"The Senate today approved bipartisan legislation championed by Senator Kay Bailey Hutchison (R-Texas), Ranking Member on the Senate Commerce, Science, and Transportation Committee, to safeguard America's human spaceflight capabilities while balancing commercial space investment with a robust mission for NASA. The bill is also supported by Committee Chairman John D. Rockefeller (D-W.Va.) and Senators Bill Nelson (D-Fla.), David Vitter (R-La.) and George LeMieux (R-Fla.)."
Bill challenges NASA to evolve, mind budget, Bill Nelson and Kay Bailey Hutchison, Orlando Sentinel
"Still, our legislation would reduce the time we would have to depend on Russia for access to the space station by extending the shuttle for another year. It would thus keep in place much of the talent at the Kennedy and Johnson space centers. Our legislation would push NASA's development of a new heavy-lift rocket forward, with the goal to fly by 2016. And it would make a significantly higher investment in commercial space ventures, specifically by accelerating development of both commercial cargo and crew carriers. Our congressional initiative also would keep the space station and its immense research opportunities going through at least 2020."



Extending Shuttle, moving the HLV forward and developing it now with much of the existing Shuttle hardware and remaining workforce, and keeping ISS going until we can figure out a use for it, are all the right things to do.
Orion is not needed and should be terminated with the remainder of Constellation. Boeing might go ahead with their commercial vehicle and Space-X with theirs. While some have stated concerns over whether a newSpace company like SpaceX can be successful on a schedule, this is not an issue with respect to Boeing (or Lockheed if they would commit to development on a commercial basis).
Either or both of two manned vehicles are logical for NASA to pursue. One is a new winged or fly-back crew carrier and the other is a deep space ISS-derived crew sortie vehicle. The former could be based on the X-37/X-40 family and would be much better for crew returns from long duration missions. The latter can be based in large measure on ISS hardware, systems and people with experience in the ISS hardware ought to be tapped to take on a major piece of the job.
Even more logical would be for Lockheed to do the commercial capsule as competition to the Dragon and to prove that the two can be cost competitive. Boeing focus on the X-37 manned carrier and/or the ISS-based sortie flyer since they've been working those two systems all along.
If NASA were serious about minding the budget then they would get serious about doing more hands-on work in-house and this would require significant realignment of organization and personnel. A lot of the NASA high ranking non-leaders need to be educated, given some legitimate experience, and put to work doing something useful other than attending marathon meetings.