Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump.

The president on Friday was to talk about several initiatives and reforms to help homeowners with risky mortgages keep their homes, a senior administration official said Thursday. Mr. Bush also was to discuss efforts to prevent these kinds of problems from arising in the future.

The official said Mr. Bush will direct Treasury Secretary Henry Paulson and Housing Secretary Alphonso Jackson to work on an initiative to help troubled mortgage holders get services and products they need to keep them from defaulting on their loans. The official spoke on condition of anonymity to discuss details of the initiatives ahead of the presidential event.

Mr. Bush will pledge to work with Congress to reform the tax code to help borrowers facing mortgage defaults, CBS News correspondent Peter Maer reported.

Mr. Bush also planned to:

- Urge Congress to pass Federal Housing Administration overhaul legislation that would give the FHA more flexibility in assisting mortgage holders with subprime mortgages.

- Call for rigorously enforcing predatory lending laws and strengthening lending practices.

Foreclosure and late payments have spiked, especially for so-called subprime borrowers with blemished credit histories or low incomes. Higher interest rates and weak home values have made it impossible for some to pay or to keep up with their monthly mortgage payments. Some overstretched homeowners can’t afford to refinance or even sell their home.

Mortgage foreclosures and late payments are expected to worsen. Some 2 million adjustable rate mortgages are to reset to higher rates this year and next. Steep penalties for prepaying mortgages have added to some homeowners’ headaches.

The economy enjoyed a strong revival in the spring although growing troubles in housing and credit markets have darkened prospects considerably since then. The Commerce Department reported on Thursday that the gross domestic product grew at an annual rate of 4 percent in the second quarter - the strongest showing in more than a year.

But that growth could be the best showing for some time as the economy continues to be battered by the worst housing slump in 16 years and a widening credit crisis that has sent financial markets on a roller-coaster ride in recent weeks.

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The Justice Department said Thursday it is investigating whether Attorney General Alberto Gonzales lied or otherwise misled Congress last month in sworn testimony about the Bush administration’s domestic terrorist spying program.

Details of the inquiry by Justice Department Inspector General Glenn A. Fine were released three days after Gonzales abruptly announced he was stepping down despite months of vowing to remain on the job.

In a letter to Senate Judiciary Chairman Patrick Leahy, who two weeks ago asked for the inquiry, Fine said his investigators believe they “will be able to assess most of the issues that you raise in your letter.”

Leahy had asked Fine to look into whether Gonzales gave inaccurate testimony about the firings of several U.S. attorneys last year.

“You identified five issues and asked that we investigate whether the statements made by the attorney general were intentionally false, misleading, or inappropriate,” Fine wrote in his four-paragraph response to Leahy in the letter dated Thursday.

“The OIG has ongoing investigations that relate to most of the subjects addressed by the attorney general’s testimony that you identified,” Fine told Leahy.

Spokesmen for Gonzales had no immediate comment.

Senate and House lawmakers have said they will continue congressional investigations of Gonzales’ leadership and management at the Justice Department, despite the attorney general’s announcement Monday that he has resigned, effective Sept. 17.

Gonzales’ resignation left the White House scrambling to find a replacement. So far, no single candidate has emerged from a list of more than two dozen lawyers, judges, GOP politicians and current and former Justice Department officials being discussed.

White House spokeswoman Dana Perino said Thursday it was unlikely that Gonzales’ successor will be named until President Bush returns Sept. 9 from the annual Asia-Pacific Economic Cooperation forum in Australia.

“We would expect to do it shortly after returning from APEC,” Perino said. “This is something we want to do in an expeditious manner.”

She would not discuss any potential candidates.

Gonzales announced his departure a month after his truthfulness was challenged during a Senate Judiciary Committee hearing. At the bitter hearing, Gonzales denied that he tried in 2004, as White House counsel, to push the Justice Department into approving the administration’s Terrorist Surveillance Program - despite concerns that it was illegal.

Gonzales said the March 2004 dispute - which played out in part at the hospital bedside of a groggy Attorney General John Ashcroft - focused on “other intelligence activities.” Ashcroft was recovering from surgery at the time. Gonzales succeeded him in 2005.

Gonzales’ testimony to Congress was contradicted two days later by FBI Director Robert S. Mueller, who said the dispute was about the program that then allowed the National Security Agency to eavesdrop on domestic terror suspects without court review.

Leahy, in a statement, said the internal probe “can help restore independence and accountability, which have been sorely lacking at the Justice Department.”

“These actions have eroded the public’s trust and undermined morale within our justice system, from the top ranks to the cop on the beat,” Leahy said. “The current attorney general is leaving, but these questions remain.”

Fine and H. Marshall Jarrett, counsel to the department’s Office of Professional Responsibility, launched a joint internal Justice review last March into whether the prosecutor firings were politically motivated. The inquiry was later expanded to include whether Gonzales inappropriately discussed the ousters in a meeting that former aide Monica Goodling later said made her feel “uncomfortable.”

Investigators also are looking into allegations that Goodling, and possibly other aides, let politics play a part in hiring career prosecutors - a violation of federal law.

The investigation is not expected to be finished for several more months, and possibly not until early 2008.

Fine’s office already is investigating the Justice Department’s role and use of information gathered as part of the domestic spying program. A follow-up audit, expected by late December, is being conducted into on whether the FBI has taken steps to end its mishandling of administrative subpoenas - known as national security letters - that allowed agents to improperly obtain personal information about people in the United States.

Leahy also asked Fine, in his Aug. 16 request, to look into whether Gonzales was not telling the truth when he testified in 2005 that there “has not been one verified case of civil liberties abuse” involving the NSLs.

“It is appropriate that the Inspector General will examine whether the Attorney General was honest with this and other congressional committees about these crucial issues,” Leahy wrote.

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This story was written by Sridhar Pappu.

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Sarah Huckabee has known her father, Mike, as many things. When she was little, he was the man whose wallet she could dig into with any sentence that began “Daddy, I need . . . .” Later, he was the man whose ascent to the Arkansas governor’s office ripped her away from her friends and familiar surroundings the summer before she entered high school. Now, as his national field director, she’s known him as a Republican Party candidate for president and charismatic speaker. But, she says, she’s never known him as “hip.”

“We’d have to work on some of his clothing options before I’d say that,” the 25-year-old Huckabee says during lunch Wednesday at a brew pub here where her father — sporting a prep-school ensemble of a blue-striped oxford shirt and blue blazer — eats with a local newspaper columnist.

But hip is precisely what Huckabee has become in the weeks since he placed second in the Iowa Straw Poll on Aug. 11. Indeed, since walking into the media filing room that night and being swarmed by the media as if he were — these are his words — “Britney Spears being released from prison,” Huckabee has been seen as the cuddly antidote to what has been an awfully tough-talking Republican field. He’s the affable, compassionate, good guy and rock-and-roll evangelical who plays guitar and wants to hang with the Rolling Stones.

It’s hard to think of a candidate in recent political history who felt such a bounce and media hug after a second-place finish in a nonbinding contest where three of the top-tier candidates or almost-candidates — John McCain, Rudy Giuliani and Fred Thompson — didn’t bother to show. But man, is he working it.

“Oh, gosh,” Huckabee says when asked to recall the media appearances he’s done since his surprise showing at the straw poll. “I did Colbert, Maher. I did Fox News Sunday. ‘Face the Nation.’ I can’t even remember them all. It’s just a blur.” (Bill Maher, who had Huckabee on his HBO program on Friday, the candidate’s 52nd birthday, ended his interview with the former governor by saying, “Rudy Giuliani scares the hell out of me, so I hope you win.”)

“I’d like to think the people of the country are looking for somebody that’s not running because he’s mad and angry,” Huckabee says in an interview here. “My two strongest critics are the extreme right and the extreme left, both of whom say the same things about me. It’s not unlike ‘The Manchurian Candidate’ — the original, which I think was better. The extreme right and extreme left are so extreme that they join together at the other side of the world. That’s really what that movie was about. At some point, extremism almost loses distinction.”

Even those who think little of his political accomplishments can see Huckabee’s appeal. Randy Thompson, whose advertising and consulting group has long aligned itself with the Democratic Party establishment in the former governor’s home state, can spend 15 minutes bashing Huckabee’s decade as governor, only to go soft.

“Everyone who’s spent time with him whether they thought he was the best governor in the history of Arkansas or the absolute worst can agree that he’s a nice man,” Thompson says. “I think there’s a certain freshness to that. That’s what the people supporting him in Iowa saw.”

Now, with the help of the national media, that’s what the rest of America has begun to see. Huckabee’s rare combination of down-home folksiness, compassion and ability to intelligently articulate conservative views has helped his transformation from former Baptist minister to the avatar of the post-Jerry Falwell evangelical movement. Once ridiculed for holding his hand up during a debate when asked which candidates didn’t believe in evolution, he’s risen above the label of religious zealot into, well, a conservative whom liberals such as Maher kind of like.

Though Huckabee’s national poll numbers currently linger at single digits, political analyst Charlie Cook calls him a candidate with “good crossover appeal to social conservatives and more secular Republicans.”

“The question to me is, will he get the resources?” Cook says. “Will he be able to take advantage of the vacuum that’s out there? Nobody’s really taken off, but will Huckabee be able to find the resources? I just don’t have the answer to that.”

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David Letterman was in a political mood Thursday, marking his 14th anniversary at CBS with stars including Willie Nelson and Kenny Chesney, and deadpanning that he’d had to leave NBC “after that men’s room incident” - a reference to the Capitol Hill scandal over Idaho Sen. Larry Craig’s guilty plea in a Minneapolis airport restroom incident he now says involved no wrongdoing on his part.

That was just a warm-up for the main political event.

Letterman’s headliner was Hillary Clinton, who walked onto the “Late Show” stage to the strains of Bruce Springsteen’s “Born to Run,” ribbed Letterman for his many jokes about her pantsuits (while wearing one, of course), and answered his questions - all serious - before delivering a Top Ten list of comedic campaign promises.

Most popular with the “Late Show” audience: a promise to allow taxpayers to roll dice for double or nothing against the IRS; the pledge to loan out Air Force One to folks who have trouble getting a flight; and the promise that her vice president “will never shoot anybody in the face.”

Interviewing the presidential hopeful, Letterman took his audience back to her very first jobs - as a teenaged Republican directing playground activities in Illinois - and after graduating from college, as a fish gutter in Alaska.

“The job was to be in hip boots with an apron, with a spoon,” Clinton recalled. “The salmon would be brought in, they’d be slit open, and the caviar would be taken out and then they’d be thrown in a big pile. My job was to grab - I mean, these are big fish - to take a spoon and clean out the insides. That’s called ’sliming fish.’ ”

It was, Clinton said satirically, “the best preparation for being in Washington that you can possibly imagine.”

Asked about the tens of millions she’s already raised for her campaign, and the many millions more that are likely to be spent, Clinton said she’d like to see a switch to “public financing, where people don’t have to raise money like this.”

“There’s a great public financing system here in New York City, and I think it’s a terrific model,” she continued. “But, again, under our constitution, the Supreme Court has decided that your contributions is a form of political speech… So it would be very hard to come up with a system that would really work. But I’m gonna do everything I can - now, as a senator - I hope, as a president - to try to deal with it.”

As for the campaign itself, the New York Democrat says it’s long, intense, and takes stamina - which she has.

“I find it exhilarating,” said Clinton. “I get to travel, go in and out of people’s lives in a way that few folks ever get to do. You’re in people’s homes, workplaces - everything that you can imagine that’s important, and they’re telling you about it.”

The campaign trail, she acknowledged, is also “incredibly draining… it seems to be what our system demands. Maybe because it’s the hardest job in the world, they want to make the candidates go through very tough preliminaries.”

The challenges are already in place, said Clinton, for the next president.

“I think it’s going to be especially hard following President Bush and Vice President Cheney; I think there are going to be a lot of problems that we’ll inherit.” said Clinton. “I wouldn’t be doing this if I didn’t think, number one, that I could win, and number two, that I could do the job that the country needs.”

“I think the fact that I would be the first woman president is a good barrier for America to break,” she continued, pointing to female leaders in other nations past and present, including Margaret Thatcher, Indira Ghandi, Golda Meyer, and Angela Merkel. “We’re the land where we say to everybody, ‘Live up to your potential, live your dreams,’ right?”

“It certainly seems overdue,” said Letterman, on the U.S. still not having had a female president, without taking a position on Clinton’s candidacy.

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