**President Obama
*The president's approval rating is at 54 percent, per a new USA Today/Gallup poll. Only 43 percent approve of his handling of health care, and 38 percent approve of his handling of the deficit.

*Obama aides say his response to the Jimmy Carter race comments "has been to tell his staff not to be distracted by the charges and to focus on health care and the rest of his policy agenda." Valerie Jarrett explains to the New York Times the White House thinking: "He could probably give a very powerful speech on race, just as he did in the course of the campaign. But right now his top domestic priority is health care reform. It's difficult, challenging and complicated. And if he leads by example, our country will be far better off."

*Obama, "trying to calm critics and rally allies on his top domestic priority, told a Hispanic gathering on Wednesday that no one in the United States illegally would receive benefits under plans for a health care overhaul," AP notes. He also "promised action on immigration, although he left unspoken a timeline."

*Some foreign policy news. Wall Street Journal: "The White House will shelve Bush administration plans to build a missile-defense system in Poland and the Czech Republic, according to people familiar with the matter, a move likely to cheer Moscow and roil the security debate in Europe."

On Afghanistan, Obama "is holding off on a decision to send more U.S. troops ... exasperating lawmakers who say his administration's latest road map for winning the war skimps on details and amounts to too little, too late."

**Health Care
*New York Times reports that "advocates of health care overhaul face an extremely delicate balancing act" as Dems control 59 seats, "meaning they need at least one Republican to join them if they are to proceed without employing a procedural shortcut that could cause havoc in the Senate. And Senate Democrats have substantial differences of their own" -- including among liberal Sens. Jay Rockefeller (D-W.Va.) and Bernie Sanders (I-Vt.), who favor a public option.

*"On the surface, it appears that no one is happy with Sen. Max Baucus (D-Mont.) -- and that may be the best news President Obama has had in months," write's WaPo's Ceci Connolly. "But behind the rhetorical fireworks was a sense that the fragile coalition of major industry leaders and interest groups central to refashioning the nation's $2.5 trillion health-care system remains intact. As they scoured the 223-page document, many of the most influential players found elements to dislike, but not necessarily reasons to kill the effort. Most enticing was the prospect of 30 million new customers."

*"The Democrats' effort to revamp the nation's healthcare system has pushed other inflammatory issues like immigration and climate change into next year, when election-year politics make it hard to get anything done," The Hill reports. "Earlier this year, some Democrats criticized the White House for pursuing too much on its agenda, and said it needed to prioritize. But now, some Democrats are worried about the intense focus on one issue -- healthcare."

*You have to wonder, how much of this is tied to his own tough re-election bid? From the Las Vegas Sun: "No sooner than the Senate Finance Committee's chairman released his long-awaited health care bill today than Senate Majority Leader Harry Reid said it's not good enough for Nevada. Reid is concerned about the cash-poor state's inability to boost Medicaid spending as would be required under the bill.

**Republicans
*House Minority Leader John Boehner (R-Ohio), "a conservative with a penchant for compromise, has spent the past few months trying to harness the anger of the GOP base without allowing his conference to veer too far to the right," Politico reports. "But never were the strains of that balancing act more apparent than during the Wilson vote, as the Ohio Republican tried to juggle his commitment to bipartisan civility with his responsibility to a besieged member of his conference.

*"The key to retaking the majority in the House could be in a message of checks and balances, according to a Republican survey presented to members of the House GOP whip team on Tuesday night," Roll Call reports. "Independents, by a margin of 53 percent to 26 percent, favored a Republican who could check and balance Obama over a Democratic Member of Congress. The poll, paid for by Minority Whip Eric Cantor's (R-Va.) campaign fund, is the latest in a series of GOP surveys that show promising signs for the Republican Party."

*WaPo's Cillizza reports that the ACORN controversy "has emboldened Republicans to use the group's troubles as a political cudgel against Democrats. 'If the Democrats continue to ignore the apparent fraud taking place with taxpayer money, they will pay a price politically,' predicted former Florida governor Jeb Bush (R) in an e-mail exchange with the Fix late Wednesday."

*"The Justice Department is investigating whether former Interior Secretary Gale A. Norton illegally used her position to benefit Royal Dutch Shell PLC, the company that later hired her, according to officials in federal law enforcement and the Interior Department," L.A. Times reports. "Norton is the first Bush official at the Cabinet secretary level to be the subject of a formal political corruption investigation."

**Massachusetts Senate Vacancy
The Globe reports that legislative leaders"believe they have narrow majorities in both chambers" to pass a bill giving Gov. Patrick the ability to appoint an interim senator. "But the bill must still survive Republican attempts to delay or kill it through parliamentary maneuvers."

*In a sign of just how important that 60th seat is, David Axelrod is now lobbying Democratic leaders in the legislature to push through the change, Fox's Garrett reports. Gibbs confirmed it Wednesday.

*"Gerard Doherty, a longtime Kennedy family intimate, ran Ted Kennedy's first Senate campaign" and he's now backing Rep. Michael Capuano's bid for Senate, Boston Globe reports. "Doherty's endorsement foreshadows the big card Capuano hopes to play - support from Kennedy insiders and maybe even a dramatically timed endorsement from Ted Kennedy's nephew, Joe, who preceded Capuano as congressman from the Eighth District."

*A new survey released by Suffolk University this morning finds Attorney General Martha Coakley with a huge lead in the Dem primary. Results: Coakley 47%, Capuano 9%, Lynch 6%.

**Campaign Stuff
*IL Sen: Cheryle Jackson, the former Chicago Urban League president and a former spokesperson for ousted governor Rod Blagojevich, has jumped in the Senate sweepstakes, Chicago Tribune reports. She's the only woman and "the lone African-American contender in the Feb. 2 primary, which also includes state Treasurer Alexi Giannoulias, former Chicago Inspector General David Hoffman and attorney Jacob Meister."

*Peter Schiff just announced on "Morning Joe" that he'll run as a Republican for Senate in Connecticut. He said Chris Dodd represents everything that is wrong with Washington, and called him a "posterboy" for the economic crisis.

*The Christie campaign in New Jersey says it didn't know Jeb Bush would be attending a fundraiser last night, the Star-Ledger reports. But the two Republicans "talked briefly and took a picture together." Christie says the visit from the ex-president's brother "doesn't cause a problem for me" politically. "This is Jeb Bush. I like governor Bush. I think he did a great job in Florida."

*Rep. John McHugh (R-N.Y.) was officially confirmed as Army Secretary, which will put the wheels in motion for a special election in New York's 23rd district.

*Mike Castaldo, a former Marine who was a volunteer for the ONE campaign in New Hampshire, is exploring a bid for Congress in the state's first district. He writes in a Union Leader op-ed: "I am a proud conservative, but the conversation that I am having around my kitchen table is much different from the conversation the Republican leaders are having around theirs. Something must change."

*Also in New Hamspshire, DiStaso has news on the second district Democratic primary, where Ann McLane Kuster has hired a campaign manager, and Katrina Swett says she's increasingly likely to run. On the Republican side, former Rep. Charlie Bass says he's leaning toward the race.

--Kyle Trygstad and Mike Memoli