The Yankees are reportedly searching for their next designated hitter but don't have a lot to spend, and could have as little as $1-2 million for the role according to Keith Law. The club is looking at several options, including Carlos Pena, a Johnny Damon reunion, and internal candidate Jorge Vazquez:

• Twitter / @MLBNetworkRadio - "Carlos Pena told @RBIRich & @MelAntonen that the #Yankees have contacted him but he continues to explore all options, 1B & DH"
• Twitter / @MarcCarig - "Yankees high spending last 3 seasons was $212m. They're about there now. Heard from people with knowledge earlier this winter that's as high as they would go. They don't want to deviate from the range they've established the last three years."
• Is Carlos Peña The Last Piece In Yankees' Puzzle? - Rob Neyer | Baseball Nation
  "Even if Peña's willing to take a pay cut from his $10 million salary last season -- and I'm not convinced he should, though he might eventually have to -- his contract will presumably push the Yankees over their arbitrary payroll "limit". Also, he might well think he deserves to play first base, and to play first base every day. Which of course isn't going to happen with the Yankees."

• Yankees shopping for DH - NYPOST.com
  "Since they already added $10 million to the payroll with the signing of Hiroki Kuroda, they don’t expect to spend a lot to sign another bat and both could be relatively low cost. Damon, 38, made $5.25 million last year with the Rays, but since Tampa Bay doesn’t want him back, he’ll likely have to settle for less in 2012."
• Yankees may bring back free agent Johnny Damon to play him as designated hitter - NY Daily News
  f the Yankees choose to go outside the organization, they will have choices, including Damon, Hideki Matsui and Carlos Pena. The team, which already expanded its budget to sign Kuroda, is not willing to spend lavishly on a DH — hence its consideration of Vazquez. But just as they were ostensibly prepared to make Bubba Crosby their center fielder in 2006 before signing Damon instead, the Yankees might still settle on an external choice.
• Twitter / @JonHeymanCBS -
  "yankees are telling people they only have $1-2M for dh spot. So no pena. And damon doesn't seem likely at that price, either"
• New York Yankees Complete Organizational Chart - MLB Daily Dish