The Note: Hillary on the Hot Seat

What happened to the inevitable candidate? Sen. Hillary Rodham Clinton, D-N.Y., wasn't supposed to have to work this hard for the 2008 Democratic nomination. But now, coping with the fallout of a leaked campaign memo and facing her own potential $87 billion moment (this time, the price tag is $95 billion), Clinton is facing internal dissent and the possibility of widespread intra-party anger over -- again -- her position on the Iraq war.

Democrats are deeply divided and liberal groups downright angry over the war-funding bill that could come up for a vote as soon as today. And the leaked memo is being subjected to scrutiny worthy of the Dead Sea Scrolls. Clinton herself is shooting it down as the candid advice of one aide, but what does it say about the state of her campaign that the deputy campaign manager, Mike Henry, would even suggest that Clinton "pull completely out of Iowa"? How well is second-quarter fund-raising going if Henry is worried that spending $15 million in the Hawkeye State would leave only $5 million to $10 million to spend in the states that vote Feb. 5?

Most intriguingly, what happened to the vaunted Clinton campaign discipline, marching in lockstep with utter confidence? "Part of the news was that the memo leaked at all: The Clinton campaign prides itself on being airtight, and any lapse is viewed as evidence of an internal power struggle," write The Washington Post's Anne Kornblut and Dan Balz.

The memo, first reported by the Associated Press, prompted Clinton herself to get on the phone with Iowa reporters. "I make the decisions, and I've made the decision that we are competing in Iowa," she told The Des Moines Register's Thomas Beaumont.

Back on the action in Congress, Clinton was testy yesterday when asked about how she would vote on the war-funding bill, ABC News' Jake Tapper reports. With former senator John Edwards, D-N.C., and Sen. Chris Dodd, D-Conn., joining (and, incidentally, Sen. John Kerry, D-Mass.) in opposing the bill, "either route chosen will bring with it huge potential political pitfalls" for Clinton and Sen. Barack Obama, D-Ill, Tapper writes.

Democrats are bracing for mass defections on the Iraq vote, with perhaps half of the caucus voting against the measure, including House Speaker Nancy Pelosi, D-Calif. "The idea that many Democrats would be left on the losing side in a consequential vote has exposed a sharp divide within the party, drawn scorn from antiwar groups, confused the public and frustrated the party rank and file," writes Carl Hulse in The New York Times.

They knew it was going to be bad, but did Pelosi and Senate Majority Leader Harry Reid, D-Nev., misjudge this one? "It's what the Republicans wanted," Rep. Lynn Woolsey, D-Calif., told Politico's Josephine Hearn.

Also worth keeping track of:

Monica Goodling's long-awaited testimony on the US attorneys scandal didn't do her old boss any favors. She gave Democrats new fuel for their inquiry, and her admission about taking political affiliation into account for civil service jobs "added to a growing picture of politicization of the nation's law enforcement system under Gonzales," writes Charlie Savage of The Boston Globe.

Dana Milbank writes about the latest "Monica Problem" in The Washington Post: "In a full day of testimony, she accused the No. 2 Justice official of giving false testimony to Congress, implied that Gonzales himself had improperly tried to influence her testimony, and generally described Gonzales' Justice Department as a wholly owned subsidiary of the Republican National Committee."

With the immigration bill still moving along in the Senate, now it's the other side playing the "amnesty" card. Homeland Security Secretary Michael Chertoff told a USA Today editorial board meeting that NOT passing a bill amounts to "silent amnesty." "You're either going to let them stay or you're going to be hypocritical," Chertoff said. Somehow we don't think Lou Dobbs and Tom Tancredo will buy it.

Gov. Bill Richardson, D-N.M., is opposing the immigration bill, putting him "in agreement with a key segment of his party, including many Hispanic voters, that want more focus on reuniting families," writes Adam Nagourney of The New York Times. He's the first major Democratic candidate to flat-out oppose the bill in its current form.

Book season is just beginning (two Clinton books next month), and Bob Shrum's memoir is being picked apart for Edwards tidbits. Shrum dismisses Edwards as "a Clinton who hadn't read the books," and says Kerry "wished that he'd never picked Edwards, that he should have gone with his gut" and chosen Dick Gephardt. As Michael Crowley sums it up on The New Republic's Website, " 'No Excuses" does tend to reinforce nagging doubts about whether Edwards is a manufactured candidate with outsized ambitions but muddy convictions."

Clinton strategist Mark Penn has his consulting practice dissected by Bloomberg's Timothy J. Burger and Kristin Jensen. They turn to Penn's own blog entries in examining his work for drugmakers, a tobacco company, and a utility. "I have found the mixing of corporate and political work to be stimulating, enormously helpful in attracting talent, and helpful in cross-pollinating new ideas and skills," he wrote in one blunt entry. "And I have found it good for business."

The Boston Phoenix's David S. Bernstein sees former governor Mitt Romney, R-Mass., running a disciplined operation that's "employing the same playbook George W. Bush used to devastate a crowded field of candidates eight years ago." Target No. 1: winning the August 11 Iowa straw poll in Ames, where he will seek to "make himself look too mighty, too popular, and too deep-pocketed to take on," Bernstein writes.

As Republicans grow anxious about the Iraq war, they've also got to watch out for primary challenges that are emerging against GOPers who are distancing themselves from the president, ABC News' Jake Tapper reports.

A day after the House voted to prevent debate on a formal reprimand of Rep. John P. Murtha, D-Pa., Murtha apologized for the outburst at issue, The Hill's Jackie Kucinich reports. So tell us why again the complaint by Rep. Mike Rogers, R-Mich., isn't worthy of debate?

The kicker:

"I just did not know if it was a conversation that we should be having, and so I just -- just didn't say anything," Monica Goodling, recounting an "uncomfortable" pre-testimony conversation with Alberto Gonzales that included him relating his "general recollection" of the US attorneys' firings process.