Bush hails revised deficit number

WASHINGTON (CNN) -- President Bush hailed new budget figures released this morning that shows the deficit is $127 billion less than what he predicted earlier this year.

Bush credited the revised number to his economic policies including tax cuts, efforts to rein in federal spending as well as his pro-growth policies.

"This good news is no accident," he said in a short speech from the White House. "It is the result of the hard work of the American people and sound policies in Washington, D.C."

Earlier this year, Bush suggested the deficit would be $423 billion, but the mid-year budget review released this morning shows the revised figure to be $296 billion. The news conference had a political flavor to it as embattled Sen. Conrad Burns (R-Montana) joined Sen. Ted Stevens (R-Alaska) and several House members in the audience.

Senate Majority Leader Bill Frist (R-Tennessee), too, praised Republican policies for the good news and suggested the GOP will do more in the future.

"We're making progress to bring our spending and revenue into line, but we cannot rest on the progress made to date," he said in a statement released by his office prior to Bush's speech. "As we strive to achieve fiscal balance, more needs to be done to help hard working families meet the cost of living."

But Sen. Frank Lautenberg (D-New Jersey) charged that it is Bush's stewardship of the economy that has caused the deficit and accused the President of now wanting to cut social programs to help balance the budget.

"President Bush dug us into a deep hole, and now he wants to cut Social Security and Medicare to get us out," Lautenberg said in a statement. "Those misplaced priorities speak for themselves."

OMB Director Rob Portman answers questions on the budget at 11 a.m. ET before giving a noon speech at the National Press Club. Democrats deliver their assessment in the Senate Radio and Television Gallery at 1:45 p.m. ET.

Jefferson vows to fight on

Rep. William Jefferson (D-Louisiana) will appeal a decision by a federal judge, who ruled Monday a search of his Capitol Hill office was constitutional, CNN's Deirdre Walsh and Terry Frieden report.

"We respectfully disagree with his conclusion," Jefferson's attorney, Robert Trout, said in a written statement in which he called the search "unprecedented, unnecessary and unconstitutional."

Chief U.S. District Judge Thomas Hogan ruled that the Constitution's "speech and debate" clause, which gives members of Congress immunity while conducting their official duties, does not shield them from execution of valid search warrants, as Jefferson's attorneys had argued in a motion asking for return of the materials seized during the May search.

"Congressman Jefferson's interpretation ... would have the effect of converting every congressional office into a taxpayer-subsidized sanctuary for crime," Hogan said in his ruling. "Such a result is not supported by the Constitution or judicial precedent and will not be adopted here."

Hogan also ruled that the Justice Department can begin reviewing the materials seized from Jefferson's office, which have been held by the solicitor general's office under an order from President Bush.

Legal sources connected to Jefferson's office said he will ask Hogan to stay his order releasing the seized materials to the Justice Department, pending the appeal.

Meanwhile, congressional negotiators and Justice Department officials are close to reaching an agreement on procedures for future searches of lawmakers' offices by federal agents with an announcement likely to come "soon," a senior Justice official told CNN.

Jefferson is the subject of a criminal probe into allegations he accepted bribes in return for using his office to facilitate business ventures in Africa. In court documents, prosecutors said $90,000 in cash was found in the freezer of his Washington house when it was searched last summer. Jefferson, who has not been charged with any crime, has denied wrongdoing and vowed to continue his bid for re-election in November. However, a Kentucky businessman and a former Jefferson staffer have both pleaded guilty to corruption charges and agreed to cooperate with investigators.

A GOP cup of Hawaiian 'Coffee'

Former Navy Captain turned motivational speaker Jerry Coffee will be introduced at a news conference today by Hawaii Gov. Linda Lingle (R) as the Hawaii GOP's candidate for Senate, a well placed Republican source tells the Grind. Republicans hope a combination of Lingle's popularity, a primary fight for the Democratic nomination and Coffee's military resume will help Republicans take this seat out of the Democratic column. Coffee served 28 years in the Navy, seven of which were as a prisoner of war during the Vietnam War. Sen. Daniel Akaka (D) is currently locked in a primary battle with Rep. Ed Case (D) for a seat Akaka has held since being appointed in 1990. Despite the divisive primary and Lingle's popularity, Democrats will still be favored to win the seat in November. The primary will be held late September.

$1.2 billion -- no joke

The money-in-politics wizards at PoliticalMoneyLine report that lobbying expenditures for the second half of 2005 exceeded $1.2 billion. That means influence peddlers spent an average of more than $200 million a month to lobby the executive and legislative branches. PoliticalMoneyLine, a non-partisan data collection company, notes that the healthcare sector led the way by spending more than $183 million during this six month time period followed by the communication and technology industry that spent nearly $159 million.

Overall, PoliticalMoneyLine estimates that $2,363,102,190 was spent on federal lobbying in 2005.

DAYAHEAD/Events making news today

POLITICAL HOT TOPICS

Compiled by CNN's Stephen Bach

WH MAY "REWORK" TERROR TACTICS: Five years after the attacks on the United States, the Bush administration faces the prospect of reworking key elements of its anti-terrorism effort in light of challenges from the courts, Congress and European allies crucial to counterterrorism operations... Accustomed to having its way on matters related to the nation's security, the administration is being forced to respond to criticism that it once brushed aside. Washington Post: Rethinking Embattled Tactics in Terror War

JUDGE RULES JEFFERSON SEIZURE IS LEGAL: While acknowledging the unprecedented nature of the F.B.I. search of Representative William J. Jefferson's legislative offices, a federal judge ruled Monday that the seizure of records there was legal and did not violate the constitutional separation of powers between Congress and the executive branch... Mr. Jefferson's lawyer, Robert F. Trout, quickly announced that he would appeal. And while Judge Hogan said the documents seized in an overnight raid May 20 and 21, including computer hard drives and boxes of records, could now be turned over to investigators, the defense is likely to seek a stay of that release. New York Times: Judge Upholds F.B.I. Search of Lawmaker's Office

THE "CONNECTICUT FOR LIEBERMAN" PARTY: Sen. Joseph I. Lieberman took steps Monday to secure a place on the November ballot as a member of his own party, Connecticut for Lieberman, should he lose the Aug. 8 Democratic primary to challenger Ned Lamont. And Lamont aired an offbeat new television commercial that parodies what his campaign says are Lieberman's negative ads. Lieberman, who announced last week he would gather petition signatures as insurance against a primary loss to Lamont, had two options Monday: to take out papers to petition as an individual, or as a candidate with a party designation. Hartford Courant: Senator Would Form Party

LIEBERMAN STILL HAS FEW "UNCONDITIONAL" SUPPORTERS: More than a week after announcing that he will run as an independent if he loses the Democratic nomination, Connecticut Sen. Joe Lieberman can count his unconditional Democratic Caucus supporters on one hand - and still have fingers left over. Centrists Mark Pryor (Ark.), Ken Salazar (Colo.) and Ben Nelson (Neb.) are the only Democrats who have indicated they will back Lieberman if he loses the Aug. 8 primary to businessman Ned Lamont and seeks reelection without a party affiliation, according to a survey conducted by The Hill and a review of other news reports. The Hill: No big rush to support Lieberman

"PIT BULL" SENSENBRENNER REALLY DOESN'T LIKE ILLEGAL IMMIGRANTS: Representative F. James Sensenbrenner Jr. has no tolerance for illegal immigrants, either in his political life or personal life. "My housekeeper in Wisconsin was born in Wisconsin," says Mr. Sensenbrenner, the Republican congressman and chairman of the House Judiciary Committee. "My housekeeper here is a naturalized U.S. citizen from Nicaragua." Mr. Sensenbrenner is so loath to risk dealing with illegal immigrants that when his Cadillacs need cleaning, he prefers do-it-yourself car washes that require tokens. "They don't have Montezuma's picture on the front of them," Mr. Sensenbrenner says of the tokens. New York Times: 'Pit Bull' of the House Latches On to Immigration

DALEY SAYS HE "SHOULD HAVE EXERCISED GREATER OVERSIGHT" IN HIRING: Mayor Richard Daley said Monday that he has acted "honestly and lawfully" but acknowledged he could have done more to avert a hiring scandal that led to the convictions of four former aides on corruption charges. "It is fair criticism to say I should have exercised greater oversight to ensure that every worker the city hired regardless of who recommended them was qualified and that proper procedures were always followed," Daley said in his most extensive comments since the convictions last week that rocked City Hall. Chicago Tribune: Daley: I could have done more

JEB NOW "UNDER FIRE" FOR HIRING: His prison boss took bribes. His law enforcement chief compared two black leaders to criminals. The top man at his child-welfare department had cozy ties to lobbyists. Nearly eight years after promising ''the most ethical administration in Florida history,'' Gov. Jeb Bush has watched several of his leaders become mired in controversies that threaten to blemish his well-polished reputation as a reformer -- the envy of other governors and political opponents alike. The most recent scandal came Wednesday, when federal prosecutors revealed that James Crosby -- the man Bush tapped to lead the long-troubled Department of Corrections -- admitted his part in a $130,000 bribery and kickback scheme with a snack-bar vendor. Miami Herald: Governor's hires under fire

GAY MARRIAGE MAY GO ON THE BALLOT IN MA: The Supreme Judicial Court delivered a major victory yesterday to opponents of same-sex marriage, validating a proposed constitutional amendment that seeks to outlaw gay weddings in a 2008 ballot measure. In a unanimous decision, the court rejected a claim by gay-rights advocates that Attorney General Thomas F. Reilly erred last year in deciding that the proposed amendment was constitutional. The court ruled that voters had a right to decide whether such a ban belongs in the state constitution. Yesterday's decision sets the stage for a highly anticipated joint session of the Legislature tomorrow, when lawmakers have the power to advance or kill the ballot initiative altogether. Boston Globe: Gay-marriage opponents get SJC go-ahead JCS CHAIRMAN PACE MOVED TO TEARS AT HEARING: A congressional hearing on immigration came to a dramatic pause Monday when Gen. Peter Pace, the chairman of the Joint Chiefs of Staff, choked up as he talked about his Italian immigrant father and the opportunities that America had given to his family. A hush fell over the auditorium at Miami Dade College as Pace, a Marine who was born in Brooklyn, N.Y., and grew up in Teaneck, N.J., was overcome with emotion and struggled to continue reading from his statement as the opening witness at the field hearing of the Senate Armed Services Committee. Pace was explaining his family's origins to the committee and the opportunities he and his three siblings enjoyed in America when he lost his composure, much to the surprise of the 150 people gathered in the hearing room and to the five senators, who sat riveted as the general paused. Washington Post: General Speaks of Immigrant Father http://www.boston.com/news/specials/gay_marriage/articles/2006/07/11/gay_marriage_opponents_get_sjc_go_ahead/

CONGRESS TAKING ON ONLINE GAMBLING: The U.S. House of Representatives is nearing passage of a measure making it illegal for credit-card companies to collect payments for Internet casinos and requiring financial institutions to help law-enforcement agencies shut down money transfers to illegal gaming sites. The House is scheduled to vote tomorrow on the bill, which combines two measures sponsored by Republican Representatives James Leach of Iowa and Bob Goodlatte of Virginia. The lawmakers predicted passage of the measure, which would then go to the Senate, where previous measures to crack down on Internet gaming have failed. Online gambling is illegal in the U.S. under a 1961 law against using telephone lines to place interstate bets. Bloomberg: U.S. House Measure Would Restrict Online Gambling

DOOLITTLE'S PACS SPENT THOUSANDS AT SAKS, TIFFANY AND RITZ-CARLTON: In the past two years, campaign and political action committees controlled by Rep. John T. Doolittle (R-Calif.) paid ever-larger commissions to his wife's one-person company and spent tens of thousands of dollars on gifts at stores such as Saks Fifth Avenue and Tiffany & Co. and a Ritz-Carlton day spa. The use of such committees, especially "leadership" PACs, for purposes other than electing politicians to Congress is a common and growing phenomenon, but campaign finance watchdogs say Doolittle has taken it to new heights. Washington Post: Lawmaker Criticized for PAC Fees Paid to Wife

TX SOS SAYS "KINKY" CAN STAY: "Kinky" is in; "Grandma" is out. That's the word from Secretary of State Roger Williams, who ruled Monday on the use of ballot nicknames by independent gubernatorial candidates Carole Keeton Strayhorn and Kinky Friedman. Strayhorn won't get to use "Grandma" on the Nov. 7 ballot because it's a slogan, Williams ruled. Friedman gets to use "Kinky," although his first name, "Richard," must also appear. Both had sought approval from Williams -- the state's chief elections officer -- for what they described as nicknames on the ballot. Fort Worth Star-Telegram: 'Kinky' is permitted on the November ballot, but 'Grandma' isn't

RUDY RAISING $$$ ON THE ROAD: Rudy Giuliani took off yesterday on a five-state stumping tour for GOP candidates that could also help him should he decide to run for president in 2008. The former mayor began with a fund-raiser for Sen. Mike DeWine last night in Ohio... Today, Giuliani is to hit Clinton's former home turf, Arkansas, before heading to Illinois, then on to Pennsylvania for an event with GOP Sen. Rick Santorum. The jaunt is to wrap up in Delaware tomorrow. New York Post: Giuliani Hits Road for GOP

FALLUJAH MAYOR ENDORSES RHODE ISLAND CANDIDATE: A candidate for the Rhode Island Legislature has gotten an unusual endorsement - from the mayor of Fallujah, Iraq, praising him as that city's "favorite USA colonel." Republican James Haldeman, a retired Marine lieutenant colonel, had re-entered the Marine Corps to go to Iraq, where he ran a civil-military operations center last year in Fallujah. He oversaw the reconstruction of schools, a power plant, water treatment plant and other facilities. Now back in military retirement, the American Airlines pilot is running for the seat held by Democratic state Rep. John Patrick Shanley Jr. AP via Yahoo! News: Iraqi mayor backs Rhode Island candidate

DeLAY WANTS THE DESK: Former Majority Leader Tom DeLay (R-Texas) wants to take an expensive piece of history with him into retirement. DeLay is seeking the House Administration Committee's approval to buy a George Washington desk, a 35-year-old replica of the one Washington used while president when the capital was New York City. DeLay needs the permission of committee Chairman Vern Ehlers (R-Mich.) to buy the $14,000 mahogany writing desk, which the government purchased in 1971, because it is considered "a special inventory item, [which] may or may not be available for purchase," according to the committee's Guide to Outfitting and Maintaining an Office of the U.S. House of Representatives. The Hill: DeLay tries to acquire storied Washington desk

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