N2K Top 10: Haley's Comment; LIne of Fire

1. HALEY’S COMMENT. Seeking to repair damage from remarks that were ripped for insensitivity to the Jim Crow era in his Mississippi hometown, Gov. Haley Barbour acceded late Wednesday to a long-running bid by the NAACP to free two sisters imprisoned on armed robbery charges in 1994. It remains to be seen whether suspending the sentences – which the NAACP says were tainted by racism – will quell outrage over the comments, which have already sent Barbour’s 2012 presidential stock plunging.
2. OUT OF SIGHT, NOT THE LINE OF FIRE. The doldrums of the week between Christmas and New Year’s didn’t stop angry Republicans from firing off quick criticism of some of President Obama’s recess appointments. Among the most vocal: Peter King, R-N.Y., the next chairman of the Homeland Security Committee. He called the naming of James Cole to the deputy attorney general post “one of the worst appointments” of Obama’s presidency. King and many others object to Cole’s support for trying accused terrorists in civilian courts. 
3. MORE RECESS. In addition to the high-profile recess appointment of Robert Ford as U.S. ambassador to Syria, the White House also used the congressional break to name new representatives to Azerbaijan, Turkey, and the Czech Republic. The moves are sure to anger some lawmakers who see the recess appointments as an end-run around the legislature. The new envoys are Matthew Bryza for Azerbaijan, Norman Eisen for the Czech Republic, and Francis Ricciardone for Turkey.
4. THE BIGGER CONVERSATION.  President Obama is getting a lot of flack for his recent private comments to Philadelphia Eagles owner Jeffrey Lurie praising his decision to give Michael Vick a second chance after his prison term for running a dog-fighting ring. But a Texas man who Obama recently pardoned for a 1980s drug conviction says that the president’s weighing in on the matter lends credibility to the argument that society need to do more to reintegrate ex-offenders after they’ve paid their debt. Timothy Gallagher, who went on to a long career as a firefighter after a Phoenix fire chief overlooked his conviction, said his own turnaround “wouldn’t have been possible without a second chance.”
5. MESSING WITH TEXAS. Texas failed Wednesday in its last-ditch bid to block the Environmental Protection Agency from taking over a portion of its clean-air permitting program, setting up a showdown early next year between the Lone Star State and the federal government. On January 2, all states must begin regulating greenhouse-gas emissions under the Clean Air Act. Even states that oppose the plans and are suing EPA have agreed to work with the agency until the lawsuits are resolved – except for Texas. On Wednesday, the U.S. Court of Appeals for the 5th Circuit rejected the state’s request for a stay of the climate rules until its lawsuits against EPA are resolved. Look for fireworks to erupt from the office of Texas governor Rick Perry.
6. NO WITCH, BUT… The Associated Press is reporting that defeated Delaware Senate candidate Christine O’Donnell is under federal investigation for campaign-finance violations. In September, Citizens for Responsibility and Ethics in Washington  asked the U.S. Attorney’s office in Delaware to investigate reports that O’Donnell used campaign funds for personal use. CREW's letter accused O’Donnell of embezzlement and quoted a former aide as saying she dipped into the campaign kitty to pay for rent, personal expenses, and even a bowling outing.
7. FORECLOSURES PICKING UP.  The mess over faulty and often falsified mortgage documentation hasn’t slowed the pace of foreclosures. Federal bank regulators reported yesterday that the number of new foreclosures jumped 31.2 percent in the third quarter, to 382,000 homes.  More are on the way: The number of foreclosures in the pipeline climbed 4.5 percent over the second quarter, to 1.2 million. About 13 percent of all mortgages are more than 90 days past due.
8. BANKS REOPENING SPIGOT?  The Wall Street Journal reports that at least some big banks are stepping up the pace of their lending to businesses, a sign that corporate executives are more eager to expand and banks are less frightened of the risk. Moody’s Analytics estimates that commercial and industrial lending edged up slightly in the third quarter, the first quarterly increase in two years. JP Morgan Chase says its lending to middle-sized companies is up 7 percent this year, with much of that growth in the past several months.  
9. RYAN RISING. A little-noticed detail in the new rules proposed by House GOP leaders would greatly increase the power of Rep. Paul Ryan, R-Wis., the incoming chairman of the House Budget Committee. As National Journal’s Katy O’Donnell reports, the new rules say that, for fiscal 2011, the chairman will set spending limits without needing a vote. Because Republicans have vowed to slash discretionary spending as much as 20 percent this year, Ryan will be a very important person to know.
10. MAMA CACTUS? Dancing With The Stars finalist Bristol Palin’s recent purchase of a home in Arizona has the buzz machine working overtime about what it all means. The Arizona Republic is knocking down reports that Palin will be attending Arizona State University’s prestigious Walter Cronkite School of Journalism. No response from the Palin camp to the widespread speculation that Sarah Palin and the rest of the clan might be joining Bristol. But Arizona does have certain charms, such as 11 Electoral College votes to Alaska’s three.

(YOU DON’T NEED TO KNOW. Developer, reality TV star, and possible presidential candidate Donald Trump, is suing, so far unsuccessfully, to block a runway expansion at the Palm Beach airport. Trump is worried about potential noise pollution at his nearby estate, Mar-a-Lago, and no wonder: Who’d want to miss the potential tete-a-tete tomorrow night at Trump’s annual New Year’s bash there. Both Tiger Woods and one of his, um, exes, Rachel Uchitel, are on the guest list. Hey, if the White House thing doesn’t work out, maybe Trump has a career in diplomacy?)

This week, National Journal is consolidating its Need-to-Know morning memos into one highlights package viewable on the home page. Separate memos will resume on Monday, January 3.