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Twenty-Six States See Unemployment Rate Increases

The White House quietly celebrated an unexpected drop in the national unemployment rate last month. But in 26 states, the jobless numbers climbed from June to July, according to new data released by the Bureau of Labor Statistics today.

But 17 states did see their jobless rates drop, including Michigan. After hitting 15.2 percent mark in June, the rate dropped slightly, to 15. The unemployment rate remains in double digits in 15 states, plus Washington, D.C.

Biden, Pelosi Stress Harmony On Budget

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.

Cruising Through Space

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.


Sound Or Strong? That Is The Question

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?"

Michelle Obama and Hillary Clinton Together To Honor Women

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."

Gibbs Won't Say if Obama Approves of Congress

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.

Polls Find Majority Back Funding Stem-Cell Research

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.

WH: Won't Penalize Solis For Husband's Tax Problem

USA Today broke the story a few hours ago, that Rep. Hilda Solis' husband only now settled a 16-year tax lien. Asked about it at this afternoon's briefing, press secretary Robert Gibbs indicated that the administration's Labor Department nominee has done nothing wrong.

"We reviewed her tax returns, and her tax returns are in order," Gibbs said. "The story denotes that her husband has some issues with paying a business tax. Now obviously back taxes should be paid. She's not a partner in that business. So we're not going to penalize her for her husband's business mistakes."

In interviews this week with network anchors, President Obama acknowledged a "mistake" with other Cabinet nominees' tax issues. "We're going to make sure we fix it, so it doesn't happen again," he told CNN.

Gregg's 'Strict Fiscal Discipline' Praised By Obama

President Barack Obama formally unveiled Judd Gregg as his choice to lead the Commerce Department, playing up his decision to reach across the aisle to someone with "strict fiscal discipline."

"Clearly, Judd and I don't agree on every issue -- most notably who should have won the election," Obama said in the Grand Foyer of the White House this morning. "But we agree on the urgent need to get American businesses and families back on their feet. We see eye to eye on conducting the nation's business in a responsible, transparent and accountable manner. And we know the only way to solve the great challenges of our time is to put aside stale ideology and petty partisanship, and embrace what works."

Obama tipped his hat to Gregg's father, even making a subtle link with him. Gov. Hugh Gregg, the president noted, was the youngest chief executive in New Hampshire's history, and took office as mills were closing and "folks were laid off."

"[Gregg] watched his dad work tirelessly to attract new industry, the kind that created jobs that carried with them a sense of dignity and self worth," Obama said.

Gregg, himself a former governor, said that now "is a time to govern and govern well."

"This is not a time when we should stand in our ideological corners and shout at each other," he said. "When the President asked me to join his administration and participate in trying to address the issues of this time, I believed it was my obligation to say yes, and I look forward to it with enthusiasm."

Gregg, who if confirmed would resign from the Senate with two years left in his third term, curiously thanked Gov. John Lynch, a Democrat, "for his courtesy and courage in being willing to make this possible through the agreement that we have relative to my successor in the Senate." Lynch is expected to name a moderate Republican placeholder to the seat.

At the end of the brief ceremony, CNN's Ed Henry tried to ask the president about why members of his administration have trouble paying taxes. Obama stopped ever so briefly, but did not answer the question.

Three Strikes, Killefer's Out

Nancy Killefer, President Obama's selection for the new post of "Chief Performance Officer," has asked that her name be withdrawn, citing -- you guessed it -- tax issues.

"I recognize that your agenda and the duties facing your Chief Performance Officer are urgent. I have also come to realize in the current environment that my personal tax issue of D.C. Unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid," Killefer said in a letter to Obama, which was made public this hour.

Notably, when he announced Killefer's nomination in early January, Obama called the appointment "among the most important I will make." But shortly thereafter, the Associated Press had reported last month that Killefer failed to pay unemployment compensation taxes on "household help" in 2005, resulting in a $900 tax lien from the DC government.

Obama had praised her as "an expert in streamlining processes and wringing out inefficiencies so that taxpayers and consumers get more for their money." And perhaps most significantly, the then-president-elect singled out her work "modernizing the IRS."

Unlike Cabinet nominees Timothy Geithner and Tom Daschle, Killefer's issue was resolved within months of the problem arising, and not during the vetting process. It's unclear if there were other issues that may have prompted Killefer's decision. If not, her role with the IRS may have the prospect of the administration fighting for this appointment more untenable. Some may well suggest a gender double-standard.

NH Gov. Lynch Confirms GOP Appointment For Gregg Seat

A statement out this hour from NH Gov. John Lynch's office indicates that the Democrat will indeed appoint a Republican to replace Sen. Judd Gregg, if he is appointed to President Obama's Cabinet. Lynch, a risk-averse politician but a popular one in the Granite State, will also get the benefit of avoiding a potentially tough choice from among Democrats interested in running for the seat in 2010.

From Lynch:

"We are in the midst of a national economic crisis, and it calls for cooperation on all of our parts. We all need to work together to do what is in the best interest of our country and our state.

"I have had conversations with Senator Gregg, the White House and U.S. Senate leadership. Senator Gregg has said he would not resign his seat in the U.S. Senate if it changed the balance in the Senate. Based on my discussions, it is clear the White House and Senate leadership understand this as well.

"It is important that President Obama be able to select the advisors he feels are necessary to help him address the challenges facing our nation.

"If President Obama does nominate Senator Gregg to serve as Commerce Secretary, I will name a replacement who will put the people of New Hampshire first and represent New Hampshire effectively in the U.S. Senate."

Obama Pays A Visit To White House Press Corps

President Obama exchanged pleasantries, but took no serious questions from the White House press corps during an unannounced visit to the press briefing room just moments ago.

As he shook hands with the reporters who remained late this afternoon, he joked about his workout routine and the lack of healthy snacks in the break room. But when a reporter tried to ask about the lobbying ties of William Lynn, his nominee for deputy secretary of defense, Obama grew more stern.

"I can't end up visiting you guys and just shaking hands if I'm going to get grilled every time I come down," he said to Politico's Jonathan Martin. "I guess Jonathan didn't like my question, Mr. President," press secretary Robert Gibbs shouted from afar.

Obama stressed this was just a courtesy call.

"We will be having a press conference at which time you can feel free to answer questions. Right now I just wanted to say hello and introduce myself to you guys, that's all I wanted to do," he said.

The president asked for patience in learning everyone's names, though he recognized some familiar faces from the campaign trail.

He was also goaded into touring not just the briefing room but the narrow corridors of the downstairs area where reporters have workstations. There, he promised the members of the fourth estate to have a "relationship that's respectful, and where you guys feel like you're actually getting answers."

He then praised Gibbs' performance at his first briefing.

"I'm very proud of him today. He got a fist-bump from me," he said.

On his way out through the briefing room again, one reporter shouted out to ask for Obama's e-mail address. Needless to say, that was one more question he would not answer.

Obama hits Ohio to boost renewable energy, economic plan

President-elect Barack Obama made a campaign-style stop in Ohio today, touting the promise of renewable energy as a job-creating engine that could help the American economy bounce back.

After a tour of Cardinal Fastener in Bedford Heights, Obama pointed out that the company had hired new employees just this week for its growing business supplying parts for wind turbines, which he said shows that renewable energy "isn't something pie in the sky."

"It can create millions of additional jobs and entire new industries if we act right now," he said. "It's not too late to change course - but only if we take dramatic action as soon as possible. The way I see it, the first job of my administration is to put people back to work and get our economy working again."

He said he was pleased that Congress has been "moving quickly" to consider his economic recovery plan. But even as he touted his plans potential benefits, he warned again that the economy could get worse before it gets better.

"I want everyone to be realistic about this," he said. "But if anyone doubts that we can dig ourselves out of this hole, I invite them here to Ohio and look what you've done here at Cardinal Fastener. ... I know that if we can summon that determination and that great American spirit once again, we will meet the challenges of our time and build a better future for our children."

After his speech, Obama greeted the crowd and at one point could be seen via the video feed doing some bicep curls with what was presumably a dumbbell created at the plant. One last bit of motivation from the soon-to-be commander-in-chief.

Obama Stands By Geithner

President-elect Barack Obama is standing by his nominee for Treasury secretary, saying this afternoon that his tax problems were unintentional and had been corrected.

And notably, Sen. Lindsay Graham, who joined Obama to brief him on his overseas trip with VP-elect Joe Biden, said that the matter was not damning.

"Now's not the time to think in small political terms," Graham said. "I think he's the right guy."

Indeed, Obama said that Geithner's nomination was initially heralded across the spectrum because he was "somebody who was uniquely qualified" to handle the economy.

"Is this an embarrassment for him, yes. He said so himself," Obama said.

In discussing his trip, Biden expressed concern about Afghanistan, saying the situation there has not improved.

"Things are going to get tougher in Afghanistan before they get better," he said. But he praised the "amazing" competence of U.S. commanders there.

Graham, a John McCain stalwart during the presidential campaign, said he was still disappointed by the result of the election but spoke of how important the bipartisan trip was.

"The campaign's over but the war is not," Graham said.

Obama and Biden were due to visit the Supreme Court after the photo op.

Obama takes his plan on the road

As we noted this morning, President-elect Obama will take his economic recovery plan on the road to Ohio this Friday. The Transition Office just announced more specifics, saying he will meet with workers and tour the Cardinal Fastener & Specialty Company, "a growing company with innovative production practices that manufactures parts used to construct wind turbines."

Last week, Obama delivered a major speech outlining his proposals in Virginia. Ohio's economy has been hard hit to be sure, but it's also notable that he would choose to continue pressing his case in another battleground state.

Gibbs: 'Honest Mistakes' Shouldn't Stop Geithner

The focus was to be on Hillary Clinton's confirmation hearing today, but it's Timothy Geithner's nomination for Treasury secretary that suddenly is under scrutiny. The Obama transition office just issued a statement saying that the president-elect stands by Geithner, despite "honest mistakes" involving taxes and the immigration status of a housekeeper.

"He's dedicated his career to our country and served with honor, intelligence and distinction. That service should not be tarnished by honest mistakes, which, upon learning of them, he quickly addressed," incoming press secretary Robert Gibbs said in a statement.

According to the Wall Street Journal, the immigration paperwork of a housekeeper expired during her brief time working for Geithner. She went on to get a green card, and charges were not filed.

Also at issue is what team Obama called a "common mistake" with Geithner's taxes, where he failed to pay Social Security and Medicare taxes while working at the IMF. He later paid the IRS back with interest.

Gibbs' statement signaled that Obama would stand by his nominee. "We hope that the Senate will confirm him with strong bipartisan support so that he can begin the important work of the country," Gibbs said.

Immigration issues have doomed some past Cabinet nominees, including Bill Clinton's first choice for Attorney General, Zoe Baird. Former New York police commissioner Bernie Kerik cited similar problems when he withdrew his nomination for Homeland Security secretary; he was later indicted for conspiracy and tax fraud.

The Senate Finance Committee is reportedly holding an emergency meeting to discuss the matter. Republicans had reacted favorably to his selection, but this news could potentially raise new questions about the choice.

Bush's Final Week

Kicking off his final week as president, President Bush thanked his Cabinet this morning for answering "the call to service" at their final meeting, while saying his administration had a "good, solid record."

"Most of all, we protected this country from harm," he said. "And we did so by providing tools for our professionals, as well as asking our military to do hard work, which they have done time and time again."

This afternoon, Bush will present the Presidential Medal of Freedom to three of his strongest allies in the wars in Iraq and Afghanistan, former Prime Ministers Tony Blair and John Howard, and Colombian President Alvaro Uribe.

The only other major event on the president's public schedule is his farewell address to the nation, scheduled for Thursday at 8 pm. Deputy press secretary Tony Fratto offered today few specifics on the speech but said it would be "forward looking."

"Presidents have the unique viewpoint on the nation and the world, and can offer their counsel and advice as they go on to do after they leave the presidency from time to time. So that will be the President's opportunity to do that," he said.

Bush has also held private receptions recently, including one last night for former members of his campaign teams. One attendee called the East Wing gathering "very moving."

He will spend Friday and Saturday at Camp David, returning to the White House on Sunday in the lead-up to President-elect Obama's inauguration.

Below are the farewell addresses of Presidents Clinton and Reagan. Bush's father chose not to deliver one.

Obama to Congress: 'Show Me Your Ideas'

With his recovery plan already facing complaints on the Hill, President-elect Barack Obama made a blanket pledge to consider any idea lawmakers have to fix the economy, offering his own twist on "Show me the money."

"I want this to work," he told reporters this morning during a press conference at his transition office. "This is not an intellectual exercise, and there is no pride of authorship. If members of Congress have good ideas, if they can identify a project for me that will create jobs in an efficient way that does not hamper our ability to over the long term get control of our deficit, that is good for the economy, than I'm going to accept it."

Obama would not answer questions about whether he was willing to allow his plan to grow even more expensive. He instead continued promising to keep an open mind to both Democratic and Republican views.

"Just show me. If you can show me that something is going to work, I will welcome it. If it works better than something I have proposed, I will welcome it. What is not an option is for us to sit and engage in posturing or the standard partisan fights while the American people are out there struggling," he said.

At a press conference called to announce his top picks for intelligence posts, Obama faced multiple questions on the economy instead. He prefaced remarks with a statement about new and higher unemployment numbers, calling it a "stark reminder about how urgently action is needed."

"There is a devastating economic crisis that will become more and more difficult to contain with time. For the sake of our economy and our people, this is the moment to act, and to act without delay," he said.

There were no surprises in Obama's choices for directors of National Intelligence and the CIA: Dennis Blair and Leon Panetta, respectively. He said his entire intelligence team is reflective of his "practical, pragmatic approach to foreign policy." He did not specifically address concerns that have been raised about Panetta's lack of direct experience with the CIA, but tried to make clear that in him the Agency has "a director who has my complete trust and substantial clout."

The president-elect was asked if his choices reflected a reassessment of his views on interrogation techniques or a softening of U.S. policy toward Iran. On the former, he reiterated his opposition to torture and promised that the country would abide by Geneva Convention standards, which he said will "make us safer and will help us in chainging hearts and minds." On Iran, he stated only that he'd speak more after taking office, but did say that "we should be willing to initiate diplomacy as a mechanism to achieve our national security goals."

The press conference ended on a lighter note, with Obama asked for his view of the BCS results. He congratulated Florida for their victory, but said: "If I'm Utah, if I'm USC, or if I'm Texas, I may still have some quibbles."

Obama launches public campaign for his economic plan

Warning that further inaction could send the economy into deeper trouble, President-elect Barack Obama began making the public case for his economic plan, saying that while government was in part responsible for the current crisis, that government alone could "break the cycles that are crippling our economy."

"It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe," he said.

Obama, no longer a candidate but president-elect, took to the stump nonetheless as he stepped up efforts to sell the nation on what he calls the "American Recovery and Reinvestment Plan." In his speech, delivered in Northern Virginia and also carried by most of the broadcast networks, he offered few new specifics of his plan, but rather broad principles and a preemptive defense of the expensive plan.

"I understand that some might be skeptical of this plan. Our government has already spent a good deal of money, but we haven't yet seen that translate into more jobs or higher incomes or renewed confidence in our economy," he said. "That's why the American Recovery and Reinvestment Plan won't just throw money at our problems - we'll invest in what works."

The package would combine spending on public works projects and investments in education and healthcare reform with tax cuts for 95 percent of American workers. He also reiterated promises to keep the plan free of earmarks, and promised great transparency in how the funds are spent.

"[We] won't just throw money at our problems - we'll invest in what works," he said. "Our goal is not to create a slew of new government programs, but a foundation for long-term economic growth."

He notably cautioned that any further inaction could cause the recession to "linger for years," and send the unemployment rate into "double digits." Later, he also conceded that the economic crisis would likely grow worse before it gets better.

To that end, he urged Congress "to act without delay."

"I know the scale of this plan is unprecedented, but so is the severity of our situation," he said. "We have already tried the wait-and-see approach to our problems, and it is the same approach that helped lead us to this day of reckoning."

The president-elect closed with allusions to two revered Democratic presidents of the past, urging Americans to rise above narrow partisanship "and insist that the first question each of us asks isn't 'What's good for me?' but 'What's good for the country my children will inherit?'

"More than any program or policy, it is this spirit that will enable us to confront this challenge with the same spirit that has led previous generations to face down war, depression, and fear itself," he said.

Republicans on the Hill reacted to the speech with continued optimism for bipartisan cooperation, but reiterated concern over the long-term financial repercussions. Calling the $1.2 trillion deficit in 2009 an "eye-popping number," Senate Minority Leader Mitch McConnell said, "Let's not use the obvious need for a stimulus package as a way to make it worse."

-- Mike Memoli and Kyle Trygstad

Obama Introduces 'Chief Performance Officer'

President-elect Barack Obama tried to stay clear of the flap over Roland Burris' fight to be seated, calling it a "Senate matter."

"I think he's a fine public servant," Obama said. "If he gets seated, then I'm going to work with Roland Burris just like I work with all the other senators to make sure that the people of Illinois and people of the country are served."

Obama's comments came at the end of a press conference at his transition offices where he announced the appointment of Nancy Killefer as "chief performance officer," a new post with the charge of "streamlining processes and wringing out inefficiencies so that taxpayers and consumers get more for their money."

Obama pointed to a Congressional Budget Office report estimating that the deficit he'll inherit will reach $1.2 trillion, and acknowledged that his economic recovery plan would likely add to that figure. One of the roles Killefer will play is ensuring that the stimulus bill makes a "big change that lasts beyond the economic recovery plan, and saves taxpayers money over the long term."

Plans to address challenges like entitlement spending are being discussed with Congress now, he said, and will likely be spelled out when he unveils his budget in the coming weeks. Typically, the incoming president delivers a "Budget Address" in lieu of a "State of the Union" after taking office.

The violence in the Middle East was again a topic, as the president-elect was asked whether his reluctance to comment under the guise of "one president at a time" could be interpreted negatively as silence to the Arab world.

"I can't control how people interpret what I'm saying," he said. "The silence is not as a consequence of a lack of concern. In fact, it's not silence. I've explained very clearly exactly what institutional constraints I'm under when it comes to this issue."

Today's press conference was the first formal forum where Obama faced reporters since arriving in Washington, though he spoke briefly to pool reporters at events Monday and Tuesday. When ABC's Jake Tapper said, "Welcome to Washington," the president-elect responded somewhat saracastically, "It's great to be here."

Table for Five

For a brief time tomorrow, it'll be five presidents at once.

After a morning press conference Barack Obama will head to the White House for the second time as president-elect, to join four of his predecessors for lunch in the Oval Office hosted by the current chief executive, George W. Bush. It's the first such gathering to be held at the White House since 1981.

At her daily briefing today, White House press secretary Dana Perino said that Bush and Obama have been speaking occasionally since their post-election meeting, most recently on New Year's Day. She expects tomorrow's gathering to include some discussion of issues, but predicted they'd focus more on sharing their experiences at 1600 Pennsylvania Ave.

"All of us would love to be flies on the wall and listening to that conversation," she said. "These are leaders who only understand what it's like to be in each others' shoes. And none of us can put ourselves in their shoes. And so I'm sure their conversation will range from everything from personal experiences here."

She expected the challenges of raising children in the White House to come up as well, adding that the Obamas "are doing a great job on that" already. Malia and Sasha, his young daughters, famously began attending classes at the Sidwell School on Monday.

Perino predicted that the scene with five past, present and future presidents and a hungry press corps would be "a little bit of a zoo."

Obama says no earmarks, defends Panetta

President-elect Barack Obama warned that he will inherit a $1 trillion budget deficit upon taking office, and pledged to ban all earmarks as an attempt to address both the "deficit of dollars and the deficit of trust."

"We're going to have to stop talking about budget reform. We're going to have to fully embrace it," he said after a meeting with his economic team this morning. "It's an absolute necessity."

He said his stimulus plan will "set a new, higher standard of accountability, transparency and oversight," and include an economic recovery oversight board, as well as an online platform so that citizens could monitor spending. He's expected to speak in greater detail about his plan later this week.

Obama, responding to a question from a reporter about his as-yet unannounced choice of Leon Panetta to head the CIA, said the former Clinton chief-of-staff "brings extraordinary management skills, great political savvy, a impeccable record of integrity" to the table.

"As a chief of staff ... to the president, he is somebody who obviously was fully versed in international affairs, crisis management, and had to evaluate intelligence consistently on a day to day basis."

He emphasized that his intelligence team has not been named, but that it would be a "top-notch" group that will "be delivering the information that the president needs," not what he wants to hear. He also said that his administration would be committed to "breaking with some of the past practice and concerns" that he said has tarnished U.S. foreign policy, referring to torture and detainment policies employed under President Bush.

Obama declined to specifically address the ongoing conflict in Gaza, saying again that the world should hear only one voice from American leadership.

"Obviously I am deeply concerned," he said. "After January 20 I will have plenty to say."

FEC Back Up Tomorrow

Five new Federal Election Commissioners will participate in the first meeting of their new terms after being sworn in yesterday, tackling a backlog of campaign finance issues and complaints ahead of November. The meeting is the first of 2008, after months of wrangling between Senate Democrats and their GOP counterparts on Capitol Hill and in the White House prevented the FEC from achieving a quorum.

For four of the commissioners, the meeting tomorrow will be the first of their FEC careers. Cynthia Bauerly, a Democrat, and Republicans Caroline Hunter, Donald McGahn and Matthew Petersen are just warming up their seats, though all have legal backgrounds. The second Democrat, Steven Walther, served previously as a recess appointee. The five new members join vice chair Ellen Weintraub, the board's third Democrat, who until yesterday was the only permanent member of the commission.

Meeting tomorrow to elect officer positions for the rest of the year, the FEC will also face a significant workload of advisory opinions for various campaigns, lobbyist disclosure rules mandated by the Senate that have yet to be set, and complaints lodged against candidates and organizations. The FEC does not comment on cases before judgment has been rendered, though spokesman Bob Biersack told Politics Nation two weeks ago the commission typically has about 100 cases in the docket.

Perhaps the most substantial case before the commission is one filed by the Democratic National Committee, which accuses John McCain of unilaterally pulling out of the public financing and matching fund system in the primary in a manner Democrats say is illegal. That could have a bearing on whether McCain gets public funds to the tune of $84.1 million for the general election campaign.

McCain is highly likely to get the funding, but it's still something the commission has to vote on, ensuring that no one is happier about the resettlement of the wayward commission than the folks in McCain national headquarters in Arlington, Virginia.

FEC To Function

After seemingly endless deadlock, the Senate yesterday approved nominations of five Federal Election Commission nominees, giving the embattled watchdog agency a full compliment of six commissioners for the first time in years. Leaders in both parties hailed the progress, which was held up over whether commissioners should be subject to separate votes.

After reaching compromise on the last controversial Republican nominee, the Senate approved nominations of Cynthia Bauerly and Steven Walther, both Democrats, and Republicans Caroline Hunter, Donald McGahn and Matthew Petersen. The five newly approved commissioners join current incumbent Ellen Weintraub, the panel's third Democrat.

The new commissioners will be sworn in once President Bush officially approves the nominations, something that is likely to happen today, and after logistical questions are resolved with each of the nominees, though FEC spokesman Bob Biersack said the panel should have all five members officially on board in short order.

The initial controversy erupted when Republicans nominated former Justice Department official Hans von Spakovsky, who Democrats charged had been involved in opinions that led to some voters being denied their right to cast ballots. Republicans wanted a vote on all the appointed commissioners at the same time, while Democrats wanted to vote on each nominee individually, in order to vote against von Spakovsky. Von Spakovsky withdrew his name from consideration earlier this year.

Despite the years of conflict over seating the full panel, Senate leaders from both parties heralded the compromise. "Confirming these nominations tonight will help restore the American people's faith that campaign finance laws will be enforced during this presidential election," Senate Majority Leader Harry Reid said in a statement. "We are also bringing greater transparency to our system of financing elections by ensuring new bundling rules will finally move forward."

Both parties lobbed accusations that the other had blocked the nominations. "A fully functioning, bipartisan FEC is long overdue," Minority Leader Mitch McConnell said. "I'm glad that Democrat obstruction on nominees is over so the FEC can now resume its critical role of enforcing election laws and ensuring that this election season is fair and equitable to all who are involved."

Once they arrive, commissioners will have a heavy caseload ahead of them. While the FEC does not comment on complaints until official action is taken, Biersack said the panel typically has at least 100 cases ahead of them, even with a full compliment of commissioners. Too, the group will have to rule on new lobbyist disclosure regulations thanks to a bill passed last year, the deadline for which has already passed, and on several advisory opinion requests.

FEC Impasse Over

The Federal Election Commission is about to get a bunch of new faces as three new appointees cleared a key Senate hurdle yesterday, the Washington Post reports. Nominees Cynthia Bauerly, a Democrat, and Caroline Hunter and Donald McGahn, both Republicans, successfully cleared the Senate Rules Committee yesterday and will head to the floor, where they will be voted on alongside previous nominee Steven Walther, a Democrat.

The votes come after months of deadlock while Republicans demanded a vote on nominee Hans von Spakovsky, a former Justice Department official who Democrats believed was unacceptable because of his advocacy for identification requirements at polling places. Von Spakovsky withdrew his nomination last week. In his place, President Bush will nominate Matthew Petersen, the chief Republican counsel for the Rules Committee.

Should the four nominees currently on the Senate floor win confirmation, which they are expected to do, they will join Democrat Ellen Weintraub, who currently sits on the panel.

The FEC requires four members for a quorum, and because it has only two members now (McGahn will replace outgoing Republican David Mason), the agency cannot author advisory opinions or issue judgment on pending matters. Crucially, had the dispute lasted into the Summer, the body would not have been able to authorize federal funds for John McCain's presidential bid, which would have forced the campaign to go to court to get their money.

WH Releases SOTU Excerpts

From the White House press office, highlights of tonight's State of the Union, as prepared for delivery:

"The actions of the 110th Congress will affect the security and prosperity of our Nation long after this session has ended. In this election year, let us show our fellow Americans that we recognize our responsibilities and are determined to meet them. And let us show them that Republicans and Democrats can compete for votes and cooperate for results at the same time."

On trusting and empowering the American people:

"From expanding opportunity to protecting our country, we have made good progress. Yet we have unfinished business before us, and the American people expect us to get it done. In the work ahead, we must be guided by the philosophy that made our Nation great. As Americans, we believe in the power of individuals to determine their destiny and shape the course of history...So in all we do, we must trust in the ability of free people to make wise decisions, and empower them to improve their lives and their futures."

On the economy:

"To build a prosperous future, we must trust people with their own money and empower them to grow our economy. As we meet tonight, our economy is undergoing a period of uncertainty... And at kitchen tables across our country, there is concern about our economic future. In the long run, Americans can be confident about our economic growth."

On earmarks:

"The people's trust in their Government is undermined by congressional earmarks..."

On housing:

"...We must trust Americans with the responsibility of homeownership and empower them to weather turbulent times in the housing market."

On strengthening No Child Left Behind:

"On education, we must trust students to learn if given the chance and empower parents to demand results from our schools. In neighborhoods across our country, there are boys and girls with dreams -- and a decent education is their only hope of achieving them. Six years ago, we came together to pass the No Child Left Behind Act, and today no one can deny its results... Now we must work together to increase accountability, add flexibility for States and districts, reduce the number of high school dropouts, and provide extra help for struggling schools. Members of Congress: The No Child Left Behind Act is a bipartisan achievement. It is succeeding. And we owe it to America's children, their parents, and their teachers to strengthen this good law."

On the importance of trade:

"On trade, we must trust American workers to compete with anyone in the world and empower them by opening up new markets overseas. Today, our economic growth increasingly depends on our ability to sell American goods, crops, and services all over the world... These agreements will level the playing field. They will give us better access to nearly 100 million customers. And they will support good jobs for the finest workers in the world: those whose products say 'Made in the USA.'"

"If we fail to pass this [Colombia free trade] agreement, we will embolden the purveyors of false populism in our hemisphere. So we must come together, pass this agreement, and show our neighbors in the region that democracy leads to a better life."

On improving our energy security:

"To build a future of energy security, we must trust in the creative genius of American researchers and entrepreneurs and empower them to pioneer a new generation of clean energy technology. Our security, our prosperity, and our environment all require reducing our dependence on oil."

On combating climate change:

"Let us create a new international clean technology fund, which will help developing nations like India and China make greater use of clean energy sources. And let us complete an international agreement that has the potential to slow, stop, and eventually reverse the growth of greenhouse gases. This agreement will be effective only if it includes commitments by every major economy and gives none a free ride."

On entitlement reform and immigration:

"There are two other pressing challenges that I have raised repeatedly before this body, and that this body has failed to address: entitlement spending and immigration. Every Member in this chamber knows that spending on entitlement programs like Social Security, Medicare, and Medicaid is growing faster than we can afford...Now I ask Members of Congress to offer your proposals and come up with a bipartisan solution to save these vital programs for our children and grandchildren."

On the freedom agenda:

"Illegal immigration is complicated, but it can be resolved. And it must be resolved in a way that upholds both our laws and our highest ideals."

On the surge in Iraq

"Our foreign policy is based on a clear premise: We trust that people, when given the chance, will choose a future of freedom and peace. In the last 7 years, we have witnessed stirring moments in the history of liberty...And these images of liberty have inspired us. In the past 7 years, we have also seen images that have sobered us...[and] serve as a grim reminder: The advance of liberty is opposed by terrorists and extremists -- evil men who despise freedom, despise America, and aim to subject millions to their violent rule."

"The Iraqi people quickly realized that something dramatic had happened. Those who had worried that America was preparing to abandon them instead saw...our forces moving into neighborhoods, clearing out the terrorists, and staying behind to ensure the enemy did not return...While the enemy is still dangerous and more work remains, the American and Iraqi surges have achieved results few of us could have imagined just 1 year ago..."

"...Some may deny the surge is working, but among the terrorists there is no doubt. Al Qaida is on the run in Iraq, and this enemy will be defeated."

On our 2008 objectives in Iraq:

"Our enemies in Iraq have been hit hard. They are not yet defeated, and we can still expect tough fighting ahead. Our objective in the coming year is to sustain and build on the gains we made in 2007, while transitioning to the next phase of our strategy. American troops are shifting from leading operations, to partnering with Iraqi forces, and, eventually, to a protective overwatch mission."

On this generation rising to the moment in the war on terror:

"We must do the difficult work today, so that years from now people will look back and say that this generation rose to the moment, prevailed in a tough fight, and left behind a more hopeful region and a safer America."

On Iran:

"Our message to the people of Iran is clear: We have no quarrel with you, we respect your traditions and your history, and we look forward to the day when you have your freedom. Our message to the leaders of Iran is also clear: Verifiably suspend your nuclear enrichment, so negotiations can begin. And to rejoin the community of nations, come clean about your nuclear intentions and past actions, stop your oppression at home, and cease your support for terror abroad. But above all, know this: America will confront those who threaten our troops, we will stand by our allies, and we will defend our vital interests in the Persian Gulf."

On the American people:

"The secret of our strength, the miracle of America, is that our greatness lies not in our Government, but in the spirit and determination of our people."

Admin Faces United Hill Front

Destroyed CIA videotapes showing the intense interrogation of two high-value terrorist suspects has sparked a battle between Congress and the Bush Administration, setting up what could be an explosive showdown complete with subpoenas and dueling investigations as many on Capitol Hill hope to reassert their body's co-equal status with the White House.

The top two members of the House Intelligence Committee presented a united front this weekend in promising a continued investigation into the tapes' destructions, squelching Justice Department hopes that Congress would stay on the sidelines. The statements came after Attorney General Michael Mukasey refused to give Congress information on Justice's investigation into the tapes' destruction.

Mukasey, on Friday, sent a letter to top members of the House and Senate Judiciary Committee, saying a special prosecutor, for which some members of Congress have called, is unnecessary, and that the Justice Department and the inspector general of the CIA have the investigation under control. Justice then advised the CIA not to cooperate with the Intelligence panel's investigation, prompting the joint statement, while the two officials heading the investigation, assistant AG Ken Wainstein and CIA Inspector General John Helgerson, asked the congressmen to hold off.

"We are stunned that the Justice Department would move to block our investigation," panel chair Silvestre Reyes and ranking member Pete Hoekstra said in a statement. "It's clear that there's more to this story than we have been told, and it is unfortunate that we are being prevented from learning the facts." Reyes, a Texas Democrat, and Hoekstra, a Michigan Republican, had asked CIA director Michael Hayden to turn over any documents and communications related to the tapes and their destruction.

The two Congressmen went on to urge Hayden to make two top CIA officials -- John Rizzo and Jose Rodriguez -- available for questioning this week. "We will use all the tools available to Congress, including subpoenas, to obtain this information and this testimony," they wrote.

In an appearance on Fox News Sunday, Hoekstra and California Democrat Jane Harman, also a member of the Intelligence committee, promised to continue their own investigation. "I think what we're going to do is we want to hold the community accountable for what's happened with these tapes. I think we will issue subpoenas," Hoekstra said. "It's important for Congress to hold [the intelligence] community accountable."

"On a bipartisan basis, the House Intelligence Committee wants to get to the bottom of this and isn't going to back off for the attorney general here, who I think, as I said, may be doing something that won't give the public confidence that it was a full and fair investigation," Harman said.

Later, the harshest criticisms came from Republican Hoekstra, a long-time member of the intel panel. "You've got a community that's incompetent. They are arrogant. And they are political. And they don't believe that they are accountable to anybody. They don't believe that they're accountable to the president," he said. "If they had done what they are supposed to do on the tapes -- keep us informed, listen to the kind of recommendations that my colleague Jane Harman made to them -- we wouldn't even be having this discussion today."

Townsend Out

Several outlets are reporting White House Homeland Security Adviser Fran Townsend has submitted her resignation and will stay only through the New Year. The former mob prosecutor who served in President Clinton's Justice Department had a close relationship with President Bush, Politico reports.

Townsend becomes the first member of the Administration to leave after Chief of Staff Josh Bolten set a Labor Day deadline for top staff to leave. It is not clear why Townsend is leaving.