DOMESTIC POLICY MATTERS
The Fiscal Cliff Debate. On Monday, the White House presented a revised “fiscal cliff” offer to Speaker of the House John Boehner (R-Ohio) calling for $1.4 trillion in new tax revenue – a small decrease from its original position of $1.6 trillion – in addition to similar cuts to entitlement programs and a promise to move forward on corporate tax reform next year. On Tuesday, Speaker Boehner countered with a proposal consisting of $800 billion in tax revenue, accompanied by more than $1 trillion in spending cuts. The same day, President Obama said in a White House interview with ABC News that he is “pretty confident that Republicans would not hold middle class taxes hostage to try to protect tax cuts for high-income individuals.” Several reports in the last few days suggest that Speaker Boehner and certain Senate Republicans are prepared to consider more than $800 billion in proposed new tax revenues, but only if the White House agrees to deeper cuts to entitlement programs. Many lawmakers, including Senate Majority Leader Harry Reid (D-Nevada), are increasingly doubtful that a deal will be reached before Christmas.
Close to 30 people, including at least 18 children, are dead after a shooting Friday at an elementary school in Newtown, Connecticut. President Obama spoke emotionally on the “heinous” school massacre of children aged 5-10 years old and educators, expressing sympathy to affected families and calling for bipartisan support to begin to address such shooting incidents. The President ordered flags to be flown at half-mast.
Health and Human Services Secretary Kathleen Sebelius announced Monday in a letter to governors that if states are going to expand their Medicaid programs, they must do so to the full extent of the health care law and cannot pursue a partial or phased-in expansion. Also on Monday, the Treasury Department announced it will sell its remaining shares of American International Group stock, following the 2008 “bailout” of the company. On Wednesday, the House approved a measure to allow the Transportation Security Administration to waive re-screening requirements for checked bags for certain international flights. The bill is headed to the President’s desk, as the Senate passed it in late November. Senate Republicans made statements this week suggesting they want to support a bill for Hurricane Sandy relief, but they would like some spending offsets or a package smaller than the $60.4 billion disaster aid package sought by the White House and introduced by select Senate appropriators on Wednesday. On Wednesday, the Federal Reserve announced it will continue to stimulate economic growth until the unemployment rate falls to 6.5 percent or the inflation rate climbs to 2.5 percent. On Thursday, Agriculture Secretary Tom Vilsack warned Congress that absent an agreement on the farm bill, milk prices could as much as double when current dairy provisions expire at the end of the year. A Government Accountability Office report released this week found federal agencies generally do not collect data from hardrock mine operators extracting minerals from federal lands because “there is no federal royalty that would necessitate doing so.” Congressman Raúl Grijalva (D-Arizona) and Senator Tom Udall (D-New Mexico) support legislation to require federal mining royalties. The Congressional Research Service released Thursday a report stating there is no correlation between top tax rates and economic growth. This week, Congress also finalized a U.S. Coast Guard reauthorization bill, which authorizes approximately $17.4 billion for fiscal years 2013 and 2014. The measure preserves the Coast Guard’s icebreaker fleet and continues a one-year moratorium on waiving permits for engine discharge issues.
Political News. Over the weekend, Representative Charles Boustany defeated fellow Republican incumbent Representative Jeff Landry in a run-off for Louisiana’s 3rd Congressional District seat. In a statement Monday, Republican National Committee Chairman Reince Priebus announced a new initiative to “grow the Republican Party and improve future Republican campaigns,” in response to Republican losses in the 2012 elections. On Tuesday, Republican lawmakers in Michigan passed a bill banning labor unions from requiring worker dues. Republican Governor Rick Snyder signed the measure, making union-heavy Michigan the 24th state to approve a “right-to-work” law. President Obama visited the Daimler Detroit Diesel Plant a day earlier and told workers, “[W]hat we shouldn’t be doing is trying to take away your rights to bargain for better wages.” South Carolina Governor Nikki Haley (R) announced this week she will not appoint a placeholder to fill retiring Senator Jim DeMint’s (R) seat, but instead is expected to appoint someone who will run for a full term in 2014. House and Senate Democratic leaders approved new committee members for the 113th Congress this week; their decisions await full caucus approval in early January.
FOREIGN POLICY MATTERS
Syria. On Wednesday, a NATO spokesman confirmed the Alliance had "detected the launch of a number of unguided, short-range ballistic missiles inside Syria this week." On Friday, Secretary of Defense Leon Panetta signed an order to send two Patriot missile batteries and 400 U.S. military personnel to Turkey to respond to rounds potentially crossing the border from Syria. In a Tuesday interview, President Obama said: “We've made a decision that the Syrian Opposition Coalition is now inclusive enough, is reflective and representative enough of the Syrian population that we consider them the legitimate representative of the Syrian people in opposition to the Assad regime, and so we will provide them recognition.” That same day, the United States listed Jabhat al-Nusra – a Syrian group – as a terrorist group and imposed sanctions on its leaders. Deputy Secretary of State Bill Burns travelled to Morocco to attend the Friends of Syria meeting, with the group formally recognizing the National Coalition of the Syrian Revolutionary and Opposition Forces on Wednesday. Deputy Secretary Burns also stopped in Tunisia and the United Arab Emirates.
North Korea & Iran. Wednesday morning, reportedly surprising the U.S. intelligence community and policymakers, North Korea successfully launched a long-range, multi-stage rocket. A statement from National Security Council spokesman Tommy Vietor called the launch “a highly provocative act that threatens regional security, directly violates United Nations Security Council Resolutions 1718 and 1874, contravenes North Korea’s international obligations, and undermines the global nonproliferation regime.” The U.N. Security Council also said Wednesday North Korea is in violation of U.N. resolutions that ban the country from “any launch using ballistic missile technology.” The launch is seen by some analysts as verification of North Korea’s collaboration with Iran on missile design and technology. While the International Atomic Energy Agency (IAEA) failed to gain access to Iran’s Parchin military complex during Thursday's visit, IAEA delegation head Herman Nackaerts indicated progress had been made on a framework agreement to address the IAEA's suspicions about the military dimensions of Iran's nuclear program. This week, the United States imposed sanctions on five Iranian nuclear experts and seven companies for helping Iran move closer to enriching uranium.
On Thursday, U.N. Ambassador Susan Rice submitted a letter to President Obama requesting her name be withdrawn from consideration to be the next U.S. Secretary of State. Ambassador Rice said she was honored to be considered, but she was “convinced that the confirmation process would be lengthy, disruptive and costly….” President Obama accepted her decision, saying he is “grateful” she will continue to serve in her current capacity. The President also said he “deeply” regretted “the unfair and misleading attacks on Susan Rice in recent weeks.” Senate Foreign Relations Committee (SFRC) Chair John Kerry (D-Massachusetts) is now speculated to be the frontrunner to replace Secretary Clinton. This week, Democratic Senators-elect Tim Kaine (Virginia) and Chris Murphy (Connecticut) were named to join the SFRC in the new Congress.
The 15th round of the Trans-Pacific Partnership (TPP) negotiations in New Zealand concluded Wednesday, with progress reported on the goods, services and investment, and government procurement chapters. Singapore will host the 16th round March 4-13, with intersessional meetings planned in the interim. Friday afternoon, President Obama signed into law Permanent Normal Trade Relations with Russia and Moldova. The law repeals Jackson-Vanik law and replaces it with the Sergei Magnitsky Accountability Act, which will sanction Russian human rights violators. Russian President Vladimir Putin reportedly said Thursday the Magnitsky provision warrants a measured response by the Duma.
The Senate Foreign Relations and House Foreign Affairs Committees announced open hearings next Thursday on the U.S. Consulate attack in Benghazi, Libya, with Secretary Clinton requested to testify. The State Department said the pending Accountability Review Board report may not be completed next week and may not be made available to Congress. Wednesday, outgoing House Foreign Affairs Committee Ranking Member Howard Berman (D-California) introduced a bill (H.R. 6644) to reform foreign assistance. Representative Gerald Connolly (D-Virginia) said he will reintroduce the bill in the 113th Congress. The House agreed Thursday by a 351-53 vote to go to conference with the Senate on the Fiscal Year 2013 National Defense Authorization Act. The Conference Committee is expected to release its report next week. Thursday, the Senate Intelligence Committee voted 9-6 to approve a classified report on the CIA's post-9/11 interrogation program that could shed light on the debate over torture. A declassified report, however, is not expected for months, at a minimum.
After Venezuelan President Hugo Chavez had surgery again for cancer in Cuba earlier this week, the State Department said Tuesday it is monitoring the “the events closely...and hope to see that any succession follows the terms of the Venezuelan constitution.” On Thursday, just days before Japan’s general election Sunday, a Chinese maritime surveillance plane was spotted in the air space of the disputed Senkaku Islands, causing the Japanese to scramble F-15 fighter jets. Next week, South Koreans also will go to the polls to elect a new President.