In it, but not of it. TPM DC

President Obama has just officially nominated Sen. Judd Gregg (R-NH) to take the reins at the Commerce Department. Senate Majority Leader Harry Reid sure (D-NV) sounds pleased:

I commend President Obama for selecting an outstanding Senate leader to guide our nation's commerce at a critical time for our economy. And I applaud his willingness to include another Republican in his bipartisan Cabinet. Senator Gregg is respected on both sides of the aisle for his impressive intellect and strong commitment to public service.

And why shouldn't Reid be psyched? Gregg may be a Republican who has consistently opposed much of the Democrats' economic agenda, but nominating him was Reid's idea, "at least in part," according to today's New York Times:

The idea of offering the job to Mr. Gregg came, at least in part, from the Senate majority leader, Harry Reid of Nevada. (The two senators are close, aides to both men said.) Mr. Reid mentioned the idea to Rahm Emanuel, Mr. Obama's chief of staff, who passed it on to the president-elect.

Gregg and President Obama, the Times explains, "barely knew each other, aside from occasional chats in the Senate gym."

President Obama will take to the airwaves tonight to pitch the economic recovery bill to the people -- and he'll have his work cut out for him.

What becomes more apparent with each passing day in Washington is that the change in administrations has changed little about Congress' standard operating procedure, the wheeling and dealing that inspired Otto von Bismarck's famous quote about lawmaking and sausage-making.

Exhibit A: the business tax breaks in the Senate version of the stimulus bill.

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The Coleman legal team is continuing to lay out their case that they want the question of rejected absentee ballots to be opened again -- and in some cases, to literally open the ballots to investigate.

Coleman lawyer Joe Friedberg has been questioning Washington County (Stillwater) elections official Kevin Corbid, and has been asking him about what have come to be known as "3A" ballots -- a category where a newly-registered absentee voter included their registration card inside the internal secrecy envelope containing the ballot, rather than immediately inside the outer envelope as it was supposed to be done.

Election officials now believe that 3A ballots should be considered to have been legally cast. The problem here is how one identifies a 3A ballot.

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Americans United For Change, the labor-backed political group that recently launched radio ads linking anti-stimulus Republicans to Rush Limbaugh, has just announced that they're expanding the Limbaugh ads to target GOP Sens. Jim Bunning (KY), Richard Burr (NC) and Mel Martinez (FL).

"Now the Obama plan goes to the Senate," the announcer says, "and the question is: Will our Senator, Richard Burr, side with Rush Limbaugh too" --interrupted by Limbaugh's "I hope he fails!" interjection -- "or will he reject the partisanship and failed economic policies of the past, and stand up for the people of North Carolina?"

Chances are, Burr will stick with Limbaugh.

Obama Announcing Gregg Appointment This Morning President Obama is holding a series of closed meetings with advisers this morning, and then at 11 a.m. ET he will make an announcement about his appointment for Secretary of Commerce. The president is expected to appoint Republican Senator Judd Gregg of New Hampshire.

Biden Meeting With Hillary, Swearing In Holder At DOJ Vice President Biden is having breakfast this morning with Secretary of State Hillary Clinton, then at 10 a.m. he will go to the Justice Department to swear in Eric Holder as Attorney General. Then he is headed to the White House to join the president for the announcement about the Commerce Secretary.

Report: GOPer Bonnie Newman Will Be NH Senate Appointee CNN reports that former Judd Gregg chief of staff Bonnie Newman will be the appointee to Judd Gregg's Senate seat. Gregg made the appointment of a Republican to his seat a condition for accepting the cabinet appointment, rather than having the Democratic governor pick another Dem who would give the party a filibuster-proof margin.

Senate Taking Up Stimulus Amendments The Senate will begin voting today on amendments to the stimulus bill, as Senators sort through the changes they would like to make to the version that passed in the House. The range of opinions varies from Democrats who would like to shift the spending priorities around, to Republicans who want to cut back the spending itself.

Strib: Minnesota Senate Contest Affecting Stimulus Margins The Star Tribune reports that the protracted Minnesota Senate dispute, and the resulting absence of a Democratic Senator, appears to be making the passage of a stimulus bill more difficult. "Our burden would be a little lighter," said Chuck Schumer, while Congressman Keith Ellison was even more blunt: "Sometimes being one or two away is like being 100 members away. We need that Franken vote, and it's critical that we get it fast."

Lawmakers' Portfolios Plummet In Recession The Hill reports that the stock market's problems might be making a very important impact Capitol Hill -- lawmakers are seeing their own portfolios fall precipitously. The members of Congress who did speak to the paper about this, including Rep. Jim Oberstar (D-MN) and Paul Ryan (R-WI) all said they've been too busy dealing with the economy to worry about their own stocks, and they are unaware of any recent transactions.

Palin Backs Perry In Texas Gubernatorial Race Sarah Palin has now gotten herself involved in the politics of another state, endorsing Texas Governor Rick Perry for re-election. Perry is facing a likely primary challenge by Senator Kay Bailey Hutchison, so the Perry campaign has sent out a letter from Palin that is specifically addressed to Republican women.

Gregg Was For Abolishing Commerce Dept. Before He Was For Running It CQ points out that Judd Gregg voted in 1995 for a non-binding budget resolution that called for abolishing the Department of Commerce in the wake of the 1994 Republican victories, and that as a committee chairman he was for cutting the Commerce budget. Now Gregg is poised to head up that very department -- so really, a lot of things can change in 14 years.

Senate Democrats just emerged from an hour-long meeting to discuss the tax filing errors that have thrown Tom Daschle's nomination as health secretary into disarray. That Daschle's former colleagues are vociferously supporting him is to be expected, but Democrats were surprisingly confident that the former Senate leader would ascend to President Obama's Cabinet.

Sen. Max Baucus (D-MT), powerful chairman of the Finance Committee, gave Daschle his vote of confidence, followed by Sens. John Kerry (D-MA) and Kent Conrad (D-ND). Daschle will have his confirmation hearing before Finance next week.

Other Democratic senators provided silent support in the background, with Republicans apparently sneaking out of the meeting in order to avoid the press.

The pro-Daschle appearance, staged in a corridor outside the Finance Committee's marble-walled hearing room, boasted only one mea culpa -- that of the nominee himself. The Democratic senators were more than happy to point fingers at Leo Hindery, the telecom mogul who paid for Daschle's private car and driver, for not sending the nominee a 1099 form indicating that Daschle would need to declare the "gift from a good friend" (Daschle's phrasing) on his taxes.

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The Coleman legal team just went through another round of calling aggrieved voters to the witness stand, pleading that their absentee ballots were improperly rejected. And again, they've run into some problems.

The Coleman campaign called Elissa Jackson, a sympathetic mother of a five-month old. During direct examination, Coleman lawyer James Langdon tried to be open about the fact that she found out about her uncounted vote because of a phone call from the Republican Party.

Then came the cross-examination by Franken lawyer Kevin Hamilton, who confirmed that, as with a prior case, the Coleman/GOP people who called her up also asked her who she voted for, and made sure she voted for Coleman. "They didn't send you that affidavit before they got the answer to the question of who you voted for in the Senate race, did they?" asked Hamilton.

"No, they didn't," Jackson replied.

Now remember: During last week's proceedings, the Coleman camp was saying repeatedly that they were not cherry-picking voters, that they didn't know whom the people they're advocating for actually supported, and for all they knew they were helping out Franken-voters. Apparently that wasn't quite 100% true.

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Can President Obama bring his no-drama style to national security? Historically the tensions between State and Defense and the National Security Council have run through every administration in the post-war era in some more than others. It was particularly tense in the first years of Reagan and throughout the Carter White House and most notoriously in the George W. Bush years. The national security adviser is supposed to be the honest broker but often winds up a contentious player in his or her own right. (See Brzezinski, Zbigniew)

Obama though has several things going for him. The first is the high stakes of having important figures with reputations to protect at the State and Pentagon jobs. It's in everybody's interest to make this work: Certainly it is for Hillary Clinton who will be at a party tonite to celebrate her swearing in. Certainly it is for Robert Gates who doesn't want to end his career in government looking like he can't get along with Democrats. And it is certainly in the interest of Gen. James Jones at the NSC who has a reputation for being as genial as he is smart.

Another thing helping Obama: It also helps when people know each other at the staff level. One Clinton veteran noted to me the close ties between Tom Donilon, the number two at the NSC, and Jim Steinberg, number two at State. They worked together in the Warren Christopher State Department. The two remain close and have known each other for decades. Those kinds of friendships can be quite helpful when institutional tensions arise as they undoubtedly well for this president just like his predecessors. I'm told they continue to talk often. That is a good thing for their organizations and for the rest of us.

Looks like a split is developing in the Senate Democratic ranks over the contentious question of using the stimulus bill to give "repatriation" tax benefits to corporations.

The idea is a simple one, though likely to alarm progressives: multinational companies with U.S. headquarters would be given a one-time discounted tax rate of 5.25% -- down from a normal rate of 35% -- if they declare their offshore earnings in this country.

Sens. Barbara Boxer (D-CA) and John Ensign (R-NV) are amassing support to add repatriation to the stimulus bill, and they've got at least a partial vote of confidence from the Senate Democratic No. 3 leader, Chuck Schumer (NY). But two fellow senior Dems, Carl Levin (MI) and Byron Dorgan (ND), are decrying what they call a business "lobbying blitz" to secure repatriation benefits.

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Senator Judd Gregg and New Hampshire's Democratic Gov. John Lynch have both confirmed what has been much discussed over the last several days: Gregg has made it clear that he would only accept an appointment to the Obama Administration if it would not cause the Democrats to gain his Senate seat.

"Senator Gregg has said he would not resign his seat in the U.S. Senate if it changed the balance in the Senate," the governor said in a statement given to the Union Leader. "Based on my discussions, it is clear the White House and Senate leadership understand this as well."

Gregg issued his own statement, making the point even clearer: "I have made it clear to the Senate Leadership on both sides of the aisle and to the governor that I would not leave the Senate if I felt my departure would cause a change in the makeup of the Senate. The Senate Leadership, both Democratic and Republican, and the Governor understand this concern and I appreciate their consideration of this position."

So there you have it. A Democratic governor will appoint a Republican Senator, as a condition of the Republican leaving the seat and creating the vacancy in the first place.