The Earlybird: Today's headlines

Capital gains debates, Fox's White House welcome, economic questions, Gramm's retirement, Reno's announcement, Florida's touch screens, cyber-taxes:

• "President Bush Tuesday declined to back a capital gains tax cut or to promise to veto spending bills that cause the government to spend next year's Social Security surplus," the Washington Post reports.
• "Bush opened the door Tuesday to a future cut in the capital gains tax," AP reports, "but said he first wants to see the effects of last spring's income tax cut."
• "Senate Minority Leader Trent Lott said he would introduce a bill to cut capital-gains taxes despite President Bush's objection," the Wall Street Journal reports.
• "Bush yesterday said Democratic charges that he is raiding the Social Security trust fund to pay for his popular tax cut are 'ridiculous,'" the Washington Times reports.
• Bush and Senate Majority Leader Tom Daschle, D-S.D., said Tuesday "that they had agreed not to tap the Social Security program to pay the government's other bills," the New York Times reports -- "an agreement that economists insist is almost certain to be broken this year."

• "An elaborate White House welcoming ceremony" is planned for Mexican President Vicente Fox today, AP reports. But while Bush "wants to make sure... Fox won't go home empty-handed," the visiting president will not get "the comprehensive overhaul of immigration laws he's seeking."
• Fox said Tuesday that Mexico and the United States must move incrementally "on the divisive issues of migration, trade and drug trafficking," the Los Angeles Times reports.

• The president's recent stem-cell decision "faces its first Senate hearing on Wednesday," USA Today reports.
• White House budget chief Mitchell Daniels is set "to become the first administration official questioned directly by Congress about the nation's deteriorating fiscal and economic health," AP reports. Daniels will testify today at a 10 a.m. House Budget Committee hearing.
• The Senate Intelligence Committee called off a scheduled hearing for a proposal "that would make it easier to prosecute government officials for leaking classified information," the Washington Post reports. The Bush administration signaled yesterday "that it is not prepared to support the provision."

• Sen. Charles Grassley, R-Iowa, has asked Attorney General John Ashcroft "to turn over documents related to a subpoena of a reporter's home telephone records," the Washington Post reports. Grassley said "the decision raises questions about the Justice Department's view of press freedoms."
• "Rupert Murdoch's News Corp. and AOL Time Warner Inc. appear to be a step closer to expanding their television presence in China," the Wall Street Journal reports.
• The Army has met its recruiting goals for the 2001 fiscal year one month early, the New York Times reports. Spokesmen credited the service's recent $150 million ad campaign for the success.
• A federal appeals court on Tuesday "dismissed an attempt to force a referendum over the government's fee-driven promotional campaign" for beef, AP reports.

• "All references to Israel as an allegedly racist regime were at least temporarily stripped from draft documents at the World Conference Against Racism on Tuesday as event organizers struggled to salvage the gathering," the Los Angeles Times reports.
• Former Sen. John Danforth, R-Mo., is expected to head a new U.S. peace initiative in Sudan, the Los Angeles Times reports.
• "The Bush administration does not plan to lessen its objections to China's strategic nuclear arms buildup in exchange for Beijing backing a U.S. missile defense shield," the Washington Times reports.

• "Saying he had won his biggest political battles," Sen. Phil Gramm, R-Texas, "announced Tuesday that he will leave the Senate after next year," the Dallas Morning News reports.
• Gramm's retirement "provoked interest from would-be successors in both major parties," the Houston Chronicle reports. Several Republicans, including State Attorney General John Cornyn, Rep. Henry Bonilla and Rep. Joe Barton, issued statements saying they were considering a bid.
• On the Democratic side, former state Attorney General Dan Morales made his bid "all but official," while Dallas Mayor Ron Kirk and Rep. Ken Bentsen are considering the race, the Dallas Morning News reports.

• "Launching her campaign for governor" of Florida yesterday, former U.S. Attorney General Janet Reno "ended months of speculation and immediately became the leading Democrat attempting to unseat" Gov. Jeb Bush (R) next year, the Miami Herald reports. "Reno said she plans to begin collecting money and hiring a staff soon."
• Reno's "star quality" could make it hard for other Democrats in the race "to raise money and get known statewide," the Tallahassee Democrat reports.

• Texas businessman Tony Sanchez "launched his bid for the Democratic gubernatorial nomination Tuesday with promises to improve education and public health care and to take on the health insurance industry," the Houston Chronicle reports.
• Minnesota accountant Michael Vekich (R) "opened a campaign committee late last week that will allow him to raise money and build a staff as he explores a possible run for governor next year," AP reports.

• The Club For Growth, "a fervent supply-side economic advocacy group," announced plans to "spend up to $40,000" on billboards "and as much as $500,000 on... cable spots to help" Republican Bret Schundler's "lagging campaign" for governor of New Jersey, the Newark Star Ledger reports.
• "Education has emerged as the top concern of voters" in the election, with voters saying "the state's perennially high auto insurance rates" and "continuing exasperation over property taxes" are other "hot button" issues, the Newark Star Ledger reports,
• Democratic candidate Jim McGreevey unveiled "a $40 million plan to place state-funded specialists in all elementary schools where a large number of third-graders are deficient in reading," AP reports.

• Rep. Stephen Horn, R-Calif., "announced Tuesday he will retire when his current term is up," saying that redistricting "had created major changes in the 38th District and that he wanted to remove any doubt about his plans," AP reports.
• Due to a "truncated special election campaign" where "time and money are short," candidates for the Massachusetts 09 special election "are intensely focused on a fraction of" the electorate -- "the small, faithful minority of residents who can be counted upon to turn out at any election," the Boston Globe reports.
• 9th District hopeful state Sen. Stephen Lynch (D) called a "slew of bills" that primary opponent Brian Joyce sponsored in the state Legislature "self serving" because they "help his fellow lawmakers -- including longer terms and health care even if they're voted out of office," the Boston Herald reports.
• Nearly a "half-dozen Republican candidates" have emerged as potential candidates in Colorado's 4th District "amid increasing signals" from Rep. Bob Schaffer (R) that "he will keep his term-limits pledge and not seek a fourth term next year," the Denver Post reports.

• In an election for town council seats yesterday, voters in Callahan, Fla., "became the first in Florida to use touch-screen voting machines, which many counties are considering as the state rids itself of the punch card ballots that hung up the 2000 presidential election," AP reports.
• Hispanic groups in California "objected to three redistricting plans unveiled last week," saying the lines "don't provide enough political opportunities for the state's growing Hispanic population," AP reports.

• "The Treasury Department will unveil Thursday a system to let companies and individuals file tax returns and pay taxes via the Internet," the Wall Street Journal reports.