•Time reporter Viveca Novak says Karl Rove was the likely source of a July 2003 article about Valerie Plame. Novak: "I remember [Rove's lawyer] looking at me and saying something to the effect of 'Karl doesn't have a [Matt Cooper] problem. He was not a source for Matt.' I responded instinctively, thinking he was trying to spin me, and said something like, 'Are you sure about that? That's not what I hear around Time.' He looked surprised and very serious." [Time, NYT, WSJ]

• Sen. Frist threatens to use the "nuclear option" to save Samuel Alito from a filibuster. Sen. Lindsey Graham (R-S.C.): "We're not close to a deal." [WP, NYT, LAT]

• White House flack Trent Duffy: "What you will see more of next year is the president going back to the basics -- winning the war and growing the economy and creating jobs." [WT]

• Sen. Clinton's quiet, centrist approach to Iraq "is drawing increasing scorn from liberal activists." [WP]

•Ronald Brownstein on Alito's abortion memos: "It's still not clear these disclosures will seriously threaten Alito's confirmation. And if they do not, both sides might need to rethink basic assumptions about the politics of the Supreme Court." [LAT]

• Gov. Mark Warner (D-Va.) tours battleground states for a head-start on '08. Warner: "As Democrats, what we have to do is put forward ideas and candidates that can win in places like Florida, that can win in places like Virginia." [NYT]

• Administration officials warn of impending caliphate; Rumsfeld says Iraq could "serve as the base of a new Islamic caliphate to extend throughout the Middle East, and which would threaten legitimate governments in Europe, Africa and Asia." [NYT]

• House and Senate have different views to the future of Medicaid. [NYT]

• Attorney, professor, and author John Yoo believes "the constitution itself gives the president lots of leeway, allowing him to invade Iraq without congressional permission and to disregard such treaties as the Geneva Convention." [LAT]

• Gov.-elect Corzine's appointment of Robert Menendez to his N.J. Senate seat fulfills childhood dream. [USAT]

• Investigators conclude John Snow's ownership of bonds did not represent a conflict of interest. [WSJ]