In it, but not of it. TPM DC

Sen. Judd Gregg's (R-NH) possible nomination as Commerce Secretary this week is looking like less of an outright victory for Democrats than originally perceived, with Sen. Mitch McConnell (R-KY) signaling that New Hampshire Gov. John Lynch (D) would appoint a Republican to fill Gregg's Senate seat.

But a reader points out that nominating Gregg could have another upside: a reliable Republican vote for President Obama's stimulus package. It would be extremely hard to envision Gregg accepting the position and then casting a high-profile vote against the economic agenda he's about to start selling.

Gregg certainly sounded independent of the administration during a Saturday interview with CNBC, when he said he would not support the Senate stimulus in its current form because of the failure to address housing:

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Daschle "Deeply Embarrassed" By Tax Problems Tom Daschle has sent a letter to Senate Finance Committee Chairman Max Baucus and Ranking Member Chuck Grassley, declaring himself "deeply embarrassed and disappointed by the errors that required me to amend my tax returns." Daschle also told the committee reviewing his nomination to be Secretary of Health and Human Services: "I apologize for the errors and profoundly regret that you have had to devote time to them."

Obama's Day Ahead President Obama is meeting at 11 a.m. with Vermont Governor Jim Douglas, a Republican who has been advocating for passage of the stimulus bill. At 1:50 p.m. he and Vice President Biden will be meeting with Secretary of Defense Robert Gates, and at 4:45 p.m. ET Obama and Biden will be meeting with Congressional leaders to work on the stimulus bill.

The Minnesota Election Trial: Week Two Today begins the second week of the Minnesota election trial, with Al Franken's legal team set to cross-examine Ramsey County (St. Paul) election director Joe Mansky. Norm Coleman's legal team secured an expert opinion from Mansky on Friday that it was highly likely that some absentee ballots were double-counted -- a glitch that would have unfairly favored Franken, because of his edge among absentees overall -- so expect Franken's team to explore both alternative explanations and the difficulty in calculating such a problem.

Obama Predicts GOP Support For Stimulus In an interview with Matt Lauer aired last night, President Obama predicted that a good number of Republicans will vote for the final stimulus bill when all is said and done. "I am confident that by the time we actually have the final package on the floor that we are going to see substantial support," said Obama.

Gregg Appointment Could Come Soon President Obama could potentially name Sen. Judd Gregg (R-NH) as his Secretary of Commerce as early as today. It looks like Gregg's appointment would not affect the Senate balance of power, as Gregg appears to have arranged for his state's Democratic governor to appoint a fellow Republican. Speculation at this point has centered on former Gregg chief of staff Bonnie Newman.

Parties Pick Candidates For Gillibrand's Seat Democrats have selected venture capitalist Scott Murphy to run for Kirsten Gillibrand's former House seat, giving the Dems a candidate capable of spending a lot of money on the race. Republicans have already picked state Assembly Minority Leader Jim Tedisco to run for this Upstate seat, which has historically been a GOP stronghold but has also moved to the Democrats in recent years.

DCCC Targeting House GOP's Opposition To Stimulus The DCCC has announced a new round of radio ads against 28 House Republicans, targeting them for their votes against the economic stimulus package. "Did you know Congressman Eric Cantor voted to bail out big banks, but opposed tax breaks for 95 percent of American workers?" the announcer says in one example ad.

Daschle Knew Of Tax Issues, Didn't Tell Obama Team The New York Times reports that Tom Daschle knew this past June about his failure to pay taxes on a car and driver provided to him by a private equity firm, but did not disclose it to the Obama team until weeks after the vetting process and the announcement of his cabinet appointment. A Daschle spokesperson said that he didn't inform people about it because he didn't yet know how the owed amount really was -- $128,000, plus interest -- and he thought an accountant was taking care of it.

WaPo: Daschle Confirmation Depends On Senate Comity The Washington Post reports that Tom Daschle's confirmation as Secretary of Health and Human Services now hinges on his close personal connections to Senators with whom he formerly served. For example, the Post mentions Daschle's friendship with Senator Tom Harkin (D-IA), who has not yet commented on Daschle's troubles -- and who voted against Tim Geithner because of his tax issues.

Obama Hosting Bipartisan Super Bowl Party At White House President Obama and First Lady Michelle Obama are hosting a Super Bowl Party at the White House tonight, beginning at 6:30 p.m. ET. The guest-list of four Senators and 11 House members is made up of mostly Democrats, but there are a few Republicans: Sen. Arlen Specter (PA), Rep. Charlie Dent (PA), Rep. Trent Franks (AZ), and Rep. Fred Upton (R-MI).

Biden Hosting Super Bowl Party, Too Vice President Biden and his wife Jill are hosting their own Super Bowl Party tonight at the Naval Observatory. The six Senators and four House members on the official guest-list are all Democrats.

McConnell: Gregg Would Be Replaced By A Republican Appearing today on Face The Nation, Senate Republican Leader Mitch McConnell predicted that a Republican would be appointed to fill Judd Gregg's seat if he becomes Commerce Secretary. "Senator Gregg has told me that if he were to take this appointment, it would not alter the makeup of the Senate in terms of the majority and the minority," said McConnell, implying that some sort of deal has been made with New Hampshire's Dem Governor John Lynch.

GOP Governors Want Stimulus Money The Associated Press reports that most Republican governors are breaking form the Congressional GOP's opposition to the stimulus bill, and are asking the Senate to pass the bill. This dichotomy is best expressed by Louisiana Governor Bobby Jindal -- he said he would accept the money as governor, but would have voted against the bill if he were still in the House.

Hillary's Debt Down To $5.9 Million -- Mostly To Mark Penn Hillary Clinton's campaign debt has now been whittled down to $5.9 million, down from highs of over $20 million -- and $5.4 million of it is owed to Mark Penn's consulting firm, with the rest of it to four smaller vendors. The Hatch Act prevents Hillary from directly raising cash as Secretary of State, though others would be able to raise money on her behalf.

Obama To Alfalfa Club: Robert E. Lee Would Be Very Confused President Obama spent last night at the Alfalfa dinner, telling jokes to the elite Washington social club. "I know that many you are aware that this dinner began almost one hundred years ago as a way to celebrate the birthday of General Robert E. Lee." said Obama, according to released excerpts. "If he were here with us tonight, the General would be 202 years old. And very confused."

Obama: Administration Will Increase Credit Availability In his newest YouTube address, President Obama announced that his administration will soon be rolling out a new set of policies for the financial system to ensure that credit finds its way to businesses and families, though no specific details have been announced just yet:



"We'll help lower mortgage costs and extend loans to small businesses so they can create jobs," said Obama. "We'll ensure that CEOs are not draining funds that should be advancing our recovery. And we will insist on unprecedented transparency, rigorous oversight, and clear accountability -- so taxpayers know how their money is being spent and whether it is achieving results."

No Obama Or Biden Events Today President Obama and Vice President Biden do not have any public events scheduled for today. (Late Update: It should be noted that President Obama is speaking to the Alfalfa Dinner in Washington tonight, but this event is not public -- it is closed press.)

Steele Speaks to House GOP, Praises Vote Against Stimulus Michael Steele addressed the House Republican Retreat today, his first interaction with the Congressional GOP since he was election RNC chairman yesterday. Steele praised the caucus for voting against the economic stimulus package: "I thought it was very important to send a signal, and you sent it loudly, very clearly, that this party, the leadership of this caucus, would stand first and foremost with the American people. You made it very clear that in order to grow through this recession that you not redistribute the wealth of the people of this nation."

Daschle Nomination Runs Into Tax Problem Tom Daschle has now filed an amended tax return in order to pay $128,000 in back taxes, plus $12,000 in penalties, for his failure to properly pay taxes relating mostly to his work for the equity firm InterMedia Partners. Daschle is still expected to be confirmed as Secretary of Health and Human Services, making him the second Obama cabinet officer after Tim Geithner to be tripped up by the tax code.

ABC: Gregg Could Be Picked For Commerce On Monday ABC News reports that Sen. Judd Gregg (R-NH) is now the leading candidate for Secretary of Commerce, and could be announced as early as this Monday. If Gregg does end up joining the Obama Administration, this could potentially give the Democrats the 60th Senate seat -- New Hampshire has a Democratic governor who would make an appointment, and in Minnesota it still looks like Al Franken is the most likely winner of their disputed election.

Reid Staffer Detailed To Work For Burris Harry Reid's office has announced that staffer Darrel Thompson will now be working on detail for Roland Burris, serving temporarily as the appointed Illinois Senator's chief of staff. Thompson served as chief of staff for Barack Obama's Senate campaign in 2004, and will now be helping Burris get his own office up and running while still holding his position as a top Reid adviser.

SEIU Rolls Out Pro-Reid Ad In Nevada SEIU has announced that they are now running this ad in Nevada on statewide cable TV, praising the work of Harry Reid as Senate Majority Leader:



This ad comes after the National Republican Senatorial Committee began their own ad campaign against Reid, targeting the Democratic leader as he goes into his 2010 re-election campaign.

Sen. Chuck Grassley (R-IA) just released a letter to White House budget director Peter Orszag that makes a pretty eyebrow-raising claim: The special inspector general charged with overseeing the $700 billion in TARP funds for Wall Street is getting the run-around from the administration as he seeks more information from banks getting bailout money.

According to Grassley, Orszag's Office of Management and Budget (OMB) originally gave Neil Barofsky, the TARP inspector general, freedom to seek information from bailout-participating banks without being subject to the requirements of a law called the Paperwork Reduction Act that aims to limit government agencies' ability to collect third party information.

But then, for reasons unbeknownst to Grassley or Barofsky, it seems that OMB went back on its decision. As Grassley states in his letter:

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Today's courtroom proceedings in the Minnesota election trial ended a little while ago, and looking back on the day something is becoming clear: After a week of one comedic misstep after another, the Coleman legal team seems to have finally gotten its act together and managed to score some points -- and take some interesting risks, too.

While examining Ramsey County (St. Paul) elections director Joe Mansky this morning, Coleman attorney John Rock was able to secure an expert opinion that the most likely reason for some of the voting discrepancies that Coleman has complained about is that a number of absentee ballots were accidentally counted twice, thanks to a duplication process for damaged ballots and a failure to label them properly.

The Coleman camp has maintained that Franken has netted about 110 votes out of this process, using about two-dozen specifically picked Democratic precincts. Winning this claim would cut Franken's 225-vote lead in half -- though the Franken camp's legal filings have also shown they could play this game, too, and subtract a net 34 votes for Coleman. But obviously this is not a place the Franken camp wants to go.

The Franken camp will have the opportunity on Monday to cross-examine Mansky, at which time they will be exploring alternative explanations and the difficulties in calculating this stuff.

Now, let's take a look at the calculated risk they also took.

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Meet the new chairman of the Republican National Committee: Former Maryland Lt. Governor Michael Steele, who defeated South Carolina party chairman Katon Dawson by a 91-77 margin on the sixth ballot.

"As a little boy growing up in this town -- this is awesome," Steele said bluntly in accepting his victory.

Steele came six votes shy of the magic number 85 on the fifth ballot, and was able to get over the top after Michigan chairman Saul Anuzis dropped out to make it a clear two-man race. Steele is now the first African-American chairman of the RNC.

The Republicans might have realized just how awful it would have been for the GOP's image if Steele hadn't won. The alternative was Dawson, who until just recently belonged to an all-white country club and has said he got involved in politics as a teenage opponent of busing programs in the 1960s -- not exactly the best face to oppose Barack Obama's agenda. Dawson briefly took the lead on the fourth ballot, and after that the movement to Steele very quickly put him on top.

As it happens, we're not the only ones noting that that the fight to add mass transit money to the stimulus bill is far from over.

Senate Democratic Vice Chairman Chuck Schumer (NY) just mentioned on a conference call with reporters that he'll be introducing a version of Rep. Jerrold Nadler's (D-NY) amendment to add $3 billion in public transportation cash to the economic recovery pot.

That would bring the total mass transit funding in the Senate's bill to more than $15 billion, if you include a $5.5 billion competitive transport grants program that can be accessed by rail or road projects. That's still half as much money for mass transit as for highways.

Michael Steele is back in the lead for RNC Chairman, after Ken Blackwell dropped out and endorsed him -- but he's still just short of a full majority. On top of that, third-place finisher Saul Anuzis dropped out and endorsed nobody.

Here are the fifth-ballot numbers, compared to the fourth:

• Steele 79 (+19)

• Dawson 69 (+7)

• Anuzis 20 (-11)

As mentioned above, Anuzis dropped out after the vote, but didn't make an endorsement. "We've got two great people still running," said Anuzis, wishing the best of luck to the eventual winner.

Steele at this point should be regarded as the most likely to win, as he is only six votes short of the magic number 85.

As this slow news day moves on, it's a good time to prepare for the Senate stimulus debate that will begin on Monday -- it's shaping up an only slightly more genial cage match than we saw in the House.

One possible X factor arising today is the sideline maneuvering of Sen. Ben "Gang of 14" Nelson. He's staying true to form by trying to build a bipartisan coalition of senators to support major changes to the House bill.

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