The American Spectator

p> BUDGETING ONE’S TIME br> Indiana favorite son, Mitch Daniels , currently director of the Office of Management and Budget, is expected to announce in early May that he is stepping down from his White House post to return back home again to Indiana for good to run for governor. Daniels has been hemming and hawing about the decision, putting it off as he worked with the Bush economic team to fix an economy broken by the Clinton-Gore administration. /p>

Daniels has been the first choice of Hoosier Republicans for some time to run for the governor’s mansion, and has been receiving lots of encouragement to do so from Washington political players like the U.S. Chamber of Commerce, which has been touting a Daniels run for more than a year.

According to several White House sources, Daniels is expected to step aside once the Bush economic stimulus package, including the Bush tax cut, is finally passed. Republicans on Capitol Hill hope to take up finalizing that legislation upon returning from Easter recess.

And on that tax cut, the Bush economic team would love to get the full $726 billion through Congress, though for months they’ve known they might have to settle for half that. For now, they will happily take something north of the $350 billion the Senate is offering and walk away saying it’s a victory for working families. “We can always come back this fall and take it up again with another $350 billion cut if we need to,” says one White House staffer.

A Republican staffer in the Senate leadership says that might not be a bad idea, particularly if Bush’s approval numbers hold firm over the next few months. “There’s a feeling up here that the stock market is going to start pumping out good numbers again, and that we’re going to see some good growth overall in the economy this summer. Democrats may be in an even weaker position than they already are. They won’t be able to say ‘no’ come October.”

While the White House would gladly take more Democratic votes, it’s Senate Republican who are the bigger headache. Sen. Susan Collins and Olympia Snowe are the usual suspects in avoiding playing nice with their conservative colleagues on taxes. But Sen. George Voinovich is a bit of a surprise for holding firm to an anti-tax cut line. According to the Senate leadership aide, GOP Senate leaders Bill Frist and Sen. Mitch McConnell did their best to woo Voinovich to their side of the aisle on the tax cut, to no avail.

p> DEVIL WOMAN br> Washington’s political and journalistic cream was curdling in the pews of St. Joseph’s Catholic Church on Capitol Hill last Friday morning. A standing room only crowd had gathered there for a memorial service for National Journal