“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.

• Wednesday, April 26, 2006 | 5:00 p.m. ET
From Donna Inserra, David Shuster, Mike Viqueira and Huma Zaidi

  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

Karl Rove and the Grand Jury
One week after he relinquished his domestic policy duties at the White House, Karl Rove spent almost four hours today testifying in front of a grand jury in the CIA leak investigation for the fifth time. Rove was not subpoenaed, but rather appeared voluntarily after discussions with special prosecutor Patrick Fitzgerald. It's unclear what exactly Rove testified about, but since he last appeared in front of the grand jury in October, some new details about his involvement have emerged.

Rove initially told prosecutors he did not speak to any reporters about the identity of CIA operative Valerie Plame and her husband Joe Wilson. In October, he revised his story telling prosecutors that he had forgotten about a conversation he had with Time magazine reporter Matt Cooper about the issue. But another Time reporter, Viveca Novak, says that she told Rove's lawyer, Bob Luskin, that she believed Rove had spoken with Cooper seven months before Rove changed his testimony. Rove supporters now fear that Fitzgerald is returning to the theory that Rove only updated his testimony because Cooper had been subpoenaed by prosecutors a few days before Rove appeared before the grand jury to alter his testimony.

Rove's appearance today raises questions about whether he will become the second person in the Bush administration to be indicted in the case. But a spokesman from Fitzgerald's office said there will be "no announcements today."

Gas wars continue
While Washington ruminates about what Rove's appearance means, the battle between Republicans and Democrats about what to do about skyrocketing gas prices continues. Democratic Sens. Dick Durbin, Debbie Stabenow, Barbara Boxer, Chuck Schumer and Maria Cantwell held a press conference in front of a gas station where the price of a gallon of gas is over $3.00. The group argued that the Bush administration is too cozy with the oil and gas industry to do much about the crisis. Durbin said Cheney's policies have put "us in this ditch," while Schumer called on Bush to "get tough on big oil."

Back in the Capitol, House GOP leaders presented their own plan that they say should hit the floor as early as next week. The plan calls for the immediate opening of ANWR and would make states responsible for enforcing price gouging statutes, limit boutique fuels, limit deposits into the petroleum reserve in the summer, and explore alternate sources of energy.

In an increasingly rare moment of bipartisanship today. Reps. Jack Kingston (R) and Eliot Engel (D), one of most conservative and one of the most liberal members in the House, appeared together at a presser to tout their ideas for increased use of alternative fuels.

• Wednesday, April 26, 2006 | 11:10 a.m. ET
From Mark Murray and Kelly O'Donnell

Snow’s job
In announcing Fox commentator Tony Snow as his new White House press secretary, President Bush cited Snow's past work as a print, radio, and TV journalist. "Tony already knows most of you, and he agreed to take the job anyway," Bush joked. He also referred to some of Snow's past columns criticizing him. "I asked him about those comments, and he said, 'You should have heard what I said about the other guy'" -- a reference, of course, to Bush's predecessor, Bill Clinton.

Outgoing White House press secretary Scott McClellan also released some background information on Snow's hire: White House chief of staff Josh Bolten contacted Snow about the job on the weekend of April 15 (by then, McClellan had already discussed his departure with Bolten); Snow met with Bush at the White House on April 20; and he accepted the position on April 25. Snow will begin his new job on May 8, while McClellan will stay on a for a short transition.

The political blogs already have been debating Snow's past work at Fox and his critical columns. One reader at the liberal Talking Points Memo site emailed, "Does Tony have to quit his job at Fox? Or can it be a joint appointment?" However, a reader at the conservative National Review Online seized on Snow's more negative comments about Bush, saying they counter the argument that Bush "only surrounds himself with 'yes men' in his 'bubble.' We can knock these lefty criticisms right out."

Meanwhile, Establishment Democrats are pouring it on. Senate Minority Leader Harry Reid's war room just issued an email listing several questions it has for Snow -- including about the White House's role in the Plame leak investigation, the Administration's WMD intelligence in Iraq, Jack Abramoff, and Vice President Dick Cheney.

• Wednesday, April 26, 2006 | 9:25 a.m. ET
From Elizabeth Wilner, Mark Murray, Huma Zaidi and Holly Phillips

First glance
There's nothing like a threat to veto a must-pass spending bill to declare the arrival of a new White House order.  Former budget chief turned chief of staff Josh Bolten will have his hands full managing the prospect -- yet again -- of a first-ever veto by a politically weak president.  Coming in at the tail end of this latest episode will be incoming budget director Rob Portman and newly minted press secretary Tony Snow.  NBC's Kelly O'Donnell reports that outgoing spokesperson Scott McClellan is expected to stick around for at least another week.

Bush's budget office last night in writing warned the Senate, which is in the process of debating the porked up war/Katrina emergency supplemental bill, that if the bill exceeds $92.2 billion for any reason other than more money for bird flu, he will veto it.  "The Administration is seriously concerned with the overall funding level and the numerous unrequested items included in the Senate bill that are unrelated to the war or emergency hurricane relief needs.  The final version of the legislation must remain focused on addressing urgent national priorities while maintaining fiscal discipline."

The House has already passed a $92 billion bill, and within the Senate, conservatives and appropriators are doing battle over roughly $14 billion in non-emergency spending which appropriators have attached to the bill.  NBC's Ken Strickland says the debate is likely to stretch into next week.  A Senate bill that exceeds $92 billion would mean difficult negotiations in conference.  In issuing the threat, Bush has weighed in on the side of his party's leadership and, more importantly for the GOP's election outlook, the conservative rank-and file whom the party needs to have motivated to turn out in November.  NBC's Mike Viqueira reports that when asked yesterday what the GOP plans to do about its poor standing in the polls, House Majority Leader John Boehner replied, "Hold the line on spending."

But with Bush's job approval rating at, well, we'll see this evening with the release of the new NBC/Wall Street Journal poll, does he have the standing to veto -- and sustain a veto of -- an emergency spending bill against the wishes of some Republicans who feel they need accomplishments to tout in what's shaping up to be a tough midterm election year?  Lawmakers from his own party have already bucked his calls to cut Medicare spending, believing it would put them at risk in the election year.  Remember that Bush is committed to halving the deficit by the time he leaves office.

The new NBC/Wall Street Journal poll on Bush's standing, Congress' standing, the oil companies' standing, and a lot more will be released tonight on NBC Nightly News at 6:30 pm ET.

Yesterday, Bush announced that he's ordering that deposits to the Strategic Petroleum Reserve be suspended during the summer in an effort to boost supply and, hopefully, ease gas prices.  In his speech, he asserted that it "will leave a little more oil on the market," and that "every little bit helps."  Based on conversations with oil traders, however, CNBC's Patti Domm advises that it's not clear right now what effect, if any, the temporary halt in SPR deposits will have on current gas prices since unstable relations with Iran and political instability in Nigeria seem to be the primary drivers of the price of oil.

During the 2004 presidential campaign, when average gas prices had soared above $2 a gallon, Sen. John Kerry (D) demanded that the Administration stop filling the SPR to increase the oil supply.  But the Administration disagreed, arguing that the reserve is national security asset and that it would continue to fill it, absent a severe supply interruption.  But in announcing yesterday that he wanted to temporarily suspend filling the SPR, Bush said, "Our strategic reserve is sufficiently large enough to guard against any major supply disruption over the next few months."

Why the change of heart?  "Because they read the same polls that everybody else reads," Phil Singer, spokesperson for the Democratic Senate campaign committee, tells First Read.  But Henry Lee, director of the environment and natural resources program at Harvard's Kennedy School of Government, says that the 30-year-old SPR has been a heated political subject throughout its existence: Touch it or refuse to touch it, you're accused of playing politics.  "You can't win," Lee explains.  "We must figure out how to develop a coherent policy for its use."  Lee adds that temporarily ceasing to fill the SPR is smart economically, because you don't want to buy oil reserves at $70-plus per barrel.  But he argues that it doesn't do much to actually lower gas prices, saying it's the equivalent of "throwing a pebble at an elephant."

Senate Democrats' proposals yesterday on how to deal with the oil companies, meanwhile, are being viewed by Wall Street as plain politicking, one Washington-based economic analyst suggests to First Read.  "Everybody's dumping on oil companies.  The rest of the business community would love to be in their position - so stinking profitable that Congress is going after them."  Among other Democratic events on the subject today, the party's House and Senate campaign committees hold a 12 noon presser at the Democratic National Committee to talk about how they see gas prices affecting the midterm elections.

Apart from announcing new press secretary Tony Snow this morning, Bush today takes part in a briefing for members of Congress on the Iraq war at 10:30 am, then makes remarks to the 2006 National and State Teachers of the Year in the Rose Garden at 1:30 pm, with a photo op preceding the event.

It's the economy...
Iran's top oil official tells the Wall Street Journal that "the country would not use its oil exports as a political weapon and that it already is struggling to meet its own domestic oil demand."

USA Today says Bush's "call for a federal investigation of possible gasoline price gouging comes out of a long political tradition that has had limited effects for consumers at the pump.  Jay Hakes, a former head of the federal Energy Information Administration who is writing a book on the energy politics of presidents Nixon, Ford and Carter, says little presidential action of substance has been taken on oil and gas prices since the last of those presidencies ended in 1981."

The Los Angeles Times front-pages this headline: "Why Gas Prices Won't Go Down."  "[T]he factors driving today's record gasoline prices are varied and complex - and beyond the reach of presidential dictate."  Another story notes that "using the Strategic Petroleum Reserve as a lever against higher prices... has been tried repeatedly by Bush and several of his predecessors, with little if any effect."

"Still, Mr. Bush's speech -- and the gathering political storm over the issue -- had some effect on the oil industry yesterday," notes the Wall Street Journal.  "The nearby contract for June delivery of light, sweet crude settled 45 cents lower at $72.88 a barrel...  Another effect was to push down the share prices of some oil and refining companies."  One analyst called that "further evidence that a sizable chunk of current oil prices is the result of investor speculation."

"Privately, Republicans said price-fixing investigations are good politics but unlikely to result in any significant punishments or price changes this year." – Washington Post

"Republican strategists said the anticorporate undertone of the Republican response carried the risk of a backlash from business leaders and free-market conservatives who deplore government intervention.  But they said the risk was relatively small at a time when both parties want to promise voters relief.” – New York Times

On the industry side, the oil industry is gearing up a "multimillion-dollar lobbying and educational campaign in response to growing political pressures brought on by rising gas prices," says The Hill.

And, "Farm groups and ethanol makers fear that the corn-based fuel additive will get the blame for the soaring pump prices in cities where ethanol is being added to gasoline," reports the Des Moines Register.  People "may see shortages of gasoline as refiners switch to ethanol from another additive, MTBE...  Ethanol has struggled to overcome image problems for years, including concerns that it would ruin engine parts, or that the fuel was a political boondoggle" for presidential candidates.

On another economic note, the Progressive Policy Institute, a centrist Democratic think-thank, released a study yesterday that may trigger some serious debate within the party over the merits of economic populism and class warfare.  Labor economist Stephen Rose argues that such themes don't work because "people no longer choose candidates primarily on the basis of 'pocketbook' issues, as they did when the New Deal coalition dominated national politics," he writes.  "Second, even if people did..., the group that could reasonably be categorized as having a clear, class-based interest in voting for Democratic policies would comprise less than one-quarter of the population."  Rose also argues that the party needs to modernize its economic and social programs and offer an agenda that speaks to America's middle class, not necessarily the working class.

This study may not come as a surprise to some.  After the 2000 election, leaders at the Democratic Leadership Council -- affiliated with the PPI -- blamed Al Gore's defeat partly on his populist message.  But Karen Ackerman, political director at the AFL-CIO, fired back at the PPI study's assertion.  According to the labor federation's experience and research, she said, "working families very much care about issues of economic security."  She cited jobs moving overseas, pension problems, and income inequality, adding that Democrats' failure to win in 2000 and 2004 had to do with the fact that voters just didn't trust the Democratic candidates on these issues.

White House names and faces
Tony Snow, 50, served as White House speechwriting director from 1991-1992 and then as deputy assistant to the president for media affairs from 1992-1993.  He currently hosts Fox News Radio’s “Tony Snow Show” and Fox's “Weekend Live with Tony Snow.”  The previous host of “Fox News Sunday” and an occasional Rush Limbaugh sub, he played a bit role in the Monica Lewinsky scandal by introducing Linda Tripp to conservative literary agent Lucianne Goldberg.  It was Goldberg who helped Tripp persuade Lewinsky to tell about her affair with then-President Clinton.

As he prepares to hit the podium, Snow might want to go back and read a Townhall.com column he wrote in a 2001 to Bush Administration newcomers: “My contribution to the Class of 2001 is some simple, time-tested advice -- Don’t get a big head...  The boneyard of American politics is filled with people who labored under the false impression that their participation in a White House made them unique and special.”  When speculation began circulating last week that Snow could be McClellan’s replacement, he wrote another Townhall.com column -- this time on the media.  Snow said the “media revolution has scrambled the world.  We get everything instantly -- news, images, analysis, reaction ... everything but actual perspective.”  Snow, who will now face reporters on a daily basis, added, "Unfortunately, the developers of the Age of Instancy have neglected to create a pause button.  As a result, people now publish musings that in previous generations they merely would have tucked into a desk drawer, or left un-mailed in a sealed envelope."

The Washington Post reports that he agreed to take the job after "top officials assured him that he would be not just a spokesman but an active participant in administration policy debates."

The Wall Street Journal covers speculation that Treasury Secretary Snow might leave and notes, "Public advocacy of the administration's economic policies is another area where the White House believes it needs help."

Despite grumbling about the White House's relations with the Hill, Bush's congressional liaison doesn't appear to be going anywhere anytime soon, Roll Call says.

The New York Times reports on the resignation of the head of the Small Business Administration, Hector Barreto, who will be replaced by Steven C. Preston, a Chicago business executive.  “The Small Business Administration was sharply criticized in the months after Hurricane Katrina as taking too long to handle disaster loans to homeowners and companies trying to rebuild.”

More on the Bush/GOP agenda
Roll Call on Bush's veto threat: "For now, Republicans said [Senate Majority Leader Bill] Frist and the White House are expected to take a tough line on the cost of the bill...  Republicans caution that Frist stressed - and Bush agreed - that the White House must be prepared to back up a threatened veto in this case given growing unhappiness with Bush within both the House and Senate Republican Conferences...  Meanwhile, Democrats have already signaled they not only back the bill’s current spending but want to add more in homeland security funds."  They're "also hoping to use the supplemental as a platform for their political attacks on Bush’s energy policies."

"Caught in the middle is Senate Appropriations Committee Chairman Thad Cochran, a soft-spoken Mississippian who has been unfailingly loyal to Mr. Bush.  But in this case, he is also determined to help his home region devastated by Hurricane Katrina.  About half of the extra $14.3 billion in the bill would go to help the Gulf Coast, and Mr. Cochran recommended $4.6 billion of this increase himself."

The Washington Times rounds up GOP conservatives' criticism of the pork in the bill.

Bloomberg reports that "Republican leaders, plagued by internal divisions over spending and immigration, plan to change the subject in Congress to issues that provide a sharper contrast with Democrats," like medical malpractice reform and a repeal of the estate tax.  "The risk is that many of the issues on the unity agenda will have little appeal to swing voters -- and also may not address the key concerns of rank-and-file Republicans, who according to party activists are most upset about spending and deficits."

In its write-up of the meeting yesterday between Bush and key Senate leaders who support a path to citizenship for illegal immigrants, the New York Times notes that Boehner said he opposes the Senate bill and its citizenship provision.  “‘I don't think that would be supported by the American people,’ Mr. Boehner said of the Senate bill while speaking with reporters.”  (Is he right?  Check out the results from our forthcoming NBC/Wall Street Journal poll.)

USA Today reports on unawareness of the looming Medicare prescription-drug benefit enrollment deadline: "Despite a nationwide campaign by government and private organizations, only 55% of seniors realize the deadline is May 15, according to a poll by the Kaiser Family Foundation...  Only 53% know enrolling after the deadline will cost 1% more per month."

Security politics
Secretary of State Condoleezza Rice and embattled Defense Secretary Donald Rumsfeld are making a surprise visit to Baghdad.  The visits were "calculated to demonstrate a strong show of support for the country’s emerging new government," writes the AP. "Rumsfeld’s press secretary, Eric Ruff, told reporters aboard the defense secretary’s overnight flight from Washington that Rumsfeld’s trip was designed to convey Bush’s encouragement at the latest steps toward putting in place Iraq’s first fully constitutional government since the fall of the Saddam Hussein regime three years ago." 

Senate Minority Leader Harry Reid said yesterday that his caucus won't seek a no-confidence vote on Rumsfeld: "a Reid aide said Senate Democrats believe the policy failures of the Bush administration go way beyond one cabinet secretary."

But Sen. John McCain (R) said he'd support a hearing on Rumsfeld, so long as the witness list is balanced.  "The relationship between McCain and Rumsfeld has never been friendly and at times has been hostile...  McCain went so far as to say publicly that he had no confidence in Rumsfeld, citing the secretary’s handling of the Iraq war and his failure to send more troops into Iraq in 2004." – The Hill

At 10:00 am, good-government activists will announce the launch a new nonpartisan group, the Sunlight Foundation, which plans to use the Internet to promote greater transparency and accountability in Congress.  Executive director Ellen Miller tells First Read that her group will provide grants to make members' personal financial statements available on the Internet, as well as government grants and contracts, and will help establish a "Congresspedia," a free Internet encyclopedia on members.  Miller previously worked at the liberal Campaign for America's Future, but she says her organization won't go easy on Democrats.  "Corruption exists on both sides of the aisle."

NBC's Viqueira reports that four more House staffers have received subpoenas, the House Reading Clerk announced yesterday, and a good guess is that that they're in conjunction with the assault charges being brought by the US Capitol Police against Rep. Cynthia McKinney (D).  A few weeks back, McKinney allegedly hit a police officer with her cell phone after he failed to recognize her as a member of Congress and tried to stop her from going around a magnetometer.  Yesterday marked the first opportunity for any subpoenas served during the two-week recess to be announced to the chamber (such an announcement is required under House rules).  Viq reports that a total of 13 people have been interviewed as witnesses by law enforcement as part of the McKinney probe.

The midterms
MoveOn.org Political Action is launching a second wave of TV ads today accusing four House Republicans of being financially influenced to vote in favor of "big industry."  The ads target Reps. Nancy Johnson (CT-5), Thelma Drake (VA-2), Chris Chocola (IN-2) and Deborah Pryce (OH-15), and accuse them of "taking campaign contributions from big drug companies then voting for a plan that protects drug company profits while hurting senior citizens who face rising prescription costs," according to a press release from the group.  The $300,000 ad buy is part of a larger planned $1.3 million ad campaign.  The first round of ads claimed the four had taken donations from oil and energy companies and then cast votes in favor of those companies.  MoveOn.org says that according their internal polling, Johnson and Drake lost ground in their districts, presumably as a result of the ad campaign.

In California, gubernatorial candidate Phil Angelides (D) -- who’s trailing Steve Westly, per the polls, for the right to challenge Gov. Arnold Schwarzenegger (R) -- “told the state's business leaders Tuesday that if he's elected, he'll be asking them to ‘invest in our people’ by paying more taxes - a campaign pledge that didn't exactly play well with his audience,” the Sacramento Bee writes.  “It even caused a few in the crowd to walk out.”

With Ohio's competitive gubernatorial primary between Republicans Ken Blackwell and Jim Petro now less than one week away, MSNBC.com looks at the four top-tier GOP African Americans -- including Blackwell -- who are running for higher office this year.  "For Republicans, these candidates present a chance to add fresh (and diverse) faces to their party.  Perhaps more important for the GOP, [they] offer the tantalizing opportunity to peel away a crucial bloc of the Democratic base: African-American voters."  But these four also show that it's not easy being a black Republican running for higher office.

Former Reagan Navy Secretary James Webb kicked off his campaign for the Democratic Senate nomination in Virginia yesterday by echoing his party's criticisms of Republicans on Iraq and the "culture of corruption."  "Webb was an early opponent of the Iraq invasion, and his military credentials... make him to some Democrats and an enthusiastic base of liberal bloggers an attractive candidate against the conservative [Sen. George] Allen." – Washington Post


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