This SCOTUSblog Commentary seems to say it all:
The Bush administration is in so much trouble he probably doesn't have the political capital to win a hard nomination fight. Bush hates losing and is probably pissed. Gonzalez would run into the same documentation problem as Miers did. He probably has to look beyond his inner circle because the cronyism complain worked. Democrats are probably more willing to filibuster someone like Priscilla Owen. Finding another Roberts would work. O'Connor is probably on the court through December, meaning she'll be involved in the abortion case in the current docket.
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