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by Frank James

A quick guided tour of some of the morning’s most important or interesting (or both) Washington-related stories.

President Bush sparked controversy by commuting the sentence of I. Lewis “Scooter” Libby, allowing his former senior White House aide and chief of staff to Vice President Cheney to avoid serving any time in prison for perjury and obstruction of justice following his conviction in the CIA leak case.

Bush’s commutation of Libby’s prison sentence resulted from the loyalty to aides the Bush family is well-known for as well as the reality that the president, standing low in the polls, had little left to lose politically.

Bush and Russian President Vladimir Putin fished in Maine as they unsuccessfully tried to reach an understanding on Bush Administration plans to deploy a missile-defense system in Poland and the Czech Republic. Defense Secretary Robert Gates and others within the Bush Administration are working on plans to withdraw significant numbers of U.S. troops from Iraq, hoping that by doing so they will gain agreement in Congress for an extended presence in Iraq of a much lower number of troops.

At least three doctors, including and Iraqi and a Palestinian, were arrested in the car bomb plot in Britain and an additional arrest was made in Australia.

The next terrorist attacks in the U.S. are likely to take the form of the small-scale attacks like those that were mostly averted in Britain last week than large, spectacular attacks, counterterrorism officials and experts said.

Sen. John McCain’s presidential campaign raised only $11.2 million in the second quarter, less than it did in the first, which prompted staff layoffs as the Arizona Republican’s support for the failed immigration-reform legislation and the distrust of many conservatives continued to hurt him.

Sen. Hillary Clinton campaigned in Iowa with former President Bill Clinton, bringing her most formidable political weapon onto the stage with her

surprisingly early in the campaign.

The Immigration issue might help the Democratic Party’s efforts to win states in the Southwest because of the high number of Latinos in states there and a backlash against the opposition of many conservatives to recent Senate immigration reform efforts.