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Bush defends foreign policy in farewell to military, lawmakers get to work on new agenda, Iraqi candidates campaign for provincial elections, California's budget woes persist, Israel temporarily halts Gaza bombings.

• "President Bush on Tuesday said that when it comes to the military, his time in office will be remembered as the early years of a generational struggle against terrorism and of 'a global coalition led by the United States' to fight for others' freedom," the Washington Times reports. "At a military parade in honor of the president and the armed services at Fort Myer in Arlington, Mr. Bush said that of all his goodbyes in his final days in office, 'nothing compares to the honor of standing before you today.'"

• Bush on Tuesday gave "45 aides, supporters and others a parting gift as he leaves office: presidential appointments to boards and councils, with terms lasting three to six years after he leaves office," CNN reports.


• "The military judge overseeing proceedings against five of the men accused of planning the Sept. 11, 2001, attacks signed an order designed to protect classified information that is so broad it could prevent public scrutiny of the most important trial at Guantanamo Bay, Cuba, according to lawyers and human rights groups," the Washington Post reports.

• "Four men being held as terror suspects at a U.S. military base in Afghanistan are asking a federal judge for the right to sue for their release -- a right already given to detainees at Guantanamo Bay," AP reports. "A hearing" today "will test whether a 2008 Supreme Court decision -- allowing al-Qaida and Taliban suspects at the U.S. naval base in Cuba to challenge their detention -- should be extended to detainees held at other military prisons overseas."

Congress: Lawmakers Get To Work On New Agenda

• "House and Senate leaders marked the first day of the 111th Congress by preaching bipartisanship Tuesday and promising to start work quickly on President-elect Barack Obama's economic proposals and issues ranging from climate change to health care," USA Today reports. "Oaths of office were administered, anti-war protesters staged demonstrations and lobbyists cruised through a series of receptions to celebrate the day."


• "As he begins to feel the full power of his nearly filibuster-proof Democratic majority, Senate Majority Leader Harry Reid (Nev.) made clear Tuesday he plans to forcefully press his party's prerogatives in the 111th Congress and will not allow an Obama White House to dictate the chamber's agenda," Roll Call (subscription) reports.

• "After a decade of litigation and a lost Supreme Court case, Lilly Ledbetter's pay discrimination plight will be the first order of business for the 111th Congress -- and House Democrats are using her name recognition and" Obama's "political capital to push for even more," CongressDailyAM (subscription) reports.

• "Roland Burris heads into a pivotal meeting with" Reid "and Majority Whip Richard J. Durbin," D-Ill., today "with an unmistakable sense of momentum," the Politico reports. "He's now got a top Senate Democrat on his side, a growing chorus of Congressional Black Caucus members backing him and an apparent edge in pending lawsuits."

• "Norm Coleman (R) extended the Minnesota Senate race for weeks and perhaps months on Tuesday, filing a lawsuit to challenge his loss to Democrat Al Franken," The Hill reports. "The Republican also beat back calls from some, including" Reid, "to concede the race."


• "House Democrats approved rules Tuesday for the 111th Congress that repeal six-year term limits for committee chairmen and prevent Republicans from using a procedural gambit to disrupt floor action. The vote was 242-181," CongressDailyAM (subscription) reports. "Republicans were particularly peeved at losing the minority's right to offer an alternative to legislation on the floor."

• "A closed door-meeting of the Senate Finance Committee on Thursday will be an early test of" Obama's "economic plan, with Chairman Max Baucus [D-Mont.] hoping to use the executive session to judge support for the tax cuts and major health provisions at the heart of the $775 billion package," the Politico reports. "Better than half the total cost of the Obama package falls within the Finance Committee's jurisdiction."

• "Members of Congress will no longer be able to hide earmark requests behind a cloak of secrecy after the chairmen of the House and Senate Appropriations committees announced new sunshine rules Tuesday," Roll Call (subscription) reports. "House Appropriations Chairman David Obey (D-Wis.) and his Senate counterpart, Daniel Inouye (D-Hawaii), said that starting with the fiscal 2010 appropriations bills, they would require Members to post their requests on their Web sites at the time they make them."

• "Former Florida Gov. Jeb Bush [R] said Tuesday he will not run for the state's open Senate seat next year and instead will work from outside elected office to rebuild the Republican Party," the Washington Times reports.

Iraq: Candidates Campaign Publicly Ahead Of Provincial Elections

• Iraq's "provincial elections on Jan. 31 are the first in which the government has deemed it safe enough for the names, instead of simply the political affiliations, of officeseekers to appear on the ballot," the New York Times reports. "It is also the first time that large numbers of candidates... have decided for themselves that Iraq is sufficiently safe to campaign publicly and put their oversize pictures on posters and banners around the city."

• "Five former Blackwater Worldwide security guards pleaded not guilty" Tuesday "to federal charges that they unleashed an unprovoked salvo of bullets and grenades in a busy Baghdad square in 2007, killing at least 14 Iraqi civilians and injuring 20 others," the Washington Post reports. "A federal judge in the District set a trial date for next January."

• "Shi'ites in Iraq gathered in their thousands to observe an annual ritual of mourning" today, "an event that has become a show of strength for a majority whose public worship was repressed by Saddam Hussein," Reuters reports. "Ashura, the most important day in the Shi'ite calendar, was largely peaceful, guarded by a heavy police and army presence three days after a suicide bomber killed 35 pilgrims outside a Baghdad shrine."

Nation: California's Budget Woes Persist

• "The coal ash pond that ruptured and sent a billion gallons of toxic sludge across 300 acres of East Tennessee last month was only one of more than 1,300 similar dumps across the United States -- most of them unregulated and unmonitored -- that contain billions more gallons of fly ash and other byproducts of burning coal," the New York Times reports.

• "State officials on Tuesday braced for the possibility of delaying tax refunds to millions of Californians, along with student grants and payments to vendors, as the latest round of budget negotiations between Gov. Arnold Schwarzenegger [R] and Democratic legislators collapsed," the Los Angeles Times reports. "With little more than a month's worth of cash left in the state treasury, the governor and lawmakers have been unable to agree on how to erase a budget gap projected to reach $41.6 billion by the middle of next year."

• "Gov. Deval Patrick [D] is backing sweeping changes to Massachusetts' ethics laws, including dramatically increasing prison time for bribery and giving the attorney general wiretapping authority in corruption probes," AP reports. "The changes were recommended by a panel formed by Patrick after the October arrest of state Sen. Dianne Wilkerson [D] on bribery charges."

• "The often-cursed Trans-Texas Corridor is no more," the Fort Worth Star-Telegram reports. "State officials say they've officially pulled the plug on the proposed statewide network of toll roads, rail lines and utilities, an estimated $184 billion project that for more than two years has been loudly opposed by dozens of lawmakers and thousands of ordinary Texans."

• "New Year's Day brought relief for most taxpayers, especially upper-income ones," the Wall Street Journal reports. "Starting Jan. 1, the basic federal estate-tax exemption jumped to $3.5 million from $2 million in 2008. This large increase is expected to result in a major decline in the number of estates subject to the tax for 2009."

Economy: Fed's Predictions For 2009 Worsen

• "The Federal Reserve signaled Tuesday that the recession could be longer and deeper than officials previously thought, with unemployment rising into next year and inflation slowing substantially," the Wall Street Journal (subscription) reports. "Minutes from the Fed's December meeting, released Tuesday with the usual three-week lag, showed Fed staff sharply reduced their economic forecasts for 2009."

• "The service sector contracted in December for the third consecutive month, while orders at factories fell the previous month on weakening consumer demand, according to data released" Tuesday "that highlighted the persistent weakness in the U.S. economy," the Washington Post reports. "The Institute for Supply Management said" Tuesday "that the service sector continued to shrink last month, although at a slower pace than it had in November."

• "Frightened by the recession and the credit crisis that produced it, the nation's mainstream economists are embracing public spending to repair the damage -- even those who have long resisted a significant government role in a market system," the New York Times reports. "But there is not much agreement yet on what type of spending would produce the best results, or what mix of spending and tax cuts."

• "General Motors Corp. has enough government loans to cover the worst-case scenario it described last month and says it won't need more if the economy holds up," Bloomberg News reports. "The U.S. Treasury has pledged as much as $13.4 billion in aid to help GM pay its bills and $6 billion to prop up lender GMAC LLC, which GM relies on for auto loans and dealer support."

World: Israel Temporarily Halts Gaza Bombings

• "The Israeli government has ordered its forces to stop their assault on Gaza for three hours a day to establish a so-called humanitarian corridor to give Palestinians access to food and medicine, the office of Ehud Olmert, the prime minister, said" today, Financial Times reports.

• "Calls by Arab and European leaders for a cease-fire in the Gaza conflict intensified Tuesday in the aftermath of a mortar attack by Israeli forces on a United Nations school that killed at least 30 Palestinians who had sought shelter there," the Los Angeles Times reports.

• "The biggest hurdle to winning a cease-fire in the Gaza Strip, according to diplomats and Israeli military officials, is a problem that has bedeviled Israel for years: how to stop Hamas from digging tunnels into Egypt in order to bring tons of rockets and other weaponry into Gaza," the Washington Post reports. "Mediators are trying to come up with an anti-tunnel plan to satisfy Israel."

• "The biggest foreign-policy challenge awaiting" Obama "isn't Iraq or Afghanistan but Pakistan," Bush's "national-security adviser said," the Wall Street Journal reports. "In an interview previewing a valedictory speech he plans to give" today, "Stephen Hadley said Pakistan's increasingly turbulent border region poses threats not just to the U.S. mission in Afghanistan, but also to neighboring India."

• "Pakistani President Asif Ali Zardari, whose government has been accused by India of supporting a major terrorist attack there, vowed Tuesday to work closely with Afghan President Hamid Karzai to combat terrorism, saying it had become a menace to all countries in the region," the Washington Post reports. "Zardari, making his first visit to Afghanistan, was welcomed by Karzai as a 'brother' and returned the familiarity several times during a joint news conference at Karzai's palace in Kabul."

• "Gazprom, the Russian gas monopoly, halted nearly all its natural gas exports to Europe on Tuesday, sharply escalating its pricing dispute with neighboring Ukraine," the New York Times reports. "The cutoff led to immediate shortages from France to Turkey and underscored Moscow's increasingly confrontational posture toward the West."

• "North Korea said" today "it would finally elect new members to its rubber stamp legislature -- a move delayed for several months amid speculation about leader Kim Jong Il's health," AP reports. "The regime also appeared to be shaking up its Cabinet, naming at least five new ministers to economic posts in what analysts say is an attempt to revive the nation's economy after losing South Korean aid amid frayed ties."

Transition: Langley Wrangling

• Obama spent much of Tuesday defending his choice of Leon Panetta for the top job at the CIA, while some of the Langley neophyte's former White House colleagues jumped to his defense. Read more in Lost In Transition,'s blog on the changeover.

Commentary: Sizing Up Panetta

• While some commentators show full support of Panetta, others are more hesitant in Earlybird's Pundits & Editorials section.

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