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Morning Bulletin – Wednesday, Jan. 28, 2009

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

(AP)
Step one for President Barack Obama's economic stimulus plan happens today in the House when members vote on the $825 billion plan this evening.

The bill, although roundly criticized by Republicans in recent days, is expected to clear the House easily. Next stop is the Senate, and Congress has promised a final bill ready for the president by mid-February.

The question today is not whether the stimulus bill will pass the House but whether they will heed the president's call for bipartisanship. From the signals Republicans were sending Tuesday, all bets are that today's vote will actually be quite partisan.

Yesterday on Capitol Hill, between meetings with House and Senate Republicans, Obama told reporters, "I don't expect 100% agreement from my Republican colleagues." Rep. Mike Castle, R-Del., suggests Obama would be lucky to get 10 percent agreement, telling USA Today there could be as many as 10 to 15 Republicans who vote for it, but added, "If I had to bet, I would bet zero."

"'I don't think too many Republicans are going to vote for this stimulus package because most of us don't believe it will work,'" Rep. Devin Nunes, R-Calif., told the Los Angeles Times.

The Washington Post's Alec MacGillis points out that there are some House Democrats who aren't totally sold on the plan either.

"For some House Democrats, the problem is less a matter of balancing the short and long term than a shortage of focus and will on the part of the administration. Their disappointment centers on the relatively small amount devoted to long-lasting infrastructure investments in favor of spending on a long list of government programs.

"While each serves a purpose, the critics say, they add up to less than the sum of their parts, and fall far short of the transformative New Deal-like vision many of them had entertained. The bill to be voted on today includes $30 billion for roads and bridges, $9 billion for public transit and $1 billion for inter-city rail -- less than 5 percent of the package's total spending.

"Administration officials have said they did not push for more infrastructure spending because of concerns about how many projects are 'shovel ready' -- a view that House members say is held most strongly by Lawrence H. Summers, Obama's chief economic adviser.

"Even though most House Democrats say they will back the plan, many reject the administration's argument, saying that infrastructure projects could easily be expedited, that the economy will need additional infusions for years to come and that the real reason for shunning infrastructure was to make room for tax cuts. Obama, with a public mandate to do something big, is missing a rare opportunity to rebuild the country, they say.

'Every penny of the $825 billion is borrowed against the future of our kids and grandkids, and so the question is: What benefit are we providing them? What are we doing for the country? It's the difference between real investment that will serve the nation for 30, 50 years and tax cuts, and that's a very poor tradeoff,' said Rep. Peter A. DeFazio (D-Ore.).

"'I go to my district and people say, 'Yeah, I can use 10 extra bucks a week, but I would rather see more substantial investment.' We've gone through a couple bubbles that were borrowing and consumer-driven. We want a recovery that's solid and based in investment and productivity, and that points us at building things that will serve us decades to come.'"

The New York Times Jackie Calmes and Carl Hulse report that while "Mr. Obama said he would not compromise on a central element of his plan that has drawn particular Republican opposition: his campaign promise for a middle-class tax credit that would also go to low-wage workers who earn too little to pay income taxes but are subject to payroll taxes for Social Security and Medicare," Republicans told the Times that "Mr. Obama told them he would listen to proposals to expand on provisions cutting taxes for small businesses and would be open to corporate tax cuts as well if Republicans cooperated to close tax loopholes for big business.

Democrats said Mr. Obama could also support a demand from a senior Senate Republican, Charles E. Grassley of Iowa, to add a provision adjusting the alternative minimum tax so that it does not hit millions of middle-class taxpayers this year.

That would add costs of nearly $70 billion over 10 years to a package that Republicans already say is too big. Several hours after Mr. Obama's visit to the Capitol, the Senate Finance Committee approved Mr. Grassley's proposal as an amendment to the emerging Senate economic recovery plan.

The full Senate is expected to take up a stimulus bill next week, following the expected passage of the $825 billion House version on Wednesday. The White House encouraged other gestures as well. As the House version of the legislation came to the floor on Tuesday, Democrats stripped from it a provision that Republicans had ridiculed as having nothing to do with economic stimulus, one expanding federal Medicaid coverage of family planning services.

(The Congressional Budget Office had estimated that the provision would actually save the government $200 million over five years by reducing pregnancy and postnatal-care expenses.) Trying to forestall other Republican attacks, Democrats also stripped out $200 million for restoring the National Mall, another provision that the minority had mocked."

The Times' Robert Pear digs deeper into the bill, reporting, 'The stimulus bill working its way through Congress is not just a package of spending increases and tax cuts intended to jolt the nation out of recession. For Democrats, it is also a tool for rewriting the social contract with the poor, the uninsured and the unemployed, in ways they have long yearned to do.

"With little notice and no public hearings, House Democrats would create a temporary new entitlement allowing workers getting unemployment checks to qualify for Medicaid, the health program for low-income people. Spouses and children could also receive benefits, no matter how much money the family had. In addition, the stimulus package would offer a hefty subsidy to help laid-off workers retain the same health plans they had from their former employers. Altogether, the economic recovery bill would speed $127 billion over the next two and a half years to individuals and states for health care alone, a fact that has Republicans fuming that the stimulus package is a back door to universal health coverage."

Meantime, Republican reaction to the president's in-person sales pitch on Capitol Hill yesterday was mixed; many appreciated the fact that Mr. Obama reached out to hear their side and in turn heavily criticized Congressional Democrats for not being as inclusive.

House Republicans are saying publicly that Democratic leaders, not President Obama, had never consulted with them as they hammered out their stimulus plan.

"'If you have an opponent with a 70% approval rating and one with a 20% approval rating, you're going to go after the one with a 20% approval rating,' a House GOP leadership aide said, referring to the Democratically controlled Congress' dismal approval ratings," writes Time Magazine's Jay Newton-Small.

"So while House Republicans praised Obama in their first breath on Tuesday, in their second breath they slammed Pelosi. 'We encouraged the President to speak with Democrat leaders to say, 'Look, if you wanted a bipartisan bill like you said you wanted, then this has to be a collective process, not a unilateral process,'' said Rep. Todd Tiahrt, a Kansas Republican."

4754840President Obama will meet with business leaders and CEOs at the White House this morning to talk about the economy before delivering remarks about the economic stimulus plan. This afternoon he heads to the Pentagon for a meeting with Defense Secretary Robert Gates and Service Chiefs.

(AP)
Also today, former Vice President Al Gore will testify on to the Senate Foreign Relations Committee today and will urge Congress to pass the president's economic stimulus, per Politico's Mike Allen.

Gore will say, "I urge this Congress to quickly pass the entirety of President Obama's Recovery package. The plan's unprecedented and critical investments in four key areas – energy efficiency, renewables, a unified national energy grid and the move to clean cars – represent an important down payment and are long overdue. These crucial investments will create millions of new jobs and hasten our economic recovery – while strengthening our national security and beginning to solve the climate crisis."

He will also "push lawmakers and President Barack Obama to swiftly enact comprehensive legislation to fight climate change, goals they may find difficult to reach politically," reports Bloomberg News' Catherine Dodge. "Gore backed Obama's presidential bid, and Obama said during the campaign that he would ask the former vice president to be a key contributor in shaping U.S. climate policies.

The two met for two hours in December to discuss the issue. ...Gore calls for the U.S. to produce all its electricity from renewable energy by 2018, while Obama aims at drawing 25 percent of U.S. electricity from such sources by 2025, in one example of their different goals."

(AP Photo/Evan Vucci)
"Eric Holder, President Barack Obama's nominee for attorney general, won the backing of his toughest critic, Republican Sen. Arlen Specter of Pennsylvania, virtually assuring that he will be approved by the Senate Judiciary Committee at a vote scheduled for Wednesday. Mr. Holder is expected to win approval by the full Senate later this week," report the Wall Street Journal's Evan Perez and Brent Kendall.

Looking ahead, Chicago Tribune's John McCormick reports, "Barack Obama may return to Chicago for a home visit as early as mid-February, during a time when Illinois will be awash in celebrations marking Abraham Lincoln's 200th birthday.

"The possible trip could be one of Obama's first flights on Air Force One and comes with the question of where the president—and potential traffic jams—will land. Aides declined to comment on Obama's February schedule, but a source close to him said he could make his first presidential visit to Chicago as early as Presidents' Day weekend, when his daughters have a three-day break from school."

(AP)
And it looks like we haven't seen the last of Gov. Sarah Palin, R-Alaska. She "opened a political action committee Tuesday, a move that may not outright confirm her intentions of running for president in 2012 but indicates she intends to remain a regular on the national political stage. ...

"She can use money raised by the committee to attend two upcoming political events outside Alaska ... First up is the annual Alfalfa Club dinner in Washington this weekend, which Pryor said the governor plans to attend. According to the Washington Post, the elite club's 200 members include politicians such as former Florida Gov. Jeb Bush, Sen. Joseph Lieberman, I-Conn., and New York Mayor Michael Bloomberg.

"In a story about last year's dinner (among the attendees was President Bush), the Post reported the club was founded nearly 100 years ago 'by four Southern gentlemen, apparently for no purpose other than holding an annual dinner on the last Saturday of January' (a nod to the birthday of Confederate Gen. Robert E. Lee). In late February, Palin is tentatively scheduled to speak at the annual Conservative Political Action Conference in Washington."

BLAGO

Chicago Tribune's Ray Long, Ashley Rueff and John Chase, "FBI plays wiretaps of Rod Blagojevich at state Senate impeachment trial"

WHITE HOUSE FOREIGN POLICY

(AP Photo/Musadeq Sadeq)
NY Times' Helene Cooper and Thom Shanker, "President Obama intends to adopt a tougher line toward Hamid Karzai, the Afghan president, as part of a new American approach to Afghanistan that will put more emphasis on waging war than on development, senior administration officials said Tuesday.

Mr. Karzai is now seen as a potential impediment to American goals in Afghanistan, the officials said, because corruption has become rampant in his government, contributing to a flourishing drug trade and the resurgence of the Taliban.

Among those pressing for Mr. Karzai to do more, the officials said, are Vice President Joseph R. Biden Jr. and Richard C. Holbrooke, Mr. Obama's special envoy to Afghanistan and Pakistan. The officials portrayed the approach as a departure from that of President Bush, who held videoconferences with Mr. Karzai every two weeks and sought to emphasize the American role in rebuilding Afghanistan and its civil institutions."

Washington Post's Karen DeYoung, "President Obama has launched a determined effort to change the tone, if not yet the substance, of U.S. relations with the Arab and Muslim worlds, saying he is eager to listen to their concerns and acknowledging that Americans 'have not been perfect' in their dealings with them.

"The early appointments of presidential emissaries to the Middle East and to Afghanistan and Pakistan; the announced closure of the military prison at Guantanamo Bay, Cuba; the choice of Arab satellite network al-Arabiya for the first formal interview of his presidency; first-week National Security Council meetings on Iraq and Afghanistan; and telephone calls to regional leaders on his first full day in office were reflections both of the seriousness of the issues and a message to governments and the public, administration officials said. Obama's initial conversation with one Middle Eastern leader conveyed little of substance, that country's Washington ambassador said: 'He just wanted to reach out on the first day as a sign and demonstration of his determination to engage.'"

(AP Photo/Gerald Herbert)
NY Times' Mark Landler, "Secretary of State Hillary Rodham Clinton said Tuesday that Iran had a 'clear opportunity' to engage with the international community, amplifying the conciliatory tone struck a day earlier by President Obama toward Iran and the rest of the Muslim world.

"Sketching out an ambitious diplomatic agenda, Mrs. Clinton also suggested that there could be some form of direct communication between the United States and North Korea. And she said relations with China had been excessively influenced by economic issues during the Bush administration."

MINNESOTA SENATE RACE

Minneapolis Star-Tribune's Pat Doyle and Mike Kaszuba, "For Norm Coleman, real live voters succeeded Tuesday where photocopied ballot envelopes had failed. On Day 2 of the trial over Coleman's lawsuit challenging the U.S. Senate recount, lawyers for him and for Democrat Al Franken questioned a half-dozen voters whose absentee ballots were rejected, a group that was generally sympathetic and indignant that their ballots had not been counted. Coleman is focusing his efforts on counting thousands of rejected absentee ballots in an effort to overcome the 225-vote Franken lead that was certified this month after the recount concluded."

2010 RACES

NY Times' Michael Powell, "New York has a new junior senator, and her first day in office might be seen as an introductory course in the state's upside-your-head political style. Even as Kirsten E. Gillibrand stepped into the well of the United States Senate, put her hand on the Bible and listened as Vice President Joseph R. Biden Jr. administered the oath of office, opposition to her appointment bubbled and swelled in New York. ...

"Since Gov. David A. Paterson announced her appointment on Friday, she has been lashed for her positions on guns — very much in favor — and illegal immigration — very much against — with downstate Democrats rumbling about primary challenges."

NY Daily News Michael McAulilff, "New Sen. Kirsten Gillibrand basked Tuesday in the glow of her first day as Hillary Clinton's replacement, but not everyone back in New York was applauding. Amid warm scenes with her family and a small horde of kids escorting the newest and youngest U.S. senator came news from Albany of a push to oust her in next year's Democratic primary."

Washington Post's Perry Bacon Jr., "The confusion and controversy surrounding the recent appointments of four Democratic senators has come with a potential twist -- it could complicate the party's efforts to solidify its majority in the Senate.

"New York's Kirsten Gillibrand, who was sworn in yesterday to fill the seat vacated by Secretary of State Hillary Rodham Clinton, became the third person named to the Senate in the past month who could face difficulty winning reelection next year. Republicans are already eyeing strong challenges to Sens. Roland W. Burris (Ill.) and Michael F. Bennet (Colo.), both selected by their states' governors over others seen as stronger contenders for statewide office."

The Hill's Aaron Blake, "As Republicans brace for a 2010 election cycle that begins their long road back to the majority, they do have one major weapon in their arsenal — redistricting. In 2000, Republicans used redistricting to solidify their majorities. Now, with the party reeling from two straight election losses, the landscape for the 2010 round of redistricting could provide them opportunities to regain some of those seats and add some new ones."

REPUBLICAN NATIONAL COMMITTEE CHAIRMAN RACE

Washington Post's Perry Bacon Jr., "As they begin meeting in Washington today, many members of the Republican National Committee are focusing their ire against what they considered George W. Bush's anti-conservative policies and trying to dump the man he tapped to run the GOP. With six candidates competing for the party's helm at the winter meetings this week, some committee members are determined to remove the current RNC chairman, Mike Duncan, who is seen as a candidate of the status quo at a time when they want to sever all ties to the former president. Duncan has held the office since 2007, when he ran unopposed after Bush chose him for the post."

(AP)
Politico's Alexander Burns, "He's not a candidate. He hasn't endorsed anyone. He doesn't even have a vote on the Republican National Committee. But in the race for the RNC chairmanship, there's no figure who casts a longer shadow than Mississippi Gov. Haley Barbour. For many longtime RNC members, Barbour, who served as chairman from 1993 to 1997, remains the very model of a modern party chief, comfortable operating in smoke-filled rooms and in front of video cameras, at ease with every member of the committee. For newer members, too, he's a shining reminder of the good old days, when Republicans had a vibrant organization and a robust message."

ALSO:

Wall Street Journal's Cam Simpson and Susan Schmidt, "Former President Bill Clinton earned more than $4.7 million last year in speaking fees from engagements in countries around the world, including Kuwait and China, according to a new disclosure report, creating potential conflicts for his wife, Secretary of State Hillary Clinton.

"Mrs. Clinton is one of a handful of members of President Barack Obama's cabinet who will have to navigate potential conflicts in their new posts related to their stock holdings, past professions or those of their spouses."

Washington Post's R. Jeffrey Smith, "Sen. John McCain (R-Ariz.) has raised a fresh challenge to the nomination of former Raytheon lobbyist William J. Lynn to become deputy secretary of defense, asking Lynn in a letter that he demonstrate by Friday how he will be able to function while disqualifying himself from key matters related to his former employer."

Politico's Kenneth P. Vogel, "Barack Obama's pick for top deputy at the Pentagon is in line for a payout of as much as $1.25 million in the coming weeks - for his work as a lobbyist for one of the nation's top defense contractors. William Lynn's nomination as deputy defense secretary already has come under fire from Democrats and Republicans because of his ties to Raytheon, where Lynn worked as a lobbyist -- a seeming violation of Obama's pledge to keep lobbyist influence out of his administration. Now Lynn's financial disclosure statement, filed two weeks ago with the Office of Government Ethics, also reveals that his financial connections to the company are deeper than previously known."

Washington Post's David Cho, "Treasury Weighs Hard Choices to Save Banks": "President Obama's top advisers are in the final stages of debating several perilous options to right the financial system, all of which are likely to prove unpopular and in some cases carry a significant risk of failure, according to sources in contact with the officials. The rapid deterioration of the economy has accentuated these hard choices. The health of many banks is getting worse, not better, as the downturn makes it difficult for all kinds of consumers and businesses to pay back money they borrowed from these financial firms. Conservative estimates put bank losses yet to be declared at $1 trillion.

"Senior administration officials are likely to try a combination of initiatives rather than pin their hopes on a single, all-encompassing solution to help the financial system, the sources said. But their strategy may require trial and error, which could make them vulnerable to the same criticism that dogged the Bush administration's fitful management of the $700 billion rescue program."

USA Today's Fredreka Schouten, "Geithner names ex-lobbyist as Treasury chief of staff"

Politico's John Bresnahan, "Rove subpoena a new hurdle for Obama": "Rep. John Conyers Jr.'s decision to subpoena Karl Rove to testify about the 'politicization' of the Bush Justice Department has dumped a thorny legal question in the laps of President Barack Obama's White House lawyers before they've even had time to settle into their new jobs."

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