House Majority Leader Tom Delay, credited with strengthening is party’s hand in Congress and persuading his caucus to protect his status as leader even if he is indicted, seems to recognize that his latest power play may be too much. Rep. Tom Delay (R-Texas) recently floated a proposal to uproot the jurisdictions of Appropriations subcommittees and reduce their number from 13 to 10, which would remove gavels from three of the panels’ powerful chairmen, known as cardinals.

Delay’s proposal is not getting a welcome reception from the cardinals themselves, or the Senate leaders. Delay’s moves demonstrate the degree to which he is exerting power in his chamber, and he is clearly positioning for advantage in what is expected to be a shake-up among appropriators in any event.

Currently Republican term limit rules require both House and Senate chairmen to step down at the end of this year. In the House, that will mean a new chairman beholden to the GOP leaders who will select him. In the Senate, Thad Cochran (R-Mississippi) is slated to resist the kinds of changes Delay is seeking.

In Rep. Delay’s proposal, he recommends completely unraveling the subcommittee jurisdictions, which in the same bill often pair unrelated agencies, requiring them to compete for limited funding. The Commerce, Justice and State Departments for example, are funded by one subcommittee, while veterans’ affairs, housing, space and environmental programs are mixed together in another bill known as VA-HUD. The jurisdictions have stayed essentially the same for decades. Difficult trade-offs occur because each subcommittee is given a sum of money to divide up, so that awarding budget increases to veterans’ programs, for example, comes at a cost to the budget of NASA, the EPA, or the Department of Housing and Urban Development.

Delay wants to replace these subcommittees with others more suited to GOP control. For example, under his plan the Regulatory Agencies Subcommittee would have jurisdiction over such agencies as OSHA, while another would cluster funding for Congress, the White House and the Judiciary. The idea is that certain bills would represent GOP priorities while others would focus on Democratic priorities such as public housing.

There are three candidates to succeed C.W. Bill Young (R-Florida) as chairman of the House Appropriations Committee, they include: Rep. Ralph Regula (R-Ohio), Rep. Jerry Lewis (R-California) and Rep. Harold Rogers (R-Kentucky). The race has put House leaders in a position to exact promises of fealty greater than that demonstrated by Young.

Regula has the most seniority of the candidates. He received accolades for taking on Democrats, who in 2003 opposed the fiscal 2004 Labor-HHS spending bill for insufficiently funding education programs. Regula retaliated by denying all requests for Democratic earmarks, and this year, Democrats voted for all appropriations bills in large numbers.

Next in seniority is Lewis, who appears to have the most support on the Appropriations panel. However, with the Ways and Means, Rules, Armed Services, Homeland Security and Resources panels also headed by fellow Californians, geographical considerations may work against Lewis.

Rogers chairs the Homeland Security Subcommittee and promises to implement tight budgets expected in the next few years. Sources on the Hill say there is no compelling reason to vault Rogers ahead of his more senior rivals.

President Bush has nominated Environmental Protection Agency head Michael Leavitt to lead Health and Human Services. Leavitt used to be the governor of Utah until he joined the administration in 2003.

The twenty-one GOP lawmakers in the House who supported doubling Amtrak's budget extracted a promise from Speaker Dennis Hastert (R-Illinois) that he would attempt to restore funds for highway projects cut in the omnibus spending package. The projects were cut by Appropriations Chairman Ernest Istook (R-Oklahoma) in retaliation for a letter all 21 signed supported an increase in Amtrak's budget. Because of the timing of the move, the bill was signed before any of the affected members could protest the cuts.

Over the weekend, Bernard Kerik's nomination for Homeland Security Secretary was scuttled, and it now appears that the head of NASA, Sean O'Keefe, may also be on his way out to take a job at LSU.

The President nominated Samuel Bodman for the position of Secretary of Energy today. Bodman is currently serving as deputy treasury secretary.

This leaves Health and Human Services as the only remaining cabinet agency with no one currently nominated for the top slot.

President Bush announced today that any alterations to Social Security would not be funded by an increase in the payroll tax. He also repeated that there would be no changes in benefits for retirees or those close to retiring.

The transition costs of partially privatizing social security have been estimated as up to $2 trillion. Without an increase in payroll taxes or a decrease in benefits, few options remain on the table to come up with the funds needed for such a move.

Speaking at a conference of transportation industry executives on December 8, Secretary of Transportation Norman Y. Mineta said the Bush administration will resubmit its surface transportation reauthorization proposal early in the 109th Congress, but few substantive changes are expected. The new proposal is necessary because the reauthorization proposal DOT submitted for the 108th Congress is now almost two years old and there might be new issues that need to be included. When asked if President Bush would budge from his insistence that surface transportation programs receive at most $256 billion over the next six years, Mineta quickly stated "next question." He did go on to reiterate three principles that Bush said must guide reauthorization negotiations. Whatever legislation makes it to Bush's desk cannot boost excise taxes, fund projects through bonding, or authorize highway spending from the general fund.

Mineta did not address a specific funding level or any explicit changes that might appear in next year's proposal, including whether the legislation would still run through fiscal year 2009, or if it would go through fiscal 2010.

Although many transportation industry representatives would like to see Bush support a proposal similar to the $375 billion plan originally offered by the House Transportation and Infrastructure Committee, many have sent numerous letters expressing support for the $318 billion in contract authority and $301 billion in guaranteed spending contained within the original Senate-passed bill.

President Bush has asked the remainder of his cabinet to stay on today. He also nominated Jim Nicholson, the current ambassador to the Vatican, to helm the Veteran's Affairs Department.

The secretaries remaining include Labor Secretary Elaine Chao, Interior Secretary Gale Norton and Housing and Urban Development Secretary Alphonso Jackson.

Late last night, the Senate passed H.R. 5419 which included a temporary 1 year USF/E-Rate fix. Senator McCain released his hold after a verbal guarantee by Speaker Dennis Hastert (R-Illinois) that his Boxing Commission bill, legislation that would promote boxing safety, would be considered in the House next session. H.R. 5419 is now being sent to the President for his signature.

Reports are emerging from the White House this morning that Secretary of Transportation Norman Y. Mineta has been asked by President Bush to stay in his post as Secretary of Transportation. There had been reports widely circulating in recent weeks that Secretary Mineta would be departing the cabinet shortly. Transportation advocates will be largely relieved by today's news that he will remain at the helm while major issues such as the reauthorization of TEA-21, the future of Amtrak and others are considered.

A similar announcement was made yesterday regarding Secretary of the Treasury John Snow. Veterans' Affairs Secretary Principi announced yesterday his resignation.

We will have a summary report on the Bush II Cabinet in the near future.

Today the Senate voted 98-2 to approve the Intelligence Reform Bill which passed through the House yesterday (336 to 75), moving the measure to the President's desk.

The package would create a director of national intelligence, who would have budgetary power over the entire Intelligence Community (IC). Currently, the Director of Central Intelligence, Porter Goss, has control over the entire IC, but no budgetary powers except for the Central Intelligence Agency, which he helms. Over eighty percent of the funds for the IC currently reside under the control of the Pentagon, until this bill is signed by the President.

The AP is reporting that President Bush asked Department of Treasury Secretary John Snow to remain on the job.

This leaves Snow and Secretary of Defense Donald Rumsfeld as the only two cabinet members whose positions are now secure.

Lawmakers have not been able to reach an agreement on how to resolve a funding shortfall of E-Rate, the federal program that finances Internet connections in schools and libraries. Therefore, consumers could see an increase of approximately $12 on their telephone bills.

The shortfall has arisen due to an FCC mandate that the Universal Service Administrative Company (USAC) change how it accounts for grants given under the E-Rate program. The change bars agencies agencies from making expenditures without the cash on hand and would cause a nearly $3 billion dollar shortfall. The fix would have exempted the USAC for a year while they figure out how to make a permanent fix.

Senator Snowe had legislation that would have made the fix in a last ditch effort as part of a broader package of telecommunication legislation that passed out of the House. It was stalled in the Senate when Senator John McCain (R-Arizona) tried to attach boxing safety legislation. Senator McCain agreed not to block the narrower bill, but it did not have support in the House.

Yesterday, Senate leaders reached an agreement to shed each committee by one seat. This move will ensure that the Republicans will have a two seat advantage on almost every committee in the upcoming 109th Congress. Still to be determined is committee funding, staff levels for the majority and minority parties and the distribution of office space.

Retirements and defeats made it possible for Senate Minority Leader Harry Reid (D-Nevada) to fill some committees without having to move out any Democrats and even award two plum assignments to Senator Charles Schumer (D-New York) and Senator Ron Wyden (D-Oregon) on the Finance committee.

Several committees will get new ranking Democrats. Senator Daniel Inoye (D-Hawaii) moves up on the Commerce committee taking over for retiring Senator Ernest Hollings (D-South Carolina). Senator Daniel Akaka (D-Hawaii) will take over from retiring Senator Bob Graham (D-Florida) as ranking member on the Veteran's Affairs committee. Senator Tim Johnson (D-South Dakota) will take over on the Select Intelligence committee and Senator Byron Dorgan (D-North Dakota) will take over on the Indian Affairs committees.

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The controversial tax provision that slowed the omnibus bill down just as it was about to be approved has been removed. With the excision of the offending measure (which would allow certain members of Congress to examine individual tax returns), the bill will move speedily to the President's desk to keep the government running.

HHS Secretary Tommy Thompson announced yesterday that it would carve the nation into 34 regions to administer the new Medicare program, which begins in January 2006.

Medicare will rely on private insurers, subsidized by the government, to deliver drug benefits. Premiums for each drug plan will be uniform throughout its region, but they could vary widely between neighboring states in different regions.

The configuration of the regions will be a significant factor in the success or failure of the law. The regional boundaries will determine how many insurers participate in the program.

The White House had originally wanted to establish large multi-state regions. Administration officials said that larger regions would force health plans to serve rural areas that they had historically shunned. However, many insurers told the administration that it would be difficult or impossible to serve such large areas.

Some of the drug plan regions are very large. One, covering all of California has 4.3 million Medicare beneficiaries. Other large single-state regions include Florida, with 3 million beneficiaries, New York (2.8 million) and Texas (2.5 million).

The new Medicare law envisions a huge role for private plans. If beneficiaries stay in traditional fee-for-service Medicare, they can get subsidized drug coverage by buying private insurance policies that cover prescription drugs and nothing else. Alternatively, they can join a managed care plan that covers drugs along with doctors’ services and hospital care.

House Majority Leader Tom DeLay (R-Texas) has proposed a new plan to streamline the current system under which some committees provide funding for unrelated federal departments and agencies. The proposed changes are said to be intended to reflect Republican priorities.

As part of the plan, one Appropriations subcommittee would have jurisdiction over regulatory agencies, another would review funding for personnel accounts and a third panel would consider spending on quality of life in the military.

While many do believe the current subcommittee structure has many anomalies, some have criticized Leader DeLay's plan to put the personnel budgets of every agency under a single subcommittee. The plan will certainly face obstacles in the Senate.

Long tradition is that changes of the Appropriations panels are rarely made. It is easier to negotiate the 13 spending bills if the House and Senate subcommittee jurisdictions match.

Although no one expects Leader DeLay's plan to be approved, it seems his motive may have been to shake people up so that some moderate changes could be made.

Yesterday, President Bush invited bipartisan congressional leaders to the White House to discuss his idea to create personal savings accounts within Social Security. These accounts are similar to 401(k) retirement plans and would allow workers to divert a portion of their Social Security payroll taxes to personal accounts, which would be invested in stocks and bonds. President Bush acknowledged yesterday that an overhaul of Social Security could hit $2 trillion, but estimated that the program will face a $10 trillion deficit if no changes are made to the system.

Social Security's trustees have said that the program's obligations to retirees over the course of the next 75 years are $3.7 trillion more than the system is expected to take in.

The President did not offer a specific plan but instead indicated his interest in working on Social Security in 2005. By not offering a more details, but instead having a broad discussion, the President could gauge how much resistance he might encounter. Preliminary reporting on the President's ideas in the press have been met with some resistance, particularly from Democratic officials.

To fund the personal savings accounts, payroll taxes would have to be diverted from paying current retirees' benefits. To continue to pay existing benefits to current retirees, the government would have to absorb "transition accounts" which could cost trillions of dollars. Yesterday, the Bush administration said that the federal government would have to increase borrowing to pay for the overhaul, as opposed to raising taxes or cutting benefits.

Many conservatives balk at additional borrowing which would increase the federal deficit.

Democrats, for the most part, are concerned that personal savings account would expose workers' funds to unnecessary risk and would cost too much. They also take issue with the President's claim that the program will face a $10 trillion deficit if no changes are made to the system.

It now appears the long delayed intelligence reform bill may be headed for a vote tomorrow, after compromise language was inserted in the bill to satisfy Duncan Hunter (R-California). The new wording has not yet been released, so the implications are uncertain. We'll continue to update as new information becomes available.

Today President Bush called on Congress to pass the intelligence reform bill waiting for a vote in the House and Senate.

Democrats claim the measure has more than enough votes to be passed if the House leadership would bring the measure to the floor, but objections from two influential committee chairmen, Duncan Hunter (R-California) and James Sensenbrenner (R-Wisconsin) have bogged down such a move in the past.

The year-end wrap up begins today in the House, after which point the intelligence bill would be scuttled until next year. Such a delay would mean recrafting the bill from scratch.

The New York Times is reporting that the administration plans to let Treasury Secretary John Snow depart. This would mean that all major cabinet agencies (with the exception of Secretary of Defense Donald Rumsfeld) will be likely helmed by new leaders.

The Associated Press is now reporting that Tommy Thompson, head of Health and Human Services, is resigning today.

Mark McClellan, currently heading Medicare, is rumored to be next in line to succeed Thompson. McClellan's brother Scott currently is the White House press secretary.