WASHINGTON (CNN) -- The FBI has concluded its final forensics tests on a stolen Veterans Administration laptop computer and found none of the personal data was accessed, a federal official tells CNN.

The FBI recovered the laptop and hard drive containing personal data on more than 26 million veterans and active-duty military personnel on Wednesday -- more than a month after their theft from the home of a Veterans Affairs analyst.

Taken May 3 from the house of a VA employee, the laptop was returned to the FBI's Baltimore's field office Wednesday after someone tipped off the U.S. Park Police, who in turn called the FBI, FBI Baltimore field office director bureau Bill Chase told reporters Thursday.

The VA said the employee had no clearance to take it home, but documents dated September 5, 2002, show the analyst was permitted to do so for "work-related projects."

No arrests have been made.

From The Morning Grind

Republicans are being urged by GOP leaders to talk about the economy and the Medicare prescription drug plan as they return home for the July 4th Congressional recess. Democrats, too, are being pressed by their leadership to do the same. But the two parties will be selling a different message.

Congressional leaders have armed their colleagues with comprehensive talking points to speak from as they hold public forums and meet with constituents over the next week. At stake is control of Congress and party leaders want to make sure rank-and-file colleagues can eloquently promote their party's agenda and vision, while at the same time casting doubt on their opponents' goals.

"If we don't let our constituents know about our accomplishments, no one will," House Republican Conference Chairman Deborah Pryce (Ohio) writes in a letter accompanying the House GOP's recess packet. "The Democrats are not going to be out there this recess touting our accomplishments for us."

In addition to highlighting an improving economy and the implementation of the Medicare prescription drug plan, Republicans are being told to speak about the successful war on terror and GOP efforts to ease the energy crisis, among other issues.

Democrats are being told to push their "New Direction for America" agenda that includes health care, economic security, college affordability, energy independence and retirement security. Democrats will also be criticizing the GOP's stewardship of Congress over the next week, which House Minority Leader Nancy Pelosi (D-California) previewed Thursday during her weekly news conference.

"As we leave this session of Congress and for this recess, I think it is important to note that Republicans have failed to pass an immigration bill," she said. "They have failed to pass a lobby reform bill, and they have failed to pass a comprehensive budget ... they failed to pass the minimum wage."

Amy Walter, senior editor of the non-partisan Cook Political Report, said Democrats and Republicans have a similar goal of trying to convince voters that their respective party is "a problem solver."

"Voters know that Republicans are in charge so they will take the brunt of the blame," she said. "The question in my mind is will Democrats be able to take advantage of voter discontent."

Walter said she thinks Democrats would be best served by continuing to promote the "time for change theme and to focus on the legislative gridlock and problems and say, 'See Republicans are in charge and we need change.'"

For Republicans, Walter said "it is hard to make the stay the course case so you have to change the subject.

"If I were a Republican going home, I would focus on some of the local issues I have been working on," she said. "And I would most likely stay away from many of the national issues."

From The Morning Grind

President Bush and Japanese Prime Minister Junichiro Koizumi head to Memphis, Tennessee this morning to pay homage to the King. Koizumi is a huge Elvis Presley fan, so Bush decided to take him on a tour of Graceland.

How much of an Elvis fan is Koizumi? Well, CNN's Robert Yoon reports that in 2001 he issued a statement to the Elvis fan club in Japan saying, "I love Elvis. I never get tired of listening to his songs no matter how many times I hear them."

That same year, Koizumi and the fan club released a CD called "Junichiro Koizumi Presents My Favorite Elvis Songs." We kid you not. Koizumi picked his favorite Elvis songs such as "Can't Help Falling In Love" and "If I Can Dream" for the special edition release.

From The Morning Grind

Massachusetts Gov. Mitt Romney (R) was hailed yesterday by a South Carolina organization for helping to fund its effort to convince Palmetto State voters to classify marriage as a union between a man and a woman by amending the state Constitution in November. The praise should help Romney further solidify his credentials as a social conservative in South Carolina, one of the early proving grounds in a presidential campaign. SCforMarriage.org announced it had received a $5,000 contribution from Romney's political action committee, The Commonwealth PAC. A glance at the organization's website shows that Romney is the first and only person listed as a campaign sponsor. But 34 elected officials including Gov. Mark Sanford (R) have endorsed the effort, according to SCforMarriage.org.

"Traditional marriage is fundamental to the development of children and to our success as a culture," Romney said in a statement released by SCforMarriage.org. "We cannot afford to shrink from the timeless, priceless principles of human experience. I will continue to work to help preserve traditional marriage and I applaud this effort in South Carolina as well as others like it across the nation."

Given the importance of the South Carolina presidential primary, will other Republicans eyeing the 2008 GOP nomination follow Romney's lead and weigh in financially on this issue?

From National Security Senior Producer Pam Benson

WASHINGTON (CNN) -- A CIA analysis has concluded the voice on an audio
tape released Thursday night on an al Qaeda website is that of Osama bin Laden,
according to a CIA representative.

From The Morning Grind

Sen. Evan Bayh called on his political supporters Thursday to donate to Rep. Leonard Boswell's (D-Iowa) campaign, a week before the Indiana Democrat visits the nation's first presidential caucus state. Bayh, who is expected to run for the White House in 2008, praises Boswell for his military service in Vietnam and notes that Republican challenger Jeff Lamberti is receiving strong support from the likes of Vice President Cheney and GOP political mastermind Karl Rove.

"Leonard's seat is the number one target for Republicans in Washington," Bayh writes, adding that Democrats are within striking distance of taking back control of the House from Republicans for the first time since 1995.

Boswell is a much sought after ally by Democrats who are eyeing presidential bids.

From The Morning Grind

While acknowledging that she tunes in "all the time" to The Colbert Report, House Minority Leader Nancy Pelosi (D-California) predicted Thursday that Stephen Colbert's goal of interviewing every Member of Congress will fall short.

"That won't happen," she told reporters at her weekly press conference.

She described Colbert's "Better Know a District" segment, where the comedian interviews Members of Congress, as humorous but offered up this advice.

"I wouldn't recommend that anyone go on the show," she said. "I would think it would be okay to go on if you were live to tape, but don't subject yourself to a comic's edit unless you want to be made a fool of."

SCOTUS REJECTS TRIBUNALS: The Supreme Court yesterday struck down the military commissions President Bush established to try suspected members of al-Qaeda, emphatically rejecting a signature Bush anti-terrorism measure and the broad assertion of executive power upon which the president had based it. Brushing aside administration pleas not to second-guess the commander in chief during wartime, a five-justice majority ruled that the commissions, which were outlined by Bush in a military order on Nov. 13, 2001, were neither authorized by federal law nor required by military necessity, and ran afoul of the Geneva Conventions. Washington Post: High Court Rejects Detainee Tribunals

BUSH TO WORK WITH CONGRESS TO "FIX THE PROBLEM": The Supreme Court's rebuff of the Bush administration's Guantanamo military tribunals knocks the issue into the halls of Congress, where GOP leaders are already trying to figure out how to give the president the options he wants for dealing with suspected terror detainees. That way forward could be long and difficult. Congress will negotiate a highly technical legal road - one fraught with political implications in an election year - under the scrutiny of the international community that has condemned the continued use of the Guantanamo prison... Within hours of the high court's ruling that the military tribunals were illegal under U.S. and international law, President Bush said he would work with Congress to fix the problem. Still, Bush vowed that the result "won't cause killers to be put out on the street." AP via Yahoo! News: Congressional hearings on Guantanamo set

A "BATTLE ROYALE" WITH MIDTERMS AROUND THE CORNER: ..."Following the July Fourth recess, I will introduce legislation, in consultation with the administration and my colleagues, that authorizes military commissions and appropriate due-process procedures for trials of terrorist combatants," Senate Majority Leader Bill Frist said yesterday after the court's decision. Both parties now face a protracted fight over the scope and meaning of the Supreme Court ruling, with each side looking to capitalize on the security issue before the November elections. "This sets up a battle royale, with the November elections just around the corner," said one senior former administration official. "Congressional Democrats screamed bloody murder that the president didn't have the authority to order military tribunals, well, now they have to decide." Washington Times: Legislative remedy to create political battle for midterms

HOUSE PASSES RESOLUTION CONDEMNING NYT: The House of Representatives on Thursday condemned the recent disclosure of a classified program to track financial transactions and called on the media to cooperate in keeping such efforts secret. Lawmakers expressed their sentiment through a resolution that was approved on a largely party-line 227-to-183 vote after days of harsh criticism by the Bush administration and Congressional Republicans aimed at The New York Times and other newspapers for publishing details of the program, which the government said was limited to following possible terrorist financial trails. The vote followed a bitter debate in which Republicans said news accounts had jeopardized the effort, and Democrats accused Republicans of trying to intimidate the press. New York Times: House Assails Media Report on Tracking of Finances

NSA COOPERATION "NOT AS EXTENSIVE AS FIRST REPORTED": Members of the House and Senate intelligence committees confirm that the National Security Agency has compiled a massive database of domestic phone call records. But some lawmakers also say that cooperation by the nation's telecommunication companies was not as extensive as first reported by USA TODAY on May 11. Several lawmakers, briefed in secret by intelligence officials about the program after the story was published, described a call records database that is enormous but incomplete. Most asked that they not be identified by name, and many offered only limited responses to questions, citing national security concerns. USA Today: Lawmakers: NSA database incomplete

BUSH BACK IN THE FORTIES: President Bush's job approval rating is up slightly, but discontent over the Iraq war, especially among women, is continuing to boost Democratic prospects in the struggle for control of Congress, a Times/Bloomberg poll has found. Bush's job approval rating edged up to 41%, his highest since January in the poll. But Democrats held a formidable advantage, 49% to 35%, when registered voters were asked which party they intended to support in fall congressional elections. Los Angeles Times: Though Bush's Numbers Edge Up, War Discontent Lifts Democrats

FIRST TOUR OF GRACELAND BY A SITTING PRESIDENT: Graceland has new paint on the fences, freshly trimmed bushes and a cleaning job worthy of heads of state. "Every little detail will be pristine," said Graceland chief executive officer Jack Soden. "There's the joke that you ought to have a big party at your house at least once a year, because if you've got really important guests coming you go the extra step to make sure everything is perfect." For Soden, who has greeted 15 million guests in 24 years, "the fact is nobody can remember a day like this one." President George Bush and first lady Laura Bush are accompanying Japan's No. 1 Elvis fan, Prime Minister Junichiro Koizumi, on a tour of Graceland. It is the first Graceland tour by a sitting U.S. president... Graceland spokesman Todd Morgan said he is unsure who else might accompany Koizumi, but Soden said the prime minister's brother, Masaya Koizumi, is a likely guest. He said the brother is a former president of The Elvis Presley Fan Club of Tokyo and helped organize installation of an Elvis statue in a Tokyo park. Memphis Commercial Appeal: Graceland's big day

VA GETS LAPTOP BACK: Federal officials yesterday announced the recovery of computer equipment stolen from an employee of the Department of Veterans Affairs. They said that sensitive personal information of 26.5 million veterans and military personnel apparently had not been accessed. The laptop and external hard drive, stolen May 3 from a VA data analyst's home in Aspen Hill, contained the names, birth dates and Social Security numbers of millions of current and former service members. The theft was the largest information security breach in government history and raised fears of potential mass identity theft. Washington Post: Stolen VA Laptop and Hard Drive Recovered

HOUSE APPROVES DRILLING 50 MILES FROM FL COAST: The House voted by a wide margin Thursday to allow oil and gas drilling as close as 50 miles off the nation's coastline, splitting a once-united Florida congressional delegation, most of whom voted to lift the historic ban that now protects coastal waters. Florida members who sided with the proposal argued that it may be the best the state can do, because bans protecting the coastline begin to expire next year and the state is losing leverage in its efforts to keep rigs from its shores. The bill passed 232 to 187. Fourteen of Florida's 25 House members voted in favor. Miami Republican Reps. Mario and Lincoln Díaz-Balart were the only South Florida House members who supported it. Miami Herald: House votes for drilling near coast

NEY'S DISTRICT OFFICE DIRECTOR SUBPOENAED: An aide to embattled Rep. Robert W. Ney has been subpoenaed in the Justice Department's investigation of influence peddling in Congress, and three other aides are leaving the Ohio Republican's staff, Ney's spokesman said yesterday. The subpoena for Matthew Parker, director of Ney's congressional district office, was issued by a federal magistrate in Washington. Ney has not been accused of any wrongdoing, but federal prosecutors have described him in court documents as having received gifts, trips and other things of value from former lobbyist Jack Abramoff and his associates. Ney spokesman Brian Walsh declined to comment on Parker's subpoena. Parker is the first member of Ney's staff to be subpoenaed by the Justice Department since Ney himself was subpoenaed in November. AP via Yahoo! News: Rep. Ney's aide subpoenaed in lobby probe

TOP THREE STAFFERS LEAVE NEY OFFICE: The top three aides for Rep. Bob Ney (R-Ohio) are leaving, or already have left, the Ohio Republican's office, the latest sign that Ney's legal and ethical troubles stemming from the Jack Abramoff scandal are growing worse with each passing day. Will Heaton, Ney's chief of staff, and Brian Walsh, the communications director, are planning to leave Ney's staff soon, according to sources close to the office. Walsh will accept a job as communications director for Sen. John Cornyn (R-Texas), while Heaton's destination is unknown. Heaton recently was married and was unavailable for comment Thursday. Chris Otillio, Ney's legislative director, left the office last Friday, the sources said. Roll Call: Three Top Ney Aides Departing; District Aide Subpoenaed

"MUPPET MESS" COST $160K: Rep. Vito Fossella owes taxpayers more than $160,000 for abusing free mailing privileges to boost his bid for reelection, his rival charged yesterday. As the Daily News reported yesterday, the Staten Island Republican violated House rules by plastering the same photo on free mailings to constituents and campaign flyers. He also used two photos - one with Muppets Elmo and Rosita at his side, the other with senior citizens hugging him - on the mailers and on his campaign Web Site. Although the mailings to thousands of voters was carefully vetted by the House Commission on Congressional Mailing Standards, the bipartisan committee wasn't aware of the duplication. New York Daily News: Vito's Muppets mess cost 160G, says Dem rival

EHRLICH TAPS BLIND HEAD OF STATE DISABILITIES OFFICE AS RUNNING MATE: Gov. Robert L. Ehrlich Jr. chose Kristen Cox - the legally blind head of the state disabilities office - as his running mate yesterday, a pick that makes a play for female voters and aims to show that the governor's brand of conservatism is tempered by compassion. Cox, 36, is a mother of two who has never run for elected office and is little known outside State House circles. A former Washington lobbyist for an advocacy group for the blind, she joined Ehrlich's administration in 2003 and became a department secretary when he elevated her office to Cabinet-level status. Baltimore Sun: Cox to run with Ehrlich

RI AG TOOK $$$ FROM DEFENDANT: Attorney General Patrick C. Lynch accepted $4,250 in campaign contributions from DuPont Corp. lawyers and lobbyists before and after reaching a $12-million settlement with the company in the state's lead-paint case. Lynch's opponent in the upcoming election, J. William W. Harsch, filed a complaint yesterday with the state Ethics Commission, saying Lynch's acceptance of money from a company he was prosecuting is in "substantial conflict with his duties." Harsch, a Republican, said his campaign discovered the donations while doing opposition research on Lynch, a Democrat. "It is a total abuse of the office of attorney general," Harsch said in an interview. "It is one of the things that will occur if the office is being used as a stepping stone to higher office." Providence Journal: Lynch accepted campaign donations from lead defendant

On "The Situation Room" today, we asked viewers the following three questions, and here are some of our favorite responses that we didn't get to read on air:

What does it mean that the citizens of Berkeley, California, will vote on whether to call for the impeachment of Pres. Bush and V.P. Cheney?

It appears that at least one town in this country is willing to take the action that many have feared doing. This administration will probably try to have them excommunicated from the country. I never thought I'd say it, but God bless California.
Bill, Leesburg, Florida

It means that the citizens of Berkeley have a whole lot more backbone than our rubber-stamp representatives in Congress.
Linda, Maryville, Tennessee

The Berkeley maneuver to vote for impeachment plays into the hands of the conservatives; it energizes the conservative base to get out and vote instead of drinking another six-pack that day. Liberals are idiots because they continually stir up the "hornet's nest" just before elections. Cool your jets and become active when you gain power if you want to be effective. Losers.
Gerald, Tampa, Florida

Is it time to negotiate with the insurgents in Iraq?

If the newly formed Iraqi government does not negotiate with the insurgents there will never be an end to the violence and a safe and secure Iraq is just a pipe dream.
Greg, Vista, California

Well Jack, that's a hell of an idea...now if only those boneheads in Washington could realize it might be a good approach. Maybe it's time to speak softly and put down the big stick.
Warren, New Jersey

It would be big mistake to make any deals with people who hate us so much, and can only achieve power by killing off the new government. They would just wait for us to leave before they took over Iraq or caused a civil war.
Jim, Canal Winchester, Ohio

Who's going to win the battle between national security and freedom of the press?

Naturally Bush and his cronies. If the Bush administration is so sincere about keeping stories top-secret then they should stop leaking the information out.
Craig, Peyton, Colorado

The press. And if they do not, we have become early Soviet Russia.
Bruce, Minneapolis, Minnesota

I hope that the media gets put in its place. You don't go around telling the operational secrets of the government that allows you to exist.
Phillip, Glad Spring, Virginia

I hope freedom of the press wins. I have a hard time believing that our national security was compromised because of the New York Times. This administration has been bragging since 9/11 how they were following the money.
Lee, Fairfield, Iowa

Veterans sigh of relief
Now that the infamous Dept. of Veterans' Affairs stolen laptop is recovered, what happens next? Lawmakers are holding hearings, lawsuits are pending, and will the government still offer free credit checks for veterans? In addition, despite previous statements to the contrary, new documents (PDF) released by Democratic staffers on the House Veterans' Affairs committee appear to show the analyst who took the laptop home had permission to do so.

Fighting leaks
Competing resolutions are introduced in the House over whether newspapers should reveal classified information. The Republican resolution (PDF) supports the leaked finance program and condemns the publication of classified information by the news media. Should Americans be as concerned with leakers as they are with newspapers that publish information? That's what Democrats are saying in their resolution (PDF), which began as a crossed out and scribbled-on (PDF) version of the Republican one.

Fighting partisan politics
The Unity08 coalition launches a "Declaration of Independence" petition, hoping to sign up enough citizens to force Democrats and Republicans into the political center.

Watch "The Situation Room" at 4:00 PM, 5:00 PM, and 7:00 PM, ET for these stories and more from our Internet reporters.

From CNN's Justine Redman

WASHINGTON (CNN) -- Secretary of Homeland Security Michael Chertoff said
Thursday that the problem of illegal immigration into the U.S. will worsen and
fester if Congress does not pass immigration reform measures before the end of
the year.

"Congress has an opportunity and it has a responsibility to act this year
to tackle this problem," he said in a speech in Washington. "The President has
used the tools of the so-called 'bully pulpit' to speak very aggressively and
clearly about the comprehensive solution he thinks is appropriate. [...] That
is the way presidents move Congress."

Chertoff predicted that the number of border patrol agents in the U.S.
will more than double during President Bush's time in office, reaching 18,000
by the end of 2008. Fences, vehicle barriers, roads, and sophisticated
equipment such as sensors, unmanned aircraft and satellites will be added to
their artillery, he said.

However, the Secretary urged that these measures must be complimented by
a temporary worker program "that is not an amnesty but that does allow people
to get themselves square with the law if necessary, if they've violated the
law, and then work in this country temporarily." He said, "By doing this we
will have given our border patrol and our other law enforcement agents the
final tool they need to do the job we have asked them to do."

(CNN) -- The Supreme Court's ruling that the military tribunals set up by the Bush administration were unconstitutional triggered a wave of reactions throughout Washington and beyond.

Below are excerpts of reactions from leaders of legal organizations, a key lawyer, Republicans and others. (For a sampling of Democratic reactions, click here.)

"The Supreme Court has made clear that the executive branch does not have a blank check in the war on terror and may not run roughshod over the nation's legal system. This decision moves us one step closer to stopping the abuse of power that has become the hallmark of this White House. Now that the Supreme Court has issued its decision, the president should make good on his promise and close Guantanamo."
-- Anthony Romero, American Civil Liberties Union

"What the court is holding, at least by the plurality, if they want to pursue the conspiracy charge that's against him, that means we go to the federal courts right now. ... But if there's other evidence, and they want to charge him with a war crime, then I'm ready to defend him in a court-martial."
-- Lt. Cmdr. Charles Swift, lawyer for terror suspect Salim Ahmed Hamdan

"I'm sure we'll look at other means to provide them justice under our laws, international law. We might look to the federal system and other means which to provide them. There also could be acceleration of efforts to return them to their native countries, to the extent those countries will accept them."
-- Sen. John Warner (R-Virginia)

"There is no way for President Bush to continue hiding behind a purported lack of judicial guidance to avoid addressing the illegal and immoral prison in Guantanamo Bay. Significantly, the court decided that the Geneva Conventions apply to the so-called 'War on Terror' -- people must be treated humanely and the administration cannot put itself above the law."
-- Michael Ratner, Center for Constitutional Rights

Congressional Democrats reacted favorably to the Supreme Court's ruling Thursday that deemed unconstitutional the military tribunals championed by the Bush administration.

The following are excerpts of statements from several Democrats:

"This decision is a stunning repudiation of the Bush Administration's lawless behavior at Guantanamo. As we approach the Fourth of July, it is entirely appropriate that the Supreme Court has reminded the President and Secretary Rumsfeld that there is no excuse for ignoring the rule of law, even when our country is at war."
-- Sen. Edward Kennedy (D-Massachusetts)

"The Supreme Court's decision concerning military commissions at Guantanamo Bay is a major rebuke to an Administration that has too often disregarded the rule of law. It is a testament to our system of government that the Supreme Court has stood up against this overreaching by the executive branch."
-- Sen. Russ Feingold (D-Wisconsin)

"Since 9/11, the Bush Administration has operated in the 'fog of law' -- expanding executive branch power, ignoring the will of Congress, bypassing Courts, and disregarding international law. Today's Supreme Court decision will help lift that fog. The opinion makes clear that the President's power is not unlimited when it comes to holding people without due process.

"It's now time for the Bush Administration to close the Guantanamo prison, and either return the prisoners to their home countries or bring them to justice in the United States... Indefinite detention without access to due process will continue to be a moral black eye for America, eroding our moral authority, national character, and the values for which our brave sons and daughters are fighting."
-- Rep. Jane Harman (D-California)

"The Justices have given our system a constitutional tonic that is sorely needed if we are to counter terrorism effectively, efficiently and with American values. This decision is a triumph for our constitutional system of checks and balances. I commend the Justices for acting as a much needed check on this Administration's unilateral policies that have clearly stretched the bounds of the President's constitutional authority."
-- Sen. Patrick Leahy (D-Vermont)

WASHINGTON (CNN) -- President Bush said Thursday while he hasn't been able to fully review a Supreme Court ruling limiting the power of his administration to conduct military tribunals for suspected terrorists imprisoned at the U.S. Navy base in Guantanamo Bay, Cuba, he said he will "conform with the findings of the Supreme Court."

Bush appeared Thursday with visiting Japanese Prime Minister Junichiro Koizumi, and said he was with the Japanese leader when the ruling was made.

"To the extent there is latitude to work with the Congress to determine whether or not the military tribunals will be an avenue in which to give people their day in court, we will do so," Bush said.

WASHINGTON (CNN) -- Veterans Affairs Secretary Jim Nicholson said Thursday a laptop computer containing personal data on over 1 million active-duty military personnel -- as well as data on a million more National Guard and Reserves members -- has been recovered. (Full story)

The laptop computer was stolen from a Veterans Affairs employee's home on May 3.

Nicholson said an attempt was being made to determine if the data on the laptop had been compromised. He said it is too early to say if the data had been breached but he was told there was "optimism" it had not.

Information on 1.1 million active troops, 430,000 National Guard members and 645,000 Reserves members was on the laptop. Its data included names, birth dates and Social Security numbers of an estimated 26.5 million people, most of them veterans.

WASHINGTON (CNN) -- In a stunning blow to executive authority, the Supreme Court on Thursday strongly limited the power of the Bush administration to conduct military tribunals for suspected terrorists imprisoned overseas at the U.S. Navy base in Guantanamo Bay, Cuba. (Full story)

The 5-3 ruling effectively means officials will either have to come up with new procedures to prosecute at least 10 "enemy combatants" awaiting trial, or release them from military custody. At the center of the dispute was a Yemeni man accused of being associated with al-Qaeda leader Osama bin Laden.

The case was a major test of President Bush's authority as commander in chief in a wartime setting. Bush has aggressively asserted the power of the government to capture, detain and prosecute suspected terrorists in the wake of the September 11, 2001, terrorist attacks.

From The Morning Grind

Appearing before a religious conference earlier this week, Sen. Hillary Rodham Clinton (D-New York) told the audience that as a child attending Sunday school she would baby-sit the children of migrant workers so that their older siblings could join their parents at work.

"I was fortunate that at an early age, through my church, I was given the opportunity to expand my horizons," Clinton told the 600 adults and teenagers attending the Sojourners "Covenant for a New America" conference.

Politically, the story served two purposes for the New York Democrat. It allowed her to promote a developing Democratic message tailored to the faith community that ties the party's "compassionate" legislative agenda directly to moral values. And, personally, it allowed Clinton to speak about her own spirituality. The latter is not new for the former first lady, but it is a theme we could hear more and more if she decides to run for president.

"She understands where the Democrats need to go in talking about values just as her husband understood it," said Stuart Rothenberg, publisher of the non-partisan Rothenberg Political Report. "And she is going to go there."

As a party, Democrats have struggled to appeal to so-called "values voters," but in recent years they have tried to reconnect with this segment of the electorate that began drifting to the Republican Party during the Vietnam War. (See CNN's John Roberts and Claire Brinberg's reporting on the Democrats' outreach efforts below).

But on Tuesday night, Clinton knew her audience and she hit on most of her points. You see, Sojourners is an evangelical organization led by Rev. Jim Wallis, a populist who uses his political savvy to promote his number one cause: ending poverty. And Clinton focused on that theme with sharp rhetoric. While she did not directly chastise Republicans for Congress' failure to increase the minimum wage, it was clear her criticism was directed at the GOP.

"People can talk all they want about how they want to be part of ending poverty, but ... they don't see with their own eyes and hear with their own ears the stories of millions of Americans and their children who are not able to be lifted out of poverty, because the minimum wage doesn't pay enough," she said. "Don't let people get away with nice words." The audience erupted into applause.

While Clinton talked about the need to help establish decent housing, create good paying jobs and feed the poor, she did not speak on the red hot social issues such as abortion or school prayer. Wallis told the Grind he believes the religious right has spent too much time focusing on these divisive issues and not enough effort seeking a solution to ending poverty. For Clinton, it is a difficult tight rope to walk as she continues to talk openly on faith and religion without speaking directly about the controversial social issues.

"There is a risk here for her," said John Green, director of the Ray C. Bliss Institute of Applied Politics at the University of Akron. "She may attract some support from people of faith, but may alienate some secular Democrats. That is where the balancing act comes in."

But like Rothenberg, Green believes that Clinton does "have some religious credentials."

From The Morning Grind

Freshman Sen. Barack Obama (D-Illinois) got rave reviews for his keynote address yesterday to the Sojourners conference, and CNN's John Roberts and Claire Brinberg report on the Democratic Party's efforts to reconnect with "values voters."

"I think we make a mistake when we fail to acknowledge the power of faith in people's lives," Obama said in his speech.

Since early last year, Democrats have reached out to religious leaders in an attempt to seek advice on how to promote their goals to people of faith. As CNN's Roberts notes, "at stake is a huge swath of voters across the Midwest and through the South."

And Obama just might be the superstar emissary the party has been looking for to help them reconnect with these voters. See full transcript of the report.

From The Morning Grind

In the latest sign Senate Majority Leader Bill Frist is gearing up for a 2008 presidential run, the Tennessee Republican has hired Marcus Branstad to lead his political field operations in Iowa. Branstad will work for Frist's Volunteer PAC and focus on state races such as Rep. Jim Nussle's (R-Iowa) bid to become governor. He will also be charged with helping Frist connect with influential Iowa Republicans who will play a key role in helping choose the next GOP presidential nominee. Branstad is the son of former Iowa Gov. Terry Branstad (R).

From The Morning Grind

Longtime Congressional Baseball coaches, Rep. Martin Sabo (D-Minnesota) and Rep. Mike Oxley (R-Ohio), hang up their mitts tonight when the final out is called in the 45th Annual Roll Call Congressional Baseball Game. Former Major League Baseball stars Don Baylor and Paul Molitor are scheduled to attend a noontime pre-game reception in the Rayburn House Office Building several hours before first pitch is thrown out. Game time is 7:05 p.m. ET at RFK Stadium. Roll Call has more on this fierce rivalry in today's edition.

SCOTUS REJECTS TX REMAPPING CHALLENGE: The Supreme Court on Wednesday rejected a broad challenge to Texas's controversial Congressional redistricting plan, giving a victory to the Republican Party and the architect of the plan, Tom DeLay, the former House majority leader. But at the same time, the court ruled that the Texas Legislature violated the Voting Rights Act in redrawing a particular district in southwestern Texas when it adopted the plan in 2003. The Legislature had carved up Laredo, removing 100,000 Mexican-Americans and adding an Anglo population from the Hill Country to shore up the faltering prospects of the Republican incumbent. The decision means that a Federal District Court in Texas will now have to redraw the boundaries of that district and the surrounding ones. New York Times: Justices Uphold Most Remapping in Texas by G.O.P.

WHAT THE DECISION MEANS: A Supreme Court decision Wednesday that largely upheld Texas' disputed congressional map is likely to provide a symbolic boost for Republicans, keep the Democratic goal of retaking the House elusive and ensure that the political legacy of former Rep. Tom DeLay will live on despite his downfall... The decision means that state legislators will have the ability to remap districts more than once every 10 years when census numbers change the allotment of House members based on population. But it was uncertain whether states would soon be altering the boundaries of congressional districts. Chicago Tribune: What remap ruling means to U.S. politics

NO SECRET U.S. WAS TRACKING THE MONEY: Ever since President Bush vowed days after the Sept. 11 attacks to "follow the money as a trail to the terrorists," the government has made no secret of its efforts to hunt down the bank accounts of Al Qaeda and its allies. But that fact has not muted the fury of Mr. Bush, his top aides and many members of Congress at the decision last week by The New York Times and other newspapers to disclose a centerpiece of that hunt... Speaking at a fund-raising event in St. Louis for Senator Jim Talent, Mr. Bush made the news reports his central theme. "This program has been a vital tool in the war on terror," Mr. Bush said. "Last week the details of this program appeared in the press... There can be no excuse for anyone entrusted with vital intelligence to leak it -- and no excuse for any newspaper to print it." New York Times: Behind Bush's Fury, a Vow Made in 2001

BUSH, GOP "WORKING TO FAN PUBLIC ANGER" OVER MEDIA LEAKS: President Bush rallied Republicans with another attack on the media last night, in remarks that highlighted efforts at the White House and on Capitol Hill to gain momentum from recent disclosures about classified programs to fight terrorism. Senior administration officials say the president was outraged by articles in the New York Times and other newspapers about a surveillance program in which the U.S. government has tapped international banking records for information about terrorist financing. But his comments at a Republican fundraiser in a St. Louis suburb yesterday, combined with new moves by GOP congressional leaders, showed how both are working to fan public anger and reap gains from the controversy during a midterm election year in which polls show they are running against stiff headwinds. Washington Post: Bush Seeks to Use Media Leaks to His Advantage

HASTERT WANTS A "FORMAL SCOLDING" FOR THE TIMES: House Speaker J. Dennis Hastert said yesterday that the New York Times deserves to receive a formal scolding from Congress for publishing a report on a classified national security program. His comments were the opening salvo in a debate expected today in the House. "Loose lips kill American people," the Illinois Republican said. Many House Republicans agree with Mr. Hastert's sentiment, and plan to support a symbolic resolution criticizing "certain media organizations" for revealing details of the Bush administration's counterterrorism programs. Washington Times: Hastert aims to reprimand paper

VA EMPLOYEE HAD PERMISSION TO WORK FROM HOME: Lawmakers say they want to know whether a Veterans Affairs employee was being unfairly blamed for losing veterans' personal information, citing newly disclosed documents showing he had received permission to work on the data from home. "From the start, the VA has acted as if the theft was a PR problem that had to be managed, not fully confronted," said Rep. Bob Filner, D-Calif. "They're trying to pin it on this one guy, but I think it's other people we need to be looking at."... According to internal documents obtained by The Associated Press, the VA data analyst faulted for losing personal data for up to 26.5 million veterans had the department's approval to access millions of Social Security numbers on a laptop from home. AP via Yahoo! News: VA worker had OK for data later stolen

SCREENERS "SPENDING TOO MUCH TIME LOOKING FOR LIGHTERS"... NOT BOMBS: The nation's aviation security chief says Congress should lift a ban on passengers carrying lighters on airplanes because screeners are spending too much time looking for lighters instead of bombs. "The lighter ban does not add to security anymore," Transportation Security Administration chief Kip Hawley told USA TODAY on Wednesday. Forcing screeners to confiscate lighters at checkpoints "is a distraction from the serious nature of finding (bomb) components." Hawley said he has briefed lawmakers and "recommended they consider whether that ban needs to stay." USA Today: Lift airline ban on lighters, TSA urges

BOEHNER REFUSES TO BUDGE ON IMMIGRATION: The House majority leader yesterday refused to budge from demanding a strong border-security bill and would not embrace Senate talk of broad legislation that would trigger a guest-worker program and other immigration changes once the borders are secure. "I'm not going to negotiate this bill -- between the House and Senate -- through the press," Rep. John A. Boehner, Ohio Republican, said after he was asked repeatedly about recent Senate developments. Mr. Boehner said House leaders instead will continue their plan to hold hearings next month to highlight flaws in the Senate-passed immigration bill, which includes citizenship for millions of illegal aliens, and the strengths of the House bill, which focuses on securing the border and enforcing immigration laws. He said the hearings will, in part, "strengthen our hand as we go into these negotiations" with the Senate. Washington Times: Boehner stands ground on border-security position

LOTT LOOKING TO TAKE ON MCCONNELL? The prospect of former Senate Majority Leader Trent Lott (R-Miss.) returning to leadership next year is creating more and more buzz on and off Capitol Hill, Republican insiders say. The higher volume of talk has been fueled partly by his former aides who hold influential lobbying positions downtown, but prominent GOP insiders with no special allegiance to Lott say it extends well beyond his inner circle. Perhaps by coincidence, Senate Assistant Majority Leader Mitch McConnell (R-Ky.) has recently sought a more public leadership role, appearing more often before television cameras set up outside the GOP conference's Tuesday luncheons, and has otherwise made himself more available to the press. The Hill: Comeback talk creates Lott buzz

JACK-CONNECTED DOI OFFICIAL CHARGED: An Interior Department official who has acknowledged receiving meals and tickets to sporting events from former lobbyist Jack Abramoff has been charged with filing a false financial disclosure report. Roger G. Stillwell, an employee of the department's Insular Affairs Office, was charged with a single misdemeanor count of making a false filing, according to papers filed Tuesday in U.S. District Court. Federal officials said he is expected to enter a guilty plea at a court appearance set for July 21 before Magistrate Deborah A. Robinson. Stillwell is an officer on the desk that handles the Commonwealth of the Northern Mariana Islands, a U.S. territory whose government hired Abramoff as a lobbyist. Washington Post: Official Charged in Abramoff Scandal

ALLEN FOE SAYS HE SAT OUT VIETNAM "PLAYING COWBOY AT A DUDE RANCH" IN NV: Republican Sen. George Allen attacked his Democratic challenger's opposition to a flag-burning amendment, and James Webb retaliated by calling Allen a coward who sat out the Vietnam War "playing cowboy at a dude ranch in Nevada." The statement by [strategist Steve Jarding,] a senior adviser to Webb, a decorated veteran and former secretary of the Navy, went to extraordinary lengths to question Allen's fortitude, even repeatedly using the middle name the senator detests and never uses, Felix... Allen adviser Dick Wadhams called Jarding's comments pathetic and said they raise questions about Webb's fitness for office. AP via Yahoo! News: Va. Senate race heats up over flag burning

"YOU SUCK," CLINTON STAFFER SAYS TO REID STAFFER: One of Sen. Hillary Rodham Clinton's top aides unleashed a tirade at Senate Democratic Leader Harry Reid's team for snubbing the former first lady on her pet issue. Clinton's staffers were outraged earlier this week when they caught wind the Democratic leadership team -- Reid (Nev.), Chuck Schumer (N.Y.) and Dick Durbin (Ill.) -- had privately planned a high-profile news conference on her plan to halt congressional pay raises until the federal minimum wage is increased. Miffed that they'd been left out of the loop, Camp Clinton managed to strong-arm Reid Tuesday morning into inviting her to the 2:15 p.m. press conference. But at 11 a.m. Reid's office told Clinton the event was moved to noon, leaving Clinton one hour to juggle her schedule to make the event. The snub spurred Clinton aide Laurie Rubiner to bark at a Reid staffer, "You suck!" and "How could you do this?" the Roll Call newspaper reported yesterday -- an account confirmed by an eyewitness for The Post yesterday. New York Post: Fury as Hill is Snubbed

MUPPET PHOTO GETS NY'S FOSSELLA IN HOT WATER: Rep. Vito Fossella (R-S.I.) violated House rules by using at least three photos in campaign flyers and in free mailings to constituents -- including a shot of the congressman with Muppet characters Elmo and Rosita. Fossella's staffers were required to sign forms certifying that any photos used in free congressional mailings would not be used in campaign literature. The photo showing Fossella with the furry, red Elmo and blue/green, Spanish-speaking Rosita appeared on his reelection Web site under the logo: "Re-Elect Congressman Vito Fossella." That same photo appeared in a taxpayer-financed constituent mailing that was distributed in early June across Staten Island and to the portion of southern Brooklyn that is part of Fossella's congressional district. The photo in the constituent mailing carried the headline: "Fossella Votes to Restore Funding for Sesame Street." New York Daily News: It's funny business in Muppet mailings

FLETCHER DRIVES ACROSS THE STREET: When Gov. Ernie Fletcher's day is over, he leaves his Capitol office, climbs into a Lincoln Town Car driven by a state trooper and returns to the Governor's Mansion -- which is just across the street. Meanwhile, his administration is encouraging Kentuckians to get out and walk more for their health. The Republican governor -- a physician by training -- makes no apologies for riding back and forth to work. "I think that's been a tradition for a long time," he said. "That's what security likes." But his do-as-I-say, not-as-I-do example irks some politicians. "I just think it's incredible," said Democratic state Sen. Ernesto Scorsone, a marathon runner and frequent critic of Fletcher. "The governor should practice what he's preaching. Otherwise it smacks of being hypocritical." AP via Yahoo! News: Ky. governor takes limo across the street

The House of Representatives on Wednesday is expected to consider a resolution condemning the leak last Friday which disclosed U.S. efforts to track terrorism financial transactions. The resolution, by Rep. Mike Oxley, R-OH, "condemns the unauthorized disclosure of... classified intelligence programs such as the Terrorist Finance Tracking Program."

Editor Bill Keller of the New York Times, which first disclosed the program, defended the report, saying, "It has been widely reported - indeed, trumpeted by the Treasury Department - that the U.S. makes every effort to track international financing of terror."

Indeed, just two weeks after 9/11, Pres. George Bush announced, "We've established a foreign terrorist asset tracking center at the Department of the Treasury to identify and investigate the financial infrastructure of the international terrorist networks."

Other top officials have testified with more specificity. For example, Stuart Levey, the Treasury Department's Undersecretary for enforcement, told a senate panel in 2004 that analysts are using financial records to "help us identify, locate and arrest terrorists." He further disclosed that sometimes, "the best strategy may be to observe the financier or money flow covertly, to identify the next link in the chain, rather than to cut the money off."

But spokesman Tony Snow on Tuesday said the information in New York Times story, about a financial database called SWIFT, was far more sensitive than anything government officials have discussed in public. "There's a difference," Snow said, "between the theoretical construct, which is 'we're going to choke off financing,' and talking about sources and methods, or ways in which you do it."

A former FBI counter-terrorism agent tells CNN that this newspaper report was so specific that is has significantly undermined an important tool in the war on terrorists. "They laid out for everybody the SWIFT methodology in a sense, and how SWIFT operates," says Dennis Lormel.

But back in 2002, a United Nations report on terror finances reported that the U.S. has "begun to apply new monitoring techniques to spot and verify suspicious transactions," and alluded to financial payment systems including SWIFT, Fedwire, and CHIPS. Victor Comras, who helped write the report, tells CNN, "Certainly the terrorists must know their own vulnerabilities with terrorism financing, since we've been announcing and bragging quite a bit about how effective our tracking of terrorism financing has been."

Still, the front page reports in the New York Times and other papers have disseminated the information much more widely than the U.N. report, or the testimony in congressional subcommittees.

On "The Situation Room" today, we asked viewers the following three questions, and here are some of our favorite responses that we didn't get to read on air:

Should Congress be worried about taxing pimps and sex traffickers?

Is this a trick question? Has something slipped by me? Do pimps and sex traffickers have to register and have a valid Social Security number so they can pay taxes?
Sandy, North Carolina

The Republican Congress is missing the big tax picture. There is a helluva lot more money to be made if the IRS goes after businesses that pay illegal immigrants wages under the table.
Mike

I am surprised at your reaction to taxing sex workers. First, we could really use the tax revenue. More importantly, it is a good halfway step toward what really should be done -- regulating the industry. Either a pimp makes his business known and pays his taxes or he risks prison.
Jim

Senator Barack Obama says Democrats should court evangelicals and other religious Americans. Is he right?

Why wouldn't Democrats want to court evangelicals? With so many Republican politicians' morals and ethics in question, there could not be a more clever time.
Jim, Maryland

Republicans have been using religion as a way to successfully manipulate the American people. Religion has no place in politics, and I applaud Democrats for avoiding this non-political issue.
Dylan, Salt Lake City, Utah

Sen. Barack Obama is wrong. If Democrats try to appeal to the religious right they will become indistinguishable from the Republicans.
B., Manhattan, Kansas

How much of a threat is redistricting to America's election process?

Redistricting is just a ploy to stuff the ballot box by the party in power. It has been going on for a long time.
Frank, Las Cruces, New Mexico

We already know those e-voting machines can be tampered with, something like 98% of incumbents usually win their seats, and there's always the matter of hanging chads and Supreme Court cronies in a pinch, so redistricting is not a threat at all to the already corrupt voting process; it merely puts everything in a neater, more logical order for the manipulation we've come to expect. Gerrymander away, I say!
Paul, Fort Worth, Texas

Significant, especially in combination with insecure electronic voting machines and "ends-justify-means" zealots running polling places. I received my polling place location notice in the mail - the day after the primary.
Jacquelyn, Chicago, Illinois

Exploding laptops
Is there any risk that your Dell laptop will burst into flames? We investigate.

Countdown to launch
Thanks to the Internet, you can track every step of the Space Shuttle Discovery mission starting with the official countdown to Saturday's launch. Why does NASA say the shuttle crew has a 1-in-100 chance of sustaining a catastrophe in outer space?

Reality of redistricting
We take an online look at exactly which Texas district (PDF) violates the Voting Rights Act and why.

Voting down e-voting
A new study assesses possible security flaws in electronic voting machines. Will the security loopholes affect elections this fall?

Freedom Tower revealed
We go online to give you a first look the newly-revised 102-story building being constructed at the World Trade Center site.

Watch "The Situation Room" at 4:00 PM, 5:00 PM, and 7:00 PM, ET for these stories and more from our Internet reporters.

WASHINGTON (CNN) -- In two rulings, the Supreme Court on Wednesday ruled against prisoner's rights -- saying high-security prisoners can be denied access to personal photos and reading material, as well as ruling that imprisoned foreigners do not automatically get new trials if police fail to inform them of their right to speak with their consulates.

In a 6-2 ruling, the high court concluded Pennsylvania inmates housed in a special separate lockup could have the items withheld as both punishment and an incentive to follow the rules.

Inmate Ronald Banks claimed corrections officers banned non-religious newspapers and magazines, television and radio, family photographs, as well as other communications among fellow inmates. Religious material, legal documents, letters from family and two paperback books "of general interest" were allowed.

Prison officials said the restrictions apply only to the most disruptive inmates, those with a history of escape or violence against other inmates. The restrictions, they argue, were applied only after milder punishments, like loss of cigarettes, did not work.

"Prison officials, relying on their professional judgment, reached an experience-based conclusion that the policies help to further legitimate prison objectives," Justice Stephen Breyer wrote for the majority.

In dissent, Justice John Paul Stevens said the prison's restrictive policy "strikes at the core of the First Amendment rights to receive, to read and to think."

In another decision Wednesday, a majority of justices appeared reluctant to allow thousands of foreign nationals' sentences to potentially be tossed out under an international treaty guaranteeing foreign suspects certain rights.

More importantly, the court did not decide the larger question of whether police are required to inform non-citizens of their right to contact their home governments.

Briefs filed with the Supreme Court show thousands of foreign nationals accused of serious crimes in the United States could be affected by rulings in this and other similar cases.

In the majority opinion, Chief Justice John Roberts said the issue was more about what legal standards should apply in the United States than overseas.

"It is no slight to the (Vienna) Convention to deny (the suspects') claims under the same principles we would apply to an act of Congress, or to the Constitution itself," he said.

The United States is one of 168 nations that has signed on to what is known as the Vienna Convention, guaranteeing suspects taken into custody in a foreign country access to their nation's consul.

WASHINGTON (CNN) -- A portion of a controversial Texas congressional map was tossed out Tuesday by the Supreme Court, but the overall redistricting plan engineered by state Republicans was found to be proper. (Full story)

The legislative plan led to the 2004 ouster of four Democratic incumbents from Congress and sparked a bitter partisan battle. The map was was promoted by Republican, including former majority leader Rep. Tom DeLay.

The divided ruling concluded that a congressional district unfairly diluted the voting strength of Latinos. "A state may not trade off the rights of some members of a racial group against the rights of other members of that group," Justice Anthony Kennedy wrote for the majority.

From The Morning Grind

House Republicans released a package of bills Tuesday aimed at energizing social conservatives five months before the midterm elections.

Billed as the "American Values Agenda," the measures range from legislation that would "protect the Pledge of Allegiance from attacks by activist federal judges seeking to rule it unconstitutional" to a constitutional amendment "declaring marriage to be between a man and a woman."

"Through this agenda, we will work to protect the faith of our people, the sanctity of life and freedoms outlined by our founding fathers," House Speaker Dennis Hastert (R-Illinois) said in a statement released by his office.

Jennifer Crider, a spokeswoman for House Minority Leader Nancy Pelosi (D-California), dismissed the announcement as a campaign stunt.

"The American people will see through the Republican's old playbook of distract, distort and divide," Crider told the Grind. "Pandering to the radical right-wing's wrong priorities does not reflect American value of opportunity, security and prosperity. Americans are demanding change, and Democrats are offering a new direction for America with real solutions to our nation's challenges."

House Majority Whip Roy Blunt (R-Missouri) told CNN's Deirdre Walsh that Republican leaders decided on the 10 legislative items after meeting with about two dozen outside groups in February as well as receiving input from the House GOP's "Values Action Team" headed by Rep. Joe Pitts (R-Pennsylvania).

Blunt said details were announced this week "both to give our outside friends the notice they need to make their final effort on these issues and to let the members know before we go home before the week in July that they'll be working in the district on this."

A Blunt spokesperson said the goal is to move on most of these items in July, but they will be spread out over several weeks depending on committee schedules. With the August Congressional recess fast approaching, some of these items could slip into September.

The GOP's "American Values Agenda" includes: Pledge Protection Act, HR 2389; Freedom to Display the American Flag Act, HR 42; The Public Expression of Religion Act, HR 2679; Marriage Amendment, HJ Res 88; Unborn Child Pain Awareness Act, HR 356; Human Cloning Prohibition Act, HR 1357; Bureau of Alcohol, Tobacco, Firearms & Explosives (BATFE) Reform, 5092; Internet Gambling Prohibition; Permanent Tax Relief for Families; Disaster Recovery Personal Protection Act, HR 5013.

A House GOP aide told Walsh the first three items that likely will be addressed are the Pledge Protection Act, Marriage Amendment and Internet Gambling Prohibition.

From The Morning Grind

Rep. Chris Cannon (R-Utah) beat back a primary challenge Tuesday from an opponent who charged he was too soft on the issue of illegal immigration. Challenger John Jacob ran his campaign on two major themes: a tough stand on illegal immigrants and the need for a change in Washington. Anti-illegal immigration groups poured money into the race and Bush and First Lady Laura Bush recorded telephone messages encouraging Republicans to vote for Cannon. In the days leading up to the election, Cannon acknowledged he could lose, but in the end he was able to collect 56 percent of the vote, while Jacob received 44 percent. This Provo-based district is rock solid Republican and Cannon is all but assured re-election in November.

"Tonight's well deserved victory by Chris Cannon demonstrates that voters prefer real solutions to our nation's important issues like border security," Republican National Committee Chairman Ken Mehlman said in a prepared statement.

In an interview with CNN's Candy Crowley and Sasha Johnson prior to Tuesday's primary, Cannon said that if he won the message it would send back to Washington is "you don't have to worry about xenophobes.

"You can focus on America and what is good for America and where we are going, because America is a wonderful place," he said.

From The Morning Grind

Sen. Evan Bayh (D-Indiana) is the only potential 2008 presidential contender to vote in favor of a constitutional amendment that would have prohibited desecration of the U.S. flag. The amendment failed by one vote with 66 senators supporting it, while 34 senators voted against it. The amendment needed 67 votes to be approved. Other possible Democratic presidential candidates -- Sens. Joe Biden (Delaware), Hillary Rodham Clinton (New York), Chris Dodd (Connecticut), John Kerry (Massachusetts) and Russ Feingold (Wisconsin) -- voted against it. GOP senators eyeing 2008 bids -- George Allen (Virginia), Sam Brownback (Kansas), Senate Majority Leader Bill Frist (Tennessee), Chuck Hagel (Nebraska), John McCain (Arizona) and Rick Santorum (Pennsylvania) -- all voted in favor of the amendment. But Senate Majority Whip Mitch McConnell (R-Kentucky), who is the front runner to become Majority Leader in 2007, and GOP Sens. Robert Bennett (Utah) and Lincoln Chafee (Rhode Island) voted against it. See the full vote results.

From The Morning Grind

Senate Democrats vowed Tuesday to block automatic pay increases for members of Congress unless the minimum wage is increased from $5.15 to $7.25 an hour.

"We're going to do anything it takes to stop the congressional pay raise this year and we're not going to settle for this year alone," Senate Minority Leader Harry Reid (D-Nevada) said. (Full story)

Republicans oppose the Democratic proposal because they argue it will hurt small businesses and instead have offered an alternative that is tied to tax breaks. Expect Democrats to try and use this issue to rally their political base for the midterm elections.

From The Morning Grind

In a speech Tuesday advocating line item veto authority, President Bush singled out Senate Majority Leader Bill Frist (R-Tennessee), Sen. John McCain (R-Arizona) and Sen. John Kerry (D-Massachusetts) for their help in promoting the idea. Wait, John Kerry? The same person who challenged Bush for the White House in 2004 and is now one of the President's fiercest critics on Iraq? That would be the one, reports CNN's Shawna Shepherd.

"I remember campaigning against him in 2004, and I remember him talking about the line-item veto, and I appreciate the fact that he's living up to the political promises he made," Bush said. "It's a good sign, and I applaud Senator Kerry for taking the lead on the line-item veto. And I hope members of his party listen to his justifications for that important piece of legislation."

From The Morning Grind

President Bush heads to Missouri today to attend a fundraiser for Sen. Jim Talent (R-Missouri) and the State Republican Party. RNC officials tell the Grind that 500 people will attend the early evening event (see details below in Dayahead) that will raise $1 million. Proceeds will be split evenly between Talent and the Missouri Republican Party. Polls show that Talent is facing a difficult re-election campaign against Democrat Claire McCaskill. Sen. John Kerry (D-Massachusetts) called on his political supporters to donate to McCaskill and two other Democrats in an e-mail appeal sent on Tuesday. CNN's Robert Yoon reports that former Attorney General Janet Reno will appear at a July 19 fundraiser for McCaskill in St. Louis.

From The Morning Grind

In less than one hour, Democratic donors received fundraising solicitations Tuesday from three of the most well known Democrats in the nation. And only one is currently serving in office. Former President Bill Clinton, former Vice President Al Gore and Sen. Hillary Rodham Clinton (D-New York) all sent out appeals for donations on the behalf of others, as the Democratic Party tries to fill its war chests in its quest to take back control of Congress in November. Gore asked on behalf of the Democratic Senatorial Campaign Committee; President Clinton requested donations for the Democratic Congressional Campaign Committee; while Sen. Clinton sought donations for Mike Arcuri, who is running for retiring Rep. Sherwood Boehlert's (R-New York) seat.

ROBERTS ASK DNI TO REPORT DAMAGE DONE BY SWIFT DISCLOSURE: Senator Pat Roberts, the chairman of the Senate intelligence committee, asked the director of national intelligence on Tuesday to assess any damage to American counterterrorism efforts caused by the disclosure of secret programs to monitor telephone calls and financial transactions. Mr. Roberts, Republican of Kansas, singled out The New York Times for an article last week that reported that the government was tracking money transfers handled by a banking consortium based in Belgium... In his letter to John D. Negroponte, director of national intelligence, Mr. Roberts wrote that "we have been unable to persuade the media to act responsibly and to protect the means by which we protect this nation." New York Times: Damage Study Urged on Surveillance Reports

HOUSE RESOLUTION WILL CONDEMN SWIFT LEAK AND PUBLICATION: House Republican leaders are expected to introduce a resolution today condemning The New York Times for publishing a story last week that exposed government monitoring of banking records. The resolution is expected to condemn the leak and publication of classified documents, said one Republican aide with knowledge of the impending legislation... Rep. J.D. Hayworth (R-Ariz.), working independently from his leadership, began circulating a letter to House Speaker Dennis Hastert (R-Ill.) during a late series of votes yesterday asking his leaders to revoke the Times's congressional press credentials. The Hill: GOP bill targets NY Times

FLAG BURNING BAN FALLS SHORT IN SENATE BY A SINGLE VOTE: The Senate rejected by a single vote yesterday an effort to amend the Constitution to allow Congress to ban desecration of the American flag, after a two-day debate freighted with political calculations and sharp disputes over the limits of free speech. The 66 to 34 vote fell just short of the two-thirds majority required to approve a constitutional amendment and submit it to the states for ratification... As expected, three Republicans -- Robert F. Bennett (Utah), Lincoln D. Chafee (R.I.) and Mitch McConnell (Ky.) -- voted against the amendment. Fourteen Democrats voted for it. The House approved the measure 286 to 130 last year. Washington Post: Senate Rejects Flag Desecration Amendment

"A DECLARATION THAT HE 'WILL DO AS HE PLEASES'": Senators on the Judiciary Committee accused President Bush of an "unprecedented" and "astonishing" power grab on Tuesday for making use of a device that gave him the authority to revise or ignore more than 750 laws enacted since he became president. By using what are known as signing statements, memorandums issued with legislation as he signs it, the president has reserved the right to not enforce any laws he thinks violate the Constitution or national security, or that impair foreign relations. A lawyer for the White House said that Mr. Bush was only doing his duty to uphold the Constitution. But Senator Arlen Specter, Republican of Pennsylvania and chairman of the Judiciary Committee, characterized the president's actions as a declaration that he "will do as he pleases," without regard to the laws passed by Congress. New York Times: Bush's Use of Authority Riles Senator

BUSH JOGS WITH DOUBLE AMPUTEE IRAQ VET: Shortly after Army Staff Sgt. Christian Bagge lost parts of both legs in Iraq when a roadside bomb tore through his Humvee last June, he vowed to not let the injury prevent him from doing things he could do before he was wounded. "I want to run. I want to swim. I want to mountain bike. The biggest goal of all is just to do what I did before," Bagge, 23, told CNN in an interview last month. On Tuesday, he did one of those things. He ran side-by-side with President Bush on the spongy black jogging track that rings the South Lawn of the White House. "And he ran the president into the ground, I might add," Bush said after jogging about a quarter-mile. USA Today: Amputee Iraq vet fulfills wish, jogs with Bush

AMERICANS "PAYING UNUSUALLY CLOSE ATTENTION" TO MIDTERMS: Americans are paying unusually close attention to the congressional elections in November, a USA TODAY/Gallup Poll finds. They are more inclined to deliver significant gains to Democrats than in any year since Republicans won control of the House and Senate in 1994. Those surveyed are more concerned about national issues than local ones -- a situation that favors Democrats hoping to tap discontent over the Iraq war and gasoline prices -- and prefer Democrats over Republicans on handling every major issue except terrorism. USA Today: Poll show Americans keeping an eye on Congress

DEMS THREATEN TO BLOCK PAY RAISE FOR CONGRESS: Seeking to leave town on a political high note, Senate Democratic leaders vowed on Tuesday to block their own annual pay raise unless Republicans also allow for a boost in the federal minimum wage. Democrats offered few details about how they plan to carry out their promise to stop Congress' scheduled 2 percent pay hike from going into effect next January. But they said they have more than 40 Senate Democrats aligned behind them and will succeed in freezing Members' pay unless Congress approves a minimum wage increase by the end of the 109th. "They can play all the games they want... but we're going to do everything to stop the Congressional pay raise being put in - the right way, the wrong way or any way," said Senate Minority Leader Harry Reid (D-Nev.). Roll Call: Reid Threatens Member COLA

A PATH TOWARDS AGREEMENT ON IMMIGRATION? With the House and Senate stalemated over how to overhaul immigration law, the contours of one potential path to an agreement have begun to emerge. The House has approved a bill that focuses on improving border security and cracking down on illegal hiring. Many of the conservative Republicans who are dominant in the House have said that these security measures must be firmly in place before the House begins discussions about elements of a Senate-passed bill that would create a guest worker program and offer steps to citizenship for most illegal immigrants now in the U.S. Los Angeles Times: Senate May Budge on Immigration

BUSH CALLS FOR LINE-ITEM VETO: President Bush, urging the Senate to pass the line-item veto, on Tuesday criticized House Democrats who didn't back the measure even though they've called for federal spending restraint. A line-item veto would allow the president to cut certain provisions in spending bills without vetoing the entire measure. The House passed such legislation last week 247-172. Thirty-five Democrats joined with most Republicans in voting for the bill... The bill faces an uncertain future in the Senate. Democrats generally oppose the measure, and not all Republicans are excited about the idea. AP via Yahoo! News: Bush urges Senate to pass line-item veto

LOBBYIST PAID FOR LUXE TRIPS TO CAPE COD Four Massachusetts congressmen have attended luxurious Fourth of July weekends at Cape Cod's exclusive Wequassett Inn in Chatham with representatives of various interest groups, courtesy of a little-known nonprofit group started by a longtime lobbyist. The lobbyist, Jeanne Campbell, received millions of dollars in contracts to lobby Congress through her Washington-based firm, Campbell-Crane. Her clients, including several Massachusetts agencies and companies, routinely attend the Fourth of July events. The trips to the Wequassett Inn, where room rates range from $475 to $1,300 per night, are intended as seminars where industry representatives can discuss legislative issues with members of Congress. But government watchdog groups say they represent a common route around federal lobbying restrictions. Boston Globe: A lobbyist link in congressmen's visits to Cape

NELSON SAYS HE'LL FILIBUSTER DRILLING BILL: Florida U.S. Sen. Bill Nelson says he would start a filibuster in the Senate to block a measure on offshore drilling if it passes the House, which is expected to vote on the bill this week. The bill would end a 25-year ban on drilling off much of the U.S. coastline. It could bring rigs as close as 50 miles from Florida's beaches. Rising fuel prices have increased support for drilling in environmentally sensitive areas. The bill last week cleared the House Resources Committee 29-9 with bipartisan support. AP via Yahoo! News: Nelson vows to filibuster drilling bill

CANNON FENDS OFF PRIMARY CHALLENGER: U.S. Rep. Chris Cannon dodged another political bullet Tuesday, winning the Republican Party's nomination for the 3rd Congressional District, late returns of the 2006 primary election showed. Cannon withstood his greatest intra-party challenge yet, coming this year from John Jacob, a millionaire who pumped more than $400,000 into his effort to unseat the five-term incumbent. Cannon won 56-44 percent. In the end, Cannon crushed Jacob and all of his money - a victory near in size to Cannon's 2004 Republican primary win over former state Rep. Matt Throckmorton. And Throckmorton spent a fraction of what Jacob did. Deseret Morning News: Cannon victorious: Congressman crushes challenger, 56-44%

MD'S EHRLICH KICKS OFF REELECTION BID TRAILING O'MALLEY: Maryland Gov. Robert L. Ehrlich Jr. starts his reelection campaign today significantly trailing Baltimore Mayor Martin O'Malley, according to a new Washington Post poll. Although the state's voters give the governor good marks for the job he's done, they also appear inclined to return a Democrat to the governor's mansion. Ehrlich kicks off his campaign today at his boyhood home in the Baltimore suburb of Arbutus, attempting to become the state's first Republican govern