All eyes in Washington are on the Tuesday tea leaves to see if the Tea Party movement is here to stay.  Senator Blanche Lincoln (D-Ark.) may have scored a Pyrrhic victory in squeaking out a win over lefty Lt. Gov. Bill Halter, yet she is going into this fall as the most endangered incumbent member of the United States Senate.  Also, Washingtonians are taking note that Sarah Palin rocketed a handfule of unknown Tea Party candidates into front runner status.  Washington noted the two clear victors yesterday — the Tea Party movement and Sarah Palin.

Notwithstanding the anger exhibited yesterday, Congress will continue to make people mad in anticipation of elections this November.  The House will work on a morgage insurance rate bill and may vote to officially start a conference between the House and Senate on the Financial Services Deform Bill.  The Senate will continue a contentious amendment process on the $140 billion Tax Extenders/Unemployment Extension bill.  Another day and another couple of hearings scheduled on the oil spill in the Gulf of Mexico.

Issues for conservatives to watch in Washington today are the following:

• Palin Power – If one were to look at the primaries yesterday for evidence of where Republicans might look for a nominee for President in 2012, look no further than Alaska’s Sarah Palin.  Palin endorsed candidates won throughout the nation and her endorsement clearly helped rocket Nikki Haley (R-SC) to a runoff for South Carolina Governor.  From Politico – “Palin had four primary endorsements in play – Carly Fiorina, Nikki Haley, Terry Branstad and Cecile Bledsoe – and three won or moved on to a runoff.”   Nikki Haley was granted front runner status in the South Carolina Governor’s race after a Palin endorsement.  Haley beat three higher profile candidates to qualify for a run off with Congressman Gresham Barrett (R-SC) for the nomination after a very ugly negative campaign.  Palin is way ahead of the curve and has shown some serious courage to jump into primary races for candidates that were not front runners a few months ago.  Moving forward, I bet you will see Sarah Palin’s power increase as the American public realizes that she can produce electoral results.  Palin is banking some good will from all of the candidates she has helped and those chits may come in handy in the not too distant future.  NOTE: I incorrectly credited Sarah Palin for the victory of Sharron Angle in Nevada in an earlier edition of this post.
• Tarp, Jr. – I wrote something yesterday at Big Government about H.R. 5297, the Small Business Lending Fund Act, expected to be considered in the House later this week.  This bill is the progeny of the widely disliked “Troubled Assets Relief Program” (TARP) and is becoming known as TARP, Jr.   The bill provides “temporary authority to the Secretary of the Treasury to make capital investments to eligible institutions in order to increase the availability of credit for small businesses.”  The problems that this legislation is creating a new bureaucracy to lend over $30 billion on behalf of the federal government to banks for the purposes of bailing out failing small businesses.   If you like the idea of small business running on the model of Fannie and Freddie, then you will love the small business crony capitalism of this legislation.  Conservatives should understand that elites in Washington, D.C. are still pushing ideas modeled on the Bailout of Wall Street.
• Gulf Oil Spill – There are four hearings in the House and Senate scheduled for today relating to the oil spill in the Gulf, yet the buzz in Washington is a hearing scheduled for next week with expected testimony from BP CEO Tony Hayward.  Politico reports, “BP CEO Tony Hayward, vilified for his handling of the Gulf oil spill, will make his first appearance on Capitol Hill next week in a hearing investigating BP’s role in the causes and the aftermath of the oil rig disaster. ”  Expect some fireworks.  More from Politico, “Hayward will testify in front of Michigan Democratic Rep. Bart Stupak’s investigative House Energy and Commerce subcommittee June 17, in a hearing titled ‘The Role of BP in the Deepwater Horizon Explosion and Oil Spill.'”  This Committee has been very active since the spill and “was one of the first to uncover the blowout preventer as a failed mechanism that caused the explosion.”  Also, the committee “released a slew of documents that allegedly showed BP tried to save costs on the rig by altering various procedures.” That hearing scheduled for next week will be the first opportunity for Members of Congress to unload on the CEO of BP, so expect some anger to be exhibited by Committee members and some very tough questions.

Note to Washington — Sarah Palin and the Tea Party movement won big yesterday.