Morning Bulletin - Thursday, April 9, 2009

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

(CBS)

LOOKING AHEAD: The Washington Post's Paul Kane and Shalaigh Murray examine what's facing Congress when they return from their two-week break on the 20th: "After approving more than $1.5 trillion to bail out Wall Street and stimulate the economy and nearly passing a $3.5 billion budget blueprint in its initial legislative sprint, Congress will return from a two-week break later this month at a definitive point for President Obama's ambitious goals. Easing off the speedy pace of the past three months, lawmakers will confront an arcane arena of long-term legislating, and the period could expose potentially deep fissures between Obama and some Democrats. Already, competing versions of climate legislation have been introduced in the House, Senate Democrats are still meeting with stakeholders in the health-care world, and the lending industry is battling a nascent effort to abolish private-sector loans for college tuition. ... It is a process that could drag into next year for some agenda items. Democratic leaders vigorously supported the rush to pass much of Obama's economic recovery plans because of the global financial meltdown, but they welcome the return to the sometimes cumbersome congressional 'sausage-making' process. ... Democratic leaders agree that they are further along on a wide-ranging overhaul of health care than they are on Obama's revolutionary climate change agenda."

The Wall Street Journal's Greg Hitt adds, "President Barack Obama plans to request new funding from Congress for the conflicts in Iraq and Afghanistan, but he risks a backlash from antiwar lawmakers. Mr. Obama is expected to seek congressional approval of $75.5 billion for the wars, perhaps as soon as Thursday. The issue is already raising tensions on Capitol Hill, especially among liberals who are sympathetic to the president's broader agenda but voice concerns about his timeline for withdrawal of troops from Iraq and his plans to beef up forces in Afghanistan. ... The supplemental-spending request is intended to provide funding for the wars through the balance of the fiscal year, which ends Sept. 30, and into the early weeks of fiscal 2010. Beginning in fiscal 2010, Mr. Obama intends for the wars to be funded as part of the regular Pentagon budget. That is a change from the Bush White House, which annually sought war funding outside the regular military budget."

3994737Continues Hitt: "The bill is likely to run into political turbulence from more conservative Democrats as well. Pennsylvania Democratic Rep. John Murtha -- chairman of the House Appropriations Subcommittee on Defense -- has said he will look to add several billion dollars to the bill to boost spending on equipment. The emerging rifts present a new political challenge for Mr. Obama. As a senator, he voted against Iraq war funding bills. In his campaign for the White House, he criticized rivals Hillary Clinton in the Democratic primaries and John McCain in the general election for their hawkishness on the issue. ... Democratic opposition isn't likely to block the bills, since many Republicans will support them -- if the White House can keep the legislation free of measures imposing stringent conditions on commanders in the field, and doesn't allow unrelated spending to be tacked on. ... The danger for Mr. Obama is that a chorus of criticism could stir new public unease with the U.S.-led wars. A public backlash could be particularly problematic for Afghanistan. Mr. Obama's strategy envisions that the U.S. military could be engaged there for years to come."

And the New York Times' Julia Preston reports that the president plans to move ahead on immigration reform, despite the political risks. "Mr. Obama will frame the new effort — likely to rouse passions on all sides of the highly divisive issue — as 'policy reform that controls immigration and makes it an orderly system,' said the official, Cecilia Muñoz, deputy assistant to the president and director of intergovernmental affairs in the White House. Mr. Obama plans to speak publicly about the issue in May, administration officials said, and over the summer he will convene working groups, including lawmakers from both parties and a range of immigration groups, to begin discussing possible legislation for as early as this fall. Some White House officials said that immigration would not take precedence over the health care and energy proposals that Mr. Obama has identified as priorities."

She adds: "But the timetable is consistent with pledges Mr. Obama made to Hispanic groups in last year's campaign. He said then that comprehensive immigration legislation, including a plan to make legal status possible for an estimated 12 million illegal immigrants, would be a priority in his first year in office. Latino voters turned out strongly for Mr. Obama in the election. 'He intends to start the debate this year,' Ms. Muñoz said. But with the economy seriously ailing, advocates on different sides of the debate said that immigration could become a polarizing issue for Mr. Obama in a year when he has many other major battles to fight. Opponents, mainly Republicans, say they will seek to mobilize popular outrage against any effort to legalize unauthorized immigrant workers while so many Americans are out of jobs. Democratic legislative aides said that opening a full-fledged debate this year on immigration, particularly with health care as a looming priority, could weigh down the president's domestic agenda."

4912056BANK "STRESS TESTS": Tomorrow, Mr. Obama will meet with his economic advisers when he "will get a progress report on stress tests at the 19 biggest U.S. banks," reports Bloomberg News' Robert Smith and Roger Runnigen. "Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben S. Bernanke and Sheila Bair, chairman of the Federal Deposit Insurance Corp., will attend the session. The group also will have a 'significant discussion about other aspects of the economy,' said Josh Earnest, a White House spokesman. The exams, to conclude by the end of April, are designed to show how much extra capital banks may need to survive a deeper economic downturn. While the tests are a central element of the administration's financial-industry rescue, both banks and regulators are wrestling with concerns over how the results will be revealed and what significance investors will put on them."

"For the last eight weeks, nearly 200 federal examiners have labored inside some of the nation's biggest banks to determine how those institutions would hold up if the recession deepened. What they are discovering may come as a relief to both the financial industry and the public: the banking industry, broadly speaking, seems to be in better shape than many people think, officials involved in the examinations say," adds the NY Times' Eric Dash. "That is the good news. The bad news is that many of the largest American lenders, despite all those bailouts, probably need to be bailed out again, either by private investors or, more likely, the federal government. After receiving many millions, and in some cases, many billions of taxpayer dollars, banks still need more capital, these officials say. The federal 'stress tests' that the examiners are administering are the subject of fierce debate within the banking industry. Regulators say all 19 banks undergoing the exams will pass them. Indeed, they say this is a test that a bank simply will not fail: if the examiners determine that a bank needs 'exceptional assistance,' the government, that is, taxpayers, will provide it."

(iStockphoto)

WHITE HOUSE DOG: "The First Lady's press secretary Katie McCormick Lelyveld says 'definitely not this week,' when asked for guidance on the arrival of the Obama's family dog," writes CBS News' Mark Knoller.

Meantime, CBS News' Michelle Levi reports that a marketing consultant is making a push for the president to choose a specific breed. "As media speculation about the breed and arrival date for the First Dog reaches a fever pitch, Greg Nelson, founder of Labradoodles For Obama anxiously awaits an official announcement. Mr. Nelson, a marketing consultant by day, started the campaign for the Obama family to pick his breed of choice – a Labradoodle – about a week before the Inauguration. ... The campaign website has seen as many as 2,500 hits a day and 5,000 people have voted in the online poll hosted on the site, he said. Eighty-nine percent, Mr. Nelson points out, chose a Labradoodle for the Obamas rather than a Portuguese water dog."

(CBS/AP)

The Wall Street Journal's David Kesmodel and Naftali Bendavid add, "A congressional ethics panel has opened a preliminary inquiry into Illinois Rep. Jesse Jackson Jr.'s role in the scandal surrounding the U.S. Senate seat vacated by President Barack Obama, the Democratic lawmaker said Wednesday. Mr. Jackson said he is cooperating with the review by the Office of Congressional Ethics. The panel is looking into his communications with former Illinois Gov. Rod Blagojevich, who was indicted last week on charges of widespread corruption, including allegations that Mr. Blagojevich tried to sell Mr. Obama's former Senate seat to the highest bidder. 'I was notified last week about the inquiry and am eager to answer any questions and provide any information to the [ethics board] about my actions related to last year's vacant Senate seat,' Mr. Jackson said in a statement issued by his chief of staff, Kenneth Edmonds.

They continue: "Mr. Jackson, son of the Rev. Jesse Jackson, the civil-rights activist, has acknowledged he was "Senate Candidate A," one of a group of potential candidates for the Senate seat identified by federal authorities in the corruption case against Mr. Blagojevich. In the indictment of the former governor unsealed last week, prosecutors said Mr. Blagojevich believed he could gain $1.5 million in campaign funds raised by backers of Mr. Jackson if he picked him for the seat. Around Dec. 4, just days before Mr. Blagojevich was arrested, he told his brother, Robert Blagojevich, who ran his campaign fund, to notify a representative of Mr. Jackson that some of the promised fund raising needed to be provided before he would name Mr. Jackson to the Senate seat, according to the indictment. A meeting between his brother and the associate of Mr. Jackson's was arranged, but later canceled, prosecutors allege. The then-governor later appointed Roland Burris."

(AP Photo/Ron Edmonds)

First Lady Michelle Obama will begin planting the White House kitchen garden at 3:15pm ET. She'll be joined by Agriculture Secretary Tom Vilsack and students from Washington, D.C.'s Bancroft Elementary School.

FOREIGN POLICY
Wall Street Journal's Jay Solomon, "U.S. to Join Iran Nuclear Talks"

Associated Press' Matthew Lee, "US dealings with Iran remain on slippery path"

LA Times' Christi Parsons, "Obama embraced pragmatism as well as leaders on his trip"

Washington Times' John Ward, "Obama tries role as apologizer-in-chief"

NY Times' Damien Cave, "Exiles Want to Expand U.S.-Cuba Relations"

(CBS)

Washington Post's Carrie Johnson, "Holder Begins Justice Revamp"

BAILOUTS
NY Times' Graham Bowley and Michael J. de la Merced, "U.S. Plan Imagines the Bailout as Investment Tool"

Washington Post's Kendra Marr, "U.S. Releases Aid To Auto Suppliers"

NY Times' Mary Williams Walsh, "Questions Over Bailout for Insurers"

McClatchy Newspapers' Kevin G. Hall, "Next taxpayer bailout: Life insurance companies"

LA Times' Jim Tankersley, "No easy road for U.S. auto industry"

NY-20 SPECIAL ELECTION
PolitickerNY's Jimmy Vielkind, "No End In Sight for Tedisco-Murphy Recount"

Albany Times Union's Leigh Hornbeck, "Tiptoeing through absentee tally"

FUTURE RACES
2009 VA Governor: Richmond Times-Dispatch's Jeff E. Schapiro and Olympia Meola, "McAuliffe, Moran report first-quarter fundraising"

2010 FL Governor: Ft. Myers News-Press' Bill Cotterell, "If Florida Gov. Crist runs for Senate, expect run on his job"

2010 KY Senate: CQ Politics, "Four Democrats Would Beat Bunning in 2010"

(AP)

Politico's Andy Barr, "Outside Palin defense fund questioned"

Politico's Kenneth P. Vogel, "RNC closes loop on Palin clothes"

ETC.
Washington Times' Christina Bellantoni and Joseph Curl, "Obamas seek new church as Easter nears"

Associated Press' Ken Kuzmer, "10 Holy Cross priests object to Obama invitation"

Chicago Tribune's John McCormick, "White House wealth: President Barack Obama's team virtually all Chicago millionaires"

USA Today's John Fritze, "Most rookie House lawmakers play hard for 'earmarks'"

Bloomberg News' Jonathan D. Salant, "Obama's Spending Spurs Former U.S. Lawmakers to Join Lobbyists"