Warning: THIS IS SPECULATION. Obviously, I think it's somewhat well-informed speculation, or else I wouldn't be writing this. But it is speculation.
(1) There will be a Supreme Court resignation within the next week. But it will be Justice O'Connor, not Chief Justice Rehnquist. There are several tea-leaf-like suggestions that O'Connor may be stepping down, including the fact that she has apparently arranged to spend much more time in Arizona beginning this fall. There are also recent intimations that Chief Justice Rehnquist may not resign. This would be consistent with Justice O'Connor having confided her plan to step down to the chief a while ago. Rehnquist probably believes that it wouldn't be good for the Court to have two resignations at once, so he would presumably stay on for as long as his health permits, and/or until after Justice O'Connor's replacement is confirmed.
(2) President Bush will appoint Attorney General Alberto Gonzales to replace O'Connor. Bush certainly wants to put Gonzales on the Supreme Court. Presidents usually find a way to do what they want to do.
And his aides will have an argument to make to conservatives (like me) who would be unhappy with a Gonzales pick: Bush would not, after all, be replacing a conservative stalwart like Rehnquist with Gonzales. Gonzales would be taking O'Connor's seat, and Gonzales is likely to be as conservative as, or even more conservative than, O'Connor. Indeed, Karl Rove will continue, Gonzales is as conservative a nominee to replace O'Connor as one could find who could overcome a threatened Democratic filibuster. Bush aides will also assure us privately that when Rehnquist does step down, Bush will nominate a strong conservative as his replacement. They might not tell us that nominee would be as an associate justice, for Bush would plan to then promote Gonzales to chief justice--thus creating a "Gonzales Court," a truly distinctive Bush legacy.
A Gonzales nomination would, in my view, virtually forfeit any chance in the near term for a fundamental reversal in the downward drift of American constitutional jurisprudence. But I now think it is more likely than not to happen.
William Kristol is editor of The Weekly Standard.