From NBC's Domenico Montanaro
WASHINGTON -- Overheard en route to the exhibit hall here at the Omni Shoreham Hotel:

"Where is it?" one man said to another looking for one of the ballrooms.

"To the right," the younger man replied.

"Everything's to the right at this conference."

True enough.

The Conservative Political Action Conference, or CPAC, the annual gathering of conservative activists, kicked off today and continues through Saturday. Speeches from potential 2012 contenders and big names from the conservative world like Rush Limbaugh and Ann Coulter all get prime speaking slots and will draw much of the buzz.

Video: Pat Buchanan talks to MSNBC's Contessa Brewer about the future GOP leaders.

But below the surface, one of the places that's a can't miss at this conference, is the exhibit hall.

It's the place to find the best color at CPAC, so your First Reader headed there (after checking in with a "Joe the Plumber" panel.)

There were books, like "Obamaland", "The End of Prosperity," even one on "The Nixons: A Family Portrait." There was plenty to go around. (The hottest selling item was John Bolton's latest -- he had just spoken and held a book signing.)

There were five on Ronald Reagan, almost as many on Coulter, Obama and Alaska Gov. Sarah Palin. There were ones about how the South will rise again as well as "48 Lies About American History (That You're Probably Taught In School)." A couple of those lies: No. 22: The colonies were intolerant and racist and No. 14: Women had no rights in early America.

There was a stand giving out Palin posters. (Sorry, they were out when we got there!) We did manage to grab a glossy Sarah Palin for President 2012 campaign sign -- paid for by the 2012 Draft Sarah Committee.

There was a trailer playing for "Not Evil Just Wrong: The true cost of global warming HYSTERIA" with a photo of Al Gore on its movie poster.

For those wanting some target practice, stop by the National Rifle Association's "Varmint" video shooting range. Young men in suits and ties as well as women in skirts and heels trained their eyes on squirrels scurrying across the hills.

There's much more, but that's just the start.

From NBC's Jim Miklaszewski

However it may be framed politically, President Obama's decision on U.S. troop levels in Iraq will NOT withdraw all U.S. combat forces from Iraq within the next 19 months.

Senior military and Pentagon officials stress -- whatever the bottom line number (which may be up to 50,000 troops remaining, it will include combat elements. Senior military officials tell NBC News those combat troops may be renamed as "advisory brigades," which will work closely with the Iraqi military, but they will still be combat forces. There will also be a number of combat forces that would be assigned to protection of the U.S. military force, the U.S. embassy and U.S. government civilian workers in Iraq.

There will also be a "residual combat force" that will be assigned to a counter-terrorism mission, to continue to hunt down terrorist elements (Al Qaeda, foreign fighters, etc.) in Iraq.

Besides the reduction in U.S. forces from today's 142,000 to about 50,000 the biggest change is that even those combat forces that do remain will no longer be engaged in daily, routine combat missions as they are today. By August 2010, the Iraqi military and police are expected to takeover all daily combat missions. 

Nevertheless, given the nature of the counterinsurgency in Iraq, all U.S. forces -- whatever their mission, rank, or gender -- could be drawn into the fight without warning.  Therefore, as Gen. (retired) Barry McCaffrey has repeatedly stressed, to leave those forces without some level of combat force protection would be irresponsible.

From NBC's Ken Strickland

Video: President Obama will present his budget plan to Congress today. NBC's Chuck Todd reports.

OMB Director Peter Orszag hand delivered the budget to Capitol Hill moments ago. Standing outside to receive it were Senate Budget Committee Chairman Kent Conrad and House Budget Committee Chairman John Spratt.

From Chuck Todd, Mark Murray, and Domenico Montanaro
*** That's one big budget: This morning, President Obama delivers remarks on his FY 2010 budget, which comes to -- cue Dr. Evil, placing his pinky finger to his lips -- FOUR trillion dollars, up from $3.1 trillion this year. It projects a $1.75 trillion deficit, representing 12.3% of GDP, which is the highest level since World War II. The other headlines here: The budget sets aside $634 billion over the next 10 years to expand health care (paid for by Medicare savings, cuts for wealthy Medicare recipients, and the reduction of tax breaks on those earning more than $250,000); it proposes $750 billion for bank bailouts on top of the $700 billion it has already spent (but this amount shows up as $250 billion in the budget, because the administration believes it will eventually get at least $500 billion back for its investments); and it sets aside $75 billion for Iraq and Afghanistan through this fall. There are also budget cuts here, including farm subsidies for high-income farmers, the last remaining cotton subsidy, and a few education pet projects. This budget is very tough on those who earn more than $250,000 a year. Not only are they losing out on the Bush tax cuts in the next couple of years, but they also will see their tax bill go above that to pay for this new health care bill. Ironically, many people hurt by this are folks who live in the bluest of cities, including New York, DC, Boston, San Francisco, and Chicago.

Video: TODAY's Matt Lauer talks to CNBC's Dylan Ratigan and Rick Santelli about President Obama's budget plan.

*** Is honesty the best policy? This, of course, is A LOT of money. But here's the thing: The price tag is much higher because the White House removes several past budget gimmicks -- like omitting the cost of Iraq and Afghanistan, and assuming AMT taxes that later will later be eliminated. What's more, the administration's budget plans for a natural disaster like Hurricane Katrina. In short, it believes this is honest budgeting and reflects a worst-case scenario. This is going to be run of those tricky spin days for the White House. They definitely deserve credit for the honest budgeting, but they're also going to have to withstand GOP and tabloid hits for increasing the deficit, bailing out more banks, and growing the annual budget by nearly 30%. Most of this, however, is because of the Obama administration's decision to be more honest about numbers than the Bush budget team was. So how many headlines in the next few days will be about tax hikes to pay for health care, and how many will be about "honest budgeting"? We think we know the answer. (Sorry, Team Obama.)

*** Hey buddy, slow down: Don't miss Bill Kristol's advice to congressional Republicans regarding the Obama agenda. Kristol did his best to slow down HillaryCare in '93-94, and he's offering similar advice -- slow it down. That's the game between the White House and congressional GOPers. They know that the longer it takes to debate health care, energy or any proposal, the more likely the White House will lose. The quicker they can get the bill written and passed, the better chance they have. It also explains why the White House wants to "flood the zone" with policy initiatives. Don't allow ONE bill to become THE debate topic. Divide the opposition by giving them 10 new policy proposals. 
 
*** At a cattle call, you need … more cowbell: In his upcoming New York Times magazine cover story on Newt Gingrich, political writer Matt Bai divides Republicans searching for a way back to power into two groups: "retrenchers" (those who believe that the GOP strayed from their conservative principles and must become more conservative) and "broadeners" (those who are perhaps less dogmatic and believe that the GOP must expand beyond its base). Well, beginning today and lasting through Saturday, the retrenchers hold a conference in DC that essentially serves as the first cattle call for 2012. (Yes, we know that election is still 1,349 days away.) Speaking at the three-day Conservative Political Action Conference will be Mike Huckabee (today at 1:30 pm ET), Mitt Romney (Friday), Mark Sanford (Friday), and Tim Pawlenty (Saturday). Bobby Jindal and Sarah Palin aren't attending. After Jindal's poorly received performance on Tuesday night, and also with Palin's rocky ride since last fall, Politico's Ben Smith declares that Romney -- who was unable to win in Iowa and New Hampshire in 2008, despite spending so much time and money in both states -- the early 2012 front-runner for the GOP. Why? "[H]e has a crucial advantage over almost all the other Republican candidates who are mentioned: He's not in office, and doesn't have to spend the next two years (at least) raising taxes, cutting services, and/or borrowing huge sums. He's free to articulate a clear voice of opposition, and to position himself to play the role of the turnaround specialist if he can make the case that Obama hasn't delivered."

*** CPAC straw poll: As it has in past years, CPAC will conduct a presidential-preference straw poll, and it will be unveiled at 4:30 pm on Saturday (right before Rush Limbaugh delivers the conference's concluding remarks). But an important note of caution: The most recent CPAC straw poll winners were Romney (2008 and 2007) and George Allen (2006). Neither, of course, went on to win the GOP presidential nomination. 

*** More CPAC: Other notable speakers at CPAC today include former UN Ambassador John Bolton (10:45 am); Samuel "Joe the Plumber" Wurzelbacher (11:45 am); Sen. Bob Corker (2:30 pm); and Michele Bachmann, Rep. Roy Blunt, Rep. John Shadegg, and RNC chair Michael Steele (all at an evening event beginning at 7:30 pm). Also check out these forum topics at CPAC: "Al Franken and ACORN: How Liberals Are Destroying the American Election System" (today at 2:30 pm); "Bailing Out Big Business: Are We All Socialists Now?" (Friday); "Will Congress Take Your Guns" (Friday); "Will Obama's Tax Policy Kill Entrepreneurship" (Friday); "Media in the Obama Era: Is Journalism Dead?" (Saturday); and "The True Cost of Global Warming Hysteria" (Saturday).
 
*** Michelle Obama watch: Beginning at 11:15 am ET today, the First Lady visits with workers at the Environmental Protection Agency to thank them for their public service.
 
Countdown to NJ GOP primary: 96 days
Countdown to VA Dem primary: 103 days
Countdown to Election Day 2009: 250 days
Countdown to Election Day 2010: 614 days

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Reuters previews the budget that Obama will unveil today. "President Barack Obama will forecast a 2009 deficit of $1.75 trillion in a budget proposal on Thursday that sets goals of overhauling the healthcare system and shoring up the U.S. economy. The huge deficit would represent 12.3 percent of U.S. gross domestic product -- the largest share since World War II. Two senior administration officials … said Obama's expensive policy goals would be offset by cuts to put the country in better fiscal shape." 

Bloomberg says the budget request "would provide as much as $750 billion in new aid to the financial industry." An administration official "said the White House hasn't decided whether the $750 billion in additional aid to the financial industry will be needed. He said it will be put in the budget as 'placeholder.' The official said the aid would appear in the budget as about $250 billion because the rules require policymakers to record the plan's net cost to taxpayers. The government anticipates it would eventually recoup some, though not all, of the money expended to help financial companies."

Also in his budget, the Washington Post reports, Obama "is proposing to begin a vast expansion of the U.S. health-care system by creating a $634 billion reserve fund over the next decade, launching an overhaul that most experts project will ultimately cost at least $1 trillion. The "reserve fund" in the budget proposal being released today is Obama's attempt to demonstrate how the country could extend health insurance to millions more Americans and at the same time begin to control escalating medical bills that threaten the solvency of families, businesses and the government."

To help finance this reserve health-care fund, the New York Times says the Obama administration proposes calling "for stricter limits on the benefits of itemized deductions taken by the wealthiest households… Administration officials said Mr. Obama would propose to reduce the value of itemized tax deductions for everyone in the top income tax bracket, 35 percent, and many of those in the 33 percent bracket — roughly speaking, starting at $250,000 in annual income for a married couple."

More: "Under existing law, the tax benefit of itemizing deductions rises with a taxpayer's marginal tax bracket (the bracket that applies to the last dollar of income). For example, $10,000 in itemized deductions reduces tax liability by $3,500 for someone in the 35 percent bracket. Mr. Obama would allow a saving of only $2,800 — as if the person were in the 28 percent bracket. The White House says it is unfair for high-income people to get a bigger tax break than middle-income people for claiming the same deductions or making the same charitable contributions."

RNC spokesman Alex Conant points out to First Read that on Obama's transition site, the president "said he would pay for health care by 'rolling back the Bush tax cuts for Americans earning more than $250,000 per year and retaining the estate tax at its 2009 level.' Now we know that is not true.  He is paying for it with a NEW tax."

The New York Daily News' cover: "The check please! Obama unveils record budget to pay for recovery."

Per a new Washington Post/ABC poll, two-thirds of Americans support President Obama's decision to send approximately 17,000 additional U.S. military forces to Afghanistan… Support for the proposed influx of troops to Afghanistan, however, comes as Americans are about evenly divided about whether the war there has proved to be worth its costs. They also split 50 to 41 percent on whether it is essential to win in Afghanistan to succeed in broader efforts against terrorism."

More: "A parallel, though less dramatic, shift over the past two years is a bump in the number who say that winning in Iraq is crucial to victory in the campaign against terrorism. On that question, 44 percent see a close linkage, the highest number since an overnight poll following Bush's speech announcing the Iraq strategy." Still, the poll finds that most believe the Iraq war has not been worth fighting. "Sixty percent in the new poll said the costs of that war have outweighed its benefits. That number is little changed from recent polls and has been the majority."

Gary Locke was named Obama's third pick for Commerce. Politico looks at his past. "Locke's post-gubernatorial efforts to drum up business for an array of companies in the rapidly expanding Chinese market may require steps to reconcile with the administration's ethics policy." Locke "has advocated for Microsoft, Starbucks, and banking, timber and shipping interests in recent years, raising potential conflicts for him as head of a department charged with promoting U.S. trade around the globe."

Bill Clinton on Obama's speech Tuesday night. 

And the Obamas appear to have chosen at least the breed of dog. They're looking for a Portuguese water dog.

"The House on Wednesday passed a $410 billion omnibus spending bill packed with pet projects requested by Democrats and Republicans alike," the New York Times reports. "The 245-to-178 vote came just a week after President Obama signed one of the largest spending bills in the nation's history, a $787 billion measure meant to rejuvenate a sluggish economy."

"Despite vows by President Obama to curtail earmarks," earmarks mark the latest congressional bill, the Boston Globe reports.  Across the country, there are more than 8,500, "totaling $7.7 billion -- up 3 percent from last year -- that were included in the $410 billion spending bill the House approved yesterday, according to the nonpartisan group Taxpayers for Common Sense. The House rejected a Republican bid to strip the earmarks out of the legislation, which is to fund government operations from early March through the end of September."

The New York Daily News plays the crazy-pork-barrel-project game. "There's $190,000 set aside in the House's version of the federal budget for bringing Cody, Wyo.'s Buffalo Bill Historical Center into the digital age" ... "$238,000 for educational programs at Honolulu's Polynesian Voyaging Society" ... "$24,000 for a sexual abstinence program." 
 
The New York Post salivates over them too with this headline: Congress' porky pols pig out on fine $wine: Big bucks for canoes and tattoos."

Meanwhile, a day after Dick Durbin told Burris he should think about resigning, Burris is staffing up and showing no indication he'll step down.

On the opening day of CPAC, this probably isn't the kind of Politico headline Republicans want: "GOP at risk of becoming party in the no." Sixteen Republicans broke with party lines on the $410 billion omnibus package "on a vote Minority Whip Eric Cantor had urged his colleagues to reject. And the cracks in the facade appear to be the first public signal of Republican rank-and-file squeamishness with a remarkably high-risk strategy that promises an uncertain return. For Republicans, a central question looms: Is saying no to Obama's agenda the way to get voters to say yes to an already beleaguered GOP brand?" 
 
The AP's Fouhy wraps the groundswell of criticism Louisiana Gov. Bobby Jindal faced from the left and right for his response to Obama's address to Congress. "Insane. Childish. Disaster. And those were some of the kinder comments ... Jindal's voice and earnest, awkward delivery have drawn comparisons to Kenneth Parcell, the geeky Southern page on the NBC comedy '30 Rock.' Indeed, a new Facebook group titled 'Bobby Jindal is Kenneth the Page' had already attracted more than 1,800 members Wednesday afternoon."

The New York Times adds that Jindal "has been a rising star in the Republican Party, but his stock took a hit as he was roundly panned for his televised response to President Obama's first speech to Congress on Tuesday night."

Don't miss Norah O'Donnell's look yesterday at Jindal's speech.

MINNESOTA: "It wasn't just Norm Coleman's list of ballots that was shrinking Wednesday. It was also his witness list," the Minneapolis Star Tribune reports. "Pamela Howell, a Republican election judge in Minneapolis who Coleman had hoped would bolster his case that some votes were counted twice, had her testimony stricken after judges learned that Coleman's lawyers hadn't shared her written statement with Al Franken's legal team." Coleman attorney Ben "Ginsberg said he couldn't believe the message of inconsistent standards wasn't getting through to the judges."

ILLINOIS: Oh, the lengths some are going to replace Rahm Emanuel. "This past Sunday afternoon, 19 candidates made their pitches to an audience of 35 voters gathered in a smoky VFW hall in the snow-covered Windy City suburbs," Roll Call reports. "That candidate-to-voter ratio, however, was an improvement from the day before -- when 13 of those same politicians pandered to a single voter in the audience at a forum held at a local school." 
 
NEW YORK: The Hill's Wilson says NY-20 is "becoming an obsession" for national Republicans. If Republican Jim Tedisco wins the March 31st special election, "Republicans will call it the first sign their party is back on track after so many devastating losses." Both the NRCC and RNC are involved in the race now. House Minority Leader John Boehner will campaign for Tedisco in the district in March, and RNC Chairman Michael Steele holds a fundraiser for him March 4.

Not to be complete outdone, Democrats will hold their own competing fundraiser for Scott Murphy on March 4th at DNC headquarters in DC. Invitees include: Kirsten Gillibrand, who held the seat for the past two cycles, House Speaker Nancy Pelosi, House Majority Leader Steny Hoyer, Majority Whip James Clyburn and DCCC Chair Chris Van Hollen.

Meanwhile, the New York Times reports that Gov. David Paterson is adding some Clintonistas to beef up his staff. "Reeling from a series of setbacks, Gov. David A. Paterson has embarked on an ambitious shake-up of his administration, turning largely to veterans of the Clintons' far-flung network to try to steady the situation." 
 
RHODE ISLAND: Rep. Patrick Kennedy may get a GOP challenger.

From NBC's Chuck Todd and Abby Livingston
It seems that White House press secretary Robert Gibbs, Sen. John McCain (R), and Sen. Russ Feingold (D) are on the same page. 

The issue: All three want a presidential line-item veto to curb earmarks and spending.

A line-item veto gives the president the power to veto particular items of a bill without having to veto it in its entirety. During the Clinton administration, Congress gave the power to Clinton, but it was later revoked in 1998 when the Supreme Court ruled that the measure overreached presidential powers.

Today, at the daily White House press conference, one of us asked Gibbs about the administration's stance on a line-item veto. Gibbs answered, "Well, I can assure you he'd love to take that for a test drive." 

The interchange prompted Feingold's office to contact First Read about legislation Feingold and his oft-strange bedfellow -- McCain -- are working on for to bring back a line-item veto that will be limited to spending and earmarks. 

The shared interest between McCain and Feingold is to curb earmark spending. Feingold's office suggested that the legislation would include a sunset provision in 2014 that "would give Congress the ability to review this legislation and decide whether to renew it."

Obama is not the only chief executive to angle for the line-item veto. In 2006, Bush 43 unsuccessfully pushed for the power as well.

From NBC's Athena Jones

During the fall presidential campaign, when struggling banks led to a credit crisis that roiled the markets and helped worsen an economic downturn, President Obama began beating the drum for updating America's financial regulatory system. 

Since then, he has called for a new regulatory framework that's part of a complex, multi-pronged solution to getting the economy back on track and to avoid financial sector meltdowns.

Today, the president met with Treasury Secretary Geithner, chief White House economic adviser Larry Summers, and the chairmen and ranking members of the Senate Banking Committee and the House Financial Services Committee to begin work on a new set of regulations to monitor a modern banking system.

"This financial crisis was not inevitable," Obama told reporters gathered in the Diplomatic Reception Room. "It happened when Wall Street wrongly presumed markets would continuously rise, and traded in complex financial products without fully evaluating their risks. Here in Washington, our regulations lagged behind changes in our markets -- and too often, regulators failed to use the authority that they had to protect consumers, markets and the economy."

The president repeated a frequent argument from the campaign trail: that 21st-century markets could not be properly regulated with 20th-century regulations.

"While free markets are the key to our progress, they do not give us free license to take whatever we can get, however we can get it," he said. "But let me be clear: The choice we face is not between some oppressive government-run economy or a chaotic and unforgiving capitalism. Rather, strong financial markets require clear rules of the road, not to hinder financial institutions, but to protect consumers and investors and ultimately to keep those financial institutions strong."

Obama has asked his economic team to develop recommendations for regulatory reform and to work with members of Congress from both parties so they can begin crafting legislation in the coming weeks and months.

He said the new regulations would aim to restore accountability and transparency and laid out several points to keep in mind in the upcoming discussion -- including the need to oversee financial institutions that pose serious risks; to streamline the regulatory structure and make sure it covers the necessary institutions and markets; to demand strict accountability starting with executives; and to have strong and uniform supervision of financial products marketed to investors and consumers.

Obama also stressed the need to challenge other countries to set high regulatory standards to prevent global crises in the future.

Alabama Republican Sen. Richard Shelby, who is ranking member of the Banking, Housing and Urban Affairs Committee, told reporters after the meeting it was important to restore Americans' confidence in the banking system and that the solution must be comprehensive and bipartisan.

"The whole banking system is built on trust. There's been a huge erosion, as everyone knows, in trust in the financial system and this would be would be a comprehensive move to bring good regulation to the banking system," Shelby said. "Heck, let's be honest: A lot of our regulators obviously didn't know what was going on with some of our big banks, otherwise all these debacles that have come about wouldn't have occurred. We've got to have comprehensive regulation where the taxpayer's at risk."

His fellow Alabama Republican, Rep. Spencer Bachus, who is the ranking member on the House Committee on Financial Services, spoke about the need to avoid having to spend taxpayer dollars on bailouts and interventions in the future.

Sen. Chris Dodd, chairman of the Senate committee on Banking, Housing, and Urban Affairs, said the group agreed with the fundamental principles the president had laid out; that they would be starting out working "off the same page"; and that he would hold as many as two hearings a week on the subject.

Rep. Barney Frank, the chairman of the House Financial Services Committee, said hearings on regulation would begin next week and argued that the "right kind of regulation is very pro-market."

He acknowledged the issue of moral hazard, but said that "we are forced by the need to right this economy and to some extent alleviate the consequences of poor judgments so that they don't affect the whole economy. Frank also argued that new regulations would help prevent that kind of behavior in the future.

From NBC's Lauren Appelbaum and Ashley Codianni

WASHINGTON -- Sen. John McCain delivered a chilling address at the American Enterprise Institute, reminding his audience the depth of resources required in Afghanistan. He talked of the stark realities of Afghanistan's situation, identifying significant increases in civilian fatalities, insurgent attacks, and influence of the Taliban throughout the country.
McCain approved of Obama's 17,000-troop increase to Afghanistan. But he stressed that increase alone would not lead to success.
 
"I have to give straight talk and that is I think things are going to get worse in Afghanistan before they get better," McCain said this afternoon. "And so I think that it's very important that the President and members of Congress and other people in leadership and respected positions inform the American people that it's going to be a long and hard and tough." 
 
McCain outlined seven areas in addition to higher troop levels that are needed in order to win the war in Afghanistan: reapply the principles of counterinsurgency, help the Afghans fight the Taliban, change alliance diplomacy, increase and reform non-military assistance, get control of the narcotics problem, work regionally, and communicate the stakes and the challenges to the American people.
 
The Arizona senator said the war in Afghanistan is likely to be even longer than the war in Iraq. "Unlike Iraq, where the surge of troops conducting counterinsurgency operations, combined with a quickly spreading Anbar Awakening, transformed the country in less than a year, Afghanistan is likely to be harder and longer. ... The scale of resources required to prevail will be enormous, and the timetable will be measured in years, not months."
 
McCain insisted this war is necessary but said he is confident of victory. "I know Americans are weary of war. I'm weary of it. But we must win the war in Afghanistan. The alternative is to risk that country's return to its previous function as a terrorist sanctuary, from which al Qaeda could train and plan attacks against America."
 
He also stressed the Afghan army is too small to solve its problems on their own and called for the world to join America in helping Afghanistan.
 
"For years the Afghans have been telling us they need a bigger army, and they are right," McCain said. "After all, their country is more populous and significantly larger than Iraq ... The costs of this increase, however, should not be borne by American taxpayers alone. Insecurity in Afghanistan is the world's problem, and the world should share the costs."
 
During Q&A, McCain later outlined options for allies to help with reconstruction teams, economic aid, and training of Afghan police.
 
"We need our allies," he said. "We are grateful for them."
 
He even called on non-NATO allies such as the Japanese to help. "We all know this strategy is not just military victory. It has many other components."
 
McCain also stressed the importance of working with Pakistan as a regional ally.
 
"For too long we have viewed Pakistan as important because of our goals in Afghanistan," McCain said. "Yet Pakistan is not simply important because of Afghanistan; Pakistan is important because of Pakistan. We cannot simply subordinate our Pakistan strategy to our Afghanistan policy."
 
When asked if America should have troops in Pakistan, McCain replied, "you'd have to have the scenario where the Pakistani government would want us there."
 
"Pakistan has enormous economic difficulties as we speak, and their army still is not trained and equipped to fight the kind of insurgency that they are facing on the Afghan border. I cannot imagine a scenario where the Pakistani government and people would want the United States troops on Pakistani soil."
 
McCain fielded a variety of questions, including one that left the audience surprised. When asked if the Russians are actively looking to undermine the United States in Afghanistan, McCain paused before answering.
 
"I think that the Russians are playing a role that's not helpful," he replied after audience laughter. "But at the same time it would hard for me to be convinced that they want us to fail there. They've had an experience there as we all know. And I'm not sure that they don't view the rise of or the country that's taken over by extremist organizations wouldn't in the long run pose a danger to their security. ... I think that their short term goals are probably to cause us difficulties, but I still, maybe being an eternal optimist, try to attempt to find areas of common ground."
 
The one thing McCain made clear during his speech and Q&A is his grave concern about Afghanistan and the war in the region. "This war will take time and commitment, and it will not be easy," McCain said at the end of his speech. "But as it has so often before, history - and the world - will look to America for courage and resolve."

From NBC's Andrea Mitchell and Libby Leist
The State Department today strongly criticized China in its annual human rights report, putting Hillary Clinton on the spot for not confronting the Chinese more aggressively during her visit to Beijing last week.

Clinton came under harsh fire from human-rights groups who said she downplayed the issue with Chinese leaders. 

Today, in announcing the report's release, Clinton defended her record.

"The promotion of human rights is essential to our foreign policy," she said, "but as a personal aside, I have worked for many years and in various capacities on the issues that are encompassed under the rubric of human rights. It is of profound importance to me and has informed my views and shaped my beliefs in ways large and small. As Secretary of State, I will continue to focus my own energies on human rights ... I am looking for results. I am looking for changes that actually improve the lives of the greatest numbers of people."

Notably though, today's report is much harsher on China than Clinton was during her visit to Beijing. It cites China's poor human rights record that has "worsened in some areas."

Clinton carried a more muted message in a press conference with the Chinese Foreign Minister on Saturday. Without elaborating on details of her discussions, she said, "The promotion of human rights is an essential aspect of our global foreign policy, and something we discussed candidly with the Chinese leadership."

The State Department report is detailed and explicit: "The government continued to limit citizens' privacy rights and tightly controlled freedom of speech, the press (including the Internet), assembly, movement, and association. Authorities committed extrajudicial killings and torture, coerced confessions of prisoners, and used forced labor. In addition, the Chinese government increased detention and harassment of dissidents, petitioners, human rights defenders, and defense lawyers. Local and international NGOs continued to face intense scrutiny and restrictions. China's human rights record worsened in some areas, including severe cultural and religious repression of ethnic minorities in the Xinjiang Uighur Autonomous Region and Tibet."

Human Rights groups were outraged after hearing that Clinton said human rights "can't interfere" with other larger policy issues where the U.S. needs China -- like the global economic crisis, security and climate change

Other highlights from the report:
AFRICA: Some countries were stabilizing forces on the continent --"nevertheless, during the year, human rights and democratic development in the region continued to face severe challenges, especially in a number of countries plagued by conflict"

-- CONGO: "The human rights situation ... deteriorated further during the year severely undermining the countries progress since national elections in 2006."

-- SUDAN: Fifth year of conflict, 2.7 million internally displaced and another 250,000 across border in Chad, civilians continued to suffer the effects of genocide

-- ZIMBABWE: Illegitimate government engaged in systematic abuse of human rights; which increased dramatically during the year, in conjunction with an escalating humanitarian crisis caused by repression, corruption, and destructive economic and food policies which the Mugabe regime persisted in applying despite their disastrous humanitarian consequences

EAST ASIA: Advances and setbacks
-- BURMA/MYANMAR: "The military regime ... continued its oppressive methods, denying citizens the right to change their government and committing other severe human rights abuses."

-- CHINA: Human rights record remained poor and worsened in some areas. The government continued to limit citizens' privacy rights and tightly controlled freedom of speech, the press, assembly, movement and association… .

-- NORTH KOREA: Human rights record remained abysmal. While the regime continued to control almost all aspects of citizens' lives, denying freedom of speech, press, assembly, and association, and restricting freedom of movement and workers' rights, reports of abuse emerged from the country with increased frequency

EUROPE AND EURASIA: Challenges in the region were strengthening new democracies, stemming government restrictions and repression of human rights NGOs and addressing hate crimes and hate speech.

-- BELARUS: The government's human rights record remained very poor and authorities continued to commit serious frequent abuses.

-- RUSSIA: Cautioned a negative trajectory in its overall domestic human-rights record with numerous reports of government and societal human rights problems and abuses during the year.

-- IRAN: Intensified its systematic campaign of intimidation against reformers, academics, journalists, and dissidents through arbitrary arrests, detentions, torture and secret trials that occasionally end in executions.

-- IRAQ: Security improved, some reconciliation occurred BUT "continuing insurgent and extremist violence against civilians undermined the government's ability to uphold the rule of law, resulting in widespread and severe human rights abuses"

-- AFGHANISTAN: human rights have improved "significantly" BUT the country's record remained poor due to weak central government institutions and a deadly insurgency." Reports of arbitrary arrests, detentions, extrajudicial killings, torture and poor prison conditions.

-- PAKISTAN: human rights situation remained poor, despite some positive steps reinstating judges, etc.

-- CUBA: Increase in suppression of speech and of assembly compared to the previous year -- harassment of dissidents intensified, including the beating of activists by security officials or government organized mobs.

From NBC's Jim Miklaszewski and Courtney Kube
Secretary of Defense Robert Gates took a very unusual step, during preparations to roll out the new Pentagon budget this year, of asking everyone who is participating in the budget process to sign a non-disclosure agreement ... even the Joint Chiefs of Staff.

NBC News has obtained a copy of this agreement, which states that the undersigned will "preserve the confidentiality of information related to the formulation of the President's budget." 

The agreement goes on to say that the individuals "will not divulge the budget-related information ... to any individual not authorized to receive it, and under no circumstances will I disclose such information outside the Department of Defense and other government agencies directly involved in the defense planning ... such as the Office of Management and Budget."

Pentagon Press Secretary Geoff Morrell said that "the highest-ranking people in this department were asked to sign this" and that Gates signed one himself. A Defense official could not tell us what the penalty is for someone who breaches the agreement.

In a building where people deal with classified information during every second of the day -- information that, if leaked, opens the leaker to criminal charges -- it is extremely rare for Pentagon civilians and military leadership to sign a non-disclosure. 

"This is highly sensitive stuff," Morrell explained, adding, "classified information with potential criminal consequences gets leaked all the time." 

Morrell denied that the non-disclosure implies that Gates does not trust his most senior advisers, saying that it actually allows the Pentagon leadership to "work together, perhaps in a more collegial and honest way."

From NBC's Ken Strickland
Senate Democrats are echoing President Obama's call for bipartisanship in addressing the nation's economic woes. Their remarks come hours after Obama's speech to Congress and a couple of weeks after Congress passed the stimulus package that drew the support from only three Republicans.

"We don't want the Republicans to continue being the Party of 'No,'" said Majority Leader Harry Reid at a leadership news conference today. "We are here today to pledge that we are going to do everything we can to work with the Republicans and work with the administration to get things done."

Sen. Patty Murray said, "The door is wide open. We welcome their ideas." 

Citing the generous amount of standing applause from Republicans during the president's address, she said, "We want them to turn their applause from last night into action and work with us."

New York Sen. Chuck Schumer called the Republican mindset on the economy "outdated and out of touch."

"They still think the only thing you do during this economic crisis is shrink government," Schumer said.

Schumer also said if Republicans don't lean toward Democratic priorities, the public would push them.

"Because what's going to happen is the public and even the Republican electorate is going to push the Republican Senators and House members much more toward what we want to do," he said.

From NBC's Athena Jones

They say the third time's the charm, right?

President Barack Obama was likely hoping that old adage would prove true this morning when he officially nominated former Washington Gov. Gary Locke to be his pick to head the Commerce Department.

"I'm sure it's not lost on anyone that we've tried this a couple of times. But I'm a big believer in keeping at something until you get it right, and Gary is the right man for this job," Obama said.

Locke is the third person the president has named to lead the department, following New Mexico Gov. Bill Richardson and New Hampshire Republican Sen. Judd Gregg, who both withdrew their nominations. Locke, who was the first Chinese-American governor in U.S. history, is also the third Asian-American to join Obama's cabinet.

Video: Obama introduces Locke as his pick for Commerce secretary.

Calling entrepreneurship and industry the "wellsprings of an economy that has been the greatest force of progress and prosperity in human history," Obama hailed Locke for his work as governor of Washington State.

The pro-free trade Locke led 10 trade missions to Asia, Mexico, and Europe, helping U.S. companies expand their international business. "It is America's workers and businesses that employ them that will determine our economic destiny," Obama said. "It is the task of the Department of Commerce to help create conditions in which our workers can prosper, our businesses can thrive, and our economy can grow.

Locke could find himself at odds with labor groups due to his pro-trade stance, but his familiarity with China will likely be beneficial at a time when the United States is hoping to work closely with its major trading partner and key lender to spur a successful economic recovery in both countries and around the world.

"Our nation's economic success is tied directly to America continuing to lead in technology and innovation, and in exporting those products, services and ideas to nations around the globe," Locke said during his brief remarks. "The Department of Commerce plays a critical role in nurturing innovation, expanding global markets, protecting and managing our ocean fisheries, and fostering economic growth. The Department of Commerce can and will help create the jobs and the economic vitality our nation needs."

The Locke announcement followed a meeting aimed at making sure stimulus money is distributed quickly and efficiently to help jumpstart economic growth. Vice President Joe Biden met with Accountability Board Chair Earl Devaney, OMB director Peter Orszag, and several Cabinet members -- including Treasury Secretary Tim Geithner and Interior Secretary Ken Salazar.

Biden told the group it was important to "follow the money," and said he wanted weekly progress reports from each department on how the money was being used.

"One of the primary roles that I am to play in overseeing this is to be the vehicle for you to let know what you need: What is it that you need in order to be able to get this job done; if you need to take it the president and me then to go from there to get you what you need to be able to do the job," he said. "This is a monumental project, but I think it's doable."

One concern expressed by both Orszag and Devaney during the meeting was the need to ensure that each department has enough procurement officers and second-level staffers to adequately monitor spending.

From NBC's Lauren Appelbaum
President Obama received high marks at various points in his speech to a joint session of Congress Tuesday night from a focus group in King of Prussia, Pa., conducted by MSNBC's Tamron Hall.

Thirty-two people, including 16 Obama voters and 15 McCain voters, participated by turning dials from 1 to 10 (10 being the highest) to grade parts of the speech.

Video: Tamron Hall shares which parts of the speech stood out to the focus group.
 
When Obama spoke about the economy, reactions from both sets of voters jumped from 5, the beginning default, to between 8 and 9. But when Obama mentioned that the economic recovery act is now law, McCain voters' reaction dipped slightly, hovering between 7 and 8, while the Obama voters' reactions stayed closer to nine.

Shortly after, though, the McCain voters' reactions steadied around 8. Obama voters' reactions held between 8.5 and 9.5.
 
McCain voters' reactions fell below 7 for the first time 20 minutes in when Obama said he would hold Wall Street and banks accountable. But when Obama said his -- and Congress' -- job was to solve the problem, even if it meant helping banks, the McCain voters' reaction jumped up close to 9. Obama voters' reaction was also about 9.

"It's not about helping banks," Obama said to growing applause. "It's about helping people."
 
During the conversation on health care, both voters' reactions remained high, with Obama voters' reactions slightly above the 9 line and the McCain voters' reactions around 8. In Obama's last line on the subject -- "So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year" -- both groups of voters stayed between 8 and 9.5.
 
When Obama began speaking about education, the McCain voters' reaction (9) was higher than the Obama voters' reaction (8).

"It will be the goal of this administration to ensure that every child has access to a complete and competitive education, from the day they are born to the day they begin a career," Obama said.

Both groups remained above 8 for the rest of Obama's discussion about education, including his line about expanding their commitment to charters schools.
 
The McCain voters' reaction jumped to close to 10, when Obama said, "I speak to you not just as a president, but as a father when I say that responsibility for our children's education must begin at home."

And then going off of prepared remarks, "That is not a Democratic issue or a Republican issue. That is an American issue."
 
The reaction remained at that level when Obama began talking about the national debt.

"There is, of course, another responsibility we have to our children," he said. "That's the responsibility to ensure that we do not pass on to them a debt they cannot pay."
 
The McCain voters' reactions continued to remain at that level while Obama joked, "See, I know we can get some consensus in here."
 
The reaction went down to slightly above 8 when Obama made a slight dig at the Bush administration.

"With the deficit we inherited," Obama said to loud applause from some Democrats, "the cost of the crisis we face, and the long-term challenges we must meet, it has never been more important to ensure that as our economy recovers, we do what it takes to bring this deficit down."
 
When Obama promised that taxes would not be raised "one single dime" for families earning less than $250,000 a year, the Obama voters' reactions reached the 10 mark and the McCain voters' reaction was above the 9 mark.
 
On the Iraq war, both Obama and McCain voters' reactions were around 9 when Obama said it was time to responsibly end the war. And in the crowd at the speech, McCain stood and applauded the president. The McCain voters' reaction then reached 10 when Obama pledged his "unyielding support" to our troops and again when he promised to raise soldiers' pay and give veterans "the expanded health care and benefits that they have earned."

But when Obama discussed his order to close Guantanamo, the McCain voters' reaction dropped to between 7 and 8 -- even though McCain, himself, advocated for closing the facility.
 
Overall, Obama stayed on the high positive side for both sets of voters; reactions were similar throughout the speech.
 
During Louisiana Gov. Bobby Jindal's Republican Response, partisan differences became more apparent. McCain voters' reaction remained between 6 and 9 during the majority of Jindal's speech.

The reaction of the Obama voters, however, fluctuated between 4 and 7.

From NBC's Mark Murray
So who is the leader of the Republican Party? RNC chair Michael Steele? Senate leader Mitch McConnell? House leader John Boehner? Louisiana Gov. Bobby Jindal, who delivered last night's GOP response? Or what about Alaska Gov. Sarah Palin?

In an upcoming New York Times magazine cover story, author Matt Bai writes that Newt Gingrich has become the GOP's go-to person when it comes to ideas. "[A]s Republicans on the Hill begin to awaken from a November beating that left them semiconscious, Gingrich finds himself, once again, at the zenith of influence in conservative Washington... Whatever else you think of Gingrich, he has always been considered a prospector in bold and counterintuitive thinking — floating ideas, throughout his career, that have ranged from giving every poor child a laptop to abolishing the entire concept of adolescence."

From Chuck Todd, Mark Murray, and Domenico Montanaro
*** Hope makes a comeback: One thing was absolutely clear from President Obama's well-received address to Congress last night: The hope that propelled him to the presidency was back. At the top of his remarks, Obama declared, "We will rebuild, we will recover, and the United States of America will emerge stronger than before." And then after a stern talk about our economy -- how we got here, and how we possibly fix it -- he ended his speech this way: "If we come together and lift this nation from the depths of this crisis; if we put our people back to work … then someday years from now our children can tell their children that this was the time when we performed, in the words that are carved into this very chamber, 'something worthy to be remembered.'" The address was also a report card of sorts. Obama touted to the public what he has achieved in his first month in office: the economic stimulus, ordering the closing of GITMO, passing the expansion of health insurance for children. Here's a final thought about the address: Obama is so comfortable delivering a speech. Even after he and Pelosi slipped up at the beginning, the president was fully in control. Also, when is the last time we've heard humor and laughs at a State of the Union (or its equivalent)? "Nobody messes with Joe."

*** Not the Jindal we know: As for Gov. Bobby Jindal's official GOP response, it appears someone gave him bad advice last night, whether it was his awkward entrance or his way-too-casual delivery. The Louisiana governor, a Rhodes scholar, is a serious guy who's known for sometimes being too wonky and even somewhat humorless. Well, he tried too hard NOT to look wonky and humorless. But it didn't work; he wasn't the Bobby Jindal we've seen before. Also, his speech seemed to be too much of a brochure about himself rather than about his party and its ideas. To be fair, Jindal got better as his speech wore on, and the good news is that past responders who also got poor initial reviews -- Tim Kaine and Kathleen Sebelius come to mind -- easily recovered. One other thing: Is it disingenuous for Jindal to slam the role of the federal government ("Democratic leaders in Washington place their hope in the federal government; we place our hope in you") when that said federal government is rebuilding New Orleans after Katrina?

The Washington Post: "Striking an optimistic tone that has been absent from his speeches in recent weeks, the president said his stimulus plan, bank bailout proposal, housing programs and health-care overhaul would work in concert to turn around the nation's struggling economy. And while he bluntly described a country beset by historic economic challenges and continued threats abroad, he said the solution lies in directly confronting -- not ignoring -- those problems. 'The weight of this crisis will not determine the destiny of this nation,' he said. 'The answers to our problems don't lie beyond our reach. They exist in our laboratories and universities, in our fields and our factories, in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth.'" 

The New York Times: "In his first address to a joint session of Congress, Mr. Obama mixed an acknowledgment of the depth of the economic problems with a Reaganesque exhortation to American resilience. He offered an expansive agenda followed by a pledge to begin paring an ever-climbing budget deficit." 

The Boston Globe makes a similar point: "President Obama, tempering the series of grim economic diagnoses he has delivered in recent weeks, sounded a new note of optimism."

The Wall Street Journal adds, "The speech, 52 minutes long, punctuated by more than 60 ovations, was billed as a rhetorical salve to a nation battered by layoffs and plunging stock prices -- and a tempering of pessimistic rhetoric from the Oval Office over the past few weeks."

The Los Angeles Times reminds us, "When Herbert Hoover said on the eve of the Great Depression that 'prosperity is around the corner,' he was ridiculed as blindly optimistic, and shantytowns were mockingly named 'Hoovervilles.' When Jimmy Carter said a 'national malaise' was behind U.S. economic woes in the 1970s, he was panned for being too grim and demoralizing. With his speech to Congress on Tuesday night, President Obama tried to navigate shoals that have challenged other presidents serving during times of economic crisis: how to balance warnings of dire circumstances against the need to inspire confidence." 

The New York Daily News' DeFrank: "In a clear tonal shift from his first month, Obama seized the bully pulpit of his office to offer more hope than angst to a nation desperate for reassurance."

The AP compares Obama's speech to FDR's fireside chats and checks in with people for reaction: "On Tuesday night, three-quarters of a century later, Barack Obama stepped up to a less intimate but equally high-stakes version of the national fireplace to do the same thing: Talk a good game, draw us a map back toward prosperity and 'speak frankly and directly to the men and women who sent us here.'" More: "[T]he rest of the speech was relatively short on the type of sunny optimism that Franklin Roosevelt and Ronald Reagan used to buoy the nation in hard times. Rather, Obama's style was a variation on the bargaining approach of Clinton. But while Clinton excelled at explaining his policies, Obama is most effective at explaining his own intentions - especially his desire to pursue post-partisan solutions to urgent national problems."

Here are the word counts from NBC's Abby Livingston:
Economy -- 31
Home/house --11 (in context of mortgages)
Jobs -- 19
Government -- 7
Deficit/Debt -- 13
College/Schools/Education -- 27
Health care -- 16
Energy -- 14
Hope -- 3

The Washington Post's Tom Shales writes that Obama "doesn't seem capable of bad speeches. Although this one began after unfortunate delays and with a slight parliamentary slip-up, he maintained his admirably high standards with a kind of state-of-the-Union speech that wasn't officially a State of the Union speech." More: "His speeches will always make news, but the fact that he's a pretty great communicator is no longer a revelation. So after perfecting a style, and having given a speech last night that was full of practical content, there isn't much further he can go as a speechmaker."

Per Politico's Roger Simon, "It was not a night of sugar plum fairies dangled before us or sweet nothings whispered into our ears. We have had plenty of those over the years." More: "And he also spoke of who was to blame: us." 

The Boston Globe's Canellos: "President Obama yesterday used the grandest stage of the presidency to reveal how he wants to be seen - as a realist, not an ideologue, as a figure of consensus, not the leader of a movement, as a hard worker grappling with problems, not a visionary seeking new horizons."

The New York Times' editorial page: "If we have had doubts about the way President Obama has been handling the multitudinous disasters bequeathed to him by George W. Bush … it was that we wanted to see more of Barack Obama the candidate in Barack Obama the president. He has not been assertive, ambitious, clear -- or audacious -- enough. Mr. Obama's first speech to a joint session of Congress on Tuesday night was his chance to change that, and he rose to the occasion." 

Politico's Harris and Martin: "The substance reflected Obama's bet that the country -- alarmed by the economic crisis, repelled by the failures of the president who preceded him --is ready to move in a decisively more liberal direction. The rhetoric, by contrast, reflected his apparent belief that most Americans remain instinctually conservative, leaving him and his agenda acutely vulnerable to backlash." (Question: But isn't Obama's rhetoric more a reflection of not wanting to alienate that conservatives, rather than that "most Americans are instinctually conservative.")

NBC's Jim Miklaszewski and Courtney Kube reported yesterday, "U.S. military and administration officials tell NBC News that President Obama is expected to announce that more than half of the American troops will be withdrawn from Iraq within 19 months. The plan, expected to be announced later this week, would draw down the number of forces from the current 142,000 to around 50,000."

More: "Although the plan falls short of Obama's campaign pledge to withdraw all U.S. combat forces from Iraq within 16 months, one senior military official said, 'It's close.' The official also points out, however, that the remaining force of 50,000 would still contain a sizeable 'combat element' to provide rapid reaction assistance to Iraqi combat forces and force protection for the remaining American troops and U.S. government civilians. The sources say the 19-month timetable was one of three options presented to President Obama for the withdrawal of forces – 16-, 19- and 23-month withdrawal plans. A senior military official said that it was up to President Obama to weigh the risks in withdrawal and 'the shorter the timetable the greater the risk,' to U.S. forces and Iraqi security." 

The Washington Post on the troop withdrawal: "Obama has not made a final decision on the matter, but it could come during a trip to give a speech in North Carolina on Friday, the officials said."   

The New York Times: "Mr. Obama's advisers said they believed they had reached an accommodation that would satisfy both the military and a public eager to get out of Iraq, while relieving the strain on the armed forces and freeing up resources for Afghanistan." 

A Treasury official tells First Read that Secretary Geithner today will announce that first-time homebuyers can start applying for the expanded $8,000 tax credit made available in the stimulus law.

The AP: "President Barack Obama intends to nominate former Washington Gov. Gary Locke to be commerce secretary on Wednesday in his third try to fill the job."

Covering the GOP response to Obama's speech, the Washington Post says that Louisiana Gov. Bobby Jindal "defended the virtues of small government that he said even his own party had abandoned in recent years. 'Instead of trusting us to make decisions with our own money, they passed the largest government spending bill in history with a price tag of more than $1 trillion with interest,' he said of Democrats. 'Democratic leaders say their legislation will grow the economy. What it will do is grow the government, increase our taxes down the line and saddle future generations with debt.'"

"Speaking of Obama, Jindal said that 'we appreciate his message of hope, but sometimes it seems like we look for hope in different places. Democratic leaders in Washington, they place their hope in the federal government. We place our hope in you, the American people.'" 

Politico notes the criticism Jindal's speech received.

The Times-Picayune on its governor's performance: "Jindal's appearance represented the delayed star turn he was to have had at the Republican National Convention in Minnesota in early September. Because he was directing the state's emergency response to Hurricane Gustav, Jindal canceled plans for a featured speaking role at the convention." If Jindal runs in 2012, "Tuesday night's speech may be remembered as the occasion when the two first went head-to-head." On his delivery: "Jindal appeared a bit nervous at first as he attempted to deliver the speech in a friendly, folksy style."

More 2012 buzz, per the Boston Globe: "Jindal was eyed by John McCain's presidential campaign last year as a potential running mate, but took himself out of contention. He has since been a leading critic of McCain's campaign tactics, saying that the Arizona senator didn't offer enough positive ideas on the economy. That has encouraged many to see Jindal as a party savior and a promising presidential challenger in 2012."

The Senate's No.2 Democrat, Dick Durbin of Illinois, yesterday asked embattled Roland Burris to resign. "'I told him under the circumstances that I would consider resigning,' Durbin told reporters. 'He said he would not resign.'"

Video: Durbin says he urged Burris to step down, but Burris vowed to stay on. 

That said, the New York Times notes, "Senate Democrats appear resigned at the moment to his remaining in Congress. With a seat in Minnesota still tied up in court over a close election, Democrats benefit from Mr. Burris's vote. And he is hardly the first senator to remain in office under a cloud. Larry E. Craig, an Idaho Republican who pleaded guilty to disorderly conduct in a sex sting, served out his term before retiring last year." 

Hilda Solis was finally confirmed as Labor secretary yesterday. After several weeks' delay, she passed confirmation by an 80-17 vote.