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Morning Bulletin – Wednesday, Jan. 7, 2009

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

President-elect Obama holds a news conference today in Washington, D.C. at 10:15am ET where, per the Wall Street Journal's Jonathan Weisman, he's "set to speak about deficit-control measures he plans to include in his first budget, due next month, an Obama aide said. The aide stressed that the president-elect is inheriting a fiscal disaster not of his making."

After warning of "trillion dollar deficits for years to come", calling for budget reform and bringing "a long-overdue sense of responsibility and accountability to Washington" yesterday, he "was expected to announce Nancy Killefer as his chief performance officer, a White House official who will work with federal agencies to set performance standards and hold agency managers accountable for progress. Killefer is director of a management consulting firm and served as an assistant secretary of the Treasury under President Bill Clinton," reports the AP's Jim Kuhnhenn.

Politico's Jeanne Cummings writes, "Barack Obama's elaborate rollout of his economic recovery plan could provide an impressive early victory for his incoming administration. But it also carries risks. If he fails to deliver on his plan — both in scope and in speed — it could wreak havoc with an already precarious economy and roil global markets that have become relatively stable since he began outlining his program. If he fails to treat seriously his invitation to congressional Republicans to engage in the process, it could inject an atmosphere of mistrust and resentment that would haunt his future domestic policy ambitions."

Meantime, Mr. Obama's former rival, Sen. John McCain, R-Ariz., teams up again with Sen. Russ Feingold, D-Wisc., and others to unveil a new earmark reform bill in the Senate this afternoon.

The economy isn't the only crisis facing Mr. Obama – the fighting in Gaza has escalated to the point that he was compelled to speak out yesterday, reports CBS News' Chip Reid. "Sources say Mr. Obama had every intention of addressing the Gaza issue ... a conflict they say he's been following very, very closely, even asking his daily intelligence briefers for extra updates on the humanitarian situation. Those sources say the president-elect wanted his voice to be heard around the globe."

Mr. Obama said, "the loss of civilian life in Gaza and in Israel is a source of deep concern to me, and after January 20th I'll have plenty to say about the issue."

The Washington Post's Griff Witte and Sudarsan Raghhavan point out, "The comments contrasted with statements from the Bush administration, which has focused its public remarks on condemning Hamas's role in initiating the violence. Bush has said that only after Hamas has stopped firing rockets should Israel be required to halt its military campaign."

Following his news conference, Mr. Obama heads to the White House for a lunch with President Bush and former Presidents Carter, Bush and Clinton. "Considering the bond they hold in history, U.S. presidents gets together infrequently, particularly at the White House. And when they are in the same room, it is usually for a milestone or somber moment — a funeral of a world leader, an opening of a presidential library, a commemoration of history. Not this time," writes the AP's Ben Feller.

Vice President-elect Biden will meet with former President George H.W. Bush at the White House this morning.

KEEP AN EYE ON: Roland Burris, Ill. Gov. Rod Blagojevich's choice to fill Mr. Obama's vacant Senate seat, meets with Senate Majority Leader Harry Reid, D-Nev., and Sen. Dick Durbin, D-Ill., today at 10:30am ET.

"The key question now for Reid and Durbin: How do they find cover in a political story that has run amok?" asks Politico's Amie Parnes and Manu Raju."One idea being considered is to have Burris win an endorsement from the sitting lieutenant governor, Pat Quinn, one Democratic insider said. A Democratic aide familiar with the process said that the idea of urging Quinn to endorse Burris is being seriously considered, and that strategy may emerge depending on the outcome of the meeting. Democrats are also considering urging Burris to not run in 2010 as one condition for their support, aides said."

The AP's Mark Sherman reports that if Reid doesn't budge, court is the answer for Burris. "If Senate Democrats stick to their refusal to seat Roland Burris as a senator from Illinois, his best bet could be getting a federal judge to force open the Senate's doors. Burris would be relying on a constitutional provision listing just three, easily met qualifications for the job and a 1969 Supreme Court decision rebuking the House for excluding an elected, though scandal-tarred, lawmaker."

The Republican National Committee meets today holds a "special meeting" with the six men vying to be the RNC's next chairman, three weeks before members vote for their new leader.

And the reason for this special meeting? "Chaos," reports the Washington Post's Chris Cillizza. After huge losses in November, the party is struggling to find a direction. On top of that, one of the candidates for chairman has come under fire for sending around a compilation CD to RNC members, which included a song titled "Barack the Magic Negro." "'The party is teetering on the edge of complete anarchy,' said one senior Republican strategist. The source added that the race to date has 'divided a party that desperately needs to add not subtract.'"

Later this week, Biden will travel to Southwest Asia with Sens. John Kerry, D-Mass.; Jack Reed, D-R.I.; Susan Collins, R-Maine; and Lindsey Graham, R-S.C. Their exact stops have not been disclosed but there are reports that Pakistan is on their itinerary.

CBS News Chief Political Consultant Marc Ambinder suggests why Biden is taking this trip now: "According to an official familiar with the planning, Biden wants a real-time assessment of the region 'so that the new administration can hit the ground running come January 20,' an official familiar with the planning said. Given the attacks in Mumbai, violence in Afghanistan, the IMF bailout of Pakistan, the incoming administration wants to reassure the region that its problems will be high on President Obama's agenda. If the administration waited until Biden was sworn in as vice president, it could take up to two months for the military, the State Department and the U.S. Secret Service to plan the trip."

Politico's Carol E. Lee reports that Biden's trip is raising red flags. "It would be awkward at best for a Vice President-elect Biden to be greeting foreign leaders and dignitaries in Afghanistan or Pakistan while the current vice president is back in Washington giving exit interviews. So Biden's Senate office announced his visit to South Asia by saying he will go 'in his capacity as the outgoing Chairman of the Senate Foreign Relations Committee.' 'The fact-finding delegation will make it clear to foreign leaders that they are not there to speak on behalf of the U.S. government, or convey policy positions for the incoming administration,' the news release said.

A transition official familar with the planning for the South Asia trip said Biden didn't want to take the trip after he became vice president because the planning is so involved that it could take up to two months to put in place. As for how he'll make sure foreign leaders know he's there as a senator not as vice president-elect: Biden will go out of his way to make it clear that he's not there to propose policy, the official said. There will be no one-on-one meetings between Biden and foreign leaders. All meetings will take place with the full delegation and the full delegation will brief Obama on its findings. But foreign affairs analysts don't buy it. 'You can pretend all you want,' [AEI's Thomas] Donnelly said. 'He can't just speak in his senatorial dimension."'

Upcoming Obama cabinet confirmation hearings this week: Health and Human Services Secretary nominee Tom Daschle, Thursday, Jan. 8, 10am, Senate Health, Education, Labor and Pension Committee; Labor Secretary nominee Hilda Solis, Friday, Jan. 9, 9:30am, Senate Health, Education, Labor and Pension Committee. Future hearings: Education Secretary nominee Arne Duncan, Jan. 13; Energy Secretary nominee Steven Chu, 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. TBA: Secretary of State nominee Hillary Clinton (NY Daily News is reporting her hearing will be on Jan. 13), Secretary nominee Shaun Donovan, Treasury Secretary nominee Tim Geithner, 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.

Mr. Obama will be interviewed on ABC's "This Week" this Sunday, January 11.

TRANSITION

Washington Post's Ceci Connolly and Howard Kurtz, "TV's Gupta Is Obama's Pick for Surgeon General"

NY Times' Eric Lichtblau, "Specter Attacks Choice for Attorney General": "Arlen Specter of Pennsylvania, who is the ranking Republican on the Judiciary Committee, said Mr. Holder's support of the White House's stance on three contentious issues when he was deputy attorney general in the Clinton administration suggested that he was too willing to do the president's bidding. 'He's had an outstanding academic and professional record, and I acknowledge that early on,' Mr. Specter said of Mr. Holder in a 25-minute speech on the Senate floor.

"'But aside from these qualifications on Mr. Holder's résumé, there is also the issue of character, and sometimes it is more important for the attorney general to have the stature and the courage to say no instead of to say yes.' The Obama transition team rejected Mr. Specter's assertions. 'From prosecuting corrupt officials from both parties to supporting the appointment of independent counsels to investigate Democrats, Eric Holder has demonstrated throughout his career that he has the integrity and independence to be an outstanding attorney general,' a spokesman, Nick Shapiro, said. The sharp criticism from Mr. Specter signaled that Republicans have identified Mr. Holder as perhaps the most vulnerable of Mr. Obama's cabinet choices. Democrats say they expect the Democratically controlled Senate to confirm Mr. Holder easily but say he faces a tougher fight than they had expected."

CIA DIRECTOR-DESIGNATE LEON PANETTA

NY Times' Mark Mazzetti, "Obama Seeks to Mend Rift Over Panetta": 'President-elect Barack Obama and his top aides called lawmakers, deployed surrogates and offered public testimonials on Tuesday as they scrambled to mend a divide in Democratic ranks over the nomination of Leon E. Panetta, a former White House chief of staff, to take over the Central Intelligence Agency. Mr. Obama and his aides were trying to mend damage done on Monday when news of Mr. Panetta's selection leaked before it had been shared with senior senators, and some Democrats responded with surprise and skepticism because Mr. Panetta lacks much intelligence experience. ... [T]ransition officials said Mr. Obama also intended to keep the C.I.A's No. 2 official, Stephen R. Kappes, a highly regarded former Marine officer and agency veteran. The transition officials spoke on condition of anonymity about the personnel move, a plan that could help defuse criticism inside the C.I.A. about Mr. Panetta's own thin background in intelligence."

Politico's Glenn Thrush and John Bresnahan, "Support for Panetta trickles in", "After a rocky start, Barack Obama's choice to lead the CIA gained critical support in Congress on Tuesday, with at least five members of the Senate Intelligence Committee backing Leon Panetta. ... Beyond the Senate's consideration, intelligence experts were questioning whether Panetta — who has little hands-on experience with intelligence matters — was the right person for the job of taking over an agency battered by questions over whether its interrogation practices amount to torture. In choosing Panetta, Obama is taking one of the capital's most familiar faces and thrusting him into a starkly unfamiliar role. And after two months of appointments whose political logic was obvious to the naked eye, Obama has left much of political Washington guessing about the rationale behind the appointment. On the one hand, Obama's choice of Panetta — a 70-year-old veteran of the Democratic establishment with a blue-chip name but no record of fresh thinking about intelligence issues — could signal a lack of other viable choices for Obama as the time runs out on the transition. Or it could mean that the selection of a prominent outsider was intended as a deliberate shove against the intelligence insiders at Langley — a signal that Obama is ready to make a tough stand to bring the vast and unruly CIA bureaucracy under his firm control."

BLAGO

AP's John O'Connor, "Exclusive: Calendar shows key Ill. Gov meetings": "Gov. Rod Blagojevich's official calendar shows he met with a top union official in his Chicago office the day before Barack Obama was elected president — just as federal prosecutors say the governor was scheming to trade Obama's Senate seat, possibly for a cushy union job. The meeting with Andy Stern, president of the Service Employees International Union, also was attended by Tom Balanoff, president of the Illinois chapter of the union, which has been Blagojevich's largest campaign contributor. The governor's schedules, released Tuesday to The Associated Press, shed new light on the governor's activities during the period outlined in a criminal complaint that accuses the Democrat of a wide-ranging scheme to profit from official action, such as selling Obama's U.S. Senate seat and pressuring the Chicago Tribune to fire unfriendly editorial writers. Other entries on Blagojevich's calendars for September, October, November and December include the governor attending a party for Tribune Co. owner Sam Zell, who is trying to sell the Chicago Cubs and Wrigley Field, lunch with the Cubs' general manager and a meeting with a wealthy former Senate candidate. Some of the people who appear on the schedules are also referenced by pseudonyms in the criminal complaint, which details conversations Blagojevich had on secretly recorded phone calls and meetings with top aides, lobbyists and contributors in the months leading up to his Dec. 9 arrest."

MINNESOTA SENATE RACE

Minneapolis Star Tribune's Pat Doyle and Kevin Duchschere, "Coleman goes to court over Senate recount"

AP's Brian Bakst and Patrick Condon, "End to Minn. Senate race pushed even further out": "In going to court, Coleman has three big challenges: raising money to pay escalating legal bills, proving the election was flawed and managing the public's desire to have the race over. 'They definitely have an uphill fight on their hands,' said Guy-Uriel Charles, a professor of election and constitutional law at the University of Minnesota. 'Their legal theory will have to overcome a burden of proof, and then they have to find enough votes to overcome Franken's lead.' That could prove difficult, since any bloc of new votes would almost surely include some for Franken."

11th CONGRESS CONVENES

LA Times' James Oliphant, "Senate's opening session: another act in political drama": "As the Senate opened for business Tuesday, there was Joe Biden -- who soon will resign his seat in the chamber to assume the vice presidency -- standing in one corner. Not far away sat John McCain, the Arizona lawmaker who lost the White House to Biden's running mate, former Sen. Barack Obama. On the other side of the room was Hillary Rodham Clinton, who lost the Democratic nomination to Obama but will probably leave the Senate soon to serve as secretary of State. Close by sat Joe Lieberman, the Democrat-turned-independent who nearly was tossed out of the Democratic caucus for supporting McCain. If that cast weren't enough, the opening session was presided over by outgoing Vice President Dick Cheney.

"But the mini-drama inside the chamber was surpassed by events beyond its doors. Roland Burris, who was named by embattled Illinois Gov. Rod R. Blagojevich to fill Obama's seat, attempted to gain admittance to the Senate but was turned away because of incomplete paperwork. Illinois' secretary of state has refused to certify Burris' appointment. And though Minnesota's canvassing board Monday certified the results of a recount that showed Al Franken defeating Republican incumbent Norm Coleman by 225 votes, Senate Democrats have decided not to seat the former "Saturday Night Live" comedian until legal challenges are resolved."

Washington Post's Paul Kane, "For 111th Congress, Somber Topics Eclipse Ceremony": "The 111th Congress began yesterday with debates over how to ease the nation's worsening recession and to fight a pair of wars overseas, adding a sense of gravity and purpose to a day normally dedicated to symbolism and the swearing-in of members. Veterans as well as newcomers to the House and Senate said the immensity of the problems the nation faces created an opportunity to move beyond the bitter partisan battles of the last decades or, conversely, to descend into legislative gridlock that would further damage a body already suffering from historically low approval ratings. 'There's something transformational happening here,' said Sen. Christopher J. Dodd (D-Conn.), a 34-year veteran of Congress. 'It's the kind of year historians will write about. . . . Can this institution deal with it?'

"While the mood in the Senate was one of bipartisan consensus, Republicans in the House accused Democrats of rewriting the rules to strip away what little power they have left. Brushing aside the criticism, House Speaker Nancy Pelosi (D-Calif.) vowed quick action on an economic stimulus plan, universal health care and climate change legislation, among other issues that have stalled during the Bush administration. 'We need action, and we need action now,' Pelosi said repeatedly. With Democrats' big gains on Election Day giving the caucus at least 256 members, Pelosi swore in the largest majority either party has held since 1993. In the Senate, seven seats had to be physically removed from the right side of the chamber and bolted down on the left side of the aisle to accommodate Democratic newcomers."

NY Times' David Herszenhorn, "Congressional Black Caucus Assesses Its Role Under a Black President": "The Black Caucus is going through an identity crisis. In recent weeks, leaders of the caucus found themselves defending the need for their group, composed of 41 House Democrats. It also is in the midst of an uneasy generational shift, as the old lions of the civil rights era begin to give way to a younger generation of black politicians who do not want to be pigeonholed by race."

HILLARY CLINTON'S SENATE SEAT / CAROLINE KENNEDY

NY Times' Nicholas Confessore, "Cuomo Aide Is Said to Try to Slow Kennedy Bid": "Even as Attorney General Andrew M. Cuomo insisted he was staying out of the competition for New York's soon-to-be-vacant Senate seat, a top Cuomo aide urged labor leaders and upstate officials to refrain from embracing Caroline Kennedy for the job, according to several people with direct knowledge of the conversations. Two of the people, including a prominent upstate Democratic operative, said the Cuomo aide, Joseph Percoco, had suggested the upstate officials give Ms. Kennedy a cold reception and had questioned her credentials. 'He said, 'Don't you think it should be someone who understands upstate? Don't you think it should be someone with experience? Shouldn't it be somebody who knows New York better?'' said the operative, who spoke anonymously out of fear of antagonizing the attorney general. 'They've been trying to feed people.'

"In a separate conversation with a top union official, Mr. Percoco was less direct, but suggested that the attorney general was interested in the Senate seat for himself. 'It wasn't a specific Caroline Kennedy conversation,' the official said. 'It was, 'I can't say he wants you to tell people he wants it, but you should, wink-wink, nudge-nudge, know that he kind of wants it,'' the official said, referring to Mr. Cuomo."

INAUGURATION

Washington Post's Michael E. Ruane, "An Amazing Event Not to Be Here For": "Inauguration Day: Millions of people, thousands of buses, mobs on the Metro, winter weather, epic potty lines. And maybe, from afar, a glimpse of history. Who needs it? Amid dire predictions of vast crowds in the District and the less-than-enjoyable happenings that could go with such a throng, some area residents have decided they would rather be elsewhere Jan. 20. Perhaps Florida. Or New York. Or . . . 'anywhere but here,' as a Fairfax county woman put it. Some tourism officials have taken notice. A ski resort in West Virginia is offering a low-cost 'escape inauguration' promotion. And several hotels on Florida's Amelia Island are offering discounts to residents of the District, Maryland and Virginia for that week."

USA Today's Frederick Schouten, "Inaugural Parade a 'staggering task'"

ALSO:

St. Petersburg Times' Adam C. Smith, "Jeb Bush won't run for Senate": "The announcement opened the door for a free-for-all of candidates vying for the rare open Senate seat in 2010 to be vacated by incumbent Republican Mel Martinez. Attorney General Bill McCollum and former state House Speakers Allan Bense and Marco Rubio said they are again looking seriously at the Republican nomination and will make announcements soon. Bush initially appeared enthusiastic about returning to public service to help lead his beleaguered party, after Martinez announced in early December that he would not run for a second term. He found strong encouragement from fundraisers and political leaders. After weeks of consideration, though, friends said Bush concluded that at this stage a grueling two-year-campaign and intense national scrutiny would be too much for his family and his new consulting business."

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