Sen. Edward Kennedy, D-Mass., his wife Victoria Reggie Kennedy, and their dogs Sunny and Splash, arrive on Capitol Hill in Washington, Monday, Nov. 17, 2008

Technically, lawmakers are returning to Washington for a final meeting of the old, lame-duck 110th Congress. In reality, the confab on Capitol Hill is nearly all about next year.

Members of the House and Senate and their colleagues-to-be were meeting Tuesday to choose their party leaders and some committee chairmen in closed-door sessions to set the stage for the 111th Congress.

The parallel meetings of incoming and outgoing Congresses have made for some close quarters shared by old, new and vanquished members.

One very familiar figure returned to the lofty Senate, having fought a battle of his own.

“It’s good to be back in the Senate,” Sen. Edward Kennedy, who has been coping with brain cancer treatment for six months, told reporters Monday as he arrived flanked by his wife, Vicki, and two dogs, Sunny and Splash.

Kennedy is a one-man confluence of governments past, present and future, his arrival an apt prelude to the final session of the 110th Congress.

The House and Senate are meeting this week for one last showdown with President George W. Bush over whether to rescue the troubled auto industry from sinking in a turbulent economy. The plan was headed for a stalemate even before it was introduced.

Beyond the stalled policy, Congress itself chugged to life for the first time since the Nov. 4 election that propelled two senators - Barack Obama and his running mate, Joe Biden - to the White House and handed Democrats stronger House and Senate majorities.

As members of the 110th Congress arrive for their last session, those who defeated some of them are attending orientations and joining lawmakers returning next year to choose their party leaders.

Mostly, people were looking ahead.

Senate Majority Leader Harry Reid of Nevada appeared briefly for the cameras Monday with six incoming Democrats: Mark Warner of Virginia, Kay Hagan of North Carolina, Mark Udall of Colorado, Tom Udall of New Mexico, Jeanne Shaheen of New Hampshire and Jeff Merkley of Oregon.

Even Republicans pivoted, if only because the future is a more pleasant subject than the recent past.

Senate GOP leader Mitch McConnell, eager to keep his caucus together to prevent Democrats from shutting down filibusters, called a photo opportunity with two Republicans, Jim Risch of Idaho and Mike Johanns of Nebraska, who are replacing retiring senators. The trio chatted until reporters starting asking questions. McConnell responded with a tight smile.

Across the Capitol, 50-odd House freshmen looked to the future as well, with an orientation that covered the minutiae of being a member of Congress - how to hire a staff and set up an office, how to conform to ethics rules and what to do in a security situation.

Some of what Congress will look like and who will serve in it remains unclear.

Five races in the House and three in the Senate still have not been decided. And the roles of two mavericks and good friends are up in the air.

Sen. Joe Lieberman, I-Conn., is something of a pariah among Democrats because he endorsed Republican Sen. John McCain for president. Many Democratic senators want Lieberman stripped of his Homeland Security Committee chairmanship and kicked out of their caucus.

But Obama has weighed in on Lieberman’s side. And from a pragmatic standpoint, Democrats will need Lieberman with them if they hope to shut down Republican filibusters.

McCain, never adored by some of his colleagues, has a similar status in the Republican caucus. McConnell has tangled fiercely with McCain in the past but lavishly complimented the vanquished presidential contender in recent days because the GOP caucus needs every vote to hold off the Democrats’ agenda.

Kennedy’s return was feted by a cheering staff and a blue-and-white banner reading “Welcome Back Senator.”

“I feel fine,” Kennedy said. He then talked of actual work that lies ahead, particularly on a health care bill he has been writing from his home in Cape Cod.

“I know Teddy’s excited,” said Sen. John Kerry, D-Mass. “He’s pumped and ready to go.”

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(L-R) U.S. Sen. Bernard Sanders (D-VT), Senate Majority Leader Harry Reid (D-NV), Sen. Debbie Stabenow (D-MI) and Sen. Charles Schumer (D-NY)

Once again the Dems to the rescue of the people while Republicans fight to help the rich:

Senate Democrats are proposing to add government help for homeowners and limits on executive compensation to legislation providing a $700 billion financial system bailout.

A draft of the plan obtained Monday by The Associated Press shows that Senate Banking Committee Chairman Chris Dodd, D-Conn., also wants the government to get a stake in the companies helped by the unprecedented rescue.

The measure would give the government the power it has requested to buy up bad mortgage-related assets that have been dragging down financial companies. But it would end the program at the end of next year, instead of creating the two-year initiative that the Bush administration has sought.

It also would add layers of congressional oversight, including an emergency board to keep an eye on the program with two House and Senate appointees.

Congressional aides said the House could act on a bailout bill as early as Wednesday. President Bush earlier Monday issued a statement saying “the whole world is watching” how the U.S. government moves on the legislation that has come in response to business turmoil that has roiled markets at home and abroad.

“Obviously, there will be differences over some details, and we will have to work through them. That is an understandable part of the policy making process,” Bush said.

But he also said “it would not be understandable if members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan.”

The proposal that Dodd has sent to Treasury Secretary Henry Paulson would let judges modify the mortgages of homeowners in bankruptcy to allow them to keep their homes.

It also would require that the government come up with “a systematic approach for preventing foreclosure” on the mortgages it acquires as part of the bailout. That would include the home loans held by Fannie Mae and Freddie Mac, the troubled mortgage giants now under the control of a government regulator.

Asked about Democrats’ demands, Treasury spokeswoman Brookly McLaughlin said, “There are lots of issues but the discussions we are having are good.”

Asked if the negotiations could slow down passage of the measure, she said, “We are confident that we can get a bill done this week.”

Dodd, interviewed on CBS’s “The Early Show” on Monday, said taxpayers should be “first in line” to get money back once conditions in the industry stabilize and recover.

“We want oversight,” he said, adding, “It’s important that we act quickly, but it’s more important that we act responsibly.”

Rep. Barney Frank, chairman of the House Financial Services panel, said that Paulson “is being entirely unreasonable” to expect that Congress will pass a bill right away without examining the proposal thoroughly and adding provisions Democrats want, such as the curbs on executive pay.

“We want to limit those as a condition for giving them aid,” Frank, D-Mass., told ABC’s “Good Morning America.”

“If Secretary Paulson would agree to that,” he said, “we could move quickly.”

Meanwhile, the Group of Seven, an organization of the world’s leading economic powers, pledged Monday to do all it could to help ease the crisis. The group said in a conference call that it welcomed the extraordinary steps the United States has taken so far.

The fast-moving negotiations between the administration and Congress unfolded a day after the government approved a request by investment houses Goldman Sachs and Morgan Stanley to change their status to bank holding companies.

That change will allow the two venerable institutions to set up commercial banks that will be able to take deposits, significantly bolstering the resources of both institutions. It will also grant them permanent access to emergency loans supplied by the Fed rather than the temporary loan status they have had since last March when the Fed moved to prop up investment banks following the forced sale of Bear Stearns.

Paulson and Federal Reserve Chairman Ben Bernanke kept up their outreach with Congress, holding meetings over the weekend aimed at convincing lawmakers to move quickly to approve the relief package.

Rep. Christopher Shays, R-Conn., who also serves on Frank’s committee, said members “need enough time to debate this” and echoed Frank’s concerns about executive pay. “We don’t have these great golden parachutes and so on. In the end we’re doing it for the taxpayers.”

Frank said that lawmakers “are building strong oversight” into the measure.

“The private sector got us into this mess,” Frank said, “The government has to get us out of it. We do want to do it carefully.”

Republican presidential candidate John McCain, speaking Monday morning on NBC’s “Today” show, said, “We are in the most serious crisis since World War II.”

He also said that despite the ballooning national debt, he would not raise taxes if elected.

Congressional leaders have endorsed the main thrust of the administration plan, but also have said that it must be expanded to include help for people on Main Street as well as the big Wall Street financial firms who have lost billions of dollars through their bad investment decisions.

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