November 30, 2012

DOMESTIC POLICY MATTERS

The Fiscal Cliff Debate. High-level negotiations surrounding the so-called “fiscal cliff” continued this week. On Wednesday, Congressional Republicans and President Obama met with Erskine Bowles and Alan Simpson, Co-Chairmen of the President’s National Commission on Fiscal Responsibility and Reform, and a group of prominent CEOs. Wednesday evening, President Obama and Speaker of the House John Boehner (R-Ohio) spoke directly for 30 minutes by phone. On Thursday, Treasury Secretary Timothy Geithner and White House Director of Legislative Affairs Rob Nabors met individually with House and Senate leadership, offering a deficit reduction proposal on behalf of the White House. The proposal included a $1.6 trillion tax increase, a $50 billion economic stimulus program, a one-year postponement of sequestration, ongoing authority for the Executive Branch to raise the debt ceiling, and $400 billion in unspecified savings from entitlement programs. Republican leaders quickly rejected the proposal, with Senate Minority Leader Mitch McConnell (R-Kentucky) calling it a “step backward”. On Friday, President Obama accused “just a handful of Republicans in Congress” of holding middle class tax cuts hostage “simply because they don’t want tax rates on upper income folks to go up.” Speaker Boehner told reporters at a press conference Friday that the fiscal cliff negotiations are at a “stalemate,” as the White House’s offer was “not a serious proposal.” Meanwhile, House Minority Leader Nancy Pelosi (D-California) announced Friday that Democrats will circulate a discharge petition in an attempt to force a House vote to extend Bush-era tax cuts for households with annual incomes below $250,000.

On Friday, the House passed (245-149) a revised measure of the STEM Jobs Act (HR 6429), designed to increase visas for high-skilled immigrants with advanced science, technology, engineering, and mathematics (STEM) backgrounds. However, the White House said in a statement that “the Administration does not support narrowly tailored proposals that do not meet the President's long-term objectives with respect to comprehensive immigration reform.” On Tuesday, retiring Senators Kay Bailey Hutchison (R-Texas) and Jon Kyl (R-Arizona) introduced a Republican alternative to the Democrats’ DREAM Act, which provides a path to citizenship for certain children brought to the United States illegally. The Republican measure, the ACHIEVE Act, which would use a three-step process to legalize qualified undocumented children but would not provide a path to citizenship, is not expected to advance through the Senate.

113th Congress. Both parties in the House finalized their leadership teams for the 113th Congress this week. The Republican Caucus voted Wednesday to elect Congressman Eric Cantor (Virginia) as Majority Leader, Congressman Kevin McCarthy (California) as Majority Whip, and Congresswoman Cathy McMorris Rodgers (Washington) as Conference Chair. This week, the Caucus also selected new chairs for the following committees: Financial Services (Congressman Jeb Hensarling, R-Texas), Foreign Affairs (Congressman Ed Royce, R-California), House Administration (Congresswoman Candice Miller, R-Michigan), Judiciary (Congressman Bob Goodlatte, R-Virginia), Science (Congressman Lamar Smith, R-Texas), and Transportation (Congressman Bill Schuster, R-Pennsylvania). Additionally, on Thursday, the Democratic Caucus elected Congresswoman Nancy Pelosi (California) as Minority Leader, Congressman Steny Hoyer (Maryland) as Minority Whip, Congressman James Clyburn (South Carolina) as Assistant Minority Leader, Congressman Xavier Becerra (California) as Caucus Chair, and Congressman Joe Crowley (New York) as Caucus Vice Chair. House Democrats postponed their committee ranking member elections.

Transition and Political News. On Monday, Chairman of the U.S. Securities and Exchange (SEC) Commission Mary Schapiro announced she will step down from the position on December 14th. SEC Commissioner Elisse Walter will serve as interim Chair. Also on Monday, Republican New Jersey Governor Chris Christie, who sports approval ratings above 70% in some recent public opinion polls in the wake of Hurricane Sandy, announced his intention to seek re-election next year. On Wednesday, Republican challenger David Rouzer conceded the race for North Carolina’s 7th District and congratulated victorious incumbent Representative Mike McIntyre (D). President Obama met with Republican Presidential candidate Mitt Romney on Thursday for a private lunch to discuss working together to maintain America’s world leadership position.

FOREIGN POLICY MATTERS

Egypt. Early Friday, the Islamist-dominated constitutional assembly approved a constitution without the participation of liberal or Christian members, seeking to pre-empt Egypt's Supreme Constitutional Court

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before it rules this Sunday on whether to dissolve the panel. The draft, which the assembly plans to deliver to the president Saturday, must be put to a nationwide referendum within 30 days. President Morsi committed Thursday to doing so "soon." The opposition called for Friday protests to demonstrate against the new constitution and President Morsi’s power consolidation moves from last week.

On Thursday, the 193 member U.N. General Assembly voted 138-9, with 41 abstentions, to recognize Palestine as a “non-member observer state.” The United States and Israel were among those countries voting no. U.S. Secretary of State Hillary Clinton described the vote as "unfortunate and counterproductive". She further noted: "Only through direct negotiations between the parties can the Palestinians and Israelis achieve the peace that both deserve: two states for two people, with a sovereign, viable and independent Palestine living side-by-side in peace and security with a Jewish and democratic Israel." U.N. Ambassador Susan Rice cautioned the vote does not confer statehood and reminded the Assembly that full state recognition requires unanimous approval from the U.N. Security Council’s (UNSC) permanent members, reaffirming the United States would veto any such a petition.

Syria. Friday, the Friends of Syria Group gathered in Tokyo in the latest show of international support for the Syrian opposition. Japanese Foreign Minister Koichiro Gemba suggested the international community has to act together where the divided UNSC has failed. Friday, on the ground in Syria, the nationwide internet and telephone outage continued for a second day, while Syrian air force jets bombarded rebel targets close to the Damascus airport, causing international carriers to halt flights to the capital.

The Senate debated the Fiscal Year 2013 National Defense Authorization Act (NDAA) for three days this week, voting on a variety of amendments, including wartime contracting oversight provisions, a provision that would address the Lord’s Resistance Army in Africa, and a measure that encourages adherence to President Obama’s deadlines for U.S. military withdrawal from Afghanistan. Late Thursday, the Senators debated an amendment offered by Senator Robert Menendez (D-New Jersey) that would bar all transactions with Iran’s energy, shipping and shipbuilding sectors and its ports, and would ban the sale of certain materials to Iran, including graphite, aluminum, steel and metallurgical coal. The amendment was approved Friday morning by a vote of 94-0. The Senators also approved, by a vote of 54-41, Senator Ayotte’s (R-New Hampshire), amendment to prohibit the transfer of those in custody at the Guantánamo Bay detention center to the United States for imprisonment. Thursday afternoon, the White House said if President Obama were presented with the NDAA in its current form, his senior advisers would recommend the President veto the bill, in large part due to the Guantanamo provision. The cloture vote on the full NDAA will take place Monday, with votes on further amendments and final passage expected next week.

Secretary Clinton spoke at the Brookings Institute Thursday about the revitalized transatlantic partnership with Europe, noting “rather daunting global challenges, among the most difficult in decades: a global economic downturn, an aggressive regime with nuclear ambitions in Iran, two unfinished wars, uncertainty about America’s global leadership and staying power.” Next week, the Secretary will travel to the Czech Republic, Belgium and Ireland, where she will participate in OSCE ministerial in Dublin. On Thursday, Secretary Clinton met with Georgian Foreign Minister Maia Panjikidze, discussing rule of law and transparency, territorial integrity and Georgia’s NATO ambitions. Secretary Clinton appeared later that day at the Transformational Trends 2013 Forum, speaking about shifts in U.S. foreign policy, including the pivot to the Asia Pacific. The Secretary also said the United States should ratify the Law of the Sea Treaty and continue to manage U.S. relationships with emerging powers like China and India.

U.N. Ambassador Susan Rice met with several Members of Congress this week, including Senators McCain, Avoytte, Lindsey Graham (R-South Carolina) and Susan Collins (R-New Maine). In a quote also reflective of other Republican Senators’ views, Senator Graham said: “Bottom line, I'm more disturbed now than I was before the 16 September explanation about how four Americans died in Benghazi, Libya, by Ambassador Rice,” raising new questions about possible GOP support if Ambassador Rice were nominated to be Secretary of State.

Tuesday, President Obama met Mexican President-elect Enrique Peña Nieto at the White House, discussing expanding ties beyond combatting narco-trafficking to creating jobs for both countries. On Saturday, Vice President Biden will lead a U.S. delegation to attend Peña Nieto’s inauguration as President. On Thursday morning, the President spoke with President Sebastián Piñera of Chile, discussing opportunities to strengthen the global economy through job creation and expanded trade, including by expeditiously moving forward on the Trans-Pacific Partnership.