This Week in Washington - August 26, 2011

    26 August 2011

    DOMESTIC POLICY MATTERS

    While Congress was in recess this week, a moderate earthquake measuring 5.8 on the Richter scale shook Virginia, Washington, D.C., and surrounding states Tuesday, and the East Coast began preparing for Hurricane Irene, expected to come ashore this weekend. President Obama was scheduled to speak Sunday at the dedication of a memorial to slain civil rights leader Martin Luther King, Jr. near the National Mall, but organizers postponed the event due to the hurricane forecast. On Friday morning, President Obama warned Irene is likely to be a “historic hurricane,” and urged Americans to evacuate if ordered to do so. The President also later decided to cut short his family vacation in Massachusetts and return to Washington Friday evening.

    Budget and Appropriations. Last Friday, the Office of Management and Budget (OMB) released a Sequestration Update Report to the President and Congress for Fiscal Year 2012 (FY12), as mandated by the Budget Control Act (BCA) of 2011 passed earlier this month. The report sets estimates of discretionary spending limits for each category in the BCA and provides the status of OMB scoring of the latest House and Senate action on FY12 appropriations bills.

    On Wednesday, the Congressional Budget Office (CBO) released its update of the Budget and Economic Outlook, which projects cumulative deficits scheduled to be cut nearly in half over the next decade to $3.49 trillion primarily due to spending caps set forth in the BCA. The report warns the economy will continue to struggle in coming years. Responding to the report, Senate and House Budget Committee Chairmen Senator Kent Conrad (D-North Dakota) and Representative Paul Ryan (R-Wisconsin) called on the Super Committee to focus on further deficit reduction efforts, while Representative Chris Van Hollen (D-Maryland), Budget Committee Ranking Member, called for a plan by the Committee to put Americans back to work.

    On Friday, Federal Reserve (“the Fed”) Chair Ben Bernanke provided a relatively upbeat assessment of the nation’s long-term economic health. The Chairman offered no commitment to a further loosening of U.S. monetary policy, although he stated the Fed would continue to analyze the possibility of doing so.

    On Thursday, Berkshire Hathaway Chairman Warren Buffett announced a $5 billion investment in Bank of America. The stock price of one of the largest U.S. banks had fallen almost 30 percent in August, reportedly as a result of some investors’ fears of insufficient capital.

    On Tuesday, the Obama Administration announced plans to save approximately $10 billion over five years by streamlining regulations across all federal departments. However, Republican House leaders criticized the move as insufficient, and Speaker John Boehner (R-Ohio) wrote a letter Friday to the President requesting a list of each proposed regulation with an economic effect greater than $1 billion.

    Senator John Cornyn (R-Texas) sent a letter to Under Secretary of Defense for Acquisition Ashton Carter on Wednesday, questioning his commitment to the F-35 fighter program and tying Carter’s pending nomination to be Deputy Secretary of Defense to his support of the program.

    This week, Republican Senators James Inhofe of Oklahoma, John Barrasso of Wyoming, Jeff Sessions of Alabama and David Vitter of Louisiana sent a letter to the Nuclear Regulatory Commission's (NRC) inspector general (IG) asking him to investigate the agency's chairman, Gregory Jaczko, for his assumption of emergency powers over U.S. nuclear power plants after the March disaster at Japan’s Fukushima facility. Meanwhile, following the earthquake in Virginia on Tuesday, one nuclear reactor near the epicenter underwent a precautionary shutdown, which proceeded without incident.

    On Friday, the State Department released an Environmental Impact Statement finding no major environmental effects from the proposed pipeline (Keystone XL) to carry Canadian crude oil through the United States to the Gulf of Mexico. A 90-day consultation period on the pipeline now has started, and the Department will host nine public meetings around the United States. The State Department said a final decision on the Keystone XL project likely will occur before the end of the year.

    Political News. In a national Gallup poll released Wednesday, Texas Governor Rick Perry passed former Massachusetts Governor Mitt Romney as the leading Presidential candidate among Republicans. Representative Jason Chaffetz (R-Utah) announced Monday that he will not challenge six-term Senator Orrin Hatch (R-Utah) in next year’s Senate primary.

    FOREIGN POLICY MATTERS

    Libyan Conflict. On Monday, with the Libyan rebels successfully driving into Tripoli, President Obama said the “momentum against the Qaddafi regime has reached a tipping point” and the “regime is showing signs of collapsing.” As the rebels and NATO warplanes target the regime’s remaining strongholds of Sirte and Sabha, the President called on Qaddafi to “relinquish power” and urged the opposition’s Transitional National Council (TNC) “to demonstrate the leadership that is necessary to steer the country through a transition by respecting the rights of the people of Libya, avoiding civilian casualties, protecting the institutions of the Libyan state, and pursuing a transition to democracy that is just and inclusive for all the people of Libya.” President Obama and British Prime Minister David Cameron spoke Monday about the evolving situation in Libya and agreed to continue to work with allies in supporting a peaceful transition to democracy. On Tuesday, the President also discussed the international community’s commitment to Libya, as well as the global economic situation, with French President Nicolas Sarkozy. Deputy Secretary of State Bill Burns led the U.S. delegation to the August 25th Libya Contact Group (comprised of countries supporting the TNC) meeting in Istanbul, where he met Thursday with Turkish Foreign Minister Ahmet Davutoğlu and Under Secretary Feridun Sinirlioğlu. Late Thursday, the U.N. Sanctions Committee negotiated a deal to release $1.5 billion of frozen Qaddafi regime assets to U.N. organizations involved in relief missions in Libya, fuel vendors, and the Libya Contact Group.

    Syrian Crisis. On Tuesday, Secretary Clinton welcomed the U.N. Human Rights Council’s (UNHRC) establishment of an international Commission of Inquiry to investigate the human rights situation in Syria. The UNHRC also denounced the Syrian regime’s violence against its citizenry.

    Other Middle East Developments. Last Sunday, Secretary Clinton said the United States was “deeply disappointed that Iranian judicial authorities have sentenced Shane Bauer and Joshua Fattal to eight years in prison.” Both U.S. citizens were detained in July 2009 after crossing the Iranian border (accidentally, they allege) while hiking in Iraq and were found guilty of illegal entry and espionage. In response to the Arab League’s support for the Palestinian Authority’s move for recognition of statehood at the U.N. in September, the State Department reiterated Wednesday that the United States does not support this effort.

    Vice President’s Travels. Last Sunday, Vice President Biden spoke about U.S.-China relations at the Sichuan University in Chengdu, China. Monday, the Vice President held a bilateral meeting with Mongolian Prime Minister Sükhbaataryn Batbold to discuss furthering the bilateral relationship, including Mongolia’s desire to seek a second Millennium Challenge Corporation compact. In Japan Tuesday, the Vice President met with Prime Minister Naoto Kan and again expressed U.S. sympathy for the earthquake and tsunami damage. The Vice President also emphasized the United States is a Pacific power that is working to strengthen its relations with Japan, China, and others in the region. On Friday, Prime Minister Kan resigned, citing public dissatisfaction with his leadership following Japan’s earthquake and tsunami in March. The ruling Democratic Party is scheduled to decide on a new Prime Minister on Monday, August 29th.

    On Wednesday, the Department of Defense released its annual congressionally mandated China military assessment report (typically submitted to Congress in March). The State Department said Thursday the report speaks to points previously made – the need for transparency in Chinese military affairs to build mutual trust and confidence and to reduce misperceptions.

    Thursday, the State Department welcomed, as a positive initial step, the announcement by the Government of Sudan to establish a two-week unilateral ceasefire in Southern Kordofan state. Last Thursday, President Obama announced his intention to nominate Susan Page as U.S. Ambassador to South Sudan.

    President Obama and Secretary Clinton condemned Friday’s terrorist attack on United Nations offices in Abuja, Nigeria. The President also called Thursday’s casino attack in Monterrey, Mexico, allegedly by criminal organizations, “barbaric and reprehensible”. The attacks reportedly killed 18 in Nigeria and 52 in Mexico.