GDP. New government data shows that “the economy took a tumble in the summer that was worse than first thought as American consumers throttled back their spending by the most in 28 years, further proof the country is almost certainly in the throes of a painful recession,” according to the Associated Press. An updated reading released by the Commerce Department “showed gross domestic product shrank at a 0.5 percent annual rate in the July-September quarter,” weaker than the 0.3 percent decline first estimated a month ago.

NEW FED PLAN. CNBC is reporting that the Federal Reserve, “in another massive life-support intervention for the U.S. financial system, Tuesday announced a $600 billion program to buy mortgage-related debt and securities and a $200 billion facility to buy consumer debt securities.” The central bank “said it would buy up to $100 billion in debt issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks” and “$500 billion in mortgage-backed securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae” in a move move “intended to strike at the heart of U.S. economic woes, the collapsed housing market.” The central bank “also launched a $200 billion facility to back consumer loans, including student, auto, and credit card loans and loans backed by the federal Small Business Administration.”

ECONOMY/TRANSITION. Today’s Boston Globe reports that “President-elect Barack Obama yesterday introduced his top economic aides with a promise to use a massive stimulus program to ‘jolt’ back on track an economy that could lose millions of jobs, while also warning that a looming huge budget deficit will require cutting programs and reconsidering priorities.” The President-elect also “scolded auto executives who last week asked Congress for a $25 billion bailout without providing enough specifics about how they would change the way they do business.”  The paper notes that “one major issue left unclear yesterday was whether Obama would follow through on his campaign pledge to raise taxes on those earning more than $250,000, which he has said would help pay for tax cuts for 95 percent of working Americans. Obama has asked his economic team to suggest whether he should immediately repeal the Bush tax cuts for the wealthiest Americans, or let them lapse automatically as scheduled at the end of 2010.”

The President-elect is set to hold news conferences on the economy today and tomorrow. Today, he is expected to discuss his vision for fiscal belt-tightening while introducing Peter Orszag, the current CBO director, as the new director of the Office of Management and Budget. The AP has more.

REP. RANGEL. The New York Times reports in an extensive front-page piece that while Rep. Charles Rangel (D-NY) “has insisted that he has kept his efforts to attract donors” for a City College of New York school of public service to be named in his honor, “Congressional records and interviews show that Mr. Rangel was instrumental in preserving a lucrative tax loophole that benefited an oil-drilling company last year, while at the same time its chief executive was pledging $1 million” to the Rangel school. The company in question, Nabor Industries, “was one of four corporations based in the United States that were widely criticized in 2002 and 2003 for opening offices in the Caribbean to reduce their federal tax payments.” When the Senate tried to crack down on the companies in 2007, Rep. Rangel “fought to protect them,” preserving the tax shelters and depriving the treasury of $1.1 billion in revenues over a decade.

The paper indicates that “what is clear is that Mr. Rangel played a pivotal role in preserving the tax shelter for Nabors and the other companies in 2007. And while the issue was before his committee, Mr. Rangel met with the company’s chief executive and a lobbyist for Nabors and discussed it, on the same morning that the congressman and the CEO met to talk about his potential support for the Rangel center.”

Also worth noting, the Washington Post reports that DC officials say that Rep. Rangel, "who recently has been buffeted by questions about his personal taxes and real estate dealings, was incorrectly given a tax break on a house he owned in the District." Rangel received the “homestead exemption,” a tax break “for people who live in a permanent, primary home in the city, that reduced the taxes he paid” on the DC home he bought in 1971 and sold in 2000. All the while, however, Rangel was keeping New York as his primary residence. If Rangel incorrectly received the tax break – which amounted to $288 per year – “he could owe back taxes or penalties.”

PARDONS. “Breaking a logjam of hundreds of pent-up clemency requests, President Bush yesterday granted pardons to 14 people and shortened the prison terms of two others,” according to today’s Washington Post. Under the headline “Round of Bush Pardons Includes No Big Names”, the Post writes “over seven years in office, Bush has been reluctant to use his near-absolute authority under the U.S. Constitution, awarding only 157 pardons and six commutations before yesterday. But that pattern could ease during the waning days of his term. People close to the process say that lawyers with political connections increasingly have approached the White House directly to seek relief for their high-profile clients, including former junk-bond king Michael Milken, former congressman Randy ‘Duke’ Cunningham (R-Calif.) and former Louisiana governor Edwin Edwards.” The Associated Press lists all of the pardoned and commuted individuals.

REP. DINGELL. The Hill reports that Rep. John Dingell (D-MI) is being encouraged by supporters to take the chairmanship of the Energy and Commerce panel’s Health subcommittee. The paper notes that “the prospect of Dingell, dean of the House, seeking a subcommittee chairmanship, is an example of the ramifications of last week’s ouster roiling through the committee and the House Democratic Caucus.” At present, Rep. Frank Pallone (D-NJ) currently has the Health panel, and “a spokesman said Monday that he had not heard about Dingell possibly taking the gavel, adding that Pallone doesn’t want to give it up.”

OVERSIGHT GAVEL. Roll Call reports that Rep. Edolphus Towns (D-NY) “is moving swiftly to lock up support” to become chairman of the Oversight and Government Reform panel, “limiting the options of his potential chief rivals for the job — Reps. Carolyn Maloney (N.Y.) and Elijah Cummings (Md.), the second and third senior Members in line for the post after Towns.” Democrats “appear loath” to defy seniority again, “though party insiders believe Speaker Nancy Pelosi (D-Calif.) and other Caucus leaders would prefer to see Cummings get the job.”

DE SENATE.  The Delaware News Journal reports that “Gov. Ruth Ann Minner named a longtime, close adviser to Vice President-elect Joe Biden to fill the senator's seat until a 2010 special election, saying voters themselves should choose a successor for Biden at the first opportunity.” Ted Kaufman, 69, will take the job early next year “after Biden takes the Senate oath for a historic seventh term on Jan. 6, then resigns for an equally historic assumption of the vice presidency on Jan. 20.” The paper notes that Kaufman’s selection “was viewed by some as protecting Attorney General Beau Biden's chances in any race to succeed his father in the Senate seat that Joe Biden has held since 1972.” Beau is now deploying to Iraq with his Delaware National Guard Unit, and has said “he would carry out his military obligations and refuse any appointment to the Senate.”

GA SENATE. The Atlanta Journal-Constitution reports President-elect Barack Obama "has become even more involved in Georgia's bitter U.S. Senate runoff, recording a so-called 'robo call' urging voters to elect Democrat Jim Martin in his Dec. 2 runoff battle with incumbent U.S. Sen. Saxby Chambliss." Roll Call reports a "new Democratic poll released Monday afternoon on the Dec. 2 Georgia Senate runoff showed the race essentially tied." In the poll "of 600 likely voters, conducted Friday to Sunday, Sen. Saxby Chambliss (R) had 48 percent and former state Rep. Jim Martin (D) had 46 percent."

MN SENATE. The Minneapolis Star Tribune reports the "number of ballot challenges in the U.S. Senate recount surged again on Monday, passing 3,000 overall and clouding the question of who's picking up ground in the hotly contested race." More than "78 percent of the votes had been recounted as of Monday night, and Republican Sen. Norm Coleman's advantage over DFLer Al Franken stood at 210, according to a Star Tribune compilation of results reported to the secretary of state and gathered by the newspaper."

DSCC. Roll Call reports that Sen. Bob Menendez (D-NJ) will be formally announced today as the next chairman of the Democratic Senatorial Campaign Committee (DSCC).  Menendez will succeed current DSCC Chairman Charles Schumer, “who revealed Monday that he was leaving the post after two election cycles at the helm to focus on policy and legislating.