DOMESTIC POLICY MATTERS
FY 2012 Budget Proposal. President Obama unveiled his Fiscal Year (FY) 2012 budget Monday. Republicans criticized the proposal for not addressing entitlement programs, such as Social Security, Medicare and Medicaid, but House Republicans also did not address those issues in their proposal to cut $100 billion in FY2011 spending. The President proposed a $3.73 trillion overall budget, which will trim deficits by $1.1 trillion over ten years by proposing to extend the domestic discretionary spending freeze for five years. Included in the FY 2012 proposal is $47 billion for the U.S. Department of State – only a one percent increase over the FY 2010 enacted level. House Appropriations’ State and Foreign Operations Subcommittee Chair Kay Granger (R-Texas) stated her intention to cut President Obama’s FY 2012 request for the State Department and to ensure foreign aid “is not used as a stimulus bill for foreign countries.”
With the current FY 2011 Continuing Resolution (CR) set to expire March 4th, the House debated hundreds of amendments to the new CR bill intended to fund the federal government for the remaining seven months of FY 2011. One such amendment had Republican budget hawks breaking ranks with the House Republican leadership to join most Democrats in voting to strike funding for an alternative engine for the F-35 Joint Strike Fighter. The House also passed an amendment offered by Representative Denny Rehberg (R-Montana) to block funding to implement the 2010 health care law. A House vote on the CR extension likely will occur Saturday. Because of key differences, however, the House and Senate may not agree on the CR extension before the March 4 deadline, so a short-term CR would be necessary to buy additional time. Speaker Boehner said Thursday any short-term measure must include spending reductions. In turn, top Democratic House aides have discussed the potential for a government shutdown at a meeting on Friday.
Secretary of the Treasury Timothy Geithner said Wednesday before the Senate Finance Committee that Congress could address corporate tax codes separately from individual tax codes, thereby moving away from a comprehensive tax reform plan. Meanwhile, Republicans in the House are attempting to cut more than $600 million from the Internal Revenue Service’s (IRS) FY 2011 budget. The CR also includes a provision that would block the IRS from enforcing a 1099 tax reporting requirement in the 2010 health care bill. Additionally, the House Ways and Means Committee on Thursday took steps to repeal the reporting requirement.
Other Congressional Activity. Legislation to reform the medical liability system also won Committee approval in the House this week. The bill would set a statute of limitations on medical malpractice claims, limit compensatory damages, and restrict attorney fees. Meanwhile, the President’s FY 2012 budget request includes $250 million to provide incentives to states to implement targeted medical malpractice reform. Additionally, House Oversight and Government Reform Committee Chair Darrell Issa (R-California) this week issued the Committee’s first subpoena for documents related to the Countrywide VIP program, which allegedly provided special home mortgage rates and lowered fees to government officials and employees. Thursday morning, the House approved a conference bill that provides a three-month extension of Patriot Act surveillance authorities: (1) accessing business records; (2) conducting roving wiretaps; and (3) monitoring individual terrorists. President Obama is expected to sign the bill into law before the authorities expire on February 28th. On Wednesday, Democratic Senate leaders unveiled their agenda for this session of Congress, including updating the highway bill, revamping patent law, reauthorizing the Elementary and Secondary Education Act, reforming the tax code, and making the research and development tax credit permanent. The Senate on Thursday passed (87-8) a two-year reauthorization of the Federal Aviation Administration (FAA), after compromising on additional flights allowed at Ronald Reagan Washington National Airport. The House Transportation and Infrastructure Committee advanced its version of the FAA bill on Wednesday, providing for a four-year reauthorization instead.
Political Turnover. This week, White House Deputy Press Secretary Bill Burton and Sean Sweeney, a top advisor to former White House Chief of Staff Rahm Emanuel, announced they will return to the private sector. On Friday, Senator Jeff Bingaman (D-New Mexico) announced his plans to retire at the end of his fifth term in 2012. New Mexico is expected to be a battleground state in the 2012 election.
FOREIGN POLICY MATTERS
Middle East Unrest. Secretary Clinton derided Iran’s “hypocrisy” in supporting protests in Egypt, while cracking down on its own demonstrators. On Wednesday, the Secretary gave her second speech on Internet Freedom, saying the “universal” rights of free speech and assembly should now also include “the freedom to connect.” The State Department also acknowledged its increased use of social media to reach out to pro-democracy demonstrators in Egypt and Iran. Early Thursday morning, after many days of protests in Bahrain, anti-riot police killed five protestors. The Government declared a state of emergency, dispatching tanks and banning public assembly. Secretary Clinton called Foreign Minister Khalid Al Khalifa to express “deep concern” and urge restraint. Protestors in Yemen continued to clash with police and government supporters in Sanaa and other cities. Libyans protesting against President Moammar Gadhafi defied security forces and demonstrated in multiple cities, where it is reported 20 protestors have been killed. Despite the government’s promise to lift the 19-year state of emergency, anti-government protests are anticipated in Algeria this weekend. On Friday, the interim Tunisian Government signaled a shift in Tunisia’s zerotolerance policy against militant Islam when it approved a general amnesty of the country’s political prisoners. Meanwhile, in Egypt, the military said this week it needs six months to prepare for elections. Thursday, Secretary Clinton pledged $150 million to assist with the transition in Egypt. Demonstrators filled Tahrir Square Friday, to maintain pressure for the transition to civilian authority and constitutional reforms. Also Friday, President Obama said he was “deeply concerned by reports of violence in Bahrain, Libya and Yemen” and urged restraint in responding to “peaceful protests.”
Middle East Peace Process. This week, Palestinian Authority (“PA”) Mahmoud Abbas reshuffled his cabinet, and PA negotiator Saeb Erekat offered to resign. Meanwhile, the United States vetoed a PA-sponsored U.N. resolution that would have labeled Israeli settlement activity in the West Bank as illegal.
Senate Foreign Relations Committee Chair John Kerry (D-Massachusetts) travelled to Pakistan this week, after bilateral relations continued to worsen with the now three-week detention of an American diplomat – Mr. Raymond Davis. Mr. Davis claims self-defense in reportedly killing two Pakistani men. Citing diplomatic immunity, the State Department maintains Mr. Davis should never have been incarcerated. Senator Kerry met with President Asif Ali Zardari and Prime Minister Yousaf Raza Gilani to reaffirm the importance of the strategic relationship and to discuss Mr. Davis’ status.
Last Sunday, Vice President Biden called Iraqi Prime Minister Nouri al-Maliki to consult on developments in Egypt and congratulate the Prime Minister on progress toward a new government. Testifying before the House Armed Services Committee Wednesday, Secretary of Defense Robert Gates affirmed the United States will withdraw its combat troops from Iraq this year. The Secretary also said that if Iraq were to ask for additional assistance, the U.S. military could have a smaller presence beyond 2011 to assist with military training and other support functions.
Bilateral Meetings. Tuesday, Secretary Clinton hosted the third session of the U.S.-Ukraine Strategic Partnership Commission and met with Foreign Minister Kostyantyn Gryshchenko to discuss non-proliferation, strengthening rule of law and energy development. The Secretary also met with Lithuanian Foreign Minister Audronius Ažubalis and discussed U.S. support for Lithuania’s chairmanship of the Organization for Security and Cooperation in Europe. Secretary Clinton later met with Indian Foreign Secretary Nirupama Rao. Wednesday, the Secretary launched a new Strategic Dialogue with Civil Society, reaching out to global civil society on issues such as anti-corruption, democracy and human rights and empowering women. On Thursday, Secretary Clinton met with Georgian Foreign Minister Grigol Vashadze to discuss regional issues. Vice President Biden met Thursday with Macedonian Prime Minister Nikola Gruevski to discuss bilateral relations, Afghanistan, and expressed hope for Macedonia moving forward on seeking NATO membership. Secretary Clinton met with the Prime Minister Wednesday, also discussing rule of law, independent media, and civil society.
Latin America. Last weekend, Argentine authorities seized U.S. military cargo intended for a planned training exchange between U.S. military experts and the Argentine federal police. The United States cancelled the training, and the State Department demanded the Argentine government return the seized equipment. On Tuesday, two U.S. Immigration and Customs Enforcement (ICE) agents travelling to Mexico City were shot, one fatally, allegedly by Zeta drug cartel members. The Mexican Government does not allow U.S. law enforcement personnel operating in its territory to carry weapons. Attorney General Eric Holder said the U.S. Government may re-evaluate this policy.
This week, President Obama announced his intention to nominate Michelle Gavin to be U.S. Ambassador to Botswana; Thomas Harrigan to be Deputy Administrator of Drug Enforcement (Justice); Mara Rudman to be Assistant Administrator for the Middle East (USAID); and Thomas Countryman to be Assistant Secretary for International Security and Non-Proliferation (State). At the invitation of Queen Elizabeth II, President Obama will travel to Britain in May. The White House also announced Vice President Biden will travel to Finland, Russia and Moldova (week of March 7th) and President Obama’s Latin America trip dates (March 19-23).