PENNSYLVANIA: Chris Matthews "MSNBC political commentator Chris Matthews has told his colleagues he won't be leaving television to run for a U.S. Senate seat from Pennsylvania," the AP reports.

TEXAS: The possible gubernatorial primary in Texas between Kay Bailey Hutchison and Rick Perry is shaping up to be one to watch. Hutchison appears to be well-positioned for now, but The Hill's Reid Wilson writes that "Texas political observers -- both objective observers and those who have chosen sides -- say they expect a much closer contest that could turn decidedly unpleasant."

VIRGINIA: Covering the official kick-off of Terry McAuliffe's gubernatorial bid in Virginia, the Washington Post says McAuliffe vowed "to create more jobs than any other governor in the country. In a day-long swing that had the trappings of a well-financed campaign, McAuliffe told audiences that Virginia 'needs to think bold' and 'out of the box' to grow the economy and keep taxes low."

More: "McAuliffe's entry into the race, which had been expected for months, sets the stage for the most fiercely contested battle for the Democratic gubernatorial nomination in more than two decades. With professional and personal contacts across the country, McAuliffe is expected to raise tens of millions of dollars for his campaign."

From NBC's Ken Strickland
Is incoming Senate Intelligence Committee Chairwoman Dianne Feinstein warming to the idea of Leon Panetta as the next CIA director? Seems like it.

Sen. Feinstein said she had "a long talk" with Panetta last night. "We laughed together," she said of her fellow California Democrat. 

While she repeated her previous position that a director with vast intelligence experience would be best, "I believe that there is a high likelihood that Mr. Panetta will surround himself with very capable professionals. And I think that's critical."

She also recounted her recent conversation with the President-elect, when they agreed on the importance of getting unvarnished information from the CIA. "President-elect Obama made the comment that he doesn't want to be told what they think he wants to hear, but what they think he should hear," and quickly added, "that's good enough for me."

From NBC's Ken Strickland
When President-elect Obama met with Senate Leadership on Monday, Obama encouraged Majority Leader Harry Reid to find a resolution to the Roland Burris controversy, according to a Democratic source.

In a private meeting, the two men agreed that on the need for an "amicable resolution" so that Democrats might continue to focus on the more important issues facing the country.

From NBC's Carrie Dann

In his first Capitol Hill press conference since his defeat in the November election, John McCain was back to fighting his favorite fight -- the one against pork barrel spending. Now flanked by two Democrats -- including one of his particularly tough critics during the election -- McCain took on the "evil" of earmarks.

"It's obvious at least some Members of Congress don't know how serious the economic situation is," McCain said of colleagues who use earmarking loopholes to fund frivolous pet projects in their home states.

Along with Russ Feingold (D-WI), Claire McCaskill (D-MO), Tom Coburn (R-OK), and Lindsey Graham (R-SC), McCain hopes to severely limit the practice of adding to legislation "unauthorized" earmarks -- meaning appropriations that bypass the normal vetting and authorization process through Senate subcommittees.

Under the bipartisan proposal, unauthorized earmarks would be subject to a point of order that would require passage by a 60-vote supermajority in the Senate. Additionally, the bill would require appropriations reports to be posted publicly 48 before Senate consideration.

McCain appeared today with cosponsors including Missouri Democrat Claire McCaskill, who once derided McCain's "lies" and accused the GOP nominee of being "obsessed" with his opponent. (McCaskill said that she was "tickled pink" to share the stage with the former candidate today.)

McCain had praise for McCaskill today, and he had kind words for Barack Obama, saying that he's "very encouraged" by the president-elect's pledge to scrub any earmarks from a massive stimulus bill.

Although his presidential ambitions have dissolved, McCain's wry humor hasn't gone anywhere. Feingold ribbed the former nominee, noting that their previous bipartisan effort was subject to a mischievous advertisement on Saturday Night Live for "McCain Fine Gold."

Taking the podium, McCain dryly added, "It's still a wonderful bargain."

From NBC's Pete Williams

Federal prosecutors today accused three New York men of randomly attacking African-Americans on election night in retaliation for Barack Obama's victory.

The three men, two of them age 18 and the other 21, and all from Staten Island, were arrested yesterday and appeared in court today. Prosecutors say shortly after Obama was declared the winner, they drove to the predominately African-American neighborhood of Park Hill and began attacking people. 

They're accused of beating a 17-year-old with a pipe, assaulting a man in the Port Richmond area, and, in the most serious attack, hitting another man with their car. That victim survived, but was in a coma while recovering. Investigators say the assailants "mistakenly believed" him to be African-American.

"It is shocking and sobering that allegations of racial violence continue in this day and age," Justice Department official Grace Chung Becker said in announcing the charges. 

The maximum penalty for these charges is up to 10 years in prison.

New York Police Commissioner Ray Kelly attributed the arrests to a decision by the NYPD to have a hate crimes team on patrol that night, which was able to respond quickly to the attacks and find an eyewitness. 

From NBC's Mark Murray
With President Bush set to leave the White House less than two weeks from now, here's a "Then and Now" to show what the United States looked like when Bush was entering office and what it looks like now as he's leaving. The "Then" is the best-available figure as Bush was taking office in 2001. The "Now" is the most recent figure.

UNEMPLOYMENT RATE
Then: 4.2% (Bureau of Labor Statistics, January 2001)
Now: 6.7% (Bureau of Labor Statistics, November 2008)

DOW JONES INDUSTRIAL AVERAGE
Then: 10,587 (close of Friday, Jan. 19, 2001)
Now: 9,015 (close of Tuesday, Jan. 6, 2009)

BUSH FAVORABILITY RATING
Then: 50% (1/01 NBC/WSJ poll)
Now: 31% (12/08 NBC/WSJ poll)

CHENEY FAVORABILITY RATING
Then: 49% (1/01 NBC/WSJ poll)
Now: 21% (12/08 NBC/WSJ poll)

CONGRESS APPROVAL RATING
Then: 48% (1/01 NBC/WSJ poll)
Now: 21% (12/08 NBC/WSJ poll)

SATISFIED WITH THE NATION'S DIRECTION
Then: 45% (1/01 NBC/WSJ poll)
Now: 26% (12/08 NBC/WSJ poll)

CONSUMER CONFIDENCE (1985=100)
Then: 115.7 (Conference Board, January 2001)
Now: 38.0, which is an all-time low (Conference Board, December 2008)

FAMILIES LIVING IN POVERTY
Then: 6.4 million (Census numbers for 2000)
Now: 7.6 million (Census numbers for 2007 -- most recent numbers available)

AMERICANS WITHOUT HEALTH INSURANCE
Then: 39.8 million (Census numbers for 2000)
Now: 45.7 million (Census numbers for 2007 -- most recent available)

U.S. BUDGET
Then: +236.2 billion (2000, Congressional Budget Office)
Now: -$1.2 trillion (projected figure for 2009, Congressional Budget Office)

From NBC's Libby Leist

NEW YORK -- Secretary Condoleezza Rice is bouncing from meeting to meeting with European and Arab Foreign Ministers here at the United Nations, trying to convince Arab leaders not to push for a Security Council resolution on the crisis in Gaza, but to accept a less forceful "presidential statement."

Rice's efforts seem to be failing, however. Saudi Foreign Minister Prince Saud al-Faisal has just told reporters that a presidential statement is not acceptable to the Arabs.

A "presidential statement" is an official document from the U.N. Security Council. It is generally viewed as more of a political statement than a legally binding resolution. Therefore a less powerful display from the Security Council.

According to a Saudi diplomat, the Arab leaders are pressing for a resolution that calls for an immediate end to the violence and then the establishment of a mechanism to police the border crossings and deal with the smuggling issue. But, the U.S. wants a mechanism first before calling for a ceasefire, the diplomat said.

A senior U.S. official confirmed the U.S. will veto any resolution calling for an immediate ceasefire and suggested the Arabs will push it forward anyway, so they can then blame the U.S. for not calling for an immediate end to the fighting.

The U.S. official said a Security Council resolution "spooks the Israelis" and that Rice believes a presidential statement is a good compromise.

Also, the official offered caution on reports that the U.S. is in full support of the Egyptian President Hosni Mubarak's initiative. Instead, U.S. officials are praising the effort to get the Israelis and Palestinians talking to the Egyptians, but they do not necessarily agree with all elements of Mubarak's plan.

The Mubarak initiative calls for an immediate ceasefire for a limited period to allow for the passage of humanitarian aid and for negotiations toward a long-lasting ceasefire. It also calls for a mechanism to police the border of Gaza to prevent smuggling and to reopen the border crossings.

Rice has walked by stakeout cameras four separate times in the past few hours, but has refused comment. She said she would have more later.

From NBC's Pete Williams

Acting on the last possible day under local court rules, lawyers for the Illinois Secretary of State today urged the state supreme court not to order him to sign the appointment certificate for Roland Burris.

The Illinois Supreme Court allows seven days for filing objections in a case like this, and that deadline was today, given that lawyers for Burris asked on New Year's Eve for the court to order Secretary of State Jesse White to sign the certificate. U.S. Senate leaders say the lack of that signature is the reason he wasn't immediately seated.

(Here's the affidavit with just Blagojevich's signature and without Secretary of State Jesse White's.)

But in today's filing, the state attorney general said, "It would be a violation of his ethical obligations to the people of Illinois to lend his name and the state seal" to further Gov. Blagojevich's appointment. What's more, said state Attorney General Lisa Madigan, White isn't required to sign anything. What White has done, she said, is register the appointment in state records, which is all he is legally required to do.

Lawyers for Burris claim state law requires the Secretary of State to sign anything official that the governor signs, but White's lawyers say that applies only to state commissions, not to appointments like this. 

Finally, White's lawyers say the Senate's leaders are wrong about their own rules. They say nothing in Senate rules requires the Secretary of State's signature. It's only recommended, they argue. In comparison, they note, there is a federal law requiring such a signature in the case of a Senate election. 

Madigan, in a written statement issued along with her filing in the state supreme court, says, the Secretary of State "has done everything he is legally required to do regarding the Burris appointment."

A portion of her statement follows:
On December 31, 2008 -- the same day Governor Blagojevich submitted the U.S. Senate's recommended appointment form to the U.S. Senate -- Secretary White registered Burris' appointment pursuant to the Secretary's only legal duty regarding appointments. 

According to 15 ILCS 305/5:

Sec. 5. It shall be the duty of the Secretary of State:

2. To make a register of all appointments by the Governor, specifying the person appointed, the office conferred, the date of the appointment, the date when bond or oath is taken and the date filed. If Senate confirmation is required, the date of the confirmation shall be included in the register.
Instead, what is at issue here is a form that is not required by law, but is merely "recommended" by a Rule of the U.S. Senate.  Moreover, a U.S. Senate Rule cannot impose a legal obligation on the Illinois Secretary of State.

Standing Rule II of the U.S. Senate provides, "The Secretary of the Senate shall send copies of the following recommended forms to the governor and secretary of state of each State wherein an election is about to take place or an appointment is to be made so that they may use such forms if they see fit." (Emphasis added.) 

In contrast, when the U.S. Senate creates a mandatory requirement for a Secretary of State's signature and seal, they enact a law, and they have not done so in this case. 

For example, under federal law, when a U.S. Senator is elected, the State must certify the election under state seal, and the law explicitly requires that the certification of election "shall be countersigned by the secretary of state of the State."  2 U.S.C. §§ 1(a), (b).

There is no law requiring the Secretary of State to sign a "recommended" form of the U.S. Senate.

The decision to treat the U.S. Senate's "recommended" form as a legal requirement is a decision of the U.S. Senate.  It remains up to the U.S. Senate to seat Mr. Burris.

From NBC's Ken Strickland
Today, Senate Democratic leaders and aides laid out some immediate steps for Roland Burris to take before the Senate considers his appointment.

First, Burris needs to get Illinois Secretary of State Jesse White to sign his election certificate.  Senate rules "recommend" that the document be signed by the Governor and Secretary of State, but White has refused to put his name on it because of the cloud of suspicion hanging over Rod Blagojevich.

Burris has asked the Illinois Supreme Court to force White to sign the certificate.

Second, Burris needs to have a squeaky clean performance when he testifies tomorrow before the Illinois legislative panel investigating the governor's corruption scandal.  Democratic aides say Burris needs to prove what is already widely assumed in Illinois political circles: that Burris' appointment was in no way connected to the "pay to play" allegations swirling around Blagojevich.

If Burris can clear those hurdles, aides say, he'd likely have his certificate come before the Senate.  At that point, the matter would be sent to the Senate Rules Committee for review.  It's unclear how long it would sit there while Blagojevich's impeachment hearings continue, but Senate Majority Leader Harry Reid said today that, ultimately, the entire Senate will make the decision on Burris as a whole.

From NBC's Athena Jones

WASHINGTON -- In his first press conference of the new year, President-elect Obama said the decision to seat Roland Burris was a "Senate matter."

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

Burris, the former Illinois attorney general, was named to Obama's vacated Senate seat by embattled Illinois Gov. Rod Blagojevich, who has been accused of trying to sell the seat. Burris was barred from taking the oath of office with other senators yesterday because his certificate of appointment had not been signed by the Illinois secretary of state. He was back on the Hill today for a meeting with Senate Majority Leader Harry Reid.

Earlier, when the Burris pick was first announced, Obama said that he couldn't accept the appointment. "Roland Burris is a good man and a fine public servant, but the Senate Democrats made it clear weeks ago that they cannot accept an appointment made by a governor who is accused of selling this very Senate seat," he said in a written statement. "I agree with their decision, and it is extremely disappointing that Governor Blagojevich has chosen to ignore it."

Obama made his comments today on Burris during a brief Q&A after he named Nancy Killefer as chief performance officer, to be charge of finding ways to make the government more efficient.

"In order to make these investments that we need, we'll have to cut the spending that we don't, and I'll be relying on Nancy to help guide that process," he said.

Acknowledging that his plan to save or create three million jobs would cost money and add to the deficit in the short term, Obama said reforming the budget and reducing wasteful spending would be necessary to avoid trillion-dollar deficits for years to come. 

He reiterated that he does not want earmarks in the recovery package. That package has an estimated cost of some $775 billion, even though some economists have said it should be $800 billion to $1.3 trillion. "We are still in consultation with members of Congress about the final size of the package," he said. "We expect that it will be on the high end of our estimates, but will not -- will not be as high as some economists have recommended, because of the constraints and concerns we have about the existing deficit."

The president-elect refused to be pinned down on the issue of the fighting in Gaza, instead sticking to the theme he has used repeatedly -- that there is one president at a time and saying he was not legally authorized to run foreign policy.

"We cannot be sending a message to the world that there are two different administrations conducting foreign policy, he said. "That is not safe for the American people."

He added that he was "deeply concerned" about the situation in Gaza and was working to make sure his administration was prepared to "engage immediately in trying to deal with the situation" as soon as he takes office, but that he faced "institutional constraints" that prevented him from directly addressing the issue because he was not yet president.

He argued that because the economy was a matter of domestic policy, he did not face the same kinds of constraints in talking about it.

From NBC's Mark Murray
In addition to the speech Obama will give tomorrow on the stimulus, First Read has learned -- per a Democratic source in the know -- that he'll also appear at the Democratic National Committee with the man he has tapped to lead the DNC: Virginia Gov. Tim Kaine.

Kaine doesn't officially become DNC chair until Jan. 21.

From NBC's Mark Murray
The AP's breaking news: "Senate Democrats plan to embrace Roland Burris for President-elect Barack Obama's vacant seat."

We'll have more ASAP...

*** UPDATE *** According to NBC's Ken Strickland, there is NO DEAL, according to Reid and Durbin aides. We'll keep you updated on this.

*** UPDATE II *** At a press conference, Reid and Durbin dropped their hard opposition to Burris being seated. They said Burris had to clear two hurdles -- get the Illinois secretary of state to sign his certification and meet with an Illinois legislative panel investigating the Blagojevich scandal -- and then the Senate Rules Committee would take up the matter. The bottom line: The door is now open for Burris to be seated.

From NBC's Norah O'Donnell

The office of Jack Kemp -- the former congressman, HUD secretary, and GOP vice presidential candidate -- announced today that he has cancer.

Per a statement, "Mr. Kemp has been undergoing tests to determine the origin of the disease and the options for continued treatment. He will continue to serve as Chairman of Kemp Partners and plans to remain involved in his business, charitable and politically related activities. Mr. Kemp and his family are grateful for the thoughts and prayers of friends and appreciate respect for their privacy at this time."

From Chuck Todd, Mark Murray, Domenico Montanaro, and Carrie Dann
*** No drama Washington? It appears that all the preparation we in the media have been doing to cover controversy -- be it Burris, the recount in Minnesota, or Panetta -- is beginning to fizzle somewhat. Senate Majority Leader Harry Reid, who meets with Burris at 10:30 am ET, suggested yesterday that the Illinois secretary of state's signature is all that's standing in the way of Burris being seated ("If Mr. Burris takes possession of valid credentials, the Senate will proceed in a manner that is respectful to Mr. Burris"). It looks like Franken will eventually be seated, too, although Minnesota will possibly have to endure weeks of additional legal wrangling. And despite a second day of criticism, it seems that Panetta might be able to survive a confirmation hearing to head the CIA, thanks to liberal support and an Obama apology to Dianne Feinstein. In addition, Jeb Bush yesterday made the "no drama" decision yesterday by announcing that he won't run for Senate in 2010. Perhaps the best drama left, as the New York Times notes today, is Kennedy vs. Cuomo in New York. (Was Cuomo behind all the upstate criticism Caroline received?) Has "No Drama Obama" become the mantra for all of Washington? Then again, with a struggling economy, war in Iraq and Afghanistan, and conflict in the Middle East, that's probably enough drama to cover...

Video: The Senate rejects Burris as Obama's replacement, while Feinstein questions their reasoning. NBC's Kelly O'Donnell reports.

*** S.P.E.C.T.E.R.: Some drama that we might see soon, however, is Eric Holder's upcoming confirmation battle to be attorney general. Yesterday, the top Republican on the Senate Judiciary Committee, Arlen Specter, gave a pretty tough speech on the Senate floor regarding Holder. "On the nomination of Mr. Holder, President-elect Obama chose not to seek my advice or even to give me advance notice, in my capacity as ranking Republican on the Judiciary Committee, which is his prerogative. Had he done so, I could have given him some facts about Mr. Holder's background that he might not have known." Ouch. Remember, Specter is up for re-election next year. Is this criticism aimed at dissuading another primary challenge from Pat Toomey, who almost defeated the Pennsylvania senator in 2004? Specter didn't speak on just any day, but opening day. His first order of business was to put Holder on notice. So what was his motivation? Is it about keeping his right flank happy? Or is it because he's upset Obama didn't consult him?

*** Transition odds and ends: At 10:15 am ET, Obama holds a press conference in DC, where, according to the New York Times, he'll announce Nancy Killefer as his chief performance officer who'll be tasked with finding government efficiencies. After the press conference, Obama heads to the White House, where the future president will have lunch with the current president (Bush 43) as well as the living ex-presidents (Clinton, Bush 41, and Carter). Also, we're told the Sanjay-Gupta-for-Surgeon-General news leaked out a tad earlier than the transition wanted. It wasn't quite ready to get rolled out but, well, there ya go. As for why Gupta, remember that the Surgeon General post is very much a P.R. post -- almost more so than a policy job.

Video: Bush, Obama and the three living former presidents will meet for lunch at the White House Wednesday. NBC's John Yang reports.

*** Profiling Schumer: Should Chuck Schumer end up a candidate for the top spot in the Senate some day soon, this Josh Green profile in the Atlantic will become the first place many reporters start when assessing Schumer's chances. "Schumer's political acuity is increasingly guiding Senate Democrats. The new president—until recently, one of them—seems to be listening, too. This is significant because Schumer is steering toward a slightly different spot from the one Democrats have traditionally aimed for. He attributes his success these past four years to a small but critical insight into the nature of the American middle class: namely, that it is more affluent and doesn't want the same things from government as does the 'middle class' as normally conceived by politicians, policy makers, and academics. Schumer sees this group as the key to the electoral balance of power, and believes he has figured out how to reach it. The composition of the Senate is a strong indicator that he may be on to something." 

*** The Macker makes it official: In Virginia today, Terry McAuliffe officially launches his bid for governor with a three-day tour throughout the state. He starts in Norfolk and then heads to Richmond, Charlottesville, and Alexandria. On Thursday, he hits Harrisonburg, Roanoke, and Bristol. And Friday, he visits the Southside part of the state. To be governor, the Macker has to clear two hurdles: 1) come out on top of a Democratic primary also featuring Creigh Deeds and Brian Moran, and 2) defeat the Republican candidate, state Attorney General Bob McDonnell. Neither will be easy, but we know this for sure: McAuliffe is going to make this gubernatorial race more expensive (with the state's unlimited campaign contributions) and MUCH MORE entertaining. What's more, this gubernatorial race will be the first campaign test of Obama's political health and the Democratic Party as a whole, and if McAuliffe wins the primary, there's the potential for an uncomfortable marriage between Obama and Terry, who has been a leading face for the Clinton political wing. Terry's trying to prove Virginia is so blue that a native New Yorker (upstate not the city, but...) could somehow be the governor of Thomas Jefferson's homestate.

*** Muzzling the minority: Yesterday, one of us co-wrote a piece noting the new rules package in the House that basically strips the minority of its ability to employ the main procedural trick that Republicans had used to stymie Pelosi over the last two years. In an age when House Republicans are desperately trying to reassert a message, if not actionable alternatives, the new in-the-weeds regulations mean that they have one less option to effectively protest Democratic bills -- particularly ones that include tax increases.

*** RNC chair update: There's another RNC chair forum today -- this one at the Republican National Committee beginning at 10:00 am ET.
 
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Countdown to RNC winter meeting: 21 days
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The Washington Post front-pages, "[C]urrent and former intelligence officials expressed sharp resentment over Obama's choice of Leon E. Panetta as CIA director and suggested that the agency suffers from incompetent leadership and low morale. 'People who suggest morale is low don't have a clue about what's going on now,' said CIA spokesman Mark Mansfield, citing recent personnel reforms under Director Michael V. Hayden.
On Capitol Hill, Democrats on the Senate Select Committee on Intelligence were still stewing over Obama not consulting them on the choice before it was leaked Monday and continued to question Panetta's intelligence experience. Vice President-elect Joseph R. Biden Jr. acknowledged that the transition team had made a "mistake" in not consulting or even notifying congressional leaders, and Obama telephoned committee Chairman Dianne Feinstein (D-Calif.) and her predecessor, Sen. John D. Rockefeller IV (D-W.Va.), yesterday to apologize."

The Los Angeles Times learns more about folks who turned Obama down for the CIA post, and it notes that Obama's defense of Panetta seemed to tick off some inside the agency. "As the controversy unfolded Tuesday, there were new indications that Panetta was not Obama's first choice for the job. A number of candidates, including former U.S. counter-terrorism official Richard A. Clarke, declined the post. Seemingly caught off-guard by the fallout, Obama moved to vigorously defend the Panetta pick and started an intensive lobbying campaign to convince lawmakers that the onetime senior aide to President Clinton was a viable candidate to lead the CIA."

"Obama sought to deflect the criticism by again calling attention to Bush administration intelligence programs that he plans to dismantle. But in seeking to soothe the controversy, Obama may have ruffled other feathers. Taking a swipe at previous directors, Obama said his team would work to ensure that U.S. spy agencies were 'no longer geared toward telling the president what the president wants to hear.' The remark appeared to be aimed mainly at former CIA Director George J. Tenet, infamous for telling the president that the U.S. had a 'slam dunk' case against Iraq's alleged illegal weapons programs. But the comment will probably rile the CIA rank and file."

The New York Times: "'[T]ransition officials said Mr. Obama also intended to keep the C.I.A's No. 2 official, Stephen R. Kappes, a highly regarded former Marine officer and agency veteran. The transition officials spoke on condition of anonymity about the personnel move, a plan that could help defuse criticism inside the C.I.A. about Mr. Panetta's own thin background in intelligence.  Mr. Panetta's lack of experience had drawn the sharpest criticism on Monday from Senator Dianne Feinstein, a Democrat who is chairwoman of the Senate Intelligence Committee and whose career in California politics tracked closely with Mr. Panetta's for years. After hearing directly from both Mr. Obama and Vice President-elect Joseph R. Biden Jr. on Tuesday, Mrs. Feinstein seemed to soften her opposition slightly, but she did not indicate whether she would vote to confirm Mr. Panetta."

"Aides to Mr. Obama conceded that they had mishandled the process, a significant stumble of his otherwise smooth transition. Mr. Biden said it had been a 'mistake' not to notify Mrs. Feinstein and others about the decision."

Does the fact that Feinstein so quickly backed down make the point of those that thought she was mostly angry about Panetta because she wasn't told in advance?

The Boston Globe editorial page throws its support to Panetta, calling him a "good choice." "In selecting Leon Panetta to be the next director of the CIA, President-elect Barack Obama has opted for sound judgment and political savvy over intelligence experience." More: "Panetta can be counted on to enforce the rule he set down last year, when he wrote that the United States 'must not use torture under any circumstances.'" But it also recommends that Panetta have "the right deputies under him" like Deputy CIA Director Stephen Kappes. 
 
Hillary Clinton's confirmation hearing appears will be held Wednesday, Jan. 14th, Bloomberg and the AP report. Napolitano's (for Homeland Security) is tentatively scheduled for the 15th, it reports. Tim Geithner's (for Treasury) will also likely be next week, but that one is not set yet.
 
Here are some of the dates for the upcoming Senate confirmation hearings:
-- Thursday, Jan. 8, 10:00 am ET: HHS: Tom Daschle (Health, Education, Labor, and Pensions Committee)
-- Friday, Jan. 9, 9:30 am ET: Labor: Rep. Hilda Solis (HELP Committee)
-- Tuesday, Jan. 13, 10:00 am ET: Education: Arne Duncan (HELP Committee)
-- Tuesday, Jan. 13: Energy Secretary: Steven Chu (Energy and Natural Resources Committee) 
-- Tuesday, Jan. 13, 10 a.m. ET: HUD: Shaun Donovan (Banking Committee) 
-- Jan. 14: Veteran Affairs: Gen. Eric Shinseki (Veterans' Affairs Committee) 
-- Jan. 14: State: Sen. Hillary Clinton (Foreign Relations Committee) 
-- Jan. 15: Interior: Sen. Ken Salazar (Energy and Natural Resources Committee)
-- Jan. 15: Attorney General: Eric Holder (Judiciary Committee) 
-- Jan. 15: Homeland Security: Janet Napolitano (Homeland Security and Government Affairs Committee) (tentative) 

Bloomberg News looks at Tim Kaine -- who is set to take over as DNC chair -- and his role in fundraising as the chairman of the Southern Governors' Association, "a group that raises money from tobacco, oil, energy and pharmaceutical companies in exchange for access to governors and other state officials… Participants in the group's Corporate Affiliates Program also include mortgage lender Freddie Mac ... Kaine's continuing involvement with the SGA as Democratic National Committee chief may raise questions for Obama, who targeted special interests during his campaign..."

In addition to meeting with Burris at 10:30 am ET, Democratic Senate leaders Reid and Durbin hold a press conference at 2:15 to discuss their priorities for the 111th Congress.

Also on in the Senate today, McCain attends his first Hill news conference -- unveiling bipartisan legislation to reform the earmark system -- since losing November's presidential election.

"Both Democrats Al Franken and Roland Burris were absent from seats they declared rightfully theirs, inaugurating new chapters in procedural and legal intrigue that could potentially take months to resolve."

Roland Burris got the support of a BIG name Senate Dem: Dianne Feinstein.

NBC's Pete Williams reports, 'Lawyers for Roland Burris told the Illinois Supreme Court more or less the following yesterday: Last week, we really needed you to act fast to order the Secretary of State to sign the Burris appointment certificate. Now we really, really need you to act fast."

Williams continues, "It's no longer theoretical that the lack of the signature could be a problem, they say. The lawyers formally advise the court that the omission was officially given as the reason Burris was not allowed into the Senate chamber yesterday. The refusal of the Senate officials to admit him 'underscores the urgent need for this court to act,' they say. What's more, they say, Secretary of State Jesse White proved this week that he still knows how to write his name. On January 5, White signed the certificate calling for a special election to replace Congressman Rahm Emanuel -- a certificate that Gov. Rod Blagojevich also signed. The same provision of the U.S. Constitution that permits a governor to call for a special election to fill a House vacancy also gives the governor authority to appoint someone to fill a Senate vacancy.  Therefore, they argue, it's illegal for the Secretary of State to sign one but not the other."

The Hill has this banner headline from its interview with the Majority Leader: "Reid: 'I don't work for Obama.'" "Democrats must be 'very, very careful' to avoid overreaching and will not rubber-stamp President-elect Obama's policies, Senate Majority Leader Harry Reid (D-Nev.) said Tuesday." Reid added that "it is essential for Obama and congressional Democrats to work closely with Republicans in the new Congress. He added that 2009 is very different from 1993, the last time Democrats controlled both Congress and the White House." The headline quote: "'If Obama steps over the bounds, I will tell him. … I do not work for Barack Obama. I work with him,' he said."

More Reid, per the Politico: "Reid vowed Tuesday that he'll lead the Senate until 2015 and beyond, taunting Republicans who'd like to unseat him and dashing the hopes of Democrats who'd like to succeed him. The Nevada Democrat, who is up for reelection in 2010, said he's actually looking forward to being considered a 'vulnerable' incumbent then."

The 111th Congress is only a day old, but Democrats and Republicans alike are puzzling over what Nancy Pelosi's promises to "govern from the middle" really mean.

The New York Times notes that the new class of House and Senate Democrats shift the Dem caucuses to the right -- not to the left. "Building on the 2006 class that gave Democrats a majority, this freshman class serves to broaden a moderate coalition considered more conservative on social issues, particularly in the House. The Democratic leadership almost certainly will be mindful — as it was in the 2008 election — of the members' individual vulnerabilities, especially since several were elected by extraordinarily narrow margins."

"Gary C. Jacobson, an expert on Congress and a professor at the University of California/San Diego, described the cumulative impact of the 2006 and 2008 elections: 'I think the effect is to move the Democratic caucus somewhat to the right and if it wants to stay as large as it is now, it has to accommodate these folks. 'You're not going to see any wild, left-wing policymaking,' he added. 'You're not going to get the Berkeley wish-list out of this crowd.'"

The Boston Globe puts Ted Kennedy front and center on its front page: "Eager to work, Kennedy makes emotional return." That's over a photo of Roland Burris holding an umbrella.

Cue your inner Dr. Evil voice (with pinky finger touching your lip)...

Yesterday, Obama tried to prep the public for trillion-dollar deficits for years to come. The New York Times says Obama "braced Americans for the unparalleled prospect of 'trillion-dollar deficits for years to come,' a stark assessment of the budgetary outlook that he said would force his administration to impose tighter fiscal discipline on the government. Mr. Obama sought to distinguish between the need to run what is likely to be record-setting deficits for several years and the necessity to begin bringing them down markedly in subsequent years."

Speaking of, per the Wall Street Journal: "A new Congressional Budget Office forecast due out Wednesday is expected to put the fiscal 2009 deficit at about $1 trillion, more than double the $438 billion in red ink CBO foresaw in September."

More from the Journal: "Obama plans to offer states $7 billion as incentive to permanently change their unemployment-insurance laws to cover part-time workers and prevent other laid-off workers from falling through cracks in the coverage. The proposal, which is set to be included in the president-elect's two-year economic-stimulus plan, will seek to use short-term aid to cash-strapped states to force long-term changes that the Obama team believes are overdue, Obama aides said Tuesday. But the proposal, along with others to subsidize health insurance for the laid-off and expand Medicaid to out-of-work Americans, are sparking bipartisan concern over the potential, long-term impact on a federal budget deficit that is expected to hit $1 trillion this year, even before the stimulus plan."

Some on Wall Street aren't all that optimistic that a legislative stimulus package will jolt the nation's economy back on track.

MINNESOTA: The recount saga rolls on, as Norm Coleman said he was filing a contest with the state. The Franken camp called the Republican's arguments the "same thin gruel."

NEW YORK: The New York Times reports, "Even as Attorney General Andrew M. Cuomo insisted he was staying out of the competition for New York's soon-to-be-vacant Senate seat, a top Cuomo aide urged labor leaders and upstate officials to refrain from embracing Caroline Kennedy for the job, according to several people with direct knowledge of the conversations."

More: "A spokesman for Mr. Cuomo, John T. Milgrim, strongly denied any effort to undermine Ms. Kennedy. He acknowledged on Tuesday that Mr. Percoco had spoken with a variety of labor leaders and officials upstate in recent weeks, including the mayors of Rochester, Syracuse and Buffalo or their aides and Assemblyman Joseph D. Morelle, the Democratic leader of Monroe County. But Mr. Milgrim disputed that Mr. Percoco had criticized Ms. Kennedy or urged others to do so. 'This is simply untrue,' said Mr. Milgrim. 'We haven't lobbied for or against anybody. This is just more anonymous sources spreading false gossip and perpetuating the circus-like atmosphere.'"

Question: Does this mean the cold reception Caroline received from some upstate was all part of a Cuomo setup?

Maureen Dowd defends the idea of appointing Caroline. "Congress, which abdicated its oversight role as the Bush crew wrecked the globe and the economy, desperately needs fresh faces and new perspectives, an infusion of class, intelligence and guts."

FLORIDA: So why did Jeb Bush so publicly explore this Senate bid now and then pull back? What spooked him? "Bush said he intends to focus on his growing portfolio of business ventures and to devote time to his family. He spent much of Tuesday calling friends and supporters to give them the news. Still, the former governor said he would continue to advocate for conservative ideas, and he offered a bit of advice to fellow Republicans: Don't target the new president with the same kind of partisan attacks that he said Democrats had hurled unfairly at his brother -- attacks that he summed up as 'Bush-hating.'"

VIRGINIA: In a conference call with reporters yesterday, advisers to McAuliffe's campaign outlined their candidate's message and strategy. They played up the fact that McAuliffe has resided in Virginia for almost 20 years; that he's raised five children in the state; and that he's started businesses there. What's more, they emphasized that with the state facing challenges during these difficult economic times, McAuliffe offers a unique business background to help turn things around.

Indeed, in his remarks today, McAuliffe said: "Now, with what we're facing in the next few years, people want a governor with that same kind of experience and approach. A governor who, like Governors [Mark] Warner and [Tim] Kaine, brings the right kind of executive background to the job. Who, like Mark and Tim, understands that not all good ideas come from Richmond. Who, like Mark and Tim, knows that it's not about politics - it's about results. That's what it's going to take to get our economy moving forward again and to build on the progress we've made over the past seven years. And that's why, today, I'm announcing my candidacy for Governor of Virginia."

From NBC's Carrie Dann and Mike Viqueira
For the first hour of the 111th Congress, the nation's lawmakers were all smiles on the House floor.  Freshmen thrust their hands across the aisle -- literally -- as they introduced themselves to their new colleagues. Representatives of both parties grinned together as they watched their children, who were invited to romp on the floor for the occasion.
 
But by the time the clock struck three times, things were back to normal.
 
"Shame on you!" Rep. James Sensenbrenner (R-WI) exclaimed. "Because you're shutting down the process and [it's] going to result in more partisanship, not less."

"They chose talking points over accomplishments," countered James McGovern (D-MA) about his Republican colleagues. "They chose to be the party of obstructionism." 
 
The debate at issue between the two parties was a complicated procedural measure that House Republicans, largely emasculated by their minority status, have effectively used to stymie their opponents over the past two years. By passing a new package of House rules by a 242-181 vote today, Democrats eliminated in some cases the minority party's ability to file a so-called "motion to recommit." In the past, such motions served as one of the only opportunities the minority party had to influence the substance of any tax-related legislation. 
 
Since losing the majority in 2006, Republicans employed the tactic 50 times, usually to raise objections about tax increases included in bills.  But in some cases, perhaps most memorably during a debate over DC voting rights in 2007, Republicans have used a motion to recommit to tack a popular amendment to a bill, rendering it political poison for many Democrats to vote against the measure.  The new rules strip the minority party of its ability to offer such a measure "promptly," meaning in a way that would kick the bill back into committee and possibly kill it altogether.
 
The GOP cried foul, saying that Speaker Nancy Pelosi's rules essentially silence the last gasps of dissent that an opposition party can voice in the majority-rule chamber of Congress. One of Republicans' key objections is that, for complicated reasons related to budget rules, they will now be unable to offer such motions in cases where a tax increase has been buried in larger legislation.
 
Democrats counter that the minority will still be able to offer amendments to be immediately voted upon -- considered "forthwith," as the formal parlance goes -- rather than weighed in the lengthy committee process.  They cite Republicans' frequent use of the procedure, which Democrats only used 36 times during their 12 years of minority status, in accusing the GOP of wielding MTRs as an "obstructionist" tool.  "They're not interested in substance," said Rep. Barney Frank (D-MA) after a lengthy House floor explanation of the procedure today. "They're interested in game playing."
 
If trackers of such House scuffles catch a hint of deja vu in today's proceedings, it's because Democrats mounted similar objections to rules that hush minority input -- back when they were in the minority. In 2004, then-Minority Leader Nancy Pelosi proposed a "Bill of Rights" for the minority party, lamenting the "incivility and the heavy hand of the majority" and accusing Republican Speaker Dennis Hastert of shutting out Democratically-offered alternatives.
 
Republicans are using that history, as well as Pelosi's past promises of transparency and bipartisanship, to call the new rules not only hypocritical, but counter to the message touted by Democrats' boss himself.  "Today's new beginning is nothing more than a new low for the Democratic majority," lamented Rep. David Dreier (R-CA). "Their cynicism and manipulation is all the more dismal against the backdrop of President-elect Obama's vision or hope, unity, and change for the better."

From NBC's Mark Murray and Domenico Montanaro
Former Florida Gov. Jeb Bush, widely rumored to be mulling a run for the Senate in 2010, today closed the door on the speculation, saying he had decided not to run.

Though he called the opportunity "compelling," he said "now is not the right time... ."

Though Bush might have been hurt by his last name -- with a brother as president, whose approval rating is at historic lows -- he would have likely cleared the Republican field.

Now, it's a wide open race to see who will replace outgoing Republican Sen. Mel Martinez.

Below is the full statement from Bush:

"After thoughtful consideration, I have decided not to run for the United States Senate in 2010.

"While the opportunity to serve my state and country during these turbulent and dynamic times is compelling, now is not the right time to return to elected office. "In the coming months and years, I hope to play a constructive role in the future of the Republican Party, advocating ideas and policies that solve the pressing problems of our day. We must rebuild the Party by focusing on the common purposes and core conservative principles that unite us all - limited government, a strong national defense and safe homeland and the protection of liberty tempered by personal responsibility.

"While fundamentally different ideologies divide Republicans and Democrats, we can not allow politics to come before the needs of our people and communities. We must raise the level of debate to reflect the American people's desire for change and bi-partisanship, embodied by November's historic election. President-elect Obama ran a tremendous campaign and I am proud to call him my President. I am confident Republicans will find productive ways to work together with the new administration to advance reforms both sides of the aisle can support.

"For me, there is no greater calling than education reform. Securing our nation's economic future starts with providing a world-class education to every single American student - building a system that lessens our populace's dependence on government. Through the Foundation for Florida's Future and Foundation for Excellence in Education, I remain committed to advancing policies key to a reform agenda, including higher academic standards, greater accountability for learning and more educational choices for all families.

"Finally, I thank Senator Martinez for his extraordinary service to our great state and thank the many Floridians and Americans across the country that offered me support and encouragement as I came to this decision."

From NBC's Lauren Appelbaum
On his second day in Washington, President-elect Obama met with his budget team and promised no earmarks will be in the stimulus plan.
 
"We are going to ban all earmarks -- the process by which individual members insert pet projects without review," he explained. "We will create an economic recovery oversight board made up of key administration officials and independent advisors to identify problems early and make sure we are doing all we can to solve it."

Video: President-elect Barack Obama tells reporters that the massive economic stimulus bill he wants Congress to pass will set a "new higher standard of accountability, transparency, and oversight."
 
When asked to clarify if some projects could be put in after they are reviewed, Obama drew a harder line.

"We will ban all earmarks in the recovery package," he said. "And I describe earmarks as the process by which individual members insert pet projects without review. So what I'm saying is, we're not having earmarks in the recovery package, period."
 
The president-elect declined to discuss specific budget numbers but said his team will be evaluating programs, eliminating some and modifying others to save money.

"What we intend to do this year, next year, and all the years that I'm in office is to demonstrate our seriousness, not by gimmicks, not by punting to future administrations the tough choices, but by making some of those tough choices while I'm in office," he said.
 
When asked about his choice of Leon Panetta to head the CIA and Panetta's "lack of experience on intelligence matters," Obama called him "one of the finest public servants that we have" and stressed his "extraordinary management skills, great political savvy, [and] impeccable record of integrity."
 
"Having said all that, I have not made an announcement," Obama continued. "When we make the announcement, I think what people will see is, is that we are putting together a top-notch intelligence team that is not only going to assure that I get the best possible intelligence unvarnished, that the intelligence community is no longer geared towards telling the president what they think the president wants to hear, but instead are going to be delivering the information that the president needs to make critical decisions to keep the American people safe.

"I think what you're also going to see is a team that is committed to breaking with some of the past practices and concerns that have, I think, tarnished the image of the agencies, the intelligence agencies, as well as U.S. foreign policy."
 
On the violence in Gaza, Obama repeated his one president at a time line.

"When it comes to international affairs, other countries are looking to see who speaks for America," Obama said. "Right now, President George Bush, as president of the United States, speaks on behalf of the U.S. government and the American people when it comes to international affairs."
 
But Obama said he is being briefed daily and will comment on the situation after he is inaugurated.
 
"I am not backing away at all from what I said during the campaign, that I -- starting at the beginning of our administration," he said. "We are going to engage effectively and consistently in trying to resolve the conflicts that exist in the Middle East. I think it's not only right for the people in that region; most importantly, it's right for the national security of the American people and the stability that is so important to this country.

"So on Jan. 20th, you will be hearing directly from me and my opinions on this issue. Until then, my job is to monitor the situation and put together the best possible national security team so that we hit the ground running once we are responsible for national security issues."

From NBC's Ken Strickland
Incoming Senate Intelligence Committee Chairperson Dianne Feinstein today said she's had a "substantial conversation" with President- and Vice President-elect Obama and Biden. 

"They've apologized profusely," for not consulting with her before naming Leon Panetta as the nominee to head the CIA.

She called the oversight a "mistake," but suggested it was an honest one.

"I've been around a long time," said Feinstein, who's serving her fourth term. "I know this happens… so that's not an issue."

But she reiterated her concerns that Mr. Panetta wouldn't come to the job with significant intelligence experience. While acknowledging the CIA Director's job requires an operational skill set, "it's also a clandestine and covert service agency for the country. And as such, I think on the ground experience as a station agent in various parts of the world is vital."

She told Obama and Biden that she'd keep an open mind about their nominee, but "I'm going to ask some hard questions."

Fellow Intel Committee Democrat Russ Feingold had a different take on the nomination. 

"My impression is this may have been a very good appointment as opposed to a questionable one," he told reporters.

Feingold made it clear he hadn't come to a final conclusion and wanted to examine it more. 

"Of course it would be nice if he had more direct experience in terms of the intelligence issue," he said, "but there are so many issues here: trying to coordinate our foreign policy issues with intelligence issues with other government agencies."

He suggested as "a very effective" former chief of staff to President Clinton, Panetta "in some ways would be an ideal person for this role."

From NBC's Mike Viqueira

No surprise, but House speaker Nancy Pelosi (D-CA) was reelected as Speaker of the House for the 111th Congress.

The vote was 255-174.

From NBC's Ken Strickland and Doug Adams
Reelected Illinois senior Sen. Dick Durbin was escorted by Ted Kennedy to the well of the Senate to sworn in earlier today.

Traditionally, the senators are escorted by the other senator from the state. But for Durbin, there was no one: Roland Burris wasn't allowed to be seated, and Obama resigned. So Durbin asked Kennedy to stand in.

Incoming senators are always accompanied by an escort. Usually that escort is the fellow senator from the state he or she represents. But in some cases others are allowed to stand in.

Lamar Alexander from Tennessee chose to have former Sen. Fred Thompson accompany him, along with the other Tennessee senator, Bob Corker.

Kay Hagan from North Carolina chose to have Sen. Barbara Mikulski (D-MD) -- the first elected female Democratic senator -- accompany her, along with her fellow North Carolina senator Richard Burr.

Tim Johnson, who was in a wheelchair, chose to be accompanied by former senator and Obama Health and Human Services nominee Tom Daschle.

Tom Udall from New Mexico chose to have outgoing Republican New Mexico Sen. Pete Domenici accompany him.

Mark Warner chose to have outgoing Republican Sen. John Warner and fellow Virginia Democratic Sen. Jim Webb accompany him.