“First Read” is a daily memo prepared by NBC News’ political unit, for NBC News, analyzing the morning’s political news. Please let us know what you think. Drop us a note at FirstRead@MSNBC.com.

Friday, February 18, 2005 | 9:25 a.m. ET
From Elizabeth Wilner, Mark Murray, Huma Zaidi and Kasie Hunt

First Glance
President Bush signs his long-desired "Class Action Fairness Act" into law at 11:40 am over criticism from some Democrats and consumer activists, but other Democrats are reserving their fire for tougher fights against Bush on med mal and asbestos legislation.

  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

Amidst all the talk of changes to the tort system and Social Security, Democratic communications strategist Chris Lehane wonders how the GOP took the reform mantle from Democrats.  "The party in power, the party of Washington, the party of special interests, is now the party of reform," whereas Democrats have become "the party of the status quo."  He argues that Democrats need to come up with some reform ideas of their own.  Party strategist Jim Jordan points out that Democrats shouldn't put forth their own plans on Social Security or Medicare: "Rolling our own plans out, that's where we screw this up."

Top GOP reform pitchman Arnold Schwarzenegger talks up his redistricting initiative as "districts that benefit the people, not politicians," while state Democrats charge that it's a partisan maneuver in the guise of bipartisanship.  Still, he may have them over a rhetorical barrel.  More on this below.

Negroponte, Day Two.  Bush emphasized yesterday that Negroponte is now the country's intel Big.  While some Democratic lawmakers use the opening to criticize the Administration's intelligence gathering, Negroponte so far remains pretty unscathed.  Meanwhile, Reuters reports that two suicide bombs have hit Baghdad mosques on this Shiite religious holiday, killing at least 15 people.  And the Washington Post says dozens of leading anti-war activists plan to meet in St. Louis this weekend "to plot strategies for a new push against the war" timed to the March 18-19 anniversary weekend.

Bush's openness to raising the payroll tax ceiling for Social Security, Day Three.  Hastert and DeLay are opposed.  Leading fiscal conservatives and attendees of the CPAC gathering in DC tell reporters they're opposed.  And the Wall Street Journal editorial page credits the President "for devoting his prestige to trying to fix" the looming shortfall -- but points out that he stepped on his own message on Wednesday when Greenspan voiced his approval for private accounts and "somebody decided the President should interfere... by giving interviews suggesting his openness to a payroll tax increase to finance any reform."

As NBC/Wall Street Journal pollster Bill McInturff (R) suggested this week when asked what advice he'd give Republicans, Bush's case for fixing the program could be undermined by wide-ranging conversations amongst the party about various options for fixing the program, and they risk sustaining some damage over discussion of ideas that ultimately won't be implemented...

In his remarks at the CPAC conference in DC last night, Vice President Cheney reiterated all the standard GOP lines on Social Security: the system will be "bankrupt" in 2042; the Administration wants to offer younger workers private accounts; and payroll taxes must not be increased (there didn't appear to be any wiggle room in here for raising the cap).

CPAC, Day Two.  The confab of conservative grassroots activists continues today at the Reagan Building.  Highlights include Pat Buchanan at 8:30 am, Ann Coulter at 1:40 pm, and a 7:30 pm dinner emceed by Sinclair Broadcasting's Mark Hyman and featuring Zell Miller presenting the "Courage Under Fire" award to... the Swift Boat Veterans for Truth.  The panel schedule sounds sort of like a conservative version of Howard Dean's DNC constituency meetings a week ago: "Social Security: It's Broke and Needs Fixin'"; "Hollywood Interrupted"; "Cutting Spending is Tough Work, But Somebody Has to Do It"; and (deep breath) "Federalism Doesn't Mean the States Should Take Everything We've Got Left When the Feds Finish With Us: Reform Out in the Country." 

RNC chair Ken Mehlman speaks tomorrow at 8:30 am. 

Social Security
Outside of Lindsey Graham (R), NBC's Ken Strickland says, no Senator from either party is really publicly embracing Bush's suggestion of raising the payroll tax ceiling.  One GOP source says a small band of Republican Senators have brought up the idea in meetings as a way to attract Democratic support, only to have it blown back in their faces.  A GOP leadership source admits that raising the caps would come at the expense of the support of some Republican Senators, and could have effect of "rolling back" the benefits of the President's tax cuts.

The Washington Times says, "President Bush yesterday indicated that raising the cap on income that is taxed to support Social Security would not violate his vow against increasing the 'tax rate,' but conservatives say the distinction makes little difference and will lead to many people paying higher taxes."

The Los Angeles Times: "Conservatives Put Off by Bush's Talk of Tax Hike."  Subhead: "The president's effort to overhaul Social Security gets tougher when he angers key backers."  Lead: "President Bush's push to transform Social Security is in trouble, despite intense salesmanship designed to build support in Congress and with the public." 

Key graph: "Bush's changing language on taxes reflects an ambiguity - one that some strategists say is deliberate.  There are competing interests within the GOP, with some opposed to borrowing the transition costs and others convinced that financing the changes through taxes or benefit cuts could politically cripple the party."

Per the Chicago Tribune, some Senate Republicans say they want to spend the entire year studying Social Security, “leaving any legislative action until 2006, which could kill the matter altogether because of the political atmosphere that might prevail in the lead-up to next year's midterm congressional elections.”

While Democrats are seeking to put the onus on Bush to come up with a detailed plan for the "crisis," NBC's Strickland says that yesterday, Reid and others did draw some lines in the sand on what the party will not accept: 1) no payroll taxes for private accounts, 2) no cuts in benefits (Democrats say the White House plan could reach 40% in cuts), and 3) no running up the deficit by trillions of dollars.  As for the President's latest suggested option of raising the income cap on payroll taxes?  "I don't know if he really meant it," said Reid.  "We'll wait and see.  He's not going to get us negotiating against ourselves."  (A favorite Bush White House line!)

The Senate Democratic leadership plans a Bush-style, multi-city "listening tour" on March 4-5 to counter the President's aggressive campaign for private accounts, Strickland adds.  Leader Harry Reid, Whip Dick Durbin, and DSCC chairman Chuck Schumer will hit New York, Philadelphia, Phoenix, and Las Vegas.  Hillary Clinton will join them in New York.

Out in California, Doris Matsui (D), who's running to succeed her late husband Rep. Bob Matsui in a special election on March 8, is up with a TV ad criticizing Bush's private accounts: "Surviving children and the disabled receive over 30% of Social Security payments...  And privatization puts that at risk.  I don’t think the government should make Americans insecure about Social Security."

Bush's other priorities
While the class-action bill is widely covered as Bush's first legislative victory, some Democrats and observers see it as the first box checked in a much longer-term, far-reaching effort by the White House to undercut Democrats' chief sources of campaign funds. 

The Washington Times: "The Class Action Fairness Act is part of a broad assault Republicans are levying against rampant litigation and the trial attorney industry, one of the biggest financial backers of Democratic causes.  Another key element of that assault is the Bankruptcy Abuse Prevention and Consumer Prevention Act, which was approved by the Senate Judiciary Committee yesterday and is headed to the Senate floor for a final vote."

USA Today says the class-action win "is just the opening salvo in a season of anticipated battles between President Bush and his allies... and consumer advocates and trial lawyers.  "The U.S. Chamber of Commerce... spent $24.5 million last year on lobbying the issue.  Plaintiffs' attorneys, who oppose the changes, are among the most loyal and generous campaign donors to Democrats."

The Washington Post says the win "illustrates the expanded influence of Republicans and their business supporters," and that the bill "is designed to funnel most such lawsuits from state courts to the federal system -- a procedural change that could have substantive implications, because federal courts traditionally have been less sympathetic to class-action cases waged by plaintiffs claiming they have been victimized by fraud or negligence by corporations."

The Wall Street Journal: "The bill could embolden business to push the Republican-controlled Congress for additional changes to the nation's court system...  The legislation was immediately hailed by a variety of industries, from tobacco to drugs and technology," although it "doesn't influence any existing anti-tobacco class actions."

The Washington Times reports wide praise for Karl Rove's motivational, SRO speech at CPAC yesterday, but also includes this: "Some of the activists yesterday grumbled that several egregious departures from conservatism were missing from the picture Mr. Rove painted of the Republican Party's dominance of Congress and of the Bush presidency.  They cited Mr. Bush's guest-worker proposal, which they see as an amnesty for illegal immigrants.  Others were critical of the administration's aggressive foreign policy."

The Boston Globe says Rove "focused on the party's message, arguing the Republican Party is realigning American politics by borrowing the identity of its opponents...  He also described conservatives as agents of change, another label historically attached to liberals.  Quoting British political philosopher Edmund Burke, Rove said conservatism should apply timeless truths to changing circumstances and that 'most of our fundamental institutions -- the tax code, healthcare, pension plans, legal system, public education, worker training -- were created for the world of today and not tomorrow.'"

By calling for freedom and democracy around the world, Rove said that President Bush had transformed conservatism from “‘reactionary’” to “‘forward looking,’” the New York Times says. 

USA Today covers Rumsfeld's press for missile defense -- despite his acknowledgement that such a "system would not serve as a deterrent to nations considering such an attack on the United States unless the system works."

USA Today previews of Bush's European tour, which begins on Sunday.

"Caulifornia"
California Democrats complained that almost one hour of the two-hour bipartisan meeting with Schwarzenegger yesterday was devoted to introductions.  They also groaned that Ways and Means chair Bill Thomas skipped the meeting (to attend an earlier GOP-only pow-wow with the governor, they say, he moved up a committee hearing, which interfered with the 11:00 am get-together.)  A Ways and Means aide said Thomas wanted to attend all of yesterday's meetings, but there were scheduling problems at the committee, which he couldn't work out with Democrats).  Still, Democrats said that both Democrats and Republicans pledged to do a better job of working together to help the state.  "We'll see what happens," said one Democratic Hill aide.

The San Francisco Chronicle says that "while Democrats and Republicans agreed to work together to get more money, they disagreed on how."

And Roll Call says some California Republicans in the congressional delegation "expressed reservations about redistricting reform," though there are denials that any of them are actually against it right now.

California certainly has blazed some trails with its initiative process, most recently its $3 billion state-funded stem cell program, which a handful of other states are now considering emulating.  All the more reason to bear in mind the divergent opinions between state and national lawmakers and observers of Schwarzenegger's redistricting plan, the piece of his effort to change state government that has the best odds for passage.

Schwarzenegger likes to point out that none of California's 153 congressional and legislative seats on the ballot in 2004 changed party hands, and argues that the lack of competition fosters government malaise and corruption.  Democrats control the state legislature and hold 33 of the state's 53 US congressional seats. 

To state Democrats, Schwarzenegger's effort to place the drawing of California's district lines in the hands of a panel of retired judges -- and in the process, trigger an irregular redistricting that would occur before the 2006 elections -- is a partisan effort in the guise of fairness and (here's that word again) "reform."  They liken the effort to the Tom DeLay-engineered redistricting in Texas, and also question why Schwarzenegger is spending so much time on this rather than on fixing schools, hospitals, or other state-overseen problems.

But Schwarzenegger remains very popular and most Californians probably aren't focused on this fight.  And the Governor is playing as much to a national audience as to his own constituents right now.  At the national level, other dynamics factor into the picture -- namely, a growing sense among those in government and those observing government that the electoral process, from redistricting to counting votes, rests too much in the hands of partisan officials.  Also, a growing realization that changes to the system itself would expedite a shaking loose of districts that otherwise might not happen for decades.

Both Common Cause at the national level and the organization's California chapter endorsed Schwarzenegger's plan yesterday.  FairVote/The Center for Voting and Democracy is putting forth former independent presidential candidate John Anderson to make their case that the plan "doesn't go far enough" on gerrymandering.

The Sacramento Bee says Schwarzenegger’s only good news yesterday was the Common Cause endorsement. 

Another Bee article notes that California hospitals worry that Schwarzenegger may be backing away from asking for more money to cover for Medicaid’s cost increases.  The hospitals have urged him to ask for $700 million, but state officials talking to the Bush Administration say they could not expect to get more than $400 million.

Schwarzenegger is back in the state and has private meetings today in Los Angeles.

Whither the Democrats
The Wall Street Journal's Washington Wire pulls this from the NBC/Journal poll: "Americans want Democrats to stand up to Bush.  Fully 60%, including one-fourth of Republicans, say Democrats in Congress should make sure Bush and his party 'don't go too far.'  Just 34% want Democrats to 'work in a bipartisan way' to help pass the president's priorities."

"Like Bush, new Democratic Chairman Dean polarizes opinion.  By 45% to 5%, Democrats say he will project a positive image rather than a negative one; Republicans say the opposite by 37% to 19%.  Independents divide more evenly."

The AP writes up Dean's debate with former Pentagon adviser Richard Perle, in which a protestor "threw a shoe at [Perle] before being dragged away, screaming, 'Liar! Liar!''"

The Los Angeles Times has deadpan coverage of yesterday's Hillary Clinton-John Kerry competition to push election reform:.

But the Boston Herald gets the joke.

Senator Clinton appears with John McCain on Meet the Press on Sunday to talk about Iraq.

And the Raleigh News & Observer says Edwards will "make his first appearance at UNC-Chapel Hill's law school" for a reception and appear on ABC's "This Week" on Sunday. 

Media notes
The drip, drip on the Jeff Gannon/James Guckert story continues, with the New York Times interviewing former White House press secretary Ari Fleischer, who has wondered whether Guckert was actually representing some GOP interest.  “Mr. Fleischer said a telephone conversation that he had with the organization's president and chief executive, Robert R. Eberle, satisfied him that the writer met his one standard for access to the West Wing briefing room, that he was not directly financed by a political party.”

CBS’s Bob Schieffer will be taking over for Dan Rather in March, and the New York Times front-pages the fact that Schieffer’s brother, Tom, is a close friend to Bush and also Bush’s ambassador to Japan.  “No problem, both of them say.”

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