF employees and he paid them back, with interest, when the "mistake" was discovered.

His "service should not be tarnished" by these issues, said Obama spokesman Robert Gibbs.

Geithner's confirmation hearing, originally scheduled for tomorrow, is now expected to take place Friday.,

While both Democratic and Republican senators expressed their support for Geithner yesterday, "At the least, the flap is a major embarrassment for the man chosen to head the Treasury Department, which oversees the Internal Revenue Service, especially as Mr. Geithner worked at the Treasury under three presidents.

"And it is the latest of several stumbles by the previously smooth-running Obama transition office — the most serious being the withdrawal of Gov. Bill Richardson of New Mexico as the choice for commerce secretary because of questions over state contracts and political contributions," the New York Times' Jackie Calmes points out.

Today, the Senate holds confirmation hearings for Veterans' Affairs Secretary nominee Eric Shinseki, Agriculture Secretary nominee Tom Vilsack and EPA Administrator nominee Lisa Jackson.

(CBS)
Transportation Secretary nominee Ray LaHood's confirmation hearing was originally scheduled for today and was postponed late yesterday.

Meantime, Washington Post's Carol D. Leonnig reports LaHood "has been an unapologetic advocate of earmarks, a practice Obama now opposes, and has used his influence to win funding for projects pushed by some of his largest campaign contributors.

"LaHood, who represented Illinois in the House for seven terms, sponsored $60 million in earmarks last year, steering at least $9 million in federal money to campaign donors, a Washington Post analysis shows. An opponent of earmark reform efforts in Congress, LaHood ranks roughly among the top 10 percent in the House for sponsoring earmarks in 2008, according to a watchdog group. ...

"LaHood has defended his use of earmarks as a way to direct federal money to decaying communities in his district and insisted there is no connection between his earmarks and projects benefiting campaign donors. Obama has pledged to resist pressure from local interests and to block unjustified earmarks from inclusion in the stimulus bill. ...

"The stimulus package would include the largest wave of federal transportation spending since the Eisenhower administration launched the creation of the interstate highway system."

(AP Photo/Susan Walsh)
Tomorrow's confirmation hearing for Attorney General nominee Eric Holder promises to have the most fireworks of any of these hearings, as evidenced by the daily coverage of the expected tough line of questioning from Senate Judiciary Committee Republicans.

Politico's John Bresnahan provides the latest look: "Senate Republicans have invited the son of man killed in a 1975 Puerto Rican nationalist bombing as well as a former FBI agent who investigated two violent groups supporting Puerto Rican independence to appear at Eric Holder's confirmation hearings.

"A third GOP witness is a pro-gun rights attorney from Virginia. These Republican witnesses signal the direction that Sen. Arlen Specter (Pa.), the ranking member of the committee, will take in trying to derail or delay confirmation for Barack Obama's attorney general pick.

"Specter and other top Republicans, including Karl Rove, the former top political advisor to President Bush, have raised concerns about whether Holder can be truly independent from the president. In particular, they question Holder's role in President Clinton's 2001 pardon of fugitive financier Marc Rich as well as Holder's involvement in Clinton's 1999 decision to grant clemency to 16 violent Puerto Rican nationalists.

"To drive home those questions, Republicans have arranged for Joseph F. Connor, whose father was killed in the Jan. 24, 1975, bombing of Fraunces Tavern in New York City, to testify before the Senate Judiciary Committee as it considers Holder's nomination."

Upcoming Obama cabinet confirmation hearings: Attorney General nominee Eric Holder, Jan 15; Interior Secretary nominee Ken Salazar, Jan. 15; UN Secretary nominee Susan Rice, Jan. 15; Homeland Security Secretary nominee Janet Napolitano, Jan. 15; Treasury Secretary nominee Tim Geithner, Jan. 16 (expected). TBA: HUD Transportation Secretary nominee Ray LaHood, CIA Director nominee Leon Penetta. Defense Secretary Robert Gates does not need to be reconfirmed.

Mr. Obama continues hammering out the details of his economic stimulus plan with Congress, however yesterday, Bloomberg News' Brian Faler reports, "Democrats in Congress may cut the share of the economic stimulus package dedicated to tax cuts below the $300 billion or more that President-elect Barack Obama is asking for, House Ways and Means Committee Chairman Charles Rangel said. ...

"Rangel's comments came after Obama lobbied Democratic senators yesterday seeking to build support for his stimulus plan and for tapping the second half of a $700 billion financial-markets rescue fund."

The New York Times' David M. Herszenhorn reports, "The president-elect and Congressional Democrats have worked carefully over the last two weeks to avoid much of a paper trail on Capitol Hill, even as they have begun intense negotiations over components of the stimulus plan, of which 60 percent will be new spending and 40 percent will be tax cuts. ...

"According to lawmakers ... parts of the plan have already taken shape. Officials said House and Senate Democrats had tentatively settled on $87 billion in additional aid to help states cover rising Medicaid costs, and $80 billion in grants to cover state and local education expenses.

"After Senate Democrats complained last week that the tax package proposed by the Obama team did not focus enough on job creation or on the energy sector, lawmakers said that the incoming administration had agreed to drop a proposed $3,000 tax credit per new employee and to add more energy-related tax breaks.

"Lawmakers said the energy tax provisions would now total more than $20 billion, including incentives for the production of energy from renewable sources, like wind, as well as added tax breaks for energy conservation. ...

"House and Senate Democrats were also debating the merits of some business tax breaks that the Obama team had proposed, including allowing companies to speed the depreciation of capital investments and applying current losses to prior years' income to claim tax benefits."

Regarding the remaining $350 billion in the financial rescue package, "Top officials of the Federal Reserve yesterday offered the most detailed proposals yet for overhauling the rescue of the financial system, urging Congress to release the next batch of bailout money and arguing that a stimulus program alone is not enough to keep the economy from plunging further into recession," report the Washington Post's Neil Irwin and David Cho.

"The Fed leaders spoke as President-elect Barack Obama worked Capitol Hill, trying to persuade Democratic senators not to block a request for the last $350 billion of the bailout funds and assuring them that he is willing to use his veto power if they do so, according to participants in his lunchtime meeting with lawmakers.

"Obama added that he would prefer to avoid making a politically awkward veto against a Democratic Congress one of his first official acts as president. ...

"Many Senate Republicans, meanwhile, continued to insist that Obama's team has provided too few details about how they would use the money. ...

"Obama is making personal calls to Democrats and Republicans to urge them to release the money, and Democratic leaders were confident that he would prevail on a matter he told them he considers the 'first vote' of his administration."

On today's schedule: Mr. Obama and Vice President-elect Joe Biden will visit the Supreme Court today and may tour the court with the justices this afternoon. Also, Mr. Biden and Sen. Lindsey Graham, R-S.C., who just returned from a trip to Iraq, Afghanistan, Pakistan and Kuwait, will brief Mr. Obama on their trip this afternoon.

CONFIRMATION HEARINGS

(AP Photo/Gerald Herbert)
.Yesterday, Hillary Clinton's confirmation for Secretary of State went smoothly by all accounts, even though she had to answer questions about her husband's fund-raising for his foundation. The New York Times' Mark Landler reports, "On most important issues, including Iraq and Afghanistan, Mrs. Clinton broke little ground, saying that she did not want to undermine President Bush before President-elect Barack Obama took office. But she left little doubt that she intended to be in the thick of all of these issues.

"'I assure you that, if I am confirmed, the State Department will be firing on all cylinders to provide forward-looking, sustained diplomacy in every part of the world,' she said. ...

"The only testy notes in a day of cordial exchanges came when Republican senators warned that Mrs. Clinton could face conflicts of interest because of foreign donations to the charitable foundation run by her husband, former President Bill Clinton. Mrs. Clinton stood her ground, saying that restrictions hammered out between Mr. Clinton and the Obama transition team were 'probably as close as we can get' without hampering the foundation's work."

"Secretary of State-designate Hillary Rodham Clinton said yesterday that the incoming Obama administration will seek to engage directly with Iran in an effort to persuade it to abandon its nuclear program and become 'a constructive regional actor,' underscoring a dramatic shift in U.S. foreign policy from the Bush administration," writes the Washington Post's Glenn Kessler.

The Wall Street Journal's Jay Solomon reports, "Republican senators stressed, however, that Sen. Clinton's confirmation would be contingent upon a strict accounting procedure being implemented to track former President Bill Clinton's foundation activities and to guard against conflicts of interest with his wife's work.

"'The core of the problem is that foreign governments and entities may perceive the Clinton Foundation as a means to gain favor with the secretary of state,' said Sen. Richard Lugar of Indiana, the ranking Republican on the Foreign Relations panel. Sen. Lugar said the best approach to guard against such conflicts might be for the Clinton Foundation to forswear donations from these foreign sources during Sen. Clinton's time at the State Department."

In other confirmation hearings yesterday:
"[Energy Secretary nominee Steven] Chu Softens Views on Coal, Nuclear Power," reports the Wall Street Journal's Stephen Power.

"Education Nominee [Arne Duncan] Is Warmly Received in Senate," writes the Washington Post's Maria Glod.

"Wider Role Urged for Housing Choice [HUD Secretary nominee Shaun Donovan]," reports the New York Times' Jason DeParle.

"Budget Director Pick [Peter Orszag] Sounds Alarm," writes Robert Pear of the New York Times.

INAUGURATION

NY Daily News' Michael Saul, "Obama's inauguration is most expensive ever at $160 million"

Washington Post's Mary Beth Sheridan and Michael E. Ruane, "D.C. Will Get Emergency Funding": "The White House announced yesterday that it will grant emergency funding to the District to help with soaring costs for the inauguration of President-elect Barack Obama, while forecasters said snow could add to the day's complications. The National Weather Service, in its first detailed look at the possible weather for Jan. 20, is calling for a mostly cloudy day but predicted a 30 percent chance of snow. The same is true for Sunday, when inauguration festivities open with the Lincoln Memorial music extravaganza, the Weather Service said.

"The emergency declaration -- based on crowd projections, not the weather -- came less than a week after D.C. Mayor Adrian M. Fenty (D) asked for the aid, citing estimates of 1.5 million to 2 million people expected to attend, according to a Bush administration spokesman. The city has projected its tab for the inauguration at $47 million, about three times as much as Congress has given the District."

NY Times' Brian Stelter, "News Outlets Hope to Capitalize on Inauguration"

Politico's Ben Smith, "Inaugural tickets scalped on Craigslist"


Click Here For All Of CBSNews.com's Special Inauguration Coverage

ROLAND BURRIS

Politico's Manu Raju, "Dems cool on Burris Senate seating": "Roland Burris will take his seat in the U.S. Senate on Thursday, but he shouldn't expect a warm welcome. Republicans are ready to portray Burris as a poster child for all that's wrong with the Democratic Party, and Democrats aren't sure that they want to back him if he runs for the seat in 2010."

HILLARY CLINTON'S SENATE SEAT / CAROLINE KENNEDY

NY Daily News' Kenneth Lovett and Glenn Blain, "Andrew Cuomo talked to Gov. Paterson about Hillary Clinton's seat – sources": "Cuomo met with Paterson at the governor's Manhattan office last month to discuss the position, two sources said. 'We will not comment on the governor's process other than to say your information is factually inaccurate,' Cuomo spokesman John Milgrim said."

A new Quinnipiac University poll shows that "New York State voters have cooled on Caroline Kennedy and more voters now prefer State Attorney General Andrew Cuomo 31 – 24 percent for Hillary Clinton's U.S. Senate seat."

MINNESOTA SENATE RACE

Minneapolis Star-Tribune's Pat Doyle and Mike Kaszuba, "Franken expands legal effort to get seated in Senate"

ALSO:

Washington Post's Cecilia Kang, "Change Sweeping to the FCC": "Julius Genachowski, technology adviser to President-elect Barack Obama, is poised to become chairman of the Federal Communications Commission at a time when communications policy lies at the intersection of sweeping changes in the high-tech business landscape. With Genachowski's private-sector experience and ear to Silicon Valley, the appointment could signal greater focus on new Internet technologies for the agency, analysts said."

LA Times' Peter Wallsten, "Retooling Obama's campaign machine for the long haul": "As Barack Obama builds his administration and prepares to take office next week, his political team is quietly planning for a nationwide hiring binge that would marshal an army of full-time organizers to press the new president's agenda and lay the foundation for his reelection. The organization, known internally as 'Barack Obama 2.0,' is being designed to sustain a grass-roots network of millions that was mobilized last year to elect Obama and now is widely considered the country's most potent political machine."

Esquire's Ryan D'Agostino, "Five New Quotes From Sarah Palin"

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