Charlie and Caitlin are caught having sex on a surveillance camera in the Mayor's office and their secret affair is blown. Carter is finally granted a foster child, but is frustrated when he sees that Paul is better with the baby than he is - until the Mayor helps him tap into his paternal instincts.
Charlie and Caitlin struggle to find security in their new relationship. To spite Charlie for downplaying an encounter with an ex, Caitlin accompanies one of New York's ten sexiest men on a business date to make Charlie jealous. Meanwhile, the Mayor plots a way to one-up his rival, the Mayor of Los Angeles.
Caitlin ends her relationship with Tom and tells Charlie she's interested in dating him. When they go out on their first date, things are awkward... until they end up in bed together, that is. But are they ready for a real relationship? Meanwhile, the Mayor hires a temp, Pete, to fill in for Stuart while he's out, but Paul and Carter see him as a threat.
Caitlin is confused by the kiss she and Charlie shared and seeks the advice of a therapist. Meanwhile, the Mayor buys the staff palm phones which enable Charlie to accidentally eavesdrop on Caitlin's session. He decides to try to fulfill Caitlin's fantasies, which in turn prompts her to decide between Charlie and her current boyfriend, Tom. Paul appears on a controversial radio talk show with Carter feeding him answers.
Caitlin makes plans with the City Hall Santa without knowing what he looks like. Stuart wrestles with his feelings when he realizes that he's in love with Michelle. And Charlie must decide which staff member is most deserving of a nice new office.
Charlie discovers that Jennifer's ex is a woman. He becomes jealous when watching her be affectionate with Caitlin, something Caitlin dismisses until Jennifer kisses her on the lips. Claudia and Paul's divorce settlement may be affected by the mayor's bickering with Judge Claire.
Carter's friend Michelle visits and begins dating Stuart. However, Carter has just asked her to be his child's surrogate mother. Meanwhile, Charlie and Caitlin struggle over what to do with incriminating photos of the mayor's opponent.
Mike calls off his engagement with Allison and increases his presence in the office, making Charlie feel threatened. However, Charlie talks him into staying with Allison and marrying her--in City Hall. Meanwhile, Caitlin helps the mayor dress like a woman for a charity event.
The mayor has a tree cut down to impress his new girlfriend. Unfortunately, it was a tree planted by George Washington in 1796. Meanwhile, Charlie has a one-night stand, who turns out to be a rival mayoral candidate's campaign manager. Mike helps out with crisis control. Charlie and Caitlin decide to be friends for the time being, while Mike announces his return to City Hall.
Workaholic Mike Flaherty is the Deputy Mayor of New York City, serving as Mayor Randall Winston's key strategist and much-needed handler. Mike runs the city with the help of his oddball staff: an anxious and insecure press secretary; a sexist, boorish chief of staff; an impeccably groomed gay activist running minority affairs; a sharp and efficient, man-crazy accountant; and an idealistic young speechwriter. Like Mike, they are all professionally capable but personally challenged.