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Monday, February 6, 2006 | 9:10 a.m. ET
From Elizabeth Wilner, Mark Murray, Huma Zaidi and Holly Phillips

First glance
With the midterm elections taking place nine months from tomorrow, congressional Republicans are starting to face some thorny choices.  Support President Bush's case for his domestic wiretapping program, or duck and hope that public support or ambivalence defuses the issue on the campaign trail?  Support Bush's proposed cuts in Medicare and other programs, or don't?  For Democrats, these decisions seem a lot easier -- vocally oppose, vocally oppose -- though still risky as Republicans argue that they lack a positive message.  The Administration's point men on both fronts preview their cases on the Wall Street Journal op-ed page.

  1. Other political news of note
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      House Speaker John Boehner became animated Tuesday over the proposed Keystone Pipeline, castigating the Obama administration for not having approved the project yet.

    2. Budget deficits shrinking but set to grow after 2015
    3. Senate readies another volley on unemployment aid
    4. Obama faces Syria standstill
    5. Fluke files to run in California

The Senate Judiciary Committee hearing on the NSA wiretapping program which the Administration maintains is vital to homeland security begins at 9:30 am.  Chairman Arlen Specter said on NBC's Meet the Press yesterday that warrantless wiretapping is "in flat violation of the law."  Per NBC's Ken Strickland, Specter and ranking member Pat Leahy will make 10-minute opening statements; Attorney General Alberto Gonzales, who will be the sole witness, will be allowed a 20-minute opening statement.  After those statements will come 10-minute rounds of questioning.  Strickland says that aides guess the hearing won't wrap up until 4:00 pm, and that committee members may approach the stakeout camera during breaks as they did during the Alito confirmation hearings.  Specter may schedule more hearings, dates TBD.  On Thursday, Gonzales and deputy intel czar General Michael Hayden will testify in a closed-door session before the Senate Intelligence Committee.

Strickland advises that today's hearing may shed little if any new light about the specifics of the NSA program.  Instead, expect a debate on the legal underpinnings the Administration cites for bypassing the special (FISA) court established by Congress in 1978 to approve wiretapping.  Thursday's session, while closed to the press, might also yield few answers because the Administration thus far is only sharing operational details of the highly classified program with the panel's chair and vice-chair.

The $2.7 trillion budget the White House is expected to propose today will include increased spending on national and homeland security and either cuts in, or the outright elimination of 141 programs, including a $36 billion cut in the growth of Medicare over five years.  A senior Administration official told CNBC's Steve Liesman that in their last budget, the big target was Medicaid, whereas Medicare got a bit of a breather because of the prescription-drug plan.  This year it's Medicare's turn.  Liesman also notes that last year, the Administration proposed reducing or eliminating spending on 154 programs and got 89; its originally proposed $54 billion in spending cuts became the $39 billion just passed by Congress last week.  Bush will sign that bill on Wednesday.

Again: the Administration envisions the budget deficit rising north of $400 billion, driven largely by spending on Hurricane Katrina recovery efforts.  Bush maintains that the deficit can be cut in half by the time he leaves office in 2009, while continuing to push for the extension of his tax cuts and for funding for two wars.  Liesman says that per the senior Administration official, war supplemental funds (amount TBD) will be requested during the year as proves necessary.

White House budget director Josh Bolten briefs reporters at 10:00 am, after which all the Cabinet-level officials hold briefings on their respective agency plans.  In addition to the response from the party's Hill leadership, Democratic Govs. Bill Richardson of New Mexico and Jennifer Granholm of Michigan are in Washington today to react to Bush's budget at the liberal-leaning Center for American Progress at 2:15 pm.

Bush had planned to give his first speech on his budget tomorrow in New Hampshire, home of Senate Budget chair Judd Gregg, but that's been bumped back till Wednesday so that Bush may attend and speak at Coretta Scott King's funeral tomorrow.  The Bushes are hosting a dinner for the Dance Theatre of Harlem at the White House tonight at 7:50 pm.  While Bush's job approval rating dropped to just 2% among African-Americans in the NBC/Wall Street Journal poll conducted immediately after Katrina, our pollsters point out that his approval rating is back in double-digit territory among this voting bloc, per our December and January surveys.

In the process of swearing in new Federal Reserve chair Ben Bernanke at the Fed today at 10:00, Bush no doubt will note the good news from Friday that unemployment has dropped to its lowest point since July 2001.  Vice President Cheney today headlines a fundraiser for Rep. Robert Aderholt in Decatur, AL at 1:30 pm ET.

And the Senate is scheduled to begin debating asbestos litigation reform, which together with class-action and medical malpractice reform comprises Bush's hoped-for overall tort-reform agenda.  The bill faces procedural hurdles and a filibuster threat from Democrats.

Security politics
The Sunday Los Angeles Times previewed today's hearing, saying its "tenor rests on a central question: Do the Republicans who control Capitol Hill have greater loyalty to Congress as an institution or to the president who heads their political party?  The [NSA] controversy may be the first of the Bush presidency to place Republicans' roles as lawmakers and politicians so directly in conflict."

MSNBC.com’s Tom Curry has your guide to the NSA wiretapping debate:

On Meet the Press yesterday, Senate Judiciary chair Arlen Specter yesterday called the government's case for the program "very strained and unrealistic," and suggested he might subpoena documents from the Administration about its legal justification for the program:

Gonzales previews his testimony in the Wall Street Journal.

"In his opening statement, Gonzales will discuss the legality of the domestic spying, though not its classified operational details," Bloomberg says, adding: "One point of contention will be Gonzales's own role in advising the president on the wiretapping, which began while he was White House counsel."

"Abraham Lincoln, citing a necessity to suppress support for the Confederacy, suspended habeas corpus, the right of suspects to challenge charges against them, in the Civil War," says the Washington Times.  "Eighty years later, after the Japanese attack on Pearl Harbor, President Franklin D. Roosevelt ordering the detention of more than 100,000 Japanese and American citizens of Japanese descent...  [A]dministration backers argue Mr. Bush's actions pale in comparison to those of past wartime presidents."

The New York Times notes the similarities between the current controversy and one 30 years ago, when “a Senate committee led by Senator Frank Church of Idaho revealed that the N.S.A. had intercepted the phone calls and telegrams of Americans.”

Yesterday's Boston Globe wrote up the growing chorus of conservatives who are opposed to the NSA program.

Per his office, Judiciary Committee Democrat Ted Kennedy plans to question Gonzales about the effectiveness of the program, arguing that it's actually harmful to national security because raises the risk that a terrorist could go free -- given that the evidence might be tainted because it possibly wasn't sanctioned by law.  Kennedy also will ask Gonzales why the Administration parted with history in deciding to circumvent the time-honored (and constitutionally required) system of checks and balances, since Congress was/is willing to give it the tools it needs.

Time magazine reports some Senators are holding out the prospect of a constitutional amendment to at least delineate presidential war powers if not actually curb them.  "Talk of an amendment could end up as merely a lever in hearings.  Then again, the first 10 amendments -- better known as the Bill of Rights -- were demanded by the states in part to curb the Constitution's broad presidential powers."

Budget and spending politics
Bolten argues against tax increases as unnecessary and entitlement cuts as necessary in the Wall Street Journal.

The AP: "Bush hopes to use the election-year budget to get his domestic agenda back on track after a frustrating year in which Congress spurned his top domestic priority of overhauling Social Security in advance of the retirement of 78 million baby boomers."

"Lawmakers and budget experts who helped negotiate past budget deals - deals that saved Social Security from bankruptcy, restored the faith of the financial markets and helped turn record deficits into surpluses - say" that the bipartisan effort Bush requested to curb the growth of entitlement programs is not "likely this year or anytime soon.  The reasons: Congress is too polarized, the crisis is still years away, and [Bush] has shown no interest in mounting the sort of major deficit-reduction effort that produced huge savings in the 1990s but had devastating political costs," says USA Today.

"Although Congress is expected to reshape Mr. Bush's proposals significantly, Republicans voiced support for the blueprint's objectives," says the Washington Times.  "Democrats sought to portray it as an election-year campaign document rather than an honest effort to deal with exploding deficits.  The budget proposal's release comes only weeks before the national debt will hit the current limit of $8.18 trillion, requiring Congress to vote for an increase to keep the government operating."

The Wall Street Journal examines the Pentagon budget, which "includes $84.2 billion for weapons procurement and $73.2 billion for weapons research and development, both increases from fiscal 2006."

The Journal also says that Bush's proposal to expand HSAs "would cost the Treasury about $60 billion over five years -- roughly double what he proposes to save through... trimming Medicare spending.  The disparity between those figures -- the cost of tax incentives and the Medicare savings -- underlined what is emerging as a basic tenet of the Bush administration's health-care policies: individuals can help rein in the nation's medical spending if more of their own money is on the line."

The New York Times traces how the Medicare prescription-drug benefit went from being one of Bush’s greatest domestic achievements to something he didn’t even mention in his State of the Union address.  “Administration officials say the start-up of any vast new social welfare program is bound to encounter difficulties…  But some experts say the new Medicare program, by its very structure, was destined for trouble.”

Bloomberg predicts that "Bush's pledge to cut the U.S. budget deficit in half will likely become a casualty of election-year politics and his own policy goals...  Excessive deficits can boost borrowing costs and crimp economic growth, Treasury Secretary John Snow said in a speech in October.  One thing that may work in Bush's favor as he seeks to fulfill his pledge is the possibility that federal tax revenue will exceed expectations this year, as it did last year...  Another is that Bush calculated his deficit reduction target of $260.5 billion based on the projected size of the deficit -- $521 billion -- when he made the pledge in 2004.  The actual deficit that year was $412 billion."

State and local governments say they “are hobbled by a lack of money and guidance from the federal government” in their efforts to plan for an epidemic of avian flu, the New York Times reports.

It's the economy
The Washington Times says Friday's good news on employment and manufacturing is encouraging Republicans as the midterm election year heats up.

The Financial Times reports growing tensions over Iran's nuclear ambitions are reflecting in rising oil prices.

Former Cheney chief of staff Lewis "Scooter" Libby's trial will start on January 8, 2007 -- after the midterm elections.  Newsweek reports recently disclosed documents show that Valerie Plame Wilson was a covert agent when she was outed in July 2003.

The Saturday Wall Street Journal wondered "how deeply the Abramoff scandal will affect lawmakers and the way Washington conducts business," given how tough it can be for prosecutors to "show explicit arrangements between the gift or contribution and the official action to prove a lawmaker was accepting bribes or gratuities.  Even depriving constituents of honest services, an easier charge to make because it doesn't require a quid pro quo, usually requires evidence there was an effort to conceal the relationship or the perks, a sign the parties knew they were wrong."

The Boston Globe looks back at Abramoff's reign as head of the College Republicans in the early 1980s when the group was in deep financial troubles because of his mismanagement of funds.  "Abramoff's critics inside the Republican Party say his tenure at the College Republicans should have provided a crystal ball into the turns his life might take."

The AP reports that a former top aide to Rep. Lloyd Doggett (D) of Texas has acknowledged embezzling more than $166,000 from Doggett’s campaigns and other groups, has apologized for the crime, and intends to pay it all back.

Sen. John McCain (R) is unilaterally forgoing the use of corporate jets, a move "with short-term ramifications in the ethics reform debate and potential long-term impact on the 2008 presidential race...  Prohibiting such flights will dramatically raise the cost of political travels, especially for those eyeing a presidential bid, during which it often becomes too time consuming to fly commercial flights and much costlier to charter flights."

The Washington Post covers newly elected House Majority Leader John Boehner apparently looking for middle ground on lobbying and ethics reform.

The GOP leadership
Bob Novak writes how two speeches by GOP Reps. Bill Thomas and Mark Souder helped Boehner beat acting Leader Roy Blunt.  “Thomas seldom deigns to descend from his Olympian heights as House Ways and Means Committee chairman.  Accordingly, his colleagues were surprised when he rose to imply Blunt had not made the trains run on time as acting majority leader.  Souder, a back-bench bomb thrower for 11 years, suggested that the election of Blunt could ratify the Democratic indictment of the GOP as the party of corruption.”

House Republicans will gather in Cambridge, MD Thursday through Saturday for their annual retreat.  President Bush will address the conference on Friday.  Boehner is urging his colleagues in the leadership to consider "a format... that would not include any leadership presentations except for National Republican Congressional Committee Chairman Tom Reynolds’ (N.Y.) briefing on the political landscape," Roll Call reports.  "Instead, the retreat would give rank-and-file members a larger role in giving feedback to leaders and would focus more on a long-term vision for the party than on narrower legislative goals."

The Democrats
National Democrats are still discussing when and how to roll out their long-promised message and agenda for 2006.

The New York Times covers Republican National Committee chair Ken Mehlman’s criticism of Sen. Hillary Clinton (D) yesterday, “describing her as a Democrat brimming with anger and a representative of the far left wing of her party…  Mr. Mehlman's remarks were some of the strongest statements he has made about Mrs. Clinton, and they reflect an effort by Republicans to tarnish her credentials when she is thought to be preparing for the 2008 presidential race.  To some extent, Mr. Mehlman was filling a void created by the failure of the Republican Party, so far, to find a strong candidate to run against Mrs. Clinton as she seeks re-election to the Senate this year.”

The midterms
The Wall Street Journal previews the Conservative Political Action Conference coming up later this week, at which activists will unofficially consider the question of, "How much more can be accomplished under George W. Bush?"

"Not since 1994 has the party in power -- in this case the Republicans -- faced such a discouraging landscape in a midterm election," writes the Washington Post.  "The result is a midterm already headed toward what appears to be an inevitable conclusion: Democrats are poised to gain seats in the House and in the Senate for the first time since 2000.  The difference between modest gains (a few seats in the Senate and fewer than 10 in the House) and significant gains (half a dozen in the Senate and well more than a dozen in the House) is where the battle for control of Congress will be fought."

USA Today considers the possibility of glitches at the polls in November after a year of "perhaps the most rapid changeover of voting equipment in history.  With that change comes an increased risk of errors and confusion, election officials say."

And NBC affiliate WPTZ in Plattsburgh, NY/Burlington, VT reports that Rep. Bernie Sanders (I), who is seeking retiring Sen. Jim Jeffords' seat, was taken to Fletcher Allen Hospital in Burlington yesterday after he collapsed at an event.  All indications are that his situation is not too serious; WPTZ's reporter says Sanders was sitting in a particularly warm corner of the room, and that he was able to walk to the rest room, where he ultimately collapsed.  Sanders also walked to the ambulance himself.  The 64-year-old was heard to say his wife had the flu and that he may have caught it as well.


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