A White House aide confirms to First Read that U.S. Ambassador to China Jon Huntsman -- the former governor of Utah -- has sent a letter to President Obama, informing him that he will resign his post.

It is now widely expected that Huntsman, a Republican, will consider running for the 2012 GOP presidential nomination.

Politico reports that Huntsman says in the letter he wants to return to the United States by May. More from Politico: "The letter thanks Obama for the opportunity to serve the country and praises the U.S. embassy staff in Beijing."

From NBC's Ken Strickland
The Senate gets back to legislative business this week. On the floor, the Senate will debate the FAA reauthorization bill -- what Democratic leaders call "the first jobs bill" of the new Congress.

Supporters say the bill is designed to modernize the aviation industry with the "next generation" air traffic control system; improve commerce by reducing delays and congestion; and create jobs by funding the the FAA's Airport Improvement Program (AIP) with $8-billion.

According to the American Association of Airport Executives, improving airport infrastructure with AIP funding could lead to the creation of 280,000 jobs. "If there were ever a jobs bill, this is it," Senate Majority Leader Harry Reid said today on a conference call with reporters.

On the heels of today's federal judge's ruling that the health-care law is unconstitutional, the Judiciary Committee will hold a previously scheduled hearing on "The Constitutionality of the Affordable Care Act." On Wednesday, the committee will hear testimony from experts and academics. 

In a newser on Tuesday, Republican Sens. Lindsey Graham and John Barrasso introduce their bill which allows states to "opt-out" of the law's major provisions: the individual and employer mandates, and expansion of Medicaid.

There also will be two policy hearings on Iraq, with testimony from U.S. Ambassador James Jeffrey and the commander of U.S. Forces-Iraq, General Lloyd James Austin. They appear before Foreign Relations Committee on Tuesday, and Armed Services on Thursday.

From NBC's Pete Williams
The Justice Department responded promptly to today's ruling on the health-care law, pledging to appeal.

"We strongly disagree with the court's ruling today and continue to believe -- as other federal courts have found -- that the Affordable Care Act is constitutional," said Justice spokeswoman Tracy Schmaler.

"There is clear and well-established legal precedent that Congress acted within its constitutional authority in passing this law, and we are confident that we will ultimately prevail on appeal.

"We are analyzing this opinion to determine what steps, if any -- including seeking a stay -- are necessary while the appeal is pending to continue our progress toward ensuring that Americans do not lose out on the important protections this law provides; that the millions of children and adults who depend on Medicaid programs receive the care the law requires; and that the millions of seniors on Medicare receive the benefits they need," she said.

A federal judge has ruled that the health care reform bill signed into law by President Barack Obama in March is unconstitutional.

Judge Roger Vinson, a Reagan appointee serving in Pensacola, Florida, ruled that key components of the law are unconstitutional and that the entire law "must be declared void."

In the decision, Vinson writes:

"... I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the Act with the individual mandate. That is not to say, of course, that Congress is without power to address the problems and inequities in our health care system. The health care market is more than one sixth of the national economy, and without doubt Congress has the power to reform and regulate this market. That has not been disputed in this case. The principal dispute has been about how Congress chose to exercise that power here.

Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void."

You can read the decision here.

Today’s decision is the second ruling by a federal judge against the constitutionality of the health care legislation. Two other federal courts have upheld the constitutionality of the law, including its requirement that most Americans buy health insurance or pay a penalty.

While the lawsuit addressed in Vinson’s ruling is the largest of its kind – with 26 states having signed on – today’s decision is likely just one more step in the law’s march to the United States Supreme Court.

But this is the biggest court victory yet for opponents of the law's requirement that all Americans buy health insurance.

*** UPDATE *** NBC's Pete Williams has more:

A federal judge in Florida has declared the new health care law unconstitutional, ruling in a lawsuit brought by 26 states against the federal government. It's the biggest court victory yet for opponents of the law's requirement that all Americans buy health insurance.

Judge Roger Vinson found the entire law unconstitutional, after declaring that its key element -- the health insurance mandate -- was a law Congress did not have the power to enact.  Opponents of the law claimed that while the government can regulate the activities of people engaged in commerce, like the insurance industry, it cannot regulate someone's inactivity -- that is, someone's refusal to buy insurance.  It's an argument the judge found persuasive. 

"It would be a radical departure from existing case law to hold that Congress can regulate inactivity under the Commerce Clause," he said.  If that were true, he said, "it is not hyperbolizing to suggest that Congress could do almost anything it wanted."  If Congress could reach so broadly, "we would have a Constitution in name only," he said.

Judge Vinson rejected the Obama administration's argument that no one truly opts out of the health care system, because everyone eventually needs medical attention.  In that sense, the judge said, health care is no different than many human activities.

"There is quite literally no decision that, in the natural course of events, does not have an economic impact of some sort. The decisions of whether and when (or not) to buy a house, a car, a television, a dinner, or even a morning cup of coffee also have a financial impact that --- when aggregated with similar economic decisions --- affect the price of that particular product or service
and have a substantial effect on interstate commerce. To be sure, it is not difficult to identify an economic decision that has a cumulatively substantial effect on interstate commerce; rather, the difficult task is to find a decision that does not," he said.

From NBC's Kevin Hurd
A new Gallup poll out today shows 88% of Republicans say it is important that Republican leaders consider the Tea Party's positions and objectives when addressing national problems.

Interestingly, slightly more than half of Democrats surveyed, 53%, also believe it's important for the GOP to consider the Tea Party's ideas -- even though just 11% of Democrats have a favorable view of the Tea Party.

Also of interest: 43% of Republicans surveyed in the  poll did not take a position on the Tea Party (52% support it, while 5% oppose it).
 
The poll was conducted Jan. 14-16, 2011.

The balancing act with the unrest in Egypt… Don’t forget Obama’s June 4, 2009 Cairo speech… The White House’s quick jobs pivot vs. the GOP’s slow one… Obama to deliver guns speech soon?... Bill Daley jokingly refers to Huntsman as the “Manchurian Candidate”… If Huntsman is planning to run, doesn’t he need to resign his ambassadorship -- now?... And watch Huntsman vs. Romney… Hatch still remains a top conservative target… DCCC gets off to an early start… And speaking of early, early voting begins today in Chicago’s mayoral race.

From Chuck Todd, Mark Murray, Domenico Montanaro, and Ali Weinberg
*** Balancing act: As the protests continue in Egypt, the Obama administration has been struggling to stay ahead of events and prepare for any possible outcome. Secretary of State Hillary Clinton took to the airwaves Sunday to say the U.S. wants to see change -- now. "We have a very clear message: Long-term stability rests on responding to the legitimate needs of the Egyptian people, and that is what we want to see happen," she said yesterday on "Meet the Press." President Obama spent the weekend conferring with key allies in the region, including Israel, Turkey, and Saudi Arabia. But he and his national security team have a clear challenge how to avoid abandoning a longtime ally, Hosni Mubarak, while at the same time trying to push him harder. Keeping some line of communication open with Mubarak is important if there is ANY chance the U.S. can still have influence on him to, for instance, call for elections and perhaps resign or pledge to resign.

*** Remembering the Cairo speech: Don’t forget: It was almost two years ago when Obama used Cairo as a setting to push the Muslim world toward democracy. “Suppressing ideas never succeeds in making them go away,” Obama said in his June 4, 2009 speech. “Government of the people and by the people sets a single standard for all who hold power. You must maintain your power through consent, not coercion.” Cairo was in lock down during the president's visit; in hindsight, one wonders if it was almost suppression like to prevent any organized protests at the time. The story now turns to Israel. New York Times: “The street revolt in Egypt has thrown the Israeli government and military into turmoil, with top officials closeted in round-the-clock strategy sessions aimed at rethinking their most significant regional relationship.” Keep in mind, Egypt has been charged with keeping arms out of Gaza.

*** The quick jobs pivot: Turning to domestic politics, the White House has quickly pivoted to jobs after the president’s State of the Union -- even if it’s being overshadowed by the situation in Egypt. This week, the Obama administration will be holding several events tied to Obama’s call for innovation. And today, the White House is launching what it calls “Startup America” -- an effort to promote entrepreneurship across the country. Also today, Senate Democrats are holding a conference call to push for reauthorization of the nation’s aviation/airport programs, which they’re calling “the first jobs bill of the 112^th Congress.” But as we’ve noted before, it’s striking how congressional Republicans haven’t made this pivot yet. There two big pushes this month (health care repeal and spending cuts) are, they argue, related to the jobs issue. But is that what the public in the middle of the electorate is hearing, or is it just the GOP base listening to that argument?

*** The Guns of February? Over the weekend, the New York Times reported that President Obama is expected to deliver a speech on the topic of guns -- in the wake of the Tucson shootings. “Mr. Obama,” the Times wrote, “has come under increased pressure to speak out from gun-control advocates, including urban Democrats in Congress and liberal activists and editorial writers. They would like him to at least support a bill that would restore an expired federal ban on the sort of high-capacity ammunition magazine that was used in the Jan. 8 shootings.” The question is whether such a speech would conflict with Obama’s attention on the center and independents, especially since any gun-control legislation likely won’t pass Congress with Republicans in charge of the House.

*** Obama on guns and gun control: It’s worth noting that Obama never staked much his presidential campaign on the issue of guns or gun control; in fact, he never mentioned the word “gun” in his presidential kick-off speech. But when he did talk about guns, he always stressed that gun-control measures that work for an urban city (like New York City) might not apply to a rural area (like Cheyenne). As Obama said in his 2008 convention speech, “The reality of gun ownership may be different for hunters in rural Ohio than for those plagued by gang-violence in Cleveland, but don’t tell me we can’t uphold the 2nd Amendment while keeping AK-47s out of the hands of criminals.” 

Jon Huntsman Jr., Ambassador of the United States to China and former Republican governor of Utah, is seen at a forum in Beijing, China in December.

*** The “Manchurian Candidate”? On Friday, we told you that a presidential bid by former Utah Gov. (and current U.S. ambassador to China) Jon Huntsman seems like a very real possibility. And today, Politico says that the Obama White House is bracing for a Huntsman run, and that a Huntsman PAC -- called Horizon PAC -- has been set up and is being led by Rick Scott’s ’10 campaign manager. Don’t miss this Politico anecdote from a Saturday off-the-record dinner, where Huntsman was present: “‘It’s also good to see Jon Huntsman, our ambassador to China,” [White House Chief of Staff Bill] Daley said, according to a source in the room. ‘Or as we call him around the White House: the Manchurian Candidate. I want Jon to know that the president has no hard feelings. In fact, he just did an interview with the Tea Party Express saying how integral he has been to the success of the Obama administration.’” Ouch.

*** How does Huntsman out-anti-Obama the others? If Huntsman really wants to run for president in 2012, doesn’t he have to resign his post right now (instead of this spring, as Politico speculates)? And doesn’t he have to announce his resignation in a blaze of glory? As the Atlantic’s James Fallows asked earlier this year in a post pooh-poohing the idea that Huntsman might run. “How exactly is he going to out-anti-Obama anyone else in the field, given that he has served Obama (and, yes, the country) so loyally?... What is the issue of principle so important that it compels him to challenge Obama's continuation in office, but has not justified any disagreement while he's serving now?” The White House had only expected Huntsman to serve for two years as ambassador, so if he leaves in the spring that would be close to that timetable.

*** Huntsman vs. Romney: While a Huntsman bid creates the obvious Huntsman-vs.-Obama drama, there’s also this conflict: Huntsman vs. Romney. If both men run, not only would there be two Mormons in the GOP race -- but also two men from VERY prominent Mormon families. How does that impact Nevada, a state Romney won in 2008 that has a sizable LDS population? And remember: In ’08, Huntsman backed McCain, not Romney (though Huntsman father backed Romney). There’s something more here…

AP

Sen. Orrin Hatch, R-Utah on Capitol Hill in Washington.

*** Hatch remains a prime target: Last week, we told you that the Tea Party Express’ Sal Russo said he wouldn’t be targeting Orrin Hatch. But Russo’s comments “were later ‘clarified’ by the group's chairwoman, Amy Kremer, who said that while Hatch is a ‘very kind and decent man ... he has also been a politician who has at times gone with the will of the entrenched political establishment instead of the will of the voters of his state,’” the Salt Lake Tribune reported. And Roll Call notes that the Club for Growth -- which targeted and helped defeat Sen. Bob Bennett last year – released this statement: “Orrin Hatch has done some good things over the decades, but six term incumbents who vote for [the Troubled Asset Relief Program], the Bridge to Nowhere, the Fannie Mae/Freddie Mac bailout, [the State Children’s Health Insurance Program], and higher taxes are quite clearly not ‘as good as it gets.’”

*** Talk about an early start: Today, the DCCC announced it’s launching a “Drive to 25” campaign -- consisting of radio and Web ads and targeted phone calls -- targeted 19 House Republicans. Here’s the script of one ad: “Here in Central New York the recession is still hitting hard, good job openings are really scarce. So it was good to hear President Obama’s plan to make the economy work for the middle class again. Invest in education to train our children for the jobs of the future, maintain America’s lead in technology with more research and development, and reduce the deficit with an overall budget freeze. That plan makes a lot of sense. But Congresswoman Ann Marie Buerkle supports a plan in Congress that would cut education by 40 percent. And her plan would cut science and technology research by 40%, too.” Folks, this is very, very early in the cycle…

*** And an early start in Chicago: And speaking of early, early voting begins today in Chicago’s mayoral race. The election is on Feb. 22.

Countdown Chicago’s mayoral election: 22 days
Countdown to Election Day 2011: 281 days
Countdown to the Iowa caucuses: 371 days
* Note: When the IA caucuses take place depends on whether other states move up

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"The Obama administration firmly aligned itself on Sunday with the protest movement that has overtaken Egypt, calling for an "orderly transition" to a more representative government amid rising U.S. concern that the demonstrations are turning violent and that unrest could spread across the Arab world," the Washington Post reports. "In telephone calls to Egyptian and regional leaders, President Obama and his top national security advisers tried to reassure them that their countries remain vital U.S. strategic partners, while warning that the political status quo is not sustainable."

The economic fallout: “Investors have largely shrugged off several of these unexpected developments recently, including the sovereign debt crisis in Europe, but the situation in Egypt has the potential to cause more widespread uncertainty, especially if oil and other commodities keep surging or the unrest spreads to more countries in the Middle East,” the New York Times says. “While Egypt’s banks and stock market closed Monday because of the chaos there, the uncertainty weighed on markets elsewhere.”

White House Chief of Staff Bill Daley explained his criticism on the health-care law. “What I was commenting on really was the politics really of the movement, of the moment, around health care,” he said on CBS’ ‘Face the Nation,’” per Roll Call. “I thought it was a very difficult climate to try to accomplish what they tried to, and I think the results, because of the misinterpretation of health care by many people, had a negative impact on Democrats.”

Speaking of difficult-to-pass, divisive legislation… “The White House is laboring to put political distance between President Obama’s new energy plan and climate legislation that’s moribund on Capitol Hill,” The Hill writes.

President Obama and Speaker Boehner appear open to golfing together, though Boehner’s talking some smack: "I'm sure I'll have to give him strokes," Boehner said on FOX.

And: “Democratic lawmakers in Hawaii introduced a bill this week that would allow anybody to obtain Obama's personal documents, an effort aimed to silence so-called ‘birthers’ and close a projected $800 million budget deficit over the next two years,” The New York Daily News reports. “The legislation would reverse a privacy law that bars the release birth records to anybody without a tangible interest, like family members.” Meanwhile, a “birther” billboard sprung up in Colorado with a caricature of Obama with and without a turbin on with the title, “President or Jihad? Birth Certificate. Prove it. Wake Up America! Remember Ft. Hood.” 

“The Republican Party won dozens of elections last fall after claiming Democrats had focused too little on creating jobs, but now GOP lawmakers stand accused of the same thing,” the AP writes. “Republicans are using their new House majority to push for a repeal of President Obama’s health care law and for restrictions on abortions, and to highlight other social issues important to their most conservative supporters. Examples include limiting jury awards in medical malpractice cases and expanding the District of Columbia’s school voucher program. Representative Tom Cole of Oklahoma, who oversaw GOP House campaigns in past years, defended the early focus on health and abortion. ‘These are commitments we made’ during the fall campaign, he said, adding that a heavier emphasis on jobs is coming soon.”

“Senate Minority Whip Jon Kyl plans to announce his 2012 intentions in February, and a decision by the Arizona Republican to retire could ignite a heated race for his No. 2 slot while unleashing significant changes within the GOP leadership,” Roll Call writes.

AP

Republican Marco Rubio speaks after winning his Senate bid in November.

Roll Call: A year ago, then-candidate Marco Rubio received a megastar welcome when he was introduced by Sen. Jim DeMint (R-S.C.) as a keynote speaker at the Conservative Political Action Conference annual gathering in Washington, D.C. But when CPAC kicks off next week, Florida’s freshman Senator plans to be miles away from the gathering — with Lincoln Day dinners in Miami-Dade and Pinellas counties as the top priorities on his February calendar. The invitation to address the widely covered conservative meeting is far from the first request Rubio has turned down; it is part of a calculated effort to stay out of the national spotlight as much as possible."

AP

Republican David Rivera is shown speaking to supporters in Coral Gables, Fla. in November.

“Rep. David Rivera (R-Fla.) is facing heightened criticism Friday after the Associated Press reported that the freshman lawmaker paid himself more than $60,000 in unexplained campaign reimbursements during his time in the state Legislature,” Roll Call writes. “Specifically, the Associated Press found that Rivera, who was already facing a state criminal investigation of his finances, didn’t report any details for more than one-third of the expenses for which he reimbursed himself. He simply called them ‘campaign expenses,’ according to the AP review.”

Republicans aren’t the only ones with an ethics problem. “Rep. Gregory Meeks is the subject of a congressional ethics probe centered on his financial-disclosure forms, which have been rife with omissions, The [New York] Post has learned. The investigation by the House Committee on Standards of Official Conduct is ongoing even as the panel's leadership changed with the new Congress, a source told The Post. The lapses in the Queens Democrat's annual financial filings include his failure to reveal at least one of his wife's sources of income -- a teaching job at Queens College, The Post has learned.”

“Senate Republicans are divided over whether to demand a balanced-budget amendment from the White House as a precondition for increasing the national debt ceiling,” The Hill reports.

Glad that’s settled… Ohio Rep. Dennis Kucinich (D) “settled a suit against a Capitol Hill cafeteria that he filed after he damaged his tooth biting down on an olive pit in a sandwich wrap in 2008,” the New York Daily News reports, adding, “On Friday, the two sides settled for an undisclosed amount, that was supposed to reflect the out-of-pocket damages Kucinich had to pay for his woes.” 

The Wall Street Journal explores efforts by prospective presidential candidates to gather fundraising allies, or bundlers, who commit themselves to gathering money from wealthy donors on a candidate’s behalf.

The Boston Globe has a timeline comparing the dates of 2008 candidates’ announcement of an exploratory committee, and those of the 2012 candidates so far.

The Washington Post’s Cillizza notes all the 2012 Republican candidates have their flaws.

BARBOUR: The AP tracks some of Haley Barbour’s controversial remarks regarding Mississippi’s segregationist past. “Even after apologizing and backtracking on certain remarks, Barbour has trouble striking the right note: Just days ago, the governor told The Associated Press he remembers little about the racial violence pulsating through the state and the South during his youth.”

DEMINT: The State Column: “South Carolina U.S. Senator Jim DeMint is reportedly considering a run for president in 2012. The South Carolina Republican, who ruled out the possibility of a run, is said to be reconsidering his decision in light of Rep. Mike Pence’s official withdrawal from the race. Additionally, news that Mr. DeMint will travel to Iowa on March 26 to address a conservative forum organized by Rep. Steve King is adding fuel to the fire over the possibility of a DeMint presidential run.

HUCKABEE: The former Arkansas governor is on his 15^th trip to Israel. The Birmingham Star writes that Huckabee will visit the Israeli Knesset to meet with the Immigration and Absorption Committee.

HUNTSMAN: “The White House expects Jon Huntsman, the U.S. Ambassador to China, to resign his post this spring to explore a bid for the Republican presidential nomination, top Democrats said,” Politico reports. “While Huntsman has no direct involvement in it, a group of operatives that could eventually comprise his strategy team has set up an entity called ‘Horizon PAC’ to serve as a placeholder for his political apparatus.”

THUNE: Politics Daily examines the qualities that may set John Thune apart from the rest of the pack of possible presidential candidates, and finds that they have more to do with who he isn’t than who he is: “Thune's generic conservative views, congressional career and intact marriage have kept him out of controversial territory.”

AP

Former Minnesota Gov. Republican Tim Pawlenty gets ready to sign copies of his book last week in New Hampshire. He is in Iowa today signing more books.

PAWLENTY: Pawlenty’s in Des Moines, Iowa, today signing his book. He was in Ohio Saturday and made two stops in Iowa on Sunday.

“If former Minnesota Gov. Tim Pawlenty decides, as expected, to run for president in 2012, he likely will talk about a unique national security qualification from 2007 in which he nudged an Indian company to drop its plans to invest in Iran,” RealClearPolitics’ McPike reports.

Tim Pawlenty “told a group of 400 conservative Ohio activists on Saturday that he accomplished a political feat that the Gipper never could,” Politico writes. “’Even Ronald Reagan couldn't win Minnesota,' Pawlenty said, referencing Reagan’s two landslide presidential victories. ‘That's how hard it is for a Republican to win in Minnesota.’” (However, T-Paw never won more than 47% in Minnesota, while Obama got 54% there in ’08.) 

Former Mass. Gov. and Republican presidential hopefull Mitt Romney at an event in Dallas last November.

ROMNEY: “Former Gov. Mitt Romney shared lunch Friday with a small-but-enhanced group of Massachusetts Republicans as he sought to build hometown support -- and tamp down potential backyard opposition -- while he progresses toward a second White House campaign,” the Boston Globe writes.

President Obama’s senior adviser David Axelrod “pointedly praised one of the leading contenders, former Massachusetts governor Mitt Romney, in a way that spotlighted Romney's vulnerability within the GOP for signing a state health care law that parallels the new federal law in some ways. Romney ‘did some interesting things there on health care, you know,’ Axelrod said. ‘We got some good ideas from him.’”

Romney raised $1.6 million in 2010 through his five state-level political action committees, as well as $4.5 million through his national PAC, the Washington Post reports.

SANTORUM: “Former Pennsylvania Sen. Rick Santorum has brought on a veteran Des Moines consulting firm to serve as adviser to his political action committee,” the AP writes. He has signed up Concordia Group LLC, its president Nick Ryan and Jill Latham, a principal at the firm.

The week ahead in politics: President Obama heads to Penn State, how do protests in Egypt affect the U.S., Republicans heads to early presidential states, plus we dig out.

Special thanks to Ali Weinberg for her handy camera work.

From NBC's Mark Murray
By now, many of you have probably seen the The Onion's spoofs of Vice President Biden -- like the one with him washing his Trans Am shirtless, or the one with him in a ponytail, or the one where he gets a lifetime ban from Dave and Buster's.

Well, Biden said in an interview with Yahoo! that he's a fan of the spoofs.

"I think it's hilarious," Biden told Yahoo! in a wide-ranging interview Thursday.

[snip]

"I saw the one of me washing a Trans-Am automobile in the driveway shirtless with tattoos all over myself and out there," Biden said with a smile. He took some issue with the story, though. "By the way, I have a Corvette-- a '67 Corvette-- not a Trans-Am."

Biden laughed that he's probably not supposed to encourage the mocking, but he said he still gets a kick out of it.

"Most people refer to me who know me, and even in the press, of being a little bit square," Biden said. "And now, I'm the philanderer. I think it's hilarious, the stuff they do on me."

From NBC's Political Unit
Mark Murray and Domenico Montanaro give their analysis of the republican response by Rep. Paul Ryan (R-WI) to the 2011 State of the Union. Plus, what about the Tea Party response by Rep. Michele Bachmann (R-MN)?

Thanks to newdayDAWNING10 for the question!

Visit msnbc.com for breaking news, world news, and news about the economy

Don’t forget to submit questions for the Boiler Room segments next week. Write questions below, post them on our Facebook page, or tweet it, to @NBCFirstRead or @mmurraypolitics or @DomenicoNBC.

Edited by Alexandra Moe. Video was shot by Ali Weinberg.

How the emerging ‘12 GOP field looks a lot like the ‘04 Dem field: Romney = Kerry, Thune = Edwards, Palin = Lieberman, Gingrich = Gephardt… The question is: Who will be Dean? (We know it won’t be Mike Pence.)… And who will be Wes Clark? (Watch for Jon Huntsman.)… Bottom line: Like in ’04, there isn’t someone -- right now -- who excites both the base and the establishment… The biggest story in the world: Egypt… Economy grew 3.2% in 4th quarter…Rahm’s back in the race… Hatch catches a break… McConnell and Kaine to appear on “Meet the Press”… And our first Top 10 Senate takeovers for the 2012 cycle.

From NBC's Chuck Todd, Mark Murray, Domenico Montanaro, and Ali Weinberg
*** Shades of 2004? While it’s still very early, and we don’t yet know who’ll actually run, the potential GOP presidential field right now looks very similar to the Democratic one that lined up against George W. Bush in 2004. Consider: Mitt Romney is John Kerry (the early front-runner from Massachusetts who looks the part but is viewed negatively as a flip-flopper); John Thune is John Edwards (the good-looking young senator who’s better known for winning a Senate race than the legislation he’s produced); Sarah Palin is Joe Lieberman (the ex-VP nominee who’s not trusted by some in the party); Newt Gingrich is Dick Gephardt (the nationally known former House leader); Haley Barbour and Mitch Daniels are Bob Graham (the respected grown-up who’s viewed more enthusiastically by the elites than the base); and Herman Cain is Al Sharpton (the long-shot who grabs headlines).

*** Who is Dean -- or the anti-Dean? One Republican who could have fired up the GOP base as did Dean with Democrats in 2003-2004 was Indiana Rep. Mike Pence, but he ruled out a White House bid yesterday and appears likely to run for governor instead. (Pence had a real opportunity to be the Mike Huckabee of the 2012 cycle: someone who makes a name for himself and perhaps grabs a TV contract. But running for governor means that he’s running to win someday. Perhaps 2016 or 2020 but we now know Pence has the ambition to be, well, more than just another famous conservative on TV.) But is there anyone else out there? And what about Tim Pawlenty, who almost seems to be a cinch to run? View the former Minnesota governor as a kind of anti-Howard Dean. While Dean fired up a despondent Democratic base, the GOP doesn’t really need to get fired up after the 2010 midterms. What T-Paw does is add Minnesota Nice to an enthusiastic Tea Party movement. 

*** Then who is Wes Clark? If there will be someone who comes out of nowhere -- like Wes Clark did in that cycle -- it could very well be former Utah Gov. (and current ambassador to China) Jon Huntsman. Yesterday, the Washington Post’s Cillizza reported that Huntsman is leaning toward a bid, and what we’ve heard privately confirms that. In a GOP field, Huntsman, who supports civil unions for gays, would have the center all to himself. But are there enough primary votes in the center to win a GOP primary? Other questions if Huntsman runs: How does someone who’s served honorably in the Obama administration explain he’s the right Republican to challenge Obama? Is his work in China a benefit or a disadvantage in a GOP primary? And how does having two Mormons in the field affect Romney? (For example, does Nevada become harder for Romney to win?) By the way, if there’s a Hillary Clinton, circa 2004, out there -- that is, someone who could run but won’t but is the obvious heir apparent in the minds of many -- it’s Jeb Bush.

*** Where’s the excitement? Perhaps the most consequential similarity between the 2004 Dem field and the emerging 2012 GOP one is this: No one really seems to be exciting both the base and the establishment -- the way Hillary Clinton and Barack Obama excited Democrats in ’08, or the way George W. Bush excited Republicans in ’00. As Penny Nance, the CEO of the conservative group Concerned Women for America recently told CBN’s David Brody: “Evangelicals want someone with: Sarah Palin’s looks and courage, Tim Pawlenty’s Midwest sensibilities, Mike Huckabee’s heart, Chris Christie’s boldness, Rick Santorum’s moral compass, Mitt Romney’s business experience, Newt Gingrich’s brains, Bobby Jindal’s common sense, and Mike Pence’s record.” Translation: There really isn’t a perfect GOP candidate right now.

*** An important reminder about ‘04: But this also doesn’t mean that Obama will have an easy race in 2012. Remember, as Democrats firmly opposed Bush and as the Iraq war got worse for the United States, Kerry came within one state -- Ohio -- of winning the presidential race in 2004.

*** The biggest story in the world? What's happening in Egypt is about as all-consuming of a story for the White House national security team as one can imagine. Publicly, the White House is clearly struggling to strike a delicate balance between supporting a longtime important ally in Hosni Mubarak and sticking to fundamental American beliefs in freedom. Just look at the pained statements both President Obama and Vice President Biden made yesterday in interviews. Said Obama: "My main hope right now is that violence is not the answer in solving these problems in Egypt. The government has to be careful about not resorting to violence. And the people on the streets need to be careful about not resorting to violence. And I think that it is very important that people have mechanisms in order to express legitimate grievances." And Biden took it a step further, pushing back at PBS' Jim Lehrer’s question about whether Mubarak was dictator. The president is getting briefed two or three times a day about Egypt by his national security team, and those briefings could get upped today.

*** Economy grew 3.2% in the last quarter: The AP on the breaking economic news: “The economy gained strength at the end of last year as Americans spent at the fastest pace in four years and U.S. companies sold more overseas. The growth is boosting hopes for a stronger 2011. The Commerce Department reports Friday that growth rose to an annual rate of 3.2 percent in the October-December quarter. That's an improvement from the 2.6 percent growth in the previous quarter. And it was the best quarterly showing since the start of last year."

*** Rahm’s back in the race: So much for that appeals court decision. “The ballot roller coaster for Rahm Emanuel finally stopped Thursday with the former White House chief of staff very much in the race for mayor and the Illinois Supreme Court emphatically rejecting a contentious challenge to his Chicago residency,” the Chicago Tribune reports. “Within minutes of the high court ruling, Emanuel was back shaking hands with voters, taking a congratulatory call from his old boss, President Barack Obama, and working to recapture an aura of invincibility he had worked hard to project until an Appellate Court ruling threatened to boot him from the Feb. 22 contest.”

*** Hatch catches a bit of a break: Given what happened to ex-Sen. Bob Bennett (R) in Utah last cycle, there’s no doubt that Sen. Orrin Hatch is vulnerable to an intra-party challenge this cycle. But the Tea Party Express -- the group that helped defeat Lisa Murkowski in the Alaska GOP primary and Mike Castle in Delaware’s -- told National Review that it won’t be targeting Hatch. Said the Tea Party Express’ Sal Russo: “I think he was an original tea partier. He has been talking about our issues from the beginning. Orrin is a Reagan conservative, as far as I’m concerned, and that’s as good as it gets.” This doesn’t mean that Hatch is completely out of the woods – he has to survive the state GOP’s convention – but it is some good news for him.

*** The “Meet” lineup: On “Meet the Press” this Sunday, NBC’s David Gregory will have exclusive interviews with Senate Minority Leader Mitch McConnell and DNC Chairman Tim Kaine. 

*** First Read's Top 10 Senate takeovers: We know it's very early, but here is our initial list of the most likely Senate seats to flip from one party to the other. No. 1 on the list is the top pick-up opportunity.
1. North Dakota: Democratic Sen. Kent Conrad's decision not to run for re-election gives the GOP an excellent shot to win this seat. The silver lining for Democrats -- there isn't the equivalent of a John Hoeven out there for the GOP, so Dems can make this a race if they can recruit a strong candidate.
2. Nevada: If Republican Sen. John Ensign runs -- and if he's the GOP nominee -- he becomes the cycle's most vulnerable incumbent. But don’t be surprised if Ensign gets a primary challenge a la Gibbons vs. Sandoval. (Heller?) Who will end up running on the Democratic side? Rep. Shelley Berkley?
3. Nebraska: If Ensign doesn't run -- or isn't the nominee -- then Democratic Sen. Ben Nelson becomes the cycle's most vulnerable incumbent. Republicans have a top challenger in state Attorney General Jon Bruning.
4. Montana: Democratic Sen. Jon Tester narrowly won this seat in 2006 due to a flawed GOP opponent (then-Sen. Conrad Burns) and an anti-GOP political environment. Now, he's running for re-election in a presidential year, when Obama won 47% in the state in 2008.
5. Virginia: Republican George Allen is already in the race, but will Democratic Sen. Jim Webb give him one? If Webb runs and Obama win's re-election, it's hard to see how he doesn't keep this seat. Just look at Allen's struggle to win in 2000 (a presidential year) when he was enormously popular and the incumbent Dem senator at the time was, well, flawed.
6. Missouri: Speaking of rematches, it doesn't appear at Republican Jim Talent will run against Democratic Sen. Claire McCaskill. That's the good news for the senator; the bad news is that Missouri isn't an easy state for any Democrat. There's every reason in the world this race moves up, but the GOP bench is a tad thinner than it should be. Numbers don't quite add up for any Dem in this state anymore, but McCaskill has some intangibles.
7. Massachusetts: On the one hand, Massachusetts is a reliably Democratic state -- and Martha Coakley won't be the Dem nominee. On the other hand, Republican Sen. Scott Brown has positioned himself -- with his voting record -- as the kind of moderate Republican (like Mitt Romney and Bill Weld) who's won gubernatorial races in the state. Brown could also benefit from the fact the Dem primary will likely be VERY crowded
8. Florida: Democratic Sen. Bill Nelson will be running for a third term in perhaps the nation's ultimate swing state. And like in his 2000 race, this comes in a presidential year. By the way, are folks 100% sure Nelson will run?
9. Ohio: As the case in Virginia, it's hard to difficult to see how Obama wins re-election but Democratic Sen. Sherrod Brown doesn't. But if Obama doesn't win a second term...
10. Michigan: Democratic Sen. Debbie Stabenow's poll numbers aren't the strongest out there. But will the presidential contest be enough to push her over the finish line?

Other Senate races on our radar (in alphabetical order): CT, ME, NJ, PA, WA, WV, WI

Countdown Chicago’s mayoral election: 25 days
Countdown to Election Day 2011: 284 days
Countdown to the Iowa caucuses: 374 days
* Note: When the IA caucuses take place depends on whether other states move up

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“Jay Carney, the spokesman for Vice President Joseph R. Biden Jr. and a former Washington bureau chief for Time magazine, will become White House press secretary as part of a final flurry of personnel changes in a months-long makeover of the West Wing,” the New York Times says.

In addition to Jay Carney being named White House press secretary, “other notable changes include Stephanie Cutter as deputy to senior adviser David Plouffe, David Lane as counselor to Daley and Rob Nabors as the new director of legislative affairs. Nabors, a former official at the Office of Management and Budget, replaces Phil Schiliro,” Roll Call writes.

The Washington Post on the transitions at the White House: "What has emerged is a staff that is well-versed in the ways of the Obama operation but not necessarily as entrenched in its culture. Democratic operatives who have long complained about the insular nature of the Obama West Wing said they are hopeful members of the new group will conduct greater outreach as they develop strategy for the next two years."

On the Last Word with Lawrence O’Donnell, New York City Mayor Michael Bloomberg said this of Obama and not addressing gun control in the State of the Union: “I think the president missed an opportunity, but I am encouraged. Presidents don't have a problem in fighting wars overseas. Congress doesn't have a problem in funding wars overseas. But we have a war on the streets of our cities, big and small.  And we have to do something about that.”

The Washington Post: "The Republican senators who rode the tea party wave to victory in the fall are now weighing whether that label will help them on Capitol Hill or become a scarlet letter. Thursday offered the first clear illustration of their situation as the newly formed Senate Tea Party Caucus held its inaugural meeting without three of the senators who won election under the tea party banner." The three: Ron Johnson (WI), Marco Rubio (FL), and Pat Toomey (PA).

“Sen. Mike Lee (R-Utah), a founding member of the Senate's Tea Party Caucus, has pledged to filibuster legislation to increase the debt ceiling,” The Hill reports. “Lee said a filibuster could be averted only if Senate Majority Leader Harry Reid (D-Nev.) and GOP leader Mitch McConnell (Ky.) reach an agreement to pass a balanced-budget amendment through the Senate.”

The Senate passed two new rules yesterday that could affect the speed of legislation: “The two resolutions eliminate “secret” holds on nominations and waive the reading of amendments that have been publicly available for at least 72 hours. They easily surpassed the 60-vote threshold required for adoption,” Roll Call writes. “Three other resolutions to change the rules regarding filibusters, or procedures that have been used to block or slow down the legislative process, were rejected Thursday. Those measures would have reduced the vote threshold for ending a filibuster after further debate, ended the use of filibusters to block legislation from coming to the Senate floor, and required Senators to hold the floor in order to continue a filibuster. They needed the support of two-thirds of Senators present and voting in order to pass.”

Meghan McCain called Michelle Bachmann “a poor man’s Sarah Palin.”

Gallup for the first time since 2005 has the GOP viewed as a net-positive – 47%-43%. That’s different, however, from the latest NBC/WSJ poll, which showed Republicans a net-negative – 34%-40%. 

Jason Chaffetz took back his criticism of Michelle Bachmann’s response to the State of the Union: He said, “My primary concern with Congresswoman Bachmann’s (R-Minn.) speech was the timing of it relative to Chairman Paul Ryan’s (R-Wis.) official response to the President’s State of the Union address. I felt at the time the proximity of her speech was too near Chairman Ryan’s official response. I have since learned that the timing of Congresswoman Bachmann’s address was not simultaneous to Chairman Ryan’s official response.”

The Illinois Supreme Court unanimously overturned an appellate court’s decision to kick Rahm Emanuel off the ballot for Chicago mayor. The Chicago Tribune: “The ballot roller coaster for Rahm Emanuel finally stopped Thursday with the former White House chief of staff very much in the race for mayor and the Illinois Supreme Court emphatically rejecting a contentious challenge to his Chicago residency.” And here’s the court’s full decision. 

The New York Times adds, "Legal experts said the State Supreme Court’s decision was probably a final answer to Mr. Emanuel’s situation, which has left this city puzzled and reeling, even as early voting is to start on Monday."

DANIELS: “Students for Mitch, a PAC organized by Yale students, announced on Thursday that they purchased TV time to air an ad to try and draft Indiana Gov. Mitch Daniels into the Republican presidential primary for the coming campaign cycle,” Real Clear Politics writes. The ad will run on a Fox affiliate in Des Moines, Iowa during this weekend’s NFL Pro Bowl, Bloomberg adds.   and

GINGRICH: “A split between prominent Republicans emerged Thursday over whether Congress should allow states to declare bankruptcy,” The Hill writes. “Former House Speaker Newt Gingrich (R-Ga) wrote in the Los Angeles Times that Congress should authorize a new law allowing states to declare bankruptcy, a move that House Majority Leader Eric Cantor (R-Va.) has derided as a ‘bailout of the states.’”

HUNTSMAN: Florida political adviser Susie Wiles, who worked previously on Gov. Rick Scott’s campaign, has “signed on as the new executive director of a political action committee formed by supporters of former Utah Gov. Jon Huntsman Jr.,” who is rumored to be considering a presidential run, the Florida Times-Union writes.

PALIN: Palin will keynote the Reagan 100 Opening Banquet at the Reagan Ranch Center in Santa Barbara California Feb. 4.

PAWLENTY: “In an interview released in Christianity Today Thursday, Tim Pawlenty asserted that the United States was ‘founded under God’ and that the founding fathers put that into the nation’s founding documents. In the wide-ranging interview, Pawlenty talked about his faith, his reversal on cap and trade, and the possibility of running against Rep. Michele Bachmann,” the Minnesota Independent writes.

PENCE: “U.S. Rep. Mike Pence shut the door today on a run for the presidency, but left wide open the likelihood that he’ll seek a different office: Governor of Indiana,” the Indianapolis Star reports. “’In the choice between seeking national office and serving Indiana in some capacity, we choose Indiana,’ Pence, R-Columbus, said of himself and wife Karen in a letter being sent to supporters. ‘We will not seek the Republican nomination for president in 2012.’”

ROMNEY: Romney is planning a “quiet, non-public visit” to New Hampshire, the Manchester Union-Leader’s political blog Granite Status writes. He will come to the state “next week specifically for private meetings with a handful of key state Republican activists. He has no public visits scheduled here at the moment prior to his scheduled March 5 appearance before the Carroll County Republican Committee Lincoln-Reagan Dinner fund-raiser at the Attitash Grand Summit Hotel in Bartlett.”

Romney is losing support, however, from influential players in key primary states, Politico writes. “In each of the traditional early states, top Romney supporters from the last campaign tell POLITICO that they’re hesitant to get behind the nearest thing the GOP has to a frontrunner. His difficulties are particularly acute in Iowa and South Carolina, where his former enthusiasts say they have not heard from him, believe he may be intent on downplaying the states in his second White House run and are openly flirting with his potential rivals.” 
 
THUNE: His decision on whether he’ll run for president will come at the end of February. “[I]t strikes me, at least, for somebody like myself who's not known, and would have to work a lot harder at getting known, that sometime in the next month or two, but for sure probably at the end of next month, we'd have to let folks know our intentions," Thune said on the Hugh Hewitt conservative talk-radio show.

Republican polling firm Resurgent Republic yesterday released the results from their dial test of President Obama’s State of the Union address. The group said viewers had an overall positive view of the address, but claim the dials dropped when Obama mentioned his administration’s accomplishments, like health care reform, and when he mentioned new federal investments. While voters responded positively to his talk of fiscal discipline and bipartisanship “there’s a healthy skepticism as to whether or not what he’s saying is going to match up with reality down the line,” Ed Gillespie, the firm’s co-director, said. Independents also tracked more closely with Republicans on Paul Ryan’s Republican response to the speech, which focused on fiscal issues. http://bit.ly/gHxQVR 

The Indianapolis Star on the news that will disappoint some national conservatives:

U.S. Rep. Mike Pence shut the door today on a run for the presidency, but left wide open the likelihood that he’ll seek a different office: Governor of Indiana.

“In the choice between seeking national office and serving Indiana in some capacity, we choose Indiana,” Pence, R-Columbus, said of himself and wife Karen in a letter being sent to supporters. “We will not seek the Republican nomination for president in 2012.”

He said he would make a decision “later this year” about what his next political step is, but by not running for president it is considered a virtual certainty that he will run for the GOP nomination for governor. While he could, instead, run for a seventh term in Congress, that’s not considered likely given that Pence gave up the job that would have made him the fourth-highest ranking Republican in the House after the November elections, in order to focus on other political opportunities.

From NBC's Shawna Thomas
After posting on Rep. David Rivera (R-FL) and the ethics headache he may cause the House Republicans, his congressional office responded saying his "campaign" was taking care of any questions having to do with the ongoing investigation into his "alleged financial improprieties." 
 
In an email to First Read, Rivera's campaign contends that "he has not committed any wrongdoing whatsoever." It put out a statement on January 3, 2011 explaining that Rivera had already submitted his congressional 2010 financial disclosures before the May deadline "in order to dispel any speculation surrounding his personal finances that were raised by political opponents during the recent election and by subsequent media reports. These federal financial disclosure documents, along with previously-amended State of Florida financial disclosure forms, demonstrate clearly that Congressman-elect Rivera, as he has stated repeatedly, never received income from entities that have been the subject of speculation in the media - including Flagler Dog Track, Millennium Marketing, or any other entity associated with a 2008 slot machine referendum in Miami-Dade County."

(The reason the Florida documents were amended was to show he had received a large loan from Millennium Marketing, the company co-managed by his mother. The statement went on to say that he has paid back that loan in full.)

Also, the congressman's campaign said he "has not personally become aware of any involvement by FDLE (Florida Department of Law Enforcement), as he has not been contacted by them. He has only read media reports." And that he has not had any discussions with the House GOP leadership about the investigation.

From NBC's Ken Strickland
In an agreement reached between Senate Majority Leader Harry Reid and Republican Leader Mitch McConnell, the world's most deliberative body will not change its rules on the filibuster after all.

A group of mostly freshmen senators were denied an opportunity to make changes with only a simple majority. They argue that the Senate rules allow that on the first day of a new session, the body may amend its rules with only 51 'yeas' instead of the 67 normally required. Democrats refer to this as "the constitutional option."

But Senate leaders have agreed not to take what many Republicans and some Democrats believe would be too drastic a step.

"Senator McConnell and I both believe that our reverence for this institution must always be more important than party," Reid said in a written statement. "And as part of this compromise, we have agreed that I won't force a majority vote to fundamentally change the Senate - that is, the so-called 'constitutional option.'"

The leaders agreed to five things that Reid said will lead to "a healthier Senate." Three of the changes are concrete, while the remaining two are more aspirational.

The first three:
1. Eliminating "secret holds," which can delay a nomination or legislation
2. Eliminating the tactic of forcing the Senate clerk of reading of an amendment aloud if it has already been publicly available for 72 hours
3. Creating legislation to exempt about 1/3 of all presidential nominations from the Senate confirmation process. These would primarily be low-level nominations for positions not directly involved with policy decisions.

In the remaining two:
4. Republican Leader McConnell agreed that he too would not try to change the Senate rules with the constitutional option "in this congress or the next Congress."
5. McConnell agreed to reduce his use of the filibuster on motions that bring the bills to the floor for debate. (There was no agreement on the frequency of filibusting bills before passage.) And Reid agreed to reduce his practice of "filling the tree," which blocks Republicans from offering amendments.

The first two items in the agreement will be codified with votes later today, which are expected to pass.

There will also be votes on the more dramatic changes to the filibuster rules that a small band of Democrats initially sought, but they will be subjected to a threshold of 67 votes (if all Senators are present), and are not expected to pass.

According to senior White House officials, the president is going to name Jay Carney, currently the communications director for Vice President Biden, to replace Robert Gibbs as White House press secretary.

Before working for Biden, Carney was a longtime print reporter, most recently the Washington bureau chief for Time magazine. He left Time for the Biden post.

The question, roared by one of the newest members of the Senate in a cavernous Capitol Hill hearing room, was this: "Is the Tea Party still a force in America?"

About 100 activists, who were gathered to listen to the the inaugural meeting of the Senate "Tea Party Caucus," delivered a resounding "yeah."

The setting -- a room that's held such press-saturated moments of D.C. importance as the last eight Supreme Court confirmation hearings -- wasn't exactly typical for the small-government, anti-establishment crowd dotted with yellow "Don't Tread on Me" flags.

But attendees seemed right at home. And the newly-elected lawmakers, fresh from casting their first series of votes and receiving word of their first committee assignments, were careful to say that their "caucus" isn't the stodgily formal assembly that the Washington-speak might imply.

"This caucus exists not for the purpose of speaking for or on behalf of any one organization or any one citizen,"  said freshman Sen. Mike Lee, R-Utah. "It serves instead as an effective forum through which you and other Constitution-loving, freedom-embracing Americans can communicate your ideas to members of the United States Senate."

"Some said when people who came from the Tea Party were elected that Washington would co-opt us," said Sen. Rand Paul, R-Ky.  "The interesting thing is that I think we're already co-opting Washington."

Paul noted that the Tea Party's anti-spending mantra is starting to seep its way into words coming out of some unlikely mouths.

"I went to my first State of the Union the other day, and guess who's now against earmarks?" Paul said gleefully. "The president of the United States has been co-opted by the Tea Party!"

But, he added, "I don't think he's necessarily happy about it."

Small but growing
Lee and Paul were joined by Sen. Jim DeMint -- whose early backing during the campaign provided a boost for many Tea Party-affiliated candidates -- as the formally announced members of the caucus. Two other freshman senators - Sens. Pat Toomey of Pennsylvania and Jerry Moran of Kansas - also spoke at the event. (It's unclear if Toomey considers himself a formal member of the caucus; Moran told reporters after his remarks that he is joining.)  Other Tea Party-affiliated activists, including anti-tax advocate Grover Norquist and FreedomWorks' Matt Kibbe, also addressed the crowd.

DeMint, the only non-freshman of the group, enjoyed the ovation of activists who credit him as a kingmaker for conservative candidates, but he underscored that the gratitude should flow in the other direction.

Gesturing to his two co-caucus members, DeMint smiled broadly. "Thank you for sending me some help!" he told the audience.

But for the short term, that help likely isn't enough to enact major changes in the world's most deliberative body.  Outright repeal of the Obama-backed health care reform bill, as well as spending cuts dramatic enough to sharply reduce the deficit, likely aren't acheivable in the Senate, where Democrats retain a majority. (The fiscally-conservative movement has more numerical steam in the House. A corresponding Tea Party caucus on the other side of the Capitol dome, led by Rep. Michele Bachmann of Minnesota, boasts about two dozen members.)

"We don't yet have the numbers to do all the good things that we need to do," DeMint acknowledged.

Instead, the Tea Party lawmakers pinpointed the passage of a balanced budget amendment, the elimination of congressional earmarks, and the prevention of a "naked" raise in the federal debt ceiling (one without offsetting deficit-reducing measures) as key agenda items to push until the next election, when the number of like-minded senators could grow.

Not every Republican who received Tea Party backing during the election opted to attend the first meeting. Sen. Marco Rubio, who received support from DeMint during the 2010 campaign, is holding out from formally joining the caucus. And new GOP freshmen Sens. Ron Johnson of Wisconsin and Kelly Ayotte of New Hampshire have also said they're not considering themselves part of the group at this time.

Paul told reporters that he didn't view any declined invitations as "snubs."  Of the five senators who did attend, he said, "I think that's a great beginning."

Paul, who organized Thursday's event, said that he hopes to have caucus meetings "quarterly," perhaps timed in advance of key votes on fiscal issues close to the members' hearts.

And maybe the next time, the setting will be a little less, well, Senate-y.

'If it's warm enough, maybe we can even do it outside," Paul said. "A couple hundred thousand people would be fine."

NBC's Ken Strickland contributed.

From msnbc.com's Tom Curry: The day after the Congressional Budget Office released its new estimate of a $1.5 trillion budget deficit for this fiscal year, CBO chief Douglas Elmendorf told the Senate Budget Committee that health care is the biggest driver of the budget problem.

Responding to a question from Sen. Rob Portman, R-Ohio, who asked him to identify the single largest fiscal challenge facing the United States, Elmendorf said, "the part of the spending that is growing very rapidly, and much faster than GDP, is spending on the government's large health care programs, both because of the aging of the population … and because of rising health spending."

He added, "The crucial underlying factor here … is the rising number of older Americans, relative to working Americans, and the rising cost of health care, relative to other things in the economy."
This should come as no surprise, Elmendorf said. "Those fundamental forces have been foreseen for decades and, I think, are inexorable under current policies."

The CBO's budget estimate released Wednesday projected that over the next several years, Medicare spending will grow at an average annual rate of nearly 7 percent, while Medicaid will grow at an average annual rate of 9 percent – even while the nation's economy itself is growing at a rate of less than 3 percent a year.

(Medicaid is the government's insurance program for poor people of all ages, but the elderly and disabled account for 70 percent of its outlays.)

He also said that a sudden onset of investor skittishness about the federal government's creditworthiness could cause an interest rate shock.

"The swings in sentiment that drive fiscal crises are not usually telegraphed very well ahead of time. They often occur very suddenly," Elmendorf told Portman.

"It's very difficult to predict what will happen if there's a sudden shift of sentiment against buying U.S. Treasury debt."

Elmendorf stuck to the CBO forecast that the health care law Congress passed last year will reduce future deficits. He repeated CBO's previous estimate said repeal of the law would add $230 billion to future deficits over the next several years.

At the hearing Elmendorf also gave a word of praise to the soon-to-be-ending $814 stimulus program, calling it "an important boost to output and employment."

The stimulus has gotten little attention in President Obama's State of the Union speech or in the budget debate in recent days.

In response to Sen. Bill Nelson, D- Fla., Elmendorf said "The waning of the effects of the Recovery Act … is one of the reasons that the economy isn't growing more rapidly over the next few years in our projection."

Nelson said people don't appreciate the stimulus because most of the money wasn't in the form of bridges and other visible infrastructure, but in "a massive infusion of money" to state governments "that people don't ordinarily see -- such as Medicaid spending as well as education."

But Elmendorf then brought the conversation back to the topic of the moment: the debt -- pointing out to Nelson that the stimulus had the unhealthy effect of adding to the debt.

"The large accumulation of debt to pay for the Recovery Act and the automatic stabilizers (such as unemployment insurance)… in the past few years has pushed debt to GDP up in a way that creates damage and risks."

President Obama Thursday answered questions live via YouTube following the State of the Union.

Recap from NBC News: In a YouTube interview set up by the White House, President Obama called for restraint from the Egyptian government as well as demonstrators in that country, adding that he has told Egyptian President Hosni Mubarak that "moving forward on reforms is absolutely critical."

Asked about the mounting debt and unemployment, the president said his administration will be "focused exclusively" on economic growth over the next 12 months. He said he will look to make cuts "with a scalpel, as opposed to a chain saw" in order to save $400 billion.

Obama was also asked about U.S. drug policy and whether it was time to legalize and regulate drugs. He said he was opposed to legalization and added that the nation must focus on the problem of drug use as a "public health problem."

There were also several light-hearted questions. Obama said he wanted to stay neutral on a prediction for the Super Bowl and said that the best thing about being president is the ability to help people. The worst thing, he said, is feeling trapped in "the bubble."

Other topics included the wars in Iraq and Afghanistan, renewable energy, the DREAM Act and health care.