DOMESTIC POLICY MATTERS
Congress adjourned for August recess this week, but both chambers will continue pro forma sessions throughout August in a Republican-led move to avoid potential Presidential recess appointments. The Senate is expected to return on September 6th and the House on September 7th.
Budget and Debt Ceiling Agreement. On Tuesday, the Senate passed (by a 74-26 margin) and the President signed into law S. 365, the Budget Control Act of 2011. The House had passed the bill 269-161 on Monday. Shortly thereafter, as authorized by the legislation, the President unilaterally increased the debt ceiling limit by $400 billion. Doing so allowed the Treasury Department to continue processing payments to Social Security recipients, soldiers, defense contractors, Medicare and Medicaid recipients and providers, and food stamp recipients. A minimum of $2.117 trillion in total deficit reduction over the next 10 years is now required. The debt ceiling will be raised in additional stages over the next six months for a total increase of $2.1-$2.4 trillion, depending on the level of further cuts and automatic spending cuts that can be triggered if certain deficit reduction targets are not met. The law also requires the creation of the Joint Select Committee on Deficit Reduction, or “Super Committee,” charged with producing legislation by November 23rd that reduces the deficit by $1.5 trillion. The Committee will be comprised of six Members of Congress from each party, whom House and Senate leaders will select by August 16th.
Fiscal Year (FY) 2012 Appropriations Bills. The Budget Control Act of 2011 set the FY 2012 overall discretionary budget authority at $1.043 trillion: $684 billion for security (including military construction, foreign operations, the intelligence community, and the budgets of the Departments of Defense, State, Homeland Security and Veterans Affairs) and $359 billion for non-security spending. Defense Secretary Leon Panetta argued that defense spending will face enough cuts as part of the deal and urged lawmakers to consider entitlement spending reductions and revenue increases instead. Though the House already passed half of its 12 spending bills, House Republican appropriators have indicated they will revise their subcommittee allocations to reflect the new cap. Meanwhile, the Senate waited for a deal on the deficit/debt limit before setting its top-line spending for the fiscal year. Democratic Senate appropriators have stated they will now begin drafting individual spending bills, but some suggest it may too late in the year to pass them.
Friday, the Senate upheld Majority Leader Harry Reid’s (D-Nevada) commitment a day earlier to clear by unanimous consent the House-passed bill funding the Federal Aviation Administration (FAA) through September 16th. The extension will provide additional time for the House and Senate to attempt to resolve differences over rural service provisions. The agreement also will end the 13-day partial shutdown of the agency which left 4,000 agency employees out of work, halted airport construction projects across the country, and cost the federal government more than $350 million in uncollected taxes on airline tickets and fuel.
Thursday, the Dow Jones industrial average closed down 512 points (or 4.3 percent) to 11,384, the worst selloff since October 2008. The sell-off may have been precipitated by fears of a global economic slowdown, including in the United States. However, on Friday, the Labor Department released the July employment statistics, which reflected a slight dip in the unemployment rate to 9.1 percent with the economy adding a larger-than-expected 117,000 jobs for the month.
The Interior Department announced Thursday its conditional approval for Shell’s plan to begin exploratory drilling off Alaska’s northern coast, after intense lobbying by the Alaska Congressional delegation and other lawmakers. The company still needs secondary permits from the EPA, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service before drilling can proceed, but the tentative approval is viewed as a sign of the Administration’s easing of restrictions on offshore oil drilling.
President Obama unveiled his plan Friday at the Washington, D.C. Navy Yard to address high rates of unemployment among military veterans. The plan includes training initiatives for veterans and their spouses, as well as tax credits to encourage employers to hire veterans for the civilian workforce. The White House released a strategy Wednesday outlining how the Federal Government will support its local partners in preventing violent extremism. Also this week, the White House announced the President and First Lady will attend 10th anniversary commemoration events at ground zero in New York City and the Pentagon, while President Obama and Vice President Biden will attend a ceremony in Pennsylvania where United Airlines Flight 93 crashed on September 11, 2001.
Political News. On Wednesday, Representative David Wu (D-Oregon) officially resigned after allegations of inappropriate sexual activity surfaced last week, paving the way for a special election to fill the seat from Oregon’s Democratic-leaning 1st Congressional District. The primary will be held November 8th, followed by a general election January 31st. Congresswoman Gabrielle Giffords (D-Arizona) made a surprise appearance in the House on Monday – the first time since she was shot in the head in January – to vote in favor of the Budget Control Act. A New York Times/CBS poll released Friday revealed an 82 percent disapproval rating for Congress – the highest level recorded in 34 years. Most recent polling also suggests President Obama’s approval rating has slipped following the debt ceiling compromise.
FOREIGN POLICY MATTERS
Syrian Crisis. Last Sunday, President Obama said he was “appalled by the Syrian government’s use of violence and brutality against its own people.” On Monday, President Obama consulted with U.S. Ambassador to Syria Robert Ford. Secretary Clinton met with U.S.-based Syrian activists Tuesday. Also Tuesday, Senator Kirsten Gillibrand (D-New York), Senator Joseph Lieberman (I-Connecticut), and Senator Mark Kirk (R-Illinois) introduced extraterritorial sanctions legislation intended to dissuade foreign investment in Syria’s energy sector. Ambassador Ford testified before the Senate Foreign Relations Committee Tuesday and returned to Syria Friday. Meanwhile, the situation in Hama, Syria, worsened this week, leading the U.N. Security Council to adopt a statement Wednesday condemning the Syrian government’s use of force against civilians. Secretary Clinton said Friday the United States is extending sanctions to further apply pressure against key individuals in the Assad regime.
Middle East. On Monday, the Egyptian government cleared Tahrir Square of sit-in protestors, leading the U.S. Government to urge Cairo to protect the right to peacefully assemble. The trial of former President Hosni Mubarak started Wednesday, with the U.S. Administration urging a fair and transparent trial process. On Tuesday, the State Department condemned the bombing attack outside a Christian church in Kirkuk, Iraq, and expressed confidence the Government of Iraq will respond appropriately. This week, the United States also agreed to the reopening of the Libyan Embassy in Washington, under the control of the Libyan Transitional National Council.
Senate Majority Leader Harry Reid (D-Nevada) and Minority Leader Mitch McConnell (R-Kentucky) announced late Wednesday a bipartisan agreement had been reached on “a path forward” to consider three pending free trade agreements (FTAs) with Colombia, Panama and South Korea and the renewal of the Trade Adjustment Assistance (TAA) program after the August recess. Not known is whether this path also will include an extension of the Andean Trade Preference Act. While U.S. Trade Representative Ron Kirk welcomed the announcement, he did not indicate exactly when the White House will send the three trade agreements to Congress.
On Thursday, President Obama announced a new interagency Atrocities Prevention Board. The Presidential Proclamation on Serious Human Rights and Humanitarian Law Violations also formalizes a mechanism for barring persons identified as organizing or participating in war crimes from entering the United States.
On Monday, Secretary Clinton swore-in U.S. Ambassador to China Gary Locke. The Secretary held a bilateral meeting Wednesday with Chilean Foreign Minister Alfredo Moreno. On Thursday, Secretary Clinton met with Canadian Foreign Minister John Baird, where they discussed bilateral security, economic, and environmental issues, as well as Libya, Syria, and the Western Hemisphere. The Secretary also met Friday with Brunei Darussalam Minister of Foreign Affairs and Trade II Pehin Dato Lim Jock Seng, discussing energy security. Secretary Clinton expressed concern Friday over the deaths of four U.N. peacekeepers in Abyei and the Government of Sudan’s response.
The Senate confirmed the following individuals Tuesday: Matthew Olsen, Director of the National Counterterrorism Center; David Adams, Assistant Secretary of Legislative Affairs (State); Derek Mitchell, Special Envoy for Burma (State); Madelyn Creedon, Assistant Secretary of Global Strategic Affairs (Defense); Alan Estevez, Assistant Secretary of Logistics and Material Readiness (Defense); and the following as U.S. Ambassadors: Earl Anthony Wayne (Mexico); Arnold Chacon (Guatemala); David Shear (Vietnam); Paul Wohlers (Macedonia); William Moser (Moldova); and Frankie Reed (Fiji Islands). Meanwhile, President Obama announced his intention to nominate Ashton Carter to be Deputy Secretary of Defense, and Gregory Woods as General Counsel to the Energy Department. On Thursday, the White House announced Vice President Biden will travel to China, Mongolia and Japan on August 16th.