President Obama holds a meeting today with members of his administration to discuss the Christmas Day attempted bombing. Per the AP, "After the meeting, to which 20 officials were invited, Obama will talk to the public about his findings, as well as a series of new steps to improve the watch lists and thwart future terrorist attacks, the White House said."

The list of attendees includes: Secretary of State Hillary Rodham Clinton, Defense Secretary Robert Gates, Homeland Security Secretary Janet Napolitano, CIA Director Leon Panetta, FBI Director Robert Mueller, Attorney General Eric Holder; Dennis Blair, director of national intelligence; Michael Leiter, director of the National Counterterrorism Center; national security adviser James Jones; and John Brennan, the president's counterterrorism adviser.

Obama will brief Democratic congressional leaders tonight, Roll Call adds.

Politico curtain-raises the meeting by previewing the five things to watch from it: 1) Will heads Roll? 2) Will we see Dr. Obama or Mr. Hyde? 3) Will Obama assist congressional investigations? 4) Does the Blair vs. Panetta fight resurface? 5) How far will the administration go in profiling?

The AP: "The suicide bomber who killed eight people inside a CIA base in Afghanistan claimed to have information about Osama bin Laden's second-in-command, and was being recruited as a double agent to infiltrate al-Qaida, a former senior U.S. intelligence official and a foreign government official confirmed Monday… NBC News first reported the bomber's identity."

The New York Times front-pages, "Manufacturing expanded in the United States in December, the fifth straight month of gains, amplifying hopes that a job market hobbled by double-digit unemployment might finally be adding paychecks. New jobless claims slipped markedly last week. Some economists think data to be released on Friday will show the economy gained jobs in December, the first monthly net increase in two years. 'We're really coming back,' said Allen Sinai, chief global economist at the research firm Decision Economics. 'The expansion is picking up the pace.'"

"But many economists remain worried that momentum could soon weaken, with the economy sliding back into glum times. Indeed, the only area in which economists can reliably declare expansion is in the supply of competing narratives about the economy — perhaps to be expected in any transition between downturn and the inevitable turn for better."

"The recession dramatically slowed U.S. health care spending to $2.3 trillion in 2008, but it still grew much faster than the economy as a whole, accounting for more than 16 percent of the nation's economic output, says a new federal analysis," the AP says. "The eye-popping figure of $2.3 trillion -- that's $7,681 per person -- underscores the challenges confronting President Barack Obama and lawmakers seeking to overhaul the system. Obama has repeatedly cited spiraling health costs as one of the main reasons Congress needs to pass his health plan, and administration officials said the findings highlighted the need for quick action."

"The saga of President Obama's first state dinner continues," the New York Times writes. "The Secret Service said Monday that a third uninvited guest gained entry to the dinner at the White House on Nov. 24. A review of video from the party, which was held to honor the prime minister of India, showed that a man wearing a tuxedo entered with members of the Indian delegation."

Following up on the New Republic's reporting yesterday, Roll Call and The Hill both confirm that Dems are looking at bypassing the formal conference to merge the two health-care bills. The Hill: "Democrats would enjoy some strategic advantages by declining the formal conference process. They would avoid having to go through a series of votes on appointing and directing conferees, and having to invoke cloture on a conference report. The process would presumably also allow Democrats to work out differences on the health bill internally, and avoid GOP maneuvers to stall passage of the legislation."

Pat Leahy (D-VT), chairman of the Senate Judiciary Committee, announced yesterday his committee will hold a hearing on the Christmas bombing attempt Jan. 20. It "will focus on anti-terrorism efforts and inter-agency communication," The Hill writes.

"Law enforcement authorities are investigating an anthrax scare at the offices of Rep. Jo Bonner (R) and several other Alabama lawmakers. Bonner's offices were closed on Monday after each received suspicious letters, according to a spokesman for Bonner, while the offices of Rep. Bobby Bright (D) and Sens. Richard Shelby (R) and Jeff Sessions (R) were also targeted, according to the Associated Press."

The Washington Post: "While the recent political chatter in Washington has focused on Democrats retiring from Congress, Republicans are leaving the House in greater numbers, a trend that could blunt the party's momentum heading into the November midterm elections. Rep. Henry E. Brown Jr. (S.C.) on Monday became the 14th Republican to announce that he will not run for reelection this year. Ten Democrats have said the same, including an attention-grabbing four in the past two months from swing and Republican-leaning districts."

"A broad look at those seats suggests more parity, in terms of the two parties' opportunities and vulnerabilities, than conventional wisdom would suggest. Each side has three seats won by the other party's presidential candidate in 2008. For Democrats, they are Louisiana's 3rd District and Tennessee's 6th and 8th districts; for Republicans, they are Delaware's at-large seat, Illinois's 10th District and Pennsylvania's 6th District."

The Republican Governors Association announced yesterday that it raised a record $30 million in 2009, and is bringing more than $25 million into 2010, according to a release on the RGA website. That number far exceeds the RGAs coffers in 2006, when it had barely more than $4 million on hand the RGA today has more cash on hand that it spent on all 36 races in 2006.

(*** UPDATE****: The Democratic Governors Association announced yesterday that it raised $23.1 million in 2009, "more than ever before in the organization's history, and will start the 2010 election cycle with nearly 12 times as much cash on hand as 2006, the last equivalent election cycle." In the fourth quarter, it says it raised more than $7 million. The DGA says it has $17.5 million cash on hand, which is $1.5 million more than 2006.)

COLORADO: CQ Politics moves the Colorado Senate race from Leans Democratic to Tossup.

HAWAII: Neil Abercrombie (D) will officially resign from Congress on Feb. 28 to focus on his gubernatorial run.

ILLINOIS: Illinois state Treasurer Alexi Giannoulias is up with two more TV ads in his bid for Senate.

NEW YORK: The Times notes that GOP gubernatorial candidate Rick Lazio is having a hard time catching fire. "Political comebacks can be tough, and Mr. Lazio's exit from the stage, after his disastrous 2000 Senate contest with Hillary Rodham Clinton, was humbling. But even among New York Republicans, with whom he is personally popular, Mr. Lazio's fiery pitch for his gubernatorial campaign hasn't yet ignited any prairie fires."

RHODE ISLAND: "Lincoln D. Chafee, the former Republican senator from Rhode Island who lost his seat to a Democrat in 2006 despite his family's longtime presence in state politics, announced Monday that he would run for governor there as an independent," the New York Times says. More: "On the Democratic side, Patrick C. Lynch, the state's attorney general, and Frank T. Caprio, its general treasurer, are competing for their party's nomination. Both are well known in the state, but so is Mr. Chafee, whose family has loomed large in Rhode Island politics for more than a century. His father, John, was the state's governor for six years in the 1960s before serving in the Senate for two decades; upon his death in 1999, his son was appointed his successor."

TEXAS: Sen. Kay Bailey Hutchison, running for governor, bought ad time during Thursday's college football national championship game between Texas (her alma mater) and Alabama.

 

From NBC's Ali Weinberg
Despite the focus on the Democratic candidate in the special election for late "liberal lion" Sen. Ted Kennedy's (D-MA) seat, conservative bloggers are stressing not to discount the Republican candidate, state Sen. Scott Brown (who, by the way, received the endorsement of former Red Sox pitcher and rumored Senate candidate Curt Schilling this afternoon, Politico reports). 
 
Conservative blogger Erick Erickson says "the odds are against Brown, but only slightly." He makes the point that Brown may not win, but that enough liberal voters are unhappy with President Obama's first-year record, including his lack of commitment to a public health insurance option, that they might use a vote for Brown as a "public rebuke to the President. (So if Democrat Martha Coakley wins, does that mean it will be a win for Obama?)

National Review Online's Jim Geraghty also picks up on the conservative sentiment that Brown's chances in Massachusetts are not as long-shot as some would believe. "A bunch of ingredients are coming together for Scott Brown. Republicans are angry and fired up, a surprising number of Democrats alternate between unenthusiastic or animosity towards the nominee, and if the independents in Massachusetts are like the ones in New Jersey, New York, and Pennsylvania, they'll shift heavily to Republicans compared to 2008." But, Geraghty warns, "The bad news is that Brown needs almost a perfect storm -- unbelievably fired-up Republicans, immensely depressed Democrats, and a heavy skew among independents -- to make up the traditional 30 percentage point deficit and win this race. 
 
Conservative blog GOP12 links to an email sent out by Minnesota Governor Tim Pawlenty's political action committee, Freedom First, listing "four beneficiaries of the committee's largesse:" Minnesota Republican Representatives Erik Paulson, Michele Bachmann, and John Kline, and Ohio Senate candidate Rob Portman. The blog picks up on Minnesota Public Radio's Tom Scheck's observation that the PAC declined to mention its donation to failed Conservative Party candidate Doug Hoffman, who was defeated in the NY-23 special election by Democrat Bill Owens, after Republican candidate Dede Scozzafava dropped out of the race. 
 
Writing at the Washington Independent, Liberal blogger David Weigel calls Rep. Peter King (R-NY)'s statement that he may not run for Senate because he would have to give up his House seat and wouldn't be able to do anything for Homeland Security the "Unconvincing Quote of the Day." Writes Weigel: "Color me unconvinced that King would retire from the House in order to make the race -- that's an extremely rare move for federal candidates, who can transfer their campaign funds easily. And I'm a bit confused about how campaigning would prevent King from "doing anything for homeland security," when a lot of his role right now is to do media interviews bashing weaknesses in the Department of Homeland Security -- not the kind of thing he'd give up during a campaign."

From NBC's Mark Murray
Loyal First Readers know that your authors are big college sports fans, as well as big proponents of a playoff system for college football. So here is a TV ad that Playoff PAC -- yes, there's a PAC to eliminate the BCS system -- plans to air this week in Boise, Dallas-Fort Worth, and Salt Lake City.

[Youtube:1ggMqbWKHIs]

Of course, those three cities happen to be the media markets for undefeated Boise State and TCU (who play in tonight's Fiesta Bowl) and Utah (who went undefeated last year).

Full disclosure: While First Read fully supports a playoff system, this Texas Longhorn author is pleased how the BCS system worked -- this year.

From NBC's Doug Adams
This weekend in the Wall Street Journal ,Sen. Orrin Hatch (R) co-authored an op-ed arguing that the health-reform bill passed by the Senate and House may be unconstitutional.

The main argument: The "individual mandate" for health insurance is unconstitutional because there is no power granted to Congress in the Constitution to require Americans to spend their money to purchase a good or service (in this case, health insurance.)

This is an argument that has been kicking around in conservative legal circles for several months now, and senators have occasionally made mention of it on the floor. Now some Republicans are considering a Supreme Court challenge if the bill becomes law.

While President Obama has defended a health insurance mandate by comparing it to the requirement to buy car insurance, conservatives point out they are not the same. State laws requiring car insurance are legal because states have far reaching powers to make law (to protect public health and safety for example), while the federal government's authorities are more limited.

Here's how the conservative legal argument goes: Congress must be able to point to one of its constitutional powers as the authority for any legislation it passes. Critics say Congress' powers to tax and spend don't apply because the mandate neither taxes nor spends. The other constitutional power granted to Congress is the authority to "regulate Commerce ... among the several states" -- commonly referred to as the "commerce" clause.  While this power has traditionally been given a broad definition by the Supreme Court, it has been narrowed in recent years. 

Conservative legal scholars argue that a mandate to purchase health insurance is not "interstate commerce," because there is no economic action. They say it is merely an attempt to dictate personal behavior. While the Supreme Court has upheld laws under the commerce Clause that involve private citizens voluntarily choosing to engage in economic activity, this is "coercing" economic activity, they argue, not regulating it.

Liberal legal scholars counter that a health insurance mandate is most certainly constitutional. They argue that health insurance both affects, and is distributed through, interstate commerce. They also argue that health insurance is sold by national or regional insurance carriers -- making the purchase of insurance policies, by definition, "interstate commerce."

However, the Congressional Research Service isn't so sure. It looked at this issue last summer and concluded that it is "unclear" whether the commerce clause would give Congress power to mandate health insurance. "Whether such a requirement would be constitutional ... is perhaps the most challenging question posed by such a proposal, as it is a novel issue ..."

Other liberal legal scholars say that depending on how the insurance mandate is structured, Congress' Article I Sec. 8 power to tax and spend could give authority. Yale Law School professor Jack Belkin argues that if the mandate is administered through the tax code -- on IRS forms -- taxpayers would have to submit evidence of adequate insurance or pay a penalty. This, Belkin argues, would be akin to Congress placing a tax on people who don't buy insurance. He says it's like Congress raising money for environmental programs by taxing polluters. "Congress is entitled to raise revenues from persons whose actions specifically contribute to a social problem that Congress seeks to remedy through new government programs," he concludes.

From NBC's Courtney Kube
Secretary of State Hillary Clinton said today that she is "not satisfied" with the procedures that allowed Umar Farouk Abdulmutallab to travel to the U.S., despite his father's warnings.

"We are not satisfied. We are conducting an internal review," Clinton said during a joint press availability with her counterpart from Qatar.

Clinton said that based on the information that she has now, the State Department "fully complied with the requirements set forth in the interagency process" about what should be done when information is provided about a threat. 

She added that they are now "looking to see whether those procedures need to be changed, upgraded."

From NBC's Mark Murray
It looks like the Salahis weren't the only ones who attended November's White House state dinner without an invite.

Press release from the Secret Service:

The Secret Service's investigation into the security events surrounding the Indian State Dinner on November 24, 2009, has revealed that a third individual, who was not on the White House guest list, entered the State Dinner. 

It appears at this point that the subject traveled from a local hotel, where the official Indian delegation was staying, and arrived at the dinner with the group, which was under the responsibility of the Department of State. This individual went through all required security measures along with the rest of the official delegation at the hotel, and boarded a bus/van with the delegation guests en route to the White House.

At present, there is nothing to indicate that this individual went through the receiving line or had contact with the President or first lady. 

Unlike the rest of the members of the official delegation, this individual was not entered into the WAVES system.

Procedural changes have already been implemented to address foreign delegations under the responsibility of Department of State who are entering facilities secured by the Secret Service. 

As the investigation is both a review of the security for the State Dinner and an ongoing criminal investigation, the Secret Service is not commenting further at this time.

From NBC's Mark Murray
Several staffers working for Alabama Rep. Parker Griffith, who recently switched from the Democratic Party to the GOP, have announced their resignations.

The staffers include his chief of staff, legislative director, and press secretary.

Per a release distributed by the Democratic Congressional Campaign Committee, "Nearly every staff member of Representative Parker Griffith's office tendered their resignation this morning in response to his recent decision to change party membership. This included the Chief of Staff, along with the entire legislative and communications team. In departing Griffith's office, the staff characterized his party-switch as a "mistake" and emphasized that this district has "benefited" from conservative Democratic leadership. Many of the staff members had worked for Griffith since before he arrived in Washington including several who worked on his campaign for Congress in 2008."

More: "Alabama's Fifth District has deserved and has benefited from great Democratic conservative leadership since Reconstruction. And until now they had it," Chief of Staff Sharon Wheeler said. "But Parker Griffith has abandoned the legacy of conservative leadership provided by Bud Cramer, Ronnie Flippo, Bob Jones, Howell Heflin, Jim Allen, Lister Hill, John Sparkman, Big Jim Folsom, and so many more."

(Politico's Ben Smith reports that two of these listed Alabama politicians -- Hill and Sparkman -- were segregationists. Of course, that was true of many Southern Democrats during the '50s and '60s.)

Washington returns to work… Team Obama repeats a pattern from the campaign of swinging and missing on its initial response to a troubling story, then busting out a single on the next pitch… David Brooks on the fallacy of expecting government perfection in an imperfect world… A "decade of missteps" regarding U.S. policy in Yemen… Playing "ping-pong" with the health-care bill… And profiling the Rick Perry vs. Kay Bailey Hutchison primary that takes place on March 2.

From Chuck Todd, Mark Murray, Domenico Montanaro, and Ali Weinberg
*** Back to work: After a two-week vacation -- or, more aptly, a quasi-vacation given the failed Christmas Day terrorist plot -- we're all back at work in Washington. President Obama returns to the White House around 11:45 am ET. The House and Senate come back to work tomorrow (although it's a pro forma session). And your morning First Read dispatch is back, too. There are three political stories to follow after the vacation break: 1) reconciling the Senate and House health-care bills; 2) hammering out the details of a jobs bill; and 3) dealing with the aftermath of the failed terrorist attack. It's important to remember, however, that the issue of the moment -- the failed terrorist attack -- doesn't suddenly become THE issue of 2010. In fact, more likely than not, the main political issue this year will be the economy. And that reality will probably hit Washington on Friday, when the new job numbers come out. Still, the failed attack over Christmas is a reminder that terror can jump up in importance at any time, upsetting the agenda instantaneously as it did over the last 10 days.

*** If at first you don't succeed, try, try again: During the presidential campaign, Team Obama often displayed this pattern when dealing with a troubling story: They swung and missed on the first pitch or two (bad first day response), then singled up the middle on the following pitch (adequate response), and finally, in many cases, scored (truly found their stride). Some examples that come to mind: Jeremiah Wright and the "bitter" controversy. And this pattern reared its head again regarding the failed terrorist attack. Compare Homeland Security Secretary Janet Napolitano's "the system worked" and even the president's initial statement on the failed attack, to John Brennan's strong performance on "Meet" yesterday and Obama's equally strong weekly address on Saturday and his SECOND statement last week when he said there were "human and systemic failures." As for Napolitano, she definitely has taken a hit from this episode, though the White House believes it was an unfair hit. (Over the weekend, Maureen Dowd, who has set the C.W. negatively for many a pol after a bad gaffe a la Napolitano's, wrote a positive piece on the Homeland chief.) One long-term fallout: Did it cost Napolitano a Supreme Court nod?

*** Who has job security and who doesn't: While Napolitano is safe in the president's eyes, not everyone in the intel community can assume they have similar job security. Director of National Intelligence Dennis Blair and the head of the National Counter-terrorism Center Michael Leiter both could find themselves being held accountable, especially if they don't perform up to snuff when Congress holds hearings later this month. For now, we're told the White House is not interested in finding a scapegoat, because as the president said he believes there were "systemic" failures as much as their were "human" ones. But if there's a smoking gun of ineptness, then the president is NOT going to be afraid to make a change. For now, though, it's all about the review. Meanwhile, the New York Times magazine publishes a brand-new piece entitled "Inside Obama's War on Terrorism." 

*** Expecting perfection in an imperfect world: On Friday, following the political back-and-forth over the failed terrorist attack, David Brooks wrote a thought-provoking column wondering why Americans expect perfection from their government when they don't expect of it of their friends, families, or colleagues. "For better or worse, over the past 50 years we have concentrated authority in centralized agencies and reduced the role of decentralized citizen action… But we shouldn't imagine that these centralized institutions are going to work perfectly or even well most of the time. It would be nice if we reacted to their inevitable failures not with rabid denunciation and cynicism, but with a little resiliency, an awareness that human systems fail and bad things will happen and we don't have to lose our heads every time they do." Of course, the reason why perfection is demanded nowadays is due, in part, to the way American politics is practiced, with both sides ready to pounce on any perceivable shortcoming. In this toxic political environment, is it even possible to have a unified national security strategy? 

*** A 'decade of missteps': As we've chronicled, Republicans from Dick Cheney to Pete Hoekstra have been quick to blame Democrats and President Obama's policies for the Christmas Day attack. But consider this sober story from Sunday's Washington Post, which blames a "decade of missteps" regarding our policy in Yemen since the U.S.S Cole bombing in October 2000 (this covers THREE administrations, folks). The U.S. has done "little to address the root causes of militancy," the Post said, citing Yemeni officials and analysts. And the war in Iraq is clearly seen as a distraction: "By 2003, the United States was focused on the Iraq war and appeared more intent on fighting corruption and promoting democracy in Yemen than on tackling al-Qaeda, experts said." Would these GOP critics acknowledge these "missteps"? By the way, the White House believes it has a good story to tell on Yemen and on terrorism in general, despite what happened on Christmas. Don't be surprised if they get a tad more "chest thumping" on the issue over the next few weeks. The list of dead al Qaeda leaders this year is quite long.

*** Will repeating the same old rhetoric work? Speaking of Cheney and Hoekstra… As much as the Obama administration got its initial response to the failed terrorist attack wrong, the Republican Party's response -- overreaching in trying to politicize the story -- might have been worse. Indeed, one gets the sense many Republicans believe this, as the GOP's critical rhetoric was dramatically toned down on Sunday. Even Jim DeMint on TODAY was tepid in his criticism. The initial Cheney/House GOP outburst is actually a reminder of just how great the challenge is for the GOP right now: The country has an open mind to an alternative to the Dems/Obama, but does the public want to go to the same old folks, who are simply repeating the same old rhetoric we've heard over the past eight years? Also, we'll ask this question: When is the Republican Party going to be FOR something, rather than AGAINST it, demonstrating that it's more than an opposition party? To make the case to take control of Congress, they are going to have to lay out an agenda at some point.

*** Bill pong: All the attention on failed terrorist attack, as well as the likely attention on the economy this Friday, has placed the health-care debate on the backburner. And that might be the best thing to happen for the Dems and the Obama administration, because they can wrap it up away from the political spotlight. Per The New Republic's Jon Cohn, "House and Senate Democrats are 'almost certain' to negotiate informally rather than convene a formal conference committee. Doing so would allow Democrats to avoid a series of procedural steps--not least among them, a series of special motions in the Senate, each requiring a vote with full debate--that Republicans could use to stall deliberations, just as they did in November and December. Cohn adds that the reconciliation will come via a game of legislative ping-pong. "With ping-ponging, the chambers send legislation back and forth to one another until they finally have an agreed-upon version of the bill. But even ping-ponging can take different forms and some people use the term generically to refer to any informal negotiations." 

*** The primaries to watch: With the New Year, we officially embark on the nearly one-year political story that is the 2010 midterms. There are several themes we'll be watching: 1) the balance of power in Congress; 2) gauging the political health of Obama and the Democratic Party; and 3) surveying how issues like health care, the economy, and the stimulus are playing across the country. There's a fourth theme that we start examining today -- the entertaining primaries that will take place during the first half of the year, particularly the ideologically charged GOP contests. In the next two weeks, we'll profile what we consider the Top 10 primaries of 2010. Today's look is at the GOP gubernatorial primary in Texas between incumbent Gov. Rick Perry and Sen. Kay Bailey Hutchison.

*** Perry vs. Hutchison: The back-and-forth in this contest resembles the annual grudge match in college football between Texas and Texas A&M -- and maybe that shouldn't be a surprise given that Perry is an Aggie and Hutchison is a Longhorn. Besides the campaign combat, perhaps the most striking development of the primary is that the more moderate Hutchison has been trying to outflank Perry from the right, hitting him on immigration, the stimulus, and even ACORN. Where Perry probably hits Hutchison: the senator's relatively moderate record on abortion. As Jennifer Duffy of the Cook Political Report puts it, "It might be one of the top-five nastiest primaries in history." Wow. The primary takes place March 2, which just happens to be Texas Independence Day.   

Countdown to MA Special Election: 15 days
Countdown to IL primary: 29 days
Countdown to TX primary: 57 days
Countdown to Election Day 2010: 302 days

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"All travelers flying to the United States from other countries will face increased random screening, and all passengers from more than a dozen terrorism-prone nations will be patted down and have their carry-on bags searched, under new rules the Obama administration said will take effect Monday morning," the Washington Post says. 

Also from the Washington Post: "President Obama's chief counterterrorism adviser on Sunday defended the administration's decision to try in federal court the man charged with attempting to bomb an airliner on Christmas Day and indicated that he would be offered a plea agreement to persuade him to reveal what he knows about al-Qaeda operations in Yemen." The Post adds that the GOP criticism "centered on the decision to try him in civilian court rather than hold him as a military prisoner. 'If we had treated this Christmas Day bomber as a terrorist, he would have immediately been interrogated military-style, rather than given the rights of an American and lawyers,' Sen. Jim DeMint (R-S.C.) said on CNN. 'We probably lost valuable information.'" 

For the most part, Republicans were much more cautious yesterday and today (see even Jim DeMint on TODAY) in their criticism of the president. But 9/11 commission co-chair Tom Kean was surprisingly harsh. "Heaven's sake, if you're in this huge health care fight and worried about the economy and global warming and all that sort of thing," said Thomas Kean, a former Republican governor of  New Jersey and former chairman of the Sept. 11 commission. "That's what they were concentrating on. And I think they weren't giving this enough attention. It's understandable, but it's not acceptable." 

Meanwhile, "The United States and British Embassies in the capital of Yemen remained closed for a second day Monday because of continuing threats from Al Qaeda in the Arabian Peninsula, the terrorist group linked to the attempt to bring down an international flight into Detroit on Christmas." 

This story about Jordan's role as a key U.S. ally in counter-terrorism only goes to highlight the lack of Arab/Muslim countries that actually publicly condemn these attacks.

"Regulatory failure, not low interest rates, was responsible for the housing bubble and subsequent financial crisis of the last decade, Ben S. Bernanke, the Federal Reserve chairman, said in a speech on Sunday," the New York Times front-pages. "Mr. Bernanke's remarks, perhaps his strongest language yet assessing the roots of the financial crisis, came as he awaited confirmation for a second term as Fed chairman and as he sought greater regulatory authority from Congress."

More: "The Senate Banking Committee approved Mr. Bernanke's renomination last month. He is expected to be reconfirmed by the full Senate before his current term expires on Jan. 31, despite some vocal opposition." 

An excerpt from Bernanke's speech: "What policy implications should we draw? I noted earlier that the most important source of lower initial monthly payments, which allowed more people to enter the housing market and bid for properties, was not the general level of short-term interest rates, but the increasing use of more exotic types of mortgages and the associated decline of underwriting standards. That conclusion suggests that the best response to the housing bubble would have been regulatory, not monetary. Stronger regulation and supervision aimed at problems with underwriting practices and lenders' risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates. Moreover, regulators, supervisors, and the private sector could have more effectively addressed building risk concentrations and inadequate risk-management practices without necessarily having had to make a judgment about the sustainability of house price increases." 

Here's a worthwhile read: a New Yorker profile of the early tenure of Justice No. 9, Sonia Sotomayor. As expected, she's been a very aggressive justice; out-speaking and out-asking questions of many of her veteran colleagues. 

AP: "The U.S. Secret Service says it is investigating an effigy of President Obama found hanging from a building in the hometown of former President Jimmy Carter." A black doll was hanging over a sign in the town reading, "Home of Jimmy Carter."

The New Republic's Jon Cohn: "According to a pair of senior Capitol Hill staffers, one from each chamber, House and Senate Democrats are 'almost certain' to negotiate informally rather than convene a formal conference committee. Doing so would allow Democrats to avoid a series of procedural steps--not least among them, a series of special motions in the Senate, each requiring a vote with full debate--that Republicans could use to stall deliberations, just as they did in November and December… 'I think the Republicans have made our decision for us,' the Senate staffer says. 'It's time for a little ping-pong.'
 
"'Ping pong' is a reference to one way the House and Senate could proceed. With ping-ponging, the chambers send legislation back and forth to one another until they finally have an agreed-upon version of the bill. But even ping-ponging can take different forms and some people use the term generically to refer to any informal negotiations. Whatever form the final discussions take place, a decision to bypass conference would undoubtedly expedite the debate, clearing the way for final passage (if not signing) by the end of January." 

Roll Call: "The House isn't due back in session until Jan. 12, but key Democrats will be in town this week hashing out the remaining differences between the House and Senate health care bills."

"Republicans scoff at the 'Jobs for Main Street Act' title that House Democrats put on their $174 billion package last month," the AP says. "They refer to it as 'son of the stimulus,' the $787 billion economic recovery plan of nearly a year ago that they say was ineffective at producing jobs."

The New York Times profiles the lone white Democrat in Alabama's congressional delegation, Bobby Bright, who has voted with Republicans on major pieces of legislation. 

"Iranian legislators on Sunday decided to not allow a visit from Senate Foreign Relations Committee Chairman John Kerry (D-Mass.), according to Iranian media," The Hill reports. 
 
Like his fellow South Carolinian Republican Sen. Lindsey Graham, Rep. Bob Inglis has taken many "departures from conservative orthodoxy," Politico writes, including Inglis on its "25 politicians to watch" list. "If he loses [in South Carolina's June primary], chances are high that it will rekindle -- or advance -- the narrative about a GOP civil war. And that's not what Republicans want to be talking about five months out from the midterm election." 

"The March 2 release of 'No Apology: The Case for American Greatness,' will kick off a monthlong tour taking the former Massachusetts governor to at least 18 states, including Iowa, where Romney's presidential campaign collapsed nearly two years ago after a second-place caucus finish," the Boston Globe writes. "But Romney, considered by many in the party to be the default Republican front-runner for the 2012 nomination, is approaching the book tour with the patient, workmanlike mien that has distinguished him from other probable contenders who seem far more eager for attention." Said a spokesman: "Inevitably there are going to be comparisons with the Sarah Palin book. We're not going to match her crowd size or sales. These are two different people with different ways of expressing themselves." 
 
"During an interview on CNN's 'State of the Union,' [Jim] DeMint said President Barack Obama has 'downplayed the risk of terrorism since taking office,' to the detriment to Americans' safety. 'It begins with not even been willing to use the word,' DeMint said. 'Aside from the semantics, he's been completely distracted by other things, and he is not focused on building the security and intelligence apparatus of our country.'"

The Hill looks at 10 questions/campaign themes to watch: 1. How real is the tea party effect? 2. How many more Democrats head for the exits? 3. Will Republicans have the funds they need to win big? 4. Does the economy turn around? 5. How will 2009 issues translate to 2010? 6. Can Republicans restore their good name? 7. What does President Barack Obama do for the Democrats? 8. How much emphasis do the national parties put on governor's races? 9. Will open seats ruin the National Republican Senatorial Committee's (NRSC) Election Day? 10. Do Democrats face formidable primaries?

On the fundraising front, vulnerable House Democrats from the fiscally conservative Blue Dog coalition are getting a leg up in campaign contributions from the group's political action committee, which, according to CQ MoneyLine, has given out the most contributions of any politician-controlled PAC through November 2009: $635,000 to be exact. Among the recipients are Reps. Bobby Bright (AL), Frank Kratovil (MD) and Walt Minnick (ID), whose races CQ Politics has deemed Tossups, the most competitive category. 

Politico takes a look at the fundraising disparity between the DCCC and NRCC -- the former vastly outraising the latter. However, it also notes that the underdog Republicans of 1994 were also outspent, but succeeded in taking back the Congressional majority. NRCC recruitment chairman Kevin McCarthy (R-CA) also predicts that donations will increase as Republicans feel more confident in the prospect of midterm wins. "You're going to find the money will soon be growing once members get past the primaries, when they'll be able to give more. When members are on defense, they're trying to keep as much money as they can to protect themselves," McCarthy was quoted as saying. 

CALIFORNIA: According to The Hill, some California Republicans are "uneasy" with gubernatorial candidate and former eBay CEO Meg Whitman's "middle-of-the-road" campaign approach, especially on fiscal issues. She recently turned down the chance to speak at an upcoming Los Angeles Republicans' forum, where both her opponents, Steve Poizner and former Rep. Tom Campbell, are scheduled to speak. 

COLORADO: Democrats in the primary for Colorado's junior U.S. Senate seat are trying to keep the race polite "so that whoever emerges as the victor won't be too bruised for the general election," the Wall Street Journal says. Current Senator Michael Bennet, who was appointed to the seat by Gov. Bill Ritter after current interior secretary Ken Salazar vacated his seat, has so far outraised his primary opponent, former state house speaker Andrew Romanoff, but Romanoff may garner more statewide support, holding a majority of state legislators' endorsements, the Journal adds. 

FLORIDA: The St. Petersburg Times names their winner and loser of the year in Florida politics.  Winner: Marco Rubio. Loser? Charlie Crist. "But," the Times notes, "nobody should count him out. He has a lot of cards to play over the next nine months."

MASSACHUSETTS: We'll know if Republicans are a TAD serious about attempting to target Dem Martha Coakley in this race if John McCain and others do more than simply provide support for Republican Scott Brown via press release.

NEW HAMPSHIRE: Republican Attorney General Kelly Ayotte leads Democratic Rep. Paul Hodes 43% to 36% in a new American Research Group poll, conducted Dec. 26-29, CQ Politics reports.

NEW YORK: "President Obama still wants Gov. Paterson dumped from the Democratic ticket, even though the field of GOP candidates for governor is weaker now that Rudy Giuliani is out of the race, a high-level source close to the White House told The [New York] Post." The source said, "Rin Tin Tin could beat Paterson," adding that Attorney General Andrew Cuomo "has to run."

OHIO: This year's midterm elections will undoubtedly hinge, in part, on candidates' economic records. While there have been over 300,000 jobs lost since incumbent Gov. Ted Strickland (D) took office, his challenger, former Rep. John Kasich (R) -- whom Strickland is either tied with or trails in polls -- was managing director of Lehman Brothers after he left the House in 2000, a position which Ohio Democrats have been quick to highlight, the Dayton Daily News writes. Kasich contends, however, that "blaming him for Lehman's collapse 'is like blaming a car dealer… for the collapse of General Motors."

TEXAS: The Fort Worth Star-Telegram reports on opposition research spending in the race between Republican gubernatorial contenders Rick Perry, the incumbent, and Sen. Kay Bailey Hutchison, his chief primary rival. According to the Star Telegram, Perry's campaign spent at least $13,250 last year on research from the premier Republican "oppo" company, John Doner & Associates, while Hutchison's campaign reports $66,400 to a Little Rock public affairs firm headed by former U.S. prosecutor Tim Griffin, who has previously done opposition work for the RNC, although a Hutchison spokesman declined to elaborate on Griffin's role on the campaign besides saying he "advised" it on some projects.

From NBC's Domenico Montanaro
For your New Year's Day entertainment, here's a video montage look back at some of the memorable political moments of the decade that was, from 2000 to 2009.

Here's the full video.

A brief clip is below.

We'd love your thoughts. Happy New Year.

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

Special thanks to Ali Weinberg.

Edited by: Domenico Montanaro and Ed Eaves.