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Monday, July 11, 2005 | 9:15 a.m. ET
From Elizabeth Wilner, Mark Murray and Katie Adams

First glance
What's hot in Washington this week?  It's almost easier to say what's not.  Today's Topic A: homeland security.  President Bush makes remarks on the war on terror at the FBI academy in Quantico, VA at 10:40 am.  White House spokesperson Scott McClellan told reporters on Friday that the speech had been scheduled before the London transit bombings, but that the attacks "give more significance to the remarks."  The London attacks and Bush's speech also raise the stakes for the Senate debate over homeland security funding, which begins today.  Democrats have long called for increased rail and port security funding; expect to see the GOP's originally proposed cuts there get walked back.

  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

The returning Congress has three weeks before the August recess, with many items likely to get bigfooted as the Senate clears its plate for at least one if not two -- and technically, possibly three, if a sitting justice gets nominated to a vacant chief slot -- SCOTUS nominations.  We may see progress this week on the two pieces of legislation that have drawn veto threats from Bush, though highway bill conferees appear to have come up with a dollar figure Bush can live with.  The Senate may also vote this week on legislation to expand federal funding of embryonic stem cell research, though a compromise effort seems to be gaining traction and Senate passage of the House bill, which Bush has committed to veto, may no longer be a sure bet.

Also on tap for the Hill this week: China, with the CNOOC bid becoming the lightening rod for any member of Congress with any kind of concern about China.  House Energy and Commerce chair Joe Barton is vocally (see USA Today) opposing the 70-percent Chinese government-owned company's bid to purchase US-based Unocal; the House armed services panel also holds hearings this week.  Last Friday, Energy Secretary Samuel Bodman discussed the CNOOC bid with reporters -- briefly.  Bodman said the Administration can't comment on the bid in any way until a government committee decides whether or not such a deal should be allowed.  When First Read suggested that Administration's relations with China could be damaged in the meantime by China-bashing on the Hill, Bodman simply repeated that there's nothing they can do right now because of the government review.

Beyond the Hill, the buzz is about Karl Rove's role in the leak of CIA operative Valerie Plame's name, as reported by Newsweek yesterday.  Per his attorney, Rove did not actually give Plame's name to Time magazine's Matt Cooper, who spoke with Rove three days before Robert Novak identified Plame in a column.  Rove's attorney also says Rove was the source who gave Cooper permission to testify about their conversation in the grand jury probe of the leak.

And looming over everything are the effort to fill the O'Connor vacancy, and the question of whether we'll get a Rehnquist retirement announcement today or this week.  Bush is scheduled to meet tomorrow with the Senate leadership and the top members of the Judiciary Committee to discuss possible nominees and the confirmation process.  Process-wise, the center of debate is just how much is enough -- both in terms of White House consultation with Democrats, and of disclosure by the nominee of his or her positions on issues like abortion.  Substance-wise, the center of debate clearly is abortion.

Somewhat ironically, a major court decision on abortion went almost unnoticed on Friday amidst the buzz about an imminent Rehnquist announcement: a federal appeals court in St. Louis upheld a lower court ruling that the federal partial-birth abortion ban is unconstitutional, increasing the chances that the SCOTUS will consider the ban during the next term.  The court already is set to consider New Hampshire's parental notification law this fall.  Likely to add emphasis to the fall debate: the parental notification measure on the California ballot, and Kansas AG Phill Kline's continuing pursuit of medical records from abortion clinics in what he calls an effort to crack down on partial-birth abortions, which critics call a fishing expedition.  The Kansas Supreme Court will consider Kline's quest in September.

The Senate meets at 1:00 pm; the House meets at 2:00 pm.

SCOTUS greatest hits
In its wrap of the Sunday-morning shows, the New York Times reports that Judiciary Committee chair Arlen Specter suggested that Bush could nominate O’Connor to the Chief Justice slot if Rehnquist retires.  The Times also notes that other Senators, like Orrin Hatch, speculated that Rehnquist would probably retire this year -- perhaps within days.

Judiciary Committee ranking member Pat Leahy (D) suggested yesterday the Bush consider someone who is not currently sitting on the bench -- and that he, Leahy, has someone in mind, NBC's Erin Green reports.  Leahy also said, "Many of the members of the Supreme Court today have told me privately they would be delighted to see somebody from outside the judiciary, outside the judicial monastery."

On Sunday, Bob Novak wrote that conservatives are urging Bush replace O’Connor with a female judge, like Edith Jones or Edith Clement, who both serve on the 5th Circuit.

The Chicago Tribune writes that conservatives are nervous that Bush’s pick to replace O’Connor could turn out -- like Souter and Kennedy did -- to be more liberal than they originally thought.

Sen. Joe Lieberman, speaking at New England College late last week, said both sides should resist demanding to know where SCOTUS nominees stand on certain issues, the Manchester Union-Leader reported (not online).

Weekend coverage of the abortion issue:
Boston Globe
New York Times

The New York Times also notes that the recent SCOTUS decision allowing governments to use eminent domain for economic development purposes has galvanized Christian conservatives, since a handful of churches have tangled with localities over the use of eminent domain to take over their properties.

The Washington Post sets up the fight as the "once-powerful liberal coalition's" "last stand over control of the Supreme Court.  If the Coalition for a Fair and Independent Judiciary the lobbyists head is unsuccessful, it will risk not only seeing the courts tilt decidedly more conservative but also seeing the liberal movement lose further credibility as an organizing and advocacy force in Washington."

Roll Call follows up on NBC's Ken Strickland's reporting from Friday about White House outreach to the Gang of 14.

The politics of terror
Could this have been a strategic leak to undercut criticism of Britain's role in the Iraq war in the wake of the London attacks?  A London Daily Mail report yesterday, echoed by US papers today, covers a British defense department memo outlining a sharp reduction in UK and US troops levels within a year.  Officials say no decisions have been made.  - AP

The transit-fixated Boston Globe covers Democrats' renewed push for increased "funding for railway and transit security in US cities, with lawmakers saying they are optimistic that they will now be able to shuttle millions of extra dollars to local mass transit agencies such as the MBTA" in the wake of the London attacks.  The Globe says that per Bill Frist's office, the originally proposed $50 million in cuts is likely to be restored, but Democrats are pushing for hundreds of millions more.

Roll Call reports that the GOP, from the White House on down, has launched "a full-scale attack on MoveOn.org, questioning the liberal group’s patriotism and worldview," in an apparent two-pronged effort "to put the group and its Democratic allies on the defensive over support for the war on terror," and to "drive a wedge between Democratic candidates and the millions of dollars that MoveOn’s supporters have pumped into their campaigns."

The economics of terror
On Friday afternoon, a day after the London attacks, Dow Jones reported that the industrial average and the NASDAQ had their biggest gains since April 21.  Economic research firm International Strategy & Investment noted to clients, "The 2004 Madrid bombings offered a reason to expect a 'muted' reaction to the London bombings, but the ultimate reaction fell short of even that."  The US stock markets were up on the day, and the major European markets exceeded their pre-attack levels by Friday.  Among the reasons offered for why the markets had such a limited reaction: "The markets were already pricing in the right level of geopolitical risk," which "is an important reason markets were set back much more by 9/11 than by subsequent attacks -- there was virtually no geopolitical risk premium placed prior to 9/11."

Hurricane politics
The AP covers Bush's authorization of FEMA relief.

The Tampa Tribune notes that although Dennis was far weaker than hurricanes which hit Florida last year, President Bush had to declare parts of that state, Alabama, and Mississippi disaster zones.  “Hoping to avoid delays that hampered recovery efforts after Florida was hit by four major hurricanes last year, Gov. Jeb Bush ordered 2,600 National Guard troops and 700 law enforcement officers to staging areas in Jacksonville, Orlando and Tallahassee.   ‘We have learned a lot over the last year,’ Bush said.”

The Pensacola News Journal notes that Jeb Bush will visit the Pensacola Bay Area today, along with Sens. Bill Nelson and Mel Martinez, Rep. Jeff Miller, state AG Charlie Crist and state House Speaker Alan Bense.  Nelson is up for re-election next year, and could possibly be challenged by Bense, while Crist is running for governor.

It's the economy
On Friday, Energy Secretary Samuel Bodman told reporters that the country is at "the ragged edge" on the demand for oil and "are for the first time in the hands of the traders," a situation he expects the country may be for a few to several years. "The rate of increase in demand has been extraordinary," between China, India and the US.  But Bodman rejected the idea of tapping the Strategic Petroleum Reserve, saying it shouldn't be used to help manage pricing.  He did note, though, that one cause to tap into the SPR could be supply disruption due to a hurricane.

And indeed, the AP reports that "[g]as prices have hit a record high of $2.33 a gallon" due to "the climbing cost of oil and strong demand in the midst of the summer vacation season...  Motorists could have more bad news on the way, with Hurricane Dennis bedeviling Gulf of Mexico oil production, which could send pump prices to even loftier levels."

The AP covers Sen. Hillary Clinton's remarks at the Aspen Ideas Festival, where she blasted the Administration for overspending -- yet giving tax cuts to the rich.  "'I sometimes feel that Alfred E. Neuman is in charge in Washington,' Clinton said referring to the freckle-faced Mad magazine character.  She drew a laugh from crowd when she described Bush's attitude toward tough issues with Neuman's catchphrase: 'What, me worry?'"

China politics
House Energy and Commerce chair Joe Barton writes in a USA Today op-ed that "whether you view Beijing as an evolving trade partner or an emerging security threat, the United States has plenty of reasons to reject the Chinese government's plan to buy a U.S. oil company...  Grumpy old 'Red China' is a rapidly industrializing nation run by contemporary communists who somehow learned to love profit but still hate freedom.  Does anybody believe that when the next energy crisis hits, they will not grab Unocal's oil?"

Taking the other side, a USA Today editorial argues, "The ill-informed China bashers in Congress and the diplomatically tone-deaf Beijing bureaucrats are overreacting.  Their frenzied behavior is a warning of worse to come if both countries fail to address their common problem: lack of alternatives to increasingly scarce oil supplies."

Meanwhile, UPI reports that "Canadian oil giant EnCana is considering bringing in Chinese companies to construct and operate drilling rigs in the Colorado Rockies...  The move would be scrutinized in Washington, where politicians are uneasy about allowing Chinese workers to acquire access to U.S.-based oil and gas facilities."  The local Democratic congressman opposes the move.

The White House and the media
The Newsweek report.

The Wall Street Journal says "the disclosure that Mr. Bush's top political strategist discussed the CIA employment of Mr. Wilson's wife amounts to a political embarrassment for Mr. Rove and the White House.  A presidential spokesman had previously given what appeared to be an unequivocal public assurance that Mr. Rove hadn't been involved in the disclosure of Ms. Plame as a CIA operative.  Discovery that earlier denials may have been carefully parsed would represent another blow to the administration's credibility..."


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