DOMESTIC POLICY MATTERS
Budget and the Debt Ceiling Debate. Federal Reserve Chair Ben Bernanke warned Tuesday that the U.S. dollar could lose its status as reserve currency if the debt limit is not raised. The bipartisan “Biden Group” met three times to negotiate on deficit reduction issues this week. President Obama and House Speaker John Boehner (R-Ohio) likely will discuss deficit matters further on a golf outing scheduled for June 18th. Vice President Biden’s group is scheduled to meet four times next week in an effort to present an agreement to Congressional leaders by July 1st. The Vice President reported that the group’s efforts have produced rough plans to reduce deficits by $4 trillion over the next 10 years, although participants still disagree on how to get there. Meanwhile, Senate Budget Committee Chair Kent Conrad (D-North Dakota) continues to work on a Fiscal Year (FY) 2012 budget resolution that will cut $4 trillion over a decade. Senator Conrad is delaying release and markup of the resolution pending the “Biden Group” negotiations. On Thursday, the House Judiciary Committee approved a joint resolution proposing a balanced budget amendment to the Constitution that would require a two-thirds vote of each chamber to run a deficit, increase revenue, or raise the debt limit. The amendment would also cap federal spending at 18 percent of the gross domestic product, thereby requiring a 25 percent cut from current spending levels. On Thursday, Senate Judiciary Constitution Subcommittee Chair Richard Durbin (D-Illinois) announced he will hold hearings on a Republican-sponsored Senate balanced budget amendment resolution (S.J. Res. 10).
On Thursday, 33 Senate Republicans joined 38 Senate Democrats to propose ending a long-standing ethanol tax credit. Senator Lamar Alexander (R-Tennessee) is drafting legislation to reduce or eliminate “permanent subsidies for mature technologies,” where funds could be used to pay down the national debt or conduct additional energy-related research and development. Dozens of House Democrats continue to urge the White House to hold fast on eliminating oil industry tax credits as part of a comprehensive budget deal.
Opposition by key Republican House leaders surfaced last week concerning language included in Judiciary Chair Lamar Smith’s (R-Texas) patent overhaul bill (H.R. 1249). Lawmakers quickly began working on a compromise to resolve issues related to the fees collected by the U.S. Patent and Trademark Office. A deal is expected to be reached in time for House floor consideration next week.
Also on Thursday, Senate Majority Leader Harry Reid (D-Nevada) announced a procedural vote on June 21st for the Presidential Appointment Efficiency and Streamlining Act (S. 679). If enacted into law, the bill will eliminate the confirmation requirement for relatively low-level appointees, clearing approximately 200 backlogged nominations. Minority Leader Mitch McConnell (R-Kentucky) supports the measure.
After the release of the Nuclear Regulatory Commission’s (NRC) Inspector General report on the scientific review process for the mothballed Yucca Mountain nuclear waste storage facility in Nevada, House Energy and Power Subcommittee Chair Ed Whitfield (R-Kentucky) called on NRC Chair Gregory Jaczko to resign Tuesday. Jaczko insisted he had not broken any laws, but Republicans continued to criticize his actions during a Senate Environment and Public Works Committee hearing on Thursday. Ranking Member James Inhofe (R-Oklahoma) called on Jaczko to recuse himself from any future license reviews for the facility.
On Monday, the White House rolled out the Campaign to Cut Waste, led by Vice President Biden. The antiwaste campaign comes after a government watchdog report suggested that the U.S. government annually wastes billions of dollars on overlapping initiatives.
Political News. During a press conference Thursday, Congressman Anthony Weiner (D-New York) announced his intention to resign, following increased pressure from Democratic leaders, including President Obama. On Monday, Representative Michele Bachmann (R-Minnesota) entered the Republican presidential race and received strong reviews for her performance in that night’s Republican debate, held in New Hampshire. Last Friday, California’s independent redistricting commission proposed new district boundaries that could endanger the re-election efforts of several Republican and Democratic House incumbents.
FOREIGN POLICY MATTERS
Greater Middle East. On Thursday, al Qaeda announced Sheikh Ayman al-Zawahri, Osama bin Laden’s former second-in-command, has been elevated to be the organization’s new leader. Obama Administration officials suggested Zawahiri may have difficulty maintaining the same degree of unity within al Qaeda that bin Laden achieved. On account of bin Laden’s death, U.S. federal prosecutors officially closed an indictment against the former al Qaeda leader stemming from the 1998 bombings of the U.S. Embassies in Kenya and Tanzania. This week, in an effort to improve strained relations with Pakistan, U.S. intelligence shared the location of two suspected bomb-making compounds, but U.S. drones and satellite feeds later witnessed Haqqani militants clearing out the contents at both facilities. Secretary of Defense Robert Gates said the United States was disappointed Pakistani militants were tipped off; however, the Secretary said such incidents must not derail the bilateral relationship. Meanwhile, with nearly 9,000 Syrians seeking refuge in Turkey, and as Turkey considered a humanitarian intervention into Syrian territory, the State Department said Thursday “under Assad, Syria has increasingly become a source of instability in the region.” The State Department further remarked the Administration is pursuing a U.N. Security Council resolution to apply pressure on President Bashar al-Assad. With President Ali Abdullah Saleh of Yemen still recuperating in Saudi Arabia, Vice President Abed Rabbo Mansour Hadi became the acting head of state early this week. The State Department said Monday reports indicated the acting president may be willing to establish a dialogue with the opposition, an approach which the United States supports.
Trying to head off the Palestinian Authority’s intention to seek a U.N. vote on state recognition, this week the White House dispatched National Security Council Advisor Dennis Ross and Special Envoy David Hale to talk to Israel and the Palestinian Authority about resuming the Middle East Peace negotiations. Meanwhile, the European Union is calling for the Quartet to present both sides with a formal framework, incorporating President Obama’s position on the pre-1967 borders as a starting point for negotiations.
Libyan Intervention. Speaker Boehner noted to President Obama Tuesday that the Administration will be in violation of the 90-day War Powers Act extended deadline this Sunday, demanded a response to questions posed in the letter by Friday, and later threatened a House vote to cut off funding for the mission. On Wednesday, a bipartisan group of Representatives led by Representatives Dennis Kucinich (D-Ohio) and Walter Jones (R-North Carolina) filed a lawsuit with the D.C. Federal District Court suing President Obama and Secretary of Defense Robert Gates for an unconstitutional military engagement. On the same day, President Obama submitted to Congress a supplemental consolidated report on Libya, saying the War Powers Act does not apply to U.S. military action in Libya because U.S. troops are engaged in a support role, with no ground troops deployed.
President Obama met Thursday with Mongolian President Elbegdorj Tsakhia. The leaders reaffirmed the bilateral political and economic relationship and recommitted to Asia-Pacific regional security. President Obama also met with Special Envoy for Sudan, Ambassador Princeton Lyman, discussing the current status of mediation efforts to resolve the crisis in Abyei and Southern Kordofan. The Ambassador provided an update of Secretary Clinton’s recent meetings with involved parties during her trip to Africa. President Obama called for a timely implementation of the 2005 Comprehensive Peace Agreement and said both sides should “not throw away the opportunity to move toward the promise of greater peace and prosperity.” The President called Turkish Prime Minister Recep Tayyip Erdoğan Monday to congratulate him on the Justice and Development party’s victory in recent parliamentary elections, consolidating the Prime Minister’s powerbase for another term. On Friday, the United States welcomed the historic adoption of the first UN resolution on the human rights of lesbian, gay, bisexual, and transgender persons.
Secretary’s Africa Trip. On Monday, Secretary of State Hillary Clinton held a bilateral meeting with Tanzanian President Jakaya Kikwete, discussing economic integration of the East African Community and U.S.-funded development projects in Tanzania. The Secretary next addressed the 53-member African Union in Addis Ababa, Ethiopia – the first time a U.S. Secretary of State has done so. Secretary Clinton said the “United States seeks new and dynamic partnerships with African peoples, nations, and institutions” to accelerate political, economic and social progress. On Tuesday, the Administration announced an additional pledge of $7.5 million in humanitarian assistance for refugees and internally displaced persons in Côte d’Ivoire and Liberia.
With the austerity protests in Athens and the decision of EU financial relief for Greece undecided, former Federal Reserve Chair Alan Greenspan warned earlier this week a Greek default had the potential to push the United States into another recession. By Friday, the U.S. stock market rose on the announcement of a possible European bailout for Greece.