• "President Obama acknowledged" Tuesday "that he had 'made a mistake' in trying to exempt some candidates for positions in his administration from strict ethics standards and accepted the withdrawal of two top nominees, including former Senate majority leader Thomas A. Daschle, in the first major setback of his young presidency," the Washington Post reports.
• "The government is poised to extend health coverage to 4 million more lower-income children, a first step in" Obama's "promise to shrink the ranks of the uninsured," AP reports. "The House was expected to approve the expansion of a children's health insurance program" today "and deliver it to Obama for his quick signature."
• Obama "will announce today that he's imposing a cap of $500,000 on the compensation of top executives at companies that receive significant federal assistance in the future, responding to a public outcry over Wall Street excess," Bloomberg News reports.
• Sen. Judd Gregg, R-N.H., nominated Tuesday for Commerce secretary, "certainly fits with" Obama's "professed desire to create a cabinet with conflicting views," the New York Times reports. "If confirmed, he will be at the top of the list of administration officials having fundamental differences with a president who is enlisting them to advance his agenda."
• "A classified Pentagon report urges" Obama "to shift U.S. military strategy in Afghanistan, de-emphasizing democracy-building and concentrating more on targeting Taliban and al-Qaeda sanctuaries inside Pakistan with the aid of Pakistani military forces," AP reports.
• "While his press secretary fielded volleys of questions about the withdrawal of his health and human services nominee, Tom Daschle, President Barack Obama went to school," the New York Times reports. "Though the visit was not on the president's schedule, he and First Lady Michelle Obama made their way to the Capital City Public Charter School in northwest Washington just before 2 p.m. to meet with some young constituents."
Congress: Stimulus Supporters, Wary Of Delays, Warn Time Is Money
• "In a ruling that keeps alive Republican Norm Coleman's chances of overturning Minnesota's U.S. Senate recount, a three-judge panel on Tuesday allowed him to bring evidence to trial that as many as 4,800 absentee ballots were wrongly rejected and should now be counted," the Star-Tribune reports.
• "Economists are warning that Congress drags its heels on passing the stimulus package at the economy's peril," Politico reports. "The economic stimulus package that the Senate began debating Monday is already two weeks behind" Obama's "original Inauguration Day target."
• "Sources inside a closed-door meeting of House Democratic leaders Tuesday night said that there was a great deal of angst among top party lawmakers about the Senate's handling of the package," CongressDailyAM (subscription) reports. "Their complaints center on the increased spending, redirection of parts of the bill and the time it is taking the Senate to move a package Democrats want passed quickly"
• Obama "is lobbying Republican senators personally on his economic stimulus package, which failed to attract a single GOP vote in the House," The Hill reports. "Obama has scheduled one-on-one meetings at the White House with a handful of GOP centrists who he believes are most likely to support an economic recovery plan that Republican leaders have panned."
• "As a liberal group launches a blistering ad campaign to pressure GOP senators into supporting the stimulus package, a Democrat seems to have escaped its attention: Sen. Ben Nelson of Nebraska," Politico reports.
• Daschle's "decision to abandon his bid for" Health and Human Services on "Tuesday left Washington reeling not just from the surprise announcement but also with the prospect of what might become of efforts to overhaul the nation's healthcare system and what his already installed lieutenants would do next," CongressDailyAM (subscription) reports.
• "Blue Dog Democrats had garnered more than a dozen additional signatures from outside their caucus on Tuesday for a letter to Majority Leader Steny Hoyer (D-Md.) calling for a prompt return to 'regular order,'" The Hill reports.
Economy: Green Industries Face Setbacks
• "The ousting of" Rep. John Dingell, D-Mich., "late last year from his chairmanship of the House Energy and Commerce Committee... was a public step in what politicians and lobbyists say has been a gradual erosion of the auto industry's clout in Washington and in state legislatures," the Washington Post reports. Obama's "move last week to support strict California vehicle emission standards was another blow to the industry, already reeling from financial pressures and dismal sales."
• "Wind and solar power have been growing at a blistering pace in recent years, and that growth seemed likely to accelerate under the green-minded Obama administration. But because of the credit crisis and the broader economic downturn, the opposite is happening: installation of wind and solar power is plummeting," the New York Times reports.
• "Despite being pinched by the economic downturn, ethanol producers are expanding so rapidly that they are pressing the government to overturn its 25-year-old rule that limits to 10 percent the amount of the corn-based additive that can be put into a tank of gasoline," the Washington Times reports.
• "The Obama administration's emerging rescue plan for the banking system would amount to financial triage, with the Treasury Department playing the delicate role of deciding which of the trillions of dollars in troubled assets plaguing the economy to buy, guarantee or leave in the hands of banks, sources said," the Washington Post reports.
• "Cellphone sales are falling, manufacturers have announced thousands of layoffs and wireless carriers are finding it harder to acquire and keep customers," the New York Times reports. "It seems like another tale of 'recession bites industry,' but there are signs that this downturn is masking something more fundamental: that the cellphone industry's best days are behind it."
Nation: Air Force Fails Nuclear Inspections
• "Air Force nuclear units have failed two inspections in the past three months, providing fresh evidence that the military service that jarred the world in 2007 by mistakenly transporting live nuclear weapons across the United States continues to suffer lapses in its management of intercontinental ballistic missiles," the Washington Times reports.
• "These days, the check isn't in the mail. It's increasingly on the Internet -- and that's bad news for the U.S. Postal Service," USA Today reports. "Electronic communication and a withering economy have pushed the Postal Service into its worst financial crisis since Benjamin Franklin founded the institution in 1775."
• "A college house-party snapshot of Michael Phelps inhaling from a marijuana pipe is the latest evidence of how a single cellphone or video image can suddenly compromise -- or destroy -- a celebrity's carefully crafted public image," the Washington Post reports.
• "Construction of the final stretch of a 670-mile security fence along the southern U.S. border has hit a series of legal, political and engineering obstacles that are slowing completion of the yearlong project," the Wall Street Journal reports.
• "The Army has launched a new effort to improve the training of its enormous civilian workforce, seeking to repair a long-neglected system for those employees who don't wear uniforms to work," the Washington Post reports.
• "From the time he walked through the curtain on 'The Late Show with David Letterman' Tuesday, ex- Gov. Rod Blagojevich was a walking punch line, drawing big laughs when he maintained he'll be vindicated and fidgeting under a folksy-yet-savvy grilling from the host," Chicago Tribune reports.
Iraq: Pentagon Letters Snarl Blackwater Prosecution
• "The Pentagon wrote in 2007 that Blackwater Worldwide contractors in Iraq are not subject to U.S. civilian criminal laws, a position that undercuts the Justice Department's effort to prosecute five Blackwater security guards on manslaughter charges," AP reports.
• "Last week's peaceful Iraqi elections appear to have been a rousing success -- a major step toward a stable democracy that will hasten the day when U.S. troops can leave," AP reports. "But Saturday's vote was simply one chapter in a story. Iraq still faces several major hurdles before it becomes clear whether the security gains of the past two years will last."
• "In the 72 hours before last week's provincial elections, U.S. and Iraqi forces targeted more than 100 people considered threats to peaceful balloting in the capital, the top American military commander in Baghdad said Tuesday," the Los Angeles Times reports. "Iraqi officials also announced the arrest of a woman they said was responsible for recruiting dozens of female suicide bombers."
• "The man tipped as the next U.S. ambassador to Iraq," Christopher Hill, "said on Tuesday he believed it was vital in diplomacy to talk to enemies as well as friends," Reuters reports.
World: More U.S. Deployments Planned For Afghanistan
• "Senior U.S. commanders are finalizing plans to send tens of thousands of reinforcements to Afghanistan's main opium-producing region and its porous border with Pakistan, moves that will form the core of" Obama's "emerging Afghan war strategy," the Wall Street Journal reports.
• "The war in El Atatra," a village in northwest Gaza, "tells the story of Israel's three-week offensive in Gaza, with each side giving a very different version," the New York Times reports. "The gaps reflect not only a desire to shape public opinion, but also something more significant: a growing distance between two peoples who used to have daily interactions, but who are being forced apart by violence, mutual demonization and a policy of separation."
• "The government of Palestinian President Mahmoud Abbas announced a $600 million reconstruction programme for Gaza" today, "most of which would be funded by foreign donors," Reuters reports.
• "Iran has fired a satellite into orbit and a shot across the bow of American diplomacy," the New York Times reports. "Its first orbital launching, announced Tuesday, coincided with celebrations of the 30th anniversary of the Islamic Revolution and raised concerns in the United States and other countries about Iran's potential use of long-range missiles to send warheads halfway around the globe."
• "Russia has vowed to put a floor under the beleaguered ruble. It may have painted a bull's-eye on the currency instead," the Wall Street Journal reports. "Pressure on the ruble is likely to mount in coming weeks, say investors and analysts."
• Bloomberg News reports "Sri Lanka will decisively defeat the rebel Liberation Tigers of Tamil Eelam within 'a few days' and free the South Asian nation from the 'dark shadow of terrorism,' President Mahinda Rajapaksa said."
Transition: Dasch-ed On The Rocks
• Daschle ended his bid for the top job at Health and Human Services Tuesday amid scrutiny over more than $140,000 in unpaid taxes. Read more in Lost In Transition, NationalJournal.com's blog on the changeover.
Commentary: Withdrawal Syndrome
• Criticism facing Daschle's and Nancy Killefer's tax woes overshadow acclaim for Obama's choice of Gregg to lead the Commerce Department in Earlybird's Pundits & Editorials section.