To: Our Readers

• Hillary's Nixonian tactics against Obama
• Senate's Democratic majority again backing down from threats to change Iraq policy
• Surprise announcement creates another GOP House vacancy
• Hastert announces resignation; district should stay in Republican hands

Outlook

1.    The Democratic presidential contest is getting mean and nasty with a desperate feeling by Sen. Hillary Clinton (D-N.Y.) that she must be stopped in Iowa or not at all. She has never been better than even in the polls in Iowa against Sen. Barack Obama (D-Ill.) and former Sen. John Edwards (D-N.C.). (See below for the Clinton-Obama story.).

2.    The inside talk in Republican circles is that the confused, unpredictable battle may be coming down to a one-on-one between former New York Mayor Rudy Giuliani and former Massachusetts Gov. Mitt Romney, with an uncertain outcome. The unexpected endorsement from the National Right to Life Committee did help former Sen. Fred Thompson (R-Tenn.), but his candidacy is in deep trouble. Sen. John McCain (R-Ariz.) is coming back but still is anathema to conservatives. Former Arkansas Gov. Mike Huckabee is picking up religious conservatives in Iowa but is deeply suspected by conservatives generally.

3.    Congress recessed with much unfinished business -- notably the alternative minimum tax (AMT) "patch" and spending for veterans. Senate Majority Leader Harry Reid (D-Nev.) was off on a congressional delegation to South America once the recess began. When he returns, he will have to deal with an overloaded docket facing a procedure requiring a 60 percent super-majority on every major vote and unlikely to get it in the current partisan atmosphere.

4.    The biggest real-life problem for the politicians may be the failure to get an AMT patch, causing a 10-week or more delay in income tax refunds for 50 million taxpayers. The Republicans are blaming the Democratic leadership of Congress, but top Bush Administration officials are readying themselves for a Democratic onslaught.

President 2008

Clinton vs. Obama: Their battle for the nomination took an unexpected twist because of an item in last weekend's column.

1.    The item reported that a Clinton agent was spreading the word that the Clinton campaign had scandalous information about Obama but was not using it for purposes of party harmony. The nature of the alleged scandal was not revealed to the source of the item (a well known Democrat), who said he thought Clinton wanted to avoid a Clinton-Obama clash that would benefit a third candidate, presumably Edwards.

2. Obama reacted with a sharp statement against Clinton's attacks, and Clinton responded with an accusation of Republican dirty tricks. The intensity of their reactions indicated that both sides are nervous as the date of the Iowa caucuses nears -- Obama worried about a Clinton breakaway, Clinton concerned about Obama creeping up.

3.    Both sides have reason to worry. Clinton can never match Obama's oratorical power, as he indicated in the Jefferson-Jackson debate in Des Moines. Obama is clearly second best to Clinton in debating technique, as indicated in the most recent debate in Las Vegas.

4.    The column item suggested Clinton planting the seeds of trouble ahead if Obama is nominated and Obama knowledgeable about past Clintonian policy of digging into an opponent's background.

Congress

Iraq: True to form, Senate Democrats have begun to back down from their demands to change Iraq policy, setting up a fight with the House and angering their anti-war base.

1.    Congress still hasn't passed a measure funding the U.S. military's presence in Iraq. After the Senate failed to reach 60 votes on a bill that would have placed serious time limits on the occupation, key Democratic senators such as Armed Forces Committee Chairman Carl Levin (D-Mich.) and Defense Appropriations Chairman Daniel Inouye (D-Hawaii) agreed they needed to weaken the measure.

2.    With House liberals demanding a firm withdrawal plan before agreeing to fund the war, Democrats are in a bind. The likely outcome will be a measure demanding policy changes but not placing any hard time restrictions on the administration-a toothless measure, ultimately.

3.    Iraq policy has been the hardest issue area for the Democratic majority, which was elected primarily in opposition to the Bush Administration's management of the issue. A combination of Senate Republican firmness and Democratic timidity at managing a foreign policy mess almost guarantees that any changes in Iraq before 2009 will be freely chosen by the lame-duck Bush Administration.

Senate 2008

Overview: Democrats are still poised for small gains in the Senate. Here is an overview of the Senate picture and updates from a few races:

1.    In Virginia, to nobody's surprise, former Gov. Jim Gilmore (R) announced he is running for the U.S. Senate seat left open by the retirement of Sen. John Warner (D). Gilmore is almost guaranteed the nomination, which will be determined in a state GOP convention instead of in a primary. In the general election, he will be the pronounced underdog to his successor, former Gov. Mark Warner (D).

2.    Democrats in Nebraska have had to settle for their third choice in the race to succeed retiring Sen. Chuck Hagel (R). College professor Scott Kleeb (D) is the likely Democratic candidate, and he polls 26 to 31 points behind either of the serious GOP candidates. This seat is safe for Republicans, unless former Sen. Bob Kerrey (D) changes his mind and enters the race.

3.    Sen. Thad Cochran (R-Miss.) had considered retiring, but he has now decided to seek a sixth term. An open seat here would still have favored Republicans, but the last thing the GOP needs is another place to play defense.

4.    Since taking over the governor's mansion in Kentucky earlier this month, Democrats are increasingly excited about the idea of targeting Senate Majority Leader Mitch McConnell (R.-Ky.). State Atty. Gen. Greg Stumbo (D) is the likely Democratic nominee at this point. This could just be wishful thinking for Democrats, but it could also develop into a race.

5.    Sen. John Sununu (R-N.H.) has real reason to worry: His negatives are high, and he is polling well behind former Gov. Jeanne Shaheen (D), whom he narrowly defeated in 2002. Six years ago, Sununu weighed down Shaheen with her efforts to raise taxes in New Hampshire. Now far removed from her record in Concord, she may skate by. Sununu is the underdog.

6.    Minnesota Sen. Norm Coleman (R) is atop the list of vulnerable Republicans. Next year, Coleman will face either comedian Al Franken (D) or attorney Mike Ciresi (D). Recent polls show Coleman leading either candidate, but below 50 percent. Until the primaries, this one stays in the GOP column.

7.    The U.S. Senate looks poised to move from no Udalls to two Udalls next year, as Representatives Tom Udall (D-N.M.) and cousin Mark Udall (D-Colo.), are favored to win their states' open seat races. Mark is a strong favorite in Colorado, but the New Mexico contest leans only slightly Democratic.

8.    Sen. Tim Johnson (D-S.D.) could be the Democrats' most vulnerable incumbent this year. Suffering neurologically since his stroke, Johnson is not in top shape for either campaigning or serving in the Senate. Republicans hoping to unseat him, however, will have to overcome the sympathy factor. This race leans Democratic.

9.    The other vulnerable Democratic Senator is Mary Landrieu (D). Landrieu will probably face State Treasurer John Kennedy (R), a former Democrat. Landrieu seems to always find a way to win, but this state is seeing the biggest GOP surge in the country, with a loss of Democratic voters after Hurricane Katrina. She has good reason to be scared.

10. The Democratic Senatorial Campaign Committee (DSCC) is drubbing its Republican counterpart, with nearly $23 million on hand at the end of the third quarter, compared to the National Republican Senatorial Committee's $8 million. DSCC Chairman Chuck Schumer (D-N.Y.) is an aggressive fundraiser who has successfully tapped the burgeoning hedge-fund industry that his party is threatening with new regulations and taxes.

11. On net, Democrats are currently looking at a pickup of four seats. They are poised to win the GOP-held open seats in Colorado, Virginia and New Mexico and to knock off Sununu in New Hampshire. Meanwhile, Republicans are not favored to win any Democratic seats. With only two Democratic seats really in play right now, Republicans have no chance of winning a majority and are almost guaranteed to lose at least one seat. The Democratic dreams of a 60-seat super-majority, however, seem unattainable right now.

House 2008

New Jersey-7: In a surprise, Rep. Michael Ferguson (R-N.J.) announced he would not seek a fifth term. This creates a second GOP vacancy in New Jersey, after the retirement announcement last week of Rep. Jim Saxton (R-N.J.). When you add in Rep. Frank LoBiondo 's (R-N.J.) difficult re-election battle next year, suddenly, the GOP is in danger of losing half of its six congressmen from New Jersey.

Ferguson, only 37 years old, was a moderate on most issues while being fully pro-life (he is an Irish Catholic with degrees from Notre Dame and Georgetown). His diverse district mostly reflects his record and is basically a toss-up district.

The district reaches almost across the width of the state, coming within a few miles of the New Jersey Turnpike in Union County and meandering through Somerset County and over to the Pennsylvania border in bucolic Hunterdon County, which combines farms and rich, spacious estates -- wealthy former Sen. Bob Torricelli (D.-N.J.) lives there.

After the 2000 Census, both parties in Trenton agreed on an incumbent-protection redistricting plan that took Hunterdon County away from Democratic Rep. Rush Holt 's 12th District and gave it to the 7th in exchange for the Democratic areas of Southern Somerset County. Still, the 7th District is very much in play. In 2004, Bush won 53 percent in this district, and Ferguson's first two re-elections in the newly drawn district were easy.

In 2006, however, Ferguson barely kept his job, fighting off State Sen. Linda Stender (D) by fewer than 3,000 votes. Immediately after her loss, Stender launched a re-election bid and had already raised a quarter-million dollars by October. Ferguson's retirement tempted some Democrats to jump into the race, but the state Democratic chairman immediately set about trying to clear the field for Stender.

Stender, as a state legislator, is a skilled retail politician who hit all the right notes in her 2006 race. Her base is Democratic Union County. Because the rest of the district is mostly GOP turf, if Republicans can field a Union County candidate, they could have the advantage.

Republican power-brokers in New Jersey are leaning on State Sen. Tom Kean (R) to run. Kean, son of former Gov. Thomas Kean (R), lost to Ferguson in the primary for this seat in 2000, and he made a respectable run for U.S. Senate in 2006, winning Somerset and Hunterdon Counties. Former Rep. Bob Franks (R), who gave up this seat in 2000 to seek the Senate, might run, as might State Sen. Kip Bateman (R) and State Assemblyman Jon Bramnick (R).

Given Stender's fundraising advantage and the likely coattail effects of a presidential race, this one starts off favoring Democrats, but could certainly swing back into the GOP column. Leaning Democratic Takeover.

Illinois-14: Rep. Dennis Hastert (R-Ill.), made official last week what we reported back in August: He will not finish his term and will instead resign by the end of the year, creating an open seat and spurring a special election. Once Hastert resigns, the governor has discretion to set the date of the special election primary and general election within 120 days. Currently, it appears that the primary will be February 5, the same date as the presidential primary. The general election would likely be in late March or early April.

The early resignation comes as no surprise to the Republican candidates, who were already running as if it were a special election. The GOP field features businessman and perennial candidate Jim Oberweis (R), State Sen. Chris Lauzen (R) and Geneva Mayor Kevin Burns (R). Lauzen and Oberweis -- the more conservative of the three -- appear to be the early front-runners.

On the Democratic side, Hastert's 2006 opponent, John Laesch (D), seems to have gotten the jump on his opponents, self-funding millionaires Bill Foster (D) and Jotham Stein (D).

The timing of Hastert's resignation probably helps Republicans. If the election had been on February 5, that would have helped the Democrat, but now it will be on its own date. Moving the open-seat election away from Election Day will eliminate Democratic coattail effects from the Presidential and U.S. Senate races upticket. When Election Day does roll along, the Republican candidate might already be an incumbent. Leaning Republican Retention.