This Week in Washington - October 5, 2012

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DOMESTIC POLICY MATTERS 

Budget and Sequestration.  Congress is in recess until November 13th.  President Obama signed the Fiscal Year (FY) 2013 Continuing Resolution late last week, allowing lawmakers an additional six months to work on FY 2013 spending bills.  Bipartisan talks among eight Senators continue in hopes of reaching agreement on a package to address expiring tax cuts and automatic sequestration cuts set to go into effect next year.  On Wednesday, Senator Mark Warner (D-Virginia) announced he would host the “Gang of Eight” to continue negotiations next week.  The other seven Senators participating in the talks include Majority Whip Dick Durbin (D-Illinois), retiring Budget Chairman Kent Conrad (D-North Dakota), Tom Coburn (R-Oklahoma), Michael Crapo (R-Idaho), Saxby Chambliss (R-Georgia), Mike Johanns (R-Nebraska), and Michael Bennet (D-Colorado).  Republican Senate leaders in a letter Monday urged President Obama to resist releasing federal emergency oil reserves to reduce gasoline prices.  On September 28th, the Office of Management and Budget issued guidance to federal agencies in advance of the new fiscal year, which directed agencies to “continue normal spending and operations,” despite the planned automatic budget cuts under sequestration.

Economy.  After three months of contraction for the manufacturing sector, the industry’s index rose to 51.5 for the month of September, primarily due to strength in motor vehicle sales and home construction materials.  Additionally, on Friday, the Labor Department released its job numbers for September, a month in which the economy added 114,000 jobs while the unemployment rate fell from 8.1 percent to 7.8 percent – the lowest rate since President Obama took office in January 2009. 

The Supreme Court opened its new term on Monday and is reviewing several high-profile cases on affirmative action in college admissions, the scope of federal lawsuits against businesses and individuals for alleged human rights abuses on foreign soil, gay marriage rights, and the Voting Rights Act.  Two U.S. Border Patrol agents were shot Tuesday in southern Arizona.  House Oversight and Government Reform Committee Chairman Darrell Issa (R-California) called for an investigation of “the full circumstances of this shooting,” which killed one of the agents.  On Tuesday, the Obama Administration announced the reprogramming of Department of Justice funds to purchase a state prison in northwestern Illinois to increase federal maximum-security cell space.  Several Republican Appropriators oppose the $165 million plan, which they say ignores Congress’ directed spending authority.  Congressman Frank Wolf (R-Virginia) expressed concern over possibly using the facility as a replacement for Guantánamo Bay detainees.  Senator Kay Bailey Hutchison (R-Texas) worried the purchase will deny money for other needed prison expenditures.  

2012 Elections.  President Obama and Republican presidential nominee Mitt Romney both spent several days preparing for the first official presidential debate, held in Denver, Colorado on Wednesday night.  By prior agreement, the debate focused on domestic policy issues, including the candidates’ differing positions on tax and spending matters and health care policy.  By most media accounts and political analyses, Governor Romney performed decisively better.  A CNN poll taken after the debate revealed that 67 percent of respondents thought Romney “did the best job in the debate.”  However, before the debate, a poll estimated that President Obama has a 50-point lead over the Republican among Latino voters.  On Tuesday, Romney stated that, if elected, he would not immediately deport the country’s estimated 1.7 million undocumented children.  Those undocumented immigrants were recently offered a two-year deferral on deportation through an Executive Order by President Obama.  Meanwhile, recent polls in the contests for control of the U.S. Senate, in which the Democratic Caucus currently maintains a 53-47 advantage, show very close races for Republican-held seats in Arizona, Indiana, Massachusetts, and Nevada and Democratic-held seats in Connecticut, Missouri, Montana, North Dakota, Virginia, and Wisconsin.

FOREIGN POLICY MATTERS    

Syria.  On Tuesday, State Department Spokesperson Victoria Nuland responded to Russian warnings against Western intervention in Syria, stressing the “nonlethal” nature of U.S. support to help “provide for people in parts of Syria that have now been liberated from regime dominance.”  In response to a Syrian cross-border mortar attack Wednesday that killed five Turkish citizens, Turkey shelled regime targets inside Syria.  On Thursday, Turkey's Parliament authorized military operations outside Turkish borders, if the government deems them necessary.  Late Thursday, the U.N. Security Council voted on a non-binding resolution to condemn the Syrian military’s attack, saying it “highlighted the grave impact the crisis in Syria has on the security of its neighbors…."  The resolution also called on the Assad government to "fully respect the sovereignty and territorial integrity of its neighbors."  On Friday, Assad’s forces reported they have regained control of the Al-Sakhour district in Aleppo.  Also Friday, the media reported regime warplanes were pounding Homs, and Syrian rebels reported they have captured an air base with a cache of missiles outside Damascus.     

Iran.  While protests this week over Iran’s tumbling currency signifies international sanctions are having a growing impact, European diplomats indicated the United Kingdom, France and Germany may be considering proposals that would tighten E.U. sanctions against Iran’s energy, finance, trade and transportation sectors.  U.S. Under Secretary of the Treasury for Terrorism and Financial Intelligence David Cohen visited France, Germany, Italy and Great Britain this week to discuss increasing the pressure on the Iranian government.  Meanwhile, Friday, some Congressional aides indicated the U.S. Congress is also considering proposals to further tighten sanctions on Iran’s financial sector.  Also Friday, the media reported that Iranian officials had offered a nine-step plan to defuse the nuclear crisis with the West; however, the plan was rejected by the United States reportedly because the plan did not guarantee Iran would not produce a nuclear weapon.

On Thursday, Afghan President Hamid Karzai accused the United States of playing a “double game” by fighting a war against Afghan insurgents rather than "where terrorism is financed and manufactured" in Pakistan.  Meanwhile, the death toll for U.S. soldiers killed in Afghanistan since 2001 passed 2,000 this week.  Wednesday, Secretary Clinton met with Foreign Minister Zalmai Rassoul prior to hosting the inaugural U.S.-Afghan Bilateral Commission meeting.  Reports emerged Thursday of an agreement between Russia and Pakistan to condemn U.S.-led drone attacks as an illegal breach of Pakistan’s sovereignty.  

Three weeks after four Americans were killed in an attack on the U.S. Consulate in Benghazi, Libya, an FBI team arrived Thursday at the site, accompanied by a U.S. Special Operations force.  The State Department's Accountability Review Board, tasked with reviewing the circumstances surrounding the September 11th attack, met for the first time Thursday.  The House Oversight and Government Reform Committee is scheduled to examine the Benghazi attack at a hearing on Wednesday.  After Libya's Prime Minister-elect Mustafa Abushagur encountered some opposition Thursday to his proposed Cabinet list, he withdrew the list Friday.  The Prime Minister-elect said he will revise and resubmit the nominations to the National Congress.

On Tuesday, the White House congratulated the Georgian people for an election on Monday that resulted in the first democratic transfer of power since Georgia gained independence.  President Mikheil Saakashvili conceded defeat Monday to the Georgian Dream coalition, whose leader, Bidzina Ivanishvili, is expected to be named Prime Minister.  Thursday, Secretary Clinton spoke with Mr. Ivanishvili and President Saakashvili, encouraging them to work together to advance Georgia’s democratic and economic development.  

House Foreign Affairs Committee Chair Ileana Ros-Lehtinen (R-Florida) and House Republican Study Committee Chair Jim Jordan (R-Ohio) sent a letter to Secretary Clinton Thursday raising questions about the Administration’s recent notification to Congress of its intent to provide a $450 million economic aid package to Egypt.  On Wednesday, Congresswoman Ros-Lehtinen said Venezuelan President Hugo Chavez, who faces opposition candidate Henrique Capriles in national elections Sunday, “...is actively seeking to deny the Venezuelan people their democratic rights and silence them through intimidation, coercion, and manipulation” of the electorate.  On Thursday, King Abdullah II of Jordan dissolved the Jordanian Parliament and called for early elections.  Thousands of Jordanians rallied on Friday to call for a boycott of the elections.

Wednesday, the United States welcomed news of the defeat of Al-Shabaab in the Somali port city of Kismayo by the Kenyan-led African Union Mission in Somalia (AMISOM) peacekeepers and Somali forces.  The State Department said Al-Shabaab’s departure from Kismayo demonstrates continued momentum by pro-government forces against the Islamist militant organization.  On Friday, Britain's high court rejected terrorism suspect Abu Hamza's final appeal, ruling he and four other terror suspects can be extradited to the United States.  The United States alleges Hamza attempted to establish a terrorist training camp in the state of Oregon and helped al-Qaida to seize hostages in Yemen.

On Friday, President Obama signed into law H.R. 6431, providing the United States the flexibility to vote in favor of assistance to Burma from International Financial Institutions.  Deputy Secretary of the Treasury Neal Wolin said the law will "support inclusive development in Burma and help reintegrate the country into the international economic community."

In New York City Monday, Secretary Clinton met with Indian Foreign Minister S.M. Krishna. The Secretary returned to Washington Tuesday, delivering remarks as part of the Strategic Dialogue on Travel and Tourism.  On Wednesday, Secretary Clinton met with the Foreign Minister of Kazakhstan, Yerlan Idrissov.  The Secretary met Friday with U.N. Under-Secretary-General for Political Affairs Jeff Feltman.

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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