At the top of the list: the federal budget. The incoming Democratic leadership has promised to make a major effort to reduce the huge federal deficit. But doing that without increasing taxes — which the Democrats want to avoid because of the political repercussions — or cutting vital programs will be a huge challenge.

Jewish federations around the country and the United Jewish Communities have already taken one hit as the newest skirmish in the budget wars begins. Funding for the innovative NORC program (naturally occurring retirement community) has gotten caught up in the effort to stop wasteful special interest spending.

In the past, NORC demonstration projects have been funded through earmarks attached to spending bills.

But even before taking over the House, Rep. Nancy Pelosi (D-Calif.), the new speaker, announced a freeze in earmarks for the rest of the fiscal year in an effort to begin taming the budget deficit. NORC funding — which enjoys broad bipartisan support — got caught up along with a lot of notorious pork-barrel earmarks.

NORCs were already struggling because last year’s federal funding was killed because of a “game of chicken between the House and Senate,” said William Daroff, the UJC vice president for public policy.

Daroff said Democratic leaders have signaled they will give the NORC program priority treatment in the fiscal 2008 budget — but for now, he said, local groups are scrambling to keep the demonstration projects afloat.

Federal money could be tighter across the board as the Democrats start wrestling with a budget mess passed on by their Republican predecessors and with the staggering costs of the wars in Afghanistan and Iraq.

“This is a Congress that is very sympathetic to funding for the critical work Jewish federations and other voluntary groups are doing,” said a Democratic staffer in the House. “We understand that spending for job training, or substance abuse counseling, or elderly services, isn’t waste. But there are only a few variables we have to work with in trying to get the budget under control. So in the end, there is a real possibility a lot of worthwhile programs will have to tighten their belts.”

Daroff said that this week’s swearing-in meetings represent the first shot in protecting the interests of critical Jewish social and health agencies in what is certain to be a difficult budget year.

“We have a lot of people coming in, talking with the new leadership and new members about our priorities in the budget process, especially concerning aging services, Medicare and Medicaid, and health insurance for children,” he said.

“We’re coming down mostly to sit down with members and staffers and introducing our people,” said Lori Price Abrams, director of the Community Relations Committee for the United Jewish Communities of MetroWest New Jersey. “Just by being part of this week’s activities, it shows how seriously we take the political process, and it shows that we want to be seen as a resource by decision makers.”

She said the New Jersey group will be especially interested in finding solutions to the NORC impasse, which has jeopardized funding for several programs in the state.

Washington is getting ready for a new push for progress on the Israeli-Palestinian peace front — but that doesn’t mean any sweeping new U.S. proposals or a new round of pressure on Jerusalem.

Instead, several top analysts say, the Bush administration wants to get soundings from Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas and look for ways to encourage their own efforts to advance some kind of peace process.

The newest controversy over Israeli settlements, including last week’s announcement that the Olmert government has authorized the construction of homes for Gaza evacuees in Maskiot, beyond the Green Line, is unlikely to be much of a factor as Washington considers its options.

“It’s just a blip,” said Seymour Reich, president of the Israel Policy Forum, a group advocating a stronger U.S. peacemaking role. “The administration is much more focused on where it’s going next. The timing (of the settlements announcement) is terrible, but it won’t have an impact if there is real movement to resume negotiations.”

Last week the State Department criticized the settlements decision and said that it would “violate Israel’s obligations under the ‘road map.’” But most observers said it was a mild, pro-forma wrist slap, not a hard rebuke, by an administration with much bigger Middle East woes.

President Bush will give a major address on the Iraq war in the next few days, and Secretary of State Condoleezza Rice is expected to head to the region for meetings with Olmert, Abbas, and others shortly after that.

“Her visit will be designed to demonstrate that while the Bush administration might not accept the Baker-Hamilton findings, it still is very much aware of the importance of trying to move forward on the Israeli-Palestinian track,” said David Makovsky, a senior fellow at the Washington Institute for Near East Policy.

The primary goal of the Rice mission, he said, will be to “find out where Prime Minister Olmert is right now. They want to get a handle on what Olmert wants, what he can live with.”

Signals from Jerusalem have been mixed in recent months, he said, and the administration wants clarification.

Washington also wants clarification of reports that Abbas and Olmert have discussed back-channel negotiations to consider some final status issues.

Makovsky said Rice would like to “seize upon the momentum” created by the recent meeting between Abbas and Olmert, but said that sweeping new U.S. proposals are unlikely.

“They want to see something that starts with Olmert and Abbas,” he said. “They want something that comes from the region. There won’t be a new U.S. peace plan, but they are sounding out the parties to see what is possible.”

Edward Walker, a former U.S. ambassador to Israel, said there are still too many big obstacles to any new U.S. initiatives — including the continued imprisonment of Gilad Shalit, the kidnapped Israeli soldier held in Gaza, and the growing strength of Hamas.

And he said Rice lacks the clout to push the parties to the negotiating table.

“Rice no longer has any credibility,” he said, “because the president has done nothing to show that he’s interested. A disinterested president means an ineffective secretary of state.”

He said the administration’s apparent lack of interest in the latest settlements flap and its impact on Abbas’ struggle with Hamas will also make it harder for Rice to make any progress.

“You just can’t seem to get this administration to focus on the question of what happens if (Abbas) goes down,” he said.

According to reports in Israel, the Bush administration continues to press the Olmert government not to respond to peace overtures from Syrian President Bashar al-Assad. But a leading Jewish Republican isn’t buying the administration’s policy of keeping Damascus in the diplomatic deep freeze.

Despite administration protests, Sen. Arlen Specter (R-Pa.), one of the strongest pro-Israel voices on Capitol Hill, recently visited Damascus and came away convinced that the Syrian dictator is ready for talks.

Speaking at a news conference before leaving the Syrian capital, Specter said that Assad “stated an interest in negotiating with Israel to try to bring a peaceful settlement to the Syrian-Israeli dispute under the UN doctrine of land-for-peace.”

According to reports in the Israeli press, Specter also said that Assad told him he could help Israel deal with Hamas and Hizbullah in return for the start of peace negotiations. Washington has said that ending support for the two terror groups is a prerequisite for talks with Syria.

Specter has a long track record of contacts with the Syrians; according to his own count, he has visited Syria 16 times since 1988 and met with the current leader’s father, Hafez al-Assad, nine times. He was also the only member of Congress to attend the elder Assad’s funeral in 2000.