“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.  To bookmark First Read, click here.

Monday, October 24, 2005 | 9:20 a.m. ET
From Elizabeth Wilner, Mark Murray, Huma Zaidi and Ryann Gastwirth

First glance
"Both arms around the toilet bowl, throwing up green," is how a longtime GOP strategist with strong Bush credentials describes to us how he's feeling these days -- and not because of bird flu.

  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

With the country's health increasingly threatened by weather and disease, President Bush flexes some bully-pulpit muscle with a 10:00 am Cabinet meeting today.  But in Washington, the health craze is about Bush himself, and how his already weakened political standing may worsen upon the indictment of one or more top White House aides in the CIA leak probe.

Reuters has reported that special prosecutor Patrick Fitzgerald "is expected to give final notice to officials facing charges as early as Monday and may convene the grand jury on Tuesday... to deliver a summary of the case and ask for approval of the possible indictments...  Fitzgerald could still determine that there was insufficient evidence to bring charges, but the lawyers said that appeared increasingly unlikely."  The grand jury will expire on Friday unless Fitzgerald extends it.  NBC's Tim Russert noted on NBC’s Today Show that an indictment of a sitting White House official, if it happens, would be the first in 130 years.

Assuming Sen. Kay Bailey Hutchison (R) was prepped by higher GOP authorities before appearing on Meet the Press yesterday, the White House appears to be resorting to the "best defense is offense" approach that served them well during the presidential campaign but has failed them more recently.  Hutchison argued that an indictment does not equal guilt, and that a perjury charge would be a "technicality" that Fitzgerald brings to have something to show for his two-year probe.  One former Clinton White House lawyer and Democratic strategist suggests in an e-mail to First Read, "Republicans saying that perjury is NOT serious in an orchestrated way is a dumb--- thing to do BEFORE the prosecutor brings his case.  It virtually guarantees that if he intends to move forward, he will make it clear that these are serious charges."

Adding poignancy to any indictments: the likelihood that the 2,000-casualty milestone for US troops in Iraq will be passed early this week -- possibly today.  As of Saturday, the count stood at 1,996.

Then there's everything else the beleaguered and burnt-out White House is trying to juggle: The gelling CW that Harriet Miers has just a couple of hours to knock the socks off the Senate Judiciary Committee two weeks from today in order to have a shot at confirmation; the Washington Post report on more evidence that Senate Majority Leader Bill Frist may have been aware of the status of his HCA stock holdings before he sold them; Tom DeLay's gamble that requesting that the current judge recuse himself from his case will help reinforce his charge that his legal battle is a partisan conspiracy; and the troubled, House GOP-led effort to cut another $50 billion from the budget to offset hurricane relief spending.

There's some good news on the economic front: the price of gas has dropped.  Complicating that news for the White House, however: oil companies are expected to show record profits when they report their third-quarter earnings this week.

"We are fighting too many fires, and taking too much friendly fire right now," the nauseated GOP strategist tells First Read.  "There is really nothing [the White House] can do other than wait for it to pass, maybe catch a lucky break and rebuild."  Some smart Democrats are starting to figure out "they have to do more than attack and sit there.  If they start figuring that out as a party, we're toast."

As we reported on Friday, Democrats are preparing to roll out a national message in November.  What remains unclear is how Democrats will broaden their currently narrow, ethics-focused argument into a broader critique on the Iraq war.  The Democratic National Committee yesterday launched a new webpage, "The Corruption Files," documenting the GOP's ethical issues.  But on Meet the Press yesterday, the party's Senate campaign committee chair Chuck Schumer defended his vote for the Iraq resolution by saying the United States needed to wage a war against terror -- the same argument the White House makes.

Election day is three weeks from tomorrow.  The Virginia gubernatorial race is neck and neck.  Although Virginia is a red state, the GOP was fighting history here already, even before the climate in nearby Washington turned sour for them, in that the party holding the White House has lost this governorship in every election since 1973.  One GOP operative says this race could be a bright spot in the party's otherwise grim near future.  If they win, they could make the argument that the national sentiment favoring Democrats isn't affecting local races.  First Read takes a closer look at how faith has played in this race, below.

Also today, Vice President Cheney headlines a fundraiser for a US House candidate at Denver's Mile High Stadium at 8:15 pm ET.

The New York Daily News writes that, "[f]acing the darkest days of his presidency, President Bush is frustrated, sometimes angry and even bitter... 'He's like the lion in winter,' observed a political friend of Bush.  'He's frustrated.  He remains quite confident in the decisions he has made.  But this is a guy who wanted to do big things in a second term.'"

The New York Times front-pages how Republicans already are testing a strategy to parry possible charges against Rove or Libby by attacking them “as a disagreement over legal technicalities or the product of an overzealous prosecutor…  Other people sympathetic to Mr. Rove and Mr. Libby have said that indicting them would amount to criminalizing politics and that Mr. Fitzgerald did not understand how Washington works.”

The Wall Street Journal says the probe "is likely to accelerate second-term turnover in the Bush administration," assuming it leads to resignations (the story notes that "it's possible that some of those targeted in the investigation could avoid prosecution through last-minute negotiations").  Bush's personnel choices "could have a big impact on whether he is able to recover from the current troubles and make a success of his final three years in office.  The question, many experts say, is whether [he] will continue relying on his loyal inner circle or will have to reach out to Republican leaders elsewhere to help rebuild his administration's credibility."

The Journal's editorial page says, "A close call deserves to be a no call...  The temptation for any special counsel, who has only one case to prosecute, is to show an indictment for his money and long effort.  But Mr. Fitzgerald's larger obligation is to see that justice is done, and that should include ensuring that he doesn't become the agent for criminalizing policy differences.  Defending a policy by attacking the credibility of a political opponent -- Mr. Wilson -- should not be a felony."

The Sunday Washington Post's Lewis "Scooter" Libby profile led with an unnamed aide recounting how Libby once joked to him that he would remain Cheney's top aide until he "'gets indicted or something.'"

USA Today -- without addressing editor Bill Keller's reference yesterday to Judy Miller's "entanglement" with Libby -- covers the rift at the New York Times between Miller and her editors and colleagues over her approach to this story.

Time magazine says former Bush campaign strategist Ralph Reed sought to help doors at the White House for indicted lobbyist Jack Abramoff, including with Rove.

The Washington Post reports on documents "that are at odds" with Bill Frist's past statements "that he did not know what was in his stock holdings.  Managers of the trusts that Frist once described as 'totally blind,' regularly informed him when they added new shares of HCA Inc. or other assets to his holdings, according to the documents."

Frist says the outcome of the SEC probe of his HCA stock sale will affect whether he decides to run for president in 2008 or not.  - AP

USA Today looks at how the Frist probe "has prompted new scrutiny of government ethics laws that allow lawmakers to set up 'qualified blind trusts' that give them insight into some of their holdings."

The Free Enterprise Fund, the only group running TV ads in DeLay's defense(/offense), plans to take its Austin ad campaign national today.  Its spot comparing Earle to snarling dogs will start airing on FOX and CNN.

Roll Call rounds up how DeLay's indictment has been a fundraising boon for Democrats, while a fourth GOP member has returned his contributions from DeLay's PAC.

The Miers nomination
Just in time for the Sunday shows, the Washington Times reported on Saturday that, per some top conservatives, the White House political director was making calls to ask how one might go about withdrawing Harriet Miers' nomination.  The White House denies that any such calls were made.

Sunday show round-up re: Miers: Judiciary Committee chair Arlen Specter still thinks Miers can be confirmed, but is inclined to call Focus on the Family founder James Dobson to testify before the committee about the private assurances he says he received from the White House about Miers' position on abortion.  Judiciary Democrat Chuck Schumer doesn't think Miers would get confirmed if the vote were held today.

Historians tell the New York Times that the hits Miers is receiving from both the left and right are without precedent.

USA Today: "The same reticence that caused [Judiciary Committee leaders] Specter and Leahy to feel short-shrifted by Miers' written answers" to the committee's questionnaire "is leaving some senators with doubts about her intellect."

The Dallas Morning News picks up on a Saturday report by Knight Ridder that Miers' family was given "18 times the assessed value for Dallas land needed for a freeway ramp," and some allege that the overestimated payout was a political favor.

The Boston Globe has top conservative activists saying that Miers "was merely the last straw in a series of disappointments with Bush that have divided their ranks."  "After displaying unprecedented unity last year, a range of leaders -- from antitax activists to the religious right -- now say they distrust the White House and worry that internal divisions could sap the movement's strength."  Among the beefs with Bush: "increased education spending," the new Medicare prescription drug plan, "White House resistance to pushing a constitutional amendment to ban same-sex marriage," and immigration.

Spending and the GOP agenda
The San Francisco Chronicle looks at the split within the GOP between those who want to cut spending and those who think that cuts in programs benefiting low-income Americans would be politically damaging.  The paper adds that, like last week, it seems that fiscal conservatives in House won’t have the votes to cut spending by $50 billion when the legislation is brought to the floor again this week.

Bill Frist's office "is circulating a memorandum that largely blames sharp Republican spending increases on the war against terrorism, an argument the Republican Party's fiscal critics call an exaggeration and coverup," says the Washington Times.  "Brian M. Riedl, chief budget analyst at the Heritage Foundation, said the memo showed 'that congressional leaders still do not grasp the depth and consequences of their historic spending spree.'  A recent Heritage analysis of the budget's growth in the past five years found that government has expanded 33 percent and 'has pushed federal spending to nearly $22,000 per household -- the most since World War II,' Mr. Riedl said."

It's the economy
CNBC advises that the big anticipated news on the economic scene this week will be the oil companies' third-quarter earnings reports, some of which could show record profits.  BP, ConocoPhilips, ExxonMobil, Marathon, and Chevron all announce earnings this week.  Also this week: important reports on the housing industry -- existing home sales on Tuesday and new home sales on Thursday.  August existing home sales were strong, thanks to low mortgage rates, CNBC advises, but it looks like they've peaked.  New home sales in August were down; they too are past their peak.

Crude oil has been trading below $60 per barrel for three days now.  - Bloomberg

The Boston Globe covers New Englanders opting for coal and other sources of fuel to heat their homes this winter in the face of high natural gas prices.

National security politics
The Washington Post looks at how the US military has resumed periodic enemy body counts to "demonstrate success in Iraq," even though the Pentagon has not formally directed them to do so.

One Democrat who's uniquely positioned to criticize Bush on the war, Paul Hackett, announces his US Senate candidacy for 2006 in Cincinnati, OH today.

2005 and 2006
Tonight from 9:00 pm to 10:30 pm ET, Gov. Arnold Schwarzenegger (R) and his Democratic opponents square off -- sort of -- in Walnut Creek, CA to debate the ballot measures on special election.  The 90-minute program will be divided into three segments.  During the first, opponents of the ballot measures -- represented by Senate President Pro-Tem Don Perata (D) and union leader Rose Ann DeMoro -- will field questions from a group of voters selected by a nonpartisan research firm.  Then comes Schwarzenegger's turn to do the same.  The final segment will feature Democratic state party chair Art Torres and GOP state chair Duf Sundheim.  In short, Schwarzenegger won't go face-to-face with any of his adversaries -- which is surprising given the amount of money being spent on this special election, given all the attack ads, and given the huge political implications for him.

The Sacramento Bee looks at how expensive the ad war in California’s special election has become.  “Campaigns have raised more than $215 million this year largely for the sake of wedging 30-second sound bites...  In a twist to make TV stations even more giddy, none of this year's issue-based campaigns can buy advertising at the federally mandated discount enjoyed by candidates.  That means rates have gone skyward."

Of all the storylines in Virginia's gubernatorial race, perhaps the most intriguing one is whether a Democrat who talks proudly about his religious faith can win a competitive race in a red state.  Indeed, Tim Kaine (D) has constantly mentioned his Catholicism (especially his missionary service in Honduras 25 years ago) in campaign stops, debates, and TV ads.  These references -- usually not associated with Democrats -- have typically come up in the context of his longtime vocal opposition to the death penalty, which opponent Jerry Kilgore (R) has attacked in recent hard-hitting ads.  But here is Kaine's response ad: "My faith teaches life is sacred.  That's why I personally oppose the death penalty.  But I take my oath of office seriously, and I'll enforce the death penalty."  And here's Kaine in a July debate: "Jerry -- I'll state it again, and I'll state it clearly: I am not going to apologize to you for my religious belief that life is sacred."

What’s most striking about Kaine’s faith-based campaign is how it’s flipping the politics of religion upside down.  For the last few years, Republicans have used faith not only as a way to attract more votes, but also as an effective weapon.  In the 2004 presidential election, they sent mailings in West Virginia and Arkansas suggesting that the Democrats wanted to ban the Bible and allow gay marriage.  More recently, Republicans complained that Democrats questioning then-Supreme Court nominee John Roberts’ views on abortion were attacking his Catholic faith.  But in this race, it’s the Democrat who’s arguing that his faith is under assault when Kilgore brings up his opposition to the death penalty.

And it might be working.  Two polls conducted after Kilgore first ran his death penalty ads show Kaine with a slight (yet statistically insignificant) lead; Kaine had been narrowly trailing Kilgore in prior surveys.  (A poll released over this past weekend, however, shows Kilgore with a two-point lead.)  A July Mason-Dixon survey noted that 55% of likely Virginia voters say they'd consider voting for a candidate who are opposed to the death penalty but won't block executions -- Kaine's position -- while just 27% said they wouldn't.

Of course, there are risks to Kaine's constant references to his faith.  Critics argue that he could turn off some secular liberals, and might open himself up to attacks that he’s using it solely to shield him from his politically risky opposition to the death penalty.  Observers also note that by saying he's against the death penalty, but will still enforce the laws supporting it, Kaine seems like a flip-flopper.  And Robert Holsworth, a political scientist at Virginia Commonwealth University, says that position might make voters question "why he won’t act on his beliefs.”  Kaine insists, however, that he's sincere about his religion.  "I've been talking about this during my whole public," he told First Read back in August.

Win or lose, you can expect more Democrats to follow Kaine’s lead in invoking his faith and using it to his advantage, says Steve Jarding, a Virginia-based Democratic consultant.  “I think it’s smart, and I think you’re going to see a lot more guys do it,” he says.  “And they should do it.”

The latest Richmond Times-Dispatch/Mason-Dixon poll, released on Sunday, shows Kilgore leading Kaine by 44%-42% -- a statistically insignificant margin.  Today, the paper notes that Kaine is leading on the budget, the environment, education, and transportation, while Kilgore leads on law and order, firearms, and illegal immigration.  “However, Kilgore's recent emphasis on capital punishment may have backfired…  Law-and-order concerns, including the death penalty, rated fifth among 11 issues tested by Mason-Dixon, the top concern of only 7 percent of voters.”

The latest ads don't seem to be working in New Jersey's gubernatorial race, where Democrat Jon Corzine is thought to have a slight lead over Republican Doug Forrester.  The AP reports on a Monmouth University/Gannett New Jersey poll, in which 46% of likely voters said they had learned "a little" about each candidate through TV and radio ads, while 40% said they'd learned "zilch."

The Sunday Boston Globe writes up former President Jimmy Carter's son Jack's interest in running against Sen. John Ensign (R) of Nevada, and notes that "the possible bid by a candidate with a famous last name has generated enthusiasm among Nevada Democrats -- as well as some relief in a party struggling to find a viable prospect to take on Ensign."


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