Dana Bash and Ted Barrett
CNN Capitol Hill Team

Two senior Democratic sources tell CNN senate Democrats are headed towards dropping the compromise idea to allow 55 to 64 year-olds to buy into Medicare because of opposition from Independent Sen. Joe Lieberman.

"It’s what the White House wants and there aren’t many other options that allow us to finish by Christmas," said one source.

Senate Democrats had an emergency meeting Monday night to discuss this issue, which threatens to derail health care.

Although a final decision was not made at Monday night’s meeting, a second Democratic source said it’s likely a final decision could be made at meeting Tuesday of all Democrats with the President at the White House.

“I think there is a fundamental understanding of the direction we’re going in, “said Sen. John Kerry, D-Mass.

Before the meeting, liberal senators Tom Harkin of Iowa and Jay Rockefeller of West Virginia indicated that the so-called Medicare buy-in would likely be dropped, and while they didn’t like that, they suggested they would support a health care bill anyway.

"If he (Lieberman) is absolutely opposed to it, it looks like we won't have it," said Harkin.

"There is still good stuff in this bill for changing the paradigm of health care in America," he said.

“Democracy isn’t written to say that you get exactly a perfect system, “ said Rockefeller. “I mean, we are where we are. That’s the ultimate bottom line.”

The Medicare buy-in concept was intended to appease liberals upset that Democratic leaders were dropping a public option.

But that ran into a wall Sunday when Lieberman said he would support a GOP filibuster to block health care if the Medicare provision was in the bill.

Dana Bash
CNN Senior Congressional Correspondent

Following GOP Sen. Judd Gregg out of his presser, I asked him about CNN reporting that the White House was not happy that he didn’t help the President by voting on the economic stimulus bill.

Gregg replied, “I’m sure that’s true.”

I asked, well why didn’t you?

He replied, “because I gave my word to people.”

Then the elevator doors closed….

House and Senate negotiators are working to hammer out differences in a roughly $800 billion stimulus package.

Dana Bash,Ted Barrett and Evan Glass
CNN Capitol Hill Team

House and Senate negotiators have reached agreement on an economic recovery bill, Senate Majority Leader Harry Reid said.

Multiple Democratic sources are giving some details of what they’re working out:

• Tax breaks for workers that had been set at $1000 per family or $500 per individual would be scaled back to $800 per family and $400 per individual

• $44 billion in aid to states, including money for education and other services.

• $6 billion – $9 billion for modernizing and repairing schools. That is intended to assuage House Democrats who are upset the Senate cut $20 billion for school construction. And, the emphasis on “modernizing and repairing” is meant to appease Senate centrists who believe school “construction” takes too long and therefore won’t stimulate the economy, and that state governments, not the federal government, should be responsible for building schools

• 35 percent of the bill would be tax cuts, 65 percent would be spending

• More money added to help people buy health insurance through the federal COBRA program

Baucus said it is possible the House could take the bill up as early as Thursday and the Senate possibly Friday.

Dana Bash
CNN Senior Congressional Correspondent

Senate Democrats have dropped two controversial spending programs in the Senate economic stimulus bill: $75 million dollars for anti-smoking programs, and $400 million for STD and HIV prevention.

Two Democratic leadership sources tell CNN Monday Democrats did it as a “symbolic gesture” to show Republicans they are listening to their objections.

But one of the Democratic sources also conceded “it’s hard to explain when you’re in the midst of a crisis, why these programs are important. When people are struggling and thinking about their jobs, it’s hard to make that connection.”

Republicans, and even some Democrats, have been pointing to both of these items as prime examples of “excess spending” that doesn’t belong in this stimulus bill.

But there are, of course, many other programs that Republican senators, and even some conservative Democrats still want to scrub from the bill.

Meanwhile, House Republican leaders put out the following list of provisions in the Senate version of the stimulus that they call "wasteful":

• $2 billion earmark to re-start FutureGen, a near-zero emissions coal power plant in Illinois that the Dept. of Energy defunded last year because the project was inefficient
• A $246 million tax break for Hollywood movie producers to buy motion picture film
• $650 million for the digital television (DTV) converter box coupon program
• $88 million for the Coast Guard to design a new polar icebreaker (arctic ship)
• $448 million for constructing the Dept. of Homeland Security headquarters
• $248 million for furniture at the new Dept. of Homeland Security headquarters
• $600 million to buy hybrid vehicles for federal employees
• $400 million for the CDC to screen and prevent STD's
• $1.4 billion for a rural waste disposal programs
• $125 million for the Washington, D.C. sewer system
• $150 million for Smithsonian museum facilities
• $1 billion for the 2010 Census, which has a projected cost overrun of $3 billion
• $75 million for "smoking cessation activities"
• $200 million for public computer centers at community colleges
• $75 million for salaries of employees at the FBI
• $25 million for tribal alcohol and substance abuse reduction
• $500 million for flood reduction projects on the Mississippi River
• $10 million to inspect canals in urban areas
• $6 billion to turn federal buildings into "green" buildings
• $500 million for state and local fire stations
• $650 million for wildland fire management on Forest Service lands
• $150 million for Smithsonian museum facilities
• $1.2 billion for "youth activities," including youth summer job programs
• $88 million for renovating the headquarters of the Public Health Service
• $412 million for CDC buildings and property
• $500 million for building and repairing NIH facilities in Bethesda, MD
• $160 million for "paid volunteers" at the Corporation for National and Community Service
• $5.5 million for "energy efficiency initiatives" at the VA "National Cemetery Administration"
• $850 million for Amtrak
• $100 million for reducing the hazard of lead-based paint
• $75M to construct a new "security training" facility for State Dept Security officers when they can be trained at existing facilities of other agencies.
• $110 million to the Farm Service Agency to upgrade computer systems
• $200 million in funding for the lease of alternative energy vehicles for use on military installations.

Dana Bash
CNN Senior Congressional Correspondent

Shortly after 5pm, Tom Daschle walked into the Senate Finance Committee’s suite of offices in the non-descript Dirksen Senate building.

Committee staff had just begun briefing Daschle’s former colleagues in the anteroom, about the investigation they had been conducting for a month about his failure to pay $128,000 in taxes – mostly for a car and driver he used for three years.

Daschle waited in the room next door.

Any other nominee may have been sitting nervously as the Senators deliberated over the controversy that will decide his fate.

Not Daschle.

According to a source in the room, the former Senate Majority leader spent some time catching up with his old friends, even sharing pictures with Chuck Schumer of New York, while he waited.

After Senators got their briefing on Daschle’s issues, they invited him into the room for about 15 minutes of questioning. Two sources in the room said most of the questions surrounded his tax problems, and that some of the queries were “were friendlier than others.”

But it turns out that almost all the Democrats on the committee had already decided they would stand with their former leader.

In fact immediately after the hour-long meeting, that’s exactly what they did.

About a half a dozen Democratic Senators came to the cameras to heap effusive praise on Daschle.

“I don’t know of a person more honorable, more decent, more honest and frankly more qualified for this position. Most of the mistakes were the mistakes of his employer,” said North Dakota’s Kent Conrad.

“There’s a completely understandable, rational explanation,” promised John Kerry.

While they were talking, Daschle himself snuck in behind them and joined the pack.

It was a vivid reminder that he was, and in many ways always will be, one of them.

When it was Daschle’s turn to speak, he used his soft spoken style to “deeply apologize” for what he called his mistakes.

But there was something missing from this rally ‘round Daschle event: Republicans.

In fact there was not a Republican in sight. Most didn’t want to say much of anything to us as they rushed out down the hall to get to the Capitol.

We’ll know soon enough what they think, since the committee has finally scheduled a confirmation hearing for Daschle next week, and they’ll have a chance to question Daschle in public.

Here’s a preview we did get from one Republican Senator, who spoke to my colleague Ted Barrett.

“It’s questionable on its surface,” Ensign said.

The blasting didn’t stop there.

“I was a practicing veterinarian. My accountant would say, ‘you know you can take a 50% deduction on your car.’ Well I didn’t use my car. But you knew you had to claim that. That was so obvious.”

Anderson Cooper talks with his panel about President Obama's plans to possibly crackdown on CEO Bonuses.

Dana Bash | BIO
CNN Senior Congressional Correspondent

Bump into John McCain in a Capitol hallway these days, and you’re lucky if you get anything beyond a polite hello. Ask him a question on any policy or political issue, and he will almost always decline comment, and keep moving.

But the former Republican presidential nominee is not planning to keep a low profile for long.

CNN has learned that McCain may get seats on an unusually high number of key senate committees, so that he can engage on a wide range of high profile issues before congress, and his formal rival in the White House.

“He wants to be a player,” McCain’s good friend Sen. Lindsey Graham, R-SC, told CNN in a phone conversation.

“He feels an obligation to the people of Arizona and the rest of the country to use his time in the Senate to be productive.”

For example, three sources close to McCain say he is hoping to secure a seat on the Health, Education, Labor and Pensions Committee in order to work with its Democratic Chairman, Ted Kennedy, on health care reform.

McCain has worked across the aisle with Kennedy on several controversial issues, like immigration reform and a patients’ bill of rights. But he also differed sharply with Barack Obama during the campaign on how to reform the country’s health care system. McCain wanted to move away from employer based health care, and opposed the Obama plan to expand on the current system.

Sources also say McCain is hoping to sit on the Homeland Security Committee, chaired by his good friend Joe Lieberman, and the Energy Committee, so that he can work closely with the Obama administration on a high priority area where they do have common ground: fighting global warming.

A Senate GOP leadership source tells CNN that their final committee assignments will not be complete until Wednesday or Thursday, and it is still not clear if McCain will get seats on these committees.

However the GOP source insists “the more things McCain wants to be involved in, the better for us.”

McCain has already been quietly engaged with the Obama team on issues relating to his most high profile Senate role – ranking Republican on the Armed Services Committee.

McCain sources say that he had concerns about Dennis Blair as Director of National intelligence, and sent a list of detailed questions for Blair to answer before the Obama team formally announced his nomination.

Dana Bash
CNN Senior Congressional Correspondent

Even Barack Obama's most ardent Senate supporters tell CNN, voting to give him 350-billion dollars more for a bailout their constituents despise, was wrenching. Says Sen. Amy Klobuchar, Democrat from Minnesota, "It's easy to vote against this." She continues: "You know if you go home, to vote to help [Mister] Obama get this money, there is not going to be a parade waiting for you.

But vote for it she did. She's one of many senators the President-elect called to pitch personally. To pitch and to promise that thistime taxpayer money will be better spent.

"He's talking to a lot of us," Sen. Klobuchar says, "about how important it is to give him the tools he needs to tackle this financial crisis."

"He's also acknowledged the horrible mistakes made by the past administration," she adds.

In fact it went beyond phone-calls. Senators demanded written assurances Mister Obama would address those mistakes.. and got letters promising more transparency and accountability on how he will use bailout funds.

Democratic Senators say it was Team Obama's full-court press that scored a crucial victory on such a controversial issue.

Senator Debbie Stabnow (D-Mich.) opposed the original bailout, and told CNN earlier this week she was torn about spending billions more: "It's not enough to just have someone you trust," she said.

But she got an Obama call too..and changed her mind. "Now," she says, "people are willing to trust a new administration with a different set of priorities and values that are going to focus on getting people back to work and stay in their homes."

But the Obama power of persuasion did not work with all Democrats. "Nobody can tell us where the money is, where it's gone, what it's done," says Senator Blanche Lincoln of Arkansas. She says she was more influenced by the flood of calls from outraged constituents demanding she oppose using more taxpayer dollars to bail-out Wall Street.

Most Republicans Senators who voted for the bailout in the fall objected to releasing the rest of the money. Even John McCain, who campaigned on the need for a rescue.

They're still smarting from their election losses.

As for Democrats - they're hoping this tough vote will be a distant memory by the next elections, two years from now.

Dana Bash
CNN Senior Congressional Correspondent

Senate Majority Leader Harry Reid announced tonight they will vote Thursday on the resolution of disapproval for releasing the remaining 350 billion dollars of the bailout fund.

A senior Democratic leadership aide says they are hopful, but admits to CNN that they are still not sure they have the votes to give President-elect Barack Obama the money he argues is essential to fixing the economy.

So, why are Democratic leaders holding the vote without knowing how it will go?

"The longer this thing hangs out there, the more water it takes on," said the Democratic leadership aide.

The decision to hold a Thursday vote comes hours after the President-elect's top aides held an urgent closed door meeting with Republican senators urging them to support giving them remaining bailout money.

But most Republican senators emerged from the meeting saying their minds were not changed and they still were unlikely to support this.

As CNN reported earlier in the day, multiple GOP senators who voted for the program in the fall, no longer support it.

So the challenge still for Mr. Obama is convincing enough of his fellow Democrats, many of whom still tell CNN they are very skeptical.

This disapproval resolution is not allowed to be filibustered, so it only needs a simple majority, 51 votes, to be defeated.

If it is defeated in the Senate, the request will automatically go through, since the law says both houses of Congress must pass disapproval measures to stop the bailout funds from being released.
It is likely this vote will not occur until after 5pm, after the markets close. But the timing is still fluid.

Barack Obama is facing bipartisan opposition to his plans for the bailout funds.

Dana Bash, CNN Senior Congressional Correspondent
Brianna Keilar, CNN Congressional Correspondent

Barack Obama is already having trouble getting fellow Democrats to give him the remaining $350 billion dollars for Wall Street.

But now, he has a growing Republican problem.

Some half a dozen Republican Senators who voted for the financial rescue in the fall tell CNN that they plan to oppose it this time.

“I think it would be very difficult voting for the TARP funds because in the first $350 billion, there was no transparency. We don’t even know how it was spent,” Nevada Republican Sen. John Ensign told CNN.

Ensign said he believes most Senate Republicans will oppose approving the rest of the bailout funds.

In fact, three Republican Senators tell CNN that some participants in Tuesday’s GOP lunch urged Republicans to unite in opposition to Mr. Obama on this issue.

The Senators, who asked not to be named because it was a private meeting, said the GOP argument in opposing the bailout funds is to make Democrats “own” the issue – and put pressure on them to handle the controversial money more responsibly.

Many Republicans say they were angry that President Bush used the money for the auto industry, and disagree with proposals to spend the money on other industries beyond the financial sector.

GOP sources say another factor fueling their opposition is how much political trouble this issue caused several Republican Senators in the fall elections.

Texas Republican John Cornyn told CNN he got pounded in his re-election bid for voting yes on the Wall Street bailout. He said that, combined with mismanagement of an already unpopular program, means he will oppose releasing the remaining $350 billion.

Because of the growing GOP opposition, President-elect Barack Obama’s team will return to Capitol Hill to lobbying Senate Republicans for support.

Rahm Emanuel, Mr. Obama's incoming Chief of Staff, and Lawrence Summers, a top Obama economic adviser, will meet with the entire Senate Republican conference Wednesday afternoon.

A Senate Democratic leadership aide said the phone calls Obama has been making to Senate Democrats since Monday have swayed some Democrats who have been reticent to disperse more money from the extremely unpopular bailout program, but "we're going to need some Republicans," the aide said.

There are some notable Republican supporters of approving the remaining bailout dollars. Sen. Judd Gregg, R-NH, is arguing forcefully to his colleagues that financial institutions need this money to get the economy back on track.

A Senate Republican leadership aide said Republicans want assurances from the Obama team that bailout funds will not be used to buoy specific industries, as it was for the auto industry by the Bush Administration. Even if those assurances are given it is unclear if enough Republicans would vote to release the money.

A vote on the resolution to block the funds could happen as early as Thursday in the Senate, though a Friday vote is more likely.

Barack Obama met with Senate Democrats for the last time Tuesday before next week's inauguration.

Dana Bash | BIO
Senior Congressional Correspondent

Consider the irony here: Barack Obama is finally spending his political capital, and he's using it on a joint effort with President Bush, to fight fellow Democrats in Congress, for a wildly unpopular Wall Street bailout.

And a full week before taking office, he even came to Capitol Hill to remind Democrats he's going to have a veto pen, and he's not afraid to use it.

I talked to more than a dozen Senate Democrats, and it was abundantly clear why he had to go to such extremes. They despise the idea of spending an additional 350 billion taxpayer dollars on what they view as a mismanaged rescue program.

The theme I heard over and over from Obama's Democratic brethren is that they think he'll handle it better than the Bush team did, but that's not enough on this issue.

Even Sen. Claire McCaskill of Missouri, one of Obama's earliest and biggest supporters told me even he "cant just say trust me."

Michigan Democrat Debbie Stabenow told me virtually the same thing.

"It's not enough to just have someone you trust. We have to have specific criteria as to what will be happening," said, "will there be accountability or transparency? We can't even get answers."

What most congressional Democrats say they're looking for are explicit assurances that major problems occurring now will be fixed. They're especially irked that in their view Bush officials have not properly tracked where or how taxpayer money is being spent, among many other things.

Several Democrats did come out of the meeting with Obama saying he made a hard pitch and a lot of promises, and that reassured them that the rescue program would be different on his watch.

I'm also told one of Obama's allies on this issue made a blunt political point: that Democrats should be careful not to put their new president in a position of feeling he has no choice but to use his veto power in an early showdown with his own party.

The problem many Democrats clearly expressed to me is that they're torn between giving Obama his first political win, and answering to already outraged constituents back home.

Sen. McCaskill had the most colorful descriptions. She said she can't go into a grocery store without getting bombarded by angry Missourians.

"People are shouting out their cars at me as they see....'when are you going to write me a check?'"

I caught Iowa's Tom Harkin at the bottom of the stairs after the Democrats behind-closed- doors session with Obama, and he framed Democrats dilemma in a stark way.

"I want him to start off right, and I have a lot of confidence in Barack Obama," Senator Harkin told me. "He's going to be a great president, but I also have a responsibility to my constituents. I don't work for Barack Obama."

Barack Obama met with Senate Democrats for the last time before next week's inauguration.

Dana Bash | BIO
CNN Sr. Congressional Correspondent

This is all from various Democratic senators I talked to leaving the meeting:

- Obama told Democrats he would veto the disapproval resolution if he had to.

- He took about 15 questions, many of which were from skeptical Democrats about TARP. He repeatedly promised to make this process more transparent.

- He also made clear he does NOT want to be doing this out of the gate, but insisted he has no choice.

- Banking Committee Chairman Chris Dodd made a point of reminding fellow Democrats what a bad political situation it would be to pass the disapproval resolution and force Obama to use his veto pen on THAT as one of his very first acts.

- Some Democrats said they felt more comfortable, but many also said they still have a lot of questions and are still unsure how they will vote on TARP.

Program note: Tune in to 360° tonight for more on the drama surrounding Blagojevich’s Senate appointment.

Gov. Rod Blagojevich and Roland Burris

Dana Bash
CNN Sr. Congressional Correspondent

WASHINGTON (CNN) Senate Democrats have no choice but to change their tone because Illinois Gov. Rod Blagojevich “called our bluff” in appointing someone over their objections, a senior Democratic congressional source conceded Wednesday.

“We tried to send a political signal to Blagojevich that we would not seat someone he appointed. He called our bluff, in a reckless way,” said the Democratic source.

A second senior Democratic source said it had clearly become a “heightened situation” that needed to be dealt with and that Burris’ face to face meeting with Senate Majority Leader Harry Reid and Majority Whip Dick Durbin really helped to establish a “person to person dialogue.”

A third senior Democratic source simply demurred that Democrats changed their tone after they “looked more into the situation.”

It is also noteworthy that Reid and Durbin went out of their way, unsolicited, to note this matter was not about race, noting that Burris himself had told them that

In terms of what to expect from this point, Democratic sources say the process they laid out today could take a month – including waiting for the Illinois Supreme Court to rule on the Burris request that it order Illinois Secretary of State Jessie White to sign Burris’s certificate of appointment, then getting Jesse White’s actual signature and then sending the matter to the Senate Rules Committee. The sources said it is entirely possible that before that is done, Blagojevich may no longer be in office, depending on what happens in the Illinois legislature impeachment proceedings, and that an acting governor might then be able to make an appointment. But one source said part of the problem Democrats are having is that the timing on both fronts is really unclear.

If the Illinois Supreme Court forces Jesse White to sign the appointment certificate, Democratic sources say the matter will be immediately taken up by the rules by the Senate Committee so it could look at the same questions as those before the Illinois impeachment proceedings:– whether anything untoward went on with the Burris appointment.

Democrats say they would hold a full Senate vote for basically the same reason.

Dana Bash and Ted Barrett
CNN Capitol Hill Team

The auto bailout bill is set to die in the Senate Thursday night after the collapse of talks aimed at fashioning a compromise between Democrats and Republicans, sources said.

A cloture vote - requiring 60 votes to end debate and move to a vote on the actual bill - will be held shortly and is expected to fail.

The chief executives of ailing automakers GM, Chrysler and Ford testify before Congress last week

Sources: White House warning GOP senators Wall Street bailout funds might be used for automakers.

Dana Bash
CNN Congressional Correspondent

Two Republican congressional sources tell CNN that Bush officials have been warning wavering Republican senators that if they don't support legislation to bailout big three automakers, the White House will likely be forced to use money passed for the Wall Street bailout, something the White House and Treasury Secretary Henry Paulson have refused to do.

 The sources asked not to be named because of the sensitivities of private conversations.

The White House negotiated a deal with Democrats to give Detroit a short term loan with strings attached, including a so-called "car czar" charged with helping the companies draw up restructuring plans. Most Senate Republicans opposed the plan as too weak in terms of focusing long-term viability for the U.S. auto industry.

As part of their full-court press to urge skeptical Republicans to back it, they made clear that if Congress didn't act, the White House would have to step in to save Detroit from collapse with funds from the $700 billion Troubled Asset Relief Program (TARP), according to the sources familiar with the conversations.

 One of the sources said the a White House official made clear to a GOP Senator that would be the worst option, because the loan could go to the auto companies with few or no requirements along with it.

 Democrats had pressed the White House from the start to help Detroit by using some of the 700 billion dollars for the financial sector, but the White House had refused.

 Talks are currently underway on another compromise auto bailout bill, so the White House threat may be moot.

 But it is noteworthy that Bush officials apparently raised the idea of using TARP money in some private conversations with skeptical Republican Senators.

Dana Bash, Ted Barrett and Deirdre Walsh
CNN Capitol Hill Team

House Democratic leaders and White House negotiators finalized an agreement on a 15 billion dollar auto bailout, and House Democratic leaders are moving to bring it to a vote.

The agreement between negotiators was finalized Wednesday morning after Democrats agreed to a Republican demand that they drop a provision blocking Detroit from filing lawsuits on greenhouse gas emissions.

House Democrats are meeting this morning to discuss the measure. House Democratic leaders are hoping to hold a vote Wednesday, but the timing is still up in the air.

Meanwhile, Senate Majority Leader Harry Reid announced “it appears unlikely” that the Senate will vote today on the auto bail out legislation. That is because the final text of the 25-page bill is not completed and Senate Republicans have told him they want to study it before deciding how to proceed.

McConnell confirmed that when he said “there can not be a vote today” until Republicans can review the bill.

White House Chief of Staff Josh Bolton will attend the Senate GOP policy lunch in the Capitol today to try to persuade skeptical GOP senators to support the bill.

A GOP senate aide emphasized how crucial this meeting is going to be, since Republicans have not been involved in the negotiations and have to be convinced that the white house sufficiently represented their concerns and interests.

It is unlikely that the White House will be able to sway Republicans like John Ensign and Jim DeMint, who say they are going slow the bill down in the Senate.

But the big question is whether the white house can convince enough Republicans so that they can get 60 votes to overcome opposition among those GOP senators.

Meanwhile, Reid said if Senate Democrats and Republicans can not reach an agreement to cut through the procedural steps opponents of the bill are likely to require, the Senate won’t have final passage until late Saturday night or Sunday.

However, Reid held out hope that an agreement will be reached to require a 60-vote threshold for the bill - the same vote total needed to break a time-consuming filibuster – but allow final passage by perhaps Friday.

One other note: Reid said Biden has told him he will come back if his vote is needed.

Dana Bash
CNN Congressional Correspondent

As negotiators move closer Tuesday evening to a compromise bill to bailout Detroit (see note from Ted and Deirdre) a small group of Senate Republicans are signaling they will try to slow its passage.

GOP Senator John Ensign said Tuesday he will filibuster the auto bailout unless there are major changes in the compromise that Democrats and the White House are close to forging.

An Ensign aide tells CNN that he will hold a press conference at noon Wednesday with about half a dozen GOP senators who intend to support his move.

It is important to note that even GOP opponents concede that the auto bailout may likely have the 60 votes to pass, but these GOP senators are trying to “slow the trains down to make a point,” according to the Ensign aide.

South Carolina Republican Senator Jim DeMint, who plans to appear with Ensign at Wednesday’s press conference, said he fully supports “extending debate” on the auto bailout legislation.

“This bailout will hurt taxpayers, it won't help the economy, and it will prevent these car companies from becoming competitive. The only way for the automakers to survive is a complete restructuring that allows them to break free from the stranglehold of union bosses,” said DeMint.

Not all Senators opposed to the Detroit bailout bill support a filibuster. Sen. Bob Corker (R-TN), said today he thought a filibuster would be unnecessary since he believes Democrats will likely have the 60 votes to pass the auto loan anyway.

Senate Majority Leader Harry Reid has threatened to keep the Senate through the weekend to complete the bailout.

“The ball is in the Republicans’ court about when we vote,” said a senior Democratic leadership aide.

“We hope to hear more soon about whether they will give us consent to do this quickly or insist that we run out the clock. In short, we will be in as long as it takes to complete action on this.”

Senate Republicans will hold a previously planned lunch meeting Wednesday where they will have an intense discussion about the auto bailout.

Dana Bash | BIO
CNN Congressional Correspondent

If we had a dime for every optimistic word we hear about compromise for Detroit, we may be able to make enough money to bailout the auto industry ourselves.

"In concept, it's together" House Majority Leader Steny Hoyer told reporters as he rushed into an all day summit on the economy.

House Financial Services Chairman Barney Frank declared there will be "agreement today, absolutely.”

"I think we're very, very close to having something we can bring before the body sometime today," Senate Majority Leader Harry Reid said as he opened the Senate floor this morning.

At 10:30am he even said he thought there could be agreement "within an hour or so."

Now, part of the art of compromise on Capitol Hill is, and always has been, mastering the art of posturing. Public expressions of good will and optimism are designed to move things along in private.

But, Republican leaders are still trying to recover politically from rushing through the Wall Street rescue. They're wary of another drive-by bailout for the auto industry.

In fact, Sen. Mitch McConnell was on the Senate floor this morning trying to tap the brakes on an auto bailout.

"There are times when help is needed but one thing most people expect when they are asked for help is that the one asking makes a commitment to change," said McConnell.

"This proposal does not go nearly far enough. It holds neither management nor labor truly accountable."

The White House has the same concerns, and they had staff working with congressional Democratic aides late last night and early this morning trying to work them out.

The big question when they finally come out of the room and declare the deal done, whether there will be enough votes to pass a Senate that is still split along party lines, and suffering from a big case of bailout fatigue.

But it’s hard to imagine Senate leaders bringing this to the floor unless they know they have the votes. They are still smarting from the precipitous stock plunge they caused after initially failing to pass a financial bailout this fall.

Reid was almost giddy about the positive effect their negotiations had yesterday.

"The mere fact that we were trying to work something out yesterday caused the stock market to go up nearly 300 points," he said.

Dana Bash
Congressional Correspondent

Anyone walking by the Capitol steps this morning saw one of the first real images of the change that's coming to Washington. Some 50 fresh-faced, newly-elected lawmakers were all smiles as they posed for their class picture.

But, that belied what was happening inside the halls of Congress.

It’s business as usual: Gridlock.

The old Congress is back in town this week for a lame-duck session, and the auto industry is begging lawmakers to avoid financial collapse.

But, calls for emergency assistance to Detroit are colliding with a partisan divide over where the money should come from.

On the Senate floor, we heard big speeches from the leadership about the need to work together.

Still, we could find no evidence that either side is sitting down to talk about how to bridge their differences on helping the auto industry.

Democrats went ahead and introduced legislation to take 25 billion dollars out of the 700 billion dollar Wall Street bailout and give it to Detroit.

Republicans and the Bush White House oppose that, calling it a slippery slope to help one industry, albeit an important one, with money intended to prop up the nation’s banks.

Instead, most in the GOP want to use money from a previously approved fund for developing fuel-efficient vehicles, which most Democrats call non-negotiable.

The result? Stalemate.

Democratic sources say they will take a test, procedural vote on their auto bailout bill Wednesday...a vote they are already telling us privately they expect to fail.

Veteran Democratic Senator Barbara Mikulski went to the Senate floor today and demanded this lame duck session "should neither be lame nor should we duck the big issues facing our country."

The way it’s going now, she’s not likely to get her wish.

Both parties will use this week to show the newbies around, elect their leadership for next Congress, maybe pass an extension of unemployment insurance benefits, and then get out of town for the rest of the year.

Dana Bash | BIO
CNN Political Correspondent

Trying to get more info, but I'm told by one Republican source here at the GOP Governors Association meeting that as of 830a , Gov. Sarah Palin was supposed to be at the presser without the row of fellow governors who stood silently behind her.

Another RGA source tells me the reason for that is a "long story" that i'll be told later.

Haley Barbour told Evan Glass that they all met at 9a and by then it was "decided" that they'd all go out.

But , notice that the host, Florida's Charlie Crist, wasn't even there.
A Florida GOP source said "he didn't know about it"

Also, it was slated for 20 minutes or so, but as you all saw, she took 4 questions...and the last, mine, was only because Gov Perry forced it.

If you couldn't sense the awkward tension on TV, you could definitely feel it in the room....