It's day three and President Obama is letting people know who's in charge. "I won," Obama told a bipartisan meeting of congressional leaders on Capitol Hill today after both sides disagreed about his stimulus plan. Republicans are seeing additional middle class tax cuts in place of Obama's refundable credit. "This is a grave situation facing the country," Obama said at a later point. Senate Majority Leader Harry Reid echoed Obama. Asked if Democrats were worried about the GOP stance, he replied: "No."

The upside of Sarah Palin’s $180,000 shopping spree was supposed to be that she would donate the clothing to charity after the election. Except the clothing is now sitting in trash bags at the RNC headquarters, according to the website New Majority. An RNC spokesperson say the clothes will still be “inventoried and will be appropriately dispersed to various charities.” But the party’s big donors, already unhappy that their money was used to dress Palin, are angry. “If they think donors are going to sit by and simply accept this they are mistaken,” one says.

The military is considering the deployment of up to 20,000 additional U.S. Marines to Afghanistan. The surge would come as a similar number of troops is cut from Iraq, meaning the Marines would still comply with their seven-month deployment schedule. The U.S. now has 34,000 troops in Afghanistan and just 2,200 Marines. "The time is right for Marines in general terms to leave Iraq. It's very much a nation-building kind of environment that's taking place there," the Marine Corps Commandant explained.

Former Lehman Brothers CEO Dick Fuld can relax. It looks like former Merrill Lynch CEO John Thain is Wall Street’s new punching bag. Even President Obama is taking shots. While discussing stimulus packages this morning, Obama said we need to make sure “taxpayer money should not go toward renovating offices.” The reference was to Charlie Gasparino’s report yesterday on The Daily Beast and CNBC that Thain spent over $1 million in early 2008 redecorating his office.

The unemployment rate in the state of California hit 9.3% in December—up from 8.4% in November. The jobless rate is now the highest in 15 years. "The new data reflected lackluster holiday sales, continued home value declines and a heightened tempo of layoffs at companies across all sectors of the economy," the Los Angeles Times reports.

We always suspected there was more to the White House than meets the eye. Rolling Stone says a mint condition collection of landmark albums are stored in the executive mansion…in the basement (isn’t it damp down there?). The White House Record Library contains a little bit of rock for Barack (his favorites include Bob Dylan’s Blood on the Tracks and Bruce Springsteen's Born to Run) as well as punk, cult classics, and—gasp!—disco. The collection began in 1973, when the RIAA donated 2,000 LPs by Pat Boone, the Carpenters and John Denver. (How unfortunate.) A few years later the collection was updated by music savior/producer John Hammond, who injected some rock records for the Carter administration. No word yet if President Obama will revive the library, but if so, let’s hope Sasha and Malia steer clear, or future presidents will have them to blame for the Jonas Brothers.

Apparently not getting the post-partisan memo, Republicans legislators are become more and more adamant in their opposition to President Obama's stimulus package with some complaining they've been shut out of drafting the legislation. Complaints include that there aren't enough tax cuts in the package and that the plan comes with too high a price tag and too much government spending. Speaker of the House Nancy Pelosi seems willing to play bad cop to Obama's good cop to get her version of the bill through the House largely untouched by the GOP. "Yes, we wrote the bill. Yes, we won the election," she told reporters yesterday.

You may have thought Ben Affleck degraded Pearl Harbor, but check this out: "Dec. 9 to my family, to us, to me, is what Pearl Harbor Day was to the United States," Illinois Governor Rod Blagojevich said in an interview yesterday with the Associated Press. "It was a complete surprise, completely unexpected. And just like the United States prevailed in that, we'll prevail in this." He also offered a creative new explanation for his impeachment: "The reason they're doing this is because they can't wait to get rid of me so they can raise taxes on the people of Illinois," he said. "This is as much about a tax increases as it is about anything else."

A major step forward in the controversial practice of stem cell research occurred today as the FDA approved a leading bio tech company, Geron Crop, to conduct experiments on up to 10 patients with spinal cord injuries. The historic decision marks a reversal of ethics-driven policy restricting the study and medical application of embryonic stem cells; critics complain it destroys human life. Its proponents, however, look forward to capitalizing on the untapped potential of stem cells to regenerate vital tissue and organs: "This is the dawn of a new era in medical therapeutics," said the CEO of Geron. He stressed that the medical benefit of the practice "goes beyond what pills and scalpels can ever do."

Former New York Senate Majority Leader Joe Bruno has been indicted on federal charges of corruption spanning 12 years. "In court papers, investigators highlighted more than $3 million in alleged payments Bruno received from people and businesses seeking state and union contracts," NBC-New York reports. Bruno stepped down in July and has long been under a cloud of suspicion.

Nine people were killed in the North Waziristan region of Pakistan by three missile strikes from a U.S. drone. The drone strike, a regular counterterrorism technique used the Bush administration, was the first authorized under President Obama. Reuters reports that more than 220 people were killed by pilotless U.S. drones in 2008. Pakistan has spoken out against the use of drones in the region and wanted Obama to review the practice.

New York, meet your new Hillary: Governor David Paterson has chosen upstate congresswoman Kirsten Gillibrand to fill Clinton’s Senate seat. The 42-year-old representative from Hudson received her call from Paterson around 2 a.m. last night. Gillibrand was chosen with the strong support of senior New York Senator Chuck Schumer, who wanted both a woman and an upstater to replace Hillary, but not everyone is happy about the pick: Gillibrand is disliked by some of her colleagues, writes the New York Post, for being a “self-promoter” and her backing by the NRA worries several of her more liberal colleagues. At least five members of New York’s democratic congressional delegation called Paterson last night to protest the choice, with Rep. Carolyn McCarthy of Nassau County even threatening a primary challenge already in 2010. Gillibrand also opposed the TARP package and is “less than enthusiastic” about gay marriage.

Breaking news alert: The Telegraph is reporting that Britain is “deluged with heavy rain.” Even more surprising, it’s expected to rain through the weekend. Actually, the item is semi-serious—flood warnings have been issued across the country—but that ruins the joke. In other news, San Diego is deluged with sunshine and Antarctica is deluged with snow.

Those who have alleged that the media is infatuated with President Obama can breathe easy: We may be reaching the end of the affair. The new White House press corps was angry at yesterday's briefing that it was denied access to Obama's retaking of the presidential oath and that Obama gave his first presidential interview to a multi-million dollar inauguration sponsor. Leading the revolt was CBS Newsman Bill Plante, whose questions included why ABC, which hosted the DC Neighborhood Ball, was given the first interview. Then, last night, Obama visited the White House press corps, just to say hello, and was clearly annoyed when asked about the lobbying background of his deputy defense secretary nominee. "I came down here to visit," the president said. "See this is what happens. I can't end up visiting with you guys and shaking hands if I'm going to get grilled every time I come down here."

“Air and Simple Gifts,” the lofty arrangement played by the quartet at the inauguration, was far from simple. In fact, the music performed by Itzhak Perlman, Yo-Yo Ma and their colleagues had been pre-recorded two days before. The musicians did really play their instruments just before President Obama took the stage, but the music blasting over loud speakers was something else.

Another twist to baseball’s continuing steroid madness: Jay McGwire is proposing a new book that says his estranged brother, baseball great Mark McGwire, did in fact use steroids. In the proposal, Jay alleges that he introduced Mark to performance-enhancing drugs at a bodybuilding competition in 1994 and that Mark used Deca-Durabolin. “I became the first person to inject him, like most first-timers he couldn't plunge in the needle himself,” Jay writes. ESPN.com notes that the brothers “reportedly haven’t spoken to each other in years.” On the sports blog Deadspin—where the story broke—Jay’s ex-fiancée is corroborating his claims.

It may look like just a golden statue, but how much is an Oscar really worth? Upwards of $6 million, estimated The Big Money and Slate. The shrewd marketing campaigns launched by the Best Picture contenders like Frost/Nixon and Slumdog Millionaire reveal that whoever spends the most on ads and attracts the most viewers, well, may just secure the win.

It got the most recognition from the Academy, but that doesn’t mean The Curious Case of Benjamin Button will come out on top. The ‘boost’—increased box office sales after a movie is nominated—may not pay off this time. Paramount execs say that because the movie was so expensive to make, even increased sales won’t pay the bills.

When Aretha Franklin took the stage at the inauguration, T.V. audiences heard My Country ’Tis of Thee, over shots of rolling mountainsides, the slow-mo flag, the deep canyons of the American West, and then—that hat! Millions of Americans couldn’t take their eyes off that large, rhinestone bow affixed to the Queen of Soul’s forehead. And clearly, they liked what they saw. Luke Song, the designer, says he’s been bombarded with requests for the $500 hat. “They want the same hat, but they understand, it’s for the ‘Queen’ only,” he said.

Obama signed an executive order yesterday ordering that Guantánamo Bay be closed within a year. The New York Times runs a story today that illustrates the “potential complications” that arise from its closure: Said Ali al-Shihri, a former Guantánamo detainee, is now the deputy leader of Al Qaeda in Yemen. Al-Shihri was released to Saudi Arabia and went through a rehabilitation program for former jihadists, before emerging in Yemen. The Pentagon claims that several former detainees have returned to terrorism, although al-Shihri is the only one known to have risen to a leadership position.

Caroline Kennedy claims that she dropped out of the New York Senate race for “personal reasons”—ostensibly, her uncle’s failing health. But Governor David Paterson’s people are whispering that Kennedy’s reasons were significantly more personal than that: According to the New York Post’s sources, she was “mired in some potentially embarrassing personal issues,” citing tax liabilities and compensation issues connected to a nanny. "And reporters are starting to look at her marriage more closely," the source said, without providing specifics. Another source tells the Post that Paterson was "furious” that Kennedy had "denied him the chance to be able to claim he had passed her over, so that he could look like he was strong and independent and willing to reject a Kennedy." Another state Democrat tells the Post he “feels bad” for Kennedy.  "I can't believe they're bringing up the marriage. She quit. What's the difference now? Let it go."

Just as we are scaling back on little luxuries like a Saturday matinee, the Russians, too, aren’t going to the movies. This year, Russian box office earnings fell by a third, and admissions by a half. Since their record-shattering movie Irony of Fate 2 opened last year, nothing can compete. Even Boogie Bones or Hipsters, this year’s top flick, can’t save the box office now.

Time to take your daily economic medicine: A pair of articles today recommends that the United States nationalize its ailing banks. In the Financial Times, George Soros writes that we should cripple the “aggregator bank” idea’s new legs: It failed the first time because it’s too difficult to value the toxic assets and it should fail for that reason again. Soros suggests we nationalize the banks, and The New York Times looks to Sweden today for a model on how to do so. In the early nineties, Sweden’s center-right government nationalized banks, quickly turned the economy around, and even made money for taxpayers in the long run. The Swedish government took full ownership of bad banks, giving them taxpayer money so they could resume lending. “If you go in with capital, you should have full voting rights,” said Bo Lundgren, Sweden’s minister of fiscal and financial affairs at the time. One downside: In the process of nationalization, existing shareholders are wiped out.

President Obama broke with a presidential tradition yesterday: the changing of U.S. reproductive policy on the anniversary of Roe v. Wade. Unlike his two predecessors, Obama did not use the occasion to alter American reproductive policy, but he does plan to issue an executive order restoring U.S. funding to international planning groups involved with abortions now that the anniversary is over. The so-called “global gag rule” was first instated by Reagan, repealed by Clinton, reinstated by Bush, and now re-repealed by Obama.

You may have held out longer than most, Britain, but we knew you'd join the global recession eventually. Welcome onboard! The British economy shrank 1.5 percent in the previous quarter, which, on the heels of the 0.6 percent shrinkage in the third quarter, means the United Kingdom is officially in recession. It was the fastest rate of shrinkage for the British economy in 30 years. Stocks, meanwhile, plunged worldwide. Europe's Dow Jones Stoxx 600 Index fell to its lowest level in five years.

After months of careful negotiations, Obama finally gets to keep his BlackBerry, but only a few senior staffers and close friends will have access to it—making the elite group the toast of the town. "It's a pretty small group of people," spokesman Robert Gibbs said of the list. The obvious members of Club BlackBerry will likely include Rahm Emanuel, David Axelrod, body man Reggie Love, Hillary Clinton, and, of course, Michelle Obama (and maybe the kids as well). Various friends from Chicago might make the cut as well. Social climbers seeking the ultimate challenge, the Mt. Everest of status symbols, will surely lobby hard for a spot on the famed BlackBerry list.

Democrats took their bigger, better 2009 majority for a spin in the Senate yesterday, passing a bill making it easier for women to sue their employers for wage discrimination. The Lilly Ledbetter Fair Pay Act, which Obama supported during the campaign, was previously a no-go as the Dems' majority was too small to carry the legislation. But with the Democrats now holding 59 seats, the party managed to score a filibuster-proof 61 to 36 vote and the legislation is on track towards quickly becoming law. All 16 female senators voted for the bill.

Laurent Nkunda, the rebel general who has been waging a bloody civil war in Congo, was arrested last night in Rwanda, according to The Times of London. Joint Congolese and Rwandan troops converged on Nkunda’s headquarters yesterday, and Nkunda was apprehended after he fled into Rwanda. Rwanda sent thousands of troops into the Congo on Tuesday in order to eradicate Hutu rebels who have been hiding out there since the genocide and to help put down a Tultsi revolt against the Congo. Nkunda has been M.I.A. since last week, when the commanders of his National Congress for the Defense of the People defected and said they would now work the Congolese government.

What would Jesus do? French bishop Marcel Lefebvre and four other bishops led a schism from the Catholic Church over a number of church reforms of the 1960s, including the abandoning of mass in Latin. In 1988, Pope Jean Paul II excommunicated Lefebvre and the rebel bishops. Now, The Telegraph reports that Pope Benedict apparently wants to heal the rift and has already signed a decree lifting the excommunications. Reinstating British bishop Richard Williamson, 68, will be politically risky, and may hurt the Catholic Church’s effort at repairing relations with the Jews. During an interview on Swedish television this week Williamson said that he did not believe that any Jews died in gas chambers during the Holocaust, although he did believe that 200,000-300,000 Jews perished.

Despite reports to the contrary, Madonna and Guy Ritchie haven’t settled everything yet, The Times of London reports. Sure, he didn’t file to get any of Madonna’s money, but what of the kids? Lourdes, 12, will continue to live with her mother in America, but the two boys, Rocco, 8, and David, 3, who was adopted from Malawi will divide their time between Britain and the U.S. However, Madonna and Ritchie can’t agree on where Rocco will go to school– Ritchie favors England while Madonna favors the US.

Rising temperatures are wreaking havoc out West, as trees throughout the region are dying at much faster rates than ever before, scientists say. "Wherever we looked, mortality rates are increasing," said Nathan Stephenson, a coauthor of the relevant study and US Geological Survey research ecologist. According to his research, mortality rates are up over 100% in old-growth forests all over the Western United States and could get worse if the temperature continues to rise. The study is billed as the first of its kind and examined trees at least 200 years old.