“First Read” is an analysis of the day’s political news, by the NBC News’ political unit. Please let us know what you think.  Drop us a note at FirstRead@MSNBC.com.  To bookmark First Read, click here.

Monday, April 24, 2006 | 6:33 p.m. ET
From Andrea Mitchell, Chief Foreign Affairs Correspondent, NBC News

  1. Other political news of note
    1. Animated Boehner: 'There's nothing complex about the Keystone Pipeline!'

      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

One thing is clear from the raft of special, one-issue polygraph exams the CIA has been requiring its officers to take as it investigates leaks: the agency is determined to scare off any future leakers.

That said, the case of Mary McCarthy, fired last week, is extraordinary. Late today, she started firing back, authorizing her attorney to talk to NBC News. Bottom line? Despite what agency officials said about the firing -- even though they would not confirm the identity of the accused -- McCarthy categorically denies that she leaked classified information. Furthermore, she says she did not have access to the information she is accused of leaking. In other words, if you don't mind a few reflections from this hall of mirrors, although McCarthy cannot say this -- that would be yet another leak! -- her friends tell me that while she worked in the Inspector General's office at the CIA, she was not working on the investigation into abuses at the secret prisons.

Of course, the CIA has said that the officer -- whom the agency wouldn't identify -- had "confessed" after being confronted with the results of a polygraph exam.

What about that? This is admittedly one-sided, but just for the record: a defense source tells NBC News that while McCarthy may have flunked her polygraph on the issue of having unauthorized contacts with reporters, she did NOT flunk the question about leaking information on the secret prison system.

CIA officials say that having unauthorized contacts with reporters is sufficient to be a firing offense, although friends of McCarthy say no one has ever been fired for that before.

We've learned a few more facts about Ms. McCarthy to add to the portrait that is emerging: the 61-year-old CIA officer graduated from law school (Georgetown University) last year and passed the bar in November. She announced her retirement and her last active duty day was Feb. 7. But under CIA procedures she was not going to be transitioned out until April 30, her formal retirement day. Next Sunday. She had planned to practice family law, specializing in
adoptions, and do public service work.

Since Feb 7, she had gone back to Langley several times to answer questions related to the investigation -- until Thursday when she was escorted out. As a fired employee, she gets to keep her pension but loses her security clearance -- which you would expect.

McCarthy has been the target of much criticism from administration sources for contributing a total of $7,000 to Democratic political causes over her lifetime, including $2,000 to the Kerry campaign.  During the Clinton years, she worked at the National Security Council and was known as the chief objector to the president's bombing of a chemical factory in Sudan in Aug. 1998. McCarthy even wrote to Clinton and her immediate boss, Sandy Berger, to argue that the evidence didn't support assuming that the factory was secretly producing biological or chemical weapons. The President rejected her criticism and bombed it anyway. McCarthy turned out to be correct.

Monday, April 24, 2006 | 6:13 p.m. ET
From Huma Zaidi

A series of violent explosions in the resort town of Dahab, Egypt continue to echo throughout the world as the death toll there rises. President Bush, speaking at a fundraiser for Rep. Jon Porter, R-Nev., in Las Vegas this afternoon, condemned the attacks calling them "heinous." But Bush was quick to use that moment to remind attendees what the GOP has been telling the public for months: that in order to defeat terrorism, voters need a party who understands that threat. "I need people in Congress who understand the nature of this enemy," Bush told the crowd.

But the concerns about terrorism have been overshadowed today by the debate — and blame game — over gas prices. The President told the crowd that while something must be done about gas prices, "[t]here's no magic wand to wave. We'll make sure that the energy companies are pricing their product fairly." Bush also resurrected a theme from his State of the Union speech, arguing that Americans must break free of their "dependence upon oil." Meanwhile, the back-and-forth between Democrats and Republicans continues over who's to blame for the skyrocketing cost of gas. A press release fired off by the Republican National Committee claims that Democrats are the source of the problem because they have stifled exploration of new energy sources (read: drilling in ANWR).

Monday, April 24, 2006 | 1:45 p.m. ET
From Elizabeth Wilner

Gas wars:  A counter attack
Because, in Washington, any "memo to interested parties" -- read: the media -- from one side can't go unanswered by the other, the Democratic Senate campaign committee (DSCC) fired off a response to their GOP counterpart's memo of earlier today (see below).  Republicans are accusing Democrats of blocking energy policies that could have alleviated current high gas prices, and of doing nothing to solve energy problems when Bill Clinton was president.  The DSCC in its response exults in Republicans' "collective anxiety attack over the fact that they are being held accountable for turning a blind eye" to soaring gas prices, and in the GOP Hill leadership's request to President Bush to ask federal agencies to look into price-gouging.  The Democrats also point to the hefty campaign contributions oil companies traditionally give to Republicans.

Senate Minority Leader Harry Reid, taking the high road while his campaign committee takes a lower one, has sent a letter to his colleague Bill Frist, the majority leader, asking that when the Senate returns, they "work together in a bipartisan fashion to address the critical issues facing the American people" -- tops among them, dealing with gas prices.

Meanwhile, our readers have plenty of suggestions for Congress in case lawmakers feel stuck -- including lowering speed limits and having members spend plenty of time at home so they can see what their constituents are paying for gas.

Monday, April 24, 2006 | 11:30 a.m. ET
From Elizabeth Wilner

The gas war has begun
President Bush and members of Congress are still making their way back to Washington, but the war over who's to blame for skyrocketing gas prices is already simmering and is expected to reach full-boil status by tomorrow.  There's little Bush can do about current high gas prices -- and if Democrats were running part of the government, they would find their hands similarly tied.  But they're doing what they can to encourage voters to blame the majority party, and they are increasingly focusing their attacks on Bush's energy policy, the drafting of which, they remind everyone, energy companies were invited to participate in.  Republican lawmakers are doing their best to deflect those efforts by taking up the cause of alleged price-gouging themselves and, now, by firing back at Democrats directly. 

The Republican Senate campaign committee issued a detailed release accusing Democrats of trying to change the subject away from a strong US economy by focusing on gas prices.  "These are the same Democrats who accomplished nothing in terms of an energy policy during eight years with President Clinton at the helm...  These are also the same Democrats who obstructed a bi-partisan comprehensive energy bill for four years in Congress," the release snipes.  A Senate GOP aide advises, "We expect Democrats to blame us as all summer...  We expect there to be hearings, Democratic calls for 'windfall' taxes on oil company profits, tapping the strategic petroleum reserve, claims of price gouging by the oil companies, VP Cheney’s ties to the oil industry, and other nonsensical theories."  Note that GOP Sen. Arlen Specter also came out in favor of a windfall tax yesterday.

Tomorrow, Bush will give an energy speech in the morning and House Democrats have already scheduled a press conference to respond, probably only the first of many such events to be planned. 

Monday, April 24, 2006 | 9:25 a.m. ET
From Elizabeth Wilner, Mark Murray, Huma Zaidi and Holly Phillips

First glance
Congress returns this week, with all the political repercussions that entails.  Republican members worried about the midterm elections will be converging on Capitol Hill, unnerving one another with stories from town halls they did back home.  Since they left town two weeks ago, new White House chief of staff Josh Bolten has made the kind of personnel changes and outreach efforts some of them were agitating for, and further changes are in the works.  Yet President Bush's most recent job approval rating is 33% and the price of gas has skyrocketed, prompting returning GOP lawmakers to compete with Democrats in calling for hearings, agency action, and a windfall profits tax aimed at oil companies.  Bush gives an energy speech tomorrow.

The Senate this week will begin debating the emergency supplemental funding request for the wars in Iraq and Afghanistan and Hurricane Katrina recovery, a must-pass bill that has become problematic for the GOP.  First, the debate over the actual emergencies the bill would fund provides Democrats with fresh opportunities to criticize the Administration.  Although the war in Afghanistan has been by many measures a success, Democrats are now suggesting that the just-resurfaced Osama bin Laden might have been caught by now had the Administration not turned its sights from Afghanistan to Iraq.  Democratic National Committee chair Howard Dean insisted in New Orleans over the weekend that Democrats will make Katrina an issue in the midterms.  Bush is scheduled to visit the Gulf Coast on Thursday, where he no doubt will urge the Senate to pass the bill.

Then there's the non-emergency side of the bill.  As NBC's Ken Strickland points out, the Senate version is $14 billion more than Bush requested and the House passed, and will prove to be a test of the GOP mantra of fiscal restraint as conservatives battle to shrink it to the requested $92 billion.  The bill also is being loaded up with earmarks by senators looking for accomplishments to tout in the midterm election year.  Bush's goal of halving the deficit by the time he leaves office already has been complicated by lawmakers' refusal to cut entitlement spending this year; the non-emergency projects being attached to the supplemental defy his call for earmark reform.

Senate efforts to pass an immigration-reform bill have been relegated to the back burner, but Bush will try to revive them by calling for a comprehensive bill -- i.e., combining border security with a guest-worker program -- in Irvine at 12:10 pm ET, his final event in California before heading East.

In the House, NBC's Mike Viqueira says that GOP House members are approaching this five-week stint until their next recess as if it were the Bataan Death March, judging from how they're talking about it.  With a weak lobbying reform measure on the table this week, Viq suggests it's possible that the only significant pieces of legislation to pass Congress before November will be the defense and homeland security appropriations bills.  The GOP leadership claims they will make another attempt to get a budget resolution next week, having failed to get a bill before departing for recess.  One bright spot for Republicans is that Democratic Rep. Alan Mollohan's temporary departure from the Ethics Committee undermines his party's "culture of corruption" case against the GOP.

Republicans in both chambers also plan a series of show votes later this spring on an estate tax repeal and bans on gay marriage and flag-burning to motivate the base.  Congress next leaves town for Memorial Day, and the targeted adjournment date is October 6.

En route home from California, Bush stops at the Venetian in Las Vegas for a 3:35 pm ET fundraiser for Rep. Jon Porter (R).  The more popular First Lady is in Connecticut, where she'll appear at a fundraiser for Connecticut Republicans, including moderate GOP Reps. Nancy Johnson, Christopher Shays and Rob Simmons.

In the New Orleans mayoral race, it's incumbent Ray Nagin versus Lt. Gov. Mitch Landrieu in the May 20 runoff.  Both are Democrats, and Landrieu, as a member of state government, also bears some responsibility for the response to Hurricane Katrina, potentially neutralizing one of voters' biggest beefs with Nagin.  Nagin took 38% of the primary vote to Landrieu's 22%, but Nagin may have a tougher time building on his support by winning over voters who chose other candidates.  On the other hand, he has a month in which to reach out to displaced voters around the country and persuade the ones who did not cast ballots on Saturday to vote in the runoff.  The state has until May 4 to certify the results, and anyone wishing to challenge the results has until May 1 to do so.  Voter turnout was estimated at 36%.

Lastly for now (but just for now), First Read is pleased to announce that we're expanding our daily 9:00 am coverage to bring you analysis and color on breaking political news throughout the day, with contributions from NBC and MSNBC correspondents and producers on Capitol Hill, at the White House, Pentagon, Supreme Court and State Department, and all around the country.  Sign up for alerts at www.FirstRead.MSNBC.com.

It's the economy...
"Oil producers and consumers said oil prices will stay high during the next few years before companies add crude output and refining capacity," Bloomberg reports.  "Crude oil will average $60 to $65 a barrel, OPEC President Edmund Daukoru told reporters in Doha, Qatar, where he's attending a meeting of ministers and company executives from producer and consumer nations."

Bloomberg also reminds us that part of the reason why prices are rising is because of "new regulations that affect the cost of blending gasoline."

Senate Majority Leader Bill Frist and House Speaker Dennis Hastert are expected to send Bush a letter today asking him to direct the Justice Department and the Federal Trade Commission to look into possible gas price-gouging, and also asking him to tell the EPA to issue waivers to make it easier for oil refiners to produce more gas.  Hill Democrats recall that "Republicans invited big oil and gas company lobbyists to the table to write the Republican energy bill that President Bush's own Energy Department said would increase gas prices," as one top Democratic staffer puts it.  As Bush gives a speech on energy tomorrow, House Democrats also plan to hold an event on the subject.

With Democrats trying to revive their charges about the Administration's energy policy, it may be an unfortunate coincidence for the White House that former Enron CEO Ken Lay testifies today, right in the thick of the gas-price frenzy.

The "economic week-ahead" schedule released by the White House suggests that both the Energy Secretary and the beleaguered Treasury Secretary will be quite busy this week.

White House names and faces
As Republican members of Congress return to work, the White House has a new chief of staff, budget director, deputy chief of staff for policy, and US trade representative, and a refocused chief political strategist.  Thus far, Josh Bolten's staff makeover has focused on the domestic policy and communications teams -- a quick response to lawmakers' concerns about having a clearly enunciated domestic message on which to run.  Will he stop there, or will he eventually turn his focus to the foreign policy team.  One sharp-eyed national security analyst points out that per the news accounts, members of the core White House national security team don't appear to have participated in meetings about staff changes thus far, and suggests that raises the question "about when/whether Bolten moves 'out of his lane'" and makes personnel changes on that front, or "decides they can't fix anything so long as the sole spokesman for policy in Iraq is Bush."

In a Sunday editorial, the Los Angeles Times called for Vice President Cheney to retire early and for Defense Secretary Rumsfeld's resignation.

NBC's Strickland advises that Democrats' talk of sponsoring a resolution for a "no confidence" vote on Rumsfeld remains just talk at this point.

The New York Times says there is anxiety and “fear and moaning” at the White House, as workaholic Bolten has replaced the easygoing Andy Card.  “[A]fter big staff changes last week… no one is sure who is in and who is out.  Aides say they are on edge, and Mr. Bolten has promised more housecleaning this week, after Mr. Bush returns from a trip to California.”

Bob Novak applauds the staff shakeup, but laments, “The problem is the change in the White House probably comes 1-1/2 years too late.  No matter what his desires, Bolten is no longer able to draw upon the political capital from Bush's re-election to take the initiative.”

Disaster politics
While Nagin got more votes than any other candidate, the New Orleans Times-Picayune points out that "Nagin is hardly a shoo-in for re-election...  62 percent of the 108,000 voters who cast ballots Saturday picked someone other than Nagin, a sign of serious trouble for an incumbent."

Nagin did well in the areas most damaged by Katrina. - New Orleans Times-Picayune

“White voters failed to dominate at the polls Saturday as thousands of black voters returned home,” keeping “Nagin's candidacy alive” and “casting an estimated 90 percent of votes in his favor.”  Yet, the Houston Chronicle suggests, the African-American turnout might not be as high in the May 20 runoff, because “the secretary of state's office does not plan to repeat the massive voter education program mounted in advance of Saturday's vote.”

"Runoffs, particularly in the South, are usually lethal for incumbents.  If an incumbent can't win a majority in the first round, history suggests that he can't win a runoff.  Turnout is usually lower in the runoff, further diluting the incumbent's appeal, though New Orleans, with chaos and uncertainty the only certainty, may present a special case." - Washington Times

Despite both candidates' calls for race not to be made an issue in the runoff, the breakdown of who supported whom suggests that will be difficult to avoid, says the Washington Post.  "The electorate in Saturday's election split along stark racial lines over Nagin, who dominated in the city's black neighborhoods of New Orleans East and the Lower Ninth Ward but struggled virtually everywhere else, according to an analysis by GCR & Associates, a consulting firm working on the election for the secretary of state's office."

More Bush/GOP agenda
USA Today lists some of the more noteworthy earmarks in the Senate version of the war/Katrina supplemental.  "The unusual battle pits President Bush and Republican leaders concerned about rising federal budget deficits against members of the Senate Appropriations Committee who have attached dozens of items sought by individual lawmakers.  Even more new spending will be sought by senators during the weeklong debate...  The fight comes in an election year when members of Congress are under pressure to show they're getting federal spending under control, especially members' hometown and home-state spending."

The Wall Street Journal, covering "crunch time" for Republicans in Congress, notes that "for the first time since coming to power in 1994, the party is at serious risk of not passing a budget resolution in the House."  Also: "A juxtaposition of events on Friday illustrated how much Congress and the Republican majority appear in denial over the negative impact of recent scandals -- and the drift of this year.  After days of orchestrating telephone calls into his district, Republican campaign officials celebrated Rep. Alan Mollohan (D., W. Va.) being forced to step down from the House Ethics Committee...  That same afternoon, the Rules Committee posted a final text of a Republican lobbying overhaul bill that showed a weaker product than the widely criticized Senate-passed version."

The Los Angeles Times says the odds are so grim for Republicans' chances of passing any significant legislation that the situation "may call for Bush to step in and demand more party unity from Republican lawmakers, who have increasingly kept their distance from the White House as the president's agenda and poll numbers have flagged."

The Chicago Tribune observes that time is running out for Congress to pass a pension-reform bill.

The New York Times says that with the May 15 Medicare prescription-drug benefit enrollment deadline approaching, “drug plans are expecting a surge of new enrollment that threatens to overwhelm already busy phone lines and leave beneficiaries struggling to figure out how to sign up for the new plan.”

The immigration debate
Frist "intends to seek passage of immigration legislation by Memorial Day by reviving the Senate bill that stalled earlier this month," reports the AP.  "In a gesture to conservative critics of the measure, Republican leadership aides said last week that Frist also will seek roughly $2 billion in immediate additional spending for border protection."

Gov. Arnold Schwarzenegger (R) has denounced the 700-mile wall along the US-Mexico border proposed by the House immigration reform bill.  "Schwarzenegger called relying on a wall as the only means to stop illegal immigration 'crazy.'  But at other points he spoke more broadly in opposition to the proposal, on practical and symbolic terms.  He alluded to the Berlin Wall, suggesting that such a structure on the U.S. border would send the wrong message to Mexico." - Los Angeles Times

The Minutemen are organizing a caravan to protest efforts to, in their view, weaken the House's tough border security bill.  The caravan will begin two days after the nationwide boycott planned by immigrant-rights activists.  It "will begin in Los Angeles on May 3 and end in the District May 12 -- with a stop at President Bush's hometown of Crawford, Texas, on May 6 to highlight what caravan organizers said was 'the president's lack of leadership in this important aspect of homeland security.'" - Washington Times

The immigration debate is ruffling some feathers between the GOP and Catholic voters at a time when the two entities appeared closer than ever, says the AP.  "While Catholic bishops and many Republican politicians share opposition to abortion, they are often split over the specifics of immigration changes.  Church leaders are challenging, and in some cases even vowing to defy, the tougher enforcement proposals by Republican lawmakers."

Ethics
USA Today covers the scaled-back lobbying reform measure the House will consider this week.

House Ethics Committee ranking member Alan Mollohan (D) will be replaced on the committee by Rep. Howard Berman while Mollohan seeks to disentangle himself from a federal investigation into his financial dealings and disclosures.

The calendar isn't being kind to embattled GOP Rep. Bob Ney, who's caught up in the Jack Abramoff scandal and faces a potential criminal indictment, notes USA Today.  "Members who face criminal indictment in an election year rarely have been able to resolve their cases before Election Day without pleading guilty.  Even with unresolved prosecutions hanging over them, however, some of these lawmakers were still able to win re-election despite their legal woes."

The midterms
The New York Times looks at how the two parties are pushing different issues to drive turnout in November -- with Democrats seizing on stem-cell research, and with Republicans looking to pass a constitutional amendment banning gay marriage.

In his remarks to the DNC meeting in New Orleans on Saturday, DNC chair Howard Dean told members that in more than 1,000 locations around the country this week, Democrats will go door-to-door talking with their neighbors about the what the party stands for.  "That’s six months before Election Day."  This "neighbor-to-neighbor" effort marks the first of three being organized by Democratic state parties and the DNC; the third effort, scheduled for September, will include training for election-day volunteers.

USA Today takes its turn covering Democrats' hopes of winning a bunch of congressional seats in the Northeast.

The Washington Post notes the polls and wonders if GOP Sen. Conrad Burns may be bouncing back in Montana, where Democrats have been walloping him for his ties to disgraced lobbyist Jack Abramoff.  "For all his bravado, Burns remains in trouble, especially in a state that generally tilts to the Republicans.  But his experience also suggests the challenge that Democrats around the country will have in turning this year's scandals into tangible gains at the polls."

Salon.com profiles vulnerable Ohio Sen. Mike DeWine (R), who in an interview says that history will harshly judge Defense Secretary Rumsfeld.  “What his comments symbolize are the lengths to which jittery GOP incumbents will go to distance themselves from George W. Bush.”

The Chicago Tribune, meanwhile, does its take on the Pennsylvania Senate race, noting that incumbent Rick Santorum (R) “is facing his most difficult re-election ever, due partly to an uncontrollable desire to speak his mind and partly to an unpopular president and an Iraq war seemingly without end.  Of the 33 Senate races this year, the Democratic challenge to Santorum is the nation's marquee contest--promising big money, prominent visitors and a referendum on President Bush's policies.”

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