Despite Buzz, Thompson Swats Away Question About His Lobbying Activities

In the GOP race, two candidates -- Sen. Sam Brownback of Kansas and former Bush health secretary Tommy G. Thompson -- have voiced support for a flat tax.

In general, a flat tax would end taxpayer breaks such as mortgage interest and charitable donation deductions, but it would also change the federal income tax to a single -- and lower -- rate. Flat-tax proposals typically promise simpler paperwork and the elimination of taxes on estates, capital gains and dividends.

Later yesterday, Giuliani served as grand marshal of NASCAR's Pepsi 400 race at Daytona Beach, Fla.

-- Associated Press

Paul's Surprising Haul

Sen. John McCain (Ariz.) considers himself to be in competition with GOP candidates riding high in the polls, including Giuliani. But at the end of June, McCain's remaining cash, about $2 million, was about the same as that of Rep. Ron Paul (R-Tex.), who barely registers in polls but has picked up lots of fans online.

Paul, a campaign spokesman said, has $2.4 million on hand. He raised more than $2 million in the second quarter and has spent $520,000. McCain spent more than $20 million in the first six months of the year. Of course, Paul also lacks the campaign infrastructure around the country that McCain has built and is now seeking to streamline.

-- Perry Bacon Jr.

Two Takes on Teacher Pay

Sen. Christopher J. Dodd (Conn.) has criticized a proposal on teachers' pay offered by Obama, one of his 2008 Democratic rivals, who advocates different salaries depending on the subjects taught and students' performance.

Dodd, who did not mention Obama's name, said Friday, "I fear that instituting a merit-pay system may encourage teaching to the test and discourage teachers from working in schools with large numbers of disadvantaged students."

In a speech Thursday, Obama suggested that teachers in science, math and special education, subjects in which many school districts do not have enough teachers, should be paid more, as should teachers whose students improve. Obama did note that raises would not be based on "some arbitrary test score."

Obama's speech was significant in part because of his audience: a gathering in Philadelphia of the National Education Association, a major teachers union that is skeptical of merit pay. It was another of Obama's frequent moves in the campaign to take controversial stands in front of groups that are likely to react unfavorably. He did it in Detroit, too, where he criticized automakers for not producing energy-efficient vehicles.

-- Perry Bacon Jr.

Deriding the Libby Decision

President Bush's commutation of I. Lewis "Scooter" Libby's prison sentence spared his friend from jail, but Democrats are hoping it will be a boon for them, as well.

Calling it an "outrageous decision," Sen. Charles E. Schumer (N.Y.), the head of the Democratic Senatorial Campaign Committee, sought to use the Libby commutation as a fundraising tool this week, sending an e-mail to supporters in search of donations that could help expand his party's majority next year.

"Republican senators are once again showing their blind obedience to Bush," he wrote. "Not one has had the guts to stand up and say that the Scooter Libby commutation makes a mockery of the American justice system."

-- Michael D. Shear