From NBC's Libby Leist
On day two of her new role as America's top diplomat, Secretary of State Clinton again displayed her first-rate political skills in front of hundreds of USAID staff this afternoon at the Ronald Reagan building.

Clinton impressed the audience of development experts using a personal touch and addressing grievances of an agency that felt neglected and underfunded during the Bush years.

She traced her own career path working to provide legal advice to low-income Americans, working on child issues, and traveling the world as First Lady to prove she was committed to their cause.

"I feel so passionately about this, because, of course, it is part of my DNA," she said.

She pledged to help the agency secure more resources.
 
"It will be very difficult for us to expect you to perform at the very high level of professionalism that we will expect without providing you the resources to do the job we ask you to do," she told those gathered. 

She received loud applause when she promised to help cut through red tape.

"Our diplomats and our development experts have to go through miles of paperwork to spend 10 cents," she said. "It is not a sensible approach."

Clinton stressed that it was up to them to prove that their work is important and needs to be funded even in dire economic conditions.

"You've got to be able to make the case that what you do for America is important even in these tough times," she said.

In a touching moment, Clinton evoked President Obama's mother, as she did in testimony before the Senate Foreign Relations Committee last week, and her work in microfinance as evidence that the president believes in and is deeply committed to development.

One slight misstep for Clinton today: She twice misidentified the acting Director of USAID, Dr. Kent Hill, as "Dr. Hall"

Friends and Family Plan
Since taking over at the State Department on Wednesday, Clinton has made a flurry of phone calls to world leaders, according to acting spokesman Robert Wood. Wood described the following calls as introductory calls, with limited policy discussion: Israeli PM Olmert, Israeli FM Livni, Israeli Defense Minister Barak, Egyptian FM Aboul Gheit, Jordan's King Abdullah, Palestinian President Abu Mazen, Palestinian PM Fayyad, Saudi FM Saud al-faisal, British FM, David Miliband, French FM Bernard Kouchner, German FM Frank Walter Steinmeier, Japanese FM, South Korean FM, Australian FM, Chinese FM, Afghan President Karzai, Pakistani Pres. Zardari, Indian FM and Mexican FS Espinosa.

From NBC's Mike Viqueira

There appears to be some surprise at how the members of your U.S. House aren't all joining hands to pass the stimulus, after all the talk and expectation of a post-partisan new day dawning over Washington.

At the risk of coming off as pedantic, we offer the following in an effort to provide a contextual prism through which we might view this institution (recycling a pertinent point I made a couple of years ago)…

"The job of the minority is to make a quorum and to draw its pay." Words spoken by House Speaker Thomas Reed in 1890 that perfectly describe the sweeping hegemony of the majority party -- and emasculation of the minority -- that is as evident today as it was 119 years ago. The majority here controls every step of the process, and when you control the process, you control the substance. To put it in the current vernacular, the prevailing view over the years is that the minority should simply sit down and shut up.

It's not too much of an overstatement to say that the most oppressed minority in America is the minority here in the "lower body." If you're a member of the party out of power, R or D, you typically are not permitted to have your bills considered in committee or on the floor; it's hard to get your amendments debated and voted on (especially the ones that have a chance of passing); you even have to go hat in hand to the majority staff in order to get a room to meet in. In short, you take it in the neck every time.

It's been this way since the time of Henry Clay, and through the years it has more or less held true regardless of which party is running the place.

The Senate, where any one random member can raise his hand to object and gum up everything, is a completely different animal. But the House was designed to be more responsive to public sentiment (though the Founders were against the idea of a two-party system in Congress (Federalist #10, if you really care), and over time the majority has established rules and procedures that make it easy to exercise its will and run roughshod over those out of power. It's what the legislative geeks call a "majoritarian institution."

.... So, as it relates to the current debate, Democrats will be happy express the view, on background, that Republicans lost the last two elections, and, as a result, they should stop whining and get over it.

This attitude is manifest in the fact that Republicans were shut out of the process that resulted in the base bill. Yes, they had a chance to offer amendments during the committee process. But they lost those votes, and the argument can and will be made by Democrats that this is as it should be, that Republicans don't have the votes because the voters saw fit to elect someone else with different policies, and therefore they lost fair and square.

Two years ago, Nancy Pelosi rose to the speaker's dais on a platform of institutional reform. Despite that pledge, the majority, which she controls, has gone the other way, limiting the minority's ability to influence the legislative product in the House, largely in reaction to what Democrats consider to be a pattern of parliamentary abuse by Republicans.

What Pelosi found is that she couldn't both reverse a culture generations in the making and still be an effective speaker of the House. Surely Rahm Emanuel, her former lieutenant and the new White House chief of staff, understands this.

So if there is to be an era of bipartisanship, it is more likely to rise in the Senate. The cold, hard fact is that with their current advantage in the house, Democrats simply don't need Republicans to enact their agenda.

From msnbc.com's Lauren Vicary

A $4 trillion Bad Bank?

I don't think the magnitude of this number has sunk in yet. $4 trillion is a VERY large number.

That's the rough estimate Sen. Chuck Schumer, D-N.Y., gave for the cost of the "Bad Bank" proposal (a kind of warehouse for toxic assets from banks). This entity would be owned by the federal government.

Keep in mind, the total value of all the goods and services in the United States this year will be about $14 trillion. So $4 trillion is about 35 percent of the total GDP.

Total federal spending last year was about $3 trillion.

Or measuring it another way: $4 trillion is about five times as big as the stimulus. And yet the "Bad Bank" concept has not gotten the headlines the stimulus has.

For more, read msnbc.com's Tom Curry's story on this.

From NBC's Mark Murray
Hillary Clinton's statement: "Today I congratulate Kirsten Gillibrand on her appointment by Gov. Paterson to serve as senator from New York. Kristen is an intelligent and dedicated public servant and a dear friend. I'm pleased that this seat, which has been my great honor to hold, and which has in its history been held by leaders like former Sens. Daniel Patrick Moynihan and Robert F. Kennedy, will be in such capable hands. And I look forward to working with Sen. Gillibrand as we meet the challenges and seize the opportunities facing New York, our nation and the world.

Harry Reid: "I just spoke to Kirsten Gillibrand to congratulate her on this appointment and told her that I know she will be a superb senator for the people of New York. I commend Gov. Paterson for choosing an effective Member of Congress and a proven problem solver who is committed to fiscal discipline, making America more secure and ensuring government is transparent and accountable. Gillibrand is a rising star in the Democratic Party who I am confident will quickly become a rising star here in the Senate and will pick up where Hillary Clinton left off in looking out for the interests of all New Yorkers."

The Brady Campaign to Prevent Gun Violence: "We have been disappointed by Rep. Kirsten Gillibrand's record on preventing gun violence during her one term in Congress. For example, she supported legislation that would have weakened efforts to fight illegal gun trafficking. We are hopeful, however, that as a United States senator representing the entire state of New York she will follow the example of Sen. Charles Schumer and former Sen. Clinton and work with us to make it harder for dangerous people to get dangerous weapons in this country."

And Brian Walsh of the National Republican Senatorial Committee: "Gov. Paterson's choice of a relatively unknown and inexperienced individual in a field of far more experienced candidates whose political leanings are more closely aligned with the New York Democrat Party is an interesting one. Clearly, Kirsten Gillibrand's appointment at the end of this chaotic process has angered the left-wing and created a real schism in the Democrat Party." More: "It's particularly noteworthy that the governor has refused to release the policy position questionnaires that he asked all prospective candidates to complete. As an appointed senator, rather than an elected one, Kirsten Gillibrand should do the right thing now and voluntarily make her questionnaire public to her new constituents in New York." 

From NBC's Mark Murray
Well, it certainly wasn't as bizarre as that press conference where Rod Blagojevich announced Roland Burris as his pick to fill Obama's vacant Senate seat -- and where Rep. Bobby Rush even made a guest appearance. ("I would ask you to not hang or lynch the appointee as you try to castigate the appointer," Rush said at that presser in late December.)

Video: N.Y. Gov. David Paterson announces Rep. Kirsten Gillibrand as his choice to fill the Senate seat vacated by Secretary of State Hillary Clinton.

Flanked on the stage by dozens of elected state Democratic officials, New York Gov. David Paterson today officially appointed Congresswoman Kirsten Gillibrand to replace Hillary Clinton in the U.S. Senate. The appointment will last until a special election is held in 2010, and that winner will serve until 2012, when the seat's six-year term concludes. 

At the press conference, Paterson described his process for filling the seat, which included asking candidates to submit their names, sit down for an interview with the governor, and fill out a questionnaire. (What he didn't mention was that the process lasted for two months, and was dominated primarily by speculation that Caroline Kennedy would fill the seat.) "I believe that I have found the best candidate to become the next senator from New York," Paterson said.

"I appreciate the opportunity that you have afforded me and the trust you have placed in me," Gillibrand said at the beginning of her speech. Then, referring to the fact that few New Yorkers know the two-term congressman, she added: "Over the next two years, you will get to know me, and more importantly, I will get to know you."

Gillibrand also recognized her predecessor, Hillary Clinton. "I aspire to follow in her footsteps."

From NBC's John Yang and Athena Jones
At the beginning of his meeting this morning with bipartisan congressional leaders, President Obama acknowledged the differences with Republicans on the stimulus package. But he said he's confident it will generate three to four million jobs, and said it's only one leg of "at least a three-legged stool." He noted that the legislation is still on target to make it to his desk on President's Day.

Obama also mentioned reports of TARP recipients renovating bathrooms and offices, saying there's a lack of accountability and transparency. And he noted the GAO report of waste in government. "Those have to be part and parcel of a reform package," he said.

 From Chuck Todd, Mark Murray, and Domenico Montanaro
*** Paterson's pick: At noon ET, New York Gov. David Paterson will finally put an end to what has become the nation's second-best appointment drama -- the best, of course, was the Blago/Burris story -- when he's announces his pick to fill Hillary Clinton's Senate seat. NBC's Andrea Mitchell reports that, according to several sources, Paterson has chosen two-term Congresswoman Kirsten Gillibrand. Gillibrand and her husband were planning to fly to Albany for an 11:00 am meeting at the governor's mansion, followed by the noon public announcement. Paterson, Mitchell adds, has told people he wants to appoint a woman to replace Hillary Clinton, and he likes the idea of having a senator from Upstate New York, which now isn't represented among statewide officeholders.

Video: In a surprising move, Caroline Kennedy withdrew her name from the shortlist to fill Hillary Clinton's Senate seat, citing "personal reasons."  NBC's Andrea Mitchell reports.

*** Turning safe seats into competitive ones: Looking ahead to 2010, you could argue -- at this very early stage -- that the appointments to fill the vacant Democratic Senate seats haven't helped the party's midterm prospects, despite what looks like a favorable map for the Democrats. In Illinois, Roland Burris is tainted by the Blago affair, and you're certain to see a Democratic primary, even if he decides to run for a full term. In Colorado, no one really knows what they're getting in Michael Bennet, who was sworn in to the Senate yesterday; as one Republican strategist told First Read, Bennet could be great statewide candidate or he could be a disaster. The same holds true for Gillibrand, who won her congressional seat in 2006 due in large part to the Democratic wave and a last-minute news report alleging that the wife of her Republican opponent (the incumbent Rep. John Sweeney) had called police to complain that he was "knocking her around." Can she raise the money needed to hold on to the Senate seat? (Remember, she will not only have to run in 2010, but also in 2012, when Clinton's term is up.) Can she avoid a Democratic primary? (It doesn't look like it. The New York Times reports that Democratic Rep. Carolyn McCarthy says she is prepared to run against Gillibrand due to Gillibrand's pro-gun views.) Also, by picking Gillibrand, has Paterson given Republicans an opportunity to pick up her Upstate congressional seat? (It isn't a safe Democratic seat by any means.) In fact, the special election to fill Gillibrand's term will be an early test for Obama and for the NRCC. This isn't the ideal situation for the Democratic Party. Caroline Kennedy, politically, solved a lot more problems for the Dems in New York than Paterson or Cuomo or others realized.

*** The economy returns to the spotlight: At 9:45 am, President Obama will host the bipartisan, bicameral leadership of Congress (Pelosi, Hoyer, Clyburn, Boehner, Cantor, Reid, Durbin, McConnell, Kyl) to discuss Congress' legislative agenda, including the stimulus.

Indeed, this meeting means that the economy will be back as the center of Obama's public agenda. Speaking of, the Washington Post notes GOP resistance to Obama's stimulus package is growing. Our question: Does it matter? Remember, Obama has big advantages and can get what he wants passed with just Dem support. What price is bipartisanship for Obama? Answer that and you'll have a good idea of the cost of the stimulus once it makes it out of Congress. After the bipartisan meeting at the White House, Obama meets with members of his National Security Council, has lunch with Biden, holds a budget meeting, and then meets with Treasury Secretary-designate Tim Geithner, whose nomination yesterday passed the Senate Finance Committee, 18-5, but who won't be confirmed by the full Senate today.

*** Finding middle ground: Who knew that on the issue of GITMO and interrogations that somehow Obama could find middle ground? But he did just that. On the surface, Obama kept a campaign promise, by shutting down the prison at Guantanamo Bay. But he didn't back himself into a corner when it comes to housing terrorist suspects, either for the purposes of interrogating them or housing them without putting them in the court system.The left seems happy with the decision, and while some conservatives are critical of the decision to shut GITMO (because of the worry of moving terrorist suspects to a prison in THEIR backyard, say San Diego, South Carolina or Kansas), the more they read the fine print, the more they'll see that nothing's been ruled out. Obama simply punted the decision on what to do with detainees. There are a few key loopholes. One, detainees could be turned over to allies that have a less than stellar interrogation policy (Saudi Arabia?) Two, the special commission Obama has created can come up with an alternative interrogation "protocol" for intelligence purposes. (Does that mean something OUTSIDE the Army field manual is possible? White House Counsel Greg Craig did not completely shut the door on that possibility.) Three, Craig also indicated that the president is aware that there may be a category of detainees who can't be tried in our court systems nor returned to another country. So as one Republican consultant told First Read, did Obama close GITMO or simply pledge to move it?

Video: The Senate Finance Committee approves the nomination of Timothy Geithner as Treasury secretary. MSNBC's David Schuster reports.

*** Cabinet slowdown: OK, we're now in Day 3 or Day 4 (depending if you're counting full days) of this new administration, and it appears it may be a while until the cabinet is fully in place. Right now, Obama has 10 of his 15 cabinet picks filled. Holder, Geithner, and Daschle are all being slowed down a tad in their confirmation processes. Remember, these aren't small jobs, as all are being asked to handle very large portfolios. And then there's the fact that Obama hasn't even named a replacement Commerce secretary yet. Considering how efficient the transition was, it has to be frustrating for this new White House that with all the advantages they have in the Senate, they are struggling to get their nominees in place.

*** Gibbs meets the press: Robert Gibbs' opening act as White House press secretary appears to have come and gone without any major issues. Perhaps his only flub was putting the White House counsel's ON BACKGROUND briefing on the GITMO and interrogation executive orders ON THE RECOCRD. Of course, many in the press didn't understand why Greg Craig's briefing was on background in the first place. Overall, Gibbs came armed with a message to push -- the announcement of the president's daily economic briefing, modeled after the PDB, the daily threat/intelligence briefing he receives -- and he saved the Blackberry nugget (trust us, plenty of reporters had been asking this question behind the scenes) for the press briefing, knowing how it would be news catnip.

*** Abortion politics: By holding off a day signing the executive order on the abortion gag rule -- i.e., not doing it on the anniversary of Roe v. Wade -- the Obama folks are once again trying to win over evangelicals. The move also underscores the fact that Obama has yet to get a single bit of criticism from the pro-choice community on this decision, as well as on his pick of the pro-life Tim Kaine to head the DNC. It's really a sea change in the Democratic Party. There is no way that both of these deals would have been tolerated by the party 10 years ago.

*** McConnell's speech: Also, today Senate GOP Leader Mitch McConnell will speak to the National Press Club at 1:00 pm. McConnell's office says it will be the first major speech by a GOP leader since Obama's inauguration. And according to Politico, McConnell "will call on both major political parties to stand up to the powerful interest groups that sometimes control them." Early on, McConnell has allowed his House GOP counterpart, John Boehner, to be the leading voice of the loyal opposition. Perhaps McConnell wants to signal that he wants to be the face of the opposition with this speech.

*** Mac is back: The Washington Post front-pages how Washington's maverick -- John McCain -- is back in business.

Here's the paper's fun lead: "A joke made its way around the Capitol yesterday: How do you know the 2008 election is really over? Because John McCain is causing trouble for Republicans again. Two and a half months removed from his defeat in the race for the presidency, colleagues say, McCain bears more resemblance to the unpredictable and frequently bipartisan lawmaker they have served with for decades than the man who ran an often scathing campaign against Barack Obama. In some instances, he's even carrying water for his former rival."

*** Keeping up with the Joneses -- er, the Obamas: In our third installment looking at challenges for the GOP, we turn our attention today to something that once was a Republican strength, but is no longer: money. In his two years of campaigning for president, Obama raised three-quarters of a billion dollars -- much of it over the Internet -- from about four million donors, which comes to less than $200 per donor. To put Obama's haul into perspective, it is more than the combined amount Bush and Kerry had at their disposal in 2003-4 ($695 million), according to data from the Center for Responsive Politics. By comparison, McCain raised $367 million in the 2008 presidential cycle, which includes the $84 million he received in public funds. Even when you add the $417 million the Republican National Committee raised, that total ($784 million) trails the combined Obama-DNC haul (almost $1 billion). To win in 2012, the Republican Party and the next GOP presidential nominee will need to find ways to compete with the Obama fundraising juggernaut, and they'll have to do it without a sitting Republican president to help raise money.

Countdown to RNC winter meeting: 5 days
Countdown to NJ GOP primary: 130 days
Countdown to VA Dem primary: 137 days
Countdown to Election Day 2009: 284 days
Countdown to Election Day 2010: 648 days

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The Los Angeles Times: "Moving to claim what he described as 'the moral high ground,' President Obama took a series of steps Thursday to dismantle the most widely condemned components of the Bush administration's war on terrorism. Obama issued a trio of executive orders to close the Guantanamo Bay detention camp within a year, permanently shut the CIA's network of secret overseas prisons and end the agency's use of interrogation techniques that critics describe as torture."

"But on a day meant to demonstrate a clean break from the policies of his predecessor, Obama put off many of the most difficult decisions about what the U.S. will do with detainees, and left room to revisit whether the CIA still should have permission to use coercive methods when questioning captives."

The New York Times: "Among the questions that the White House did not resolve on Thursday were these: What should be done with terrorists who cannot be tried in American courts, either because evidence against them was obtained by torture or because intelligence is too sensitive to use in court? Should some interrogation methods remain secret to keep Al Qaeda from training to resist them? How can the United States make sure prisoners transferred to other countries will not be tortured?"

The Washington Post's Priest uses the executive orders yesterday to note that Obama has ended Bush's definition of the "war on terror." But do note that when asked directly about this yesterday, White House Press Secretary Robert Gibbs suggested that there hadn't really been a declaration of the end of the war on terror, and Obama has frequently used that phrase as well.

The New York Post: "But families of the 9/11 fallen slammed Obama for going soft on terrorists. 'The terrorists are going to be cheering,' said FDNY Fire Lt. Jim McAffrey, whose brother-in-law, FDNY Battalion Chief Orio Palmer, was killed at Ground Zero. 'It's the wrong move. It sends a chilling message to people who are trying to fight the war on terror.'"

A harder line towards China? "Timothy F. Geithner, who moved closer to confirmation as Treasury secretary on Thursday, told senators that President Obama believed China was 'manipulating' its currency, suggesting a more confrontational stance toward that country than under the Bush administration," the New York Times writes.  

USA Today covers Hillary Clinton's first full day at the State Department. "President Obama stood next to Hillary Rodham Clinton on her first day as secretary of State on Thursday and proclaimed 'a new era for American leadership' through diplomacy. To prove his point, he named high-profile envoys charged with re-energizing U.S. policy toward two vexing global flashpoints. Obama and Clinton tapped former Senate majority leader George Mitchell, who negotiated a 1998 peace deal in Northern Ireland, to tackle the Israeli-Palestinian conflict. And they hired former assistant secretary of State Richard Holbrooke, who brokered a 1995 truce among warring factions in Bosnia, to coordinate policy in Afghanistan and Pakistan, where the U.S. military is fighting a growing insurgency."

The New York Times adds, however that the "appointment of such diplomatic heavyweights could pose a challenge to Mrs. Clinton as she seeks to carve out her place as the nation's chief diplomat. Each was once viewed as a potential secretary of state, and Mr. Holbrooke, in particular, will have a wide-ranging portfolio."

Per NBC's Libby Leist, Secretary of State Clinton is scheduled to address USAID employees at noon ET at the Ronald Reagan Building in D.C.

The appointment of William Lynn has raised hard questions of hypocrisy for the Obama administration. (Obama proposed rules against lobbyists, yet nominated former Raytheon lobbyist Lynn as the Pentagon's No. 2). Michigan Democrat "[Carl] Levin said he was worried that if Lynn had to recuse himself from any issue that could affect Raytheon, he would be unable to do his job effectively. The Pentagon deputy typically runs much of the day-to-day operation of the Defense Department and handles many key budget and procurement decisions."
 
But look at what was apparently behind the choice: "Gates pushed hard for Lynn's appointment and favored him over other officials suggested by the Obama transition team. At a news conference Thursday, Gates said he was impressed with Lynn and argued he should get the job despite the lobbying ban."

The Wall Street Journal writes that Obama "will issue an order restoring U.S. funding for international family-planning groups involved with abortion. But he chose not to do so on Thursday, the anniversary of Roe v. Wade. President Obama was breaking with the tradition set by his recent predecessors to make an abortion-related order on the anniversary of the Supreme Court ruling, another example of his attempt to support liberal policies he believes in while trying to defuse emotional political debates." The paper says the timing for the order is unclear but is expected soon.

The Obama cabinet continues to take shape: Two more cabinet members were confirmed: LaHood for Transportation and Shaun Donovan for HUD. That means 10 of Obama's 15 cabinet members are now in place. "Also confirmed were Lisa Perez Jackson as Environmental Protection Agency administrator, Nancy Helen Sutley as a member of the Council of Environmental Quality, Mary Schapiro as chairman of the Securities and Exchange Commission and Susan Rice as ambassador to the United Nations."

The Washington Post says that the Maverick McCain is back. "The surest sign of McCain's return to his 'maverick' ways came when he caught wind of an effort by Sen. John Cornyn (R-Tex.) to delay Clinton's confirmation vote by a day, pushing it from Tuesday to Wednesday because he was seeking greater disclosure about foreign donors to former president Bill Clinton's charitable foundation. McCain found the objection gratuitous -- despite policy disagreements with Clinton, he and most Republicans consider her well qualified -- and said so publicly."

Roll Call previews McConnell's speech at the National Press Club. "In the first major policy speech by a Republican leader since Obama was sworn in -- and McConnell's first at the Press Club since he laid out his party's position on campaign finance reform in 1997 -- the Senate Minority Leader will address the broad themes of Obama's inaugural speech. One source familiar with its language said the speech will focus "on the post-partisan dynamic" and on avoiding the partisan posturing that has been a hallmark of the House and Senate over much of the past decade." The speech was apparently drafted with House Minority leader John Boehner, "and it will focus largely on policy issues McConnell believes can be addressed in a bipartisan manner, with an emphasis on entitlement reform… Boehner will give the Republicans' Saturday radio response to Obama's first radio address to the nation, according to GOP aides."

MINNESOTA: "Al Franken's effort to block Norm Coleman's lawsuit over the U.S. Senate recount was rejected Thursday by a three-judge panel, setting the stage for a trial to begin Monday on the Republican's claims," the Minneapolis Star Tribune writes, adding: "The panel also rejected Franken's attempt to limit any court review to verifying math and other technicalities of the recount and canvass, clearing the way for the judges to consider Coleman claims that some votes in Democratic areas were counted twice, that some absentee ballots from GOP areas were wrongly rejected and that there were other irregularities." 
 
Coleman also put out a video to supporters, declaring, "I fully expect to win this election." 
 
Though he fully expects to win, he says, he joined the Republican Jewish Coalition, a Republican lobbying group for Jewish causes, as an adviser. "Democrats raised ethical questions about the job, citing Senate rules that require members to report negotiations involving private employment, and preventing ex-senators from lobbying for two years." Coleman said he would not be lobbying, but simply needs to pay the bills. The conservative blog, The American Spectator, writes in reaction, "However this is spun, the fact that Coleman is taking another job doesn't inspire much confidence that he truly believes he'll prevail in court and head back to the Senate." (Though the campaign apparently later contacted the blog to spin its side.) 

NEW YORK: The New York Times on Paterson's pick of Gillibrand: "If Mr. Paterson was hoping to quiet the tumult over the selection process by picking Ms. Gillibrand, there were indications that he may not get his wish. Ms. Gillibrand, who has been endorsed by the National Rifle Association, is controversial among some of the party's more liberal leaders downstate. Representative Carolyn McCarthy, a Long Island Democrat and ardent gun control activist, said Thursday that if Ms. Gillibrand got the job, she was prepared to run against her in a primary in 2010. Ms. McCarthy was elected to Congress after her husband was killed in a gunman's rampage on the Long Island Rail Road in 1993."

More: "Ms. Gillibrand's selection was a careful political calculation by the governor, who will run for his second term as governor in 2010, when Ms. Gillibrand will also be on the ballot. The choice reflects Mr. Paterson's thinking that his selection should be someone who can help him attract key demographics — in Ms. Gillibrand's case upstate New Yorkers and women."

The New York Daily News: "Paterson Thursday night was being lobbied against Gillibrand by the left wing of the Democratic Party, which views her as too conservative, sources said. Rep. Carolyn McCarthy (D-L.I.) and Manhattan Borough President Scott Stringer are already considering running primaries against her in 2010, sources close to the two said." 
 
Liberals are angered by the pick of the NRA-backed congresswoman and the New York Post writes, "Gillibrand, a mother of two occasionally resented by colleagues for being an aggressive self-promoter, was strongly backed for the post by Charles Schumer…."

As the Wall Street Journal reminds us, "The new senator could face two elections in the next four years -- in 2010 for the final two years of Ms. Clinton's term, and in 2012 for a full term."

From NBC's Mike Viqueira
You may have heard about the "Purple Tunnel of Doom," wherein bona fide Inaugural ticket holders were directed by police into the Third Street tunnel that runs under the base of Capitol Hill, only to become trapped there and miss the entire ceremony. Survivors have even dedicated a Web site in order to commiserate over their plight.

Congressman and member of the House Democratic leadership, Rep. Chris Van Hollen, has written to Sen. Dianne Feinstein, chair of the JCIC, endorsing the idea of an investigation.

His letter to DiFi:
"I am writing to express my deep concern over the fact that thousands of people who had tickets were denied access to the historic swearing-in ceremony for President Barack Obama, and applaud you for initiating a thorough investigation into how this happened. I strongly endorse this review and look forward to learning what went wrong so we can avoid such problems in the future.

"My office has received many calls and emails from constituents expressing their disappointment and heartbreak over not being able to witness this momentous occasion. And to be clear, these are individuals who did everything they were supposed to do. They obtained tickets issued by the Joint Committee on Inaugural Ceremonies; they arrived at the entrance gates early in the morning; and they waited for hours to go through security. Yet despite following the rules, they were still denied access. And worse yet, they were kept in the dark - deprived of information - as the hours passed and their hopes of seeing history in the making slipped away. As one of my constituent put it, 'I waited more than 50 years for this moment, and now I've missed it.'

"I understand and appreciate the enormous security challenges presented by the nearly 2 million people who took part in this inaugural event, and I salute the extraordinary planning that went into this effort. However, I am baffled by the break down, on such a broad scale, of the processing of people who followed the rules and came only to see, hear and be part of this remarkable moment in our nation's history.

"I look forward to reviewing the findings of the investigation so we can ensure accountability and prevent such breakdowns in the future."

From NBC's Mark Murray
The New York Times has an article suggesting plenty of tension between Gov. David Paterson's camp and Caroline Kennedy's, a day after Caroline surprised the political world by withdrawing her name from consideration for filling Hillary Clinton's Senate seat.

Per the Times, "Problems involving taxes and a household employee surfaced during the vetting of Caroline Kennedy and derailed her candidacy for the Senate, a person close to Gov. David A. Paterson said on Thursday."

More: "The person close to the governor said Mr. Paterson 'never had any intention of picking Kennedy' because he had come to consider her unready for the job." Ouch.

Seeking reaction to the Times piece, a Caroline source told First Read those revelations were "B.S." coming from the governor's office.

In addition, a Caroline spokesman sent NBC's Kelly O'Donnell this statement: "Caroline Kennedy withdrew her name for consideration from the United States Senate for personal reasons. Any statements to the contrary are false. The governor set up a fair and deliberative selection process. This kind of mudslinging demeans that process and all those involved."

Paterson's office has released its own statement, possibly seeking to extinguish some of this tension. "Last night Caroline Kennedy informed the governor that she was withdrawing her name from consideration for an appointment to the United States Senate for personal reasons. This decision was hers alone," the statement reads. "The governor had a private conversation with Ms. Kennedy yesterday afternoon. Out of respect for her decision making process, the governor's Office did not respond to any inquiries in order to allow her time to deliberate. The governor considers Caroline a friend and knows she will continue to serve New York well inside or outside of government. We wish her well in all her future endeavors."

Paterson's office also has announced that the governor will make his pick tomorrow at noon ET.

From NBC's Pete Williams
While expressing their joy at President Obama's executive orders governing the treatment of enemy combatants, human rights groups say they're concerned that the rules leave the door open to indefinitely detaining some of the prisoners now held at Guantanamo Bay. 

The Bush administration argued that it had the authority to hold some detainees for as long as the war on terror lasted -- even if they were convicted by a military court and served out their sentences. The Obama order suggests indefinite detention is at least an option.

Many defense lawyers believe the detainees should be placed in only two categories -- those to be charged and tried, or those to be released or sent to another country. But the new Obama Guantanamo order suggests there may be a third category of detainees who cannot be tried, because of problems with evidence, but who are too dangerous to release.

"I do acknowledge and am somewhat worried that they've left the door open for this third category," said Sarah Mendelson, director of the Human Rights and Security Initiative at Washington's Center for Strategic and International Studies.

ACLU Executive Director Anthony Romero said he was worried about the same thing. 

"We are hopeful that as the process unfolds and gets clarified, there will be no doubt that detainees must either be charged, prosecuted and convicted, or released," he said.

Lawyers for some of those held at Guantanamo Bay have another concern about President Obama's call for a complete review of all detainee records -- it may have the effect of slowing down or stopping the federal court reviews now going on in Washington, D.C. Lawyers for hundreds of detainees have have aruged in court that their clients are wrongly held, and federal judges have ordered some released, finding the government's evidence unpersuasive.

From NBC's Andrea Mitchell

Not announced today was the appointment of Dennis Ross to lead a diplomatic initiative toward Iran and the rest of the region.

As the president was leaving the State Department ceremony, I asked him, "What about Iran?"

He answered on camera, "Andrea, this is not a press conference, but we will announce a comprehensive policy toward Iran in due course."

Other senior officials said Iran would be handled separately and Ross is still in line for a position -- although clearly less elevated than George Mitchell and John Negroponte.

After the speeches, Obama went along the front row, shaking hands with senior diplomats and many Obama and Clinton friends and supporters (George Stevens, Vernon Jordan, Holbrooke's wife Kati Marton) in the State Department's ceremonial room, reaching out, in particular, to Condi Rice's deputy Secretary of State and former head of intelligence, veteran ambassador Negroponte, and posing for pictures with Mitchell and his wife Heather, among others.

After the announcement of Mitchell's appointment to handle Middle East negotiations, Obama pointedly said that as part of a lasting ceasefire in Gaza, Gaza's borders must be opened. Public pressure on Israel was noticably absent during the Bush years.

From NBC's Domenico Montanaro
Though much of the focus is on the news being made at the State Department and the evident foreign policy shift from the previous administration to this one, there was also some news made on Capitol Hill at the hearing for Obama's pick to head national intelligence, Dennis Blair.

On the issue of torture, Blair would not go as far as Attorney General-designate Eric Holder. The AP reports that he "replied cautiously" when pressed about the issue.

"There will be no waterboarding on my watch," Blair did say. "There will be no torture on my watch."

But he refused to go as far as Holder, who at his confirmation hearing last week said flatly, "Waterboarding is torture," citing that he "did not want to jeopardize agents who thought they had legal approval," AP notes.

"Michigan Democratic Sen Carl Levin told Blair, 'If the attorney general designee can answer it, you can too,'" per AP.

"I don't mean to reopen those cases," Blair said of the CIA's admitted waterboarding of at least three detainees. "I'm hesitating to set a standard here."

From NBC's Ken Strickland
Senate Armed Services Committee Chairman Carl Levin wants more information on President Obama's choice for deputy Defense secretary because of his lobbying ties. Yesterday, the White House issued new rules prohibiting former lobbyists from working in the field they sought to influence.

"Given the president's new stricter rules requiring his appointees to recuse themselves from matters or issues on which they have lobbied, the Senate Armed Services Committee will need further information before proceeding," Levin said in a written statement.

The nominee in question, William Lynn, worked for defense contractor Raytheon in 2007 and 2008, when he lobbied Congress and the Bush administration.

At his first news conference today, White House Press Secretary Robert Gibbs said a waiver may be in order for Lynn. "Any standard is not perfect," Gibbs said. He cited experts who praised the new rules, but also agreed with the president that sometimes "a waiver process that allows people to serve their country is necessary."

Gibbs added, "In the case of Mr. Lynn, he's somebody who obviously is superbly qualified, is experienced going back to his Pentagon jobs during the [Bill] Clinton administration, make him uniquely qualified to do this."

Armed Services Chairman Levin said the committee will wait for a decision from the White House before going forward, "as to whether the new rules will preclude Mr. Lynn, who was a registered lobbyist for a defense contractor, from participating in key Department of Defense decisions, and if so, whether a waiver will be forthcoming and what the scope of the waiver will be."

From NBC's Pete Williams
The Obama administration's position on the oath of office can now be summarized as follows: There was no need to re-take the oath. Mr. Obama did it "out of an abundance of caution."  But that same spirit of caution was not abundant enough to result in re-signing any of the executive orders he signed on Wednesday, before repeating the oath.

President Obama's spokesman, Robert Gibbs, said today that it was the White House counsel, Gregory Craig, who pressed for re-doing the oath to resolve any doubts. But if there were any such doubts, Gibbs was asked by NBC's Chuck Todd at today's press briefing, why not re-sign Wednesday's orders? "Because the counsel's office continues to believe that the president was sworn in appropriately and effectively," Gibbs said. 

Pressed on whether that was a contradiction, Gibbs said, "Well, you know lawyers." 

Many prominent constitutional scholars believe repeating the oath was the right move, even though it was legally unnecessary. Professor Laurence Tribe of Harvard noted Thursday that Herbert Hoover got a word wrong in taking the oath in 1929, incorrectly prompted by Chief Justice Taft.

Hoover saw no point in doing it over. "In today's society, that would lead to lawsuits. It would lead to various pundits questioning the legitimacy of the presidency," Tribe said.

Professor Akhil Reed Amar at Yale summarized the view of many experts: "It couldn't hurt.  It's like chicken soup, belt and suspenders. Why not do it?"

At Thursday's White House briefing, Gibbs noted that two other presidents are known to have said it over again. But in both those cases -- Chester A. Arthur in 1881 and Calvin Coolidge in 1923 -- concerns were raised about whether a sufficiently esteemed person administered the oath, not the wording. 

By the way, there's no legal requirement for administering the oath. Anyone can do it. 

From Andrea Mitchell and Libby Leist
The ceremonial Ben Franklin room on the eighth floor of the State Department is packed with a who's who of diplomats and Washington power players awaiting the arrival of President Obama, Vice President Biden and Secretary of State Clinton.

One notable absence: Dennis Ross. He will not be a special envoy to Iran, senior officials tell NBC News, but he is expected to be in charge of Iran policy.

Jack Lew and James Steinberg are here directly from their confirmation hearings.

George Mitchell and Richard Holbrooke, who will be announced today as special envoys, are here and will walk out with Obama, Biden and Clinton.

Also in the audience -- prominent Democrat Vernon Jordan, Former Defense Secretary William Cohen, North Korea nuclear negotiator Chris Hill (a pal of Holbrooke's), and Obama foreign policy advisor Samantha Power.

Former Ambassador to Israel Martin Indyk is here, but so far has not been offered a position in the Obama administration.

*** UPDATE *** Reaction from Tony Blair to the appointment of George Mitchell: "Tony Blair welcomes George Mitchell's appointment as envoy, renewing their close and productive relationship for peace and progress in Northern Ireland. It shows the true commitment President Obama and Secretary Clinton have to making real progress in the Middle East."

From NBC's Mike Viqueira

As a purely academic exercise, you might want to watch the House floor now as they vote on whether to disapprove the allocation of the second $350 billion of the TARP. The vote is essentially a freebie, in that no matter what the outcome the administration is getting that money. So watch and see how badly the deeply unpopular TARP gets crushed here this afternoon.

Because of the way the original legislation was written, the recent vote by the Senate to free up the funds was, for all practical purposes, the end of the story.

But the language also requires a vote on the House floor if someone calls for it. Rep. Virginia Foxx did so, so now they are voting. A "yea" vote is a vote against allocating the second $350 billion.

It's safe to say that if the Senate hadn't allowed the money to go through and it became up to the House, the administration would not have gotten it.

From NBC's Ken Strickland
At an unrelated news conference in the Capitol, the normally chatty Sen. Chuck Schumer had little to say about Caroline Kennedy's withdrawal from consideration of taking the Senate seat vacated by Hillary Clinton.

"I have kept the confidence of these discussion between myself and Gov. Paterson, myself and any of the potential candidates," Schumer said. "And I'm going to continue to do that."

Schumer clearly knew something, but wasn't giving it up.

"I have talked to both Gov. Paterson and Caroline Kennedy in the last few days and few hours," he said. "But I'm going to keep those conversations to myself. For the governor, it's his decision... And I don't think it'll be too long a distance away."

From NBC's Domenico Montanaro
Newly minted Secretary of State Hillary Clinton received a boisterous and enthusiastic welcome at the State Department for her first day on the job.

She spoke of the hard work going forward, but praised the career diplomats as the best there are.

"This is not going to be easy. ... It's going to be hard," Clinton told the State Department staff packed into the building. "But if it weren't hard, somebody else could do it, besides the professionals of the Foreign Service and the Civil Service and our Diplomatic and Development Corps."

She also spoke of her own hopefulness for renewed, robust diplomacy in the Obama administration.

"There are three legs to the stool of American foreign policy: defense, diplomacy, and development," Clinton said. "And we are responsible for two of the three legs. And we will make clear, as we go forward, that diplomacy and development are essential tools in achieving the long-term objectives of the United States. And I will do all that I can, working with you, to make it abundantly clear that robust diplomacy and effective development are the best long-term tools for securing America's future."

President Obama and Vice President Biden are slated to pay a visit to Foggy Bottom later this afternoon.

From NBC's Carl Sears
The Senate Finance Committee approved Treasury Secretary nominee Tim Geithner by an 18-5 vote. The nomination now moves to the full Senate.

Three Republicans on the panel voted for him: Hatch, Cornyn, Snowe.

Five Republicans opposed him: Kyl, Bunning, Grassley, Roberts, Ensign.

From NBC's Ken Strickland
At least two -- maybe three -- Senate Republican on the Senate Finance Committee have said they will NOT support Tim Geithner's nomination for Treasury Secretary. The comments were made moments ago in a committee meeting where they will later vote on the nomination.   

Sens. Jon Kyl and Jim Bunning's announcements do not come as a surprise since they've been very critical Geithner for his failure to pay taxes and his involvement in the current financial crisis.

Kyl, who gave Geithner the most intense grilling during his confirmation hearing yesterday, said the tax issues was NOT a disqualifying factor, but argued that his lack of candor was. At one point in the hearing yesterday, Kyl scolded Geithner saying, "would you answer my question rather than dancing around it PLEASE."

Bunning also took issue with tax matter, but seemed equally disturbed by Geithner's role in the current money crisis. The nominee currently serves at the president of the New York Federal Reserve. Bunning said Geithner introduced "weapons of financial destruction."

Another Republican, Mike Enzi, also expressed doubts about supporting Geithner today saying, "I'm not sure he's the right man for the job." Enzi said he was surprised the committee was even voting on Geithner, saying that other nominees had withdrawn from consideration for lesser tax problems.

However, GOP Sens. Hatch, Roberts, and Cornyn said they will support Geithner's nomination. No panel Democrats have expressed opposition so far. The expectation is still that Geithner will confirmed by the committee after the current debate.

From Chuck Todd, Mark Murray, and Domenico Montanaro
*** Caroline's out: Late last night, after conflicting news about her intentions, Caroline Kennedy pulled out from consideration for filling Hillary Clinton's New York Senate seat. "I informed Gov. Paterson today that for personal reasons I am withdrawing my name from consideration for the United States Senate," she said in a one-sentence statement. Her withdrawal comes after an almost two-month rollercoaster ride for Kennedy -- first announcing her desire for the seat and becoming the instant front-runner; then stumbling with the press; and then, before last night, seeming to be the favorite once again. Per NBC's Andrea Mitchell, a Kennedy spokesman would not say what the so-called "personal reasons" were that she cited in her statement. But other Kennedy family members and friends that Mitchell reached out to last night said it has nothing to do with any deterioration in Ted Kennedy's health. To the contrary, they said he has improved in recent weeks (Tuesday's incident notwithstanding). Mitchell adds that people close to the governor say his next choice would most likely be Congresswoman Kirsten Gillibrand from Upstate New York. A couple of other sources close to Kennedy also indicate that she was becoming increasingly uncomfortable by the fact that Paterson was getting strong-armed into appointing her. 

Video: In a surprise move, Caroline Kennedy withdraws her name from consideration to fill Hillary Clinton's now-vacant seat. NBC's Andrea Mitchell reports.

*** And what about Cuomo? The other possible replacement, of course, is New York Attorney General Andrew Cuomo. But he has a couple of things working against him. For starters, Cuomo isn't a woman, and Paterson has at the very least signaled that he'd like to appoint a woman to fill Clinton's seat. (He noted to NBC's Mitchell on Tuesday that there were just 17 women U.S. senators.) Also, given the charges of nepotism that followed Caroline Kennedy after her name first surfaced for the job, it turns out that Cuomo comes from a political dynasty himself (although he certainly has a lengthier resume in public service than Caroline does). Perhaps the one thing in Cuomo's favor: If Paterson appoints him to serve in the Senate, the governor would eliminate a possible primary challenge from Cuomo for Paterson's own governorship. Then again, if Cuomo gets the nod, most of the statewide officeholders in New York would have gotten their jobs via appointment, not by the people.

*** What a crazy last couple of months: If anything, last night's news about Caroline Kennedy was just another reminder of how strange the appointments for the vacant Senate seats have been since Obama won the presidency last November. Ex-Delaware Gov. Ruth Ann Minner surprised the political world when she chose Ted Kaufman, a former Biden aide, to fill Biden's Senate seat, which opened the door to Biden's son running for it in 2010. In Colorado, Gov. Bill Ritter selected a virtual unknown -- at least to national political reporters -- in Denver schools chief Michael Bennet. And, of course, we don't really need to remind you about the craziness that occurred in filling Obama's Senate seat. It's also worth pointing out that Paterson's two-month process of trying to replace Hillary Clinton didn't really do anyone any favors, especially Kennedy and Paterson. If this lesson has taught Paterson anything, it's probably that it's best to make a quick but prudent decision and then stick to it. Oftentimes, playing Hamlet -- "to be, or not to be" -- doesn't get you anywhere.

Video: Secretary of State Hillary Clinton arrives at the State Department for her first day on the new job. 

*** Picking your fights: Although today is just Obama's third day in the White House, Senate Republicans seem to be having trouble picking fights with the new president and his incoming administration. Case in point: John Cornyn holding up Hillary Clinton's confirmation vote, then voting FOR her along with 93 other senators. ("My concern is not whether our colleague, Sen. Clinton, is qualified to be secretary of state or not. She is," Cornyn said. "And I intend to vote for her confirmation but I also believe it's very important to flesh out some of the concerns that have been raised legitimately." Now, Arlen Specter and other Republicans have delayed a Judiciary Committee vote on Eric Holder's AG nomination, even though fellow GOPers Orrin Hatch and Mel Martinez say they'll vote for him and Holder's confirmation appears likely. Are these really the fights that Republicans want to have right now? As John McCain said on the Senate floor yesterday, "We had an election, and we also had a remarkable and historic time [Tuesday], and this nation has come together as it has not for some time. I pay attention to the president's approval ratings. Very high. But more importantly, I think the message that the American people are sending us now is they want us to work together and get to work." The GOP is going to have plenty of time to have serious -- and unified -- policy fights with the Obama administration, and how they pick their fights could very well impact what happens in the 2010 midterms. In fact, House Republicans appear to be scoring more political points on the stimulus front, using the CBO analysis that it will take years, not months, for the money to help the economy.

*** The exceptions to the rule: Despite early praise for his executive orders instituting new ethics rules -- the headline in the Washington Post reads "Lobbyist Rules Surpass Those of Previous Presidents, Experts Say" -- the Republican National Committee is reminding reporters that two Obama administration picks (William Lynn for deputy Defense secretary and William Corr for deputy HHS secretary) were lobbyists and seem to violate Obama's rule on them. Then again, when you are in the midst of a honeymoon, you can get away with stuff like this -- for now at least. Still, isn't this a pretty blatant oversight of their rules? How much pressure can the GOP have in pushing the Obama administration on these appointments?

*** Obama's day: According to the White House, Obama will begin his day meeting with his economic team and then his senior staff (both are closed to the press). Next, he meets with retired military officers to discuss his proposed executive orders dealing with detention and interrogation policy. The Washington Post says that Obama today will issue an order "calling for the closure of Guantanamo Bay within a year, an immediate case-by-case review of the 245 detainees remaining there, and the application of new rules governing the treatment and interrogation of prisoners." And finally today, Obama will head to the State Department to meet with Secretary of State Clinton, and then two will address State Department employees. Also, stay tuned for the first Robert Gibbs press briefing, scheduled for 12:30-ish. 

*** Too much southern comfort? In our next installment examining some of the GOP challenges, we today take a look at geography -- specifically, the Republican Party's concentration in the South and few places elsewhere. According to the nonpartisan Cook Political Report, nearly half of the Republicans in the U.S. House (80 out of 178) hail from the South. By contrast, they have only 18 members from the Northeast (compared with the Democrats' 77), 45 from the Midwest (the Dems have 55) and 35 from the West (Dems have 63). In addition, December's NBC/Wall Street Journal poll showed that 33% of American adults in the South viewed the Republican Party favorably. That's compared with just 19% who viewed it positively in the Northeast, 25% in the Midwest and 28% in the West. Likewise, according to the exit polls, the South was the only region where McCain beat Obama, and it accounted for 32% of his vote (versus 21% from the East, 23% from the West, and 24% from the South). Republican rejoiced when they won those races in Georgia and Louisiana after Obama's election. The true test of the party's strength, however, will be in places outside the South.

*** Dean's exit: Despite the thunderous applause he received at yesterday's DNC meeting, where Tim Kaine was formally elected as the party's new chairman, Howard Dean's exit hasn't received that much attention in today's papers. It's quite remarkable that he is leaving without a job offer, not even an ambassadorship... Did the president call Dean and thank him for service? When is the last time the titular head of the Democratic Party spoke to the one-time ACTUAL head of the Democratic Party?

Countdown to RNC winter meeting: 6 days
Countdown to NJ GOP primary: 131 days
Countdown to VA Dem primary: 138 days
Countdown to Election Day 2009: 285 days
Countdown to Election Day 2010: 649 days

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