By MICHAEL FALCONE ( @michaelpfalcone ) and AMY WALTER ( @amyewalter )

NOTABLES:

• CHUCK HAGEL GETS THE DEFENSE NOD… After weeks of rumors that former Sen. Chuck Hagel, R-Neb., will be nominated for Secretary of Defense, President Obama will make it official today. ABC's Matthew Larotonda, David Kerley, and Jonathan Karl report: Senior officials within the administration and Capitol Hill confirmed the pick to ABC News after the Nebraska Republican had emerged as a frontrunner among potential candidates several weeks ago. Hagel, 66, is a decorated Vietnam veteran and businessman who served in the senate from 1997 to 2009. After having sat on that chamber's Foreign Relations and Intelligence Committees, he has in recent years attracted praise from current and former diplomats for his work on Obama's Intelligence Advisory Board as well as the policy board of the current Defense Secretary Leon Panetta. http://abcn.ws/ZtY4Bt

• …BUT A FIGHT IS BREWING: Despite having served in the Senate as recently as 2009, Hagel will almost certainly face a contentious nomination process, as public opposition has already mounted weeks before the pick is to be made official. ABC's Devin Dwyer and Jonathan Karl report: Criticism stems from Hagel's controversial past statements on foreign policy, including a 2008 reference to Israel's U.S. supporters as "the Jewish lobby" and public encouragement of negotiations between the United States, Israel and Hamas, a Palestinian group the State Department classifies as terrorists. … The Nebraska Republican has also drawn fire for his outspoken opposition to the 2003 U.S.-led war in Iraq and the subsequent troop "surge" ordered by then-President George W. Bush in 2007, which has been credited with helping bring the war to a close. On the left, gay rights groups have protested Hagel for comments he made in 1998 disparaging then-President Bill Clinton's nominee for U.S. Ambassador to Luxembourg James Hormel as "openly, aggressively gay." Hagel has since apologized for the remark as "insensitive." http://abcn.ws/ZwmNoM

• OBAMA TAPS JOHN BRENNAN FOR CIA: Along with the Hagel announcement, President Obama will nominate top counterterrorism adviser John Brennan to head the CIA, ABC's Martha Raddatz reports. More background from the AP's Julie Pace: "Brennan … was deeply involved in the planning of the 2011 raid that killed Sept. 11 mastermind Osama bin Laden. And he has led administration efforts to quell the growth of terror organizations in Yemen and elsewhere in the Middle East and North Africa. … His tenure at the agency during Bush's presidency drew criticism from liberals when Obama considered naming him CIA director after the 2008 election. Brennan denied being involved in what the government called 'enhanced interrogation techniques' during the Bush administration, but still withdrew his name from consideration." http://abcn.ws/UAruwA

• EXCLUSIVE - GABBY GIFFORDS AND MARK KELLY SIT DOWN WITH DIANE SAWYER. For their first interview since the Newtown, Conn., tragedy, former Arizona Congresswoman Gabrielle Giffords and her husband, Mark Kelly, spoke with ABC News' Diane Sawyer, who posted this message on Facebook along with a photo of the interview: "I had the chance to speak with former Representative Gabby Giffords and her husband retired astronaut Mark Kelly this weekend. They spoke about an important new initiative they're launching-the interview will air on Tuesday on World News." http://on.fb.me/WDfAwK

• ECONOMIC INDICATORS - GAS PRICE EDITION: ABC News Business Correspondent Richard Davies warns to expect bad news when the U.S. Energy Department releases its weekly gas price report today. The national average is creeping up after falling to a one year low in mid-December. Analysts expect the trend to continue in the coming months.

THE NOTE:

President Obama's second term cabinet shakeup continues today when he announces his intent to nominate Chuck Hagel as Defense Secretary and John Brennan to the post of CIA Director during a 1 p.m. news conference.

But as ABC Chief White House Correspondent Jon Karl notes today, the confirmation of Hagel, a former Republican senator, "will be no slam dunk":

"Senate Democrats tell me there is no guarantee Hagel will win confirmation and that, as of right now, there are enough Democratic Senators with serious concerns about Hagel to put him below 50 votes. The bottom line: He may ultimately win confirmation, but not before a bloody fight in the Senate.

On the plus side, Hagel is a decorated Vietnam veteran and a former Republican Senator who's views on military issues closely match the president's views. But he has already come under withering criticism from across the political spectrum. Among other things, he has come under fire for controversial comments on Israel (in 2008, he referred to Israel's US supporters as 'the Jewish lobby'), his opposition to some sanctions against Iran, and his suggestion, also in 2008, that the U.S. should negotiate with Hamas."

Time Magazine's Mark Halperin had a similar prediction:

"If Hagel has a good confirmation sherpa and performs well in his courtesy calls and at his hearings, he will likely be confirmed. But/and at a pretty high cost. Expect a LOT of people to want to testify against him. And don't rule out a filibuster of this nomination, which would, obviously, change the math." http://ti.me/VvwfU0

More on the rough road ahead for Hagel from ABC's Martha Raddatz on"Good Morning America" today. WATCH: http://abcn.ws/VNTZBZ

NOTED!

ABC's RICK KLEIN: It's getting crowded in here. One consequence of the un-grand bargain is that Washington will be fighting fiscal battles again early this year - then likely later, too. The result is not just a feeling of déjà vu but of suffocation. Republicans and any coalition that wants to slow President Obama's agenda - on immigration, gun control, energy policy, what have you - has the perfect way to do so now, perhaps indefinitely. "None of these issues, I think, will have the kind of priority that spending and debt are going to have over the next two or three months," Senate Minority Leader Mitch McConnell said on ABC's "This Week" yesterday.

ABC's AMY WALTER: For all the hand wringing about upcoming fights between the White House and Congress over Chuck Hagel, the debt ceiling and the sequester, a reminder that the two branches were designed to challenge each other. To be sure, this is a frustrating process- and one that has resulted in less than ideal outcomes. Voters say they like the idea of divided government, but they don't like the reality of it.

"THIS WEEK" REWIND:

MCCONNELL: THE TAX ISSUE IS FINISHED. As President Obama and Republicans slowly approach the next round of deficit-reduction talks, Senate Minority Leader Mitch McConnell drew a line in the sand, in his interview with ABC's George Stephanopoulos: no more tax increases. McConnell: "The tax issue is finished, over, completed. That's behind us. Now the question is, what are we going to do about the biggest problem confronting our country and our future? And that's our spending addiction. It's time to confront it. The president surely knows that. I mean, he has mentioned it both publicly and privately. The time to confront it is now." http://abcn.ws/Xbz4uz

HEITKAMP: GUNG-CONTROL PROPOSALS 'WAY IN EXTREME.' After The Washington Post reported that Vice President Biden's working group will press a broad gun-control agenday, newly elected Democratic Sen. Heidi Heitkamp, N.D., told ABC's George Stephanopoulos those proposals would go to far. Heitkamp: "Let's start addressing the problem. And to me, one of the issues that I think comes - screams out of this is the issue of mental health and the care for the mentally ill in our country, especially the dangerously mentally ill. And so we need to have a broad discussion before we start talking about gun control. … I think you need to put everything on the table, but what I hear from the administration - and if the Washington Post is to be believed - that's way - way in extreme of what I think is necessary or even should be talked about. And it's not going to pass."

GRETA VAN SUSTEREN GOES ON THE RECORD (WITH ABC NEWS): Fox News' Greta Van Susteren has interviewed some of the biggest names in U.S. politics on her show, "On The Record," but you'll never guess who her dream guest dream political guest is. Van Susteren, who appeared on the "This Week" roundtable Sunday, answered viewer questions from Facebook and Twitter for an "All Politics is Social" web exclusive hosted by ABC's Kaye Foley. About that dream guest, here's her answer: "Bo, the first dog. I love animals. I'd love to be on Animal Planet. On Animal Planet you aren't dealing with death and destruction and people fighting with each other all the time. To the extent that Bo is a part of politics, I'd love to interview Bo. Plus, I love the fact that he looks like he's wearing white knee socks. Bo is my favorite." WATCH the full interview: http://abcn.ws/13bVdfF

THE BUZZ:

with ABC's Chris Good ( @c_good)

SCOTUS RETURNS: GAY MARRIAGE, AFFIRMATIVE ACTION, VOTING RIGHTS. The Supreme Court returns to the bench today, and ABC's Ariane de Vogue reports: The justices will hear two potentially blockbuster cases in March concerning gay marriage. One of the cases-Hollingsworth v. Perry-addresses whether there is a fundamental right to same-sex marriage. The other-Windsor v. United States-deals with the federal law that defines marriage as between a man and a woman. In both cases, the court will hear arguments on potential procedural obstacles that could stop it from getting to the core constitutional questions. The court will also hear a case challenging a key provision of the Voting Rights Act. Section 5 of the law says that certain states with a history of voter discrimination must clear any changes to their election laws with federal officials in Washington. Lawyers for Shelby County, Ala., are challenging the constitutionality of Section 5. The case, called Shelby County v. Holder, will be argued Feb. 27. The day before, the court will hear arguments in Maryland v. King, a case about whether Maryland officials can collect DNA from someone who has been arrested but not convicted of a crime. http://abcn.ws/WD3Fir

SANDY AND THE CLIFF: WILL PAUL RYAN'S VOTES HAUNT HIM IN 2016? Paul Ryan voted in favor of the "fiscal cliff" tax deal but against a Hurricane Sandy relief bill that would add $9.7 billion in debt. ABC's Shushannah Walshe reports on the potential implications for 2016: The two votes four years from now may mean nothing or could haunt Ryan if he decides to run for president in 2016, depending on who is battling for the nomination. The fiscal cliff vote could become an issue, particularly if his opponent is Florida Sen. Marco Rubio who could highlight the fact that Ryan voted for the measure while Rubio voted against it. The Sandy vote could also be resurrected if his rival is New Jersey Gov. Chris Christie who blasted members of his own party this week when Boehner decided not to vote on a $60 billion Sandy relief package after assuring lawmakers from the affected he states he would. … Will Ryan be more vocal on the looming battle to raise the debt ceiling? It will be one to watch. http://abcn.ws/Sb0YZE

OBAMA'S VACATION BY THE NUMBERS. With President Obama returning from a nine-day vacation in Hawaii with family and friends, ABC's Mary Bruce reports: Obama played FIVE rounds of golf with SEVEN different partners, spending roughly THIRTY hours on TWO different courses on Oahu. The president made FIVE early morning trips to the gym at the nearby Marine Base at Kaneohe Bay. … The Obamas ventured out for dinner with friends FOUR times, leaving their Kailua vacation home for gourmet Japanese meals at Nobu and Morimoto … The president interrupted his vacation for SIX days to negotiate the "fiscal cliff" in Washington. All told, he will have spent roughly FORTY hours on Air Force One flying between D.C. and Hawaii. http://abcn.ws/WA0xUx

PELOSI: MORE TAXES IN NEXT CLIFF DEAL. The fiscal cliff isn't quite over, and House Speaker Nancy Pelosi says tax revenues must be on the table as President Obama and congressional Republicans negotiate over how to avert budget sequestration. The Hill's Mike Lillis reports: "'In this legislation we had $620 billion, very significant … changing the high-end tax rate to 39.6 percent. But that is not enough on the revenue side,' Pelosi told CBS's Bob Schieffer in an interview taped Friday. Without offering many specifics, the California Democrat said she wants to scour the tax code for unnecessary loopholes and 'unfair' benefits that help those-either companies or individuals-who don't need it." http://bit.ly/WnUi5y

CHUCK HAGEL: LET THE SNIPING BEGIN. Rumblings on Capitol Hill, already, are not good. Politico's Scott Wong and Manu Raju report: "Sen. Lindsey Graham (R-S.C.), an Air Force reservist who serves on the Armed Services Committee that will consider the nod, said Hagel would hold the 'most antagonistic' views toward Israel of any defense secretary in U.S. history. … 'It is a strange signal for the White House to send that they are willing to fight for Hagel but not Rice,' one Senate Democratic aide said Sunday. 'Democrats are not currently unified behind Hagel, and it will take some real work by the administration to get them there, if it's even possible.' 'I can't imagine why [Obama] would choose to burn his political capital on this nomination. For what? There is no constituency for Chuck Hagel,' one senior GOP aide said. 'Obama will expend every ounce of political capital he has to get him across the finish line. Dems will hate this." http://politi.co/VFMgc7

RAND PAUL'S SON ARRESTED AT AIRPORT. From the Charlotte Observer's Elisabeth Arriero: "The son of U.S. Sen. Rand Paul, and the grandson of former presidential candidate Ron Paul, was arrested Saturday morning at Charlotte Douglas International Airport. Police said William Hilton Paul, 19, was traveling early Saturday from Lexington, Ky., to Charlotte. When the plane landed about 10:49 a.m., Paul was charged with consuming beer/wine underage, disorderly conduct and being intoxicated and disruptive." http://bit.ly/VNWUuc

WHO'S TWEETING?

@davidaxelrod: When I was in WH, I slept better at night knowing that John Brennan never did. He worked 24/7 to keep Americans safe. Extraordinary guy.

@timkmak: When you think about the debt ceiling, remember it took the NHL 113 days of their own shutdown to come to a deal

@dgordon52: Great piece in @HuffingtonPost today by @rickjacobs in support of Hagel: http://www.huffingtonpost.com/rick-jacobs/why-chuck-hagel-should-be_b_2423695.html … #p2

@HotlineJosh: NJDC (National Jewish Democratic Council) SUPPORTS Hagel, despite previous reservation. Definite tea leaf http://sulia.com/my_thoughts/10cad357-48a5-48e1-9e40-e0dc2efbc2d6/?source=twitter …

?@DavidMDrucker: The attempted @SpeakerBoehner coup: Larger than first thought but no less inept: http://bit.ly/XApMw6 h/t @j_strong