Make no mistake: if Scott Murphy wins in the NY-20 special election tonight, the White House will have plenty to say. But hours before the polls close and half an ocean away, press secretary Robert Gibbs was hesitant to say much, while making sure to call it a "very conservative" district where Republicans hold a registration advantage.

"Let's wait and see the result," Gibbs said when asked about domestic politics during Air Force One's journey to the United Kingdom. "You know, public polling and even Republican polling that showed the Democratic candidate down 30 points only several weeks ago. So regardless of the outcome, this is a district where, by all accounts -- particularly in a special election which largely, as you know, drives out the partisans -- the real partisans on each side -- to even be competitive in a district like that I think demonstrates quite a bit."

The White House did step up its role in the race, with a late endorsement from President Obama, a cash infusion from the DNC, and a radio ad voiced by Vice President Biden. It's been said repeatedly that the race is a referendum on Obama's stimulus package, if not his administration in general.

Even with all the pressing issues facing the U.S. and U.K. ahead of the G-20 Summit, some in the British press are still focused on the perceived snub British PM Gordon Brown suffered during his visit to recent visit to Washington.

It started when White House press secretary Robert Gibbs referred to a "special partnership" between the two trans-Atlantic allies, instead of the usual "special relationship" monicker. Then, the Brits were shocked to learn that President Obama and Brown would not hold a full-fledged Rose Garden press conference, but rather a more informal Q&A in the Oval Office. Then, there was the issue of gifts. Brown presented Obama with a pen set made with timbers of a sister ship to the HMS Resolute, of which the president's desk was fashioned. Obama in return gave Brown a set of DVDs that were not even the proper version to play back in the U.K.

To see how this is all looming over the visit, look no further than Saturday's conference call the White House held to preview the trip. Here are the questions that came from British reporters:

Given the importance in international diplomacy of symbolism, I was just wondering if you could throw any light on the gift that the Obamas are likely to be giving the Queen. As you know, the presentation of the DVD box set raised some eyebrows in Britain. I wondered if there had been a sort of special thought going into this gift process.

Did we just hear Mike Froman restore the "special relationship" to its place in the lexicon, the special relationship with Britain, instead of the "special partnership"? He spoke about the value of it.

On this special relationship, there was a lot of stuff in the -- comment in Britain about -- Robert Gibbs, your talk about the "special partnership." But I did hear Mike Froman earlier talk about how he was coming to Britain to -- how President Obama was going to reaffirm the value of the "special relationship" with Britain. So I just wondered whether the "special relationship" was the phrase back in vogue as opposed to the "special partnership."

On the latter question, Gibbs said: "I continue to be mystified about the difference between the two words." Still, it was covered the next day as big news.

"The story of the snub was just too good for Fleet Street," Reginald Dale, a senior fellow at the Center for Strategic and International Studies, told me last week. "The British media will of course be watching Obama in London, where Brown is chairing the meeting, to see if there's any further attempt to patch things up."

The top Republican on the House Budget Committee said today that Republicans will introduce their long-awaited budget alternative tomorrow. Many expected to see a detailed explanation of the GOP budget last week, but Republican leaders distributed a vague, 17-page "blueprint" that drew criticism from the White House.

"We'll release all of our numbers and all of our budget," said Rep. Paul Ryan (R-Wisc.). "Tomorrow, the Republican budget will show a better future for America on all the key metrics."

Meanwhile, on the Senate floor this morning Judd Gregg (R-N.H.), ranking member of the Senate Budget Committee, shot back at the White House and Budget Chairman Kent Conrad's (D-N.D.) criticism of Senate Republicans for attacking the budget without offering their own alternative.

Gregg pulled out a large poster board featuring a March 2006 quote from Conrad. At that time, when Republicans were in power, Gregg had similarly criticized Democrats for not offering an alternative budget. Conrad said then that it was the majority's job to introduce a budget, while "our job is to critique the budget."

"And that's the tack we've taken this year," said Gregg, who added that the minority party traditionally offers amendments to the budget, which he said was the more bipartisan approach.

Good morning, Washington. As we post, President Obama is taking off in Air Force One en route to London, as he makes his first major trip abroad (sorry, Canada). Our take on his trip can be found here. When he arrives in London, he'll meet with U.S. Embassy workers before calling it a night; his full schedule starts Wednesday. Meanwhile, VP Joe Biden has returned to Washington, where he'll be preparing for his next Middle Class Task Force Event.

The major domestic political news: It's Election Day in the Hudson Valley, as the voters in New York's 20th District select a replacement for Kirsten Gillibrand, who was appointed to the Senate. Republican James Tedisco and Democrat Scott Murphy finally face off after a few competitive months of campaigning, debates and ads. As the first congressional election during the new administration, both parties are looking at this race as more than just one House seat.

With Congress set to recess on Friday for two weeks, the Senate continues today its 50 hours of debate on the budget resolution. The House will soon take up its own budget resolution, but today it will consider the Senate amendments to the GIVE Act and a number of suspension bills. Also, Gov. Kathleen Sebelius (D-Kan.) faces her first hearing in the HHS confirmation process.

**President Obama
*A new Washington Post/ABC poll gives Obama strong approval numbers - 66 percent. Importantly for Obama, he "continues to benefit from a broadly held perception that others should bear the bulk of responsibility for the severe economic problems that confront his administration. Americans see plenty of offenders, but only about a quarter blame the president and his team for an economy that's in the ditch." Also of note, the "right track" number has nearly tripled, to 42 percent.

*As Obama heads to Europe, 7 in 10 respondents tell CNN that world leaders respect Obama. Only 49 percent thought the same at the start of George W. Bush's term.

*GM Fallout: The LA Times says Obama's announcements on the auto industry "put the Obama administration squarely in the position of adopting a so-called industrial policy, in which government officials, not business executives or the free market, decided what kinds of products a company would make and how it would chart its future. ... The notion that it was the president, not car company executives, who would pick such a course drew immediate criticism, especially from conservatives."

*Obama did not ask for advice before ousting GM CEO Rick Wagoner, Sen. Carl Levin tells The Hill. "He didn't ask us about it, he informed us," Levin said. He also also raised the idea of a "double standard for a long time between the financial industry and the way the auto industry is treated."

*The NY Times gives some behind-the-scenes. "The internal debate that led to the announcement culminated in two back-to-back 45-minute sessions in the Oval Office last Thursday. Members of Mr. Obama's auto task force, led by two former investment bankers, Steven Rattner and Ronald Bloom, presented the president with what one senior administration official called 'an incredibly difficult and painful set of decisions.'"

*Bloomberg looks at the other Big Three automaker, Ford, which did not take government money and thus was spared yesterday. An industry observer said the company "has done all the right things, but it could all turn negative if GM gets in a competitive situation that's dramatically different" after a potential bankruptcy. Ford said it is "prepared to do whatever is necessary to remain competitive, including going beyond the cost-cutting efforts already under way."

*Politico found the Republicans not on the same page, ranging from concern over a president ousting a CEO to support for a tough line with the auto industry. A senior GOP aide said the party was caught "flat-footed."

*Reset Accomplished?: NBC reported this morning that Russia was interested in a "broad agreement" with the Obama administration over key priorities. Andrea Mitchell said the White House sent a top diplomat to the Hague on short notice to hammer out something concrete that could be announced in London. The news comes on the same day Dmitry Medvedev pens an op-ed in the Washington Post. "The exchange of letters between myself and President Obama this year showed mutual readiness to build mature bilateral relations in a pragmatic and businesslike manner," he writes.

*Secretary of State Clinton confirmed something long suspected, that the Obama administration has ditched the "war on terror" term. "The administration has stopped using the phrase, and that speaks for itself, obviously," Clinton said en route to the Hague. While it was not an official directive, "It's just not being used," Clinton said.

*Washington Post sees that Michelle Obama "is enjoying a second look from the American public -- particularly from those who were put off by her as a candidate's wife, but are warming to her as the president's wife."

**Congress
*"President Obama made a strong pitch for his budget to House Democrats in a closed-door meeting on Monday night, arguing that the budget includes key components to turning around the ailing economy, according to several Democratic sources who took verbatim notes in the meeting," CNN reports.

*Per the NY Times, Obama said: "If we don't pass the budget, it will empower those critics who don't want to see anything getting done." Obama also "said that he intended to keep pressing to reduce the red ink and that the spending would help prompt the growth needed to turn the economy around. According to one account, he said he was 'as serious as a heart attack' about lowering the deficit."

*"The chairman of the Senate Budget Committee said Monday that if Republicans attempt this week to block a $3.55 trillion budget resolution that contains funding for the president's health care overhaul, Democrats would likely submit a second resolution" that would include reconciliation, allowing the Senate to pass it with just 50 votes, NPR reports.

*Perry Bacon profiles Judd Gregg: "Now, after turning his back on the post and the administration, the always confident and occasionally sarcastic Gregg has rediscovered his voice as the top Republican on the Senate Budget Committee and de facto leader of the opposition to Obama's $3.5 trillion budget."

*The Hill: "Some Democrats -- from the Blue Dogs on the right to the Progressive and Black caucuses on the left -- are not sold on the resolution that will be voted on the House floor this week."

**Campaign Stuff
*NY-20: "The polls are open in the 20th Congressional District, where voters today will choose the next representative in the heated race between Democrat Scott Murphy and Republican James Tedisco."

Politico: "But no matter how you look at it, the first congressional contest of the Obama era has taken on an importance that belies its strategic value. ... Still, the upstate New York contest to succeed Kirsten Gillibrand is worth paying close attention to, if for no other reason than that the results will be breathlessly interpreted and the winning side will rally around them."

The Hill: "The party that wins the election to fill the House seat vacated by now-Sen. Kirsten Gillibrand (D) will seize political momentum. But it will also inflate -- or puncture -- the power base of high-profile politicians on both sides of the aisle, including President Obama."

*MI Gov: Rep. Pete Hoekstra (R-Mich.) threw his hat in the ring yesterday, joining "other potential Republican candidates [including] state Sen. Tom George of Texas Township, Attorney General Mike Cox, Secretary of State Terri Lynn Land and Ann Arbor businessmen David Brandon and Rick Snyder."

*Richmond Times Dispatch covers Mike Huckabee's visit to Virginia to campaign with Bob McDonnell. Huck criticized those who say "that the Republican Party has sort of already experienced its demise and that the funeral services are being planned in the near future." Huck: "You come to places like Virginia and you see that with Bob McDonnell, we've got a very strong pulse," Huckabee said. "Cancel the memorial."

*Richmond Mayor Dwight C. Jones endorsed Del. Brian Moran in the Democratic gubernatorial primary.

*Also of note in VA: the DNC chairman signs a bill okaying "Choose Life" license plates.

*Sue Davis of WSJ looks at last-minute appeals from Congressional campaigns as the first quarter comes to a close. From the DSCC: "The Republicans think that betting against America is the way to beat us on Election Day. I know that betting on you is a surefire way to prove them wrong." From the NRCC: "Help us stand up against the Democratic spending spree in Congress and end the reign of Speaker Nancy Pelosi."

--Mike Memoli and Kyle Trygstad

President Obama today signed the Public Lands Management Act of 2009, an omnibus package of 150 individual bills dedicating public lands for conservation. Obama called the legislation "among the most important in decades to protect, preserve, and pass down our nation's most treasured landscapes to future generations."

"This legislation guarantees that we will not take our forests, rivers, oceans, national parks, monuments, and wilderness areas for granted; but rather we will set them aside and guard their sanctity for everyone to share," he said during an East Room ceremony that included the bill's top supporters in Congress. "That's something all Americans can support."

Again, however, Obama was signing legislation that had not been posted on the White House Web site for public comment for five days, as was promised during the campaign. Robert Gibbs was asked about this at today's briefing, and said Obama is still "committed to and has brought greater transparency" in office.

"There are obviously situations that come up, especially when the president's going to go overseas for a certain period of time while a bill is there," he said - alluding to Obama's pending departure for Europe. "Although not perfect, I think the president has made a greater step forward in transparency and feels like we're making progress on making sure the American people can see and read what the president is going to sign into law."

New York's 20th District, which includes all or parts of 10 counties in the Hudson Valley, is one of those districts that proves party registration is not always an electoral indicator. In recent years it's disproved election history, as well, leaving political prognosticators and practitioners unsure of tomorrow's special election outcome.

The race to replace Sen. Kirsten Gillibrand's (D) former House seat has been called a referendum on President Obama's economic policies, as well as a preview of the 2010 midterm elections. Both parties have poured resources into the race, though the DNC may be trying to hedge its bets, while the NRCC and RNC are going all-in.

Inside the campaign, Jim Tedisco's (R) years of public service (and voting records) have been the target of Scott Murphy's (D) campaign, while Tedisco has attempted to tie the political novice's career as a venture capitalist to Wall Street's role in the dismal economy.

In the district, Republicans lead Democrats in voter registration by a wide margin -- some 67,500 as of November 2008. And, according to the Almanac of American Politics, this area has been Republican territory since the birth of the party. George W. Bush won here by 7 and 8 points in 2000 and 2004.

However, these stats did little to help Republican Sandy Treadwell, whom Gillibrand defeated by 24 points in November. Nor did then-incumbent John Sweeney, who lost to Gillibrand by 6 points in 2006, gain from the sizeable party-ID edge or GOP record in the district. Obama also won the district by 3 points.

In New York's unique ballot system in which candidates can be placed on mulitple lines, both Sweeney and Treadwell won placement on three party lines: Conservative, Independence and Republican -- giving them an even larger registration advantage. Gillibrand was endorsed by the other two parties: Democrats and Working Families. This time, the Dem candidate will get a third line, as Murphy has been endorsed by the Democrats, Working Families and Independence parties.

The race will come to a close tomorrow night, and the victorious party will surely claim a bigger victory than a sole congressional district. Murphy's poll numbers appear to put him on track for a victory, so we'll also see tomorrow night if polling is any better indicator in NY-20 than party ID or history.

President Obama today said that America's auto industry must endure some short-term pain to ensure its future, saying bankruptcy is a very real option for two of the largest automakers rather than making them "wards of the state."

The president's announcement came after GM and Chrysler submitted plans for restructuring under the terms of last year's bailout. Obama said those plans did not go far enough, and gave each a period to work with stakeholder groups to "justify an investment of additional taxpayer dollars."

The auto industry has been moving in the right direction, but Obama said there needs to be new leadership, and said GM CEO Rick Wagoner is stepping down in recognition of the fact "that it will take new vision and new direction to create the GM of the future." The company will receive funds to keep it operating for 60 days while it comes up with a "credible model for how to not only survive, but succeed." Chrysler, however, got a more sober prescription, saying funds will be cut off unless the company closes an agreement with Italy's Fiat to merge operations.

Obama then said bankruptcy may be a final option, but cautioned that it was not a death sentence. And he urged Americans to continue buying cars and hold on to the ones they had, with all warrantees guaranteed by the federal government. He said the government will take other steps as well to support the auto industry, speeding up the purchase of cars for its fleet, and working to adjust the stimulus program to create a program where Americans can exchange gas guzzlers for newer, more fuel efficient cars.

That is what Obama saw as the ultimate cure for the auto industry, saying it needs to build on current successes and speed up efforts to build cars that will end the nation's addiction to oil.

"The path I am laying out today is our best chance to make sure the cars of the future are built where they've always been built - in Detroit and across the Midwest; to make America's auto industry in the 21st century what it was in the 20th century - unsurpassed around the world," he said.

And speaking directly to auto workers, he pledged that he would fight for them.

"You are the reason I am here today," he added. "I got my start fighting for working families in the shadows of a shuttered steel plant and I wake up every single day asking myself what I can do to give you and working people all across this country a fair shot at the American dream.

Obama was flanked during the announcement by members of his economic team, including Treasury Secretary Geithner, as well as the secretaries of Energy, Commerce and Transportation.

One day before he leaves for Europe, President Obama's schedule reflects some of his biggest domestic challenges. He'll announce the administration's plans for the auto industry this morning -- the biggest news is the resignation of GM's CEO. He'll also highlight conservation efforts when he signs the Omnibus Public Lands Management Act this afternoon. Later he'll travel to Capitol Hill to speak with House Democrats about his budget.

Vice President Biden ends his latest international jaunt in Costa Rica, where he meets with the country's president. If you missed it, be sure to read Mark Leibovich's piece in the Sunday Times profiling Biden's role in the administration. Our favorite part: the VP was not made available to comment, but the president was; he said Biden can "help stir the pot." Also, a 2016 bid is NOT ruled out.

The Senate today begins consideration of the budget resolution, which the House will also do this week. The House is expected to once again take up the GIVE Act, which the Senate altered and passed last week.

Check out all the Sunday talk show clips you missed, including former (and current?) rivals, Barack Obama and John McCain.

**President Obama
USA Today previews Obama's Europe trip. "Still new on the world stage at 47, Obama will meet privately with at least six presidents, prime ministers and a king in London, then five more as he travels on to France, Germany, the Czech Republic and Turkey. He'll attend three summits, deliver two major addresses and hold a roundtable with students in Istanbul. He'll take time out to see Queen Elizabeth II at Buckingham Palace and sightsee from Strasbourg to Istanbul. The goal of the trip, says Denis McDonough, deputy national security adviser, is nothing less than 'restoring America's standing in the world.'"

*President Obama spoke with the Financial Times ahead of the G20, and "played down talk of a split between the US and the leading continental European economies, notably Germany and France." Obama: "In all countries there is an understandable tension between the steps that are needed to kick-start the economy and the fact that many of these steps are very expensive and taxpayers have a healthy skepticism about spending too much of their money, particularly when it is perceived that some of the money is being spent not on them but on others who they perceive may have helped precipitate the crisis."

*AP on the GM news: The White House forced the resignation Rick Wagoner as it plans to announce a new 60-day deadline for the company to restructure. "Two people familiar with the plan said Sunday it will demand further sacrifices from the automakers and bankruptcy would still be possible if the automakers failed to restructure. The officials spoke on condition of anonymity because they were not authorized to make details public."

Washington Times: "The Obama administration has determined that neither Chrysler LLC nor General Motors Corp. can survive without dramatic changes in their businesses, and given them only weeks to completely restructure on a fast schedule that could involve a quick 'dip' into bankruptcy, senior administration officials said Sunday. ... While Mr. Obama's team has judged that GM could become viable with major sacrifices, it decided that Chrysler cannot survive as a stand-alone company, a senior administration official said. The White House did not agree to give the two Detroit automakers the additional $21.6 billion in loans they were seeking, but it did say it would give them an unspecified amount of financing if they go through with the far-reaching reorganizations the White House is demanding."

**Congress
*WaPo provides a "Budget Watcher's Guide to the Action."

*The White House wants the Senate to confirm a few more nominees this week before it takes off for a two-week recess.

*NYT's Hulse takes on reconciliation, and the GOP's sudden opposition to it: "That means critics can have a field day lampooning Republicans and asking them -- as Senator Bernie Sanders, the Vermont independent, did repeatedly the other day -- why reconciliation was such a good idea when it came to giving tax cuts to millionaires but such a bad one when it comes to trying to provide health care to average Americans."

*Lobbyist Paul Magliocchetti's firm, PMA Group, is closing after federal prosecutors raided his home and office. "More alarming to lawmakers and aides, however, is that prosecutors may turn their attention to the dinners at the Alpine and Capital Grille or other gifts they might have accepted from Mr. Magliocchetti -- potential violations of longstanding Congressional ethics rules that could lead to more serious bribery charges if linked to official acts," NYT reports.

**Campaign Stuff
*NY-20: The Albany Times-Union endorsed Democrat Scott Murphy yesterday in the March 31 special election. "On Tuesday, in a race being watched around the nation as a bellwether of next year's midterm elections, the district's voters will choose between a candidate who would work with Mr. Obama to achieve his goals, and one who would continue Washington's partisan divide. We believe voters should support Democrat Scott Murphy."

On Sunday, Murphy campaigned with New York's senators, Chuck Schumer and former Rep. Kirsten Gillibrand. AP lays out the stakes for the GOP: "A win for Tedisco, the Assembly's minority leader, could calm critics of Republican National Committee Chair Michael Steele's uneven attempts to lead the party out of a slump that began with dismal federal elections in 2006 and continued in 2008."

*Bob McDonnell launched his gubernatorial campaign in Virginia on Saturday, but the Washington Post focuses on the "unprecedented battle within his beleaguered party has overshadowed the race and threatens to hamper McDonnell's campaign." GOP chair Jeff Frederick is battling calls to resign over a number of missteps, and McDonnell only recently added his name to that list.

*AP also checks in on Sen. David Vitter, who "appears to be on the rebound as he takes on a high-profile role of being critical of congressional Democrats and President Barack Obama." But Louisiana Democratic party chair Chris Whittington "said Vitter still needs to answer questions about the prostitution scandal. Whittington said Vitter also will be politically vulnerable because of his opposition to Obama's attempts to bring the economy out of a recession."

*LA Times reports on how the Republicans running for California governor are turning their back on Arnold Schwarzenegger's record. "By criticizing his painstakingly crafted budget, actively opposing several of his ballot measures and, more subtly, jabbing at his work habits and ego, Meg Whitman and Steve Poizner are striving to distance themselves from the unpopular Schwarzenegger and tap widespread GOP anger over the incumbent's broken pledge not to raise taxes. It is, in the words of a strategist involved in the race, a competition to become 'the anti-Arnold.'"

*RI Gov: Former Sen. Lincoln Chafee (R) told a church audience yesterday that he will decide by May on a run for governor, ProJo reports.

*Minnesota still has just one senator. And It could be years before it has two.

**Sports Alert: Question: How many brackets were busted yesterday with Michigan State's stomping of Louisville? Our guess is quite a few.

--Kyle Trygstad and Mike Memoli

UPDATED: Democratic leaders Nancy Pelosi, Steny Hoyer and Harry Reid, and Republican leaders John Boehner and Mitch McConnell reacted to the plan announced today by President Obama to combat extremism in Afghanistan and Pakistan. Here are there statements:

Pelosi:

"I support President Obama's comprehensive strategy for Afghanistan and Pakistan. The President's plan is the result of a detailed study and is wisely centered on dismantling al Qaeda and denying safe havens in both Afghanistan and Pakistan to those who would attack the United States. This strategy recognizes a point that I have emphasized for years, and one that I shared with the President following my visit last month to Afghanistan, which is that we must have a regional approach to countering terrorism.

"By aiding Pakistan in their efforts to defeat terrorists, investing in and training Afghan Security Forces and their Army, creating conditions to marginalize insurgents and foster democracy, and cooperating with our allies to achieve these goals, we can strengthen our global counterterrorism efforts and prevent another catastrophic attack, such as the horrific one Osama bin Laden launched on September 11th.

"The President's strategic and comprehensive approach is the right plan to stabilize Afghanistan and to protect the American people."

McConnell:

"I commend the President's announced strategy for Afghanistan today which includes a surge of forces and a renewed commitment to dismantling Al Qaeda and combating the Taliban. Republicans are supportive of these national objectives and will work with the administration to develop policies to secure greater cooperation from the government of Pakistan to rid the tribal areas of terrorist sanctuaries. We are fortunate to have Secretary Gates, Admiral Mullen and General Petraeus manage this surge and the counterinsurgency strategy as well."

Reid:

"We've said for some time that we must refocus our resources on threats like al Qaeda and the Taliban in the Afghanistan/Pakistan border region. I strongly support the President's decision to do just that.

"When I was in Afghanistan last year, I had the opportunity to meet with our military leaders and our brave troops on the front lines. They continue to do a tremendous job, and we must all be committed to giving them the resources they need and a focused mission that will defeat al Qaeda and make Americans safer here at home."

Hoyer:

"I applaud the Obama Administration for taking its time to develop a comprehensive strategy for the Afghanistan/Pakistan region. This plan was formed through a deliberative process, with many stakeholders consulted on the best path forward. This is a wise and realistic plan that represents a real change in strategy, and it has my support.

"As Democrats have long cited, Afghanistan is where the real war on terror must be fought. Yet for seven years, our efforts in Afghanistan have been hampered by a widely-acknowledged lack of focus and resources. What President Obama outlined today is a new, robust strategy for this crucial fight, which includes for the first time a more limited and well-defined end goal for our mission there. I especially appreciate that the President's strategy includes a new and more productive role for our allies, asking them to contribute civilians who are experts in fields critical to Afghanistan's rebuilding. Finally, I appreciate that the President's plan will ultimately include benchmarks, to ensure that our ongoing efforts are effective and that our funding is used for the purposes we intend.

"I look forward to working with the President as we move forward on this strategy and as we work together to meet the challenges we face in Afghanistan, Pakistan and throughout the rest of the region."

Boehner:

"The challenge of bringing stability to Afghanistan is enormously complex, but our efforts to defeat Al Qaeda and the Taliban are vital to the security of the American people. I support the strategy the President unveiled today because it reflects the advice of our commanders on the ground. I hope he will continue to honor their counsel because we should not allow political considerations here at home to trump the importance of achieving success in the region. Moving forward, we must ensure this strategy is implemented in a manner that is both flexible and reflective of the situation on the ground, and we must aggressively monitor its progress.

"The commitment and sacrifice of our men and women in uniform is nothing short of amazing. Republicans are committed to doing everything possible to support our troops and give them all the resources they need to succeed in their mission in Afghanistan."

American personnel will seek to stabilize governments in Afghanistan and Pakistan while targeting the extremists who pose a continuing threat to global security, President Obama announced this morning.

The commander in chief spoke of what he called a "stronger, smarter and comprehensive strategy" for the two nations, the result of a review he called for upon taking office. He said that U.S. policy will be dictated by "a clear and focused goal: to disrupt, dismantle, and defeat al Qaida in Pakistan and Afghanistan, and to prevent their return to either country in the future."

"That is the goal that must be achieved. That is a cause that could not be more just," Obama said. Then, looking straight into the television cameras instead of at his teleprompter, he said: "To the terrorists who oppose us, my message is the same: we will defeat you."

Though today's announcement had been advertised as an Afghanistan policy, the role of Pakistan in fighting terrorism was paramount, and in fact, Obama spent the first half of his speech focusing on that nation. He said al Qaida and its "extremist allies" have left Afghanistan for Pakistan, a group that "almost certainly includes" Osama bin Laden, and is responsible for 9/11 and the death of thousands of Pakistanis since then.

"They have blown up buildings, derailed foreign investment, and threatened the stability of the state. So make no mistake: al Qaida and its extremist allies are a cancer that risks killing Pakistan from within," he said.

He signaled a stronger role for America there, saying "we will not and cannot provide a blank check," and that the government "must demonstrate its commitment to rooting out al Qaida." And alluding to a high profile promise from early in his campaign, he said that the U.S. "will insist that action bet taken - one way or another - when we have intelligence about high-level terrorist targets."

Moving away from the "war on terror" branding used by the previous administration, Obama spoke of a "campaign against extremism" that won't be fought "with bullets or bombs alone." He urged support for two pieces of legislation that would direct aid to the Pakistani people and encourage economic development.

In Afghanistan, he said the U.S. must work to prevent al Qaida from establishing safe-haven again, fight a resurgent Taliban, and "promote a more capable and accountable" government. Having already announced sending 17,000 troops for combat operations, he said he would not shift focus to training Afghan security forces, with the goal of establishing an army of 134,000 and police force of 82,000 by 2011.

In addition to military forces, he announced a "dramatic increase" in civilian efforts to "advance security, opportunity and justice" throughout the country.

"At a time of economic crisis, it is tempting to believe that we can short-change this civilian effort. But make no mistake: our efforts will fail in Afghanistan and Pakistan if we don't invest in their future," he said, plugging his budget plan that increases foreign assistance programs.

Obama stressed that the new policy would take time, and that he has "no illusions that this will be easy."

"The world cannot afford the price that will come due if Afghanistan slides back into chaos or al Qaida operates unchecked," he added. "We have a shared responsibility to act - not because we seek to project power for its own sake, but because our own peace and security depends upon it."

Some have described the shift in policy as signaling that this is now "Obama's" war. But the president described this as an essential part of a war that America did not choose.

"Nearly 3,000 of our people were killed on September 11, 2001, for doing nothing more than going about their daily lives," he said. "Al Qaida and its allies have since killed thousands of people in many countries. Most of the blood on their hands is the blood of Muslims, who al Qaida has killed and maimed in far greater numbers than any other people. That is the future that al Qaida is offering to the people of Pakistan and Afghanistan - a future without opportunity or hope; a future without justice or peace."

A new Siena poll finds Democrat Scott Murphy taking a 4-point lead in the March 31 special election for New York's 20th District. Republican Jim Tedisco led by 4 points in the previous poll, released March 12. Tedisco had held a 12-point lead in a Feb. 26 poll.

Murphy's support among Democrats has risen by double digits since the February poll, when 60% of voters had no opinion of him. Tedisco's support among Republicans, however, has remained steady, with less than two-thirds backing him.

Murphy 47 (+6 vs. last poll, March 12)
Tedisco 43 (-2)

"This remains a very tight race, with intense campaign activity on both sides," Siena spokesman Steven Greenberg said.

Happy Friday, Washington. Today, President Obama unveils his much-anticipated strategy for Afghanistan, which also pays considerable attention to Pakistan. Obama will discuss his plans this morning at an event in the EEOB, surrounded by interested parties from the region and his administration. Later, he'll speak at a ceremonial installation event for Atty. Gen. Eric Holder, and address the CEOs of the nation's largest banks to discuss his financial rescue plan.

Neither the House or Senate are in session today. For the next few days, the focus will be on the special election in New York's 20th District, where both parties have invested heavily. The DNC begins airing a TV ad today in Albany highlighting President Obama's endorsement of Democrat Scott Murphy.

Looking ahead, this Sunday will be a big one on the talk shows. Obama will appear on "Face the Nation," while Tim Geithner appears on both "Meet the Press" and "This Week."

**President Obama
*Gallup Poll on economy: "For the past two weeks, the percentage of respondents in The Gallup Poll who say the economy is getting better has been steadily ticking up," USA Today's Page reports. "That doesn't mean everyone's outlook is rosy -- 66% continue to say the economy is getting worse -- but it does signal a significant improvement in public attitudes after nearly two years of downbeat forecasts."

*AP has details on the new Af-Pak plan: Obama plans "to dispatch thousands more military and civilian trainers on top of the 17,000 fresh combat troops he's already ordered. ... The strategy includes 20 recommendations for countering a persistent insurgency that spans the two countries' border, including sending 4,000 U.S. trainers to try to increase the size of the Afghan army."

*Bloomberg: "Obama also would support legislation to boost economic aid to Pakistan to $1.5 billion a year in exchange for that country cracking down on Taliban and al-Qaeda militants hiding out along border," officials said last night.

*Obama will caution "that the fight will not be easy, and will get tougher before it gets easier." Secretaries Gates and Clinton will join him, ABC notes. The Washington Post says Obama will describe his policy "as a sharp break with what officials called a directionless and under-resourced conflict inherited from the Bush administration." An official said al-Qaida wasn't defeated, but saw its leadership move to Pakistan.

*The New York Times writes about yesterday's online town hall, saying the White House "learned it must be careful what it wishes for" by inviting an online audience to vote on questions. "More than 100,000 questions were submitted, with the idea that Mr. Obama would answer those that were most popular. But after 3.6 million votes were cast, one of the top questions turned out to be a query on whether legalizing marijuana might stimulate the economy by allowing the government to regulate and tax the drug. ... The marijuana question later took up a good chunk of the daily White House press briefing, where Robert Gibbs, the press secretary, suggested that advocates for legalizing marijuana had mounted a drive to rack up votes for the question."

*Obama will visit Normandy for the D-Day anniversary, an aide to the French president announced.

*The Washington Times reports that Obama continued collecting money for his 2010 re-election account after being elected president. One of the donors, Bruce A. Heyman, is managing director at Goldman Sachs, which received a $10 billion bailout last year. "The donations are legal, but the timing is unusual because Mr. Obama formally left the Senate on Nov. 16 and already had a surplus in his Senate campaign treasury."

*Kathleen Sebelius' confirmation hearing is set for April 2.

**Congress
*Senate committee approves budget: "President Barack Obama's fiscal agenda gained steam, as the Senate Budget Committee Thursday embraced a $3.6 trillion budget that Republicans complained would pile up a huge federal debt," reports WSJ.

*The Washington Times notes that the GOP Budget alternative was "light on numbers and specific policy proposals": "Endorsing across-the-board tax cuts, the 19-page 'Republican Road to Recovery' was a general policy statement that slams Mr. Obama's spending and tax plan as harmful to future generations without identifying a detailed alternative."

*DNC response to GOP budget "blueprint": Spokesman Hari Sevugan: "After 27 days, the best House Republicans could come up with is a 19-page pamphlet that does not include a single real budget proposal or estimate. There are more numbers in my last sentence than there are in the entire House GOP 'budget.'"

*Sen. Gillibrand's former life: The NYT takes a look into Gillibrand's work representing Philip Morris, and notes that she plays down her role in her firm's work for the tobacco giant. "But a review of thousands of documents and interviews with dozens of lawyers and industry experts indicate that Ms. Gillibrand was involved in some of the most sensitive matters related to the defense of the tobacco giant as it confronted pivotal legal battles beginning in the mid-1990s."

**Campaign Stuff
*NY-20: The DNC has launched an ad for Scott Murphy in the special election race. The ad features President Obama's endorsement of Murphy.

*Fundraising Decreases: "Combined donations from individuals to the six major party campaign committees have fallen by more than 26 percent from a similar period two years ago, according to filings with the Federal Election Commission," WaPo reports.

*LA-6: John Boehner is heading to Baton Rouge tomorrow to campaign and fundraise for freshman Rep. Bill Cassidy (R).

*Roll Call's Shira Toeplitz reports that Manchester Mayor Frank Guinta is considering a run against Rep. Carol Shea-Porter (D-N.H.).

*Interesting nugget from the Miami Herald, which reports on conventional wisdom in Florida now tilting toward a Crist Senate run. From his former chief of staff, George LeMieux: :Everyone does seem convinced. I talked to him this week and he hasn't made up his mind."

--Mike Memoli and Kyle Trygstad

The Democratic National Committee is making its presence felt in the special election race for New York's 20th District. The committee is airing a TV ad featuring President Obama's endorsement of Democrat Scott Murphy. The ad is scheduled to air on all broadcast stations in Albany through Monday, the day before the March 31 election.

Despite the district's Republican tilt, Sen. Kirsten Gillibrand (D) carried it by a wide margin in November, before being appointed to the Senate. Obama is also viewed favorably in the upstate district, where he defeated McCain by 3 points.

Yes, there was a question about marijuana.

But there were some bits of real news at today's "Open For Questions" town hall meeting at the White House today. President Obama found another quick use for his "persistence" motto while answering a question about job creation, warning that while there have been some positive signals more could still lose their jobs.

"We're going to have to be patient and persistent about job creation because I don't think that we've lost all the jobs we're going to lose in this recession," he said. "We're still going to be in a difficult time for much of this year."

Obama explained that employment tends to be a "lagging indicator," as businesses tend to wait until well after a recovery has taken hold before adding to their payroll.

"The reason I point that out is, I don't want people to think that in one or two months suddenly we're going to see net job increases. It's going to take some time for the steps that we've taken to filter in."

Earlier today, Vice President Biden said he thought that the economic stimulus package was starting to have a "mild impact," but he, too, said there's more to be done as recovery funds just start getting paid out.

Obama also again defended the scope of his budget plan, while pointing a finger at his predecessor.

"A lot of the critics out there are saying, 'How is it that you're going to be spending all this money? We've got to worry about the deficit,' et cetera. I just want to remind you that the money that we are spending on education, on health care, and on energy -- if you added up all that increased money that we're spending, it still is not what's driving our long-term deficits," he said. "What's driving it is Medicare, Medicaid, a structural gap that we have because of the Bush tax cuts over the last several years that left us spending a lot more than we were saving."

The "investments" that will be made through his plan will address that gap, he said.

"I don't want us to constrict and reduce our ambitions, and set our sights lower for our kids and the next generation, because we weren't willing to make those investments now," he said.

The White House called today's experiment in a "virtual" town hall a success, and said that more than 67,000 people logged on to watch on the White House Web site. It was also carried live in part by most of the cable networks.

We reported earlier on House Minority Leader John Boehner referring to the Blue Dogs as "lap dogs," while Rep. Paul Ryan (R-Wisc.) asked for the moderate Democrats' help in opposing the budget.

Now, Politico's Glenn Thrush is reporting that Minority Whip Eric Cantor and Ryan, ranking member on the Budget Committee, were opposed to the House Republicans' release today of a budget "blueprint," though Boehner pushed them to back it.

"Cantor and Ryan were reportedly 'embarrassed' by the document -- believing it was better to absorb a week of hits from Democrats than to be slammed for failing to produce a thoughtful and detailed alternative," Thrush reports.

The Hill reported earlier this week on a "grumbling" among Republicans when Cantor and Ryan both voted for the Democrats' retroactive tax on AIG bonuses, while Boehner and Pence voted against it.

Just about every top member of President Obama's economic team has made the rounds of the Sunday talk shows in recent weeks -- except for Treasury Secretary Timothy Geithner. That will change this Sunday when he appears on NBC's "Meet The Press."

Word of the sought-after booking came from the show's executive producer, Betsy Fischer, on her Twitter feed. Sunday's show will also feature Sen. John McCain.

Geithner appears to have weathered the storm of criticism he faced on a number of fronts, particularly his handling of the AIG bonuses. The fact that he's booked on what is still the highest-rated of the Sunday shows could be seen as another sign of confidence in him on the part of the administration.

White House press secretary Robert Gibbs mocked Congressional Republicans' "alternative budget," making note of the fact that it contains "one more picture of a windmill than there is a chart of numbers."

"Just for your knowledge - there's exactly one picture of a windmill," he quickly added.

Gibbs said that a budget proposal that has no numbers is par for the course for the "Party of No," which he says is now the "Party of No New Ideas."

"To extend trillions and trillions of dollars of tax cuts for the wealthy, continue subsidies for big oil -- I think it takes us back to where we've been and why we're in this problem," Gibbs said. "I think the administration is glad that Republicans heard the president's call to submit an alternative. We just hoped that next time it will contain actual numbers so somebody can evaluate what it means."

Gibbs was then asked if his scathing response was in line with President Obama's promises as a candidate to "change the tone of Washington." He thought for a moment, and then said: "Yeah."

"I don't think that's a whole lot to ask," Gibbs said of having an alternative budget with real dollars attached. "I guess it's no wonder that over the course of many years, budget deficits in this town and debts ballooned because a group of individuals think that you can have a budget that doesn't contain numbers. No wonder we have an inherited budget deficit of 1.3 trillion dollars, and a debt that's out of control."

On a talk radio show this morning, House Minority Leader John Boehner called out fiscally-conservative House Democrats, the Blue Dog Coalition, saying he now refers to them as the "lap dogs."

"I would hope that the Blue Dogs would look at this budget and realize this just isn't going to work," Boehner said. "But you know we don't have conservative Democrats in the House much anymore. We've got a handful of them, and by in large the Blue Dogs have become what I call the lap dogs because every time they get a chance they end up voting with Nancy Pelosi and Harry Reid and doing what the President wants them to do."

House Republicans released the outline of their budget alternative today that they say creates more jobs and better controls the national debt than the Democratic resolutions that will hit the House and Senate floors next week.

"We just haven't seen any courage out [the Blue Dogs]," Boehner said, "and while I would love to have them take a serious look at our budget or work with us to develop a budget, I haven't seen any effort on their part to do so."

While Rep. Paul Ryan (R-Wisc.), ranking member on the Budget Committee, made a public plea yesterday for the fiscally-conservative Democrats to join with them in opposing the President's budget, there is no indication that Republican leadership has reached out to the Blue Dogs to work with them.

"These statements come from the same individuals who wrote the President a blank check for eight years, driving spending to the highest levels in our country's history," Rep. Charlie Melancon (D-La.), Blue Dog co-chair, said in response to Boehner's comments.

"Rather than just saying 'no,' the Blue Dogs will continue working in a productive manner to moderate legislation and offer commonsense policy alternatives," said Melancon. "We do not subscribe to the extreme philosophies of the far right or the far left, and we certainly do not take serious issues and use them for political gain."

Speaker Nancy Pelosi said this morning at her weekly press conference that House Democrats will definitely "be proposing reconciliation for health care" proposals this year so as to achieve a "robust initiative" and "the strongest possible package."

While Senate Majority Leader Harry Reid said later during a briefing with reporters that reconciliation was not currently in the Senate's plans for health care or other Democratic priorities, he maintained he's "taking nothing off the table."

The legislative maneuver would require only 50 votes to pass the Senate, far easier than the 60 votes usually needed. Republicans have voiced opposition to it, which Pelosi called hypocritical.

Reid and fellow Democratic Senate leaders Dick Durbin (Ill.) and Charles Schumer (N.Y.) also brought up Republican hypocricy. Schumer read off of a press release statements by Republicans over the last eight years saying in a number of different ways that "deficits don't matter."

"There's a little bit of speaking one way when there's a Republican president, and now a Democratic president's another," Schumer said. "They should worry about the deficit, but they should've worried about it back then."

While House Republicans outlined their alternative budget earlier today, Reid said Senate Republican critics should come up with their own plan if they're unhappy with the Democrats' proposals.

"You don't like this?" Reid said. "What do you suggest would be better?"

One day after President Obama offered his endorsement in an e-mail to supporters, Democrat Scott Murphy has released a radio ad recorded by Vice President Biden.

"As a graduate of Syracuse Law School, I not only root for the orange, I root for Upstate New York as well," Biden says in the ad. "That's why this special election you'll be holding next Tuesday, March 31st is so important to me. I'm supporting Scott Murphy for Congress, and so is President Obama."

The special election for New York's 20th District takes place Tuesday, March 31.

Click through to see the full script and listen to the ad.

-Audio of the ad can be found here

-Ad script:

Biden: This is Vice President Joe Biden. As a graduate of Syracuse Law School, I not only root for the orange, I root for Upstate New York as well. That's why this special election you'll be holding next Tuesday, March 31st is so important to me. I'm supporting Scott Murphy for Congress, and so is President Obama. Scott's a businessman who helped create over 1,000 jobs. He knows people have to work together to get things done, and he'll work with Democrats and Republicans in Congress to get things done for Upstate New York. That's why Scott supports our economic recovery plan, because it means 76,000 jobs for Upstate and funding for schools, which helps keep property taxes down. We have a lot of work to do, and Scott will help get it done. So I hope you'll vote next Tuesday. And I hope you'll join President Obama and me, Joe Biden, in supporting Scott Murphy. He's a businessman who knows how to create jobs for Upstate New York.

Murphy: I'm Scott Murphy, running for Congress, and I approve this message. Announcer: Paid for by Scott Murphy for Congress

Today President Obama will be hosting an online town hall meeting in the East Room, where he'll answer questions "submitted and voted on by the public" at the White House web site. Vice President Biden leaves today for another foreign trip. He'll be in Chile and Costa Rica, meeting with leaders from South and Central American nations, in addition to Gordon Brown of the UK. His wife Jill Biden is joining him.

In Congress, the Senate Budget Committee continues to work on its budget plan today, following the House committee's approval last night. House Republicans will unveil their alternative budget proposal at a morning press conference.

Treasury Secretary Timothy Geithner is back on the Hill today at a House Financial Services Committee hearing. He is expected to detail his request for expanded authority to regulate the financial system, including hedge funds and large insurance companies such as AIG.

**Budget
*AP: "For now, President Barack Obama's Democratic allies are endorsing his ambitious budget plan, but general agreements on fighting global warming and boosting health care promise to be severely tested later in the year as details are penciled in. The Senate Budget Committee was poised to adopt Obama's budget plan Thursday after approval by a companion House panel on a party-line vote late Wednesday."

*WSJ: "Congressional leaders are sticking broadly to the priorities outlined by Mr. Obama in a budget message sent earlier this month to Capitol Hill. But important differences are emerging, as tensions simmer among Democrats over issues such as climate change and health care, as well as spending."

*Bloomberg: "White House Budget Director Peter Orszag sought to minimize the administration's differences with lawmakers. The House and Senate plans 'may not be identical twins to what the president submitted, but they are certainly brothers that look an awful lot alike,' he told reporters yesterday."

*The GOP is rolling out its alternative plan, Politico reports. The document has chapters with clear divisions between "The President's Budget" and "Republicans' Solution." Rep. Cantor said the party is responding "to the administration -- and the president himself, who continues to say that Republicans don't have any ideas. We're here today to say yes we do," Cantor said.

**Geithner on the Hill
*Geithner "will outline the broad revamping of the regulatory system, which goes further than expected, in a hearing on Thursday. He is expected to say that the new rules are necessary to prevent a repeat of the excesses that nearly wrecked the global financial system and plunged the economy into a recession," reports the NYT.

*WaPo: "The administration also will seek to impose uniform standards on all large financial firms, including banks, an unprecedented step that would place significant limits on the scope and risk of their activities. Most of these initiatives would require legislation."

*CNBC's Jim Cramer backed Geithner's plan on "Morning Joe" today: "Remember Erin, a bunch of hedge funds almost brought down the Western world twice now," Cramer said. "Why does this group not get regulation is the issue. I salute this idea of bringing these guys in. They're just rogue elements in society."

**President Obama
*NY Times notes how Obama "is navigating multiple constituencies within his party. ... The divisions are no greater than those that existed within the Republican Party when it was in power, and at this point they do not threaten Mr. Obama's ability to win the main elements of what he is seeking in his budget. But they bring to life a paradox of political success: As a party expands its ideological and geographic reach, as the Democrats have in the last two elections, it becomes harder to hold together."

*Washington Post looks at Obama's shifting the focus from Wall Street to the budget. "Obama's attempt to channel public anger reflects the White House's belief that he is constrained against engaging in too much Wall Street bashing -- or outright punishment -- by his reliance on the financial sector to fulfill Treasury Secretary Timothy F. Geithner's new plan for rescuing the nation's banks. ... Adding to that constraint is the fact that Obama's campaign received considerable financial support from Wall Street."

*The White House web site has received more than 77,000 questions for the president's online town hall meeting today. AP notes he'll answer those questions from the same room where he held his prime time news conference. "Already, the White House is connecting the old-school press conference with the new-media event. It will be an easy contrast between skeptical reporters and supporter-selected questions. Political operatives say the White House's strategy is a way to reach a demographic key to Obama's election."

*ABC has Obama's quotes from his fundraisers last night, where he defended his budget plan and still criticized the "Hall of Mirrors" atmosphere in Washington. "I know it can be easy, especially in Washington, to get caught up in the day-to-day chatter on cable television, to be distracted by the petty and the trivial, and to fall in the trap of keeping score of who's up and who's down. There will be days where we may be declared winners and there will be days where the umpires say, 'oh, they lost that one.' There will be days where the markets go up and there will be days when the markets go down. But you and I, we measure our economy recovery in different ways."

*The Chicago Tribune reports on WH Chief of Staff Rahm Emanuel's profitable stint at Freddie Mac. "Emanuel's Freddie Mac involvement has been a prominent point on his political résumé, and his healthy payday from the firm has been no secret either. What is less known, however, is how little he apparently did for his money and how he benefited from the kind of cozy ties between Washington and Wall Street that have fueled the nation's current economic mess."

*Obama's "Organizing for America" is buying TV time now to support the budget plan. The 30-second ad script, per CNN: ""America is facing tough times. President Obama has a plan to get our economy moving again, to cut the deficit in half, and create jobs by investing in health care, energy independence and schools. Thousands are going door to door as part of Organizing for America -- gathering support for President Obama's plan to invest in America's future. You can help, too. Call Congress and tell them to support President Obama's budget plan to get our economy moving again."

**Campaign Stuff
*PA Sen: Specter in trouble or not? Two polls released yesterday showed opposite results in a potential 2010 Republican primary -- Specter up 15 to Pat Toomey in a Franklin & Marshall poll, and down 14 in a Quinnipiac poll.

*Michael Steele, back out doing interviews, told CNN he would consider running for president some day. "God has a way of revealing stuff to you, and making it real for you, through others," Steele said. "And if that's part of the plan, it'll be the plan....[If I run] it'll be because that's where God wants me to be at that time."

*Tim Pawlenty got a 2012 question at home yesterday. His answer: "We've got soldiers going off to war. We've got deployments coming up the next two weekends in a row. We've got brave and courageous Minnesotans who are going out and are laying their lives on the line for us. And we need to stay focused on saying than you to them and making sure they have all that they need do their mission. We are in the middle of a flood that could be of a historic nature and we need to make sure we are deal with those issues. We have a historic budget deficit we need to resolve by May. That's enough for this week."

*A new Survey USA poll has David Paterson's approval rating at 24 percent, with 67 percent disapproving.

--Kyle Trygstad and Mike Memoli

The House passed today the Omnibus Lands Bill that the Senate approved last week. The final tally was 285-140, with 38 Republicans voting for the bill and four Democrats voting against it.

Click through to read Speaker Nancy Pelosi's statement following the vote.

Pelosi:

"Today, the House passed a landmark bill to conserve public lands for future generations of Americans. This bipartisan legislation creates more than 2 million new acres of wilderness, and provides the greatest expansion of wilderness areas in 15 years, including more than 700,000 acres in my own state of California.

"The public lands bill protects a thousand miles of rivers -- a 50 percent increase in the wild and scenic river system. It establishes new national trails, national parks, national conservation areas, and a new national monument. It provides the protection of law to the National Landscape Conservation System, which was created administratively in 2000 to manage the 'crown jewels' of the Bureau of Land Management, containing some of the most spectacular landscapes in the West.

"In this challenging time of drought in the West, the lands act also includes numerous water-related provisions that will help manage the drought, improve aging infrastructure, recharge groundwater supplies, and promote the reuse and recycling of water. The bill also contains a historic settlement to restore the San Joaquin River in the Central Valley of California.

"The provisions in this bill were developed in communities across America by local supporters, working together with their elected representatives. As a result, the bill enjoys broad support from wildlife, conservation, hunting and fishing, and outdoor business groups across the country. This is a day of celebration for all who treasure and enjoy our natural and cultural heritage."

Robert Gibbs defended President Obama's plans to attend two fundraisers tonight for the DNC, saying that "we haven't seen politics by either party stop" despite the economic crisis.

"I hope he's not placid and unsmiling," Gibbs joked, adding: "I think you'll see in the remarks he makes tonight ... that he wholly understands the hardships and struggles that the American people are undergoing in their lives each day. I think it's also safe to assume that the president wants to see a strong party system in this country."

Not only is Obama attending fundraisers tonight, but the announced earlier today his endorsement of Scott Murphy in the NY-20 special election. That race has in part been focused on Obama's stimulus plan, and so the White House understandably sees some political gain to be had by winning what is still a GOP-leaning district.

Today, the DNC also mobilized the strength of the Obama campaign e-mail database with an appeal from chairman Tim Kaine asking Democrats to donate to Murphy's campaign.

"This race is important to President Obama and to our party because it again gives us the opportunity to make a big impact on our efforts to bring about a lasting economic recovery," Kaine writes. "To restore our economy and build a foundation for lasting prosperity, the President needs Scott's help. This week, Scott needs yours."

The DNC says the email was sent to 50,000 party activists "in and around" the 20th district. The party has also donated $10,000, split between the New York Democratic Party and the Murphy campaign.

The message of the day seems to be Democratic harmony, displayed just now between Vice President Biden and Speaker Pelosi as they prepared to have lunch at the Capitol. The Democrats both expressed strong confidence that lawmakers will produce a budget that meets the administration's goals, with Pelosi saying the House is "intent to deliver for the president."

"I know at the end of the day, we will have a strong budget supportive of the president's principles," Pelosi said. She also sent a message to Republicans, saying that while she hoped a budget would pass with bipartisan support, "I know the bill will pass."

Biden, saying he was happy to be back "home" in the Congress, said he is confident in the leadership of Pelosi and Senate Majority Leader Harry Reid.

"We're in a position where in order to rebuild this economy, it can't be built on a false bubble," the former senator said. "We have to get down to rebuilding an economy that produces a solid foundation for the better part of the beginning of this century. And that requires us to deal with education, with health care, and it requires us to deal with energy, and also budget discipline built in."

The White House announced today that the Economic Recovery Advisory Board headed by Paul Volcker will work to come up with other revenue streams through the tax code that would pay for Obama's plan, since lawmakers have objected to some of the initial revenue generators like the adjustment in charity deductibility. OMB Director Peter Orszag said the Congressional budget resolutions were "98 percent the same" as the White House's budget. And Biden repeated the view that they are on the same page.

"I feel very confident that we're going to get a budget that is totally consistent with and reflective of all we've asked for," Biden said.

OMB Director Peter Orszag downplayed differences between the White House and Democratic budget writers on the Hill over key planks of Obama's fiscal plan, saying that while some changes have been made, "the vast bulk" of the resolution as it stands is "aligned with the key priorities of the president.

"I think it's very clear that if you look at the budget resolutions that are being adopted by both the House and Senate, they are from the same family as the president's budget," Orszag said on a conference call this morning. "The resolutions may not be identical twins to what the president submitted, but they are certainly brothers that look an awful lot alike."

UPDATE: Press secretary Robert Gibbs was asked about this at today's press briefing, saying there is "no language I know [of], certainly that I've seen or that has been passed around."

He added, though, that President Obama is less concerned with "the phraseology" than he is about the "steps that he's taken and that we need to take as a country to protect our citizens."

EARLIER: The Washington Post reported online yesterday that "speechwriters and other staff were notified" via e-mail that the Obama administration "prefers to avoid using the term 'Long War' or 'Global War on Terror,'" and said that the Office of Management and Budget wanted to use the phrase "Overseas Contingency Operation."

OMB Director Peter Orszag was asked about this during a conference call this morning to discuss the administration's ongoing budget negotiations with Capitol Hill; he denied that there was a coordinated administration directive on the phrase.

"I am not aware of any communication that I've had on that topic," said Orszag, who said he had read the report. OMB spokesperson Kenny Baer then jumped in to say that the memo was written "by a career, mid-level civil servant," and that "there was no official memo or guidance given out by OMB."

The term "war on terror" has been the source of some controversy, and Obama has avoided using it in his public statements. Press secretary Robert Gibbs was asked on January 23 whether the administration would still use that term, and he said only: "I would point you to the words that the President said in his inaugural address about the challenges that we face." A day earlier, Gibbs said he was not aware of any decision to drop the "war" branding.

Obama spoke about terrorism yesterday during his meeting with the Australian Prime Minister, saying that the "threat of terrorist attacks from al Qaeda and their affiliates is not a threat that's going away."

"It's important for us to stay on the offensive and to dismantle these terrorist organizations wherever they are," he said. But later he added that "we will not just solve these problems militarily, but we're also going to have to be much more effective diplomatically; we're going to have to be much more effective on the development front."

President Obama endorsed this morning Scott Murphy, the Democratic candidate in the special election to replace Sen. Kirsten Gillibrand (D) in the House. Murphy is locked in a tight race with Republican Jim Tedisco in the upstate 20th District of New York, with just less than a week to go until the March 31 election.

Obama won the 20th District by 3 points in November, and Gillibrand defeated a Republican challenger by 24 points.

Obama sent an e-mail to supporters announcing his endorsement and asking for last-minute volunteers. "What you do now can make all the difference as we work in the coming weeks and months to lead our country in a new direction," Obama wrote.

Here is the press release provided by the Murphy campaign:

"Scott Murphy is the right candidate for Upstate New York to turn the economy around and create jobs," said President Barack Obama.

"Scott has the right experience, with a record of creating real, high-paying jobs in Upstate New York. Now he's ready to go to Washington to continue that work alongside me and Democrats and Republicans in Congress. He has shown he's willing to take a stand for the people in his district by supporting the American Recovery and Reinvestment Act to get Upstate New York's economy moving again."

"Not only will Scott Murphy be a strong ally in creating jobs and stabilizing the economy, he also shares my commitment to improving health care, bringing our schools into the 21st century, and pushing for openness in government and responsible budgeting."

"Scott Murphy will follow in the footsteps of Kirsten Gillibrand by delivering for Upstate New York, and I look forward to working with him in Congress."

"I could not be more honored and humbled to have the President's support," said local businessman Scott Murphy. "I look forward to working with the President as well as Democrats and Republicans in Washington to implement his recovery package, help create jobs Upstate, and ultimately get our economy back on track."

Good Wednesday morning. The day after his prime time news conference, President Obama has a full schedule that starts with a meeting with NATO's secretary general. He'll later head to Capitol Hill to speak to the Senate Democratic Caucus. Vice President Biden will also be on the Hill, having lunch with Speaker Nancy Pelosi.

Tonight, however, it's a mix of politics and partying: Obama hosts an event commemorating Greek Independence Day, and then heads to not one but two DNC fundraisers. Biden has already done some fundraising for the party and for one candidate in particular; the DNC needs the cash, since the RNC outraised them last quarter.

The House and Senate Budget committees will begin marking up the budget today, with numerous spending cuts expected. The Senate will continue consideration today of the House-passed National Service bill, as the House considers a Senate bill that would create a special inspector general for TARP.

**President Obama
*Some reviews of Obama's prime time presser from the newspapers that didn't get called on. USA Today: "President Obama was walking a careful line." New York Times: In his second prime-time news conference from the White House, it was Barack Obama the lecturer, a familiar character from early in the campaign. Placid and unsmiling, he was the professor in chief, offering familiar arguments in long paragraphs. Washington Post: "President Obama sought to reassure Americans last night that his administration has made progress in reviving the economy and said his $3.6 trillion budget is "inseparable from this recovery." WSJ: "Obama largely focused on defending his domestic economic proposals. He repeatedly took openings to make the case that the government should spend now on renewable-energy development, education and a health-insurance overhaul that would put the economy on a sounder footing once it recovers." LA Times notes that Iraq and Afghanistan did not come up.

*Former RNC flack Alex Conant notes that Obama has already had half as many prime time newsers as Bush and Clinton did in their eight years.

*Under the radar, considering the long road it took: Obama now has a Commerce Secretary, as Gary Locke was confirmed yesterday by unanimous consent.

*With Congress already cutting into his budget plan, the White House will launch a task force to find other tax revenues in the form of "loopholes and subsidies, tougher enforcement against tax avoidance, and tax simplification."

*A Gallup poll shows that 54 percent of voters approve of Obama's handling of the AIG mess, while 39 percent disapprove. Only 28 percent approve of Treasury Sec. Geithner's handling of it, compared to 26 percent who approve of Congress. The poll was conducted March 21-22, 2009.

*Hillary Clinton is polling well, according to CNN, with a 71 percent job approval rating. That's 10 points higher than Condi Rice. "The poll's release comes as Clinton teams up with Mexican officials to kick off several weeks of meetings designed to find ways to fight drug violence on both sides of the U.S.-Mexican border. Tuesday the Obama administration announced a major increase in security funding and agent deployments along the border."

*Speaking of Rice, she was on Leno. "These are difficult questions and difficult issues. My view is, we got to do it our way; we did our best. We did some things well, some things not so well. Now, they get their chance," Rice said. Her defense of the president: "I saw many a cabinet secretary go in and have the president be the best questioner in the room. This was a president who was compassionate; he knew the issues."

*Stay tuned for the online town hall meeting coming up Thursday. The White House web site is soliciting questions, which will then be voted on by visitors.

**Congress and the Budget
*WaPo: "Key Democratic leaders were performing major surgery yesterday on President Obama's first budget plan in an effort to bring skyrocketing annual deficits under control, while preserving the option of enacting some of the president's most significant and costly domestic priorities."

*Politico: "Senate Budget Committee Chairman Kent Conrad outlined a five-year spending plan Tuesday that would narrow the deficit by two-thirds but severely weaken President Barack Obama's ability to achieve the tax cuts and health care reform at the heart of his domestic agenda."

*USA Today: "Key Democrats such as the chairman of the Senate Budget Committee, Kent Conrad of North Dakota, said some of Obama's most ambitious ideas must be jettisoned to reduce the deficit, including extending tax cuts of $400 for most workers and $800 for couples that were approved in the stimulus package. ... Lawmakers also are dropping $250 billion requested for future bank bailouts."

*New York Times: "The Senate Democratic plan also does not set a dollar amount for a health care overhaul fund; Mr. Obama called for $634 billion to be set aside for health care changes over the next decade. But Mr. Conrad said the budget created special reserve funds that would allow legislation on both health care and energy as long as those plans did not add to the deficit."

*'Rough Patch' for Cantor?: "House Minority Whip Eric Cantor (Va.), a politically shrewd up-and-comer in the GOP, has broken with his party on two high-profile issues. And the defections on last week's AIG bonus tax bill and the Obama administration's troubled assets plan have exasperated some members in the GOP conference."

*The Hill says that the air "rushed out of the AIG bonus outrage balloon" as lawmakers all but tabled the tax bill. "While he insists the bonus tax bill remains a priority in the Senate, Senate Majority Leader Harry Reid (D-Nev.) acknowledged it won't come up for weeks."

*Wall Street Journal follows up on Arlen Specter's rejection of the EFCA. "The Pennsylvania senator's move could strengthen the business community's resolve to defeat any legislation that would boost labor's ability to organize workers and win contracts. ... Unions, meanwhile, appeared to be caught flat-footed by the announcement."

*The Senate takes up Chris Hill's nomination to be ambassador of Iraq today. NYT: "Hill is not likely to be tripped up by the committee, since he has been strongly endorsed by its chairman, Senator John F. Kerry, and is viewed as acceptable by the ranking Republican, Senator Richard Lugar. But his confirmation could be delayed in the full Senate if Mr. Brownback or Mr. McCain places a hold on it - something neither has ruled out. Another Republican senator who had expressed opposition, Lindsey Graham of South Carolina, told reporters on Wednesday he would not be a roadblock."

**Campaign Stuff
*NY-20 Special Election: "What's clear is that businessman Scott Murphy, the Democrat, has the momentum over state Assemblyman Jim Tedisco (R), and a loss for Republicans could be potentially disastrous for a party looking for good news," The Fix writes.

*Politico says that while the RNC "is going all out" to elect James Tedisco, the DNC has not played a role in the NY-20 race on behalf of Scott Murphy. And "Obama has yet to officially endorse Democrat Scott Murphy or to cut a TV ad touting the candidate -- despite the fact that the election is less than a week away."

*Josh Kraushaar notes that while Specter has a healthy approval rating, he's getting "crushed" by Pat Toomey in the primary, according to a new Quinnipiac poll. It shows Toomey leading 41 to 27 percent, with 28 percent of Republicans undecided.

*AP: Gov. Bobby Jindal (R-La.) was again in the mode of presidential response last night, speaking at a GOP fundraiser last night as Obama was speaking in prime time. "We are now in the position of being the loyal opposition," Jindal. "The right question to ask is not if we want the president to fail or succeed, but whether we want America to succeed." He joked about his state of the union response, saying: "They're not allowed to show my speech at Gitmo anymore."

*Gov. Arnold Schwarzenegger told the Los Angeles Times: "I'm not running for anything." It came as he defended raising taxes. "I'm more comfortable with it because I'm not running for anything, because I know it's the right thing. Even though I promised the people of California I'm not going to raise taxes, at the same time I said I'm not going to sign a pledge, because what if there's an emergency?" Asked if that meant he won't run for Senate, he confirmed: "When I say I'm not running for anything, that's exactly what I mean ..... until you change the Constitution."

*Clearing up any doubts, Larry Kudlow said on his CNBC show that he's not running against Sen. Chris Dodd.

*A Quinnipiac poll shows that Mayor Mike Bloomberg is under 50 percent in key matchups for his re-election bid. He leads City Comptroller Bill Thompson 49-35 percent, and Rep. Anthony Weiner 46-36 percent. 57 percent of voters disapprove of the decision to extend term limits.

*Jim Bunning alert: He's criticizing Sen. Mitch McConnell for raising money to pay down his own campaign debt while Bunning has his own race now. Bunning, to the Louisville Courier-Journal: "I refrained from doing it for two years, he sent out his, so you know where he stands." He says he'll decide whether to stay in the race in three months.

-- Mike Memoli and Kyle Trygstad

RCP literally had a front row seat for tonight's presidential news conference. We'll have an extended analysis tomorrow, but here are some early thoughts and tidbits from the East Room.

• AP, NBC, ABC, CBS, Univision, Stars & Stripes, CNN, Fox, Politico, ABC Radio, Washington Times, Agence France, and one other outlet got called on for questions, and several did ask follow up questions. But most notably, he did not call on the New York Times, Washington Post, USA Today, or Wall Street Journal - just to name a few major newspapers.
• Biggest moments at first glance: defense of budget amid questions about debt; his talk of his "philosophy of persistence"; tough question about handling of AIG, and why there was a delay before he expressed outrage publicly; and a thoughtful discussion of his moral views on issues like stem cell research.
• President Obama was not quite as forceful on the budget as might have been expected. He did promote it in his opening statement, and he stressed his view that his budget is making critical investments that will set the table for long term growth. But he was put on the defensive at times, specifically when asked about the national debt potentially doubling again as a result of his plan.
• Two notes on style: first, the president did not use a standard teleprompter as he did for the first press conference. Instead, he read from a large TV monitor at the back of the room, instead of having a the two panels at his left and right on the podium.
• Second, the president was noticeably more concise with his answers this time. At the his first presser, some answers were seven or eight minutes long, but this time most seemed to be in the four to five minute range. I believe the longest extended exchange was the one on the morality of stem cell research.
• The only news in the opening statement came from a line that was not included in the excerpts. Without naming the company, he said that the AIG bonus mess was "another symptom of the culture that led us to this point." But he walked a fine line, criticizing specific culprits but saying that we can't "demonize" all investors who are trying to make a profit.
• CNN's Ed Henry had probably the toughest question for the president, asking why it seemed that New York Atty. Gen Andrew Cuomo seemed to be getting more results on the AIG bonus mess than the White House, and furthermore why it took him days to express public outrage. Obama reacted sternly, saying: "It took us a couple of days because I like to know what I'm talking about before I speak."
• Some of the questions from niche or targeted media: defense spending and procurement; homelessness problem; and the rising threat of violence because of the drug trade.
• Also, an interesting question about whether Obama felt his race has played a role in his administration thus far. It spurred his only real joke: that all the feelings of euphoria and history from the inauguration were gone after just one day.
• After press secretary Robert Gibbs had announced "last question," it was clear that Obama took a bit more of a final lap as he answered a question about how a new Israeli government might factor into the peace process. He spoke more generally about how he is "a big believer in persistence," and listed some specific examples of instances in his early administration where some have second guessed his decisions. And notably, after not facing any questions about Geithner's fate or his handling of the job so far, Obama brought him up specifically. He said some questioned whether he'd ever come up with a plan to fix the financial markets weeks ago, but that he did this week.

The White House has sent out excerpts of the president's opening remarks tonight. As expected, he'll lead off with the budget, saying his plan will lead to "broad economic growth" by investing in key priorities. And in a rebuttal to those who argue he's taking on too many challenges at once, Obama will paint his approach as "attack[ing] this crisis on all fronts."

"The budget I submitted to Congress will build our economic recovery on a stronger foundation, so that we do not face another crisis like this ten or twenty years from now," he will say. " We invest in the renewable sources of energy that will lead to new jobs, new businesses, and less dependence on foreign oil. We invest in our schools and our teachers so that our children have the skills they need to compete with any workers in the world. We invest in reform that will bring down the cost of health care for families, businesses, and our government. And in this budget, we have made the tough choices necessary to cut our deficit in half by the end of my first term - even under the most pessimistic estimates."

That hints at what will likely be one area of discussion tonight -- the figures released by the Congressional Budget Office last week painting a much gloomier outlook for the federal deficit than the administration had put forth when it released the budget last month. It's also worth noting that though Obama's budget shows the deficit being cut in half by 2013, it then starts increasing again.

No reference, at least in the excerpts, to the AIG bonus scandal.

Full excerpts after the jump.

[W]e've put in place a comprehensive strategy designed to attack this crisis on all fronts. It's a strategy to create jobs, to help responsible homeowners, to re-start lending, and to grow our economy over the long-term. And we are beginning to see signs of progress.

...

"The budget I submitted to Congress will build our economic recovery on a stronger foundation, so that we do not face another crisis like this ten or twenty years from now. We invest in the renewable sources of energy that will lead to new jobs, new businesses, and less dependence on foreign oil. We invest in our schools and our teachers so that our children have the skills they need to compete with any workers in the world. We invest in reform that will bring down the cost of health care for families, businesses, and our government. And in this budget, we have made the tough choices necessary to cut our deficit in half by the end of my first term - even under the most pessimistic estimates.

"At the end of the day, the best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led to a narrow prosperity and massive debt. It's with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest.

"That's what clean energy jobs and businesses will do. That's what a highly-skilled workforce will do. That's what an efficient health care system that controls costs and entitlements like Medicare and Medicaid will do. That's why this budget is inseparable from this recovery - because it is what lays the foundation for a secure and lasting prosperity.

...

"We will recover from this recession. But it will take time, it will take patience, and it will take an understanding that when we all work together; when each of us looks beyond our own short-term interests to the wider set of obligations we have to each other - that's when we succeed. That's when we prosper. And that's what is needed right now. So let us look toward the future with a renewed sense of common purpose, a renewed determination, and most importantly, a renewed confidence that a better day will come."

Sen. Arlen Specter (R-Pa.) announced from the Senate floor today his opposition to the Employee Free Choice Act. His might have been the 60th and deciding vote for cloture, allowing the labor-backed bill to move forward this year for a potential vote. Instead, his decision could kill it.

"I have made up my mind," Specter said from the Senate floor.

Specter's decision to vote against cloture was first reported today by CongressDaily. Grover Norquist, president of Americans for Tax Reform, also broke the news today during a luncheon at a labor-issues conference.

Specter noted the slim margin on this bill, and compared it to 2007 when he was the lone Republican to favor cloture on similar legislation. Even if Specter joined Democrats again this time, however, the bill was not assured of progressing. A few Democrats, such as Arkansas Sens. Blanche Lincoln and Mark Pryor, that voted in favor of cloture two years ago have not committed to doing so this time.

Up for re-election next year, many viewed Specter's decision to be at least partially based on politics. Democrats have won the state in the last five presidential elections, including President Obama's 11-point victory in November. In 2006, Sen. Bob Casey (D) knocked out incumbent Republican Rick Santorum by more than 17 points.

On the other side, Specter narrowly escaped primary defeat in 2004, holding off Republican challenger Pat Toomey by just 1.6 points. Toomey, a former three-term congressman who now leads the anti-tax Club for Growth, is currently gearing up to challenge Specter once again.

"This announcement should end the rumor mill that I have made some deal for political advantage," Specter said. "I have not traded my vote in the past, and I will not do so now."

Toomey, however, released a statement following Specter's announcement saying just the opposite. "The difference between Specter's vote on the big government stimulus bill and Specter's vote on card check: a threat in the Republican primary," Toomey said.

Specter and other moderate Republicans have been in this position before, including during debate on the economic stimulus bill, which three Republicans -- Specter and Maine Sens. Susan Collins and Olympia Snowe -- supported. Specter noted the pressure that this puts on centrist members.

"In a highly polarized Senate, many decisive votes are left to a small group who are willing to listen, reject ideological dogmatism, disagree with the party line and make an independent judgment," Specter said. "It is an anguishing position, but we play the cards we are dealt."

Hours before his prime-time press conference, President Obama held a "two-and-two" with Australia Prime Minister Kevin Rudd in the Oval Office this afternoon, touching on the financial rescue plan and his plan for Afghanistan.

Obama said he and Rudd spent "the bulk of our time talking about the global financial crisis," and said it was a "great meeting of the minds" before next week's G20 summit. Asked about Treasury Secretary Timothy Geithner's comments on the Hill today, Obama supported his call for Congressional action so that the federal government could get authority to intervene with non-bank financial institutions.

"In the absence of that capacity, you end up with the situation that we've been in," Obama said, referring to situations like AIG posing "systemic risks to the system." "We will work in consultation with members of Congress. That will be just one phase of a broader regulatory framework that we're going to have to put in place to prevent these kinds of crises from happening again."

He also called for cooperation among other nations to "be able to hammer out a better approach than we've been taking recently."

Obama was also asked about specific plans for Afghanistan, with some reports indicating he may roll out details later this week. Obama said the 90-day strategic review was still under way. He did address terrorism more broadly, citing the 9/11 attacks but also the bombing in Bali, which he said Australians remember.

"It's important for us to stay on the offensive and to dismantle these terrorist organizations wherever they are," he said. "It is a difficult task. It's one that requires us to stay focused. It requires effective coordinated action. It requires a recognition that we will not just solve these problems militarily, but we're also going to have to be much more effective diplomatically; we're going to have to be much more effective on the development front. And my expectation would be that over the next several years you are going to see a more comprehensive strategy, a more focused strategy, a more disciplined strategy to achieve our common goals."

One of the highlights of President Obama's conversation with crew members of Space Shuttle Discovery was Commander Fincke's comment on the number of sunrises and sunsets they see each day. Here is the transcript provided by the White House:

THE PRESIDENT: Well, thank you so much for taking the time to speak with us. We've got a crew of wonderful schoolchildren here who are all interested in space, and we've got some members of Congress who are like big kids when it comes to talking to astronauts.

I'm told that you're cruising at about 17,000 miles per hour, so we're glad that you are using the hands-free phone. (Laughter.)

COMMANDER FINCKE: Mr. President, we go around the planet once every 90 minutes. It's quite a thrill, and it is very fast, and we see 16 sunrises and 16 sunsets every day.

Republicans on the House Budget Committee are preparing an alternative to President Obama's budget, while GOP leaders continue to paint the President's plan as an expensive, liberal agenda that will increase the national debt at an incomparable rate.

At a morning press conference, Republican leaders John Boehner (Ohio), Eric Cantor (Va.) and Mike Pence (Ind.) railed against the budget in advance of the President's prime-time news conference tonight.

"Our position is his budget is far outside of the mainstream," said Cantor.

"The president is proposing a gusher of new debt, new taxes and more spending," concurred Rep. Paul Ryan (R-Wisc.), ranking member of the Budget Committee. "The president's budget is so far to the left that it's to the left of the Progressive Caucus budget that came to the floor last year that about 130 Democrats voted against. So we're seeing a strong lurch to the left."

"When you look at the debt numbers in this budget you'll see that over the next six years President Obama will create more debt than his 43 predecessors have in the last 220 years," said Boehner.

"The President's budget is the most fiscally irresponsible budget in the history of the United States," said Pence.

As Senate Minority Leader Mitch McConnell (Ky.) did yesterday, Cantor noted that Obama's planned trip to Capitol Hill tomorrow was a sign that his plan was not favored by centrists in Congress or around the country. "We wouldn't have to see a campaign to try to convince moderate Democrats to support this budget if it was reflective of the mainstream of this country," Cantor said.

Boehner has planned a news conference this afternoon to talk about the President's prime-time event tonight, and Ryan will discuss the President's budget further at another press conference.

Meanwhile, Democrats are touting the priorities of the budget as a way forward in the tough economic climate. House Majority Leader Steny Hoyer (Md.) noted four specific priorities: reducing the deficit by half over the next five years; making a down payment on health care reform; investing in energy independence; and reforming and investing in education.

Senators Patty Murray (D-Wash.), Bernie Sanders (I-Vt.) and Jeff Merkley (D-Ore.) spoke today about the health care, education and energy investments in the budget.

"Investing in education is one of the most certain ways to prepare a skilled and ready workforce and to strengthen our economy well into the future," said Murray, the Democratic Conference Secretary. "Now is not a time to sit back and criticize. Now is a time to be bold and make the critical investments in our country that are so overdue."

Hoyer also said that while Democratic leaders in the House "are all very concerned about the level of the deficit" Congress is facing in the near future, it was Republican policies that put the government in this position.

"I've been very very criticial over the last eight years of the policies that have been pursued by the previous administration which put us deeply into debt," Hoyer said. "We're going to be working on getting that budget deficit down, but it will not be done near-term because of the budget hole we were dealt and left and that was so deep."

President Obama will hold his second prime-time news conference tonight at 8:01 ET, placing himself directly into American households to discuss the nation's economic situation and path forward. He starts his day talking to astronauts at the Space Station during a morning phone call.

Obama will also hold a one-on-one meeting with Australia Prime Minister Paul Rudd as he continues to keep an eye on the coming G-20 Summit. The White House released an op-ed written by the President on the global economy, which is being published in newspapers across the globe today.

Vice President Biden begins his day hosting Secretary of State Hillary Clinton for breakfast at the Naval Observatory, followed by daily briefings at the White House and conference calls with mayors and governors to discuss implementing the economic stimulus.

The House will vote on a number of suspension bills, while the Senate takes up the House-passed National Service bill, a.k.a. the GIVE Act, which encourages volunteering and triples the size of AmeriCorps.

**President Obama
*"The White House received a big boost on Monday as stock markets and the financial community rallied at news of a $1 trillion plan to buy up toxic assets weighing down the nation's banks," The Hill reports.

*WSJ reports that "weeks of searing criticism by politicians and the public had left bankers leery of working with the government. After brainstorming about what to do about that problem, the White House resolved to try to take control of the debate

*Budget Battle: "President Obama will go to Capitol Hill this week to try to persuade skeptical Senate Democrats to support the administration's first budget request after an analysis showed that the spending plan would drive the nation deeply into debt over the next decade," WaPo reports.

*Cutting Through the Corps: Politico's Martin writes on the White House's effort to get their message beyond the Washington press corps, reaching out to local, liberal and ethnic news sources. "In many ways, Obama's effort is simply the latest expression of a familiar phenomenon. It is the perennial hope of presidents -- especially early in their administrations -- that they can escape the filter of an often-skeptical Washington press corps and communicate directly with a target audience," writes Martin.

*An Obama-written op-ed calling for global action on economic challenges appeared in 31 newspapers around the world this morning, from the Middle East to Australia, Southeast Asia and Western Europe, as well as Africa, South America and Pakistan. "My message is clear: The United States is ready to lead, and we call upon our partners to join us with a sense of urgency and common purpose. Much good work has been done, but much more remains.," Obama writes.

*Americans aren't happy with the way AIG management, Congress or Treasury Sec. Tim Geithner have handled the AIG bonus mess, though Obama gets a passing grade, according to a new Gallup poll.

**Prime-Time Press Conference
*Chris Cillizza on what to watch for: "Tone will matter for Obama tonight. He has drawn some criticism for his somewhat jovial manner when discussing the state of the economy during his interview with '60 Minutes' and must avoid coming off as dismissive or not overly concerned about an economy that has Average Americans on edge. And, watch to see how aggressive the reporters in the room are when it comes to AIG, Treasury Secretary Timothy Geithner and the economy writ large. The tone has grown more combative of late in White House press secretary Robert Gibbs's daily briefings. Will it carry over to the questions asked of the chief executive?"

*Perhaps trying to head off some criticism before tonight's press conference, Obama announced some candidates for other top posts at Treasury. "In recent days, in spite of public furor over huge bonuses paid at American International Group Inc., the administration has concluded that it needs the private sector to play a central role in fixing the economy. So over the weekend, the White House worked to tone down its Wall Street bashing and to win support from top bankers for the bailout plan announced Monday, which will rely on public-private investments to soak up toxic assets."

**Congress
*With the comment from Sens. Mitch McConnell (R-Ky.) and Judd Gregg (R-N.H.) yesterday that Obama's budget would be a "tough sell" to centrist Members, The Hill reports that "Senate Republican leaders are trying to drive a wedge between the Obama administration and centrist Democratic senators who could be key to his budget's approval."

*Senate Pausing AIG Bonus Tax Bill: "Jarred by a cool reception from the White House and fears of unintended consequences across the financial world, Senate leaders are likely to delay until late next month legislation to punitively tax bonuses at banks and investment firms that receive federal aid," the Washington Post reports.

*A third of the bonus money is coming back anyway.

*The National Service bill the Senate is considering this week has brought Sen. Ted Kennedy back to Washington.

**Campaign Stuff
*"In the Republican graveyard of the Northeast, the region where the party all but ceased to compete over the past decade, there are signs of GOP life in places that as recently as November seemed to have none," Politico reports.

*The New York Observer reports that RNC chair Michael Steele will come to New York on April 1 to appear with Republican-turned-independent Michael Bloomberg. "Bloomberg is currently courting local G.O.P. officials because he is hoping to be allowed to run in the Republican primary."

*Don't look now - but someone is asking questions about Sarah Palin in Iowa. The Iowa Independent cautions though that it's an automated survey. "Touch-tone phone polls are cheap and not considered very reliable. Whoever commissioned this poll must still be in the very early stages of a campaign. Once the live calls start, the race will have actually begun."

Exxon Valdez: "Today marks the **20th anniversary of one of the worst environmental disasters in history, the Exxon Valdez oil spill. After two decades, the memory of the spill persists for the commercial fishermen and Alaska natives whose livelihoods were destroyed by Exxon's recklessness. Sadly, the oil persists, too: A 2007 National Oceanic and Atmospheric Administration study showed that 26,600 gallons of crude oil from the spill are still lingering below the surface of Alaska's beaches."

**Random Headline: In L.A., even the gangsters got style.

--Kyle Trygstad and Mike Memoli

Senate Majority Leader Harry Reid released the following statement in response to the plan unveiled today by Treasury Secretary Tim Geithner to buy bad bank assets:

"The Treasury Department plan is based on the sound principle that if we are to revive our economy, we must unfreeze the credit markets so people can get the loans they need to keep their small businesses open, buy a car or send their children to college. Like any investment, this plan carries the potential for both risk and reward. But above all, we must act - one risk we will not take is standing on the sidelines and doing nothing while a bad situation gets worse."

Reid has continued to hammer Republicans as 'do-nothing' legislators, as he implied in the last sentence of his statement. At an off-camera briefing with reporters Thursday, Reid took a few shots as well. "Once again Republicans are doing what they've always done in this Congress -- and that is to do nothing," he said. And later he added: "The problem we have here is the Republicans don't want us to get anything done."

Reid noted from the Senate floor today that Republicans blocked his attempt to get the House's AIG bonus tax bill passed quickly last week as unanimous consent legislation and that he's awaiting their cooperation.

"Despite last week's Republican objection to passing the AIG bonus bill, we will continue to work to right this egregious misuse of taxpayer funds," Reid said. "Republicans have asked for more time to study the legislation. With Republican cooperation, we can quickly and responsibly return these funds to the American people."

The DCCC is up with a new TV ad in New York's 20th District, where Democrat Scott Murphy and Republican Jim Tedisco have one week left in the campaign to win Sen. Kirsten Gillibrand's former House seat.

"The file on politician Jim Tedisco's 26 years in Albany isn't pretty," the narrator says in the ad. "He refused to help struggling New Yorkers, voting against middle class property tax relief. But Tedisco did help a wealthy mortgage executive convicted of millions in fraud, asking the judge to go easy on him. And the convicted felon's company became one of Tedisco's top campaign contributors. That's Jim Tedisco, just another Albany politician."

The DCCC and Murphy campaign have used Tedisco's experience in the state Legislature against him throughout the campaign. Tedisco's reluctance to take a stance on the economic stimulus bill has also been a focus of the Murphy campaign, which released its own ad last week after Tedisco said he would have opposed the bill.

The special election will be held next Tuesday, March 31.

UPDATE: The NRCC released a web ad this morning that hits Murphy for stating that he still would vote for the stimulus even with the included loophole that allowed firms like AIG to give large employee bonuses. The NRCC refers to Murphy as a "Wall Street lobbyist," while the DCCC calls him a "local businessman."

Click through to watch the ad.

Good Monday morning, Washington. Today's news is focused on the full rollout of Treasury's plan to address the banking crisis. Treasury Secretary Geithner will discuss the plan shortly with reporters, and later meet with President Obama.

Obama, meanwhile, is kicking off a week focusing on the budget with remarks this morning about how investing in clean energy is a critical component of the plan. Obama is under pressure to make some headway in selling his plan to a Congress and even a public that appears to be growing more skeptical. Not only does he need to rebound after what was considered his toughest week yet as president. But next week he will be traveling to Europe for the G20 Summit.

Congress won't be very busy today on the floor, but lawmakers are gearing up to hold their own hearings on the budget soon. The Senate will also be taking up the AIG bonus tax, a provision that did not get the full support of the White House this weekend.

**President Obama
*Obama told Steve Croft at "60 Minutes" that there have been no conversations about replacing Timothy Geithner. "And if he were to come to me, I'd say, 'Sorry, Buddy. You've still got the job.' But look, he's got a lot of stuff on his plate. And he is doing a terrific job. And I take responsibility for not, I think, having given him as much help as he needs." Obama was also asked if he is "punch drunk." "There's gotta be a little gallows humor to get you through the day," he said. "You know, sometimes my team talks about the fact that if you had said to us a year ago that the least of my problems would be Iraq, which is still a pretty serious problem, I don't think anybody would have believed it."

*Geithner sat down with the Wall Street Journal Sunday to talk about his banking plan, and said the government cannot fix the financial crisis alone. "Our judgment is that the best way to get through this is if we can work with the markets," he said. "We don't want the government to assume all the risk. We want the private sector to work with us."

*The Treasury Secretary also writes an op-ed to explain the Public-Private Investment program, which "will purchase real-estate related loans from banks and securities from the broader markets. Banks will have the ability to sell pools of loans to dedicated funds, and investors will compete to have the ability to participate in those funds and take advantage of the financing provided by the government."

*AP looks at the week ahead: "Obama and his aides plan an aggressive push to deliver a $3.6 trillion budget that contains many of his campaign promises. He plans to speak about the energy portion of his budget at the White House on Monday, highlighting research and development in clean energy." Tuesday he'll hold the prime-time press conference. "The president is back in campaign mode as he stumps for a budget proposal that, so far, has faced opposition from members of both parties."

*Obama supporters fanned out across the country Saturday to sell his budget in an effort organized by "Organizing for America." "Some of the people stopped by the canvassers at a Virginia subway station told CNN it would be easier to build momentum for the new initiative if it were focused on one specific item, such as the effort to reform health care, rather than around the broader agenda."

*As Politico notes, the New York Times was not kind to Obama this weekend. "The sentiment, coming just two months after the president was sworn in, reflects elite opinion in the Washington-New York corridor that Obama is increasingly overwhelmed, and not fully appreciative of the building tsunami of populist outrage."

*Many were disappointed that the president was missing from the Gridiron Dinner, but the VP told some good jokes. In one, he cracked his boss was getting ready for Easter. "He thinks it's about him," Biden said. And of course there was a jab at Sarah Palin, with Gov. Jennifer Graholm saying she "really set back the cause of hot governors."

**Congress
*Budget Cutter: "Armed with new deficit estimates, Senate Budget Committee Chairman Kent Conrad is pressing to cut up to $28 billion, or almost half, of the increased appropriations sought by President Barack Obama for domestic and foreign aid programs in the coming year," Politico reports.

*Bailout Bonuses: "As the White House pulled back from its initial favorable response to the House vote last week, senators have also shown some hesitation about embracing the House's 90-percent income tax on bonuses paid this year," the NYT reports.

*Sen. Judd Gregg (R-N.H.), once a pick for the Cabinet, warned Sunday that Obama's budget could bankrupt the nation.

*Outrage watch: Rep. Pete Stark, the second-ranking Democrat on the Ways and Means Committee, "has been taking advantage of a tax break for a home in Maryland that he claims as his principal residence," Bloomberg reports. "Stark, 77, confirmed in a telephone interview last week that he and his wife, Deborah, are registered to vote in California's 13th congressional district using the address of her parents in San Lorenzo, about 25 miles southeast of San Francisco. Stark also said both he and his wife have California driver's licenses."

**Campaign Stuff
*AP sizes up the NY-20 race on week out. "It's not that the race will decide U.S. House power; Democrats have a comfortable majority. It's not that the district is a bellwether; Republicans outnumber Democrats. It's not that the outcome will gauge the public's exact sentiment; turnout is always very low in special elections. But Democrats and Republicans plan to use the results anyway as a measure of the popularity of Obama's economic efforts. The outcome also will serve as a barometer for the beleaguered GOP and its new national chairman, Michael Steele."

*Sue Davis of the Wall Street Journal makes a very astute point as she looks at Arlen Specter's challenge heading into the re-election year. "Only those registered as Republicans can vote in the primary, and it is a more conservative electorate after 239,000 Republicans and independents switched affiliations last year to vote in the Democratic presidential primary between Hillary Clinton and Mr. Obama. Most of those party-switchers are moderate Republicans like Mr. Specter, the sort of voters who protected him from conservative challengers in the past."

*Rep. Jim Gerlach (R-Pa.) says he's been asked to "consider running" against Specter. "But I told them that I am fully exploring a run for Governor," he told PoliticsPA.com.

*Another Democrat, Atty. Gen. Jack Conway, is considering running for the Senate in Kentucky. "I've been saying all along I owe Kentucky voters my best effort at attorney general ... so I'm going to get through the (legislative) session. And I'll say something in the coming weeks," he told a local TV station.

*The Boston Globe reports that Mitt Romney will endorse Meg Whitman in the Republican primary for California governor. Whitman was a top Romney backer in his presidential bid.

*CA Sen: The Governator "has plunged with gusto into a new round of campaigning up and down the state to push the measures, and has now landed encouragement from some very powerful allies - like the popular Democratic president. With a year until primaries begin for the 2010 elections ... political observers say the latest developments have tripped off a new round in the guessing game of what his next step may be," the SF Chronicle reports.

President Obama is making his third visit to Camp David this weekend. And after the week he's had, never has the presidential retreat been more enticing.

Today was a fitting end to a difficult week for the president, with the Congressional Budget Office releasing much bigger deficit projections than the administration had issued, and continued questions being raised about when and what exactly Treasury Secretary Geithner knew about the AIG bonuses.

Press secretary Robert Gibbs naturally didn't agree with the sentiment that Obama faced possibly his toughest week in office, returning to his standby of being critical of "cable chatter." He bluntly added today: "We've been called idiots before."

"The president isn't focused on the ups and downs and day-to-day scorekeeping, he's focused on looking ahead," he said.

Gibbs downplayed the CBO deficit numbers, likening the idea of the long-term forecasts to filling out an NCAA bracket now for a tournament years down the road. He was more guarded on news that Geithner was asked about the AIG bonuses at a Congressional hearing before March 10, the date the administration had initially given as they day he first learned of the issue. He repeatedly referred reporters to Geithner's interview with CNN yesterday, and to a tick-tock that appeared in today's New York Times.

Obama himself spent today with state and local officials, announcing before the National Conference of State Legislatures an initiative at the federal level to ensure transparency in any lobbying for stimulus dollars. He later met with Govs. Arnold Schwarzenegger and Ed Rendell, and New York Mayor Mike Bloomberg, to discuss infrastructure investments.

After that meeting, Bloomberg did give Obama a rousing endorsement as others are increasingly questioning his leadership.

"He's been in office only a couple of months, and yet he's doing exactly what he should be doing," said Bloomberg, a Republican-turned-independent who is running for his third term this year. "He's tackling all of those tough problems that nobody's been willing or able to find a solution to. ... This is a president that's not ducking responsibility. He was elected to change things, and he's actually trying to do that. And he's doing it in a nonpartisan way just like he promised he would."

Not a bad way to end the week.

Two interesting statements from the first couple of California about President Obama's "Special Olympics" gaffe.

Gov. Arnold Schwarzenegger (R) was asked about it at the White House in the last hour, where he was meeting with the president, Gov. Ed Rendell and Mayor Michael Bloomberg. He cut Obama quite a bit of slack:

"I didn't see it, but I heard about it. ... I know where his heart is at. He loves Special Olympics. He would do everything he can to help special Olympics. And every one of us sometimes makes a mistake, when something comes out of your mouth, you say, 'Oops, I wish I wouldn't have said that.' I have many of those."

First lady Maria Shriver, whose mother, Eunice, founded games, was a bit more critical, even as she gave Obama the benefit of the doubt. According to the San Francisco Chronicle, here's Shriver's statement:

"While I am confident that President Obama never intended to offend anyone, the response that his comments have caused, coupled with the reaction of a primetime audience, demonstrate the need to continue to educate the non-disabled community on the issues that confront those with a developmental disability. My mother has dedicated her life to fighting stereotypes and ridicule for this community, and there is still much work to be done.

"The President's apology for his comments and his commitment to bringing the Special Olympics to the White House are important first steps in shedding light on this important issue. Often times we don't realize that when we laugh at comments like this it hurts millions of people throughout the world. People with special needs are great athletes and productive citizens, and I look forward to working with the President to knock down myths and stereotypes about this community.''

Robert Gibbs did offer a more contrite statement on Obama's comment, saying at today's press briefing:

"I know that the president believes that the Special Olympics are a triumph of the human spirit. And I think he understands that they deserve a lot better than the thoughtless joke that he made last night, and he apologizes for that."

A survey released Wednesday by Public Policy Polling found President Obama leading Sarah Palin by 20 points in a hypothetical 2012 presidential race. Three and a half years before the actual election will take place, the poll served as a reminder of exactly how much things can change in a relatively short amount of time.

It's sometimes hard to remember what conventional wisdom was four years ago, shortly after George W. Bush began his second term in office. Most might remember that, as evidenced by an August 2005 Gallup survey, New York Sen. Hillary Rodham Clinton was the odds-on favorite to win the Democratic nomination. This was just a year after anyone outside of his Illinois State Senate district had ever heard of Barack Obama, whom Gallup didn't even include in the poll.

At that time, however, most Washington insiders felt Clinton had little chance of winning the general election -- as this July 2005 Washington Monthly piece illustrates. She was seen as too liberal, unable to win swing voters and vulnerable to inevitable Republican attack ads. Less than three years later, many saw Clinton as just the opposite, and her supporters were using those same arguments during the Democratic primaries for why Obama could not win.

Democratic insiders today may not fear a potential challenge from Palin, who -- like Clinton four years ago -- could be seen as too polarizing to pick up enough independent voters. While Palin certainly didn't appear ready for a presidential bid last year, who's to say she won't be three years from now? Palin was mayor of a town with less than 10,000 people just three years ago. Now she's being polled against the President of the United States.

In politics, three years is a lifetime.

Good Friday morning.

After a late arrival from the West Coast last night, Obama starts his day a bit later than usual with his daily morning meetings. This afternoon, he'll meet with the National Conference of State Legislatures to discuss the stimulus plan. Later, he'll talk infrastructure with Govs. Arnold Schwarzenegger and Ed Rendell, and New York City Mayor Michael Bloomberg, who are all slated to appear Sunday on "Meet the Press." Obama will later address the National Newspaper Publishers Association, who is awarding him the Newsmaker of the Year award.

The White House had said Obama will head to Camp David this weekend, though it was not on the public schedule for today. If he follows through on that plan, it means snubbing the Gridiron Dinner, which is held this weekend. VP Biden is filling in at the annual affair.

Another Friday, another quiet day on Capitol Hill. Neither the House or Senate are in session today.

**President Obama
*Timothy Geithner sat down with CNN to try and address questions about his handling of the AIG matter. Geithner, on calls for him to resign: "If this was not challenging, it wouldn't be consequential. And I feel this deep sense of personal responsibility and obligation and, really, opportunity to work with this president, this Congress, to try to make this economy stronger, to make sure our financial system never goes through this again. People are going to disagree with some of the choices we make, but we have to act."

*New York Times, on the bonuses: "Interviews with senior Federal Reserve and Treasury officials, as well as members of Congress, leave little doubt that the bonus program was a disaster hiding in plain sight. Mr. Geithner is not the only one who appears not to have understood the populist fury the bonuses would set off."

*Chris Cillizza: "The weekend will be telling as to how the administration -- and the Republican opposition -- plan to move forward on Geithner. Who does the White House put out on shows like 'Meet the Press,' 'This Week with George Stephanopoulos,' 'Face the Nation' and 'State of the Union' to make the case for the administration's economic plan and, by proxy, Geithner? And, do more prominent Republicans jump on the "resign" bandwagon or hold their fire?"

*Politico's VandeHei and Allen on Obama's communication struggles: "The discipline and strategic focus of the campaign have yet to move into the White House. The story of the day often catches the president flat-footed or on the defensive -- and regularly undercut by fellow Democrats. To Obama's dismay, he is learning that successful presidential communications is only in part -- often a fairly small part -- about personal eloquence. It requires harnessing his words to a consistent strategy of public education."

*NY Times says that Obama "held his own" on the "Tonight Show." "For Mr. Obama, the appearance on 'The Tonight Show' is something of a gamble. The president himself acknowledged earlier Thursday at a town-hall-style meeting in Los Angeles that he was getting some flack from critics who said he should be spending his time fixing the economy and not going on late-night television. ... Obama walked a tightrope between projecting good humor and projecting a presidential air."

*AP has more on the Iran video we noted late last night. "The video also was as much an attempt to reach out directly to the Iranian people as it was a gesture toward the country's leadership. While Obama has advocated direct diplomacy with Tehran, he also has said there are multiple elements within Iran with whom the United States could have a dialogue."

*The Hill says that Obama is taking the lead from Reagan on the budget. "Like the Gipper, Obama is using arcane budget rules to push for massive, transformational changes in American life. ... Like Reagan, Obama has pressed for an ambitious budget that seeks seminal shifts in spending, the tax code and the size of deficits. What's more, he's doing this while trying to pull the country out of the worst recession since the one Reagan faced."

*The big news, though, is that Michelle Obama is planting a garden.

**Congress
*The House passed a bill taxing bonuses paid by AIG and similarly bailed-out companies at a 90 percent rate.

*The two top-ranking Republicans -- Leader John Boehner and Whip Eric Cantor -- voted oppositely. "Cantor voted for it, telling POLITICO: 'You take money from the government, this is what happens.' In all, 85 Republicans voted for the bill, including Missouri Rep. Roy Blunt -- Cantor's predecessor as whip -- and Florida Rep. Adam Putnam -- the Republicans" former No. 3 man in the House."

*The Blame Game: "Democrats, rocked by public outrage over bonuses, on Thursday began blaming each other over who was responsible for the mess. The House blamed the Senate; the Senate blamed the Obama administration. President Obama, on travel in California, was relatively quiet on the issue. But Republicans blamed everyone," The Hill reports.

*More Blame Game: "Isn't it unseemly of Republicans to blame this mess on the Obama administration?" Carl Cannon asks. "Isn't it also untoward for Democrats on Capitol Hill to turn on their own president -- and his Treasury Secretary -- so quickly?"

*Sen. Sam Brownback said he's going to do "everything I can" to hold up Chris Hill's nomination as Iraq ambassador, the Wash Times reports.

**Campaign Stuff
*Mitt Romney said on Larry King that Obama "is a president who is learning on the fly. He's never turned anything around before. He hasn't had the experience of leading a nation or a business or a state in trouble. And the first rule I can tell him is focus, focus, focus." Romney also criticized the AIG tax, "You don't have a government take punitive action against a small group of people. Frankly, it's unconstitutional, in my view."

*NY-20: Politico's Kraushaar reports on the ad wars in the special election race between Republican Jim Tedisco and Democrat Scott Murphy.

*CT Sen: Rough story in the NYT for Chris Dodd (D). "Across Connecticut, anger is erupting against Mr. Dodd, the chairman of the Senate Banking Committee, whose stature in Washington once reflected the state's beneficial ties with the financial industry. Now, he finds himself a symbol of the political establishment's coziness with tainted corporations and a target of populist wrath over their excesses."

**Sports Alert: Congrats to VCU on a great season and tough 1-point loss to UCLA last night. And congrats to Eric Maynor for a great career -- Kyle was there for Maynor's first game.

--Kyle Trygstad and Mike Memoli

The White House has posted a video message from the president to those celebrating Nowruz, which is celebrated in Iran as the beginning of a new year.

Buried in the message is this direct appeal, on camera, from the president of the United States to the Iranian government:

"We have serious differences that have grown over time. My administration is now committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the United States, Iran and the international community. This process will not be advanced by threats. We seek instead engagement that is honest and grounded in mutual respect.

"You, too, have a choice. The United States wants the Islamic Republic of Iran to take its rightful place in the community of nations. You have that right -- but it comes with real responsibilities, and that place cannot be reached through terror or arms, but rather through peaceful actions that demonstrate the true greatness of the Iranian people and civilization. And the measure of that greatness is not the capacity to destroy, it is your demonstrated ability to build and create.

"So on the occasion of your New Year, I want you, the people and leaders of Iran, to understand the future that we seek. It's a future with renewed exchanges among our people, and greater opportunities for partnership and commerce. It's a future where the old divisions are overcome, where you and all of your neighbors and the wider world can live in greater security and greater peace.

"I know that this won't be reached easily. There are those who insist that we be defined by our differences. But let us remember the words that were written by the poet Saadi, so many years ago: 'The children of Adam are limbs to each other, having been created of one essence.'"

Video after the jump:

Maybe this is why sitting presidents don't go on late night talk shows.

President Obama, joking with Jay Leno about his bowling scores:

THE PRESIDENT: "I bowled a 129." (Laughter and applause.) LENO: "No, that's very good. Yes. That's very good, Mr. President." THE PRESIDENT: "It's like -- it was like Special Olympics, or something." (Laughter.)

Deputy Press Secretary Bill Burton, speaking to reporters on the flight back to DC:

The President made an offhand remark making fun of his own bowling that was in no way intended to disparage the Special Olympics. He thinks that the Special Olympics are a wonderful program that gives an opportunity to shine to people with disabilities from around the world.

It's worth noting that Vice President Biden had just attended the Special Olympics in Idaho last month.

UPDATE: Having now viewed the segment on air, this seems a bit less controversial than we may have thought. Obama appears not to be likening his performance to one from the Special Olympics, but rather he's playing off of Leno's rather sarcastic, or perhaps overly cheery praise of the measly 129. He's even gesturing to Leno as he makes the comment.

Still, any joking reference to the Special Olympics is probably not PC for anyone, let alone the president of the United States. And the fact that the White House pre-emptively addressed the line confirms as much.

President Obama got a bit of a softball toward the end of his town hall meeting in Los Angeles this afternoon, when a supporter asked what he and others could do to help him. His answer: "Patience."

"I'm serious about this, because look. There was a lot of excitement during the campaign, and we were talking about the importance of bringing about change," he said. "We are moving systematically to bring about change. But change is hard. Change doesn't happen overnight."

He said that change has to be pursued with "responsibility," and said his administration is working methodically to address all its challenges, including the economy.

"I understand how mad everybody is about this AIG bonus business. ... As I said before, I'm mad," he said. "Even though I didn't draw up these AIG contracts, [and] my White House didn't, it's my responsibility to fix the system. ... But the fact of the matter is, we have to work through the huge mess that was made in the financial system. It's going to cost some money. It's not going to be pretty. People are going to be frustrated. And we are going to get it done."

Additionally, he said that he needs supporters to focus on the budget debate as closely as the followed the campaign.

"Because, again, we're going to have some tough choices to make," he said. "I can't print money."

On the energy issue, for instance, he said interest groups for "dirty" energy will likely run ads criticizing his agenda. "And you've got to pay attention and educate your coworkers, and educate your friends and your family."

Obama then made a blunt gurantee. "We are not always going to be right. And I don't want everybody disappointed if we make a mistake here or there." What's more important, he said, is that people see his administration working for them.

"That's one thing I can assure you of, is that four years from now you are going to be able to look back and you're going to say, 'A, the guy worked hard on what he said he was going to work hard during the campaign. And he may not have gotten everything perfect but we are moving in the right direction."

The House passed H.R. 1586 this afternoon, taxing at a 90 percent rate executive bonuses paid by companies that received at least $5 billion in bailouts from the government.

The bill passed on a 328-93 vote, more than the necessary two-thirds majority. Republicans split on the vote, with 85 Members, including Minority Whip Eric Cantor (Va.), voting for it and 87 against it. Just six Democrats voted against the bill.

Congress's move to tax these bonuses stems from the outrage caused by the $165 million in retention bonuses that AIG, which the federal government has given tens of billions of dollars in bail-out funds, recently paid to employees. This bill, if agreed to in the Senate and signed by President Obama, would affect AIG bonuses as well as other companies that have received substantial government dollars, such as Fannie Mae and Freddie Mac.

Prior to the vote, Republicans on the House floor hammered the plan, calling it simply a rewrite and cover-up of history. GOP Members also questioned how a provision in the economic stimulus bill that would have capped bonus payments at $100,000 was stripped from the package during conference committee. It's unknown who stripped the Senate-approved provision written by Sens. Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine).

Sen. Chris Dodd (D-Conn.) also admitted yesterday on CNN that he helped write a loophole in the stimulus bill that allowed any bonuses paid before February 11, 2009, to be exempted.

While Democrats attempted to look forward, Republicans were not inclined to let that happen. Pressed on the House floor by Republicans to answer what happened to the bonus restrictions, Financial Services Chairman Barney Frank (D-Mass.) said he didn't know.

"I was not a member of the conference committee," Frank said. "So the answer is I am not familiar with whatever the reasons were as to why this was left out. I will say this, had there been no language whatsoever, we still would not have had the authority. In other words, what did survive was additional authority. Now, if there had been no bill whatsoever, we would not have come even this close."

Frank went on to say that he had no recollection of GOP members of his committee asking to increase restrictions on executive bonuses, calling their interest in compensation restrictions a "fairly newfound hobby."

During an off-camera briefing with reporters earlier in the afternoon, Senate Majority Leader Harry Reid (D-Nev.) refused to discuss what happened in the conference committee, and he instead criticized Republicans for their attacks on the Democratic plan.

"Once again, Republicans are doing what they've always done in this Congress. And that is to do nothing," Reid said. "I'm always hoping for the sun going up. With Republicans, it's always going down."

Sens. Max Baucus (D-Mont.) and Charles Grassley (R-Iowa), the top ranking Members on the Finance Committee, are working on a similar bonus-tax plan in the Senate. Reid said he hoped the Senate could take up the bill before the chamber's two week-long recess in early April.

AIG continues to be the talk of the town in Washington. But in California, President Obama just spoke about his administration's efforts to boost production of hybrid and electric cars.

Tellingly, Obama joked at one point about the frustrations he is feeling in Washington, as the AIG mess threatens to derail his agenda.

"I know it's not easy," he told workers at an electrical vehicle plant. "There are days, I'm sure, when progress seems fleeting, and days when it feels like you're making no progress at all. That's how it feels in the White House sometimes, too."

The advances being made at plants like this one are key not only to greening the planet, but to spurring a new green economy.

"We have a choice to make," he said. "We can remain one of the world's leading importers of foreign oil, or we can make the investments that will allow us to become the world's leading exporter of renewable energy. We can let climate change continue to go unchecked, or we can help stop it. We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for our lasting prosperity."

Obama announced a $2 billion grant program through the stimulus plan that will encourage automakers and engineers to develop new battery technology and boost production of hybrid vehicles.

His focus on energy today comes as he is facing more direct personal criticism in Washington. In the opening weeks of his term, Republicans had preferred to target the Democratic leaders of Congress rather than attack Obama. But today, House Minority Leader targeted an "out of touch" White House for its unfailing support of Treasury Secretary Tim Geithner.

Obama will speak later at a town hall meeting, when he'll likely be faced with new questions about the AIG controversy in DC.

Facing a re-election campaign in 2010, Sen. Richard Burr's (R-N.C.) approval rating has dropped to 35%, with 32% disapproving and 33% not sure, according to a new PPP survey (March 12-15, 1000 RV, MoE +/- 3.1%).

The polling firm notes that Burr's numbers are worse than former Sen. Elizabeth Dole's (R-N.C.) at this point in her re-election campaign two years ago. Dole went on to lose to Democrat Kay Hagan by 9 points.

These poor numbers come as Democrats search for a candidate to challenge Burr. In this poll, PPP tested Sec. of State Elaine Marshall (D), who finished third in the 2002 Senate Democratic primary. Despite holding statewide office for years, more than 50% of respondents said they had no opinion of her.

Burr (R) 43
Marshall (D) 35
Und 22

House Republicans will introduce today an alternative to the Democrats' plan to tax 90 percent of the bonuses received by employees of bailed-out companies.

The GOP plan would require the Treasury Department to come up with a plan within two weeks to recoup all of the bonus money.

"We don't want 90 percent of it back," Minority Leader John Boehner said at a morning press conference. "We want all the money back."

Republicans plan to point out today several mistakes with the Dem plan, including that it would take a year to get any of the money back -- after the execs file their tax returns next year.

The GOP plan, which will be offered by freshman Members, allows Republicans to vote against the Dem plan with an alibi -- they do think Americans should get their money back but they feel their plan is better.

--Kyle Trygstad

Happy Tournament Thursday. But the new cliche is that March Madness is in Washington as the government continues to deal with the AIG mess.

But President Obama and Vice President Biden will spend most of the day outside of the Beltway. Obama is in California, where he'll start his day with a tour of an electric car plant in Pomona. He'll later hold a town hall meeting in Los Angeles, which will also include Gov. Arnold Schwarzenegger (R-Calif.), Los Angeles Mayor Antonio Villaraigosa, and Secretary of Labor Hilda Solis. He then tapes the "Tonight Show" before returning to DC.

Biden is in St. Cloud, Minn., for a Middle Class Task Force town hall meeting. He'll be joined by Secretary of Education Arne Duncan, Secretary of Housing and Urban Development Shaun Donovan, Secretary of Transportation Ray LaHood, Secretary of Agriculture Tom Vilsack and Sen. Amy Klobuchar (D-Minn.).

The House will vote today on a bill that would tax employee bonuses paid by companies that received at least $5 billion in TARP money. Meanwhile, after confirming Ron Kirk as U.S. Trade Representative yesterday, the Senate will begin consideration of the nomination of Elena Kagan for Solicitor General. Debate and votes on amendments to the omnibus lands bill will likely be followed by a final vote on the package.

**AIG Fallout
*AIG CEO Edward Liddy testified in front of a House Financial Services subcommittee yesterday "that he had just asked a few hundred employees of the beleaguered insurance company to give back at least half of the extra pay," Washington Post reports.

*The Post's Dana Milbank also chronicled the highlights.

*WSJ reports that some employees of the "disgraced Financial Products group have agreed to return hefty retention bonuses under mounting public outrage over $165 million in payouts to a unit that brought the insurer to its knees."

*Click to read the text of H.R. 1586: "To impose an additional tax on bonuses received from certain TARP recipients." Not all Republicans are on board for the 90% bonus tax that House Democrats will introduce this morning.

*"In order to prevent Republican amendments, the bill will be brought up under rules that require a two-thirds vote for it to pass," The Hill reports. "As Democrats prepared legislation, Republicans sensed an opportunity to tie Obama to the scandal, and began calls for Treasury Secretary Timothy Geithner's resignation."

**AIG Fallout II
*Chris Dodd clarified his statements yesterday about the bonuses provision, seemingly pointing the finger at the Obama administration. Politico has his statement: "I'm the one who has led the fight against excessive executive compensation, often over the objections of many. I did not want to make any changes to my original Senate-passed amendment but I did so at the request of Administration officials, who gave us no indication that this was in any way related to AIG. Let me be clear - I was completely unaware of these AIG bonuses until I learned of them last week."

*Now, "The White House is acknowledging that concerns raised by the Treasury Department earlier this year led to legislative language exempting existing AIG bonus contracts from new limits on executive compensation." But a White House official said that the administration was not "in a position to insist on any changes to the bill," and that Congress "held the cards."

*Time reports that Treasury officials were informed of the bonuses on Feb. 28, earlier than the administration has acknowledged. "The Treasury Department official says the fault appears to lie with career staffers at the department who failed to report the imminent bonus deadline up the chain to Geithner. This failure may be a by-product of the difficulty Geithner has had staffing up at Treasury."

*The New York Times calls this a "defining moment" for Geithner. "Fair or not, questions about why Mr. Geithner did not know sooner about the A.I.G. bonuses and act to stop them threaten to overwhelm his achievements and undermine Mr. Obama's overall economic agenda. ... The controversy comes as Mr. Geithner is about to announce details of the restructured bank rescue program, and it clouds prospects for more rescue funds that the administration is all but certain to need."

**President Obama
*New York Times on Obama's California town hall last night: "Striking a populist tone that found favor with the crowd of about 1,300 people, Mr. Obama called for bipartisanship to get the budget passed even as he mocked skeptics back in Washington who he said were accusing him of trying to do too much." He again took responsibility for AIG: "Washington is all in a tizzy over who's at fault," Mr. Obama said. "Some say it's the Democrats' fault, the Republicans' fault. Listen, I'll take responsibility. I'm the president."

*Chris Cillizza talks to political consultants about whether appearing on "Leno" is a smart move. Most said it was, saying Obama will face mostly predictable questions before an audience that leans GOP and indie. But Curt Anderson, a GOP media consultant, described the appearance as "an over-reach that cheapens both the presidency and his image."

*Washington Times reports that just days before his inauguration, Obama signed a $500,000 book deal. "Analysts say there don't appear to be any rules that would bar such transactions after a president takes office, but it's unclear whether an incoming or sitting president has ever signed a book deal upon entering the White House." The deal is for an abridged version of "Dreams From My Father." Ken Gross, former associate general counsel at the Federal Election Commission (FEC) and a campaign finance expert, said there doesn't appear to be any rules that would prevent Mr. Obama from signing book deals while in the White House.

*Former Pres. Bush is writing a book, too, tentatively called "Decision Points."

*AG Eric Holder said yesterday that "the Justice Department has no plans to prosecute pot dispensaries that are operating legally under state laws in California and a dozen other states -- a development that medical marijuana advocates and civil libertarians hailed as a sweeping change in federal drug policy," the L.A. Times reports.

**Campaign Stuff
*The Courant talks to Dodd about the political fallout. "I've been getting whacked around the head for the last eight or nine months -- part of it my own fault for not stepping up earlier," he said. The political and economic environment "doesn't help," he adds, but he shot down speculation that he'd retire. "I'm running. I haven't announced anything yet. ... I want to win. What I want more than winning is to do what I'm supposed to be doing."

*Josh Kraushaar reports that AIG is now an issue in NY 20. The NRCC argues that support for the stimulus is support for AIG bonuses. "Did Scott Murphy ever actually read the bill or did he knowingly support a bill that would hand out millions in taxpayer-funded bonuses to Wall Street executives?" the NRCC asks in the release.

*It seems official, we'll have our second special election in California. Rep. Ellen Tauscher (D-CA 10) confirmed she has been asked to join the State Department, which has "set off an immediate scramble for that rarest of commodities: an open House seat in the Bay Area." San Francisco Chronicle adds: "For Tauscher, the decision has its own political implications. The centrist Democrat already had a powerful platform in Congress as chair of the business-friendly New Democrat Coalition, and she was seen as a possible candidate for the Senate in the mold of California's Sen. Dianne Feinstein."

*OH Sen: A Quinnipiac poll released yesterday showed the race to replace Sen. George Voinovich (R-Ohio) wide open.

*A spokesperson for Gov. Sarah Palin's SarahPAC says that she still has not confirmed her attendance at a GOP fundraiser in DC, and actually "never saw the invitation," the Anchorage Daily News reports. Meg Stapleton: "Someone helping me out on the East Coast ... in the enthusiasm of Sarah Palin and the enthusiasm of providing some sort of response confirmed that the governor was coming, and that wasn't appropriate because the governor didn't even know of the invitation."

*Palin, meanwhile, is defending herself after an article in Portfolio roundly criticized her handling of the gas pipeline. She called a headline "idiotic" for suggesting that the stalled process is her fault. Yesterday she also "surprised state legislators ... by indicating she is willing to negotiate how much the state taxes natural gas in order to attract oil companies to a pipeline project."

--Mike Memoli and Kyle Trygstad

Democrats will introduce a bill on the House floor tomorrow morning that would apply a 90 percent income tax to bonuses given to employees of companies that have received at least $5 billion in TARP money. This would apply to bonuses paid by AIG, as well as Fannie Mae and Freddie Mac.

"We passed a recovery act. We did not pass a license to steal," said Rep. Steve Israel (D-N.Y.), one of the architects of the bill. "If you won't give the bonuses back, we will tax them back."

House Majority Leader Steny Hoyer, who sets the House floor agenda, said at an afternoon press conference that the bill would be voted on tomorrow and that he expects it to pass "in an overwhelmingly bipartisan fashion."

Hoyer was particularly "outraged" that AIG employees would accept such large bonuses and that the House would be forced to act, especially on the same day the House passed the GIVE Act. That bill will, among other things, increase the number of AmeriCorps volunteers and promote volunteering through college incentives.

"Give it back," Hoyer said. "Give it back to the company and to the people that kept your company alive after your failure to act responsibly. Act responsibly now."

According to a release handed out at the press conference, the bill will apply only to bonus payments received since the beginning of the year and to individuals whose annual income exceeds $250,000.

"This money doesn't belong to AIG," Israel said. "It belongs to the American taxpayer, and we're going to take it back."

House Minority Leader John Boehner released a video this morning detailing the outline for Republicans' alternative budget, as the party continues to campaign against President Obama's.

One aspect of Obama's budget that Republicans have targeted is the cap-and-trade proposal, which would require companies to buy credits for the amount of pollution they release into the air. The aim is to lower carbon emissions while also raising $646 billion by the end of the next decade.

A Wall Street Journal article, which Boehner's office distributed in a press release, reports that the revenue garnered from the plan could be up to three times as high as that figure.

Republicans call it an "energy tax hike" and emphasize the fact that it would increase utility prices for Americans, though the White House included a tax credit to make up the difference.

"The President says there isn't anyone that makes under $250,000 that's going to pay one dime of new taxes," Boehner said in a radio interview this morning. "It's just not true. They've got this energy tax in there that they call cap-and-trade. I call it cap-and-tax. If you drive a car, you're going to pay it. If you buy goods that are produced in the United States, you're going to pay it. And if you have the audacity to flip on a light switch, you're going to pay it."

During an off-camera briefing with reporters this morning, Rep. Peter Roskam (R-Ill.) called the cap-and-trade proposal an "old fashioned hustle."

"I found it breathtaking actually...at a time when people are really struggling, that this administration was contemplating an initiative that without question is going to raise energy costs," Roskam said. "And I would suggest to you that that's just an old fashioned hustle. The guarantee of higher energy costs with the elusive promise of something in the future."

As the president travels to his state, Gov. Arnold Schwarzenegger (R-Calif.) laid out the welcome mat by touting the impact that the stimulus plan is having in California.

Schwarzenegger held an event in Merced to tout one of the 57 infrastructure projects that he said will create 11,000 jobs in the Golden State.

"President Obama was absolutely right to invest federal economic stimulus funding in our nation's ailing infrastructure -- and I made sure California was prepared to jump on this opportunity because we know first-hand it's an effective way to provide a shot to the arm for our economy and put thousands of Californians back to work," Schwarzenegger said in a statement from his office.

Schwarzenegger, who mocked Obama during the campaign, was one of two high-profile Republicans supporting him in the stimulus effort. The president had already traveled to Florida to appear with Charlie Crist (R) while the plan was before Congress. Schwarzenegger, who is term limited, is expected to join Obama at one of his town hall meetings.

Before taking off on a cross country flight, President Obama talked with reporters for 15 minutes about the AIG mess, renewing his call that Wall Street act more responsibly while defending his administration's role.

Obama also stood by his embattled Treasury Secretary, saying that Timothy Geithner has inherited a more complicated set of challenges than anyone in the job since Alexander Hamilton.

"I have complete confidence in Tim Geithner and my entire economic team," Obama said. "Nobody is working harder than this guy. He is making all the right moves in terms of playing a bad hand."

Obama said that as president, he accepts responsibility for the current controversy over AIG bonuses, but also said he didn't want to engage in talk of who knew what when, and what they did about it. And even as he said he accepted responsibility, he said that nobody in his administration drafted the contracts.

"Nobody here was responsible for supervising AIG and allowing themselves to put the economy at risk by some of the outrageous behavior that they were engaged in," he added. "We are responsible, though. The buck stops with me. And my goal is to make sure that we never put ourselves in this kind of position again."

Obama ignored a question about reports that he received campaign contributions from AIG. He did address the growing public anger over the bonuses, and said he did not want to "quell" that anger, but "channel our anger in a constructive way."

"The most important thing we can do right now is stabilize the financial system, get flowing -- credit flowing again to businesses and consumers, and make sure that we change how these businesses operate so that they don't put us in a situation in which, when things go bad, the taxpayers have to foot the bill, and when things go good, folks are getting not just $6-million bonuses, but $30- or $40-million bonuses."

He also took a shot at some of the lawmakers who have reacted strongly to the situation and criticized his handling of the controversy.

"There are a whole bunch of folks now who are feigning outrage about these bonuses that a year ago, or two years ago, or three years ago, said, well, we should never meddle in these compensation plans; these are the best and the brightest; they know what they're doing; that's part of the market -- and now, suddenly they're outraged," he said. "The point that I've been trying to make consistently has been that we believe in the free market, we believe in capitalism, we believe in people getting rich, but we believe in people getting rich based on performance and what they add in terms of value and the products and services that they create."

This was a rare Q-and-A session with Obama, and came just before a Capitol Hill hearing on AIG was set to begin. By addressing the situation personally, the president hoped to begin to shift the focus back to his budget plan, which he will be selling to "voters" as he called them during his California trip.

Good Wednesday morning, on what should be a beautiful day in Washington.

President Obama will meet with the Congressional Hispanic Caucus in the White House this morning before taking off for Southern California, where he'll hold a town hall event with local residents in Costa Mesa.

Congress will get its chance to grill the head of AIG today, as CEO Edward Liddy testifies before a House Financial Services subcommittee and answers questions regarding the $165 million in retention bonuses handed out to AIG employees.

The Senate will consider Ron Kirk's nomination for the post of U.S. Trade Representative and is expected to vote at around noon. It will also continue consideration of the omnibus lands bill.

Here are the headlines we're reading today:

**President Obama
*"White House officials are looking to use an executive-pay provision inserted into the recently passed stimulus law" to recoup the $165 million in bonuses that AIG handed out, WSJ reports.

*White House chief of staff Rahm Emanuel "categorically dismissed to The Associated Press any suggestion that Geithner is in trouble."

*Bloomberg says the AIG mess "gives administration critics a new weapon to thwart Obama's agenda, from his budget to plans for financial-market regulation."

*AP reports that the health care reform effort could cost $1.5 trillion over the next decade -- more than double the $634 billion "down payment" he set aside in the budget. "It's impossible to put a price tag on the plan before even the basics have been finalized," said White House spokesman Reid Cherlin.

*Washington Times reports on what could be a snag in Gary Locke's confirmation as Commerce Secretary. The former Washington Gov. "has performed legal work for companies doing business with Beijing and was forced to refund several political donations that he received in the 1990s from key figures in a Chinese influence-buying investigation."

*And in other appointee news, chief information officer-designate Vivek Kundra, already under scrutiny after an FBI raid at his current office, apparently had an unrelated arrest for theft 13 years ago.

*A crowd of 1,000 came just to try to get tickets for Obama's rally in Orange County today, the LA Times reports.

*Washington Post looks at the "sisterhood" in the Obama administration. "The 'Obama women' -- as African American women who've taken big jobs in his administration have been nicknamed -- mark another step in the long journey of black women from outsiders to gatekeepers in political Washington. They have quietly entered their jobs with little attention paid to the fact that they are the largest contingent of high-ranking black women to work for a president."

*Civil Rights Laws: "Obama's success has emerged as a central argument from conservatives who say his victory proves that some of the nation's most protective civil rights laws can be erased from the books," the L.A. Times reports.

*Rahm, an inspiration: The NYT reports that a Rahm Emanuel quote is highlighted on a Manhattan church's sidewalk message board. "Never waste a crisis. It can be turned to joyful transformation," the sign reads.

*On ESPN, Obama announced that he has chosen Louisville, North Carolina, Memphis and Pittsburgh in his Final Four bracket.

**Congress
*Budget: "Senior members of the Obama administration are pressing lawmakers to use a shortcut to drive the president's signature initiatives on health care and energy through Congress without Republican votes," Washington Post reports.

*Dem Budget Skepticism: "There is rising doubt among Democrats -- particularly moderates already concerned about the big costs and deficits called for in Obama's budget -- that either Obama or Washington have enough bandwidth this year to stimulate the economy, overhaul the failed financial sector and move on to a far-reaching domestic agenda," Politico reports.

*AIG: Chairman and CEO Edward Liddy "will take the hot seat today in a hearing before a House Financial Services subcommittee," which will "examine how AIG arrived at its "terrible situation" and why it is receiving so much taxpayer money," ABC News reports.

*Liddy testifies one day after "lawmakers and administration officials sought ways to recoup the money either by imposing stiff new taxes on the extra pay or requiring the company to return it in exchange for future taxpayer aid," USA Today reports.

*The New York Times looks at some earmarks in the recently-signed omnibus bill, including one from Mary Landrieu (D-La.) "for a community center in New Orleans to be built by a nonprofit group" that her brother helped found, "allocated even though the project is defunct." This and others "are just a tiny fraction of the billions of dollars in earmarks in the bill, but they help illustrate why critics continue to demand more restraints and how new rules announced by Democrats on Capitol Hill and embraced by Mr. Obama might serve to block some initiatives but not others."

**Campaign Stuff
*NY-20: "The stakes are especially high for new Republican National Committee Chairman Michael Steele and the GOP, since a win would provide the embattled chairman with some much-needed breathing room, and a loss would enable Democrats to frame the race as a validation of President Barack Obama's stimulus package," Politico reports.

*PA Sen: The Hill reports that Sen. Arlen Specter (R-Pa.) won't run as a Democrat in 2010, but he hasn't ruled out an independent bid.

**Bush Alert
Former Pres. George W. Bush, in his first public speech in Canada yesterday: "I'm not going to spend my time criticizing him. There are plenty of critics in the arena. He deserves my silence. ... I love my country a lot more than I love politics. I think it is essential that he be helped in office."

--Kyle Trygstad and Mike Memoli

Speaker Nancy Pelosi announced this afternoon new legislative proposals that would enable the federal government to recover taxpayer dollars misappropriated by companies such as AIG, the financially-troubled firm that gave its executives tens of millions of dollars in bonuses.

"We have repeatedly called on executives at corporations that have taken our financial system to the brink of collapse with irresponsible business practices to return their bonuses and other financial rewards," Pelosi said. "Most appallingly, while millions of Americans struggle through this economy, those who have received the largest measure of taxpayer assistance from the Treasury Department have shown no restraint."

According to a press release from the Speaker's office, Congress is considering "authorizing the U.S. Attorney General to recover prior and future excessive compensation payments made by companies, such as AIG, that received federal financial assistance; prohibiting abuse of retention bonuses by companies receiving capital infusions from Treasury; and recouping a substantial portion of the bonuses through special taxation legislation."

"Congress has already passed legislation signed into law by President Obama last month that protects taxpayers from excessive executive compensation and we will continue to pursue all effective means to curb such abuses of the public trust," Pelosi said.

Senate Democrats also sent a letter today to Edward Liddy, the chairman and CEO of American International Group (AIG), warning of a potential steep tax Congress could enact if the executives do not return their bonuses.

"We insist that you immediately renegotiate these contracts in order to recoup these payments and make the American taxpayer whole," 44 Democratic senators wrote. "We stand ready to take the difficult, but necessary step of working to enact legislation that would allow the government to recoup these bonus payments, perhaps by imposing a steep tax - as high as 91 percent - that will have the effect of recovering nearly all of the bonuses that have been paid out since AIG turned to taxpayers for help."

NRCC Chairman Pete Sessions (R-Texas) held a conference call with bloggers today to discuss the special election race in New York's 20th District, where Republican Jim Tedisco and Democrat Scott Murphy are engaged in a spirited campaign.

With both national parties spending money, I asked Sessions about the importance the GOP places in this race; whether they're looking to build momentum from a win here.

"Both parties would be intensely interested in making sure they win this race," Sessions said. "It is important for us any time there is a close race to be the winner."

"We are certainly not sitting around touting that this is over with. And the Republican Party has put its best wishes and its money and its support behind Jim Tedisco. We think he is a good conservative leader, he is well known within the district, and he very clearly, deliberately wanted to learn more about, for instance, about the bills including the stimulus package and how would he have voted. He took time, and then made the decision that he would have voted no."

The special election is slated for March 31, two weeks from today.

The luck of the Irish was not with Robert Gibbs today. He faced more than a dozen questions today about the administration's handling of the AIG mess. One reporter gave him an "F" on an answer before he could even finish. It got so bad he even claimed reporters could be accused of torturing him.

"I would posit that the CIA should look at the process which I'm undergoing," he said.

Much of the difficulty came because the White House press secretary avoided direct answers to many questions by saying he wasn't a contract lawyer, and that he did not have an exact timeline yet of when key members of the administration learned of the executive bonuses and how they reacted. But when told about questions from some Republicans about the sincerity of President Obama's outrage over the situation, Gibbs put up a vigorous defense.

"Barack Obama came in and there was a new sheriff in town on executive compensation," Gibbs argued, referring to some of his very first executive orders. "I think it would bear some going back to any of the critics of the president's genuine outrage and ask them what they did or didn't do to change the way executives are compensated before Barack Obama got to town as president of the United States."

While Democrats made various proposals today regarding the bonuses received by AIG executives -- from pushing the execs to give the money back, to taxing the bonuses at an incredibly high rate -- House Republicans have used the opportunity to hit the administration for its lack of oversight.

"Two weeks ago, the President's spokesman said that they were confident that they knew how every dime was being spent at AIG," Majority Leader John Boehner said this morning at press conference. "Well clearly, they didn't know what they were talking about. I think this is outrageous, and I think the American people are rightly outraged that their tax money is going to pay bonuses to the very people who got this company in trouble."

"One of our biggest concerns with the bailout, the stimulus, and government intervention in the private market was the stunning lack of accountability for taxpayer dollars," Whip Eric Cantor said today in a press release. "To date the Administration still has not put forth a plan to show taxpayers how the government will be accountable for how their dollars are spent."

Speaking from the House floor today, Conference Chairman Mike Pence compared favorably reactions to the President's budget to the outrage over AIG.

"Now, much in the media today is focused on the frustration over a large business -- specifically A.I.G. ... But I also heard an enormous amount of outrage in my district yesterday about this Administration's budget," Pence said. "And as I explained the metes and bounds of this budget today, the outrage about A.I.G.'s bonuses, the outrage about bailouts had suddenly met its match."

House Majority Leader Steny Hoyer told reporters today that the House will indeed vote on giving the District of Columbia a full-voting member in the House of Representatives. When exactly a vote will take place is still unknown.

Doubt had arisen when Democrats pulled the bill from the floor two weeks ago. After the Senate passed its version Feb. 26, Hoyer indicated that the House would take up the bill the following week. However, the gun amendment added on to the Senate bill and the likelihood of one being added to the House version halted the progression of the bill's passage.

"We're having discussions, and I think we're making some progress," said Hoyer. "This is the time for this bill."

Hoyer indicated that the possibility of passing the bill with the gun amendment attached -- a take-what-we-can-get approach -- had been discussed with D.C. voting rights advocates, including Delegate Eleanor Holmes Norton (D-D.C.) and D.C. officials. However, Hoyer said Norton's opinion would be weighed heavily in the final decision and that some version of the bill would be voted on in the House.

"My preference would be a clean bill that didn't deal with any other state and didn't deal with any extraneous issues," Hoyer said.

Before events to celebrate St. Patrick's Day, President Obama began his public schedule with remarks on his budget plan this morning. Appearing with the chairmen of the House and Senate Banking Committees -- Democrats John Spratt and Kent Conrad, respectively -- Obama renewed his call on Republicans to do more than "just say no."

That "is the right advice to give your teenagers about drugs," he said. "It is not an acceptable response to whatever economic policy is proposed by the other party. The American people sent us here to get things done. And in this moment of enormous challenge, they are watching and waiting for us to lead."

Obama returned focus to the budget after recent events on small businesses and the stimulus package. He again defended the scope of the plan, by saying "that the challenges we face are too large to ignore," and that just as Americans are facing multiple challenges at once, so should their government.

"To kick these problems down the road for another four years or another eight years would be to continue the same irresponsibility that led us to this point," he said.

That's a message he'll take on the road tomorrow in a trip to California. But before that, he will spend the rest of his day marking the St. Patrick's Day holiday, as he did with the annual Shamrock Ceremony with the Irish prime minister, or Taoiseach. He used the event to announce Pittsburgh Steelers owner Dan Rooney as his next ambassador to Ireland. Rooney, in addition to owning the reigning Super Bowl Champions, was an early supporter of Obama.

"The bond between our countries could not be stronger," Obama said. " As somebody who comes from Chicago, I know a little bit about Ireland, and the warmth, the good humor, and the fierce passion and intelligence of the Irish people is something that has informed our own culture, as well. And so that's why this day and this celebration is so important."

He even joked that he and Taoiseach Brian Cowen may be related, with Obama's great-great-great grandfather hailing from County Offaly, which Cowen represents.

"I have checked, and unfortunately, there are no Kearneys on the electoral register anymore in my electoral district," Cowen later said. "But if there were, I assure you, I'd have them on my campaign team."

Top o' the morning to ya. On this St. Patrick's Day in Washington, President Obama will continue the custom of welcoming leaders from Ireland to the White House. The Irish prime minister -- or "Taoiseach" -- will present shamrocks, but also talk issues. But first, Obama will meet this morning with the chairmen of the House and Senate budget committees. Tonight, the White House will host a social event in honor of the holiday.

On Capitol Hill, the Senate continues consideration of the motion to proceed to H.R. 146, the new vehicle for the omnibus lands bill. The House will vote on a series of suspension bills, and Energy Sec. Stephen Chu will testify before the Science and Technology Committee. Speaker Nancy Pelosi will also host the traditional St. Patrick's Day Lunch, which Obama will attend.

And bringing a taste of Chicago to DC, the fountain on the South Lawn has been dyed green. It's not the Chicago River, but it'll do.

**President Obama
*Gallup finds that Obama's mid-March approval rating (61%) is higher than Clinton's (53%) or Bush43's (58%) at this point in their first terms.

*AP on the AIG fallout: "The White House says it's trying to put strict limits on the next $30 billion installment in taxpayers' money for American International Group amid questions about whether the Obama administration responded fiercely enough to revelations of executive bonus payments." Sen. Richard Shelby, ranking member of the Banking Committee, said Treasury Sec. Timothy Geithner "either knew or should have known what was going on. We need to know, what are the details of this? When were the bonuses signed up? Who's getting it?"

*Here's the first Obama judicial nomination. NY Times: "President Obama is expected to name his first candidate to an appeals court seat this week, officials said, choosing David F. Hamilton, a highly regarded federal trial court judge from Indiana, for the appeals court in Chicago. ... The administration official said part of the reason for making the Hamilton nomination the administration's first public entry into the often contentious field of judicial selection was to serve 'as a kind of signal' about the kind of nominees Mr. Obama will select. The official spoke on the condition of anonymity because the nomination had not been officially made. The White House is planning to announce a handful of other candidates over the next few weeks to fill some of the 17 vacancies on the appeals courts."

*Yesterday we noted Joe Biden's early start on the political circuit. Today Politico reports that George W. Bush didn't head for a fundraiser until late April '01, and Bill Clinton waited until May '93. "That Obama and Biden are revving up the Democratic fundraising machine so soon, and in the midst of grave economic challenges, is not going unnoticed among Republicans, who are already pouncing on the administration's top two members for hitting the campaign trail barely eight weeks after Inauguration Day."

*Bloomberg reports that U.S. corporations are pushing back against some of the administration's budget plans that are "not aimed squarely at reviving the economy. They say Obama is trying to do too much, taking the focus off fixing credit markets and proposing ideas that may hurt rather than help."

*At a fundraiser for the DNC last night, Joe Biden said that Obama's job is harder than FDR's. "Let me explain what I mean by that," he added. "It was clear the problem Roosevelt inherited. This is a more complicated economic [problem]. We've never, ever been here before - here or in the world. Never, ever been here before."

*How ready is shovel ready? WSJ: "States are quickly assembling their construction wish lists. But it takes time to advertise for contractors, collect bids, check the numbers, pick a winner and get work underway. A typical paving project -- easy roadwork -- takes close to three months from the time the money is approved to the arrival of work boots on the ground, according to the American Association of State Highway & Transportation Officials."

*The LA Times previews Obama's impending visit, including what is said to be the first appearance by a sitting president on a late night talk show. "President Bush did a taped cameo appearance last year on the game show 'Deal or No Deal,' to support a contestant who had served in Iraq. But he did not discuss any issues."

*According to Megan Smolenyak, chief family historian at Ancestry.com, both Obama's and Biden's Irish relatives were shoemakers by trade, and arrived in the United States within six months of one another in the mid-19th century.

**Congress
*Here is the showstopper of a quote from Sen. Chuck Grassley about AIG, if you haven't seen it. "I suggest, you know, obviously, maybe they ought to be removed. But I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide."

*An Earmark That Bugs People: The $1 million earmark secured by Utah's "junior senator to kill the insects is hardly wasteful pork" to the 80 some people living with crickets that "devoured crops, frightened children and threatened families' livelihoods in the tranquil high desert," WaPo reports.

*Obama's earmark proposal would not have stopped the 'Bridge to Nowhere,' The Hill reports.

*Democrats on AIG: "Tim Geithner is moving against AIG pretty quickly, but 79 House Dems, led by second term Rep. Joe Courtney, D-Ct.) are telling him (and the folks back home) they hate AIG just as much as he does," Politico reports.

*The Employee Free Choice Act, or "Card Check," is favored by 53% of Americans, with 39% opposing it, Gallup finds.

**Campaign Stuff
*OH Gov: Incumbent Ted Strickland (D) leads two potential GOP challengers by double digits, but his approval rating is dropping as voters now disapprove of his handling of the economy.

*In New Jersey, Republican Chris Christie is making an issue of Gov. Jon Corzine's (D) proposed budget. From the Newark Star-Ledger: "We will not have tax increases like this in a Christie administration," Christie said on a conference call with reporters. "You don't raise taxes during a recession. The way to fix the budget is to bring jobs back to New Jersey by lowering taxes."

*10 members of the New York Congressional delegation sent a letter to the state Democratic Party chair last week urging her not to expend party resources on Sen. Kirsten Gillibrand's re-election. NY Observer: "Their epistle served as a vivid reminder to Ms. Gillibrand (in case she needed one) that her January appointment to the Senate may not shield her from a serious challenge from within her own party next year."

*WSJ looks at the unenviable position Chris Dodd is in as the financial crisis dominates the Washington agenda. "As Senate Banking Committee chairman, the Connecticut Democrat will be able to claim credit for new financial regulations the public wants. But he also is a longtime friend of Wall Street, making him a convenient scapegoat if voters sour on the government's handling of the economic crisis."

**Scandal Alert
*Bush aide embezzled $579k: National Journal reports that "Felipe E. Sixto, 29, who was an associate director at the White House Office of Intergovernmental Affairs ... used money he stole from a government-funded nonprofit to pay student loans and credit card debt and to purchase a car, a truck, a piano and artwork, according to documents filed this month at the U.S. District Court for the District of Columbia."

*The Washington Post explores ties between Rep. Jack Murtha (D-Pa.) and a research center in Pennsylvania that has received $250 million in federal funding. "The center then channeled a significant portion of the funding to companies that were among Murtha's campaign supporters."

**RIP, P-I: Here's the final front page of the Seattle Post-Intelligencer.

-- Mike O'Memoli and Kyle McTrygstad

Robert Gibbs had more than 24 hours to come up with a response to former Vice President Dick Cheney's comments about new administration policies on terror suspects. So when asked about them at today's briefing, the White House press secretary had a glib answer ready.

"I guess Rush Limbaugh was busy, so they trotted out the next most popular member of the Republican cabal," Gibbs said with a devious grin.

Shifting to a more serious tone, he went on to portray the new policies not as releasing suspected terrorists from custody, but as bringing them to justice long delayed under the Bush administration.

"I think the president saw over the past seven plus years the delay in bringing the very people to justice that committed terrorist acts on this soil and on foreign soil. That delay, in seeking swift and certain justice, is what he decided to change through his executive order," Gibbs said.

The White House was criticized in some quarters for picking a political fight with Limbaugh, and Gibbs acknowledged that he may not have always been constructive with some of his remarks. Today, when Gibbs first invoked the Republican "cabal," some reporters reacted with surprise at the strong language. When he was asked later in the briefing if the Cheney response was "sanctioned" by the White House, Gibbs backtracked ever so slightly.

"Sometimes I ask forgiveness rather than for permission," he said. "I hope my sarcasm didn't mask the seriousness of the answer."

Strong: having or marked by great physical power; having great resources.

Sound: solid; firm; stable.

That's how Merriam-Webster defines the two words that the White House says is the difference between what John McCain said on the campaign trail last year and what President Obama and his economic adviser Christina Romer said in the last few days when describing the fundamentals of the U.S. economy.

At the daily press briefing, Press Secretary Robert Gibbs noted a difference between the two. "Do I think there's a definitional difference between sound and strong? Absolutely," Gibbs said. "I think the fundamentals, as Ms. Romer said, are sound. That the President is taking steps each and every day to strengthen those fundamentals to ensure that the pillars that we need to turn our economy around to create the jobs the President talked about, to give the middle class finally a fair shake, and to put ourselves on a path toward sustained economic growth is exactly what the President is focused on each and every day."

However, the NRCC sees little difference and has issued a press release in 50 Democratic House districts questioning the potentially conflicting statements.

"Are the fundamentals of our economy strong or is the President of the United States just fundamentally wrong? That is the question Mary Jo Kilroy needs to answer," NRCC Communications Director Ken Spain is quoted saying in a press release to one of 50 House districts. "Does Kilroy stand by her Democrat colleagues who claimed that it was 'absurd' to say the fundamentals of the U.S. economy are sound or will she stand up to President Obama and tell him that he is sadly mistaken when it comes to the economic problems middle-class Americans are facing?"

There's a bit of a stir today over comments this weekend by Gov. Ed Rendell (D-Pa.) about his efforts to get Sen. Arlen Specter (R-Pa.) to switch parties, efforts he added that include Vice President Biden. Today, the Vice President's office said it won't comment on Biden's private conversations.

Forget about private conversations -- just look at his public comments. Two weeks ago, Rendell and Biden playfully teased Specter over his party status at a stimulus-related event in Philadelphia.

"You could make life a little easier for yourself by taking that registration card of yours and making that little change from R to D," Rendell told Specter, according to a pool report. Specter later joked that the praise from Democrats at the event made him feel like he was hearing his own eulogy.

"When Gov. Rendell talks about a change of registration," Specter began at one point, before being interrupted by Biden. "Don't make your decision now," the VP said. Another report quoted Biden as saying flat-out: "Why don't you just go ahead and be a Democrat?"

Biden has been full of praise for Specter, who played a key role in passing the stimulus plan and was a colleague of his for 28 years in the Senate. On Friday, when Biden began introducing members of Congress at an Amtrak event, he started with Specter before acknowledging his Democratic colleagues, and called him "one of my closest friends, period."

"I want to thank Arlen Specter for his leadership on matters relating to Amtrak, and a lot of other things," he said.

Proving that Sarah Palin remains a popular character in the Republican Party, the Alaska governor will keynote the annual fundraiser for the GOP's Senate and House campaign committees. The Senate-House dinner will be held June 8 at the Washington Convention Center.

NRSC Chairman John Cornyn and NRCC Chairman Pete Sessions, both from Texas, made the announcement today:

"Governor Palin has quickly emerged as one of the most popular and recognizable faces in the Republican Party, and we are honored to have her deliver the keynote address at the Senate-House dinner. As a proven leader in her home-state of Alaska, Governor Palin represents a breath of fresh air from the business-as-usual crowd in Washington, and is one of our Party's up-and-coming young governors who will play a critical role in our re-building efforts in the years to come. Last fall, she electrified and energized crowds across the country, and we expect she will generate a similar amount of enthusiasm at this spring's dinner," said Cornyn.

"On behalf of Congressional Republicans, it is a pleasure to announce one of the brightest rising stars in the Republican Party, Sarah Palin, will deliver the keynote address at this year's Senate-House dinner. Governor Palin's conservative values, commendable achievements in Alaska and the sheer energy she personifies make her one of the most compelling visionaries of our Party. With respect, admiration and enthusiasm, I look forward to welcoming her to Washington and await the inspirational address our Party needs, as it rebuilds and prepares for a victorious election cycle," said Sessions.

President Obama said that his administration is exploring "every legal avenue" to try and block bonuses to be paid to executives from AIG, asking how they could justify the "outrage" to taxpayers who now own most of the company.

"This is a corporation that finds itself in financial distress due to recklessness and greed.
Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay," Obama said to a crowd of small business owners this morning.

Obama said that Treasury Secretary Timothy Geithner hopes to use the leverage that the Treasury has because of its ownership stake in AIG to resolve the controversy. Geithner is working with AIG CEO Edward Liddy, who Obama made sure to mention took the job "after the contracts that led to these bonuses were agreed to."

Obama interrupted his remarks at one point to cough, then joked that he was "choked up with anger" over the bonuses.

"I think Mr. Liddy and certainly everybody involved need to understand, this isn't just a matter of dollars and cents. It's about our fundamental values," he said. "All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses. ... All they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules."

Geithner, who joined Obama for the announcement in the East Room, had a stern message of his own, but for U.S. banks, as he urged them to loosen up credit to help small businesses.

"Many banks in this country took too much risk, but the risk now to the economy is that you will take too little risk," he said. "You need - you banks - need to make the extra effort to make sure that good loans are getting to credit-worthy small businesses in order to serve the larger public good of moving this nation to recovery. And given the role that many banks played in causing this crisis, you bear a special responsibility for helping America get out of it."

Good Monday morning, Washington and beyond. This morning, President Obama appears with Treasury Secretary Geithner to announce some new policies meant to help small businesses. This comes after reports this weekend that AIG will still pay out significant bonuses to its top executives, despite administration objections. Later, Obama will speak at the Department of Veterans Affairs.

Vice President Biden, meanwhile, will speak at the IAFF conference in DC, and later at a DNC function. Biden is playing a somewhat typical vice presidential role of rallying the party faithful; he also helped Sen. Blanche Lincoln kick off her re-election campaign in Arkansas this weekend.

The House and Senate are back in session this afternoon. The House will rename a few U.S. Post Offices, while the Senate considers the omnibus lands bill once again. The lands bill easily passed the Senate in January, but the House rejected it last week.

Here are the headlines we're watching today:

**Check out all the Sunday talk show highlights on RealClearPolitics Video, including Ben Bernanke and Dick Cheney.

**President Obama
*AP has the details on today's small business announcement, "a broad package that includes reduced small-business lending fees and an increase on the guarantee to some Small Business Administration loans." This follows a Sunday full of appearances on the talk shows by top economic officials.

*Adam Nagourney writes about the latest AIG fallout: "The Obama administration is increasingly concerned about a populist backlash against banks and Wall Street, worried that anger at financial institutions could also end up being directed at Congress and the White House and could complicate President Obama's agenda." David Axelrod, however, tried to spin that most of these problems and the frustration over them precede the administration. "We've got enormous problems that need to be addressed. And it's hard to address because there's a lot of anger about the irresponsibility that led us to this point. This has been welling up for a long time," he said.

*WashingtonPost.com's Sargent on Axelord and a similar sentiment from Obama pollster Joel Benenson: "My question is, how much longer is this going to cut it? These quotes ... have a weirdly passive quality to them. Obama's pollster can blame 'corporate interests' for having too much sway over the 'agenda in Washington,' as Obama's pollster put it, but it's the Obama administration that's supposed to set the 'agenda in Washington' now."

*Chris Cillizza this morning piggybacks on Mike Allen's report from this weekend, about the Obama administration's plans to "kick off an all-out grass-roots effort" using tools from the campaign with the mission of selling the president's budget. "David Plouffe, who was Obama's campaign manager and is now an adviser to OFA, called this effort the 'first major engagement' of the group in the legislative process and said in a statement that it will call on supporters 'to help the President win the debate between those who marched in lockstep with the failed Bush economic policies and now have no new ideas versus the Obama agenda which will help us manage the short term economic crisis and puts us on the path to long term prosperity.'"

*On CNN, Dick Cheney faulted the administration for rolling back Bush administration terror policies. "I think those programs were absolutely essential to the success we enjoyed of being able to collect the intelligence that let us defeat all further attempts to launch attacks against the United States since 9/11. ... President Obama campaigned against it all across the country. And now he is making some choices that, in my mind, will, in fact, raise the risk to the American people of another attack."

*Vice President Biden's mother is in the hospital after a fall at her home in Wilmington, the News Journal reports.

*Doing too much?: "President Barack Obama has filled nearly twice as many government posts as the previous two presidents did at this point in their first terms. The problem is, the current administration has so much more on its plate that it needs more key people in place to advance its ambitious agenda."

*"Marking a new season in his young presidency, President Barack Obama and his allies around Washington are about to give the capital a bracing lesson in one-party rule," writes Politico's Raju and Allen.

*Budget opposers: "Some of the special-interest groups opposed to tax increases or spending cuts in President Obama's proposed 2010 budget plan are facing a more immediate pocketbook problem: The recession has sapped their ability to fight back."

**Congress
*The omnibus lands bill will now be added as an amendment to a piece of House legislation -- H.R. 146 -- and Sen. Jeff Bingaman (D-N.M.), who sponsored the first bill, thinks it should have no problem passing the Senate once again.

*NYT's Hulse noted Saturday that the issue of gun rights "still persistently tie [Democrats] in knots and have been used by Republicans to stall two major bills this year, with more likely to come."

*Waters (D-Calif.) and the bank: "Rep. Maxine Waters said she didn't do anything improper in advocating for a Boston-based bank in which she and her husband have held financial stakes. The California Democrat said in a statement that her efforts were intended to aid minority-owned banks overall, not just OneUnited Bank, an institution that received $12 million in federal bailout money," the WSJ reports.

*AIG: "While lawmakers are vowing to investigate huge bonuses paid by American International Group--the struggling mega-insurer that has received more than $170 billion in government rescue funds--they admit it's not clear the government has the authority to stop them, or recoup the bonus money," Politico reports.

**Campaign Stuff
*Two weeks to go in NY-20 special election race. Reuters reports that "for Republicans, a win would help turn the page on the painful 2008 election and offer them a glimmer of hope at a time when Democratic President Barack Obama enjoys high approval ratings."

*Former Rep. Rob Simmons (R-Conn.) says he wants to run for the Senate in 2010, challenging incumbent Chris Dodd (D-Ct.). Meanwhile, Dodd tried to explain to the Hartford Courant his relationships with two men he owned property with, one of whom was Edward R. Downe Jr., "a millionaire Long Island socialite who later would orchestrate one of the biggest insider trading scams in Wall Street history."

*The CW is quickly developing in New Jersey. Gannett's Trenton bureau chief writes under the headline, "Governor just sealed his fate: He's set to lose."

*Rep. Ben Chandler (D-Ky.), who's toyed with a number of statewide races since his gubernatorial bid in 2003, is now seriously considering a bid for the Senate, according to the Lexington Herald Leader. Lt. Gov. Dan Mongiardo is already running.

*Remember when a McCain adviser talked about the "real Virginia?" Here's Jim Bunning this weekend: "I need your support to offset Lexington, Louisville and some other people who don't think like we do in Northern Kentucky," Bunning said at yet another Lincoln Dinner.

**Republicans
*The Christian Science Monitor tries to look at the bright side with the RNC. "In a way, Republican strategists have no choice but to be optimistic about Steele's continued presence as party chair. Ousting the party's first black chairman could be disastrous for the GOP's image. Moreover, the mechanics of an ouster are difficult: A two-thirds vote against Steele would be required at a meeting of the 168-member national committee, not just the executive committee. GOP chairs serve two-year terms, so if the 2010 midterms prove disastrous for Republicans, Steele could be voted out at the 2011 winter meeting."

*McClatchy notes a split on earmarks between brothers-in-arms John McCain and Lindsay Graham. "I agree with John McCain that we need (earmark) reform, but I am not embarrassed at all about trying to get the Small Business Administration to build a new convention center in Myrtle Beach," Graham said. "The reason people know about it is I put my name by it."

**The Tourney Alert: Here are our upset locks for the NCAA Tournament...
-Kyle: #12 Arizona over #5 Utah; #11 VCU over #6 UCLA -- Eric Maynor and Chase Budinger will dominate.
-Mike: Keep an eye on the Siena Saints out of the powerhouse (ok, not really) MAAC. They won a first-round game last year and are a 9th seed this year, but did draw a hot team in #8 Ohio State.

--Kyle Trygstad and Mike Memoli

The Obama administration is clearly trying to strike the right balance when it comes to talking about the economy. First, the president was described as being too negative and lacking the message of hope when it came to his public statements. Then his budget was criticized for its overly rosy projections of a recovery.

This week, the administration is pointing to positive indicators - including a four-day streak of gains at the stock market, in suggesting that the nation may be turning a corner.

"I don't think things are ever as good as they say and they're never as bad as they say," Obama told CEOs yesterday.

Today, the president continued his economic focus as he met with Paul Volcker, head of his economic recovery board. He was asked about his economic adviser Larry Summers saying one problem was an "excess of fear" among Americans.

"If we are keeping focused on all the fundamentally sound aspects of our economy, all the outstanding companies, workers, all the innovation and dynamism in this economy, then we're going to get through this. And I'm very confident about that," Obama said.

Press secretary Robert Gibbs attempted to explain the new language on the state of the economy.

"I think we've seen some glimmers of hope," Gibbs said. Asked if the administration sees any stabilization, Gibbs was careful not to declare the end near, alluding to a famous declaration from Pres. Bush.

"We're hopeful that the pillars are beginning to be put in place to stop the downturn, to turn the economy around, to create jobs, put more money back in people's pockets, and provide that long-term economic growth," he said. "[It's] important to stress that we've unfurled no 'Mission Accomplished' banners and I think any suggestion of that would be quite premature."

Before the president took office and early in his term, he would repeatedly say that things would "get worse before they get better." I asked if that was still the case.

"Sure," Gibbs said. "What's important -- whether things get a little bit worse or a little bit better, the President is taking steps to put us on a path towards job creation, economic growth, income growth -- and more importantly, to address the long-term challenges that we've faced for so long.",

UPDATE: Here's the audio.

Vice President Joe Biden was in his element this afternoon as he joined former Congressional colleagues to trumpet funding for passenger rail in the stimulus funding. Saying he's in the top five of Amtrak riders of all time, the former Delaware senator said the system has been "left out much too long" in the nation's transportation plans, despite claims that it is over-subsidized.

"Every, every, every, every passenger rail service system in the world relies on subsidies. We subsidize our highways and airports more than we subsidize Amtrak," he said at Union Station this morning. "So let's get something straight here: Amtrak is not bent at the trough. Amtrak has been left out. ... I'm tired of apologizing for help for Amtrak."

Biden used to ride the train to and from Wilmington most days when he served as the state's senator for six full terms. One of the projects in the stimulus plan is a $21 million renovation of that station, and another $105 million will be spent on renovating Amtrak facilities nationwide. Also included: $82 million to fix damaged rail cars, $63 million to upgrade the electricity pathways, and $10.5 million for a new station in Sanford, Fla. Rep. Corrine Brown (D-Fla) was among those on hand thanking the veep for his role in securing the funds.

"If you have any problems in the stimulus, call the po-po. That's Joe Biden!" she said, declaring the group part of "Team Amtrak."

A number of the senators who spoke made light of their former colleague's promotion to Vice President, with his former longtime aide Ted Kaufman, now serving in his old seat, joking that he has to think twice before he addresses Biden. Biden himself joked that for the first time, his senators have no choice but to listen to him speak. "My speech will take no longer than 60 minutes," he promised.

So comfortable with the group was Biden that he was heard using the f-word a little too close to the open mic as he greeted them. Of course, his predecessor was caught doing the same, but in a more negative context.

Happy Friday. Today, President Obama will receive a report on the stimulus from Paul Volcker, the chair of his Economic Recovery Board. He'll then make some remarks on the economy. Meanwhile, Vice President Biden will swear in Labor Secretary Hilda Solis, and then make an announcement about Amtrak funding at Union Station. He and the president will then have lunch. Also, Larry Summers will speak at Brookings, ending a week in which the president's economic team took a higher profile.

Get ready for another quiet Friday on the Hill, as neither the House or Senate are in session today. Yesterday, the Senate confirmed the nominations of David W. Ogden and Thomas John Perrelli for the posts of deputy and associate attorney general, respectively. The House celebrated Pi yesterday, designating March 14 (or 3.14) as National Pi Day.

The other big topic du jour remains Michael Steele. Folks alternately speculate that Steele is toast, will survive, or that his fate depends on the NY-20 special. This much is clear -- it's hard for the GOP to rebuild when the chairman is fighting to stay afloat.

**President Obama
*Permanent Campaign: "Obama already won the election. But politics never actually goes away. It has been called 'the permanent campaign.' Books have been written about it, as long ago as the 1980s ... The message is that campaigning has become an essential part of governing. A high public-approval rating gives a president more clout with Congress," writes NJ's William Schneider.

*President Obama told the Business Roundtable that the economy isn't as dire as it seems. (This after saying for months that it's going to get worse before it gets better). "I don't think things are ever as good as they say, or ever as bad as they say," Obama said. "Things two years ago were not as good as we thought because there were a lot of underlying weaknesses in the economy. They're not as bad as we think they are now."

*President Obama is considering a request from Gov. Rick Perry to send troops to the Mexican border, Washington Post writes.

*The first front in the gay rights issue for Obama will be deciding whether to grant partner benefits to gay federal employees, based on a San Francisco case. NY Times: "If he supports the personnel office on denying benefits to the San Francisco court employees, he risks agitating liberal groups that helped him win election. If he supports the judges and challenges the marriage act, he risks alienating Republicans with whom he is seeking to work on economic, health care and numerous other matters."

*Obama's staffing woes continue, and JMart thinks the lobbyist ban limits are to blame.

*Earl Devaney, the man in charge of the stimulus oversight, said it is "inevitable" that waste will occur. "I'm afraid that there may be a naive impression that given the amount of transparency and accountability called for by this act, no or little fraud will occur. My 38 years of federal enforcement experience tells me that some level of waste and fraud is unfortunately inevitable," Devaney told state officials charged with coordinating the spending, per the Washington Times.

*Tim Geithner had a rough go on Capitol Hill, especially during questioning from Sen. Jim Bunning, ABC reports. "You were part of the problem. You were the head of the Federal Bank of New York, you sat in on the meetings of TARP when it was decided. In fact they give you credit for it being your plan," Bunning said.

*The Obamas are "cultivating the Beltway social elite behind the scenes," Washington Times finds. They invited top editors from DC's "luxury lifestyle magazines" to discuss, "among other things, how President Obama and first lady Michelle Obama can embrace Washington's glittery social scene."

*Carl Cannon runs through a selection of current polls that "provide a portrait of our public mood." He notes that Bush 43 "made it a point of pride to ignore the polls. This wasn't always a good thing. On the other extreme, Bill Clinton was such a slave to public opinion that he once tasked his pollsters to find out whether Americans wanted him to vacation out West -- or return for another summer on Martha's Vineyard."

**Michael Steele
*Adam Nagourney looks into the Steele situation. "It appears highly unlikely that there would be any serious move to recall Mr. Steele, who is barely two months into a two-year job. The political repercussions of replacing the party's first African-American chairman would be too severe, several Republican leaders said, and there are no obvious candidates ready to take the job. Nonetheless, there were expressions of anguish over what many Republicans described as Mr. Steele's growing pains as he takes on the role of leader of a party struggling to find its way after its defeat in the November elections. This latest episode seems likely to diminish his conservative credentials further, undercutting his ability to present his case for his party and raise money."

*Phil Singer points out that in 2006, Michael Steele said he opposed a key plank on abortion in the RNC platform.

*Florida GOP chair Jim Greer sent a letter supporting Steele.

**Congress
*No Second Stimulus: Speaker Nancy Pelosi downplayed yesterday the imminent possibility of a second stimulus.

*National Journal's Jonathan Rauch writes that earmarks aren't as easy to get passed as one might think and proves it by attempting to get one for himself. A must read, as usual.

*NJ's Congressional Insiders Poll: Members of Congress grade their leaders. Dems give: Pelosi, B, Boehner, D, Reid, C; McConnell, D+. GOPers give: Pelosi, D+; Boehner B-; Reid, D; McConnell, C+. Click through to read Members' quotes about them.

**Campaign Stuff
*MN SEN: Could it be? "After seven weeks of testimony and thousands of bits of evidence, the end of the trial -- if not the final outcome -- is finally in sight," the Minnesota Star Tribune reports.

**Stewart v. Cramer: The ongoing media battle between Jon Stewart and CNBC's Jim Cramer climaxed last night as Cramer went on The Daily Show for the full half-hour. Check out the entire interview (which couldn't even fit in the 30 minutes), as Stewart rips into Cramer and CNBC for irresponsible financial reporting.

**Sports Alert
*Congrats to Syracuse for coming out on top in a 6-overtime Big East Tournament quarterfinal game with UConn last night. Their 127-117 win came in the second-longest Division I game ever. (Full Disclosure: Kyle couldn't make it past double overtime). Read the AP story and watch the Sportscenter highlights here.

--Mike Memoli and Kyle Trygstad

After sparking an outburst of conversation Tuesday when she admitted the possible necessity of a second economic stimulus package, Speaker Nancy Pelosi pulled back some today during her weekly press conference.

"I really would like to focus on the first one," Pelosi said, when asked about a second stimulus. "I know that people have made suggestions that we should be ready to do something, but I really would like to see this stimulus package play out. I think it's important that the American people and the Congress of the United States have confidence in the recovery package that we have passed."

Pelosi discussed the subject later in the press conference as well. "We've done a big package, several hundred billion dollars, which I never thought I would see the day that we would have a package that big," she said. "We've done that. Let's see how that works."

House Oversight Committee Chairman Edolphus Towns (D-N.Y.) announced today that he has instructed committee attorneys to begin an investigation into whether Merrill Lynch misled Congress about when it decided to award billions of dollars in bonuses.

New York Atty. Gen. Andrew Cuomo alleged yesterday that Merrill must have misled Congress in mid-November when it said it was waiting until the end of the year to decide on executive compensation. His reasoning comes from a March 3 deposition from Merrill's director and compensation committee chairman John Finnegan, who indicated a decision to pay bonuses before the end of the year had already been made by a Nov. 11 meeting.

"The Committee takes very seriously Attorney General Cuomo's allegation that Merrill Lynch provided misleading information to Congress regarding bonuses for its top executives," Towns said in a statement released today.

Towns also stated that the investigators will focus on two issues: "Did Merrill Lynch executives attempt to cover-up the decision to pay its top employees $5.8 billion in bonuses on the eve of its merger with Bank of America"; and "as a part of this cover up, did Merrill Lynch executives deliberately attempt to mislead this Committee in their November 24, 2008 letter, asserting that 'incentive compensation decisions for 2008 have not yet been made.'"

Vice President Joe Biden said this morning that government officials at all levels have an obligation to implement the program effectively, claiming that the current economic crisis is more "complicated" than the Great Depression.

"Sounds ridiculous," he quickly acknowledged, "but it was not as complicated as this is."

Biden was speaking to a room full of state officials who are charged with administering federal stimulus dollars in their states. He said that transparency is a must, and that if the money is spent wisely, citizens will support the program.

"It's important ... that citizens know in your state what long-term investments are being made and that there's a prospect, in their view, that it will pay off," he said. "People will support us."

He also urged officials to contact him directly with questions. And he pressed for patience, noting that the Obama administration has been in power just 52 days, and that the stimulus proposal is younger still.

"We're moving as fast as we can. And that's why we're so thankful you're here to help us -- help us figure out how to move this so everybody knows what the rules of the road are."

President Obama echoed that message when he addressed the group later.

"If the money is being spent as it needs to be spent ... then I think all of us will benefit and our voters and our constituents, the people we work for, are going to be extraordinarily grateful," he said.

Good Thursday morning, Washington and beyond. President Obama's day is highlighted with a speech to the influential Business Roundtable. Earlier, he will drop in on a day-long conference being run by Vice President Biden to discuss with state officials the implementation of stimulus funds. He'll also attend the dedication of Abraham Lincoln Hall at the National Defense University.

The Senate is likely to approve today Obama's nominee for deputy attorney general, David Ogden, whose represenation of defendants in pornography cases has caused backlash toward his nomination among some conservatives.

The House will begin consideration of the Water Quality Investment Act of 2009, which would distribute $15 billion to the states for water and sewage projects. The land management bill, which would have expanded the nation's wilderness areas, failed in the House yesterday.

Here are the headlines we're watching today:

**President Obama
*The New York Daily News puts it simply: "President Obama railed against government largess Wednesday, but still signed a $410 billion spending bill that served up the kind of pork he campaigned against."

*In a signing statement, Obama reserved a right to "bypass dozens of provisions in a $410 billion government spending bill even as he signed it into law," New York Times reports. "Obama's instructions followed by two days his order to government officials that they not rely on any of President George W. Bush's provision-bypassing signing statements without first consulting Attorney General Eric H. Holder Jr. In that order, Mr. Obama said he would continue the practice of issuing signing statements, though "with caution and restraint, based only on interpretations of the Constitution that are well founded."

*AP's analysis: "In proposing only modest changes in how lawmakers finance their pet projects, President Barack Obama tossed aside a golden opportunity to work with Sen. John McCain. Instead, the president stood foursquare with his Democratic allies, the people he needs most to advance his ambitious agenda."

*Jonathan Martin concludes that in the earmark battle, Obama caved to the "old bulls." "Pulled between his campaign rhetoric and his own party's congressional barons, President Barack Obama largely sided with his Hill allies in unveiling an earmark proposal Wednesday that shies away from any strict crackdown on the practice. Obama proposed further transparency for the spending goodies prized by many members of Congress - but stopped far short of the kind of serious limits reformers wanted."

*Newsweek's Howard Fineman was on "Today" this morning discussing his piece that posits that Obama is losing the "establishment." "Obama may be mistaking motion for progress, calling signals for a game plan. A busy, industrious overachiever, he likes to check off boxes on a long to-do list. A genial, amenable guy, he likes to appeal to every constituency, or at least not write off any."

*Obama yesterday created the White House Council on Women and Girls. But Josh Gerstein reports that some in the women's movement wanted more - a blue ribbon commission or a Cabinet-level office. "With all respect to Valerie Jarrett and Tina Tchen, both of whom are excellent folks. ... I think both are going to find this is one of many things they're responsible for and I think they'll be stretched to give it proper attention. We have told them that," said Martha Burk, a former chair of the National Council of Women's Organizations.

*Washington Post talks to Jay Carney, the journalist-turned-Biden flack. Carney, when asked about managing the supposedly gaffe-prone Biden: "I think that in politics, people get stereotyped or they have reputations that they have to contend with. And the thing about the vice president, most of what people attribute to him as being gaffes are really examples of his candor. Vice President Biden is not capable of not telling you how he feels."

*Obama finally rolled out his ambassadors to Iraq and Afghanistan: Chris Hill and Lt. Gen. Karl Eikenberry. And he'll also name Margaret Hamburg, a former New York City health commissioner, to lead the Food and Drug Administration.

*Broder on Chas Freeman: "The country has lost an able public servant in an area where President Obama has few personal credentials of his own -- the handling of national intelligence."

**Congress
*Second Stimulus: "As the nation continues to shed jobs, an increasing number of economists are saying Congress will need to pump more money into the economy this year. But reaction on Capitol Hill has been almost uniformly negative -- and much of the blowback is coming from Democrats," reports Politico.

*David Ogden: "The nomination by President Barack Obama to be Attorney General Eric Holder's top aide sparked an angry Senate debate over Ogden's legal career," the AP reports. "During his Senate confirmation hearing last month, Ogden sought to reassure senators that he would prosecute child pornographers aggressively, and he urged the lawmakers not to judge him by arguments he made on behalf of his past clients."

*House Defeats Land Management Omnibus: "The bill would have designated more than 2 million acres of wilderness in nine states and established three new national park units, a new national monument, three new national conservation areas, more than 1,000 miles of national wild and scenic rivers and four new national trails," reports the NYT.

*Canada is closely watching the new wastewater bill that the House is taking up today for its impact on iron and steel manufacturers.

**Republicans
*Chris Cillizza reports that Ken McKay will be announced today as the new executive director at the Republican National Committee today. McKay ran R.I. Gov. Don Carcieri's 2002 and 2006 campaigns. "A source close to the decision painted McKay's ability to guide a candidate to victory in one of the most Democratic states in the country as well as his experience at the state level as the major selling points for McKay."

*Many are looking at this Q&A with GQ as the next potential land mine for Michael Steele, especially the section on abortion. "I see the power of life in that--I mean, and the power of choice! ... The choice issue cuts two ways. You can choose life, or you can choose abortion. You know, my mother chose life. So, you know, I think the power of the argument of choice boils down to stating a case for one or the other." Asked if he was saying that women have the right to choose abortion, Steele said: "Yeah. I mean, again, I think that's an individual choice."

**Campaign Stuff
*NJ Gov: A Quinnipiac poll released this morning finds Chris Christie (R) leading Gov. Jon Corzine (D) by 9 points in a potential Nov. 2009 general election matchup.

*Gov. Mark Sanford is officially rejecting federal stimulus funds, but the legislature plans to vote to accept it against his request. The State with the chaser to this shot: "Sanford's announcement came the same day as new unemployment data showed the state with the nation's second-highest jobless rate, at 10.4 percent."

*Everyone's writing about the other Palin today. But the hometown Anchorage Daily News writes about the SarahPAC email yesterday seeking funds for out-of-state political trips. "Over the last many months, the governor has received thousands of requests for her time. While the governor always encourages visits to Alaska, she looks forward to a few potential Outside events over the next few months," spokesperson Meg Stapleton said in a written statement. One of those trips will be to Evansville, Ind., on April 16.

*It looks more and more like Rep. Anthony Weiner (D-N.Y.) might not run for mayor again this year. In a statement to supporters, he said: "At the beginning of the summer when Congress takes a break, I will look at the lay of the land again and try to determine the best political course." Weiner had been gearing up for a run after a surprisingly strong showing in 2005. But Mike Bloomberg's overturning term limits may have made it a less appealing race.

**Matthews v. Fleischer: And what would your morning be without some awkward TV. Watch their confrontation here.

--Kyle Trygstad and Mike Memoli

Michelle Obama and Hillary Clinton shared a stage for the first time today at a State Department event honoring recipients of the International Women of Courage Award.

One year ago, Clinton was still battling Obama's husband for the Democratic presidential nomination. But today, the Secretary of State and first lady exchanged pleasantries during the event in the Benjamin Franklin Room.

"Now I know a little bit about the role that Michelle Obama is filling now," Clinton said. "I have to say that in a very short time she has, through her grace and her wisdom become an inspiration to women and girls, not only in the United States, but around the world."

Obama said she just loved calling Clinton "Secretary Clinton" -- no doubt it beats "Madame President."

"The woman who is running this department, this big huge effort, has always been such a committed person, friend, supporter, to me," Obama said. " We are honored and thrilled to have her serving in this role. She set the bar high in her last post. And I'm confident that she's going to keep setting the bar high in this post."

It was certainly the Clinton show, and she even appeared to get emotional as one of the seven women honored spoke glowingly of her record as a "woman of courage who has inspired women around the world to reach great heights."

"Your untiring efforts in championing women's rights worldwide are well-known," said Ambiga Sreenesvasan, a lawyer from Maylasia who has pushed for greater rights for women in her country.

The seven honorees were chosen from scores of recommendations from American embassies around the world.

"The women we honor here, standing on this stage today, risk their lives to fight for themselves and for their mothers, daughters, sisters, grandmothers, and friends," Obama said. "In doing so, they create a better society not just for them, but for their fathers, sons, brothers, grandfathers, and husbands."

Robert Gibbs was surprisingly noncommittal when asked today if President Obama approves of the job that the Democratic-led Congress is doing.

The president has just signed the controversial omnibus bill, which he earlier called "imperfect." Some had urged him to consider a veto of the bill in the name of fiscal responsibility, considering thousands of earmarks and significant increases in spending. But the White House never budged, saying he would sign it because it represented leftover business of the previous Congress.

Obama himself had offered a measure of criticism for so many spending measures being unfinished. So, Gibbs was asked today, does Obama approve of how Congress is performing?

"I do not know if he was called in the Gallup poll that shows that Congress' approval rating is at a four year high," Gibbs deadpanned. "I do not believe he was among the thousand or so respondents."

Speaker Nancy Pelosi had joined Obama today for the announcement of a White House Council on Women and Girls. One might ask how she and her Senate counterpart, Harry Reid, felt about the non-answer.

Republicans in both chambers of Congress will join forces in opposition to President Obama's budget, the two chairmen of the House and Senate Republican conferences told reporters today.

Rep. Mike Pence (R-Ind.) and Sen. Lamar Alexander (R-Tenn.), beginning the cooperation in messaging, recited the party's new talking points on numerous occasions during an off-camera briefing with reporters, stating that the new budget spends too much, taxes too much and borrows too much. "We've got four weeks to make that case, starting this week," Alexander said.

"Given the magnitude of the issues encompassed in this budget, this was the right battle to lock arms," said Pence.

"Give Bill Clinton credit," said Alexander. "He raised taxes to balance the budget. This president is raising taxes to grow the government."

Pence defended Republicans' response to Democratic proposals in the new Congress and derided the inclination that they are the "party of no." Noting that the President had asked for GOP ideas in the early stages of the stimulus debate and that they had offered their own plan, Pence said: "They were the ones that said no to those ideas."

Pence also said he's heard "there's a lot of sticker shock among Blue Dog Democrats" regarding the size of the budget, and that the GOP "will make every effort to make common cause with any fiscally conservative Democrats."

The conference chairmen also slammed Democrats for entertaining the idea of a second stimulus. Pence said this was an indication that their first stimulus plan "has already failed." Alexander said he was surprised about talk of new spending when "we don't even know what was in the first stimulus yet."

On the Employee Free Choice Act, which both Alexander and Senate Minority Leader Mitch McConnell referred to today as the "No Choice Act," Alexander called it "the most radical piece of legislation before this Congress" and said he was "astonished the Democratic majority would put it ahead of fixing health care" and other important matters.

President Obama today actually defended the right of members of Congress to insert earmarks into legislation, but announced some reforms he'd like to see to avoid further waste, fraud and abuse with the process.

Obama called the omnibus bill "imperfect," and suggested he would not veto it because Congress should not be "bogged down" when it has more urgent priorities. But he said earmarks account for only 1 percent of the total bill, and criticized those who "railed most loudly" against it while inserting their own earmarks.

"There are times where earmarks may be good on their own, but in the context of a tight budget, might not be our highest priority," he said.

His proposed reforms would do the following:

• Require members to post all earmark request in advance on their Web sites.
• Require earmarks to be "open to scrutiny at public hearings."
• Require earmarks to for-profit private companies be subject to competitive bidding requirements.
• Forbid earmarks to be traded for political favors.

He also said that in the future, if his administration finds an earmark that has no "legitimate public purpose," they'd seek "to eliminate it, and we'll work with Congress to do so."

An easier method might be the line-item veto. When asked about it a few weeks ago, press secretary Robert Gibbs suggested Obama would use it if the authority was given to him, but he did not seem to be pushing for it himself.

"We're happy to have Congress pass such an effort," Gibbs said today.

Obama has not yet signed the omnibus bill, but must do so before day's end to keep the government running.

Good morning, Washington. This morning, President Obama will sign the omnibus spending bill, warts and all. But he'll later make an announcement on reforming the earmark process going forward. Later, he'll sign an executive order creating the White House Council on Women and Girls, and then meet with members of the House and Senate budget committees.

Vice President Biden, back from his trip to NATO, will announce the administration's new drug czar today. First Lady Michelle Obama and Secretary of State Hillary Clinton will be together to present the Secretary of State's Award for International Women of Courage.

The House will vote today on the Omnibus Public Land Management Act of 2009, which greatly expands the nation's wilderness areas. The Senate passed the bill in January by an overwhelming majority. The Senate will consider David Ogden's nomination as deputy attorney general. Also, Senate and House Judiciary subcommittees will hold a joint hearing on a constitutional amendment that would require Senate vacancies to be filled by special elections, not appointment.

Here's what's in the headlines today:

**President Obama
*President Obama's announcement of a way forward on earmarks today will "be his attempt to distance himself from the 9,000 earmarks in the omnibus spending bill he'll sign likely earlier in the day." Officials "were tight-lipped about details of the agreement. But sources did say to expect something close to or along the lines of what Mr. Obama has promised in the past."

*Obama is now planning "semi-regular" meetings with Democratic leadership at the White House, CNN reports. "The Wednesday confabs come amid growing signs that Obama's agenda may face major hurdles put in its way by some of his fellow Democrats, who have different priorities on some details in the president's budget."

*The administration will officially announce his new drug czar today, Seattle Police Chief R. Gil Kerlikowske. The search "was slowed as details of drug arrests involving Kerlikowske's son came to light." The position will no longer have the Cabinet-level designation it had under Bush 43, but a senior official said he'll have "full access and a direct line to the president and the vice president."

*Obama's education proposals announced yesterday "reflected his party's belief that education at all levels was underfinanced in the Bush years and that reform should encompass more than demands that schools show improved test scores. But they also showed a willingness to challenge teachers' unions and public school systems, and to continue to demand more accountability."

*New York Times looks ahead to potential judicial appointments coming from the Obama administration. "White House lawyers have compiled lists of likely candidates for vacancies on several of the 12 regional appeals courts, notably those based in Richmond, Va., and New York. Lawyers, scholars and political scientists have been watching closely to see whether and how much Mr. Obama will use his power to nominate judges to counterbalance the evident rightward shift of the federal courts under President George W. Bush."

*After having his nomination withdrawn to lead the National Intelligence Council, Chas Freeman angrily bashes the "Israeli lobby," which he said was behind a "barrage of libelous distortions." The withdrawal "will be seen by many to raise serious questions about whether the Obama administration will be able to make its own decisions about the Middle East and related issues."

**Congress
*The Senate passed last night the $410 billion omnibus appropriations bill, a package passed yearly to fund the federal government. On a 62-35 vote, eight Republicans voted in favor of the bill, while three Democrats crossed over in opposition.

*Washington Post: "The bill, which includes thousands of controversial earmarks inserted by members of both parties, was approved on a voice vote after eight Republicans joined 54 Democrats in backing a procedural measure to bring the long and rancorous debate to a close. President Obama has indicated that he will sign the legislation despite having misgivings about the earmarks."

*Gallup: Thanks largely to Democrats approving of the Democrat-controlled Congress, the legislative body's approval rating has reached a four-year high. Congress's 39% approval rating is its highest since Feb. 2005. That number includes 57% of Democrats, 34% of independents and 22% of Republicans.

*As we reported yesterday, Speaker Nancy Pelosi said she believed a second stimulus may be needed to continue the government's economic recovery effort. CNN reports that Appropriations Chairman David Obey said "he's already instructed his staff to start drafting a second stimulus proposal. Obey said his staff is preparing the outline of a stimulus bill but he cautioned there is no timeline to move on it."

**Campaign Stuff
*Dodd in trouble in 2010? According to the latest survey from Quinnipiac he is, as he trails former Rep. Rob Simmons (R-Conn.).

*Rep. Mike Castle (R-Del.) released this statement to the Wilmington News Journal on a poll showing him leading Atty. Gen. Beau Biden in a hypothetical 2010 vote. Castle: "While it's always nice to be ahead in the polls, they will not influence my decisions for the 2010 election," Castle said in a statement. "I haven't closed any doors on my political options, but at this time, my priority remains the needs of our state and its representation in the House of Representatives."

*A special election to replace Labor Secretary Hilda Solis in the House will be held May 19.

*And in case you missed it, here's what happens when you ask Jim Bunning for his poll numbers. ""That means it's none of your g--d--- business. If you paid the 20 grand for the poll, you can get some information out of it."

--Mike Memoli and Kyle Trygstad

Republicans criticized President Obama yesterday for lifting a ban on federal funding for embryonic stem-cell research. However, two new polls find that a majority of Americans actually favor it.

"This decision runs counter to President Obama's promise to be a president for all Americans," House Minority Leader John Boehner said yesterday. "I fully support stem cell research, but I draw the line at taxpayer-funded research that requires the destruction of human embryos, and millions of Americans feel similarly."

By Boehner's logic, however, had Obama done nothing and left George W. Bush's restrictions in place, he would still not "be president for all Americans." According to polls released by Gallup and Rasmussen, a majority of Americans favor lifting or easing restrictions on federal funding of embryonic stem-cell research.

Gallup's survey -- conducted Feb. 20-22, two weeks before Obama's executive order -- found that 52 percent wanted to see more funding, including 39 percent of Republicans and 64 percent of Democrats.

Rasmussen, in a survey conducted Sunday and Monday, found 52 percent agreeing with Obama's decision. In that poll (of which 45 percent of respondents said they were pro-life), 70 percent believed the research had the potential to cure a previously incurable disease, and just 29 percent said it was morally wrong.

Speaking with reporters this morning, House Republican leaders criticized President Obama's budget and blasted what they say is a lack of focus on the economy.

"It's as if the administration thinks it's a part-time job to address this economy," said House Minority Whip Eric Cantor. "We're at the White House last week for two hours talking about health care while the Dow drops 200 points."

Going forward, Cantor said, "our focus will be about jobs -- jobs are the path to putting this country back on track."

The GOP leaders, including John Boehner, Mike Pence and Cathy McMorris Rodgers, also called on Obama to veto the omnibus appropriations bill that the Senate is expected to pass today.

Also present was freshman Rep. Cynthia Lummis (R-Wyo.), who argued against what she said is "the largest budget proposal in history." Pence chimed in on the budget as well, saying it "spends too much, taxes too much and borrows too much, and the American people know it."

Coming out of a "listening session" with econominsts, House Democratic leaders defended their approach to the economy and indicated another stimulus package may be necessary.

Mark Zandi, an economic adviser to John McCain's presidential campaign and chief economist at Moody's Economy.com, said more taxpayer money was needed up front and that "another stimulus is a reasonable probability."

Asked if she agreed with Zandi's comment, Speaker Nancy Pelosi said yes.

The "word of the day," Pelosi said, is "confidence -- confidence in our markets, confidence in lending, confidence in our financial institutions." It's also "about time," she said. "In order to instill confidence, the President has taken a new direction. And it takes time."

"In record time, we have passed the President's economic recovery plan and we are now anticipating very positive outcomes from that," Pelosi said. "Last week, the President put in motion the housing proposal and we are positive in anticipation of what that will result in."

Zandi, among four economists to meet with House Democrats today, credited the speedy economic policy decisions of the White House and Congress and said that "by this time next year, the economy will stabilize."

"The policy response to date has been very good, and we've got to give it a chance to work, which I think it will," Zandi said.

"What we heard [in the meeting] was that President Obama was right when he called for an economic stimulus right away," said Rep. George Miller (D-Calif.).

President Obama's education speech opened on a defensive note, answering criticism that he should be bringing a singular focus on the economy.

"I know there's some who believe we can only handle one challenge at a time," he said. They forget, he quickly added, that Lincoln "helped lay down the transcontinental railroad and passed the Homestead Act and created the National Academy of Sciences in the midst of civil war." FDR fought a war and a depression. And Kennedy "didn't have the luxury of choosing between civil rights and sending us to the moon." "And we don't have the luxury of choosing between getting our economy moving now and rebuilding it over the long term," he concluded.

Fifty days into his administration, he called education a critical area because "the future belongs to the nation that best educates its citizens."

"Despite resources that are unmatched anywhere in the world, we've let our grades slip, our schools crumble, our teacher quality fall short, and other nations outpace us," he said. "The relative decline of American education is untenable for our economy, it's unsustainable for our democracy, it's unacceptable for our children -- and we can't afford to let it continue."

Notably, Obama's remarks largely ignored the No Child Left Behind policies of his predecessor. Instead, he proposed incentives for good teachers, grants to schools who raise standards, and a greater investment in early childhood education. Funding for some of his proposals was already tucked into the stimulus bill, though he also asked Congress to act on Early Learning Challenge Grants.

Obama closed by saying that as important a role government can play in improving education, parents can play the most important role. He followed with a familiar story about the role his mother played in his education, waking him up early for additional lessons before school.

"It's because she did this day after day, week after week, because of all the other opportunities and breaks that I got along the way, all the sacrifices that my grandmother and my grandfather made along the way, that I can stand here today as President of the United States," he said. "I want every child in this country to have the same chance that my mother gave me, that my teachers gave me, that my college professors gave me, that America gave me."

It's a busy day for President Obama, starting with an education policy speech this morning to the Hispanic Chamber of Commerce. After some private meetings, Obama will then meet with members of the New Democrat Coalition at the White House, and then UN Secretary General Ban Ki-Moon.

The Senate will continue consideration of the omnibus appropriations bill, with a final vote likely today. Republican amendments to the bill will also be considered, including one that would require lawmakers to vote publicly on their pay raises.

The House will vote today on the naming of some federal buildings around the country. An Energy and Commerce subcommittee will look at the future of coal under climate legislation.

**President Obama
*Chicago Tribune: Obama's education plan calls for expanding teacher pay incentives and offering grants to schools that raise their standards. "The president's proposals describe voluntary, not mandatory, programs, officials said, and he will not discuss possible changes in President Bush's 'No Child Left Behind' program."

*A memo from Obama was sent to executive departments yesterday on signing statements, saying that he would return "signing statements" to their original purpose, suggesting constitutional issue with legislation. These statements "should not be used to suggest that the president will disregard statutory requirements on the basis of policy disagreements," the memo said. Unmentioned was President Bush, but it was a clear reversal.

*Treasury Secretary Timothy Geithner urged the House Democrats to be patient during a two-hour meeting last night. AP: "He sought to reassure them that President Barack Obama's administration has acted quickly to respond to the recession and the financial crisis. House Democratic leader Steny Hoyer said lawmakers voiced concerns about the amount of money the government has spent and the effectiveness of the money in freeing up loans and saving jobs."

*New York Times reports on how Democratic committee chairs are tinkering with Obama's budget plan. "The apparent first casualty is a big one: a proposal to limit tax deductions for the wealthiest 1.2 percent of taxpayers." Obama proposed it to finance health care changes. Chairmen are also objecting to cutting farm subsidies and cutting Medicare, Medicaid and Social Security spending. But "the White House ... is making clear that it is ready to push back, judging by its reaction to the strong resistance to its proposal to limit wealthy taxpayers' deductions."

*ABC reports that Gen. Ray Odierno says the fight against insurgents in Mosul "might lead to U.S. troops remaining in the city past a June 30, 2009 deadline for all U.S. combat troops to leave Iraqi cities, but only if the Iraqi government made such a request."

**Congress
*Omnibus: In the Senate, today is "the day to watch, as the leadership has to maneuver to get the omnibus bill that pays for running the government and its agencies passed in the Senate, given that previous resolutions financing the government expire at midnight," reports the NYT. "A pay raise amendment proposed by Senator David Vitter, Republican of Louisiana, will add a bit of drama [today] because it would require lawmakers to publicly approve their own pay raises each and every time."

*"Senate Democratic leaders are confident they have enough votes to move a $410 billion omnibus spending bill through the Senate Tuesday after picking up a handful of key votes," The Hill reports.

*Dem Unity: "The Menendez rebellion was a jolt of political reality for Reid, House Speaker Nancy Pelosi (D-Calif.) and Obama, signaling that the solidarity of the stimulus debate is fading as Democratic lawmakers are starting to read the fine print of the bills they will wrestle with in the coming weeks and months, and not always liking what they see," reports the Washington Post.

*Cantor Is 'Mr. No': "For all the focus on the king of conservative talk, Democrats may have found a more important villain in House Minority Whip Eric Cantor, a telegenic young Republican trying to bring life to his party on Capitol Hill," Politico reports.

*John McCain sits down for an interview with Politico.

**Campaign Stuff
*"The Supreme Court narrowed the reach of the Voting Rights Act, ruling that a measure aimed at helping minorities elect their preferred candidates only applies in electoral districts where minorities number more than 50% of the voting-age population," reports the WSJ.

*Via Politico, Asheville Citizen-Times reports that Heath Shuler will not run for Senate in North Carolina.

*MO Sen: The Republican primary is well under way, even though Sarah Steelman has yet to officially enter the race. She and Rep. Roy Blunt had a back-and-forth yesterday on earmarks.

**Sports Alert: Congrats to Eric Maynor and VCU for destroying George Mason in the CAA Tournament Championship last night and earning its second NCAA tourney berth in three years.

--Kyle Trygstad and Mike Memoli

Jon Vogel, who recently signed on as a partner at Global Strategy Group, has gone back to the Democratic Congressional Campaign Committee, replacing Brian Wolff as executive director.

During the 2008 election cycle, Vogel led the independent expenditure program, which the DCCC credits with picking up 24 seats. Vogel also served as political director, and in 2006 as the Northeastern and Florida regional political director.

"I'm excited that Jon Vogel will be our new Executive Director," DCCC Chairman Chris Van Hollen said today in a released statement. "Jon brings a deep level of understanding about House campaigns that can only be gained from two extremely successful cycles."

President Obama is set to speak about education tomorrow, after an executive order signing today on stem cell research. The White House has said a president must be able to walk and chew gum at the same time, but questions mounted today about why it is devoting time to so many other policy areas when both Wall Street and Main Street are looking for more reassurance about the economic crisis.

No less an authority on the economy than Warren Buffet hinted at the unease during an interview with CNBC, when he said consumers are still holding back on spending in part because of a "muddled" message from Washington. Robert Gibbs defended the administration's broad policy agenda at the daily press briefing.

"[Obama] would love the opportunity to only have to focus on one of those challenges at a time. I think given the many challenges that we face, that's a little bit of a flight of fancy," he said. "Washington has for many, many years, postponed or put off dealing with the problems that we're now facing."

He later justified the science and education events specifically, saying today's students need to be better trained to "meet the jobs of the future."

"Tell me which business is going to borrow money to expand, to add jobs, to do stem cell research, that can't find the people either coming out of college today or graduate school to do those jobs," he asked.

He ended the discussion with a somewhat tortured extrapolation of a reporter's analogy about a house on fire.

"Which room are you going to put out first? Or are you going to call the fire department and ask them to put all of it out? Or are you going to say, you know what, we love the living room; start over there," he said. "We could do that. And maybe by the time they get to the kitchen or the den the whole house is in ashes."

"In recent years, when it comes to stem cell research, rather than furthering discovery, our government has forced what I believe is a false choice between sound science and moral values. In this case, I believe the two are not inconsistent."

That's what President Obama said this morning in announcing his executive order for federal funding of embryonic stem-cell research, as Mike detailed earlier. Senate Majority Leader Harry Reid agreed with Obama, stating today that "our most promising scientists have been forced to work with one hand tied behind their backs" since President Bush took office in 2001.

House Republican leadership -- not surprisingly -- has come out quickly against the move, with Republican Whip Eric Cantor calling it a distraction from the country's economic problems and GOP Leader John Boehner saying it's "further dividing our nation at a time when we need greater unity to tackle the challenges before us."

Both Cantor, in a CNN interview, and Boehner, in a press release, cited their moral opposition to this as well.

"Frankly, federal funding of embryonic stem-cell research can bring on embryo harvesting, perhaps even human cloning that occurs," Cantor said on CNN's "State of the Union" yesterday. "We don't want that. That shouldn't be done. That's wrong."

"Indeed, science and respect for human life can coexist," Boehner said, after noting last week that he does not oppose federal funding for non-embryonic stem-cell research. "Politicians in Washington would be well-served to recognize this fact before they ask taxpayers to subsidize the destruction of innocent human life simply to advance a particular agenda."

UPDATE: Click through to read what Speaker Nancy Pelosi and Senate Minority Leader Mitch McConnell had to say about the executive order.

Nancy Pelosi:

"By lifting the executive ban on federal funding for stem cell research, President Obama has given hope, and potentially health, to millions. Every family in America is just one diagnosis, one phone call, or one accident away from needing the benefits of embryonic stem cell research.

"Today President Obama has also restored science to its rightful place in our national debates. Scientists must be allowed to pursue the research that they believe has the most promise to cure. And when they do, America remains a world leader in innovation, discovery, and growth.

"If we have a scientific opportunity to treat and cure disease, we have a moral opportunity to support it. That is why Congress will move to pass legislation to make this executive order the law of the land."

Mitch McConnell:

"The administration's announcement on embryonic stem cell research represents a troubling shift in U.S. policy. With this announcement, the government is, for the first time, incentivizing the creation and destruction of human embryos at the expense of the U.S. taxpayer. I support biomedical research and I believe the administration would be far better served by directing taxpayer funds to research on non-embryonic stem cells, which is both effective and ethical."

President Obama used religious language as he made the case for his decision to lift a ban on federal funding for stem cell research. Calling himself a "person of faith," Obama said he believes we "are called to care for each other and work to ease human suffering," and that this research could make that possible.

"I believe we have been given the capacity and will to pursue this research - and the humanity and conscience to do so responsibly," Obama said at an East Room event this morning.

He acknowledged that "thoughtful and decent people are conflicted about, or strongly oppose, this research." While Obama "respects their point of view," he sided with "the majority of Americans - from across the political spectrum and of all backgrounds and beliefs" who want to see federally funded research to go forward.

He did draw the line at human cloning, saying it is an abuse, "dangerous, profoundly wrong and has no place in our society." "We will ensure that our government never opens the door to the use of cloning for human reproduction," he said.

Obama also signed an order to ensure that scientists can do their work free of government interference.

"Promoting science isn't just about providing resources - it is also about protecting free and open inquiry. It is about letting scientists like those who are here today do their jobs free from manipulation or coercion, and listening to what they tell us, even when it's inconvenient - especially when it's inconvenient," he said.

A number of lawmakers -- mostly Democrats -- joined physicians, scientists and disabled individuals for the event. The Republicans on hand included Rep. Mike Castle, a moderate Republican from Delaware, and Sen. Orrin Hatch, a more conservative member from Utah, but one who supports research. Hatch has said he studied the issue for years, but came to the conclusion that it facilitates life.

Additional limits remain on research, but Obama signaled he'd let Congress play a role "to provide further support." Sen. Tom Harkin and Arlen Specter have sponsored legislation that would do so. Harkin, a Democrat, was on hand for today's event but Specter, a Republican, was not.

Happy Monday, Washington. Today is science day at the White House, headlined by President Obama signing an executive order and presidential memorandum on stem cell research and "scientific integrity." He'll speak from the East Room on the topics this morning, and later meet with finalists from the Intel Science Talent Search. Meanwhile, Vice President Biden is heading overseas to meet with NATO in Belgium. "The purpose of his trip is to consult with allies on Afghanistan and Pakistan and to ensure that their views help inform the strategic review ordered by President Obama," the White House says.

The Senate will pick up today where it left off last week, as Senate Democrats searched for one more vote to pass the omnibus appropriations bill. In the meantime, Republican amendments to the bill will be considered, and a temporary continuing resolution Congress passed Friday will keep the federal government running through Wednesday.

U.S. Trade Representative nominee Ron Kirk will testify in front of the Senate Finance Committee today, a week after the committee announced that Kirk owed -- and had agreed to pay -- nearly $10,000 in back taxes.

Some of today's headlines after the jump.

**President Obama
*Obama will also "issue a presidential memorandum aimed at insulating scientific decisions across the federal government from political influence," according to the Post. One official said the memorandum will ensure that "people who are appointed to federal positions in science have strong credentials and that the vetting process for evaluating scientific information doesn't lead to any undermining of the scientific opinion," he said.

*But officials "said the president would leave it to Congress to determine whether the long-standing legislative ban on federal financing for human embryo experiments should also be overturned," New York Times adds.

*Chris Cillizza: "Expect a series of statements today from leading contenders for the 2012 presidential nomination echoing Gingrich's sentiment as opposition to stem cell research is a stone-cold winner among conservatives who view it as a slippery slope in the abortion argument." Newt Gingrich was one of them, telling the Fix that his move was an "ideological sideshow." "It is dangerous for the Obama administration to pick a wide series of fights," said Gingrich. "Each of these fights simply drains energy away and increases the coalition which decides it has a collective interest in stopping everything."

*Last night, Obama made an unscheduled appearance at the Kennedy Center tribute to Sen. Ted Kennedy, and led the audience in singing happy birthday. Caroline Kennedy also presented the Profile in Courage Award to her uncle in one of her first public appearances after the New York Senate "campaign."

*New York Times' Jeff Zeleny writes about the unique role being played in the White House by David Axelrod, and shares this anecdote about a "Wednesday Night Meeting" he organizes each week. "'It helps clarify my thinking to talk to people who I have faith in,' Mr. Axelrod said, reluctantly describing the weekly meetings he had hoped to keep under wraps so he would not suddenly be overrun by requests from people hoping to dispense advice." More from the piece: "He also helps decide which fights to pick and which ones to avoid, making him a leading voice in setting the political tone in Washington. The recent back-and-forth with Rush Limbaugh, for example, was explicitly authorized by Mr. Axelrod, who told aides that it was not a moment to sit quietly after Mr. Limbaugh said he hoped that Mr. Obama would 'fail.'"

*Is the tech-savvy Obama team behind the ball? Lynn Sweet notes that the White House web site "is having trouble keeping up with a minimal level of transparency. The White House staff page has only six names. The nominations and appointments page needs updating to include everyone in the Obama White House. Gary Locke, Obama¹s choice for commerce secretary, is not even listed as an appointee, nor is the confirmation of Hilda Solis as labor secretary noted."

*Atty. Gen. Eric Holder was in Selma this weekend to commemorate the anniversary of the voting rights marches there. In the New York Times, meanwhile, his president was distancing himself from the "nation of cowards" remark. "We've made enormous progress and we shouldn't lose sight of that," Obama said.

*Wall Street Journal reports that when he visits Europe next month, Obama "will press world leaders to boost emergency government spending to lift the global economy, risking a rift with European nations more concerned with revamping financial regulation."

*Bloomberg reports that Obama, "who during his 2008 campaign talked about Abraham Lincoln and John F. Kennedy, is governing more like LBJ." "Obama's record is comparable to what Johnson, another Democrat, achieved in 1965 with his 'Great Society' programs. That agenda, the most ambitious since Franklin Roosevelt's New Deal, included the Voting Rights Act of 1965, the creation of Medicare and Medicaid, and a national beautification program. ... For the most part, Obama has been sticking to his campaign pledges, which included ending the war in Iraq, cutting taxes for the middle class, broadening health care and achieving energy independence. Events have prompted him to adopt the other, potentially competing agenda that involves the deepest government intervention in the economy in 76 years."

**Congress
*The Senate will try to complete work on the stalled $410 billion spending bill this week, but not before Democrats are forced to navigate a series of politically charged Republican amendments...including a tricky one that would require lawmakers to vote affirmatively for any future Congressional pay raises -- always a treacherous vote," the New York Times reports.

*The Hill: "Senate Democratic leaders, facing withering criticism over earmarks in the omnibus spending bill, are promising more reform, but perhaps to little to satisfy critics in their own party."

*A different view from the Washington Times, which reports that Democrats have been put in a position where they are selling earmarks as a good thing.

**Campaign Stuff
*L.A. Times writes that Obama has provided a "bright spot" for Republicans amid "tough times': "By stocking his Cabinet with some of the Democrats' top political prospects, Obama has created a number of opportunities for Republicans ahead of the 2010 midterm elections."

*VA Gov candidate Bob McDonnell (R) is profiled by the Times-Dispatch's Tyler Whitley: "McDonnell sometimes was a thorn in Gov. Timothy M. Kaine's side. In February 2006 McDonnell issued an opinion that said Kaine overstepped his constitutional authority when he issued an executive order that outlawed bias against gay people in state hiring, employment and promotion. Kaine ignored the opinion and criticized McDonnell, saying the attorney general was favoring discrimination."

*Rep. Neil Abercrombie announced Sunday that he's running for governor in the Aloha State. The Democrat "said he wanted to bring Obama's message of hope and change to the Islands." A few other Democrats are considering bids; Lt. Gov. Duke Aiona is already in the race to succeed fellow Republican Gov. Linda Lingle.

*A CQ analysis found 34 Congressional districts that voted for Obama at the same time it sat a Republican in Congress, while another 49 leaned McCain but also voted for Democrats in the House.

*Adam Smith asks: "It seems an insane question to raise 604 days before Florida elects its next U.S. senator: Is Kendrick Meek already on the verge of walking away with the Democratic nomination? Voters are paying no attention, the field of candidates isn't set, and there's a long, long way to go. And yet it's hard not to take note of how busy Meek has been, tangibly picking up ground."

*IL Sen: "If he decides to run, Burris could find himself in a contentious primary with William Daley, the brother of the Chicago mayor and co-chairman of President Barack Obama's transition team, and Illinois Treasurer Alexi Giannoulias, a close friend of the president."

**They Said It Couldn't Be Done: Virginia Gov. Tim Kaine will sign into law today a smoking ban for the entire state. This will likely be the signature legislation of his one term as governor.

--Mike Memoli and Kyle Trygstad

The New York Times has posted a transcript of its interview with President Obama this week. The session aboard Air Force One covered a wide range of topics, but there was only one that required a follow-up conversation after: whether the president was a "socialist," as has been suggested.

Obama first responded by saying: "You know, let's take a look at the budget -- the answer would be no."

He repeated his contention that his budget would reduce non-discretionary spending "to the lowest levels in decades," as a percentage of GDP.

"So if you look at our budget, what you have is a very disciplined, fiscally responsible budget, along with an effort to deal with some very serious problems that have been put off for a very long time," he said.

Asked if he was more liberal than he suggested during the campaign, Obama said "it would be hard to argue" that he is.

"If you look at spending, what we said during the campaign was, is that we were going to raise taxes on the top five percent. That's what our budget does. We said that we'd give a tax cut to 95 percent of working Americans. That's exactly what we have done. That's the right thing to do," he said. "It provides relief to families that basically saw no growth in wages and incomes over the last decade. It asks for a little bit more for people like myself who benefited greatly over the last decade and took a disproportionate share of a growing economy. I actually don't think that anybody who examines our budget can come away with the conclusion that somehow this is a - that this is in any way different than what we proposed during the campaign."

So the president was asked, if he does not consider himself socialist, what is he? Liberal? Progressive?

"I'm not going to engage in that," he said.

The interview ended as Air Force One landed. But the Times notes that Obama called to follow up later, saying, "It was hard for me to believe that you were entirely serious about that socialist question." He then responded with some pointed criticisms of his predecessor.

"I did think it might be useful to point out that it wasn't under me that we started buying a bunch of shares of banks. It wasn't on my watch. And it wasn't on my watch that we passed a massive new entitlement - the prescription drug plan without a source of funding. And so I think it's important just to note when you start hearing folks through these words around that we've actually been operating in a way that has been entirely consistent with free-market principles and that some of the same folks who are throwing the word socialist around can't say the same," he said.

The full interview is available here. The entire section about the "socialist" question is after the jump.

Q. The first six weeks have given people a glimpse of your spending priorities. Are you a socialist as some people have suggested? A. You know, let's take a look at the budget - the answer would be no.

Q. Is there anything wrong with saying yes?

A. Let's just take a look at what we've done. We've essentially said that, number one, we're going to reduce non-defense discretionary spending to the lowest levels in decades. So that part of the budget that doesn't include entitlements and doesn't include defense - that we have the most control over - we're actually setting on a downward trajectory in terms of percentage of G.D.P. So we're making more tough choices in terms of eliminating programs and cutting back on spending than any administration has done in a very long time. We're making some very tough choices.

What we have done is in a couple of critical areas that we have put off action for a very long time, decided that now is the time to ask. One is on health care. As you heard in the health care summit yesterday, there is uniform belief that the status quo is broken and if we don't do anything, we will be in a much worse place, both fiscally as well as in terms of what's happening to families and businesses than if we did something.

The second area is on energy, which we've been talking about for decades. Now, in each of those cases, what we've said is, on our watch, we're going to solve problems that have weakened this economy for a generation. And it's going to be hard and it's going to require some costs. But if you look on the revenue side what we're proposing, what we're looking at is essentially to go back to the tax rates that existed during the 1990s when, as I recall, rich people were doing very well. In fact everybody was doing very well. We have proposed a cap and trade system, which could create some additional costs, but the vast majority of that we want to give back in the form of tax breaks to the 95 percent of working families.

So if you look at our budget, what you have is a very disciplined, fiscally responsible budget, along with an effort to deal with some very serious problems that have been put off for a very long time. And that I think is exactly what I proposed during the campaign. We are following through on every commitment that we've made, and that's what I think is ultimately going to get our economy back on track.

Q. So to people who suggested that you are more liberal than you suggested on the campaign, you say, what?

A. I think it would be hard to argue, Jeff. We have delivered on every promise that we've made so far. We said that we would end the war in Iraq and we've put forward a responsible plan.

Q. In terms of spending.

A. Oh, in terms of spending. Well, if you look at spending, what we said during the campaign was, is that we were going to raise taxes on the top five percent. That's what our budget does. We said that we'd give a tax cut to 95 percent of working Americans. That's exactly what we have done. That's the right thing to do. It provides relief to families that basically saw no growth in wages and incomes over the last decade. It asks for a little bit more for people like myself who benefited greatly over the last decade and took a disproportionate share of a growing economy. I actually don't think that anybody who examines our budget can come away with the conclusion that somehow this is a - that this is in any way different than what we proposed during the campaign.

But more to the point, it is what's needed in order to put this economy on a more stable footing. One of the problems that we've had is that we have put off big problems again and again and again and again. And as I've said in my speech to the joint session of Congress, at some point there is a day of reckoning. Well, that day of reckoning has come.

What I'm refusing to do and what I've instructed my staff that we will not do is to try to kick the can down the road, to try to paper over problems, try to use gimmicks on budgets, try to pretend that health care is not an issue, to continue with a situation where we are exporting - importing - more and more oil from the middle east, continuing with a situation in which average working families are seeing their wages flat line. At some point, we've got to take on these problems.

Q. Is there one word name for your philosophy? If you're not a socialist, are you a liberal? Are you progressive? One word?

A. No, I'm not going to engage in that.

Here's the followup:

At 2:30 p.m., President Obama called The New York Times, saying he wanted to clarify a point from the interview. Here is a transcript of that brief call:

President Obama: Just one thing I was thinking about as I was getting on the copter. It was hard for me to believe that you were entirely serious about that socialist question. I did think it might be useful to point out that it wasn't under me that we started buying a bunch of shares of banks. It wasn't on my watch. And it wasn't on my watch that we passed a massive new entitlement - the prescription drug plan without a source of funding. And so I think it's important just to note when you start hearing folks through these words around that we've actually been operating in a way that has been entirely consistent with free-market principles and that some of the same folks who are throwing the word socialist around can't say the same.

Q. So who's watch are we talking about here?

A. Well, I just think it's clear by the time we got here, there already had been an enormous infusion of taxpayer money into the financial system. And the thing I constantly try to emphasize to people if that coming in, the market was doing fine, nobody would be happier than me to stay out of it. I have more than enough to do without having to worry the financial system. The fact that we've had to take these extraordinary measures and intervene is not an indication of my ideological preference, but an indication of the degree to which lax regulation and extravagant risk taking has precipitated a crisis.

I think that covers it.

A motion to freeze federal government spending at 2008 levels through the rest of this fiscal year failed in the House today, shortly before the House passed a continuing resolution, which will fund the government at 2008 levels through next Wednesday.

Such a move would not have been necessary had Senate Democrats come up with 60 votes to pass the omnibus appropriations bill, which Republican leadership opposes because of its increased spending levels and 8,000-plus earmarks (though some of the earmarks were added on by Republicans). However, today's deadline for action on funding the federal government through Sept. 30 forced Democrats to buy Senate Majority Leader Harry Reid a few more days to come up with the votes.

The temporary continuing resolution passed 328-50, with 2 Democrats and 48 Republicans voting against it. The Senate then agreed to it on a unanimous voice vote. The spending freeze, offered by House Republicans, failed on a 160-218 vote, with all 152 Republicans and eight Democrats voting for the measure.

"Let's show the American taxpayers that we get it," House Minority Leader John Boehner said from the House floor shortly before the spending freeze vote. "Let's show investors in our American economy that we get it. Because clearly the bill that's been under consideration both here in the House and now in the Senate has a $30 billion increase over last year's spending, and includes nearly 9,000 earmarks. And the way to put all of this to a stop is to just have a spending freeze."

While Speaker Nancy Pelosi celebrated the House's approval yesterday of the housing bill, Minority Leader John Boehner said the bill would punish those who play by the rules.

"The Helping Families Save Their Homes Act will prevent tragic home foreclosures, strengthen the housing market and our economy, and protect the American Dream of homeownership for America's families," Pelosi said following the 234-191 roll call vote. "Americans all agree that homeowners bear personal responsibility for their actions and their debts, but lenders must also act in good faith, lend responsibly, and work with homeowners who are at-risk of foreclosure because that is in the interests of lenders, borrowers, neighborhoods, and our nation's economy."

Boehner, however, stated that while "Republicans believe that we need to help families who acted responsibly stay in their homes," this housing bill "doesn't do that."

"This legislation forces taxpayers to reward irresponsible behavior - including lying about income on a mortgage application - and will prolong the housing crisis," Boehner said. "By letting bankruptcy judges rewrite a mortgage through the controversial 'cramdown' process, it gives a pass to the small percentage of borrowers who made bad decisions and adds more uncertainty to a market that desperately needs some stability."

Meanwhile, the NRCC sent out press releases in 41 Democratic districts last night, targeting those that voted for the bill. "[This congressman] voted today against protecting millions of Americans who played by the rules, including thousands of his constituents," the NRCC stated in the press release. "The motion that he voted against would have prohibited those who lied on mortgage applications from receiving taxpayer assistance."

Good Friday morning.

President Obama heads to Columbus, Ohio, today, a visit that will highlight another effect of stimulus funds. The city had laid off police recruits, citing budgetary shortfalls, but new federal funds have allowed the city to keep them. Vice President Biden will also visit with police officers in Miami. Obama will return to Washington this afternoon and have private meetings.

Senate Majority Leader Harry Reid, seeking one more vote to avoid a filibuster, decided last night to hold off on a procedural vote that would have brought the $410 billion omnibus appropriationsbill up for final approval. The Senate will continue debate and consideration of amendments on the bill today.

The Bureau of Labor Statistics released this morning its latest job report, with job losses rising to 8.1 percent, and the number of unemployed persons up to 12.5 million. Congress's Joint Economic Committee will hold a hearing this morning on this latest report.

**President Obama
*Obama today speaks at the graduation ceremony for 25 police recruits "who owe their jobs to the economic recovery bill he signed into law less than three weeks ago," AP reports. Mayor Michael Coleman "announced last week that the Justice Department had informed the city that it would get $1.25 million in stimulus money to pay the officers' salaries through the end of the year."

*Also in Columbus: the Arnold Schwarzenegger Bodybuilding Classic.

*The New York Times writes that Obama "indicated for the first time that he was open to compromise on details of the proposal he put forth in the 2008 campaign. ... Obama defended the idea of a new public insurance program but said he understood the objections to it. 'The thinking on the public option has been that it gives consumers more choices and it helps keep the private sector honest, because there's some competition out there,' Mr. Obama said. But, he added, 'I recognize the fear that if a public option is run through Washington and there are incentives to try to tamp down costs,' then 'private insurance plans might end up feeling overwhelmed.'"

*Christina Bellantoni was in New Orleans, where Obama sent two Cabinet secretaries to "signal that his administration will push stalled rebuilding efforts, and in a stark change to the backslapping that residents usually witness from federal officials, neither was shy about frustration with red tape."

*Frustration is mounting at Treasury, as a nominee for deputy Treasury secretary has withdrawn. "The development could be a blow to Geithner as he struggles to deal with the financial crisis at a time when 17 top jobs beneath him remain unfilled at the mammoth agency. Treasury officials declined to comment on the matter Thursday."

*National Journal's Political Insiders Poll finds that 53% of Democratic political operatives think Obama is governing more to the left than they expected and 23% think he's more to the center; 82% of Republican operatives think he's governing more to the left than they expected.

*Surgeon General Gupta? Nope: "Dr. Sanjay Gupta, CNN's chief medical correspondent, has withdrawn his name from consideration as surgeon general of the United States, he said Thursday. 'This is more about my family and my surgical career,' Gupta told CNN's 'Larry King Live.'"

**Congress
*Omnibus: "Last night, Senate Majority Leader Harry M. Reid (D-Nev.) canceled a final procedural vote that would have cleared the way for final passage and announced that debate will continue at least through Monday," reports the Washington Post.

*Reid "had been confident Thursday evening that he had the 60 votes needed to cut off debate. But a half hour after the roll call was to begin, Reid admitted he was still one vote short, forcing a late night meeting in Speaker Nancy Pelosi's office over where to go next," reports Politico.

*Housing Bill: The House passed housing legislation yesterday on a 234-191 roll call vote. "It now heads to the Senate, where it will face a tougher fight but has the backing of some powerful members. Under the legislation, bankruptcy judges could cut the principal on a homeowner's mortgage as well as reduce the interest rate and extend the terms -- provisions known as cramdowns," the Washington Post reports.

*We documented Brad Pitt's visit to the Capitol yesterday, as did Dana Milbank: "For the two hours Pitt was at the Capitol yesterday, Congress could have declared war on Canada and nobody would have noticed. But while it was disruptive, the actor's visit to Washington could not have been better timed. His latest film, "The Curious Case of Benjamin Button," is about a man who ages in reverse. As it happens, this is the same way Washington grows: As time passes, the nation's politics become more and more juvenile."

**Campaign Stuff
*The Chicago Sun-Times is still digging on Roland Burris. "On the same December day then-Gov. Rod Blagojevich named Roland Burris to fill President Obama's U.S. Senate vacancy, Burris' right-hand political man, Fred Lebed, phoned an associate and told him, 'We'll have to do some things for the governor.'" That associate, John Ruff, "also recalled Lebed telling him he'd had discussions about Burris' interest in the seat with Blagojevich representatives as far back as October. That claim by Ruff contradicts what Burris said in a Jan. 5 sworn statement that is now part of a state perjury investigation."

*More Burris: "Over Republican objections, Democrats who run the Illinois Senate defeated legislation today that would have allowed for a special election to replace appointed Democratic U.S. Sen. Roland Burris before his term ends in January 2011," reports the Chicago Tribune.

*Mark Leibovich writes about the curious case of Jim Bunning, saying he's the Republican version of Roland Burris because of his "behavior issues." "Key Republicans are gently (or not gently enough) trying to dissuade Mr. Bunning from seeking re-election in 2010 out of concern that his paltry fund-raising, declining approval ratings and irascible conduct have made him something between vulnerable and unelectable. But in recent weeks, Mr. Bunning has shown no sign of stepping aside and delivered a string of incendiary pronouncements that have fed an impression that he is, to go with a baseball metaphor, a bit of a screwball."

*Ned Lamont, who defeated and then lost to Joe Lieberman in 2006 Senate race, is now thinking about a gubernatorial bid in Connecticut. "Hartford can nickel and dime around the edges," said Lamont. "They can add 3 percent here, take off 4 percent there," But you worry whether they can make the big differences that we need to do.

*Chris Cillizza notes that the DNC, DSCC and DGA are all raising money over Rush.

--Kyle Trygstad and Mike Memoli

Former Gov. Bob Ehrlich (R-Md.) launched a new Web site today, fueling speculation that he may be setting the stage for another statewide run in the Free State next year.

The site certainly has the feel of a campaign site, with a picture of Ehrlich beside the slogan "Our Maryland: Always worth fighting for." Visitors can sign up to be on a mailing list and "Join the Team." And a "Latest News" page features a number of links to stories promoting Ehrlich's work, and others that are critical of the Democratic agenda, both locally and nationally. A footer on the site says that it is paid for by the "Bob Ehrlich for Maryland Committee."

Greg Massoni, an Ehrlich spokesperson, said not to read too much into the new Web site, saying it's just another vehicle to promote the former governor's radio show, TV appearances and books.

"It's still way to early to predict whether or not he's going to run for anything," Massoni said. But he added: "It's safe to say that Nancy Pelosi and Harry Reid and Martin O'Malley make it interesting to keep the option alive."

In 2002, Ehrlich became the first Republican elected governor in Maryland since Spiro Agnew. Despite strong favorability ratings, he lost a tough re-election battle to then-Baltimore Mayor O'Malley by six points in 2006, when Democrats rode a national wave and retook control of Congress. O'Malley's approval rating has rebounded after dipping as low as the 30s in 2008.

Ehrlich would certainly be less inclined to seek a rematch in the still heavily-Democratic state if his successor had higher numbers. Another option could be the U.S. Senate, with some questioning whether Barbara Mikulski will seek another term. An open seat could spur a free-for-all among Democratic officeholders, potentially creating another opening for Ehrlich, himself a former member of Congress.

Sen. Ted Kennedy - or is it Sir Edward Kennedy? - stole a bit of the president's spotlight at the closing session of his health care summit this afternoon. The Lion of the Senate, returning to Washington after some time in Florida for cancer treatment, received a raucous welcome as he accompanied President Obama into the East Room.

"That's the kind of greeting a knight deserves," Obama said.

Kennedy spoke briefly, praising the president's effort to finally achieve what has been one of his major goals, while vowing to be "a foot soldier" in that fight.

"I join with all of those that feel that this is the time - now is the time for action," he said. "I think most of us who have been in this room before have seen other times when the House and the Senate have made efforts, but they haven't been the kind of serious effort that I think that we're seeing right now. ... This time we will not fail."

Obama fielded a number of friendly comments and guarded questions, primarily from members of Congress but also some medical experts and representatives of the business community. There were some lighter moments, though a similar exercise last month at the end of the fiscal summit provided more highlights, including the aback and forth between Obama and John McCain.

As he closed the session, Obama assured lawmakers that while he has some "very strong ideas" about how a final health care reform should look, he didn't want to "get in the way" of the Congress as they played their part.

"But the one thing that I've got to say here," he added. "There's been some talk about the notion that maybe we're taking on too much. That we're in the midst of an economic crisis, and that the system is overloaded, and so we should put this off for another day."

Health care efforts failed "when times were good," and during other recessions, when the nation was at war and in peace time, he said.

"It strikes me that now is exactly the time for us to deal with this problem," he said. "For all of you who've been elected to office, or those of you who are heading up major associations, I would just say, what better time than now. And what better cause for us to take up."

Actor Brad Pitt is making quite the scene inside the Capitol this afternoon. Teenage congressional pages were lined up 50 deep -- clogging the entrance to the Rotunda -- waiting to catch a glimpse of the Hollywood hunk.

A seemingly equal pack of reporters and photographers were bunched together by the Speaker's Balcony for a photo opportunity. Pitt spoke briefly at a photo op with Speaker Nancy Pelosi and Majority Whip James Clyburn, just before walking into Pelosi's office for a meeting.

"Did you see him?" asked one female reporter to another, as the photo op ended.

"He said like four words," the other woman said.

While Angelina Jolie films her upcoming movie "Salt" in D.C. over the next few days, Pitt met with Pelosi today to discuss his "Make It Right" project, which aims to help rebuild the Lower 9th Ward of New Orleans.

Just outside the Rotunda, the pages were continuing to wait for Pitt, hoping to see him on his way back out. "It just doesn't pay off to get here first," said one anxious female page to another.

As the White House health care summit got underway, President Obama tied the need for reform to the nation's economic woes, calling it not just a "moral imperative; it's a fiscal imperative."

"If we want to create jobs and rebuild our economy, and get our federal budget under control, then we have to address the crushing cost of health care this year, in this Administration," Obama told lawmakers and so-called "stakeholders" gathered in the East Room. "Making investments in reform now, investments that will dramatically lower costs, won't add to our budget deficits in the long-term - rather, it is one of the best ways, in fact maybe the only way, to reduce those long term costs."

Acknowledging that past efforts have failed, Obama said that the time is ripe for action now because "the call for reform is coming from the bottom up," and from "all across the spectrum." He said that those involved in this discussion won't always "see eye to eye," but he outlined several areas where he said there is agreement, most notably the idea that those who have insurance they are happy with should keep it.

"Every voice has to be heard. Every idea must be considered. Every option must be on the table -- there should be no sacred cows," he said. The one option off the table is the "status quo."

"Those who seek to block any reform at any cost will not prevail this time around," he added. "I didn't come here to Washington to work for those interests. I came to work for the American people - the folks I met on the campaign trail, the people I hear from every day in the White House."

Participants in the summit are now in five separate breakout sessions to discuss finer details of any potential reform effort. Obama will then reconvene the groups in the East Room for a Q&A session.

NRCC Chairman Pete Sessions (R-Texas) released the following statement today thanking RNC Chairman Michael Steele for his contribution to the special election race in New York's vacant 20th District. Steele has come under fire lately for his performance as the newly-minted leader of the Republican National Committee.

Sessions:

"Each of us in House Republican leadership appreciate Chairman Steele's early contribution to our effort to fight our way back to the majority. But even more than this generous donation, we appreciate his total commitment to winning the special election in New York's 20th Congressional District. He is deeply committed to rebuilding the Party in blue states, and he's putting action behind his words. Not only has Chairman Steele personally been on the ground in New York twice, his staff is fully engaged and helping to make sure we have a superior grassroots turnout operation. Having worked with Michael before, I look forward to partnering with him again as we work to expand our party."

Good morning, Washington. Today at the White House, President Obama hosts a health care summit, which will be similar in format to the recent fiscal responsibility summit. He'll delivery opening remarks to the diverse group of stakeholders before they head into breakout sessions. Obama will then field questions at a closing session in the East Room. Elsewhere in the administration, Vice President Biden is in Florida to speak to the AFL-CIO.

The Senate will continue consideration today of the omnibus appropriations bill. The Senate Homeland Security and Governmental Affairs Committee holds a hearing on how the federal government plans to account for the expected $501 billion that will be spent over the next two years as a result of the economic stimulus package.

The House will vote today on Obama's housing legislation, which will help struggling homeowners lower their monthly mortgage payments in bankruptcy court. Speaker Nancy Pelosi will meet this afternoon with actor Brad Pitt on a project to construct affordable and environmentally-sustainable housing for low-income residents of the Lower 9th Ward in New Orleans.

**President Obama
*Gallup: After months of sub-20% satisfaction with the way things are going in the country, the satisfaction level has been 20% or higher for the last seven days.

*The Washington Post, previewing today's health care summit: "Obama's opening gambit to dramatically expand the health-care system has attracted surprising notes of support from insurers, hospitals and other players in the powerful medical lobby who are set to participate in an unusual White House summit on the issue this afternoon. The lure for the industry is the prospect of tens of millions of new customers: If Obama succeeds in fulfilling his pledge to cover many more Americans, those newly insured people will get checkups, purchase medicine, undergo physical therapy and get surgeries they cannot afford today."

*The New York Times writes about how the administration is "grappling with the cloud that still lingers" over the Clinton health care plan "15 years after it imploded." "Intent on establishing herself as a powerful secretary of state, she has steered clear of public statements on the topic and has not discussed it in any detail with President Obama."

*White House officials say the current U.S. economic crisis only makes health care reform more imperative. Senior policy adviser Melody Barnes: "Our healthcare costs are exploding our economy. When he talks about getting spending under control ... one of the primary things he is focusing on is bringing our healthcare costs under control."

*Wall Street Journal says that the administration is considering changes to a proposal in his budget to reduce tax deductions enjoyed by upper-income Americans. "But after objections from Democratic lawmakers, Treasury Secretary Timothy Geithner appeared to suggest at one point Wednesday that the administration was willing to consider dropping or modifying the proposal. The resistance from Mr. Obama's own party -- focusing on a single element of the president's tax plans -- could foreshadow broader troubles for the rest of his proposed tax increases."

*Vice President Joe Biden is expected to reiterate the White House position that ''a strong middle class needs a strong labor movement" at the AFL-CIO meeting in Miami today. He'll also visit to a transit hub under construction near Miami International Airport, "where he will likely highlight President Obama's stimulus aid for transportation projects."

*The administration is hiring Vivek Kundra as the first-ever "Chief Information Officer." He's currently with the DC government. "Kundra, 34, is expected to oversee how government agencies purchase and use information technology and will be in charge of all federal technology spending. He also will be responsible for making sure agencies' networks and systems work together and share information while maintaining security and privacy standards."

*"Barack Obama won the presidency in large measure because he presented himself as a demarcation point," Karl Rove writes in the WSJ. "Last week's presentation of his budget shows that hope was a mirage."

*On a less serious note, the New York Times spends an entire 586 words about Obama's hair turning gray. "Mr. Obama's graying is still of the flecked variety, and appears to wax and wane depending on when he gets his hair cut, which he does about every two weeks. His barber, who goes by only one name, Zariff, takes umbrage with bloggers who alternately claim Mr. Obama, 47, is dyeing his hair gray (to appear more distinguished) or dyeing it black (to appear younger). "I can tell you that his hair is 100 percent natural," Zariff said. "He wouldn't get it colored."

*And everyone reports that the Obamas got a swing set for Malia and Sasha, just a stone's throw away from the Oval Office. "The president, the first lady and the girls tested out the swing set together. The first lady's office says that the Obama daughters, 10 and 7 years old, stayed playing for over an hour after their father had gone back to work."

**Congress
*And so begins Congress's investigation into the Bush administration: Karl Rove and former White House counsel Harriet Miers will testify on the U.S. Attorney firings in front of the House Judiciary Committee. Speaker Nancy Pelosi said this "upholds a fundamental principle: no one is above the law and Congressional subpoenas must be complied with."

*D.C. Voting Rights Snag: "The issue of giving the District of Columbia representation has been 'hijacked,' as one aide characterized it, by those favoring a lifting of many gun restrictions in Washington, D.C. Conservative Democrats who favor gun rights have been caught in the middle as the matter shifts to the House," reports the NYT.

*Former Lawmakers Get Earmarks?: "A $410 billion bill that would keep the government running through September directs $227 million to pet projects for former lawmakers, including an ex-congressman facing corruption charges, a USA TODAY analysis shows."

**Republicans
*Steele In The Ticking Off Business: WaPo: "Republican National Committee Chairman Michael S. Steele says he will keep pressing forward on his plans to remake the party, even if he occasionally annoys moderates or conservatives. 'I'm in the business of ticking people off,' he said in an interview. 'That's why I'm chairman.'"

*Congressional GOP on Rush: "Congressional Republicans are trying to figure out how to distance themselves from Rush Limbaugh without really distancing themselves too much from Rush Limbaugh. Democrats laid the trap by declaring Limbaugh the head of the GOP, and Republicans in Congress can't seem to figure out how to solve the riddle."

*Rush Limbaugh challenged Obama to appear on his radio show in the latest rounds between the host and the White House. And he had this to say about WH Chief of Staff Rahm Emanuel: "Rahm Emanuel is the power behind the throne. And don't let his effeminate nature and his ballerina past mislead you on this. He may look effeminate. He was a ballerina at one time. But he has the feral instincts of a female rat defending its young."

*Minority Leader John Boehner has an op-ed today in the Washington Post on Limbaugh, after yesterday's from David Plouffe. "President Obama has said that we must change the way Washington operates in order to address the unprecedented challenges of today. I hope that those inside and close to the administration begin heeding his advice, because the change-the-subject campaign they are employing is the oldest trick in Washington's book."

*NRSC chair John Cornyn is circulating an e-mail to supporters calling the Limbaugh attacks an "outrage." "During his campaign last year, President Obama promised to bring a new tone to Washington. He decried partisan politics ... Yet, just weeks into his Administration the President's staff has been caught engaging in a coordinated and cynical political attack game - the very diversion and manipulation then-candidate Obama attacked the McCain campaign for last year."

**Campaign Stuff
The Columbia State reports that with Gresham Barrett entering the South Carolina gubernatorial race, it looks like "a replay, of sorts, of the 2002 race between Mark Sanford (then an ex-congressman), Charlie Condon (then the state attorney general) and Bob Peeler (then the lieutenant governor)." Current Lt. Gov. Andre Bauer and Attorney General Henry McMaster also are considering bids.

--Mike Memoli and Kyle Trygstad

The anti-tax Club for Growth has endorsed its first candidate of the 2010 election cycle, announcing today its support for Republican Kevin Calvey in the race for the open 5th District in Oklahoma.

Rep. Mary Fallin (R-Okla.), who represents Oklahoma City, announced over the weekend that she's running for governor next year rather than for re-election to a third term. Fallin won a deep Republican primary in 2006, when the 5th District was last open.

The Club chose to endorse Calvey so early due to his eight-year record in the state legislature, when he "proved himself to be a genuine fiscal conservative."

"Given Kevin Calvey's record in the Oklahoma House of Representatives, we have every reason to believe he will be a strong fiscal conservative in Congress," said Club for Growth President Pat Toomey. "As Congress seems more and more determined to spend the country into oblivion, Washington could use a fighter like Kevin Calvey to stand up for taxpayer's hard-earned money. The Club for Growth PAC is proud to issue its first endorsement of the 2010 cycle in support of such a principled candidate."

Oklahoma City Mayor Mick Cornett, who took Fallin to a runoff in 2006, is said to also be considering a bid, as is fellow 2006 race alumnus Johnny Roy and State Rep. Mike Thompson. The Oklahoman reported that all were at the Oklahoma County Republican Convention over the weekend when Fallin announced her gubernatorial bid.

The D.C. Voting Rights Act of 2009, passed by the Senate last week and scheduled to hit the House floor this week, has hit a snag.

"A House vote on the D.C. House Voting Rights Act will be postponed to allow more time for discussion on outstanding matters," House Majority Leader Steny Hoyer announced in a released statement today.

The gun amendment sponsored by Sen. John Ensign (R-Nev.) was agreed to in the Senate last week, and the fear a similar amendment would pass in the House forced Democratic leadership to pull it yesterday from the House floor. The amendment would strike out the restrictive gun restrictions currently utilized in the nation's capital, which Ensign said today were "much too burdensome."

"There's no question if it is voted on it will pass," Ensign said of a potential gun amendment to the House bill. "And that's what Nancy Pelosi is afraid of."

D.C. voting rights supporters oppose Ensign's gun amendment, which would take away the District government's power to enact any laws that restrict gun ownership not prohibited by federal law. Ensign said today that he'd be willing to discuss his amendment but would not commit to a compromise because "they haven't offered anything."

Asked if he'd rather see the bill pass with his amendment, or his amendment fail along with the bill, Ensign said: "I'd rather see the legislation go down and my legislation passed."

House Minority Leader John Boehner weighed in yesterday after the bill was pulled from House consideration, calling out Democratic leaders for their "hollow" promise to restore "regular order" in the House. "By maneuvering to deny Second Amendment rights to residents of our nation's capital, Democratic leaders have made it clear that 'regular order' and the will of the American people will be respected only when it serves their interests," Boehner said.

Hoyer said today he would continue to resolve the issues keeping the bill from the House floor. "I remain committed to working with the Democratic leadership, Congresswoman Norton, President Obama and all other supporters of D.C. voting rights to address the remaining challenges so we can bring this historic legislation to the Floor as soon as possible," he said.

As the White House continues to promote initiatives it says are cutting wasteful spending, questions are mounting about why President Obama will not take a stronger line on the omnibus spending bill in Congress, which has been derided as full of pork and irresponsible spending increases.

Today, Robert Gibbs invited to his press briefing Secretaries Janet Napolitano and Tom Vilsack, who outlined specific steps they've undertaken to find savings in the budgets of the Homeland Security and Agriculture Departments, respectively. This after Obama himself said he would save $40 billion by reforming the Pentagon procurement process.

But when he was asked again why they won't take a stronger line on the omnibus bill, Gibbs simply repeated what has become the company line.

"This is the culmination of the legislative business from the previous fiscal year from the previous Congress," he said, adding again that the president is "concerned" and that his record has shown his commitment to earmark reform. "The president believes that we can work with Congress to reduce wasteful spending in the future."

Pressed about the fact that the omnibus legislation is still pending and could be changed, Gibbs promised that Obama will soon "lay out some very clear objectives" about handling earmarks in the future.

A cynic might argue that allowing the omnibus bill to move forward is simply acquiescing to business as usual in Washington, a clear break with the president's rhetoric. Further questions were raised when Gibbs could not give a clear answer about whether Obama would support a new effort to have a line item veto.

"If they want to send it down, the president will use it," Gibbs eventually said when asked if Obama wants the power.

Gordon Brown, prime minister of the United Kingdom, addressed a joint meeting of Congress this morning in the House chamber. His 33-minute speech touched on the importance of the United States' role in world affairs, and he said the world has never been more ready to work together with the U.S.A.

"You now have the most pro-American European leadership in living memory," Brown said. "Now, more than ever, the world wants to work with America."

Brown said there were two new battles America and the rest of the world must tackle today: "a global economy in crisis and a planet in peril."

Most of Brown's standing-ovation lines brought both sides of the aisle to their feet, though certain ones -- such as bringing fortune to everyone, not just the fortunate -- received a mixed reception from Republicans.

Defending his budget plan, President Obama maintained that discretionary spending would actually drop over time, something he said hasn't been clear in "the chatter on the cable stations."

"It reduces discretionary spending for non-defense programs as a share of the economy by more than 10 percent over the next decade, to the lowest level in nearly half a century," he said. "I want to repeat that. I want to make sure everybody catches this."

The statement comes as lawmakers begin delving into the outsized plan, released last week to skeptical reviews. The president, standing with Sen. John McCain, said he is "cutting what we don't need to make room for what we do."

Obama also announced plans to reform the procurement process, which he said has been "plagued by massive cost overruns, outright fraud, and the absence of oversight and accountability."

"The American people's money must be spent to advance their priorities, not to line the pockets of contractors or to maintain projects that don't work," he said. "As commander in chief, I will do whatever it takes to defend the American people. ... But I reject the false choice between securing this nation and wasting billions of taxpayer dollars."

Reforming the procurement process was a topic raised by McCain at last week's fiscal responsibility summit. Obama praised his former rival, and Sen. Carl Levin, for leading a separate effort on Capitol Hill to reform the process, saying he would work to incorporate their ideas.

"What's encouraging is there's broad, bipartisan consensus on behalf of reform, and we are committed to take swift action that changes our system of contracting to save taxpayers' money," he said.

The executive order signed today, Obama said, would "stop outsourcing services that should be performed by the government, and open up the contracting process to small businesses," as well as "strengthen oversight to maximize transparency and accountability." He said these reforms would save $40 billion each year.

Good Wednesday morning. U.K. Prime Minister Gordon Brown will speak this morning to a joint meeting of Congress. The Senate will continue consideration of the omnibus appropriations bill, while the House deals with the D.C. Voting Rights Act, among other bills.

Congress also continues to examine President Obama's proposed budget. The Senate Finance Committee begins looking at it today, while OMB Dir. Peter Orszag testifies before the House Ways and Means Committee.

Obama will reportedly sign an executive order today changing the process for awarding government contracts. The rest of his day is in private meetings, but tonight he'll host another social event at the White House, this time a dinner for Congressional committee chairmen.

**President Obama
*AP: This morning, President Obama will announce proposed changes in how government contracts are awarded, which the White House says will save $40 billion a year. "During last week's White House meetings on the nation's financial future, lawmakers and officials bluntly told top Obama aides that government contracts needed to be handled in a better way."

*Obama yesterday suggested that with stocks at historic lows, it may be a good time for investors to buy. "The president's words did little to inspire Wall Street, however. The S&P 500 closed under 700 for the first time since October 1996 and the Dow Jones industrial average sank for the fifth day in a row, closing down 37.27 points at 6,726.02."

*Washington Times looks at the challenges Obama is facing from his fellow Democrats on earmarks. Steny Hoyer and Harry Reid "said that banning earmarks would undermine Congress' constitutional power to control the government's purse strings and would cede to the executive branch critical decisions on where federal taxpayer dollars are spent."

*Sen. Evan Bayh (D-Ind.) has an op ed in the Wall Street Journal opposing the current omnibus bill.

*Dana Milbank writes that the Brits did not exactly feel that Obama gave Prime Minister Brown a warm embrace. "For the president -- beloved by the world largely for the fact that he is not Bush -- it was a surprisingly cool reception for an ally. ... In the next 13 visits Blair made to the United States to meet with Bush, all but one included a full stand-at-the-flags-style news conference."

**Congress and the Budget
*Politico: "A group of 14 Senate Democrats and one independent huddled behind closed doors on Tuesday, discussing how centrists in that chamber can assert more leverage on the major policy debates that will dominate this Congress. Afterward, some in attendance made plain that they are getting jitters over the cost and expansive reach of Obama's $3.6 trillion budget proposal."

*USA Today: "Some of President Obama's top economic officials got an earful from members of Congress on Tuesday about what troubles them in the president's budget plan: Spending. Taxes. Deficits. Debt. And the economic forecasts upon which the budget is based."

*Washington Post: "Rebutting Republican charges that the plan would raise taxes on a broad swath of Americans," Peter Orszag and Tim Geithner "said the tax increases -- aimed primarily at business and a few million families who earn more than $250,000 a year -- are essential to reducing record budget deficits bloated by financial-sector bailouts and federal spending to prop up the economy."

**Rush vs. Steele
*Obama campaign manager David Plouffe wrote an op-ed in the Washington Post this morning titled, Minority Leader Limbaugh. "The 2008 election sent many messages. At the top: Americans wanted to turn the page on the politics of division and partisan pettiness, and they wanted a government -- and country -- that would put the middle class first. Watching the Republicans operate this past month, it would appear that they missed that unmistakable signal. Instead, Rush Limbaugh has become their leader."

*Politico's Martin: "Top Democrats believe they have struck political gold by depicting Rush Limbaugh as the new face of the Republican Party, a full-scale effort first hatched by some of the most familiar names in politics and now being guided in part from inside the White House."

*Greta Van Sustren, Sean Hannity and Laura Ingraham went through the Steele vs. Limbaugh argument last night on FNC. Click here for a transcript of what they said.

*Chuck Todd, on "Morning Joe": "It's win-win for Rush. Rush is not exactly upset that he's been picked out as the opposition to the president...He's loving it." On RNC Chair Michael Steele: "He is bordering on becoming a version of Howard Dean on the Republican side...Steele, if he's not careful, will not have the respect of party insiders."

*Politico reports that key GOP leaders are already worried that the party "made a costly mistake" in choosing Michael Steele as chair. "Steadily becoming a dependable punch line, Steele has brushed back Rush Limbaugh, threatened moderate Republican senators, offered the 'friggin' awesome' Louisiana Gov. Bobby Jindal some 'slum love,' called civil unions 'crazy' and promised more outreach to 'urban-suburban hip-hop settings' via an 'off the hook' public relations campaign." He also does not have a chief of staff, a political director, a finance director or a communications director.

*Steele was on the "Today" show this morning defending himself.

**Campaign Stuff
*IL-5: You can say hello to the new congressman from Illinois's 5th District, Democrat Mike Quigley. He still has to defeat a Republican and Green Party candidate in the April 7 special general election, but his win last night in the primary is tantamount to an election to Congress in this Chicago district, formerly held by Rahm Emanuel. Click here for complete unofficial results.

From the Chicago Tribune: "The special primary in the 5th Congressional District yielded low voter turnout at the end of a two-month campaign -- potentially a plus for Quigley, who started the race as the best-known of the dozen Democrats following years of public battles with two Stroger administrations. With 95 percent of precincts counted, Quigley had 22 percent in the crowded field."

*L.A. Mayor: "Los Angeles Mayor Antonio Villaraigosa secured a second four-year term in Tuesday's election," reports the L.A. Times. "With about half of the votes counted, Villaraigosa avoided a runoff against the second-place candidate, attorney Walter Moore.The mayor had been expected to secure the needed majority, given that he had appeared in television commercials for himself and two other campaigns -- and had outspent Moore by a ratio of 15 to 1."

--Kyle Trygstad and Mike Memoli

With most of the votes counted in the Illinois 5th, Cook County Commissioner Mike Quigley holds what his campaign now calls a "virtually insurmountable" lead in the Democratic primary. The nomination is tantamount to victory in the heavily-Dem district.

With 85% of the precincts reporting as of 9 pm CST, here's how the vote stacks up:

Mike Quigley         10,390     22%
John Fritchey         8,079     17%
Sara Feigenholtz      7,984     17%

A release from the Quigley campaign, though short of declaring victory, points out that the candidate was outspent all of his opponents by a 5-to-1 margin, $3 million to $550,000.

Quigley will face the Republican nominee on April 7 before he can officially take Rahm Emanuel's (and Rod Blagojevich's) old seat.

Robert Gibbs again took issue with the commentary of a CNBC personality, today suggesting that Jim Cramer's claim that President Obama is pursuing a "radical agenda" is unfounded.

"I'm not entirely sure what he's pointing to to make some of the statements," Gibbs said at his daily press briefing. "You can go back and look at any number of statements he's made in the past about the economy and wonder where some of the back-up for those are too."

On "Mad Money" last night, Cramer said Obama's agenda "is destroying the life savings of millions of Americans." "I just want some sign that Obama realizes the market is totally falling apart. And that his agenda has a big hand in that happening," he said. On the "Today" show this morning, he went on to say Obama's budget "basically put a level of fear in this country that I have not seen ever in my life," and represents "the greatest wealth destruction I've seen by a president."

"Some people are on TV every day to comment on the tracking poll," Gibbs said, picking up on an analogy from his boss. "There are other people that were elected to try to fix the problem." He added that the cable hosts are tailoring their message "to a very small audience," while President Obama "has to look out for the broader economy and the broader population."

The question about Cramer's comments came from NBC's Tom Costello (here's betting this exchange ends up on "Nightly News" tonight). The latest flare-up comes 11 days after Gibbs slammed CNBC's Rick Santelli for comments about Obama's housing plan.

Gibbs' response was markedly tamer today, though. "There are very few days that I've had more fun," Gibbs said of the Santelli response. "I was afraid I was going to have too much more fun."

New York Gov. David Paterson broke the wrong kind of record today, with The Marist Poll announcing that Paterson's approval rating came in lower than any other governor in the pollster's 30 years of tracking.

With just 26% saying Paterson is doing an excellent or good job -- including 30% of Democrats, 26% of Republicans, 20% of independents -- he drops below Gov. Eliot Spitzer's 30% approval in March 2008, just before resigning from office. Paterson's rating has dropped 20 points in just over a month.

Paterson is also falling way behind in potential 2008 primary and general election matchups. Tested against Paterson were Democrat Andrew Cuomo, and Republicans Rudy Giuliani and Rick Lazio. Sen. Kirsten Gillibrand (D) is likely facing a difficult election in 2010 as well, and Marist tested Democratic Rep. Carolyn McCarthy, and Republicans Rep. Peter King and former Gov. George Pataki.

Here is how they matched up:

Governor
Democratic Primary
Cuomo 62 - Paterson 26

Republican Primary
Giuliani 78 - Lazio 17

General Election Matchups
Giuliani 53 (+6 vs. last poll, Jan. 27) - Paterson 38 (-8)
Paterson 47 - Lazio 35

Cuomo 71 - Lazio 20
Cuomo 56 - Giuliani 39

Senate
Democratic Primary
Gillibrand 36 - McCarthy 33

Republican Primary
Pataki 56 - King 32

General Election Matchups
Gillibrand 49 - King 28
Gillibrand 45 - Pataki 41

It's worked before.

President Obama urged Americans not to read too much into the day-to-day fluctuations of the stock market, comparing it to a daily tracking poll and saying a broader view is needed before jumping to conclusions about his economic plans.

"I'm looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing," Obama said in the Oval Office after a meeting with British Prime Minister Gordon Brown. "The stock market is sort of like a tracking poll in politics. It bobs up and down day to day, and if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong."

The media has come lately to using the Dow Jones Industrial Average as a barometer of Obama administration policies. Treasury Secretary Timothy Geithner's announcement of principles of a financial system reform effort was panned when the Dow plummeted. It took another dip when the market feared nationalization of banks. Press secretary Robert Gibbs even jokingly took credit for a rally the next day when he downplayed those fears, noting an uptick of more than a hundred points during his briefing.

Obama did concede, however, that the banking system "has been dealt a heavy blow," and said there are a number of factors "working their way through the system." "As people absorb the depths of the problem that existed in the banking system, as well as the international ramifications of it, that there's going to be a natural reaction," he said. Coordinating with other G20 countries, as Brown has suggested, could be a step toward rebuilding confidence in the global economy, Obama added.

The meeting of Brown and Obama, the first between the new president and a European leader at the White House, comes one month before a meeting of global leaders next month in London. Obama reinforced the notion of a "special relationship" between the two countries, calling a question by a British journalist about whether he has less of a Euro-centric view than his predecessors "misguided."

"Great Britain is one of our closest, strongest allies and there is a link, a bond there that will not break," he said.

Brown, eager to use the photo op to boost sagging popularity across the pond, tried his best to be chummy with the president.

"I've enjoyed every conversation that we've had, both on the telephone and when we've met. I don't think I could ever compete with you at basketball -- perhaps tennis," he suggested.

"I hear you got a game," Obama responded.

Former State Delegate Brian Moran (D) is releasing his first radio ad of the primary campaign for Virginia governor. The one-minute ad will begin airing tomorrow in Hampton Roads, where large military and African American populations reside.

The ad features former Delegate Mary T. Christian, who represented Hampton in the State House for close to 20 years. "Known to many as 'Doctor C,' I had the honor of being the first African American elected to the Virginia General Assembly from Hampton in over 100 years," Christian says in the ad. "And I know what it means to stand up for our community. That's why I'm supporting Brian Moran to be the next governor of Virginia."

Moran's campaign has focused largely on winning the endorsements of local leaders. His supporters in the populous Hampton Roads area include the mayors of Norfolk, Newport News, Portsmouth and Hampton.

He also boasts the endorsements of Richmond Mayor Dwight Jones and Petersburg Mayor Annie Mickens, who -- as with the mayors of the Hampton Roads cities -- are from cities with large African American populations. African Americans made up one-fifth of the Virginia electorate in the 2008 general elections.

With the primary just three months away, a new poll released today showed the Democratic race between Moran, former DNC Chair Terry McAuliffe and State Sen. Creigh Deeds still up in the air.

As he predicted it would, Sen. John McCain's (R-Ariz.) amendment to the omnibus appropriations bill was voted down today on a 32-63 roll call vote. McCain's measure would have wiped out the $410 billion bill and kept most federal spending for fiscal year 2009 at its 2008 level.

"Right now we are laying a huge debt, a debt on our children and grandchildren which is not in keeping with our responsibilities," McCain said. "I urge my colleagues to vote for this...amendment. I doubt if it will be passed."

As he did yesterday, McCain called out some of the earmarks that are attached to the omnibus and called on President Obama to veto the final bill. "The whole process has to be fixed," he said.

Just two Democrats voted for the amendment, while nine Republicans voted against it. The Senate will take up further amendments to the bill later this afternoon.

The stimulus bill has been law for two weeks now, but President Obama is still selling it. At an event at the Transportation Department this morning Obama sought to demonstrate progress, saying the first highway construction contract has been awarded, and 200 more will break ground in coming weeks.

These projects, Obama said, are "fueling growth in an industry that's been hard hit by our economic crisis." He estimated that projects like highway repairs will create or save 150,000 jobs by the end of 2010 - more jobs than were cut by GM, Ford and Chrysler. According to a White House release, one third of those jobs are created secondarily, through increased spending by those who are directly employed through the construction jobs.

The president announced that each project made possible by recovery funds will include special signage indicating as such.

"Let it be a reminder that our government, your government is doing its part to put the economy back on the road to recovery," he told department employees.

Obama was joined by Vice President Biden, who he said is called "The Sheriff" around the White House for his oversight role of recovery funds.

"If you're misusing taxpayer money, you'll have to answer to him," Obama said.

As the stock market continues to drop and his economic team works to sell his massive budget plan, Obama sought to reassure Americans that his philosophy was the right one for this crisis.

"There are those out there who say this can't be done, it can't be done efficiently, it can't be done effectively. We've gone through a lot of years where we're told what government cannot do," he said. "Government can't do anything by itself, we've got to have the private sector involved. But there are critical things that government can do."

Good morning, Washington. Today, President Obama has a full schedule, with the main event being a visit by British Prime Minister Gordon Brown. The economy should be the focus as both countries look toward recoveries. Obama will also visit both the Transportation and Interior Departments -- the former to promote the stimulus plan, and the latter in honor of its 160th birthday. The president also hosts Boy Scouts in the Oval Office, before meeting with Eagle Scout and Defense Secretary Robert Gates.

On the Hill, the Senate continues consideration today of the $410 billion omnibus appropriations bill, with votes scheduled to begin by noon. Treasury Sec. Tim Geithner and OMB Dir. Peter Orszag will be testifying in separate House committees today on Obama's budget.

And it's always a good day when voters are voting. Today it's in Chicago, where the Fifth District seat once held by Rahm Emanuel is up for grabs. The Democratic primary is where all the action is, and despite a wide field, the favorites are Mike Quigley (backed by the Tribune and Sun-Times), Sara Feigenholtz (heavy union support and EMILY's List), and John Fritchey (backed by most ward organizations).

Here's what we're reading this a.m.:

**President Obama
*Yesterday's nominations of Kathleen Sebelius and Nancy DeParle set up a week that will mostly be dominated by health care. Michael Scherer profiles the lesser-known DeParle, "known in health care policy circles as one of the brightest minds of her generation, and, Obama now hopes, one of a select group who know enough to make health reform happen this year." Her new position as "health czar" was originally part of Tom Daschle's job description. "But with Daschle out, the White House still decided it needed a high-level coordinator for the reform effort."

*WSJ looks at questions heading into the health care fight: "Should large businesses be required to offer workers coverage? ... Would a bare-bones plan with limited coverage qualify? Should individuals be required to buy insurance? ... Should a public plan be created to compete with private insurers? ... How to pay for it all?"

*Rep. John Marshall (D-Ga.), a member of the Blue Dog coalition, told ABC he's unlikely to support Obama's health care plan unless he's shown it won't add to America's long-term debt. "Frankly all of us would like to see more Americans have access to health care and there will be a lot of different arguments concerning the appropriate plan, but I think there's a larger issue on the table now and I think the President has a real opportunity to show some leadership with regard to that issue, and it's the long-term fact that our budget just isn't sustainable," he said.

*Prime Minister Gordon Brown plans to sell the idea to Obama that the effects of the two countries' economic bailout packages would be "magnified" if they worked closely together. BBC: "Downing Street dismissed suggestions that the visit had been downgraded by President Obama after it emerged there would not be a formal joint press conference. Mr Brown's spokesman said there 'will still be a media availability' when the two men meet." (Press secretary Robert Gibbs seemed unsure of the format yesterday; the official schedule called only for a pool spray.)

*More Tax Problems...Really?: "Leaders of the Senate Finance Committee this afternoon revealed that another of President Obama's nominees -- U.S. Trade Representative-designate Ron Kirk -- has tax problems," reports CongressDaily.

*Washington Post reports that Obama made private overtures to Russian President Medvedev. A letter hand-delivered to the leader "raises the prospect of the United States halting development of its missile defense program in Eastern Europe if Russia helps resolve the threat posed by Iran's nuclear program, senior administration officials said last night."

*Secretary of State Hillary Clinton, joined by envoy George Mitchell, is in Israel today. At a meeting this morning with President Shimon Peres, Clinton repeated her warnings that rocket attacks from Gaza against Israel "must cease." She was also to meet with both party leaders (they haven't sorted out the new prime minister).

*How low can it go? The Dow is back to '97 levels as it dropped below 7,000. USA Today: "Of all the bear markets in Dow's long history, only the 89.2% drop during the Great Depression was worse."

**Congress
*Budget on the Hill: Obama "is sending his Treasury secretary and budget director to Capitol Hill on Tuesday to defend his proposed tax increases, which are being met with misgivings by both Republicans and Democrats in Congress," reports the AP.

*"White House budget chief Peter Orszag is preparing to push back against critics portraying the Obama budget as a massive increase in federal spending. Mr. Orszag says President Barack Obama's fiscal blueprint would put funding for basic government operations -- outside of the military -- on a downward path over the next decade," reports the WSJ.

*The Senate is considering the $410 billion omnibus appropriations bill, which the House passed last week. The package reportedly has more than 8,000 earmarks attached to it. Republicans have criticized Obama for agreeing to a earmark-laden bill, though WH Press Secretary Robert Gibbs announced yesterday that Obama "will release new rules for earmarks prior to signing the bill," writes the Washington Times.

*WaPo's Milbank details McCain's Senate floor outburst: "In the four months since the presidential race, the former Republican nominee has been, for the most part, a graceful loser, returning to the Senate to lead the loyal opposition with dignity. But yesterday, he exploded."

**Republicans
*RNC chair Michael Steele told Mike Allen that he reached out to Rush Limbaugh "to tell him he meant no offense" for calling him an "entertainer" whose show can be "incendiary." Steele: "My intent was not to go after Rush - I have enormous respect for Rush Limbaugh. I was maybe a little bit inarticulate. ... There was no attempt on my part to diminish his voice or his leadership." More: "I went back at that tape and I realized words that I said weren't what I was thinking. It was one of those things where I thinking I was saying one thing, and it came out differently. What I was trying to say was a lot of people ... want to make Rush the scapegoat, the bogeyman, and he's not."

*AP notes that Democrats couldn't have been happier to see Steele apologize. Gov. Tim Kaine: "Chairman Steele's reversal this evening and his apology to Limbaugh proves the unfortunate point that Limbaugh is the leading force behind the Republican Party, its politics and its obstruction of President Obama's agenda in Washington."

*Howard Kurtz writes about how eager the White House is to make Limbaugh out as the party leader. "White House officials contend that, with Limbaugh commanding more airtime than any other prominent Republican, they are obliged to respond to his call for the president's failure -- which they are more than happy to equate with financial ruin."

*Bobby Jindal talked to Larry King about his State of the Union response. "Let's be clear, the president is a great speaker -- probably the greatest we've seen in a generation. I'm certainly not nearly as good of a speaker as he is. And I'm not the only one that's got that opinion. I hope people look at the content of the speech, not just the delivery. You know, for years, I've been told I speak too quickly. Now I'm told I speak too slowly."

**Campaign Stuff
*Today is primary day in Chicago in the race to succeed Rahm Emanuel. From the Sun-Times: "The candidates have their volunteers working phone banks, calling and re-calling supporters to make sure they will be turning out to the polls today in what is expected to be a very low-turnout election. The temperature outside is expected to be below freezing today, which bodes well for candidates such as State Rep. John Fritchey, who has the lion's share of the Democratic ward organizations backing him."

*KY SEN: "Republicans have a new strategy for dealing with the wildly unpredictable Sen. Jim Bunning (R-Ky.): keep their distance and hope he implodes. That means little fundraising help from top Republicans in Washington, little to no engagement with the National Republican Senatorial Committee and a cold shoulder from Kentucky political strategists," reports Politico.

**Of Course He Is: Blago is writing a book about the Senate appointment. Ca-ching!

--Mike Memoli and Kyle Trygstad

Club for Growth President Pat Toomey released a statement this afternoon indicating that he is once again considering a run for Senate in Pennsylvania:

"As this disastrous recession worsens, I have become increasingly concerned about the future of our state and national economy. Unfortunately, the recent extraordinary response of the federal government -- more corporate bailouts, unprecedented spending and debt, higher taxes -- is likely to make things worse. I think we are on a dangerously wrong path. Pennsylvanians want a US Senator focused on real and sustainable job creation that gets our economy growing again. That is why I am considering becoming a candidate for the US Senate."

Toomey, a former Pennsylvania congressman from 1998-2004, announced in January that he would not challenge Sen. Arlen Specter (R-Pa.) again in 2010. Toomey left the House to challenge Specter in the 2004 Republican primary, but lost by a 51 percent to 49 percent margin.

With all the chatter about Gov. Bobby Jindal's (R-La.) response to Pres. Obama's address to Congress last week, do you remember who gave last year's? It was none other than Gov. Kathleen Sebelius (D-Kan.), now the HHS Secretary-designate. The next day, she endorsed then-candidate Barack Obama during what were then critical days leading up to Super Tuesday.

Also worth noting, given her new status, is how health care was only a small part of her response. She urged then-Pres. Bush to move on SCHIP legislation; Pres. Obama signed it into law last month. Here's what she said then:

We know that we are stronger as a nation when our people have access to the highest-quality, most-affordable health care. When our businesses can compete in the global marketplace without the burden of rising health care costs here at home.

We know that caring for our children, so they have a healthy and better start in life, is what grownups do. Governors in both parties, and a large majority of the Congress are ready, right now, to provide health care to 10 million American children, as a first step in overhauling our health care system.

Join us, Mr. President, sign the bill and let's get to work.

As he left this afternoon's announcement with Sebelius, Obama said: "We're going to go get to work."

Sebelius' full speech after the jump.

President Obama today announced the appointment of two women, Gov. Kathleen Sebelius (D-Kan.) and Nancy Ann DeParle, to lead what may be the toughest fight of his presidency as he seeks to implement national health care.

"Health care reform that reduces costs while expanding coverage is no longer just a dream we hope to achieve, it's a necessity we have to achieve," Obama said at a rather Spartan ceremony in the East Room this afternoon

Sebelius and DeParle will fill separate rolls that were to have been handled by Tom Daschle before he withdrew his nomination last month. Obama said that in Sebelius, the nation will have a person of "remarkable intellect" and "unquestioned integrity" leading the Department of Health and Human Services. He also noted shared roots in saying she has the "kind of pragmatic wisdom you'll tend to find in a Kansan."

Her status as a Democratic governor in a ruby-red state was also key to the decision, as Obama said that any movement toward health care reform requires a "that focuses not on Democratic ideas or Republican ideas, but on ideas that work to rein in costs, expand access, and improve the quality of health care for the American people."

Obama closed his remarks by acknowledging the daunting challenge ahead, but played up the outsider rhetoric that was key to his success.

"I realize that there are those that simply don't believe Washington can bring about this change, and the odds are long," he said. "It's failed too many times. There are too many special interests and entrenched lobbyists invested in the status quo. ... But I also know this - I didn't come to Washington to take the easy route, or work for the powerful and the well-connected interest who have run this city for too long. I came to work for the American people. I came here to deliver the sweeping change that they demanded when they went to the polls in November."

Though not likely to be confirmed, Sebelius will likely participate in a health care summit at the White House this Thursday as the administration expands focus on its domestic agenda beyond the economy.

Democrat Scott Murphy and Republican Jim Tedisco, locked in a special election battle for the vacant seat in New York's 20th District, have both recently hit the airwaves with new ads. Tedisco's campaign launched two new TV ads -- one positive and one negative -- while the DCCC has funded a new radio ad for Murphy, who has also had ads on TV.

Tedisco's positive ad, titled "He's Fighting For Us," features Tedisco and a series of supporters talking up his legislative achievements. "Jim Tedisco single-handedly saved that health clinic," says one supporter. "Told Spitzer: 'no driver's licenses for illegal aliens,'" said another.

His negative ad, "Scott Murphy Never Wanted Us To Know," hits Murphy for his work as a venture capitalist. "Murphy's just another Wall Street millionaire, hiding a past that's threatening our future."

Meanwhile, Murphy's radio ad, "Just Won't Do," defends his tax-paying record, which Tedisco and the NRCC have been using as an attack line for weeks, and knocks Tedisco for refusing to state whether he supports the economic stimulus package signed by President Obama. Newspaper editorials in the district have called on Tedisco to take a stand on the stimulus.

Here is an excerpt from the ad:

The worst economic downturn since the Great Depression ... even more jobs lost Upstate. But Jim Tedisco refuses to say whether he supports President Obama's economic policies ... refuses to say whether he supports the jobs stimulus law. Instead, Jim Tedisco attacked his opponent, and The Times Union confirms Jim Tedisco's attack on Scott Murphy, quote, "misrepresents the facts." Scott Murphy has paid all his taxes.

Good snowy Monday morning, Washington. The House and Senate return today amidst possibly the largest snow storm to hit the capital area in three years. The Senate will begin considering the $410 billion appropriations omnibus package that the House passed last week. The House will vote tonight on a few minor bills, including the Civil War Battlefield Preservation Act and Shark Conservation Act.

Congress will begin holding hearings this week on the president's newly-offered budget. OMB Director Peter Orszag and Treasury Secretary Tim Geithner are both expected to testify on the Hill.

Kansas Gov. Kathleen Sebelius is set to be announced today as President Obama's pick for HHS Secretary, barring a last minute weather delay. If all goes according to plan, it will be the final Cabinet appointment by the administration, nearly four months after Election Day and almost four weeks after former nominee Tom Daschle dropped out due to an issue with unpaid taxes.

**Sunday Morning Talk Shows: Check out clips from all the major shows at RealClearPolitics Video, including Rahm Emanuel, Secretary Gates, and Eric Cantor.

**Sebelius to HHS
*Kathleen Sebelius will take the HHS job today at the White House, Washington Post reported Saturday. AP: "The announcement of his health and human services secretary nominee comes just days before the president holds a White House summit on health care. Lawmakers from both parties and representatives of major interest groups, from insurers to drug companies to consumers, will attend."

*Lt. Gov. Mark Parkinson, who moves up when Sebelius is confirmed, has said he won't run for a full term in 2010. AP: The former GOP chairman "senses less-than-enthusiastic support within his adopted party, and some Republicans say hard feelings remain within the GOP."

*The Kansas GOP is happy to see her go, with the executive director saying: "When Sebelius leaves, the Democratic Party ceases to exist."

*The conservative Sam Brownback (who it should be noted is leaving the Senate in hopes of taking Sebelius' old job) had praise for the appointment.

*From the NYT: "Sebelius recently observed that the greatest frustration of her six years in office had been her inability to persuade lawmakers to raise tobacco taxes for a modest expansion of government health coverage."

*Howard Dean hints at some disappointment that he did not get the HHS job. "I was pretty clear that I would have liked to have been Secretary of HHS but it is the president's choice and he decided to go in a different direction," he said. As for the person who got the HHS nod over him - Gov. Kathleen Sebelius of Kansas - he said: "I think she will be very good. She is a very nice person and I think she will be fine."

**More Obama
*The NYT reports on former Bronx borough president Adolfo Carrión Jr., who begins his new job today as director of the White House Office of Urban Affairs. "...the results of many of his initiatives and commissions are mixed, with some achieving their goals, some still in the planning stages and others fading away."

*Budget: Politico's Mike Allen reports that "conversations with an array of White House aides, allies and advisers make clear that Obama sees the massive size of his agenda as a political advantage, not a vulnerability. The decision to move big and quickly with a $3.6 trillion budget that tries to tackle not just an ailing economy but energy, education and health care was a deliberate strategy -- one that Obama believes leaves Washington's deck stacked decisively in his favor, no matter the final fate of his proposals."

**Congress
*Budget Hearings on the Hill: "White House budget officials trek to Capitol Hill to explain components of the $3.6 trillion budget that includes billions in new spending on health care, sweeping changes in school loan programs, higher taxes for more affluent Americans and companies, and a cap on carbon dioxide and other gases," The Hill reports.

*Gallup: Both parties have seen a sizeable uptick in their approval ratings since December. Democrats have gone up from 37% to 47%, and Republicans have risen from 25% to 36%. "These increases suggest that both parties have benefited perceptually from the change in government from the Bush administration to the Obama administration."

**Republicans
*At CPAC, Mitt Romney won the 2012 straw poll with 20 percent. Bobby Jindal had 14 percent, followed by Ron Paul and Sarah Palin, with 13 percent.

*But Rush Limbaugh is generating the most buzz for his speech on Saturday night. Fox has a transcript. Rush, on Obama: "He's liberal is what matters to me. And his articulated -- his articulated plans scare me. Now, I understand we can't say we want the President to fail, Mr. Limbaugh. That's like saying -- this is the voice of the New Castrati, by the way, guys who have lost their guts. You can't say Mr. Limbaugh that you want the President to fail because that's like saying you want the country to fail. It's the opposite. I want the country to survive. I want the country to succeed."

**Campaign Stuff
*In the NY-20 special election, Democrat Scott Murphy won the Independence Party line, the first time a Democrat has done so, the Daily News reports. Independence Party Chair Frank MacKay: ""It's certainly not a slight to Jim Tedisco," MacKay said. "We like him. He's a friend. But we're really excited and proud to be supporting Scott Murphy." The election is March 31, four weeks from tomorrow.

*Alexi Giannoulias will open an exploratory committee for Illinois Senate today. Lynn Sweet reports that he's running "no matter the election scenario or the other contenders." Former Commerce Secretary William Daley has floated his name "to head off Giannoulias securing early endorsements." Rep. Jan Schakowsky is also "mulling a run, with her chances of getting in more likely in a special election."

*Gov. Pat Quinn said he hasn't spoken to Sen. Roland Burris about resigning. Quinn, speaking at a Black History Month event, suggested that Burris "find a different way to serve and step aside," the Chicago Trib reports. And Sen. Dick Durbin acknowledges some racial issues surrounding his appointment, but says despite his call for him to resign: "His vote still counts, his signature is still necessary for critical appointments. I will be working with him whenever there's the need for both Illinois senators to be involved in projects. I'm going to try to work with him as well as I can."

**Sports/Obama Alert: Kyle sat four rows behind Obama at the Wizards-Bulls game in D.C. Friday night. He can report that the president did partake in good-natured trash talking with some fans sitting just behind his courtside seat, and he appeared deeply into the game despite his team's dreadful performance.

--Mike Memoli and Kyle Trygstad