In the House….This week, Democrats defied the White House with a new FISA proposal that would investigate the administration’s warrantless surveillance activities, empower federal judges to examine whether telecom companies should be held liable (without allowing Bush to invoke the “state secrets” doctrine), and make FISA the exclusive means to conduct domestic surveillance for intelligence purposes. The GOP delayed a Thursday vote on the proposal by requesting a late-night closed session to discuss the bill (the first since 1983 and the fifth since 1825); another vote is expected today.

On Tuesday, the House voted 229-182 to establish an independent ethics office (though ironically, in order to corral the necessary votes, the Democrats had to leave voting time open for longer than permitted under current House rules.) The new body will allow non-House members to examine member activities for the first time, but lacks subpoena power. Also this week, the House passed the nonbinding Democratic budget blueprint and failed to override Bush’s veto of an intelligence authorization bill that banned waterboarding.

In the Senate…After a 15-hour debate, the Senate yesterday rejected an extension of Bush’s tax cuts in its final vote to approve its $3 trillion budget proposal. Both chambers’ proposals purport to end the federal deficit by 2012, though neither factors in long-term war costs. All week, Senate debate was flush with election-season maneuvers: in one gambit, the GOP proposed a vote on Sen. Obama’s campaign proposals via an amendment budgeted at $1.4 trillion, while another Republican, English-only amendment–designed purely to get Senators on the record on the contentious issue–gained easy passage (without Sens. Obama and Clinton’s endorsements). Meanwhile, the one-year, prospective DeMint-McCain ban on earmarks (which Sens. Obama and Clinton hustled to endorse this week) was rejected by a 71-29 vote.

And in a resounding victory after years of delays, this week, the Senate passed the Second Chance Act after Sen. Sessions (R-Ala.) lifted his long-standing hold on the bill. The President is expected to sign the bill soon.

Also this week, House Dems filed a civil lawsuit against White House Chief of Staff Josh Bolten and former counsel Harriet Miers, who continue to defy subpoenas in their refusal to testify before Congress about the nine U.S. attorneys’ firing. Under threat of subpoena, a highly disgruntled John Ashcroft appeared before Congress to hotly dispute allegations that the $52-million contract his company was awarded to oversee a DOJ settlement evidenced any kind of political malfeasance. Rep. Sanchez (D-Calif.) said the contract resembled a “backroom, sweetheart deal;” an aggrieved Ashcroft berated the committee for wasting taxpayer’s money in investigating the question.

Meanwhile this week, longtime Bush dissenter Admiral Fallon joined the ranks of former Army General Eric Shinseki and General John Abizaid when he stepped down from his role as CENTCOM commander. (Last year, Fallon opposed the surge and vowed that an attack on Iran “will not happen on my watch.”) The White House rejected speculation that Fallon’s departure was any sign of mounting U.S. aggression toward Iran.