Dems have relieved pep in their step after last week, especially Friday's Q&A heard 'round the world... But Republicans have reason to feel good, too… Obama administration unveils $3.8 trillion budget for FY2011… Breaking down the budget's winners and losers… President Obama holds interview via YouTube… Primaries in Illinois take place tomorrow… And DCCC hits Tim Griffin (R) in Web video.

From Chuck Todd, Mark Murray, Domenico Montanaro, and Ali Weinberg
*** Pep in the Dems' steps? Last Monday, we wrote that the Obama White House and congressional Democrats were having a very rough start to 2010. They lost the special election in Massachusetts, jeopardizing health care; the December jobs report was worse than expected; and Ben Bernanke's confirmation was in trouble. But it's fair to say that the White House now has stabilized things a bit after what took place last week, including the State of the Union, the positive GDP news, Bernanke's eventual confirmation, and the Q&A heard 'round the world. That Q&A, in particular, mesmerized many on Friday -- and throughout the weekend -- giving despondent Democrats a chance to feel better about the president, his prospects in 2012, and maybe even their chances in 2010 (although much more is going to have to happen on that front for them to minimize losses in November). But while Obama won that round in the Q&A, perception-wise, House Republicans had reason to feel good, too. The exchange made them look like they matter, even more so than their Senate GOP colleagues. And as GOP strategist John Feehery told Dan Balz, it perhaps gave Americans a sense of what Washington might look like if the GOP takes back control of Congress.

*** Budget day: Today, the Obama administration rolls out its $3.8 trillion FY2011 budget. The details: It projects a $1.6 trillion deficit for this year, it estimates a $1.3 trillion deficit for 2011, and it collects $678 billion over 10 years by phasing out the Bush tax cuts for wealthy Americans. Per USA Today, winners in Obama's budget include more money for the wars in Afghanistan and Iraq, education, clean energy, airline security, and veterans programs. The losers: 38 Education Department programs are consolidated into 11, two National Park Service grant programs are eliminated include the consolidation of education programs, and NASA's moon mission is scrapped. It's important to remember that this budget isn't set in stone; it's only the administration's recommendation to Congress. Still, it's not good news for the White House that every news story here leads with the projected deficits (no wonder they rolled out the spending freeze idea last week). And the NASA cut might not play too well in Florida. President Obama speaks on the budget at 10:45 am ET, as does OMB Director Peter Orszag at 11:30 am.

*** Obama's YouTube interview: Also today, at 1:45 pm ET, President Obama participates in an interview via YouTube. Per the White House, Obama will "answer video and text questions submitted by YouTube users during and after the State of the Union. Users voted the best questions to the top on CitizenTube, YouTube's political platform, and Steve Grove, YouTube's news and political director, will ask a selection of the top-voted questions to the President in a live-streamed interview on YouTube and Whitehouse.gov."

*** Tomorrow's Illinois primary: The first primaries of 2010 -- in Illinois -- take place tomorrow. Here are the latest headlines: The Chicago Tribune reports that the Democratic race for governor "escalated along racial lines Saturday as Gov. Pat Quinn and Comptroller Dan Hynes traded charges of incompetence fueled by the scandal at Burr Oak Cemetery and a TV ad featuring the late Mayor Harold Washington… On Saturday, sharp rhetoric roiled the campaign as Quinn was joined by U.S. Rep. Bobby Rush to criticize Hynes, the state's three-term comptroller. Quinn alleged that Hynes knew for years about disinterred human remains at Burr Oak, a predominantly African-American cemetery." And in the Senate Democratic contest, the candidates have all been trying to portray themselves as the most electable Dem in November.

*** Like father, like son? It's important to remember, though, that the Senate and gubernatorial primaries aren't the only races to watch in Illinois tomorrow. In IL-14, Ethan Hastert -- Denny Hastert's son -- is running for his father's old congressional seat, for the opportunity to challenge incumbent Bill Foster (D)… In IL-10, which is the seat Kirk is giving up, there are crowded Democratic and GOP primaries to replace him… And in IL-8, half a dozen Republicans are running for the right to take on Melissa Bean (D) in the fall. By the way, the New York Times profiles the GOP primary in IL-14, where Ethan Hastert is running against Randy Hultgren. 

*** More midterm news: In Arkansas, the Democratic Congressional Campaign Committee has released a Web video hitting GOP congressional candidate (and former RNC oppo-researcher and Rove protégé) Tim Griffin… In Indiana, GOP Congressman Steve Buyer said he's not running for re-election… And in Pennsylvania, CQ has moved the Senate contest from Lean Democrat to Toss-up.

Countdown to IL primary: 1 day
Countdown to TX primary: 29 days
Countdown to Election Day 2010: 274 days

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"President Obama will send a $3.8 trillion budget to Congress on Monday for the coming fiscal year that would increase financing for education and for civilian research programs by more than 6 percent and provide $25 billion for cash-starved states, even as he seeks to freeze much domestic spending for the rest of his term," The New York Times reported yesterday.

"The budget for the 2011 fiscal year, which begins in October, will identify the winners and losers behind Mr. Obama's proposal for a three-year freeze of a portion of the budget. Many programs at the National Institutes of Health, the National Science Foundation and the Energy Department are in line for increases, along with the Census Bureau. Among the losers would be some public works projects of the Army Corps of Engineers, two historic preservation programs and NASA's mission to return to the Moon." 

USA Today: "President Obama will unveil a record $3.8 trillion budget for 2011 on Monday that would boost war spending, trim domestic spending and rely on $1.3 trillion in new borrowing. The budget would be the third in a row with a deficit of more than $1 trillion. The red ink would be cut nearly in half by 2014, mostly by allowing tax cuts on families making more than $250,000 to expire in 2011." 

The AP adds, "Echoing the pledge in his State of the Union address to make job creation his top priority, Obama put forward a budget that included a $100 billion jobs measure that would provide tax breaks to encourage businesses to boost hiring as well as increased government spending on infrastructure and energy projects. He called for fast congressional action to speed relief to millions left unemployed in the worst recession since the 1930s."

In a blog posting on Saturday, White House Communications Director Dan Pfeiffer wrote, "During these tough economic times, American families are forced to make tough choices about what they can spend money on and what they need to cut from their household budgets. Through the course of the budget process we did the same thing. The President believes we need to be honest about what is working and what isn't and that making tough choices about which programs to fund and which to reduce or terminate is part of governing."

Among the cuts: Consolidating 38 Education Department programs into 11, cutting a National Park Service grant program, and terminating the Brownfields Economic Development Initiative. 

Pfeiffer and OMB Director Peter Orszag held a conference call with reporters last night to discuss the FY2011 budget, NBC's Kelly Paice notes. Orszag said the goal of this budget was to reduce the deficit from 10.6% of GDP (what it is now) to 3.9% (by 2015). But he pointed out the importance of doing so with a "relatively smooth glide path," acknowledging that acting too aggressively could throw the country back into a recession. Orszag also said that this year's budget creates a 10-year deficit reduction of $1.2 trillion, "not including savings of two winding down wars."

He stated that although the GDP is expanding, "the employment market remains weak," with 7 million fewer jobs now compared to December 2007. Therefore, main goals of this budget include job creation and middle class security.

Pfeiffer said, "While we made progress in jobs, we have not made enough," as one out of ten Americans are still looking for work. Pfeiffer added that the president made clear in his State of the Union address last Wednesday that "he wants a jobs bill on his desk as soon as possible."

The New York Times front-pages that the Obama administration is seeking to reform No Child Left Behind. "The Obama administration is proposing a sweeping overhaul of President Bush's signature education law, No Child Left Behind, and will call for broad changes in how schools are judged to be succeeding or failing, as well as for the elimination of the law's 2014 deadline for bringing every American child to academic proficiency." 

"The Obama administration said yesterday it would consider local opposition when deciding where to hold the Sept. 11 trials and pledged to seek swift justice for the professed mastermind of the attacks," AP writes.

"Tension between the US and Iran heightened dramatically today with the disclosure that Barack Obama is deploying a missile shield to protect American allies in the Gulf from attack by Tehran," The Guardian writes. "The deployment comes after Obama's attempts to emphasize diplomacy over confrontation in dealing with Iran -- a contrast to the Bush administration's approach -- have failed to persuade Tehran to open its nuclear installations to international controls. Washington is also concerned at the threat of action by Israel, which is predicting that Iran will be able to build a nuclear missile within a year, a much faster timetable than assessed by the US, and is warning that it will not let Tehran come close to completion if diplomacy fails. The director of the CIA, Leon Panetta, met the Israeli prime minister, Binyamin Netanyahu, and other senior officials in Jerusalem last week to discuss Iran."

The Los Angeles Times: "The decision to advise the accused Christmas Day attacker of his right to remain silent was made after teleconferences involving at least four government agencies -- and only after Omar Farouk Abdulmutallab had stopped talking to authorities, according to knowledgeable law enforcement officials." 

On Tuesday, Defense Secretary Robert Gates and Joint Chiefs Chairman Mullen will testify on Capitol Hill about scrapping "Don't Ask, Don't Tell." The New York Times: "Gay rights leaders say they expect Mr. Gates to announce in the interim that the Defense Department will not take action to discharge service members whose sexual orientation is revealed by third parties or jilted partners, one of the most onerous aspects of the law. Pentagon officials had no comment. Gay rights groups are calling the hearing historic even as they question how quickly the administration is prepared to act. But Republicans are already signaling that they are not eager to take up the issue."

Interestingly, the Times points out that the Obama administration might have been forced to defend DADT in court, if it wasn't going to change the law.

The front page of Sunday's New York Times: "[A]s the Republican National Committee ended its winter meeting here on Saturday, party leaders, if jubilant over a string of election victories and declining support for President Obama, were also questioning whether they could take full advantage of the opening Democrats had handed them. At a moment of what appears to be great if unexpected opportunity, the Republican Party continues to struggle with disputes over ideology and tactics, as well as what party leaders say is an absence of strong figures to lead it back to power, from the party chairman to prospective presidential candidates." 

Pulitzer-Prize winning independent fact-checker Politifact, checked Rep. Jeb Hensarling's (R-TX) statement to President Obama at the House Republican Retreat on Friday that: "What were the old annual deficits under Republicans have now become the monthly deficits under Democrats." Despite Hensarling saying he'd welcome fact-checkers looking at their statements, Politifact gave that a "False."
 
"Rep. Jeb Hensarling did some extreme cherry-picking to suggest that deficits have ballooned under Obama," the Web site writes. "But using the Hensarling technique, you could also say they were bigger under President Bush."

"Scott Brown hasn't even been sworn in yet, but environmentalists are already preparing Web ads targeting the incoming GOP senator on climate change legislation." The ad says: "Senator-elect Brown, Massachusetts takes you at your word. It's time to lead on bipartisan clean energy climate legislation." The Boston Globe: "With its all-Democratic, largely liberal congressional delegation, Massachusetts has rarely been a target of so-called 'issue ads,' spots made by interest groups pushing a particular proposal. Bay State lawmakers have long been reliable votes for the Democratic legislative agenda."

The Washington Post's Chris Cillizza lists a few winners and losers in the end-of-the year fundraising reporting period. Included on the winners list is Senate appointee Michael Bennet, "a virtual unknown to the people of Colorado and a target of Republicans" whose "stellar fundraising ensures that he will be able to introduce -- and reintroduce -- himself in the coming months." Among the losers are Arkansas Republicans, who, despite incumbent Democratic Sen. Blanche Lincoln's vulnerability, haven't raised anything close to Lincoln's $5 million war chest.  

"Sens. Byron L. Dorgan (D-N.D.) and Christopher J. Dodd (D-Conn.) together have more than $7.5 million in leftover campaign funds but nowhere to spend it, now that they're not seeking re-election in November," CQ Politics reports. "Campaign finance law doesn't limit how much money senators can transfer to national party committees, and Democratic Senatorial Campaign Committee chairman Robert Menendez (N.J.), who has a tough job these days, surely would love to have a chunk of those funds." 

CALIFORNIA: The Los Angeles Times profiles Senate candidate Carly Fiorina as she addresses a room of San Diego Republicans, citing her conservative views on abortion and same-sex marriage: "The fact that Fiorina felt compelled to detail her views on abortion and same-sex marriage underscores one of her greatest challenges as she seeks the Republican nomination: The party's most faithful voters are not convinced she is one of them. Part of the reason is that, unlike her primary opponents, Assemblyman Chuck DeVore of Irvine and former U.S. Rep. Tom Campbell, Fiorina is an unknown political quantity. She has never sought election to public office before now, so she doesn't have a paper trail of legislation, statements and votes." 

INDIANA: Rep. Steve Buyer (R) of the state's strongly Republican 4th district announced he would not seek re-election this fall, CQ Politics reports. 

NEVADA: "Results of a straw poll conducted during Carson City's countywide Republican Central Committee precinct meeting Saturday showed Gov. Jim Gibbons coming out ahead of former North Las Vegas Mayor Mike Montandon and former federal judge Brian Sandoval. In the U.S. Senate race, the poll gave Nevada Sen. Mark Amodei the edge over eight other Republican candidates who want a shot at unseating U.S. Sen. Harry Reid in the November general election." 

NEW YORK: "Gov. Paterson has a paltry $620,000 in available cash to spend on a primary -- about 20 times less than his likely Democratic opponent, Attorney General Andrew Cuomo," The New York Daily News writes. "An analysis of the $3 million in campaign cash Paterson has on hand reveals he has far less for a primary battle than originally thought. The $620,000 is not even enough to buy a week's worth of TV airtime in the state." 

PENNSYLVANIA: Noting that "party-switching Sen. Arlen Specter (D-Pa) no longer has the upper hand when it comes to holding his seat for another term," CQ Politics changes the race for Specter's Senate seat from Leans Democratic to Tossup.