The headlines have been crazy: "Report: Obama May Merge NASA, Pentagon Space Programs" in this version on Fox News. There are even more sensational examples... none of them with a basis in reality.
It all started with a Bloomberg News item saying the Obama administration might turn the mission of launching NASA's Orion capsule from the planned Ares I over to "military rockets" - the Atlas or Delta EELVs - " because military rockets may be cheaper and ready sooner than the space agency's planned launch vehicle." Other outlets picked up on Bloomberg and took it to the point of alleging a "merger" without ever noticing the premise was wrong and that no merger is even being contemplated.
The Bloomberg story as spectacularly uninformed. The Atlas and Delta EELVs are not purely military rockets: NASA can purchase them commercially from United Launch Alliance (ULA) any time they want. EELVs carry commercial satellites and NASA payloads like the GOES series. What NASA would have to pay ULA to do is build a man-rated version, which the Pentagon has no interest in. It's also not clear where NASA and DoD ties need to be closer: they cooperate every day on everything from range operations to the significant military support to shuttle launches to missions like Orbital Express and vehicles like the X-43.
All this came during one of the more bizarre NASA news stories - that Administrator Mike Griffin's wife, among others, was openly lobbying the new Democratic administration to retain the Republican appointee. There is even an "internet petition campaign" by another former NASA official, Scott Horowitx, who seems clueless about the fact that Internet petition carry zero weight anywhere in the government (since anyone can just make them up and harvest names from the Internet.)
Now, SHOULD the new Administration look at replacing the Ares I?
Ares I, based on Shuttle SRB segments, seemed very sensible when proposed. However, it reminds me more and more of the Vanguard booster, which was sold as a simple and affordable solution using existing stages and turned into an entirely new rocket that remained a marginal design even while driving program costs from $20M to $110M (in 1950s dollars). We did eventually make Vanguard work, and the program paid for itself in technical advances, but will Ares I be as fruitful?
It may be Ares I is still the right solution, but a lot has changed since NASA made the original trade studies. Given that plus the way launcher selection affects all other decisions for Constellation, it makes sense to do one more review at this point. A well-funded team including NASA and independent experts should look at Ares compared to man-rated Atlas, Delta, and Falcon solutions. Future contributions to a heavy-lift vehicle for Constellation would be part of the value considerations, but top priority would be to find the optimal Orion launcher based on criteria supporting safety, performance, schedule, and cost objectives.