Monday, July 10, 2006 | 9:30 a.m. ET
From Elizabeth Wilner, Mark Murray, Huma Zaidi andAlexIsenstadt

  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

In today's issue:
Bush and Republicans tout a shrinking deficit
Detainee, immigration policy questions confront the returning Congress
With fewer than 30 voting days left, how do Hill Republicans plan to spend their time?
See how they run: DeLay in Texas (?!) and Lieberman in Connecticut

First glance
Having not gotten the bump they were looking for from the June jobs report last Friday, the Bush Administration and GOP lawmakers are gladly advancing their Tuesday news that an unexpected increase in tax revenue is reducing their deficit projection.  President Bush is scheduled to make remarks tomorrow on the "mid-session review," his Administration's revision of revenue and deficit forecasts for the year, and his new budget director is also scheduled to give a big speech at the National Press Club.  But the word is out, and Bush may use today's occasion of the swearing-in of his new Treasury Secretary to cast the development as proof that his tax cuts are indeed boosting the economy -- as GOP lawmakers already have begun to do.

What the news really measures is the success of this Administration's efforts to manage expectations about deficit projections (with the help of former White House budget chief turned chief of staff Josh Bolten), intentionally setting markers each year that wind up being too high.  The deficit projection they're now claiming to have cut is their earlier estimate of $521 billion, which close observers always believed was inflated, says business and government strategist William Moore.  Moore also points out that in claiming that the higher-than-expected tax revenues are based on the tax cuts, Republicans are overlooking how a huge increase in federal spending during Bush's presidency has also boosted revenues.  (Arguing in favor of increased spending as an economic stimulant probably isn't a case that would fly with the GOP base.)

And of course, having inherited a budget surplus from President Clinton, the deficit Bush has pledged to cut in half before he leaves office is a deficit largely of his own making due to his tax cuts, increased size of the federal government, and spending on two wars, as well as on hurricane recovery.  The Administration attributes much of this to the need to fight the war on terror.

Today, Bush meets with the Prime Minister of Slovenia at 10:00 am, then takes part in Hank Paulson's swearing-in at the Treasury Department at 11:10 am. Tonight, he and Laura Bush host a social dinner in honor of the Special Olympics. Tomorrow, he squeezes in a road trip to Wisconsin before heading to Germany on Wednesday and then from there to the G8.

Congress returns this week with fewer than 30 scheduled voting days left before the midterm elections.  The latest addition to the list of outstanding items for returning members to choose from: the creation of a legal system for trying detainees, now that the US Supreme Court has ruled against the Administration's approach to military commissions at Guantanamo Bay.  NBC's Ken Strickland reports that two Senate hearings on the issue are scheduled for this week.

Also on the menu: immigration reform (both chambers), reauthorization of the Voting Rights Act (the House), an estate tax repeal (the Senate), and a host of measures that aren't expected to become law but appeal to the GOP base.  On immigration reform, Sens. John McCain (R) and Ted Kennedy (D) head up a field hearing in Miami today on the contributions immigrants have made to the US armed forces.  Armed Services chair John Warner also attends, and Joint Chiefs chair Peter Pace testifies.  The Senators hold a press conference at Miami Dade College at 1:15 pm.

Vice President Cheney hits the road today, headlining a closed-press, regional fundraising luncheon for the GOP House campaign committee in Troy, MI at 12:30 pm ET, then making remarks at a rally for the Michigan National Guard and Joint Services at Selfridge Air National Guard Base at 1:30 pm ET.  At 7:00 pm ET, Cheney headlines another closed fundraiser for GOP Rep. Ron Lewis in Owensboro, KY.

Also on the 2006 election front, reports are mixed on whether former Rep. Tom DeLay (R) will run for the Texas House seat from which he so recently resigned.  A federal court decision has left the GOP without a candidate on the ballot in November -- unless DeLay, whose name will remain on the ballot, chooses to run.  State Republicans are appealing.  Democrats are eager to force DeLay back onto the trail and make him the poster boy of their "culture of corruption" case against the GOP.  But it must be noted that the smattering of 2006 contests which might have turned on ethics so far have not proved it to be a winner.

And Sen. Joe Lieberman's Democratic colleagues are having to declare whether they will support him should he lose the nomination in Connecticut and run for re-election as an independent.  But saying they'll support the Democratic nominee, whether it's Lieberman or challenger Ned Lamont -- is actually the easy part.  The harder question to answer is whether or not they'll actively campaign for Lamont against Lieberman.  If they do steer clear, the unintended victims could wind up being the Democratic challengers to the state's three vulnerable GOP House incumbents since, as one staffer to a high-profile Democratic lawmaker put it, "It's not like we can all come in for them and not the Senate race unless Lieberman wins the primary."

Your favorite, constantly updated political calendar is always available on MSNBC.com.

It's the economy
White House budget chief Rob Portman tells the Washington Times in an interview "that tax revenues are expected to show at least double-digit growth in the year to date compared with fiscal year 2005...  Mr. Bush has set a goal of halving the deficit by 2009 compared with 2004, which finished with a $412 billion deficit.  He and congressional Republicans have made the nation's recent economic growth one of the twin pillars, along with the war on terror, of their election-year campaign.  Mr. Portman said the revenue is so strong that if it were to continue, it could play a major role in helping ease the budget deficit" -- though entitlement cuts would still be necessary.

House Democrats plan to counter an anticipated GOP full-court press on tax cuts and a bolstered economy by talking about "skyrocketing" gas prices, a minimum wage hike, education costs, and "the enormous deficit," per a senior House Democratic aide.

Security politics
"Congressional Republicans, on the defense over the unpopular war in Iraq, are hoping this week to shift the national security debate to the North Korea missile crisis and to countering terrorism," says the Boston Globe, previewing the Senate hearings on Gitmo detainees and noting how some Republicans are "assailing Democrats for not supporting full funding for the national missile defense program."

The New York Times looks at the divide in Congress -- and within the GOP -- "over what kind of rights detainees should be granted."

In the meantime, the AP reports that the United States is urging China to "apply more pressure on North Korea to end its missile tests and return to international nuclear disarmament talks.  A top diplomat said the aim is to show that Kim Jong Il's government has 'no support in the world.'"

Time reports that Bush's muscular approach to foreign policy, known among critics as "cowboy diplomacy," has fizzled.  (and along with it, potentially, is his second-term goal of spreading democracy.)

House Intelligence Committee chair Peter Hoekstra talked yesterday about his earlier complaints to the Administration that they weren't voluntarily briefing Hoekstra and other key members of Congress as much as they should about certain intelligence programs.  "Hoekstra appeared mollified.  But he said he still believes the administration falls short of its legal obligations to brief key congressional members on significant intelligence operations." – Washington Post

Remember Hoekstra's and vulnerable GOP Sen. Rick Santorum's recent claims about evidence of WMD?  "Congressional Republicans are at odds with Democrats -- and the Bush administration -- over the significance of 500 munitions found in Iraq since 2003 and recently disclosed by the Pentagon," says the Washington Times.  "Republican lawmakers say the 500-plus shells" containing traces of sarin, "with more likely to be found in the coming months, are evidence that Saddam was still concealing WMDs in 2003 in violation of United Nations resolutions to disarm after Iraq's failed invasion of Kuwait...  To the consternation of congressional Republicans, including [Hoekstra], the Democrats are getting support from the administration" in shooting down GOP claims.

Other people's elections
Attorneys for leftist candidate Andrés Manuel López Obrador have filed a complaint with Mexico's Federal Electoral Committee charging that fraud occurred in the presidential election and that López Obrador, and not proclaimed winner and conservative contender Felipe Calderón, won the race.  The committee has until September 6 to declare a winner. – USA Today

"Despite his rhetoric, analysts say [López Obrador] faces an uphill battle both to win a court ruling to overturn the election as well as to galvanize Mexicans into taking to the streets to support him," says the Wall Street Journal.  "Whatever the outcome, the dispute is likely to further polarize a divided nation, making governing more tricky for the next president."

The immigration debate
The Wall Street Journal editorial page runs an op-ed calling for comprehensive -- i.e., including a guest-worker plan and a path to citizenship for illegal immigrants currently in the country -- reform that's signed by influential conservatives such as Jack Kemp, Jeanne Kirkpatrick, Grover Norquist, CNBC's Larry Kudlow, Bill Kristol, Linda Chavez, Steve Forbes, and Vin Weber.

In some of his "most extensive" comments on the issue, former President Clinton told the National Council of La Raza in Los Angeles over the weekend that "the conservative wing of the Republican Party is using the immigration issue to divide Congress and the nation," reported the Los Angeles Times.  "Clinton, perhaps in deference to his wife, Hillary's, presidential ambitions, has been all but silent on the immigration issue in recent months.  He was careful Saturday to stake out middle ground...  (After a lengthy silence of her own, Sen. Hillary Rodham Clinton (D-N.Y.) in May endorsed a legalization process for illegal immigrants, but emphasized the importance of protecting national security.)"

Karl Rove is scheduled to address the conference tomorrow.  Rove can also be expected to talk about the issue today at a grassroots event in Colorado, where the issue is also on the front burner.

Previewing today's Senate field hearing in Miami, an aide to Sen. Ted Kennedy (D) informs First Read that there are 60,000 naturalized citizens and permanent residents on active duty in the military; 101 of them have died in Iraq and Afghanistan.  "Given the deep commitment of these immigrants in the armed service to our land," Kennedy is expected to say, "it is an affront to their noble military service to declare the 12 million undocumented immigrant men, women, and children to be criminals, as some in Congress have done."

"At least 30 states have passed laws or taken other steps this year to crack down on illegal immigrants, often making it harder for undocumented workers to find jobs or receive public services," says USA Today.  "Among major themes of the state legislation: fining businesses that hire undocumented workers and denying such companies public contracts if they don't verify the legal status of employees."  USA Today

More on the Bush agenda
As Congress returns to work, Reuters notes that lawmakers have a host of issues to address that "could help decide whether voters will reelect them in November...  Action or inaction on contentious issues including immigration, pensions, energy, and federal spending could determine whether the Congress sheds the impression that it has made few legislative achievements."

The Washington Times looks at the trouble Republicans are having in passing anything these days.  "An election-year session of Congress with little major legislation turned into laws is nothing new.  Lawmakers traditionally are loath to vote on contentious legislation so close to the start of campaigning."  Still: "The legislative year is littered with failed or stalled Republican priorities.  Some -- such as overhauling immigration, repealing estate taxes and changing rules on lobbying in response to several ethics scandals -- are disappointments for many in the Republican Party and for Mr. Bush."

Bob Novak interviews Sen. Lindsay Graham (R), who says that Republicans "remind him of a tournament golfer who ignores the leader board and thinks he is ahead going into the 17th and 18th holes, when he really is trailing.  'It's like we think we'll get by with pars on the last two holes when we really need birdies,' Graham told me."  Novak adds that he has spoken with other prominent GOPers, all of whom believe the tide has turned for them in the last month.  "Each of them says the American voter will stick with the Republicans after taking a good look at Democrats, a mind-set that often is a precursor of defeat."

Ethics
Yesterday marked the 45-day deadline for the US Solicitor General to turn over materials confiscated by the FBI in their May raid of Democratic Rep. William Jefferson's Capitol Hill office.  But NBC's Joel Seidman reports that Jefferson's attorney, Robert Trout, expects a forthcoming court decision on the constitutionality of the raid to "eclipse the deadline."  Trout also says he expects the decision by US District Court Judge Thomas Hogan, which could come as early as today, to be appealed by the losing side.  Hogan has said he would keep the materials sealed until there is a final ruling.  President Bush ordered the seized materials to be sequestered by the Solicitor General's office.  Jefferson has not been charged with any wrongdoing in the probe, which has so far resulted in two guilty pleas.

The Sunday Washington Post profiled anti-tax activist Grover Norquist, one of the most influential unelected figures in the Republican party, as he struggles to maintain that status in the wake of report about his ties to Jack Abramoff.

More on the midterms
Politicians soon will be able to set up profiles on Facebook.com and MySpace.com, Time notes, while the Washington Post's Kurtz examines the growing presence of political videos on YouTube, including videos posted by candidates.

In Connecticut, Lieberman challenger Ned Lamont has now spent $2 million of his own money on his campaign, and Lieberman continues to press Lamont on why he has not released his tax returns.  Lieberman's latest ad accuses Lamont of being a closet Republican and tells viewers that Lieberman has voted with Democrats 90% of the time. – Hartford Courant

In California, Schwarzenegger Administration officials hold a background briefing on the special legislative session called to address the deteriorating condition of the state prison system, which has become an issue in the gubernatorial race.

As if she hasn't faced enough difficulties already.  Rep. Katherine Harris, the GOP's Senate candidate in Florida, announced late Friday that "she will undergo surgery to have an ovarian mass removed" on July 17.

Pegged to Cheney's visit there later today, the Wall Street Journal examines the race in Kentucky's 2nd district, the kind of somewhat uphill race Democrats need to win to have a shot at taking back the House.

Massachusetts Democrats have created a panel to oversee campaign ads in the party's gubernatorial primary and "publicly rebuke candidates who use negative attacks," the Boston Globe reported yesterday.  The four-member panel will be chaired by former governor and presidential candidate Michael Dukakis and includes Sen. John Kerry's brother Cameron.

And the New York Times front-pages GOP Sen. Rick Santorum's seemingly uphill bid for re-election in Pennsylvania, where he's trying to convince voters that he hasn't become part of the Washington Establishment he used to rail against.

“First Read” is an analysis of the day’s political news, from 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.

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