This Week in Washington - November 16, 2012

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DOMESTIC POLICY MATTERS

Budget, Sequestration, & the Economy. At his first press conference since being re-elected, President Obama reiterated on Wednesday his demand for additional tax revenue from the highest income earners. The top four Congressional leaders met with the President Friday to begin to negotiate a deal to avoid the "fiscal cliff." President Obama called for $1.6 trillion in new tax revenues over the next ten years and urged Congress to immediately pass legislation extending the current tax rates for household incomes up to $250,000. Speaker of the House John Boehner (R-Ohio) also presented a framework to include tax code and spending reform strategies, noting that Republicans were willing to put revenue increases on the table, but only if they are coupled with "significant spending cuts." Speaker Boehner, Senate Majority Leader Harry Reid (D-Nevada), Senate Minority Leader Mitch McConnell (R-Kentucky) and House Minority Leader Nancy Pelosi (D-California) agreed the meeting was "constructive" and felt confident they could come to an agreement. Senator Tom Coburn (R-Oklahoma) released a report Thursday that estimates the Department of Defense could save at least $67.9 billion over ten years by ending wasteful spending. 

The "lame-duck" session of Congress began on Tuesday. On Wednesday, the Senate failed to proceed to a final vote on cybersecurity legislation, but Thursday, Minority Leader McConnell suggested that leaders could come to an agreement on cybersecurity legislation next month. This week, the House Energy and Commerce Committee and the Senate Health, Education, Labor and Pensions Committee held oversight hearings on the recent meningitis outbreak, focusing on how to prevent a similar outbreak in the future. Senate Armed Services Committee Chair Carl Levin (D-Michigan) and Ranking Member John McCain (R-Arizona) are working to prepare the National Defense Authorization Act for Fiscal Year 2013 for consideration after the Thanksgiving recess. However, Senator Rand Paul (R-Kentucky) announced Thursday he has put a hold on the bill until he is guaranteed a vote on his amendment to require a jury trial for Americans detained in terrorism investigations. Also on Thursday, Attorney General Eric Holder announced a resolution to the criminal case against BP relating to the Deepwater Horizon rig that exploded in the Gulf of Mexico in 2010. BP has agreed to plead guilty to 14 criminal counts, including manslaughter, and to pay a $4.5 billion settlement to the Justice Department. The settlement does not cover three top BP employees under indictment, and the company still faces potential penalties from federal civil lawsuits.

Hurricane Sandy Recovery. President Obama announced Thursday that Housing and Urban Development Secretary Shaun Donovan, former head of the New York Housing Authority, will head federal efforts to support state governments in long-term redevelopment after Hurricane Sandy. The Federal Emergency Management Agency will continue to lead immediate recovery efforts and, as of Thursday, had spent approximately $611 million on the recovery. Despite earlier support for off-sets to federal disaster recovery funding, this week conservative lawmakers said they are willing to accept an aid package without off-sets. 

Political News. Independent Senator-elect Angus King (Maine) announced Wednesday that he will caucus with Senate Democrats in the next Congress, giving the party a 55-45 advantage over Senate Republicans. Lawmakers settled on several party leadership positions for the 113th Congress this week: Senate Republicans named Senator Jerry Moran (Kansas) to serve as Chairman of the National Republican Senatorial Committee; House Republicans chose Congresswoman Cathy McMorris Rodgers (Washington), backed by House Speaker John Boehner (Ohio), to serve as House Republican Conference Chair over Congressman Tom Price (Georgia), who was supported by Congressman Paul Ryan (Wisconsin); Republicans also picked Representative Greg Walden (Oregon) to serve as Chairman of the National Republican Congressional Committee, and Speaker Boehner selected Congressman Pete Sessions (Texas) as the next Chairman of the House Rules Committee; Senate Democrats re-elected their leadership team on Wednesday, which includes Senator Harry Reid (Nevada) as Majority Leader, Senator Dick Durbin (Illinois) as Majority Whip, Senator Chuck Schumer (New York) as Conference Vice Chair, and Senator Patty Murray (Washington) as Conference Secretary; for House Democrats, Minority Leader Nancy Pelosi (California), Minority Whip Steny Hoyer (Maryland), and Assistant Leader James Clyburn (South Carolina) announced they will run for re-election to their leadership posts. Representative Don Young (R-Alaska) withdrew a proposal Thursday that would have allowed members to offer earmarks under certain conditions.

2012 Elections. On Thursday, Democratic challenger Ami Bera was declared the winner over House Administration Committee Chairman Dan Lungren (R-California). Congressman Brian Bilbray (R-California) conceded defeat to Democratic challenger Scott Peters on Friday. Representative Allen West (R-Florida) challenged vote totals showing challenger Patrick Murphy (D) with a 2,000 vote lead; further legal developments are pending. Representatives Ron Barber (D-Arizona) and Mike McIntyre (D-North Carolina) hold small leads over their Republican challenges, but those races remain unresolved.

FOREIGN POLICY MATTERS    

Following Central Intelligence Agency (CIA) Director General David Petraeus’ resignation and the accompanying scandal, several Members of Congress criticized the Federal Bureau of Investigation (FBI) this week for having failed to notify Congress and the White House promptly of its investigation. The White House says it was notified on November 6th, although the FBI inquiry reportedly began several months before. This week, the media reported the FBI also investigated General John Allen, apparently for allegedly inappropriate communications with a female civilian in Tampa, Florida. While the Tuesday Senate Armed Services Committee (SASC) hearing to consider General Allen’s nomination to be the next NATO Supreme Allied Commander in Europe was postponed, the White House said Tuesday President Obama still has "faith" in General Allen. Meanwhile, on Thursday, the SASC advanced General Joseph Dunford’s nomination to be Commander of U.S. Forces in Afghanistan, the position being vacated by General Allen. 

Friday, at closed Congressional briefings on the U.S. Consulate attack in Libya, General Petraeus reportedly testified the CIA’s prepared talking points referred to the incident as a terrorist attack. Petraeus is reported to have noted other federal agencies made changes to the CIA's draft, removing the terrorist designation. United Nations Ambassador Susan Rice, who initially described the situation in Libya as a demonstration in response to an anti-Muslim film clip, faced renewed criticism this week from Republican Senators John McCain (Arizona), Lindsey Graham (South Carolina) and Kelly Ayotte (New Hampshire). The Senators said Wednesday Ambassador Rice is unqualified to be Secretary of State, and they would block her nomination, if it were put forward. President Obama later defended Ambassador Rice during his first press briefing after the election, saying she has "done exemplary work" with "skill, professionalism and toughness and grace." While House Foreign Affairs Committee (HFAC) Chair Ileana Ros-Lehtinen (R-Florida) originally asked Secretary Clinton to testify before the Committee this week, the State Department said she will testify on the attack after the Accountability Review Board releases its findings, likely in December. In other HFAC news, Congressman Brad Sherman (D-California) withdrew from consideration Friday to be the Committee’s next Ranking Member, instead endorsing Congressman Eliot Engel (D-New York) for the position.

Despite international calls for restraint Thursday, Israel and Hamas escalated their conflict over the Gaza Strip, with Palestinian militants launching hundreds of rockets into Israeli territory, including two longer-range missiles that targeted Tel Aviv. In response, Israel intensified air strikes over Gaza and sent tanks to the border. On Thursday, the State Department defended Israel’s right to self-defense and said the "onus was on Hamas" to halt the attacks. Meanwhile, Egypt’s Prime Minister Hesham Kandil traveled to Gaza Friday, while thousands of Egyptians protested against the third day of Israeli air strikes. Egyptian President Mohamed Morsi also pledged to support the Palestinian enclave's population in the face of "blatant aggression".

Iran. An International Atomic Energy Agency (IAEA) diplomat said Thursday that Iran could soon increase uranium enrichment at the Fordow nuclear plant. On Friday, the IAEA released its quarterly Iran report, which reflects Iran’s ability to produce enough fissile material for the core of a nuclear warhead within four months. 

Syria. Officials from the United States, France, Germany, Qatar, Turkey and other nations were attending meetings in London this week with Mouaz al-Khatib – the head of the new Syrian National Coalition for Opposition and Revolutionary Forces. While France has recognized the new opposition group, no other country has similarly done so. British Foreign Secretary William Hague said Friday European nations are discussing whether to overturn an E.U. arms embargo on Syria, after French Foreign Minister Laurent Fabius raised the possibility Thursday of the E.U. agreeing to provide the opposition with "defensive arms".  

On Friday, the House voted 365-43 to pass the Russia and Moldova Jackson-Vanik Repeal Act of 2012 (H.R. 6156), which effectively grants Permanent Normal Trade Relations status for Russia and Moldova and includes the Sergei Magnitsky Rule of Law Accountability Act – a provision that seeks to hold accountable Russian individuals who engage in gross human rights violations. 

Secretary Clinton and Secretary of Defense Leon Panetta attended a bilateral security summit in Australia Wednesday to review the implementation of the joint military training hub and to improve interoperability between the U.S. and Australian Navies. In Singapore Friday, Secretary Clinton met with Minister for Foreign Affairs and Minister for Law K Shanmugam, discussing economic engagement, security and regional exchanges. On Saturday, Secretary will join President Obama in Thailand.

Published In: Elections & Politics Updates, Finance & Banking Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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