Today, before the Senate Government Affairs Committee, Tom Ridge began his confirmation hearings to become head of the newly created Homeland Security Department. In what is expected to only be a one day hearing, Ridge won praise as President Bush's Director of the White House Office for Homeland Security, which was created after the attacks of September 11, 2001.

Senator Susan Collins (R-Maine), in her first hearing as newly-selected chairwoman of the committee, while providing overall praise, asked Ridge not to overlook the 2 million state and local officials around the country on the front line of the war on terrorism, noting that the legislation creating the agency, "offers no assurance that the new department will coordinate and communicate effectively with state and local first responders."

The Senate Democratic Leader, Tom Daschle (D-South Dakota), wanted Ridge's assessment of the financial resources needed for the department to organize and carry out its mission. Yesterday, Senate Democrats, arguing that the administration had failed to provide the funds needed to meet the nation's increased security needs, unsuccessfully tried to add $5 billion for security-related programs to a $390 billion spending bill for this budget year.

The Homeland Security Department represents the largest federal reorganization since the Defense Department was set up in 1947. It will combine almost two dozen agencies with 170,000 employees in an attempt to better coordinate anti-terrorism efforts at home. Included in the new department will be Secret Service, Coast Guard, Customs Service, Immigration and Naturalization Service, Transportation Security Administration, Federal Emergency Management Agency, and the General Service Administration's federal protective services.

Ridge was elected to Congress in 1982 and was elected Governor of Pennsylvania in 1994. After the September 11th attacks, President Bush asked Ridge to head the then new White House Office of Homeland Security. He won a Bronze Star for valor in the Vietnam War.

As promised, we've got a more in-depth roundup of the late-night amendments, whether they passed or not, and their impact on the omnibus spending package winding it's way through the Senate. It appears that the total spending is not going to meet the administration's self-imposed cut-off, due to several proposed amendments and earmarks. Be sure to check often for the latest Peyser analysis of ongoing legislation.

In one of several amendments to be tacked on last night to the omnibus spending package in the senate, Patty Murray (D-WA) proposed that Amtrak funding be increased to $1.2 billion from $762 million. It passed by voice vote, and along with other amendments helped bring the current cost of the bill to more than $390 billion. The omnibus is on track to break the $750.5 billion target the administration had sought for fiscal 2003. More on the other amendments and their fates shortly.

Today in Scranton, PA, President George W. Bush renewed his call for Congress to impose the first federal restrictions on malpractice cases, saying that "broken" medical liability system is driving away doctors and increasing the cost and availability of health care. Today the President urged Congress to enact legislation limiting awards for pain and suffering to $250,000 and to curb punitive damages as well.

The President first proposed an overhaul of medical-liability system last summer. The House passed legislation along the lines the president wanted, but the measure stalled in the then Democratic-controlled Senate. With the Senate now in Republican control, the prospects might be better. Democrats and trial lawyers have resisted changes in malpractice laws, saying that patients need legal recourse when they are harmed by reckless doctors.

The President stated that this is a national problem that can not be addressed solely by state governments. Typically, states set their own malpractice guidelines.

Although he wasn't invited to the event with President Bush, Gov.-elect Ed Rendell (D) was scheduled to hold a news conference shortly after the President's noon speech in which he was expected to call on Bush to raise Medicare and Medicaid payments for doctors and hospitals. Rendell spokesperson Ken Snyder said award caps will take years to implement: "We need solutions that will take months".

From up on the Hill, a couple updates to pass along. The FY2003 omnibus spending bill is moving along now, with a few defeated amendments in its path, including a Democrat sponsored amendment which would have boosted homeland security spending by $5 billion. It was defeated 45-51. The GOP Leadership met earlier to encourage members to vote down all Democrat-sponsored amendments in the hopes of adhering to the administration's request to keep spending to $751.3 billion. The latest amendment would have provided money to first-responder grants, and security at many transportation locations including airports and ports.

Also, according to CQ, the House and Senate are somewhat divided on the idea proposed by Representative Don Young (R-Alaska) to increase the federal gas tax by $.02 annually and raise other revenue sources in order to expand the federal highway trust fund to $60 billion. Outgoing Finance Committee chairman (now senior Democrat) Senator Max Baucus, (D-Mont.) is opposed to raising taxes to increase the size of the fund, although he too wants to enlarge it. One method to do so would be to allow the fund to earn interest and to distribute that money to the states. As work on TEA-21 progresses, we'll be sure to update our clients and friends.

After a lengthy standoff, both sides in the Senate have agreed on funding levels that will allow the Senate to now organize properly. Committee funding will reflect the close split of the chamber, much like last year's agreement, although the Republican committee chairmen will gain an additional 10% for "administrative expenses". This represents a compromise between the Democratic assertion that the money reflect the 51-49 split and the Republican position that the majority party should get 2/3 of all funding. Business can now start to be taken up in the Senate, although the delay has pushed back the timetable on several initiatives.

There are a number of political nuggets to pass along this morning, from both inside the beltway and from far beyond. We'll begin with the president's falling poll numbers and then move on to Mississippi and finish with the state of Washington.

Yesterday, the Gallup New Service released polling information which showed that President George W. Bush's approval rating has dropped below the 60% level for the first time since the attacks on September 11, 2001. The poll showed a 58% approval rate and a 39% disapproval rate. After the attacks, his approval skyrocketed reaching a record 90% in mid-September 2001. It has been gradually declining since.

The most recent drop may be related to the controversy over North Korea's nuclear weapons capability. In a poll conducted a week ago, the President had a 60% foreign affairs approval rating. That rating is now 53% with 42% of Americans disapproving of the way he is handling foreign affairs. The seven-point drop in foreign affairs approval is nearly equal in size to the five-point drop in Bush's overall approval rating. In contrast, the President's economic ratings have shown no change from last week, thus leading to the implication that foreign affairs is the reason for the President's declining ratings.

Meanwhile, the current head of the Republican National Committee, Haley Barbour, confirmed in a letter that he'll be running for governor of Mississippi in the fall against incumbent Democratic Gov. Ronnie Musgrove. Barbour ran unsuccesfully for a Senate seat in the 1980s, and the race is expected to cost several million dollars according to both sides.

And finally, in Olympia, Washington, Democratic Governor Gary Locke has been chosen to deliver the Democratic Party's response to the President's State of the Union address on January 28th. Locke was chosen by Minority Leader Tom Daschle (D-SD) because he wanted the response to be delivered by a governor. Locke currently chairs the Democratic Governors Association and provided the Democratic response to one of the President's radio addresses in 2001.

In an interesting manuever, Senator John Edwards (D-NC) has managed to keep his seat on the Senate Judiciary Committee by trading his position on the Commerce Committee to Maria Cantwell (D-WA). Both stand the benefit from the switch, with Edwards keeping a high-profile position to attack the administration's judicial nominees, and Cantwell gaining an influential voice on technology issues important to the state of Washington.

In other committee news on the Democrat side, Senator Lautenberg (D-NJ) was denied his attempt to return to the Environmental and Public Works Committee, where he formerly served as chairman. He picked up a seat on Commerce, Governmental Affairs and Small Business, instead. The only other incoming Democratic Senator, Mark Pryor (D-AR), notched assignments on the Armed Services, Governmental Affiars and Small Business committees.

The only three other changes for the Democratic caucus were Evan Bayh (D-IN) and Hilary Clinton (D-NY) joining Armed Services and Jon Corzine (D-NJ) joining Foreign Relations.

Over on the analysis side of the website, we've just posted a look at S.104: The National Rail Defense Act, proposed by Senator Fritz Hollings (D-SC). It's similar to S.1991, from last year, with a few modifications to reflect changes in the new Homeland Security Department. The act would increase funding to Amtrak, eliminate the self-sufficiency agreement and authorize money for high speed rail routes and security upgrades. It would also require that Amtrak have an independent financial consultant review its methods of cost accounting, and to help create an annual five-year financial plan to be overseen by the Department of Transportation's Inspector General.

Yesterday, Connecticut Senator Joseph I. Lieberman joined the Democratic field running for President in 2004. The Democratic field already includes Senator John Kerry of Massachusetts, Senator John Edwards of North Carolina, former Vermont Governor Howard Dean, and former House Minority Leader Richard Gephardt. Other Democrats who are said to be considering running include Senator Bob Graham of Florida and New York Civil Rights Activist Al Shapton.

Senator Lieberman announced yesterday at his old high school in Stamford, Connecticut that he would run for the Presidency in 2004. In his announcement, Lieberman stated, "We must rise above politics and restore independence to the White House, not compromise our economic or environmental or health secruity for political contributors or extreme ideologies. We must rise above partisan politics and stand up for our values here at home, because family and faith and responsibility matter more than power and partisanship and priviledge."

The addition of three term Senator Joe Lieberman adds the most conservative Democrat to the presidential field. A founding member of the centrist Democratic Leadership Council, the spring board for former President Bill Clinton's successful run in 1992, Senator Lieberman has co-sponsored the Senate resolution authorizing President Bush to use military action to disarm Iraq, supports the limited, experimental use of vouchers to provide public funds for private school tuition; and touts a pro-business voting record.

Senator Lieberman ran with former Vice President Al Gore on the Democratic ticket in 2000. The unsuccessful Gore/Lieberman ticket won the popular vote and received more votes than any other Democratic ticket in history.

We've just posted an analysis of the National Governors Association's reaction to President Bush's stimulus proposal. Left out of the deal (reportedly at the last minute) were any funds for state governments, who are trying to make ends meet in a difficult budget cycle. In addition, some governors are concerned that the proposed tax-free dividend change will adversely affect their ability to raise money with state-backed bonds, deeping existing fiscal holes in budgets across the nation. For the full look at the governors' response and of the likely fiscal impact should the plan pass, be sure to check it out right here.

As the Hill begins to swing into action, there are a few updates to pass along today to our clients and friends. To get things started, the Senate passed a Continuing Resolution (CR) yesterday to keep the government running until the 31st of January. This is the ninth CR passed but it might not be the last, as FY03 appropriations may take until early February to be completely finished. GOP Leaders are pushing to complete an omnibus spending bill before President Bush's Jan. 28th State of the Union address, but the traffic jam in the Senate (see below) may prevent the markup from occurring in a timely fashion.

Despite passing a CR, the Senate hasn't managed to pass an organizing resolution necessary to begin work on all fronts. (The House has already begun to organize, with almost all committee rosters rapidly being chalked in.) Due to the inability of Senate leaders to reach agreement on committee ratios and budgets for the new Congress, action on the transportation appropriations bill and others has been put off until the week of January 13. As soon as we learn of a change, we'll notify our clients and friends.

Senator Zell Miller (D-GA) has announced that he will not run for re-election in 2004. He has indicated that he would neither endorse nor campaign for any candidate seeking his seat. He made public his intentions now so that people who want to run can begin their preparations.

He indicated that he would resign within days after the November 2004 election so that his successor can begin to serve immediately and gain additional seniority.

Senator Miller came to the Senate in July 2000 when he was appointed by then Governor Roy Barnes (D) upon the death of Senator Paul Coverdell (R). He was elected to the seat with in November 2000. Previously he served for two terms as Governor of Georgia.

We've just posted a piece in the analysis section detailing the outlook for FY2003 Appropriations. The prospects for early passage are quite low given the number of obstacles to be overcome in the opening days of the 108th Congress from simple organization issues to keeping the government funded through a series of Continuing Resolutions. For the whole scoop, check out the piece located here.

U.S. Senate Democratic Leader Tom Daschle of South Dakota announced on Tuesday that he has decided not to run for president at the next election.

"I concluded that I want to be here in the Senate, making a difference for my state and my country," Daschle said in a statement issued by his office.

Daschle's announcement came as something of a surprise since he had been widely expected to join up to a half dozen or so other congressional Democrats in seeking their party's 2004 presidential nomination. An announcement was planned for this weekend in his home of Aberdeen, South Dakota with a fly around the state and the key primary states of Iowa, New Hampshire, South Carolina to follow. In fact, some fellow Democrats were so sure he was running that some had already begun to jockey for position to replace him as the Senate's incoming minority leader.

We've recently posted a brief summary of the US Conference of Mayor's meeting today which includes items of interest on several fronts from welfare reform to TEA-21 reauthorization. Take a look over in our analysis section!

When the 108th Congress convenes tomorrow, process will be the priority. While GOP leaders in both chambers will meet to map out their agendas, they must first tackle many housekeeping issues including the selection of committee chairman.

In the House, candidates for full committee chairmanships and for top Appropriations subcommittee positions came before the Republican Steering Committee yesterday and today to explain why they wished to head committees. No decisions are expected before January 8. The Democratic Steering Committee began its own deliberations today as well.

In the Senate, incoming Senate Majority Leader Bill Frist (TN) and his leadership team were to meet today to discuss the stalled organizing negotiations with Democratic leader Tom Daschle (SD).

One of the first policy tasks Congress is expected to dispense with when it reconvenes is to quickly push through an extension of unemployment benefits that expired shortly after Christmas. President Bush has called for Congress to speedily pass legislation that would resume the extension of unemployment benefits and apply it retroactively to Dec. 29.

In a few weeks, President Bush is to release his new federal budget. After many years of increases in spending for popular domestic programs, the Administration is putting the government on a restrained, wartime budget which would lessen funding for many domestic programs for the foreseeable future.

In the new budget, the President is calling for domestic spending to be held steady at $316 billion, the same as last year. This excludes spending on homeland security. This policy marks a major adjustment of federal priorities in the face of soaring defense spending, new demands for funds to protect the nation against terrorism and stagnant tax revenue. NOTE: Spending on domestic programs funded in annual appropriations bills rose by about 40% in President Bill Clinton's second term with increases for education, natural resources, job programs, transportation and health research.

Democratic leaders have been expressing displeasure that the administration's main motive for the hold on domestic spending is to offset the revenue lost through the president's 2001 tax cut. They also claim the administration wants to cut spending in order to make room in the budget for further tax cuts and new priorities such as Medicare prescription drug benefit for seniors.

The virtual freeze on domestic spending comes as many governors are lobbying for federal assistance to help them weather one of the worst fiscal crises in years. Federal grants and payments to public schools, local law enforcement agencies, universities, research laboratories and state highway departments are crucial to state budgets, which are mostly forced by state constitutions to be balanced each year.

States have asked the White House for a reduction in payroll taxes to spur local spending and for temporary increases in the federal share of the Medicaid low-income health program, and the administration is considering making some relief part of a broad stimulus plan that would include tax cuts.

We've got a special look at the new proposal from the House Democratic leadership to spur the ailing economy. The proposal will focus on five different areas to target job creation and economic growth, with a proposed cost of $100 billion over ten years. House Democratic Leader Nancy Pelosi (D-CA) claims the measure will help create over one million jobs. Be sure to check out the entire measure over on the analysis side of the website.

We understand the House Committee on Transportation & Infrastructure will send to committee members before January 10 a questionnaire to be used for proposing projects for earmarked funding in the upcoming reauthorization of the TEA-21 legislation. Committee majority staff is circulating the draft questionnaire to minority staff today (January 6) for final approval. House Members at large will probably receive the questionnaire shortly after committee members.

As soon as a copy of the questionnaire is available we will post it in the analysis area of our website.