This Week in Washington - July 6, 2012

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DOMESTIC POLICY MATTERS

Congress is in recess this week in observance of the Fourth of July holiday.  Both chambers will return Monday.

Budget/Sequestration. Six Republican Members of the Senate Armed Services Committee, along with Independent Senator Joe Lieberman (Connecticut), sent a letter to 15 defense contractors Thursday, asking them to assess the potential effects of sequestration on their businesses.

On Tuesday, House Ways and Means Committee Chair Dave Camp (R-Michigan) announced the Committee will hold a hearing on July 10th to explore the implications of the Supreme Court’s ruling that the individual mandate in the healthcare law is constitutional, particularly as it relates to Congress’ authority to lay and collect new taxes.  Meanwhile, the House Rules Committee announced Thursday that it will meet next Monday to discuss the “Repeal of Obamacare Act,” the first step in fulfilling House Majority Leader Eric Cantor’s (R-Virginia) promise to hold a repeal vote next week. 

“Fast and Furious.”  In response to the House’s June 28th vote to hold Attorney General Eric Holder in contempt, Holder said Tuesday that Republicans have made him a “proxy” to attack President Obama in an election year, stating one would be “exceedingly naive to think that vote was about … documents.”  Also on Tuesday, Ranking Member of the Senate Judiciary Committee Chuck Grassley (R-Iowa) sent a letter to Attorney General Holder demanding to know who at the Justice Department reviewed a memo prepared by the Bureau of Alcohol, Tobacco, Firearms and Explosives about the Fast and Furious operation. 

On Tuesday, President Obama declared a major disaster in the State of Florida, making federal aid available to supplement state and local recovery efforts in the area affected by Tropical Storm Debby in late June.  Wildfires continued burning in Western states this week.  The National Interagency Fire Center, which coordinates wildfire-fighting efforts nationwide, said that 36 fires in nine western states were burning Wednesday.  Last Sunday evening, a C-130 military cargo plane from North Carolina crashed while fighting a wildfire in South Dakota, killing at least one of the six crew members on board.  Seven other firefighting C-130 planes were grounded this week because of the crash.

On Thursday, House Oversight and Government Reform Chair Darryl Issa (R-California) released a new report detailing failed mortgage company Countrywide Financial’s VIP loan program, which reportedly included discounted mortgage loans to lawmakers, key congressional staffers, Administration officials, and top officials at Fannie Mae.  While the identities of the Members of Congress receiving loans under the program have been known for years, and the program has been previously investigated by the Senate Ethics Committee, the report sheds new light on Countrywide’s relationship with Fannie Mae and asserts that Countrywide used the loan program to lobby Congress and block legislation that would have reformed the mortgage industry.  President Obama held an event Friday afternoon at the White House with construction workers and college students to sign the $105 billion transportation reauthorization bill, which also includes a one-year extension of the federally-subsidized student loan interest rates as well as a five-year extension of the national flood insurance program.  

Department of Labor Statistics.  The Department of Labor reported Friday that employers added a fewer-than-expected 80,000 jobs in June, and the national unemployment rate remained unchanged at 8.2 percent. 

Political News.  The office of nine-term Representative Jesse Jackson Jr. (D-Illinois) announced Thursday that the Congressman needs “extended in-patient treatment” for “certain physical and emotional ailments.”  Congressman Jackson has been on medical leave since June 10th.  On Friday, five-term Michigan Republican Congressman Thaddeus McCotter announced he is resigning his House seat.  Meanwhile, President Obama campaigned in Ohio and Pennsylvania this week. 

FOREIGN POLICY MATTERS   

Syria.  This week, U.S. Ambassador to Syria Robert Ford participated in the Cairo meeting with Syrian opposition leaders, which was held under the auspices of the Arab League. The State Department applauded the initiative.  Also this week, the State Department praised the continued Syrian military defections, which included a General, seven other officers, and dozens of soldiers.  According to the State Department, these “countless” defections reflect “not only the stress that Assad’s military is under, but increasingly his officers and his rank-and-file are voting with their feet against his regime.”  Also Tuesday, the State Department highlighted a Human Rights Watch report released that day, which reportedly identifies some 27 detention centers and alleges the Syrian Government intelligence agencies have been using these facilities to torture pro-democracy protestors.

Iran.  Tuesday, the State Department acknowledged reports that Iran had conducted a missile test, noting this is not a positive development.  On Friday, the State Department welcomed the decision made by the Italian energy company, Edison International S.p.A. to withdraw from Iran’s energy sector.  Edison is the sixth company to withdraw from its investment in Iran under a Special Rule that excludes companies from being subject to a U.S. investigation into past Iran-based activities, as long as they continue to avoid sanctionable activity with Iran in the future.  

Secretary of State Travel.  Before departing Washington Thursday, Secretary Clinton praised the U.N. Human Rights Council for adopting a resolution that she said “makes clear that all individuals are entitled to the same human rights and fundamental freedoms online as they are offline, and all governments must protect those rights regardless of the medium.”  In Paris on Friday, the Secretary attended the Friends of the Syrian People meeting and also met with Palestinian Authority President Mahmoud Abbas.  Secretary Clinton’s travels will also include stops in Japan, Mongolia, Vietnam, Laos, Cambodia, Egypt and Israel.  

This week, after Secretary Clinton called and again expressed “deepest regrets” to Pakistani Foreign Minister Hina Rabbani Khar for last November’s tragic incident in Salala, NATO supply trucks were allowed to resume travel via Pakistan to Afghanistan.  This weekend, Secretary Clinton is traveling to Tokyo to attend the Afghanistan donor conference, where the Afghan government will be looking for at least $4 billion of aid pledges from the international community.  

Trade Developments.  In San Diego this week, Trans Pacific Partnership (TPP) negotiators met for another round of discussions that included topics such as Australia’s alternate data-flow proposal and the TPP chapter on state owned enterprises (SOEs).  There is growing consensus that the more contentious chapters – such as those on intellectual property rights, SOEs, and market access – likely will not be addressed prior to the November U.S. elections.  The next TPP negotiation round is scheduled to be held again in the United States in September.  While campaigning Thursday in Ohio, President Obama announced the United States is challenging China’s imposition of antidumping and countervailing duties on imported American-produced automobiles.  Specifically, the United States has requested dispute settlement consultations with China at the World Trade Organization (WTO) to eliminate what the United States alleges are unfair duties.  In response to South Korea’s announcement they will resume a lethal scientific research whaling program, the State Department expressed concern and asserted the United States remains committed to the moratorium on commercial whaling.  

International Elections.  On Monday, President Obama called and congratulated Enrique Pena Nieto, who won the presidential election in Mexico last weekend.  President-elect Nieto expressed hope Monday for more U.S. assistance to counter the narcotics-related violence that has killed over 50,000 people in less than five years in Mexico.  Meanwhile, this Saturday, Libyans will go to the polls in their first democratic election in more than fifty years to elect a new government.  

Last Friday, House Foreign Affairs Subcommittee on Africa, Global Health, and Human Rights Chair Chris Smith (R-New Jersey) held a hearing on the situation in Mali.  Assistant Secretary of State for African Affairs Johnny Carson testified Mali “represents a microcosm of the complex problems challenging Africa as the country grapples with four distinct yet interrelated crises: a political crisis stemming from a military coup d’état that took place on March 21, a rebellion waged by armed Tuareg groups that has destabilized northern Mali, threats from terrorist and other extremist elements, and a humanitarian crisis in the Sahel exacerbated by the events in Mali.”  Meanwhile, this week, Islamists continued destroying cultural heritage sites in Timbuktu.  On Friday, the State Department welcomed the passage of U.N. Security Council Resolution 2056 on Mali, which registers the international community's grave concern about the serious threat to the stability posed by the situation there.