First glance
The drama in Washington today centers on efforts to get to the bottom of conversations, and the ultimate result of one such effort may be the indictment of one or more Bush Administration officials, which would be a big deal.  But don't lose sight of something that might be of greater immediate interest to the public: the fact that President Bush's tax reform panel, which is expected to send him its recommendations by November 1, is proposing to scale back two of the nation's most popular tax breaks, for home mortgage interest and employer-paid health insurance.

The panel is proposing the rollback as a way to compensate for its also-proposed elimination of the alternative minimum tax, which is affecting more and more middle-class taxpayers every year and is in serious need of fixing.  Still, as one Washington-based economic analyst points out to First Read, while this may be good policy, it won't play well in town halls.  Unless these recommendations somehow go away between now and November 1, tax reform may not look so much like the savior of the GOP domestic agenda.

As for who talked with whom about what, Karl Rove may or may not make his fourth appearance before the grand jury in the Valerie Plame leak investigation today -- but the panel will hear from the New York Times' Judith Miller again.  Miller's second showing in a formal capacity comes on the heels of her meeting yesterday with prosecutor Patrick Fitzgerald to discuss her recently discovered notes from a previously undisclosed conversation she had with Cheney chief of staff Lewis "Scooter" Libby.  NationalJournal.com reported yesterday that Libby did not disclose this conversation in his testimony.  On TODAY this morning, Attorney General Alberto Gonzales refused to speculate about why Fitzgerald wants to hear from Rove again.

As NBC's Chris Matthews reminds us, while the ultimate result of this investigation may be the indictment of one or more Bush officials, what this is about is the Administration's case for going to war, which centered on WMD which were never found.  On that note, the CIA releases a report today which, USA Today says, "rebukes the Bush administration for not paying enough attention to prewar intelligence that predicted the factional rivalries now threatening to split Iraq.  Policymakers worried more about making the case for the war, particularly the claim that Iraq had weapons of mass destruction, than planning for the aftermath, the report says."

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Also today, noting (seriously or ironically? we can't tell) how Rove has "given him permission" to talk about their conversation about Harriet Miers, Focus on the Family's James Dobson tells his radio-show listeners all about it.  But you can read about it below.

And Tom DeLay's lawyers are subpoenaing prosecutor Ronnie Earle (D) to talk about his grand-jury etiquette.

President Bush meets with the President of Poland at the White House at 11:10 am, then addresses political appointees and senior executive service employees at DAR Constitution Hall at 2:10 pm.

DNC chair Howard Dean does Letterman tonight.  RNC chair Ken Mehlman and the RNC's new "e-campaign director" will hold a conference call today with bloggers to discuss the Miers nomination, an RNC spokesperson tells First Read.  And last but hardly least, look for the latest NBC/Wall Street Journal poll, being released tonight on NBC Nightly News at 6:30 pm and in tomorrow's Journal.

Spending and the Bush/GOP agenda
Bush's tax reform commission currently plans to recommend that two of the nation's "most popular tax breaks - for home mortgage interest and employer-paid health insurance" -- be narrowed in an effort to compensate for the elimination of the alternative minimum tax, says USA Today.  "Panel members said the tax breaks would be lost mostly by employees with generous health insurance plans and homeowners with expensive mortgages.  But key details remain to be worked out."

The plan "is likely to meet strong opposition from taxpayers and lawmakers," says the Wall Street Journal.  "Americans already are worried about escalating health-care costs, and homeowners regard mortgage tax breaks as sacrosanct...  Panel members said... yesterday that scaling back the deductions for mortgages and employer health-insurance costs would better distribute tax breaks across all income levels, since both disproportionately benefit upper-income earners."

In reporting on how DeLay is basically a de facto majority leader, The Hill says that DeLay "made an impassioned speech to his fellow House Republicans" last week, in which he "took responsibility for some of the budgetary concerns that have overwhelmed congressional leaders in recent weeks.  'We lost sight on spending, and for that I apologize,' DeLay told his fellow House Republicans.  There has been growing unrest among some rank-and-file members, particularly conservatives, that Republicans in Washington have discouraged their base with increased government spending.  Some members and aides are afraid that the rapidly expanding deficit could result in low GOP turnout during the critical 2006 midterm elections."

As we noted yesterday, a group of labor, consumer and liberal groups have formed the Emergency Campaign for American Priorities (ECAP), whose mission is to prevent Congress from cutting spending on social programs to offset hurricane relief spending.  Today, one of those groups, the American Federation of State, County and Municipal Employees, will hold a press conference at 2:30 pm in DC to launch their part of this national campaign to fight those cuts.

Ethics
The Washington Post says the notes Judith Miller recently found reveal that Miller and Libby "discussed Bush administration critic and former ambassador Joseph C. Wilson IV about three weeks before the name of Wilson's wife, covert CIA operative Valerie Plame, appeared in" Bob Novak's column.  "Numerous lawyers involved in the 22-month investigation said they are bracing for Fitzgerald to bring criminal charges against administration officials.  They speculated, based on his questions, that he may be focused on charges of false statements, obstruction of justice or violations of the Espionage Act."

The Los Angeles Times says that June 2003 conversation “could be significant because it suggests that administration figures were discussing Wilson with reporters even before he wrote an op-ed piece in the New York Times... that criticized the intelligence the administration used to launch the war in Iraq.”

Rove continues to make appearances on behalf of GOP candidates and causes.  He's scheduled to headline a fundraising breakfast for Virginia gubernatorial nominee Jerry Kilgore on Saturday morning in Tyson's Corner.  Tickets are $25.

The AP on DeLay's lawyers subpoenaing Ronnie Earle: "The subpoena... asked that the prosecutor and two of his assistants appear in court to explain their conduct...  Dick DeGuerin, DeLay's attorney, also asked that grand jurors be released from their secrecy oath so they could answer questions about the prosecutor's conduct.  Earle's office said in a written statement, 'Because of laws protecting grand jury secrecy, there are limitations to what we can say at this time, but we fully expect to prevail in this matter.'"

The Free Enterprise Fund is releasing their second Earle attack ad.  The ad, which begins running in Austin tomorrow,  opens with an announcer saying, "A prosecutor with a political agenda can be vicious' over footage of a snarling, barking dog," according to a release from the group.

Even though DeLay is technically out of the leadership, the New York Times notes that he “remains the go-to guy for many House Republicans.  They say he is virtually indispensable as the party faces the daunting prospect of delivering $50 billion or more in spending cuts as well as an immigration measure.”  But: “Some Republicans acknowledge that their work could be tainted by any perception that Mr. DeLay commands the House from the sidelines...”

Despite Senate Majority Leader Bill Frist's claims that his HCA stock was held in blind trusts, thus posing no conflict of interest for him when voting on health care legislation, the AP reports on the existence of Bowling Avenue Partners, a Frist family investment partnership which also invested in HCA stock.  Houston Chronicle

Rep. Kevin Brady (R) of Texas says he takes "full responsibility" for his actions after being arrested and charged with driving while intoxicated after attending a football game at the University of South Dakota over the weekend.  Brady was awarded the "Alumni Achievement Award winner" at a pre-game parade.  His court date is set for November 8.

The Miers nomination
"Some of the advocacy groups that are concerned about... Miers' lack of a record on social issues are favoring a new approach to thwarting her nomination: Asking the nominee, who has no judicial experience, complex questions about constitutional law and hoping she trips up," reports the Boston Globe.  "Miers's supporters... said that trying to catch her with arcane questions would be inappropriate, and may elicit sympathy for her."  The Globe runs some sample questions.

USA Today notes how a shift in the White House's strategy for selling Miers, away from her being a "trailblazer" and onto her being an evangelical Christian, "has ignited new controversies."

Like this one.  Senate Judiciary chair Arlen Specter is asking Focus on the Family chief James Dobson what exactly the White House told him about Miers that he "shouldn't know," reports NBC's Ken Strickland.  Specter says he also spoke with Karl Rove about the matter.  On his radio show recently, in expressing support for Miers, Dobson said, "When you know some of the things that I know -- that I probably shouldn't know --" people will understand why he supports Miers.  Yesterday, Specter sent Dobson a letter through his chief counsel to get to the bottom of it.  "I sure want to know what it is he knew that he shouldn't have know," Specter said to Pennsylvania reporters.  "I intend to find out."

According to Specter, it was disclosed to Dobson that Miers attended a pro-life dinner, though it's unclear if she bought the tickets or attended as a guest, Strickland says.  Dobson was also told that Miers is an evangelical Christian.  Specter acknowledges that those points were released to the press shortly after Bush nominated Miers, and plans to ask Dobson if those are the things he was told but "shouldn't know."  "They are not items which one would have expected to be in the confidential receipt category," Specter said.

But Specter may now have his questions answered.  On his radio show today, per his website, Dobson -- noting for listeners how he has "been a topic of conversation from the nation's Capitol to the tiniest burg and farming community" -- will say that "Rove has now given me permission to go public with our conversation," in which Rove basically assured Dobson that Miers fit the bill for conservatives "and that the President knew her well enough to say so with complete confidence."  Dobson will also say, in response to those conservatives who "are now upset" because "highly qualified individuals... had been passed over, that "what Karl told me is that some of those individuals took themselves off that list and they would not allow their names to be considered, because the process has become so vicious and so vitriolic and so bitter, that they didn't want to subject themselves or the members of their families to it."  Dobson will blame Democrats for "politicizing" that process so "that it's become an ordeal and many people just don't want to go through that."

There were some reverberations yesterday in Washington conservative circles over Laura Bush's suggestion that objections to Miers could be based in sexism.  "Conservative activists expressed distress over the White House tactic of questioning their motives...  Later yesterday, the White House stood by Mrs. Bush's assessment," says the Washington Times.

The Washington Post reminds us that "Ed Gillespie, one of Bush's top advisers on the confirmation process, raised the sexism issue in a private meeting with conservatives last week,...  Since then, other Republican backers of the nominee have raised the possibility that Miers's sex is causing her to be judged by a harsher standard...  The sexism controversy is part of a broader pattern that seems to be causing raw feelings between the White House and its usual conservative allies."

The New York Times notes that with her comments yesterday, Laura Bush joins liberals -- like Sen. Barbara Mikulski, Eleanor Smeal of the Feminist Majority, and Marcia Greenberger of the National Women's Law Center -- who have made similar statements.

National security politics
As mentioned above, the CIA releases a report today, written by former CIA analysts, which "rebukes the Bush administration for not paying enough attention to prewar intelligence that predicted the factional rivalries now threatening to split Iraq.  Policymakers worried more about making the case for the war, particularly the claim that Iraq had weapons of mass destruction, than planning for the aftermath, the report says."  - USA Today

It's been a while since anyone has mentioned the cost of the Iraq war, and with the October 15 vote looming, it seems fitting to mention a revised Congressional Research Service report on the price tag.  Per the report, the Administration has allocated $357 billion for military operations, reconstruction, embassy costs, and various foreign aid programs in Iraq and Afghanistan since the September 11 attacks.  CRS also estimates that $251 billion of that total has been for Iraq, about $82 billion for Afghanistan, and $24 billion for base security.

The Washington Post reports that last night, "Shiite, Sunni Arab and Kurdish power brokers reached a breakthrough late Tuesday that revived hopes of winning Sunni support for the charter and defusing the Sunni-led insurgency by political means...  The tentative accord, which would allow the constitution to be changed early next year, was reached through closed-door deals made largely by political party chiefs rather than members of the committee that wrote the charter.  A parliamentary leader questioned whether enough time was left for the National Assembly to give it legal approval before the referendum."

On Friday, a day before Iraqis head to the polls, Undersecretary of State Karen Hughes delivers a keynote address at 11:30 am at George Washington University on the challenges and opportunities the United States faces in its diplomacy with the rest of the world.  The Post also reports today that Hughes initiated an Oval Office meeting between Bush and a group of Palestinian officials last week after receiving "an earful of complaints about the administration's Palestinian policy during a just-completed tour of the Middle East."  - Washington Post

It's the economy
Fed chief Alan Greenspan and two other Fed governors give speeches today, Bloomberg notes in its report that the Fed is indeed thinking about continuing to raise interest rates because of concerns about energy price-induced inflation.  Greenspan "is scheduled to discuss the flexibility of the U.S. economy and its resilience to shocks, a topic he addressed two weeks ago."

The Merrill Lynch research department yesterday presented clients with a list titled "Seven Constraints Facing the Consumer:" 1) Personal "savings rate at -0.7%;" 2) "Debt/income ratio at a record 124% (was 117% a year ago);" 3) "Housing affordability at a 14-year low; 16-year low for first-time buyers;" 4) "Fed tightening... - households have $2.3 trillion of short-term debt that will get dinged by the relentless rise in short-term rates;" 5) "Higher energy prices;" 6) "Lagging wages: average hourly earnings" are growing at the "weakest pace" since December 1990; and, 7) "Regulatory credit changes: Fed letters of guidance (mortgages), tightened bankruptcy protection laws (Chapters 7, 13), higher minimum credit balance payments."

Party politics
RNC chair Ken Mehlman seems to be using a new populist line in speeches these days, adding to his longtime riff about Democrats being the party of the elites, by charging that the "Howard Dean Democrats" "don't trust people to make the decisions themselves."  He also told an audience of Connecticut Republicans on Monday night that the GOP agenda includes fighting terrorism, competing in a global economy, tax reform, new energy policies, and health care (which is something Washington hasn't come close to really addressing anytime recently).

DNC spokesperson Karen Finney responds to Mehlman's line on Dean and Democrats: "Ken Mehlman's rhetoric has sunk as low as the Republican party's poll numbers," she tells First Read.  "Any time they dust off the old trick of divisive, unfounded attacks on Governor Dean, it means we must be doing something right and the Republicans are running scared.  The fact is, whether Ken Mehlman likes it or not, the American people have decided that the Republican 'culture of corruption' is bad for America."  Finney adds that "it's gotten so bad" that the party is having recruitment issues "and you are seeing key Republicans distancing themselves from the President."

A new, for-profit liberal organization, the New Progressive Coalition, will launch next Tuesday, NBC's Michelle Jaconi reports.  The group's goal is to "wire progressive politics" by "cross-connecting progressive political entrepreneurs, organizations and investors to fuel a political machine that harnesses the left's potential," per its mission statement.  Executive director Kirsten Falk says "the status quo isn't working...  Investment has been election-driven and then it goes away."  (The group uses the term "investor" instead of "donor.")  Falk also says that "conservatives have a network that took years to cultivate," and this will be a similarly long-term project.

NPC plans to provide expertise and capital to liberal organizations, Jaconi reports, with an emphasis on organizations and investors that are under the radar, i.e., investors that aren’t big-dollar or well-known.  They will reach out to medium-sized organizations and ones that need mailing lists.  They will try to match up investors and organizations on the investor side, and then offer advice on the organizational side.  To help in this regard, they have assembled a community of advisors who have agreed to be available to their members in varying degrees.  Founder Deborah Rappaport notes that they are "not trying to duplicate the 'vast, right wing conspiracy,'" but says they "are in a position to do that we can do to take advantage of the environment."

2005
Gov. Arnold Schwarzenegger does a town hall in Santa Barbara today at 2:30 pm ET.  Wife Maria Shriver does Oprah.

Yesterday in Virginia's gubernatorial race, Jerry Kilgore (R) went up with two hard-hitting TV ads blasting Democrat Tim Kaine's personal opposition to the death penalty.  One ad features the father of a man who was murdered in 1993.  "Tim Kaine voluntarily represented the person who murdered my son," the man says in the ad.  "He stood with murderers in trying to get them off death row.  No matter how heinous the crime, he doesn’t believe that death is a punishment.  Tim Kaine says that Adolf Hitler doesn’t qualify for the death penalty."  "Those are emotional ads," the University of Virginia's Larry Sabato tells First Read.  "It is like Hiroshima or Nagasaki."  Sabato notes that Kaine has helped himself in parrying this charge by maintaining that while he's opposed to the death penalty due to his Catholic faith, he still would enforce it if elected governor.  Yet Sabato says that Kaine has made it clear that he has no enthusiasm for the death penalty.  "And in Virginia, there is a real enthusiasm for the death penalty."

In addition to Karl Rove campaigning for Kilgore this Saturday, Bill Clinton will campaign for Kaine in Northern Virginia and Charlottesville on October 21, the Washington Post reports, and "Laura Bush and Vice President Cheney are scheduled to hold separate fundraisers for Kilgore at private homes in Virginia.  The Bush event, tonight at a McLean home, is $5,000 a person, according to an e-mail invitation.  Cheney is scheduled to be at a Richmond home Monday, also for a $5,000-a-person event."

The Newark Star-Ledger looks over newly released campaign finance reports for gubernatorial candidates Jon Corzine (D) and Doug Forrester (R), which show that the two have spent nearly $45 million, most of which has been self-financed and breaks previously set records.  The Star-Ledger also covers last night's radio debate between Corzine and Forrester.  Corzine "said flatly he would not raise taxes on gasoline, a revision of his earlier statement that he would not take the idea off the table.  He also leveled his harshest criticism ever of the scandal-racked administration of former Gov. James McGreevey, saying 'Jim McGreevey failed as governor.'"

And the New York Daily News covers the latest WNBC/Marist College poll, which shows Mayor Mike Bloomberg (R) with a 27-point lead (59%-32%) over Fernando Ferrer (D).  Meanwhile, a new Quinnipiac University poll shows Bloomberg with a 28-point lead (60%-32%).

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