PRESIDENT-ELECT Barack Obama's transition team and Secretary of State-designate Hillary Clinton are reportedly planning to enhance the funding, staffing, and missions of the State Department. These changes are needed in part to cope with the global economic crash and specific conflicts in the Middle East, the Persian Gulf, and Central Asia. But the proposals also reflect a new emphasis. Americans voted last month for a different kind of foreign policy, one that is oriented more toward diplomatic conflict resolution and less toward military force.

Clinton should have little trouble getting more funding for new hires at the State Department and the US Agency for International Development. Some money for expansion is already in the pipeline. A supplemental war funding bill that became law in June provides money for Foreign Service hiring. The State Department has requested funding for 1,500 positions; most of that money would go to fill positions otherwise lost to attrition, but a portion would pay for about 160 new positions.

Clinton will no doubt seek more money for more new posts. In this pursuit, Secretary of Defense Robert Gates can be a crucial ally. He has strongly supported a greater role for foreign service officers in nation-building missions. Gates is right about the need for diplomats and development specialists to take up missions that should not fall to the uniformed military.

On the merits, Clinton has a strong case to make that global economic developments are more than ever intertwined with geopolitics, and therefore the State Department should have a major role in discussions with other countries on economic policy. At present, for example, the Treasury Department manages the so-called "strategic economic dialogue" with China. Given that China has accumulated a surplus of nearly $2 trillion while the United States is drowning in debt, that dialogue does have strategic overtones. The State Department should have a seat at the table when US and Chinese officials discuss China's pursuit of energy resources in places like Sudan, Burma, or Iran.

In wishing to appoint special envoys to pursue peace agreements between Israel and the Palestinians, or between India and Pakistan, Clinton is wisely reviving a practice that lapsed during the Bush administration. Obama is likely to be tied up for some time in efforts to revive the domestic economy. And Clinton's own responsibilities as secretary will preclude the kind of immersion in specific knotty conflicts that a qualified special envoy is best suited to manage. If Bush had tasked the right special envoy with the forging of Mideast peace, a grand bargain with Iran, or resolution of the Kashmir conflict, the nation's security might be less tenuous than it is today.




The Boston Globe, December 26, 2008

Sen. Hillary Rodham Clinton's (D-N.Y.) move to the Department of State could remove a significant fundraiser for Democrats.

Clinton, whom President-elect Obama has nominated as secretary of State, has raised and contributed millions of dollars to candidates and party committees since her election in 2000, and the former first lady has never been shy in traveling around the country to lend her fame to fellow Democrats.

"If you were organizing an event with her, you know you can put a number next to her name because of her star power and network," said Chris Lehane, a Democratic strategist. "Up until you had Obama, she was in a category all by herself."

Now that could change. While campaign finance lawyers contacted by The Hill said no laws would prevent Clinton from keeping her campaign committees open, cabinet officials typically refrain from overt political campaigning after their confirmation.

"When a cabinet appointment is acting as a surrogate for a presidential reelection campaign, they leave the room when the pitch is being made," said Kenneth Gross, a partner at Skadden Arps Slate Meagher & Flom. "You are allowed to give. You are allowed to fundraise. You just have to be a wallflower."

Clinton, who is readying for her confirmation hearing before the Senate Foreign Relations Committee, has not made a decision on whether to shutter her campaign committees.

"We will be addressing those questions in due course," said Philippe Reines, Clinton's spokesman.

Clinton's leadership political action committee, HillPAC, is one of the largest contributors to other candidates. She has funneled more than $2.9 million to candidates and party committees at the federal and state level since the 2002 election cycle through the PAC. HillPAC and Clinton's Senate campaign committee, Friends of Hillary, have hosted nearly 1,000 events and fundraisers for national committees, state parties and almost 120 candidates across the country, according to Clinton aides.

After losing the Democratic nomination to Obama, Clinton became a prominent surrogate for her former rival. She headlined more than 70 events and fundraisers in close to 20 states. She also raised almost $1.2 million for the Democratic Senatorial Campaign Committee in 2008 through events in California, Washington, D.C., Massachusetts, and North Carolina, according to her aides.

Clinton has several options. She could close down her committees and give their funds to charity or to national party committees, such as the DSCC or the Democratic National Committee. But campaign finance rules would place a $15,000 ceiling on any contribution from her leadership PAC to a party committee.

Clinton could also suspend her committees and keep their accounts open while serving at State. "The money could just sit there," said Rob Kelner, who heads the election and political law practice group at Covington & Burling.

If Clinton continued to fundraise and contribute to candidates, however, she could attract negative attention for what would be unusual activity by a cabinet official.

"I am sure she would anticipate news stories on her PAC if she is contributing to candidates during her time as secretary of State, which would be an awful distraction," Kelner said.

The Hatch Act, a federal law intended to prevent the use of government resources for political purposes, and other rules limit fundraising and campaign activities by federal workers. Most Senate-confirmed political appointees, including cabinet officers, however, are exempt from the Hatch Act. They are prohibited from soliciting government employees for campaign contributions, but may still raise funds for candidates.

Another complication is that Clinton still has debt from her presidential campaign. According to a Federal Election Commission report released on Dec. 20. Clinton's campaign remained close to $6.4 million in debt at the end of November.

While Democrats will miss Clinton's fundraising prowess, many see a potential replacement in Caroline Kennedy. President John F. Kennedy's daughter is campaigning for an appointment to Clinton's Senate seat by New York Governor David Paterson (D).

Kennedy's endorsement of Obama during the Democratic presidential primary helped establish the Illinois senator's bona fides with the Democratic establishment. Her prowess as a fundraiser already has been impressive. A well-known philanthropist, Kennedy has raised more than $65 million in private support for New York City's public schools.

"The moment it becomes official, she becomes a superstar," Lehane said about Kennedy if she became a senator.

While Lehane said Kennedy could not match Clinton's fundraising abilities immediately, her name recognition alone could help other Democratic candidates with campaign funds for the 2010 midterm elections. That's a key selling point for Kennedy, who could help other New York politicians, including Patterson, who will be on the 2010 ballot.

"Does that mean she can rise to the level of going out to the states and helping with your midterm candidates? Absolutely," Lehane said. "Everyone wants a little bit of Camelot in their state."

By Kevin Bogardus, The Hill, December 25, 2008

By MARK LANDLER and HELENE COOPER , New York Times, December 22, 2008

Sen. Hillary Rodham Clinton has formally given up hope of recovering about $13 million she loaned her failed presidential campaign, according to campaign finance reports filed today.

The decision formalizes what Clinton has said for months: that she will not seek repayment for the money that she and her husband, former president Bill Clinton, invested in her White House bid.

But Clinton still owes $6.4 million to vendors that her campaign used during the extended primary battle with then-Sen. Barack Obama. As of Nov. 30, she still owed about $5 million to Mark Penn, her chief strategist and pollster.

Clinton has made strides in paying off her campaign debt, the documents show. She paid media consultant Mandy Grunwald $58,000. And she finished paying her former spokesman, Howard Wolfson, $200,000.

But the clock is ticking. Once she is confirmed as Obama's secretary of state, she will be barred from raising money to pay off the debt. And she still owes plenty to vendors.

Her debts include: $168,437.66 for insurance, more than $750,000 for printing and $3,411 to a bakery in New York.

By Michael D. Shear, The Washington Post, December 22, 2008

Having spent more than a year on a failed effort to win the Democratic presidential nomination, Senator Hillary Rodham Clinton has officially recognized the multimillion-dollar toll that the campaign took on her personal assets

Mrs. Clinton filed papers with the Federal Election Commission over the weekend formally writing off all of the $13.2 million she lent the campaign, plus $77,900 in interest on the loan.

Her giving up any hope of reclaiming the money, a step signaled in September when the statutory deadline passed for recouping all but a small piece of it, confirms the financial strain that the fund-raising juggernaut of the Obama campaign placed on Mrs. Clinton personally.

And in addition to the personal loan, the same weekend filing showed that she still owed millions of dollars to dozens of vendors as of Nov. 30. She did manage to chip away at that debt in November, reducing by roughly $1.1 million the $7.5 million she owed at the end of October. The single biggest debt as of November's end was $5.4 million, to the firm of Mark Penn, her former chief strategist.

The shadow of her debt has hung over Mrs. Clinton ever since she ended her campaign for the nomination in June. The Clintons have held a series of fund-raisers to try to pay it off, and President-elect Barack Obama has also been urging his supporters to help out with contributions.

Mrs. Clinton even recruited her mother, Dorothy Rodham, to the cause. In early December, Mrs. Rodham sent an e-mail message to supporters urging contributions to help retire her daughter's campaign debt and offering an autographed children's book about Mrs. Clinton in exchange for a donation of $250 or more.

Now, nominated to be secretary of state, Mrs. Clinton has been dealing with additional finance-related complications. Former President Bill Clinton has already disclosed a long list of donors to his charitable organizations, making his international dealings more transparent and thus meeting a condition set by Mr. Obama for his selection of Mrs. Clinton.

And Congress has removed another stumbling block by adopting a measure to reduce the secretary of state's salary, satisfying an obscure constitutional provision that forbids appointment of a lawmaker to a federal position that was either created or given a pay increase during the legislator's concurrent term.

But if Mrs. Clinton is confirmed as secretary, her ability to raise money to pay off her campaign debt will be sharply restricted. Provisions in federal law could keep her from personally soliciting contributions at all, leaving the job to her presidential campaign committee.

Kenneth A. Gross, a campaign finance lawyer, said that although Mrs. Clinton could not simply walk away from the remaining debt, she was not under a strict deadline for paying it off. Still, he said, carrying the multimillion-dollar burden with her as she begins her new job would be unpalatable, at the very least.

"It weighs on you," Mr. Gross said. "It's not going to debilitate her in any way from functioning as secretary of state, but it's a cloud that she would like to make go away."

By MICHAEL FALCONE, The New York Times, December 22, 2008

WASHINGTON (AP) - A former top aide to ex-President Bill Clinton will be tapped as Hillary Rodham Clinton's No. 2 at the State Department this week, The Associated Press has learned.

James Steinberg, a deputy national security adviser in the Clinton administration, will be nominated for deputy secretary of state as early as Tuesday, people familiar with President-elect Barack Obama's transition team said. They spoke on condition of anonymity because the appointment is not yet public.

In an e-mail sent late Monday to staff at the University of Texas at Austin, where he serves as dean of the Lyndon B. Johnson School of Public Affairs, Steinberg said he welcomed the job. Steinberg previously had been mentioned as a choice for Obama's national security adviser, which now will be taken by retired Marine Corps Gen. James Jones.

"Tomorrow (Tuesday) I anticipate that President-elect Obama will announce his intention to nominate me for the position of deputy secretary of state, an honor for which I am deeply appreciative," Steinberg said in his message to faculty and students.

"If confirmed (by the Senate) it will be a great privilege to serve with President Obama, Secretary of State-designate Clinton and the entire national security team at this time of great challenge but also of great opportunity for the United States and the world," he said.

Steinberg, a close and early supporter of Obama, has been dean of the Johnson school for three years after leaving the Brookings Institution in Washington, where he was vice president and director of foreign policy studies from 2001 to 2005.

From December 1996 to August 2000 he was deputy national security adviser to President Bill Clinton. Prior to that, he was chief of staff at the State Department and director of the department's policy planning staff.

By MATTHEW LEE, The Associated Press, December 22, 2008

WASHINGTON (AP) - The candidate of change has wholeheartedly embraced experience in choosing his Cabinet.

President-elect Barack Obama has tapped senators and representatives, governors and veteran bureaucrats to help him confront the challenges of two wars, a crippled financial system and a deepening recession.

His reliance on experienced officials may seem a bit at odds with his campaign theme of "change we can believe in." But some Democratic activists and nonpartisan analysts say it makes sense, given the dire economic problems and public anxiety.

"In uncertain times, Americans find it much more comforting that the people who are going to be advising the president are steeped in experience," said Rutgers University political scientist Ross Baker. "A Cabinet of outsiders would have been very disquieting."

To be sure, Obama's inner circle includes far more veterans of elected office and federal agencies than government newcomers.

More so than his recent predecessors, he has drawn heavily from the Senate for top advisers. His choices for secretary of state (Hillary Rodham Clinton of New York), interior secretary (Ken Salazar of Colorado) and vice president (Joe Biden of Delaware) were fellow senators. Tom Daschle, named health secretary, was the Senate Democratic leader from South Dakota until he lost his seat in 2004.

From the House, Obama has plucked Reps. Rahm Emanuel of Illinois as his chief of staff, Hilda Solis of California for labor secretary and just-retired Republican Ray LaHood of Illinois for transportation secretary.

He also settled on three prominent current or former governors for the Cabinet: Bill Richardson of New Mexico for commerce secretary, Janet Napolitano of Arizona at homeland security and Tom Vilsack, who stepped down as Iowa governor two years ago, for agriculture secretary.

Several appointees had ambitions far beyond their state borders. Vilsack, Richardson, Biden and Clinton sought the presidential nomination that Obama won. Daschle considered running for president as well.

Obama also came down on the side of experience in filling other Cabinet posts. Defense Secretary Robert Gates is a holdover from President George W. Bush's administration and a former CIA director under Bush's father. Attorney General-designee Eric Holder was deputy attorney general under President Bill Clinton.

Timothy Geithner, the choice for treasury secretary, is president of the Federal Reserve Bank of New York. Lawrence Summers, Obama's National Economic Council director, is a former treasury secretary.

For the most part, Obama's Cabinet has been well received by both Democrats and Republicans, although some Democrats have complained that Obama's team will not do enough to shake up the status quo on matters such as the Iraq war, oversight of the financial industry, and trade.

Former Dallas mayor Ron Kirk's nomination to be U.S. Trade Representative, for example, drew fire from groups that say current policies have shipped too many jobs overseas and allowed unsafe imports to enter the country.

"I am deeply concerned" that Kirk's past positions "do not reflect the reform agenda that President Obama has pledged," said Rep. Mike Michaud, D-Maine, co-founder of the House Trade Working Group.

High-profile Cabinet members such as Gates and Hillary Clinton have drawn the most attention. But the few Washington newcomers in the group may end up playing bigger roles in Obama's bid to make break sharply from Bush administration policies.

Energy Secretary-designee Steven Chu, for example, pledges to give prominence to scientific research and efforts to combat global warming, two areas that many contend were slighted by Bush. Chu, director of Lawrence Berkeley National Laboratory in California, has been a vocal advocate of aggressive action to deal with climate change.

By most counts, Obama has fulfilled his promise to have the most diverse Cabinet in history. Of his nominees for jobs generally considered "Cabinet level," fewer than half are white men.

Three are Latino (Richardson, Salazar and Solis). Four are black (Kirk, Holder, U.N. Ambassador nominee Susan Rice and Environmental Protection Agency pick Lisa Jackson). Two are Asian-American (Chu and Eric K. Shinseki, Obama's pick for veterans affairs secretary).

But Obama fell short, Baker said, in picking full-throated Republicans for his Cabinet. Gates, staying on as defense secretary, has not confirmed that he is a Republican, and LaHood often annoyed GOP leaders by refusing to walk the party line on key issues.

All in all, however, Obama has put in place a diverse team in which almost no one appears to have been chosen mainly to fill a gender or ethnic slot, said Norm Ornstein, a political scientist at the American Enterprise Institute.

"To be able to get that mix of Hispanics and African-Americans and Asians and women is really impressive," he said.

The overall team, Ornstein said, "is a collection of very strong individuals and people known for their pragmatism."

It may not please liberal activists who want sweeping change in Washington, he said, but it reflects a pragmatic new president facing some of the toughest challenges in modern times.

By CHARLES BABINGTON, The Associated Press, December 20, 2008