The President nominated Samuel Bodman for the position of Secretary of Energy today. Bodman is currently serving as deputy treasury secretary.

This leaves Health and Human Services as the only remaining cabinet agency with no one currently nominated for the top slot.

President Bush announced today that any alterations to Social Security would not be funded by an increase in the payroll tax. He also repeated that there would be no changes in benefits for retirees or those close to retiring.

The transition costs of partially privatizing social security have been estimated as up to $2 trillion. Without an increase in payroll taxes or a decrease in benefits, few options remain on the table to come up with the funds needed for such a move.

Speaking at a conference of transportation industry executives on December 8, Secretary of Transportation Norman Y. Mineta said the Bush administration will resubmit its surface transportation reauthorization proposal early in the 109th Congress, but few substantive changes are expected. The new proposal is necessary because the reauthorization proposal DOT submitted for the 108th Congress is now almost two years old and there might be new issues that need to be included. When asked if President Bush would budge from his insistence that surface transportation programs receive at most $256 billion over the next six years, Mineta quickly stated "next question." He did go on to reiterate three principles that Bush said must guide reauthorization negotiations. Whatever legislation makes it to Bush's desk cannot boost excise taxes, fund projects through bonding, or authorize highway spending from the general fund.

Mineta did not address a specific funding level or any explicit changes that might appear in next year's proposal, including whether the legislation would still run through fiscal year 2009, or if it would go through fiscal 2010.

Although many transportation industry representatives would like to see Bush support a proposal similar to the $375 billion plan originally offered by the House Transportation and Infrastructure Committee, many have sent numerous letters expressing support for the $318 billion in contract authority and $301 billion in guaranteed spending contained within the original Senate-passed bill.

President Bush has asked the remainder of his cabinet to stay on today. He also nominated Jim Nicholson, the current ambassador to the Vatican, to helm the Veteran's Affairs Department.

The secretaries remaining include Labor Secretary Elaine Chao, Interior Secretary Gale Norton and Housing and Urban Development Secretary Alphonso Jackson.

Late last night, the Senate passed H.R. 5419 which included a temporary 1 year USF/E-Rate fix. Senator McCain released his hold after a verbal guarantee by Speaker Dennis Hastert (R-Illinois) that his Boxing Commission bill, legislation that would promote boxing safety, would be considered in the House next session. H.R. 5419 is now being sent to the President for his signature.

Reports are emerging from the White House this morning that Secretary of Transportation Norman Y. Mineta has been asked by President Bush to stay in his post as Secretary of Transportation. There had been reports widely circulating in recent weeks that Secretary Mineta would be departing the cabinet shortly. Transportation advocates will be largely relieved by today's news that he will remain at the helm while major issues such as the reauthorization of TEA-21, the future of Amtrak and others are considered.

A similar announcement was made yesterday regarding Secretary of the Treasury John Snow. Veterans' Affairs Secretary Principi announced yesterday his resignation.

We will have a summary report on the Bush II Cabinet in the near future.

Today the Senate voted 98-2 to approve the Intelligence Reform Bill which passed through the House yesterday (336 to 75), moving the measure to the President's desk.

The package would create a director of national intelligence, who would have budgetary power over the entire Intelligence Community (IC). Currently, the Director of Central Intelligence, Porter Goss, has control over the entire IC, but no budgetary powers except for the Central Intelligence Agency, which he helms. Over eighty percent of the funds for the IC currently reside under the control of the Pentagon, until this bill is signed by the President.

The AP is reporting that President Bush asked Department of Treasury Secretary John Snow to remain on the job.

This leaves Snow and Secretary of Defense Donald Rumsfeld as the only two cabinet members whose positions are now secure.

Lawmakers have not been able to reach an agreement on how to resolve a funding shortfall of E-Rate, the federal program that finances Internet connections in schools and libraries. Therefore, consumers could see an increase of approximately $12 on their telephone bills.

The shortfall has arisen due to an FCC mandate that the Universal Service Administrative Company (USAC) change how it accounts for grants given under the E-Rate program. The change bars agencies agencies from making expenditures without the cash on hand and would cause a nearly $3 billion dollar shortfall. The fix would have exempted the USAC for a year while they figure out how to make a permanent fix.

Senator Snowe had legislation that would have made the fix in a last ditch effort as part of a broader package of telecommunication legislation that passed out of the House. It was stalled in the Senate when Senator John McCain (R-Arizona) tried to attach boxing safety legislation. Senator McCain agreed not to block the narrower bill, but it did not have support in the House.

Yesterday, Senate leaders reached an agreement to shed each committee by one seat. This move will ensure that the Republicans will have a two seat advantage on almost every committee in the upcoming 109th Congress. Still to be determined is committee funding, staff levels for the majority and minority parties and the distribution of office space.

Retirements and defeats made it possible for Senate Minority Leader Harry Reid (D-Nevada) to fill some committees without having to move out any Democrats and even award two plum assignments to Senator Charles Schumer (D-New York) and Senator Ron Wyden (D-Oregon) on the Finance committee.

Several committees will get new ranking Democrats. Senator Daniel Inoye (D-Hawaii) moves up on the Commerce committee taking over for retiring Senator Ernest Hollings (D-South Carolina). Senator Daniel Akaka (D-Hawaii) will take over from retiring Senator Bob Graham (D-Florida) as ranking member on the Veteran's Affairs committee. Senator Tim Johnson (D-South Dakota) will take over on the Select Intelligence committee and Senator Byron Dorgan (D-North Dakota) will take over on the Indian Affairs committees.

For all friends and clients using newsreaders, Peyser Associates now has its very own rss feed. The feed pulls from all the news articles and is updated each time an article is added. It is coded in RSS 1.0 and contains full posts for each article.

Some robust newsreaders include Feedreader (for Windows) and NetNewsWire (for Macs).

The controversial tax provision that slowed the omnibus bill down just as it was about to be approved has been removed. With the excision of the offending measure (which would allow certain members of Congress to examine individual tax returns), the bill will move speedily to the President's desk to keep the government running.

HHS Secretary Tommy Thompson announced yesterday that it would carve the nation into 34 regions to administer the new Medicare program, which begins in January 2006.

Medicare will rely on private insurers, subsidized by the government, to deliver drug benefits. Premiums for each drug plan will be uniform throughout its region, but they could vary widely between neighboring states in different regions.

The configuration of the regions will be a significant factor in the success or failure of the law. The regional boundaries will determine how many insurers participate in the program.

The White House had originally wanted to establish large multi-state regions. Administration officials said that larger regions would force health plans to serve rural areas that they had historically shunned. However, many insurers told the administration that it would be difficult or impossible to serve such large areas.

Some of the drug plan regions are very large. One, covering all of California has 4.3 million Medicare beneficiaries. Other large single-state regions include Florida, with 3 million beneficiaries, New York (2.8 million) and Texas (2.5 million).

The new Medicare law envisions a huge role for private plans. If beneficiaries stay in traditional fee-for-service Medicare, they can get subsidized drug coverage by buying private insurance policies that cover prescription drugs and nothing else. Alternatively, they can join a managed care plan that covers drugs along with doctors’ services and hospital care.

House Majority Leader Tom DeLay (R-Texas) has proposed a new plan to streamline the current system under which some committees provide funding for unrelated federal departments and agencies. The proposed changes are said to be intended to reflect Republican priorities.

As part of the plan, one Appropriations subcommittee would have jurisdiction over regulatory agencies, another would review funding for personnel accounts and a third panel would consider spending on quality of life in the military.

While many do believe the current subcommittee structure has many anomalies, some have criticized Leader DeLay's plan to put the personnel budgets of every agency under a single subcommittee. The plan will certainly face obstacles in the Senate.

Long tradition is that changes of the Appropriations panels are rarely made. It is easier to negotiate the 13 spending bills if the House and Senate subcommittee jurisdictions match.

Although no one expects Leader DeLay's plan to be approved, it seems his motive may have been to shake people up so that some moderate changes could be made.

Yesterday, President Bush invited bipartisan congressional leaders to the White House to discuss his idea to create personal savings accounts within Social Security. These accounts are similar to 401(k) retirement plans and would allow workers to divert a portion of their Social Security payroll taxes to personal accounts, which would be invested in stocks and bonds. President Bush acknowledged yesterday that an overhaul of Social Security could hit $2 trillion, but estimated that the program will face a $10 trillion deficit if no changes are made to the system.

Social Security's trustees have said that the program's obligations to retirees over the course of the next 75 years are $3.7 trillion more than the system is expected to take in.

The President did not offer a specific plan but instead indicated his interest in working on Social Security in 2005. By not offering a more details, but instead having a broad discussion, the President could gauge how much resistance he might encounter. Preliminary reporting on the President's ideas in the press have been met with some resistance, particularly from Democratic officials.

To fund the personal savings accounts, payroll taxes would have to be diverted from paying current retirees' benefits. To continue to pay existing benefits to current retirees, the government would have to absorb "transition accounts" which could cost trillions of dollars. Yesterday, the Bush administration said that the federal government would have to increase borrowing to pay for the overhaul, as opposed to raising taxes or cutting benefits.

Many conservatives balk at additional borrowing which would increase the federal deficit.

Democrats, for the most part, are concerned that personal savings account would expose workers' funds to unnecessary risk and would cost too much. They also take issue with the President's claim that the program will face a $10 trillion deficit if no changes are made to the system.

It now appears the long delayed intelligence reform bill may be headed for a vote tomorrow, after compromise language was inserted in the bill to satisfy Duncan Hunter (R-California). The new wording has not yet been released, so the implications are uncertain. We'll continue to update as new information becomes available.

Today President Bush called on Congress to pass the intelligence reform bill waiting for a vote in the House and Senate.

Democrats claim the measure has more than enough votes to be passed if the House leadership would bring the measure to the floor, but objections from two influential committee chairmen, Duncan Hunter (R-California) and James Sensenbrenner (R-Wisconsin) have bogged down such a move in the past.

The year-end wrap up begins today in the House, after which point the intelligence bill would be scuttled until next year. Such a delay would mean recrafting the bill from scratch.

The New York Times is reporting that the administration plans to let Treasury Secretary John Snow depart. This would mean that all major cabinet agencies (with the exception of Secretary of Defense Donald Rumsfeld) will be likely helmed by new leaders.

The Associated Press is now reporting that Tommy Thompson, head of Health and Human Services, is resigning today.

Mark McClellan, currently heading Medicare, is rumored to be next in line to succeed Thompson. McClellan's brother Scott currently is the White House press secretary.

Some news sources are now reporting that Asa Hutchinson, the former head of the DEA and current undersecretary of the Department of Homeland Security, will resign shortly. Hutchinson had been in the race to succeed Tom Ridge, but Kerik's impending nomination left that possibility out.

President Bush is reportedly set to nominate Bernard B. Kerik for the position of Secretary of the Department of Homeland Security, succeeding Tom Ridge.

In a surprise move, U.N. Ambassador John C. Danforth announced his resignation, after spending five months on the job. Danforth had been in the running for the position of Secretary of State, but will now return home to St. Louis.

President Bush today selected Nebraska Governor Mike Johanns (R) to be the next secretary of Agriculture. If confirmed by the Senate, Johanns will take over the agency from Ann Veneman, who announced her resignation last month.

Farmland conservation and forestry groups have said they expect little change in the direction of the administration on forest policy issues. But the next agriculture secretary could usher in a new realm in farm policy as Congress begins to debate the 2007 farm bill.

“Governor Johanns has some challenges ahead of him in terms of managing farm program spending and writing the 2007 farm bill,” said National Pork Producers Council President Keith Berry. “But we believe with his knowledge and experience, he is more than up to the task.”

Ralph Grossi, president of American Farmland Trust, said he was hopeful that Johanns could further bolster farmland conservation, which critics say USDA has failed to champion at a level needed to support the nation’s farming community. “We believe that Governor Johann’s experience with Nebraska’s agriculture producers and his many farm trade missions can help develop new policies that enable more farmers to manage risk, create new markets at home and abroad, reward environmental stewardship, give consumers healthier food choices, and provide more return to the taxpayer,” Grossi said.

“We especially are hopeful that he will lead the effort to reform U.S. farm policy with the next farm bill,” Grossi added. “With his leadership, we can craft a bill that is a win-win for agriculture and the environment as well as farmers and consumers.”

Johanns, 54, was born in Iowa and raised on a dairy farm, but has spent much of his adult life in public service. He is a lawyer and served in county and city government before becoming mayor of Lincoln, Neb., in 1991, and then governor in 1998. He was the first Republican in more than 40 years to win re-election in Nebraska in 2002, when he took 69 percent of the vote.

Today, Department of Homeland Security Secretary Tom Ridge informed President Bush he was leaving his position.

Some of the names mentioned to replace Ridge include former Virginia Gov. James S. Gilmore III, Massachusetts Governor Mitt Romney and current White House homeland security adviser Frances Fragos Townsend.

Although the Labor, HHS and Education bill is the largest of the annual domestic spending bills, less than one-third of it is for discretionary programs under the annual control of appropriators. The remainder is mandatory spending for entitlement programs such as Medicare and Medicaid.

The fiscal 2005 Labor, HHS bill which passed Nov. 20 as part of the omnibus spending package would provide $497.6 billion -- $143 billion of it in discretionary spending. (The total does not include a 0.8 percent across-the-board cut in discretionary accounts.)

The final bill does not include $12.8 billion for Title I education programs for low-income school districts, a $500 million increase over fiscal 2004. The measure also provides $10.7 billion for special education grants to states, a $607 million increase over 2004.

The National Institutes of Health are slated to get a 3 percent increase to $28.6 billion, $73 million above the House level and $300 million below the Senate’s. The Low Income Home Energy Assistance Program is to receive $2.2 billion, including $300 million in emergency funding. Abstinence-only sex education programs are to get $100 million, $30 million more than in fiscal 2004 but $82 million less than the White House requested.

The Bush administration was successful in securing funding for priority projects that received little support in Congress. The final bill includes $20 million, half the amount requested, for a prisoner re-entry program that allows religious groups to receive funds to help convicts make the transition back into society. It also includes a $250 million Bush proposal to develop partnerships between community colleges and employers in high-demand industries. The bill, however, does not fund the president’s $50 million proposal for re-employment job training vouchers.

Some of the hot button issues that were attached to the FY 05 Labor, HHS appropriations bill included: overtime pay rules, student loan rates and state school funding formulas.

Both the House and Senate bills included language that would have sharply limited new overtime pay rules. The administration says the rules will make 1.3 million low-income workers eligible for overtime pay for the first time. However, critics contend that as many as 6 million other workers could lose their eligibility because their jobs will be reclassified as exempt professional positions. Conferees dropped the provision under a White House veto threat.

With respect to student loan rates, the House bill contained an amendment that would have eliminated certain types of college loans that guarantee lenders a higher return than other federally subsidized loans. Under pressure, Republicans pushed through separate legislation that eliminated the subsidy for one year.

The Senate Labor, HHS and Education appropriations bill would have provided $72 million for states that stand to lose money for the 2004-05 school year because of failing child poverty rates. The Education Department changed its policy distributing Title I funds the year, using child poverty counts on an annual, rather than a biennial basis. The House measure did not contain the provision, and it was dropped in the final bill.

President Bush has just nominated Carlos M. Gutierrez, the CEO of Kellogg's, to be the new Secretary of Commerce.

Gutierrez, assuming confirmation by the Senate, would succeed Don Evans, and would be the first outsider nominated to a cabinet position. So far, all positions have been filled by members inside the administration.

Under the 2005 fiscal year omnibus appropriation that was passed last week, more than one million college students will have their financial aid cut or eliminated.

Appropriators did not renew a provision from the 2004 fiscal year appropriations bill that prevented the U.S. Department of Education from changing they way they calculated student eligibility for Pell Grants. Pell Grants provide up to $4,050 in annual aid to low-income students and are based on family incomes.

The department has been wanting to change the formula used to determine eligibility for federal student aid. The formula is based on how much of a family's income is discretionary and available to pay for college tuition. This is determined by using variables such as state and local taxes. One opponent of the measure, Senator Jon Corzine (D-New Jersey) said the change will result in thousands of students losing their eligibility for the Pell Grants, particularly as many states have lowered taxes on personal income since the last update of tax tables.

Proponents of the change, including Rep. John Boehner (R-Ohio) believe the change will help reduce a budget deficit for the Pell Grant program. The change, he believes, could free up more money to increase the maximum amount for Pell Grants in future years.

Pell Grants are federal aid but are funded as a discretionary program. The program is run as as entitlement because students who are eligible for aid automatically qualify for assistance. Congress has struggled to fund the program recently due to the rise in college students and more adults returning to higher education due to a tight job market.