DOMESTIC POLICY MATTERS
Continuing Resolution (CR) and Appropriations. After a Continuing Resolution (CR) to keep the government operating through November 18th failed in the House of Representatives Wednesday, the Republican leadership included a new offset aimed at rescinding money for the Department of Energy loan program that supported now-bankrupt Solyndra Inc (Top executives from Solyndra invoked their Fifth Amendment rights and declined to testify at the House Energy and Commerce Subcommittee on Oversight and Investigations hearing on Wednesday). With additional Republican support, the House passed the second CR early Friday morning by a mostly party line vote of 219 to 203. Due to disagreements over offsets to disaster relief funding, the Democratic-controlled Senate rejected the House-passed measure on Friday afternoon. Senate Majority Leader Harry Reid (D-Nevada) then advanced an amended version that removes all offsets to disaster funding. Both chambers may return on Monday if agreement is not reached Sunday. On Wednesday, the Senate Appropriations Committee marked up the State-Foreign Operations, Labor-HHS Education, and Transportation-HUD appropriations bills.
Deficit Reduction & Jobs Agenda. On Monday, President Obama unveiled his new plan for economic growth and deficit reduction. The Administration projects the plan will save more than $3 trillion over the next ten years by winding down the wars in Iraq and Afghanistan, cutting spending on a variety of government programs, and raising taxes on the wealthy under the so-called “Buffet Rule” named after billionaire investor Warren Buffet who famously said that he is taxed at a lower rate than his secretary. Following the President’s speech, Republican leaders in both chambers registered their disagreement with the plan, citing “phantom savings,” pointing out a failure to address entitlement reform, and calling the plan a form of “class warfare.” The Joint Select Committee on Deficit Reduction held a public hearing on Thursday on “Revenue Options and Reforming the Tax Code.” Broad consensus existed for conducting both corporate and individual tax reform, but Members of the Committee disagreed on the best approach. President Obama continued to speak about his jobs proposal on Thursday against the backdrop of an outdated bridge linking the home states of top Republican leaders in the House and Senate, telling the audience that as the two most powerful Republicans in government, Speaker of the House John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Kentucky) “can either kill this jobs bill, or they can help pass this jobs bill.”
On Wednesday, the Federal Reserve unveiled “Operation Twist” – a new plan to boost the economy by shifting $400 billion of its Treasury securities holdings into longer-term debt and reinvesting principal payments from mortgage-backed securities. Following the Federal Reserve’s announcement, the Dow Jones Industrial Average had its biggest two-day loss since December 2008.
The United States military’s “Don’t Ask, Don’t Tell” policy came to an official end on Monday at midnight, allowing openly gay men and women to serve in the armed forces. Despite a late request for a stay and calls for clemency from former President Jimmy Carter, Pope Benedict XVI, and others, Troy Davis was put to death by lethal injection late Wednesday for the 1989 murder of a police officer, reigniting the death penalty debate. With many states set to face tough penalties in the coming year for their inability to meet education standards set by the 2002 No Child Left Behind Act – and inaction by lawmakers to reform the measure this year – on Friday, President Obama announced plans to waive unilaterally many requirements set forth in the decade-old law.
Political News. Senate Republican Conference Chair Lamar Alexander (R-Tennessee) announced Tuesday he will resign from his leadership position in January, although he plans to run for re-election in 2014. Republican Policy Committee Chair John Thune (R-SD) subsequently announced that he will seek the conference chair post. On Thursday, Michigan Congressman Thaddeus McCotter withdrew his candidacy for the Republican presidential nomination and announced he will support former Massachusetts Governor Mitt Romney. On Saturday, in a Florida straw vote, Republican presidential candidate Herman Cain defeated the field.
FOREIGN POLICY MATTERS
U.N. General Assembly (UNGA). On Friday, Palestinian Authority President Mahmoud Abbas formally petitioned the U.N. for Palestinian statehood before the UNGA, saying “it is time for the Palestinian people to gain their independence.” Speaking next, Israeli Prime Minister Benjamin Netanyahu said “Israel wants peace” but said peace could not be achieved through U.N. resolutions. The day before, Turkish Prime Minister Recep Tayyip Erdoğan addressed the Assembly, enumerating a list of grievances with Israel, including accusing Israel of thwarting attempts to solve the Israeli-Palestinian conflict. Late Friday, the Quartet issued a statement urging both Israel and the Palestinian Authority to return to direct negotiations. President Obama addressed the UNGA Wednesday talking about “the pursuit of peace in an imperfect world.” On the margins of the UNGA, President Obama held a number of bilateral meetings and, accompanied by Secretary of State Hillary Clinton, attended the inaugural Open Government Partnership high-level meeting on Tuesday. Secretary Hillary Clinton also held a number of separate bilateral meetings on the margins with her foreign counterparts from Peru, Qatar, Tunisia, Saudi Arabia, Turkey, Israel, Russia, Japan, Kosovo, and Pakistan. On Thursday, the Secretary co-hosted, with Turkish Foreign Minister Ahmet Davutoğlu, the new Global Counterterrorism Forum and echoed the U.N. Secretary-General’s recent call for all U.N. members to finalize the Comprehensive Convention Against International Terrorism. Secretary Clinton and Secretary of Defense Leon Panetta attended the U.S.-Gulf Cooperation Council (GCC) Meeting Friday, where State Department officials described the meeting as “continuing to put the GCC at the heart of … the region’s security architecture….”
Taking two days, the full Senate debated and voted on amendments to the Generalized System of Preferences (GSP) bill, including an amendment to extend the Trade Adjustment Assistance (TAA) program. While several other amendments were offered only Senator Casey’s TAA amendment passed. Late Thursday, the GSP/TAA bill passed the Senate by a vote of 70-29, potentially clearing a path forward for the pending free trade agreements (FTAs with Colombia, Panama and South Korea). In response, House Speaker Boehner (R-Ohio) reiterated his call for President Obama to send the FTAs to Congress immediately and expressed confidence “that all four bills can be signed into law by mid-October.”
Also Wednesday, the Obama Administration unveiled its decision to offer a $5.8 billion arms sales package, including an upgrade of existing F-16 A/B fighter jet planes, rejecting Taiwan’s request for new C/D fighter jet planes. Senator John Cornyn (R-Texas) unsuccessfully attempted to insert an amendment to the GSP/TAA bill that would have mandated the sale of F-16 C/D fighter jets to Taiwan. A bipartisan group of Senators unveiled legislation Thursday that targets China’s currency practices. Senate Majority Leader Harry Reid (D-Nevada) has agreed to schedule a vote on the bill before the end of the year.
The Senate Appropriations Committee marked-up the Senate State/Foreign Operations spending measure Wednesday, passing the bill by voice vote. With respect to approved amendments, Senator Mark Kirk (R-Illinois) led the effort to cut guaranteed funding to Pakistan; and Senator Lindsay Graham (R-South Carolina) successfully advocated for cutting aid to the Palestinian Authority.
Greater Middle East Developments. On Thursday, before retiring next week, Chairman of the Joint Chiefs of Staff Admiral Mike Mullen told Senate Armed Service Committee Members that Pakistan’s intelligence agency had supported Haqqani insurgents last week in the attack on the U.S. Embassy in Afghanistan. Pakistani officials denounced Admiral Mullen’s allegation Friday. While at the UNGA, Iranian President Mahmoud Ahmadinejad said Iran would cease producing 20 percent enriched uranium, reviving the nuclear fuel swap deal that fell through in 2009. On Wednesday, President Obama welcomed the release of Shane Bauer and Josh Fattal from detention in Iran; thanking His Majesty Sultan Qaboos bin Said of Oman, Iraqi President Jalal Talabani and the Swiss government for their efforts over the past two years to secure their release. Meanwhile, after recuperating from injuries received in an assassination attempt over three months ago, President Ali Abdullah Saleh returned Friday to Yemen from Saudi Arabia. U.S. officials conceded President Saleh’s return was a surprise. Also Friday, the State Department announced an agreement with Afghanistan that provides $268 million for joint programs promoting rule of law, counternarcotics and law enforcement. Several Republican Senators, who initially opposed U.S. Ambassador to Syria Robert Ford’s nomination – such as Senators Mark Kirk (R-Illinois) and James Inhofe (R-Oklahoma) – now support his nomination. NATO announced Wednesday it would extend its Libya military campaign for three more months. On Thursday, the United States officially reopened its Embassy in Tripoli. On the same day, Tunisian authorities jailed Qaddafi’s former Prime Minister Al-Baghdadi al-Mahmoudi on charges of illegal entry, after he attempted to cross the border to Algeria.
The White House announced Friday President Obama will host President Porfirio Lobo of Honduras on October 5th. Also Friday, President Obama congratulated the people of Zambia for peaceful presidential elections, saying “[t]he United States looks forward to working with President Michael Sata,” and acknowledging former President Rupiah Banda’s contributions to Zambia’s democratic development.