DOMESTIC POLICY MATTERS
While Congress is in recess this week, President Obama focused on the economy, as he spent three days holding town hall meetings across the Midwestern United States before leaving for vacation in Massachusetts. The President blamed Congress’ partisan standoff for its failure to enact job creation legislation. The White House announced that President Obama will deliver a speech in early September to outline his specific deficit reduction and job creation plan, to include a payroll tax cut and other stimulus components, which the President will ask the congressional Super Committee to consider. Meanwhile, the U.S. stock market continued to decline this week, with sharp drops Thursday and Friday inspired by the Asian and European markets.
Budget and Appropriations. On Wednesday, the White House Office of Management and Budget (OMB) directed federal departments and agencies to set their Fiscal Year (FY) 2013 budget requests as much as 10 percent below current spending levels. Also on Wednesday, House Majority Leader Eric Cantor (R-Virginia) sent a letter to House Republicans urging them to move forward on the FY 2012 appropriations bills based on the spending caps set by the debt limit agreement, noting “I believe it is in our interest to enact into law full-year appropriations bills at this new lower level.”
After a former Securities and Exchange Commission (SEC) official alleged that the agency illegally destroyed investigative files, Senator Chuck Grassley (R-Iowa) sent a letter to SEC Chairwoman Mary Schapiro expressing his concern that the “records may contain critical information that could be extremely useful in piecing together complex cases …” Meanwhile, the Justice Department announced it has begun investigating Moody’s Investors Service and Standard & Poor’s regarding their ratings of mortgage-backed securities in the lead-up to the 2008-2009 financial crisis.
On Thursday, the Department of Homeland Security (DHS) announced a new immigration strategy that echoes the DREAM Act, legislation that died in the Senate last December. In a letter to Senate Majority Whip Richard Durbin (D-Illinois), DHS signaled that it will not aggressively seek to deport young people brought to the country illegally as children who enroll in college or join the military.
Political News. Last Saturday, Texas Governor Rick Perry (R) officially announced his candidacy for President in 2012. The same day, Congresswoman Michelle Bachmann (R-Minnesota) won the Republican Ames Straw Poll in Iowa. The third-place finisher in the straw poll, former Minnesota Governor Tim Pawlenty, announced Sunday his withdrawal from the race for the Republican nomination. Last weekend, President Obama’s Gallup approval rating dipped to a new low at 39 percent, joining every President since Lyndon Johnson to have slid under the 40 percent mark in the venerable poll. After California’s independent redistricting commission certified new congressional district lines for the state on Monday, new Representative Janice Hahn (D-California) announced her intention to run for re-election in 2012 in the redrawn 44th district, where Congresswoman Laura Richardson (D-California) also may run. Meanwhile, Democratic Governor Earl Ray Tomblin signed into law West Virginia’s redistricting plan, which makes minimal changes to the districts of Republican Congresswoman Shelley Moore Capito and Democratic Congressman Nick Rahall and no change to the seat of Republican Representative David McKinley.
FOREIGN POLICY MATTERS
Syrian Crisis. Last Sunday, President Obama spoke with King Abdullah bin Abdul-Aziz Al Saud of Saudi Arabia. Both heads of state agreed the Syrian regime’s violent campaign against its citizens must end immediately. After this week’s declarations condemning President Bashar al-Assad from Turkish Prime Minister Recep Tayyip Erdoğan, the EU, and a trilateral joint statement from British Prime Minister David Cameron, French President Nicolas Sarkozy and German Chancellor Angela Merkel, on Thursday, President Obama explicitly called on President Assad to resign and announced “unprecedented sanctions” against the Syrian Government. President Obama emphasized “[t]he future of Syria must be determined by its people,” further saying “[t]he United States cannot and will not impose this transition upon Syria.” President Obama also executed an Executive Order that immediately freezes all U.S. assets of the Government of Syria, bans U.S. imports of Syrian-origin petroleum and petroleum products, and prohibits U.S. persons from operating orinvesting in Syria.
House Majority Leader Eric Cantor (R-Virginia) also issued a statement Thursday that called for President Assad’s resignation. Senator Kirsten Gillibrand (D-New York), a sponsor of legislation to sanction Syria (S. 1472), said Thursday, “[a]nd while I am very pleased the United States has extended sanctions to Syria’s petroleum sector today, I hope our allies around the world follow suit in the near future.” Senators John McCain (R-Arizona), Joe Lieberman (I-Connecticut) and Lindsey Graham (R-South Carolina) echoed this sentiment. Meanwhile, Ambassador Robert Ford remains in Damascus; House Foreign Affairs Committee Chair Ileana Ros-Lehtinen (R-Florida) said Thursday, “[i]t is also important that the administration take the next step in ending its engagement policy and reverse its mistake of sending a U.S. ambassador to Syria.”
Middle East and South Asia. The Quartet released a joint statement of concern Wednesday over Israel’s recent announcements of advance planning for new housing units in East Jerusalem, saying Jerusalem remains a core issue that needs to be esolved through negotiations between Israel and the Palestinian Authority. On Thursday, Secretary Clinton condemned terrorist attacks in southern Israel, saying “[t]his violence only underscores our strong concerns about the security situation in the Sinai Peninsula,” and urged the Egyptian Government to address the security situation in the Sinai. Condemning Friday’s bombings in Northwest Pakistan and Kabul, Secretary Clinton stated, “Through their violent actions, terrorists continue to demonstrate blatant disregard for the efforts of the Pakistani people to build a more peaceful and prosperous country,” and added, “Brutal attacks such as these will not lessen our resolve or our commitment to Afghanistan and the region.” In response to Turkey’s cross-border airstrikes Wednesday and Thursday in Kurdish areas of Northern Iraq against the PKK (a terrorist organization), the State Department said the United States “recognizes the right of Turkey to defend itself against terrorist attacks.”
Vice President’s Travels. Vice President Biden departed Washington Tuesday for a nine-day trip that will take him to China, Mongolia, Japan, and Hawaii. The Vice President is visiting China at the invitation of Vice President Xi Jinping, with whom he met with Thursday and discussed, among other topics, the debt ceiling deal. In Beijing Friday, Vice President Biden met with Chinese President Hu Jintao and Premier Wen Jiabao. The Vice President assured China – the United States’ largest foreign creditor – that U.S. Treasury securities remain a safe investment. Friday morning, Vice President Biden also attended a U.S.-China business dialogue where he encouraged bilateral competition and investments.
On Wednesday, Secretary Clinton and Defense Secretary Leon Panetta participated in a joint forum at the National Defense University. Secretary Panetta addressed questions related to the $350 billion initial defense cuts, and possible additional cuts, resulting from the debt ceiling deal. The Secretary emphasized if Congress is unable to finalize a deal on a further deficit reduction package, the additional automatic defense cuts would weaken the United States’ ability to respond to world threats. Secretary Clinton fielded questions that focused on the increased U.S. public skepticism toward development and foreign assistance aid. The Secretary noted the State Department’s budget is only approximately one percent of the federal budget.
With a trade agreement between Canada and Colombia taking effect Monday, House Ways and Means Chair Dave Camp (R-Michigan) and Trade Subcommittee Chair Kevin Brady (R-Texas) called on President Obama to submit the three pending U.S. free trade agreements (with Colombia, Panama and South Korea) to Congress for swift approval. Also Monday, in a speech at the 8th Annual Border Security Conference in El Paso, U.S. Trade Representative Ron Kirk outlined how Texas will benefit from the passage of the agreements, but also broadly reviewed the Administration’s trade agenda – such as supporting Trade Adjustment Assistance (TAA) renewal, moving forward to open markets and enforce U.S. trade rights, and exploring next steps in the multilateral Doha Round.
On Thursday, the State Department released its annual Country Reports on Terrorism 2010. The State Department also said Thursday USAID will contribute up to $900,000 in emergency relief supplies to North Korea in response to recent flooding, following a decision by South Korea to offer $5 million in food aid.
President Obama called Thai Prime Minister Yingluck Shinawatra last Sunday to congratulate the Prime Minister on her election. The President also spoke last Saturday with British Prime Minister David Cameron about Syria, Libya, Afghanistan, and the global financial system.