• The Bush "administration has transformed the nation's federal appeals courts, advancing a conservative legal revolution that began nearly three decades ago under President Ronald Reagan," the New York Times reports.
• "President Bush has three months left to issue his final round of pardons, a process that could bring him to consider whether to forgive a list of administration officials, soldiers and operatives engaged in the war on terror -- and even just-convicted Ted Stevens (R-Alaska)," Roll Call (subscription) reports.
• "Director of National Intelligence Mike McConnell has taken steps to make it easier for U.S. intelligence agencies to recruit first-generation Americans with foreign relatives," the Washington Post reports. "In an Oct. 1 directive, McConnell removed a requirement restricting access to 'sensitive compartmented information,' the highest level of classified information, to employees whose family members or close associates were U.S. citizens."
• "The steep buildup in government spending on intelligence programs continued over the past year, according to figures made public on Tuesday, but American intelligence agencies are also bracing for a new era of austerity," the New York Times reports. "Current and former intelligence officials said that some belt-tightening had already begun because of the economic crisis, and that further large increases in the budget were unlikely, no matter who became the next president."
• "Illegal exports of weapons, military equipment and national security-related technology to potentially adversarial nations are on the rise, the U.S. Justice Department reported Tuesday," AP reports. "Of 145 people or companies charged with shipments last year, nearly half involved -- or 43% -- were exporting goods to Iran and China."
Congress: Lieberman Likely To Lose Chairmanship
• "Democratic lawmakers in Congress are girding for a major battle over Medicare next year that could result in substantial changes, including cuts in payments to private insurers that offer Medicare coverage and a new right for the federal government to negotiate drug prices," the Wall Street Journal reports. "Pressure to act on Medicare is rising as the program grabs a growing share of the federal budget."
• "Democratic leaders are discussing a major reshuffling of Senate committee chairmanships, according to multiple sources, and the proposed changes include ousting Sen. Joe Lieberman (I-Conn.) from his coveted chairmanship," The Hill reports. "Lieberman, a former Democrat who supports Sen. John McCain (R-Ariz.) for president, is likely to lose his gavel on the Homeland Security Committee he has chaired since January 2007, say the sources who see him being replaced by Sen. Daniel Akaka (Hawaii), the committee's third-ranking Democrat."
• "Senator Edward M. Kennedy, who has been battling a severe form of brain cancer from his home on Cape Cod, returned to his residence in Washington" on Tuesday, "a sign that his treatments have been progressing well," the Boston Globe reports. "The Massachusetts Democrat... will continue his treatments in the nation's capital."
• "Senate Minority Leader Mitch McConnell (R-Ky.) said Tuesday that Alaska Republican Ted Stevens should give up the Senate seat he has held for four decades," The Hill reports.
• "Stevens is asking the Justice Department to investigate the conduct of federal prosecutors who participated in the trial that led to his conviction for lying about home renovations and gifts he received from a wealthy businessman," AP reports. "The Fairbanks Daily News-Miner reported Tuesday that Stevens attorney Brendan Sullivan requested an investigation into 'numerous, serious constitutional violations' by government prosecutors."
Iraq: Government Condemns U.S. Strike In Syria
• "The Iraqi government Tuesday condemned a U.S. helicopter assault inside Syria over the weekend as Damascus shut down an American school and cultural center in reaction to the raid," the Los Angeles Times reports. "As the Iraqi government voiced displeasure over the American assault, the Cabinet also approved changes to a proposed U.S.-Iraq security agreement that would allow U.S. forces to stay in Iraq through the end of 2011."
• "Iraq took over from US forces" today "control of the central Shiite province of Wasit, which US commanders say is often used by Iranian groups to smuggle weapons to launch attacks in Iraq," Agence France-Presse reports. "Wasit became the 13th of Iraq's 18 provinces to be handed over by US-led forces to Baghdad amid an overall improvement in security across the violence-wracked country."
• "In the first case of its kind, an Iraqi judge Tuesday convicted an Iraqi man of abducting, torturing and killing two American soldiers in the summer of 2006," the Washington Post reports. "Ibrahim Karim Muhammed Salih al-Qaraghuli was found guilty and sentenced to death after expert testimony that his fingerprints matched photos of bloody prints found on the front panel of the pickup truck used to drag the soldiers, Pfc. Kristian Menchaca and Pfc. Thomas L. Tucker."
• "At least 310 private security companies from around the world have received contracts from United States agencies to protect American and Iraqi officials, installations, convoys and other entities in Iraq since 2003, according to the most comprehensive accounting yet of the secretive and weakly regulated role that private firms have played in the conflict," the New York Times reports.
Nation: New York's Governor Warns Of Massive Deficit
• "New federal rules made final" on Tuesday "will tighten enforcement of the No Child Left Behind law, including requiring schools nationwide to use a single formula to calculate high school graduation rates," the Washington Post reports. "The administrative change was one of several the Bush administration has put in place in an effort to put a final stamp on the 2002 education law considered one of the president's most significant domestic initiatives."
• New York "Gov. David A. Paterson [D] said on Tuesday that the state's budget deficit had swelled to a projected $47 billion over the next three and a half years amid a worsening global financial crisis, and that the state must end its addiction to excessive spending," the New York Times reports. "The state is now projecting that as a result of the crisis and its ripple effects, New York will lose 160,000 private-sector jobs between now and the end of 2009, and face a sharp drop in income tax and corporate tax revenue."
• "Much of the University of Texas medical school on" Galveston Island, Texas, "suffered flood damage during Hurricane Ike, except for one gleaming new building, a national biological defense laboratory," the Times reports. But "how a laboratory where scientists plan to study viruses like Ebola and Marburg ended up on a barrier island where hurricanes regularly wreak havoc puzzles some environmentalists and community leaders."
• "Federal accident investigators on Tuesday charged that the air-ambulance industry and its regulators have moved too slowly to halt the spate of accidents that made 2008 the deadliest year in emergency medical helicopter history," USA Today reports. The National Transportation Safety Board "voted for the first time to put safety enhancements for air-ambulance flights on its annual 'Most Wanted' list of suggested improvements."
Economy: Fed Slashes Key Interest Rate
• "Stocks skyrocketed nearly 11 percent" Tuesday "in the second-biggest point gain ever for the Dow Jones industrial average, buoyed by signs of improving credit conditions and expectations that the Federal Reserve would slash a key interest rate today," the Washington Post reports. "Investors were cheered by reports that the Fed was making progress in unlocking corporate debt markets through its program to buy commercial paper."
• "The big question on the minds of investors on Wall Street and Main Street, however, remains this: Have stocks fallen enough to reflect the steep declines in profits that are sure to accompany a potentially long global recession?" the New York Times reports.
• "The Federal Reserve may lower its benchmark interest rate to 1 percent today and signal further reductions to levels unseen since Dwight Eisenhower was president," Bloomberg News reports. "Tumbling commodities prices and weaker consumer spending are slowing inflation, which officials described as a 'significant concern' at their last scheduled meeting in September."
• "Give away $700 billion and you tend to attract a crowd, but a growing number of lawmakers and economists are criticizing the Bush administration for extending the massive Wall Street rescue plan far beyond what they had thought were its original limits," the Washington Times reports. "In the three weeks since President Bush signed the bailout bill, the Treasury Department has pledged to purchase at least $163 billion in preferred stock to boost the capital of nearly 35 national and regional banks."
• "As the U.S. Treasury prepared to start shipping $125 billion this week to the country's largest banks, an impatient White House served notice companies receiving the money to start making more loans," AP reports.
• "The current downturn is shaping up to be worse than the recessions of 1990-91 and 2001 and the prolonged downturn that ended in 1982," the Wall Street Journal reports, looking at "five areas economists are watching, and the indicators they are tracking."
• "Consumer confidence dipped to its lowest level on record as Americans reacted with growing pessimism to financial uncertainty and widespread job losses, according to a survey released" Tuesday, the Washington Post reports. "The sentiment found in the survey was reinforced by more bad news in the retail sector -- layoffs at the world's largest appliance manufacturer and decreased consumer spending at rental car, athletic apparel and other companies."
• "After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers," the New York Times reports. "The pullback is affecting even creditworthy consumers and threatens an already beleaguered banking industry with another wave of heavy losses."
• "Output from the world's oilfields is declining faster than previously thought, the first authoritative public study of the biggest fields shows," the Financial Times reports. "The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields."
World: 20,000 More Troops Requested For Aghanistan
• "With Iceland, Pakistan, Hungary and Ukraine already clamoring for mountains of cash, the $250 billion set aside by the International Monetary Fund to help struggling nations through the economic crisis is beginning to look puny," AP reports. "China and oil-rich Persian Gulf states should fund the bulk of a major boost in the IMF's bailout pot, Gordon Brown, the British prime minister who has burnished his reputation by taking the lead on the financial meltdown, said Tuesday."
• "U.S. commanders in Afghanistan now believe they need about 20,000 additional troops to battle a growing Taliban insurgency, as demands mount for support forces such as helicopter units, intelligence teams and engineers that are critical to operating in the country's harsh terrain," the Washington Post reports.
• "Pakistani and Afghan leaders on Tuesday agreed to make contact with insurgent groups, including the Taliban, in a bid to end bloodshed and violence in their troubled border regions," the Post reports. "Leaders from the neighboring countries reached the decision" in Islamabad "at the end of a two-day jirgagai, or mini-tribal council, which was attended by 50 officials and tribal elders from both sides."
• "Pakistan's government summoned the U.S. ambassador" today "to urge an immediate halt to missile strikes on suspected militant hide-outs near the Afghan border," AP reports. "Missile attacks have killed at least two senior al-Qaida commanders in Pakistan earlier this year.... However, a marked uptick in their frequency has badly strained America's seven-year alliance with Pakistan."
• "More than 150 people were killed in Pakistan when a magnitude 6.4 earthquake struck before dawn and destroyed as many as 20 villages near the southwestern city of Quetta, officials said," Bloomgerg News reports.
• "Congolese rebels fought their way closer to the city of Goma in eastern Congo on Tuesday, sending tens of thousands of villagers fleeing down muddy roads, as the top U.N. representative in the country appealed to the Security Council to reinforce its peacekeeping force," the Washington Post reports.
• "Defense Secretary Robert M. Gates said" Tuesday "that he would advise the next president to seek a new nuclear arms agreement with Russia that provides for further reductions in nuclear warheads, keeps the existing verification procedures and is easy to amend in the event threats develop," the Post reports.
• "Russia's lower house of parliament" today "ratified treaties with the Georgian breakaway regions of South Ossetia and Abkhazia that will allow Moscow to station thousands of troops there," Reuters reports. "Russia recognised the two regions as independent states in the aftermath of August's brief war with Georgia, drawing condemnation from Western states who said it was violating Georgia's sovereignty."
• "Suicide bombers struck targets across northern Somalia" today, "including a U.N. compound, officials said," AP reports. "There were deaths and dozens of injuries, but an exact casualty figures were not immediately available."
• "For many of the financially strapped nations of the Middle East, the oil-rich countries of the Persian Gulf have served for years as an economic lifeline," the New York Times reports. "Suddenly, that lifeline appears frayed, dangerously so for countries like Egypt and Jordan, as the energy-rich nations find themselves pulled into the global financial crisis and undermined by dropping oil prices."
• "Kim Jong-il, North Korea's leader, is probably hospitalized but still capable of making decisions, Japan's prime minister, Taro Aso, said Tuesday," the Times reports. "If Mr. Kim, 66, had been incapable of decision-making, Japanese and other intelligence officials believe, 'we would be seeing different developments' in North Korea, Mr. Aso said."
Campaigns: Obama Hits Prime Time
• Barack Obama will channel his inner Ross Perot tonight when he dominates major national and cable networks with a 30-minute television spot. Earlybird's Campaign News section has more.
Commentary: For The Greater GOP Good
• In Earlybird's Pundits & Editorials section, Sen. Stevens is urged to resign in order to preclude even more trouble for Senate Republicans.