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WEEK ONE HUNDRED & THIRTY-FOUR

August 7, 2011                Treasury Secretary Timothy Geithner has told President Obama he plans to remain in his job through the fall of 2012, keeping in place Obama’s longest serving economic advisor after the first U.S. credit downgrade and renewed fears of a second recession:

·        During his tenure, Geithner has continually won over Obama in contentious policy debates, shaping the president’s responses to the financial crisis and successfully arguing that the government should not seize struggling banks—more recently, he urged Obama to propose cutting the annual deficit by $4 trillion, despite other top advisors’ advice that the president focus squarely on the nation’s high unemployment.

August 8, 2011

1.        Standard & Poor’s Ratings Services downgraded the credit ratings of Fannie Mae and Freddie Mac and other agencies linked to long-term U.S. debt:

·        The agency also lowered the ratings for farm leaders; long-term U.S. government-backed debt issued by 32 banks and credit owners; and three major clearing houses, which are used to execute trades of stocks, bonds, and options—all the downgrades were from AAA to AA+, reflecting the same downgrade S&P made of long-term U.S. government debt on August 5th.

2.        World markets plunged in the worst day since the financial crisis, eradicating hundreds of billions of dollars of wealth in a setback to the struggling U.S. economic recovery:

·        Despite efforts by world leaders to reassure markets, investors remained alarmed over the mounting economic woes in the U.S. and a spreading debt crisis in Europe, and the Dow Jones industrial average fell 634 points—but in the first trading day since the U.S. was downgraded August 5th by S&P, which said that U.S. Treasury bonds have become a riskier bet because of the government’s failure to lower its debt burden, investors actually poured money into U.S. bonds.

3.     The jolt to America’s prestige as an economic super power has so far only hardened positions in Washington, as President Obama and congressional leaders are seeking to use the downgrade in America’s credit rating to gain leverage in the next round of the battle over the federal debt:

·        Obama spoke at midday as the Dow was heading toward a 634-point drop, and he portrayed S&P’s decision to downgrade U.S. credit as proof that political paralysis “could do enormous damage to our economy and the world’s,” and he called upon the nation’s political leadership to stop “drawing lines in the sand”—but by day’s end, there was no indication compromise is in the offing, with House Majority Leader Eric Cantor sending a memo to House Republicans urging them to hang tough.

WEEK ONE HUNDRED & THIRTY-THREE

July 31, 2011        President Obama and congressional leaders of both parties said that they had agreed to a framework for a budget deal that would cut trillions of dollars in federal spending over the next decade and clear the way for an increase in the government’s borrowing limit:

  • Obama spoke from the White House, telling reporters that “the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default”—just before Obama spoke on television, the two Senate leaders, Harry Reid (D-Nevada) and Mitch McConnell (R-Kentucky), took the floor to endorse the pact as well.

August 1, 2011

1.     After months of partisan impasse, the House approved a budget agreement intended to head off a potential government default, pushing Congress a big step closer to the conclusion of a bitter fight that has left both parties bruised and exhausted:

  • Despite the tension and uncertainty that has surrounded efforts to raise the debt ceiling, the vote of 269-161 was relatively strong in support of the plan, which would cut more than $2.1 trillion in government spending over ten years while extending the borrowing authority of the Treasury Department—it would also create a powerful new joint congressional committee to recommend broad changes in spending, and possibly in tax policy, to reduce the deficit;
  • In the end, 174 Republicans and 95 Democrats backed it, while 66 Republicans and 95 Democrats voted against it—Oregon’s delegation split in favor, 3-2, with Greg Walden (Oregon’s only Republican representative), David Wu, and Kurt Shrader voting yes and Earl Blumenauer and Peter DeFazio voting no.

2.     The Obama administration issued new standards that require health insurance plans to cover all government-approved contraception for women, without co-payments or other charges—the standards, which also guarantee free coverage of other preventative services for women, followed recommendations from the National Academy of Sciences and grew out of the new healthcare law:

  • The mandate applies to private insurance and will take effect beginning August 1, 2012, as plans renew—the requirement does not immediately help women who have no health insurance.

3.     The Justice Department filed a challenge to Alabama’s tough anti-illegal immigration law, arguing that the Constitution prohibits state and local governments from creating a national “patchwork” of immigration policies:

  • The suit, filed in Alabama’s northern district, makes the second time the Obama administration has sought to block a state immigration reform law—a number of states, including Georgia, South Carolina, Utah, and Indiana have embraced similar laws, but Alabama’s law, signed in June by Gov. Robert Bentley, is the strictest.

August 2, 2011

1.     The Senate passed emergency legislation to avoid a first-ever government default, rushing the legislation to President Obama for his signature just hours before the deadline—the vote was 74-26:

  • Oregon’s senators split on raising the debt ceiling, with Sen. Ron Wyden voting in favor and Sen. Jeff Merkley casting a vote against it—Wyden said he had misgivings about the bill, but voting it down was not an option.

2.     The longest decline in stock prices since the nation’s financial crisis started in 2008 has investors worriedly watching new economic indictors expected this week for signs that the economy is slipping back into recession:

  • Stocks plunged, despite Congress’ final approval of a deal that avoided what would have been a devastating default on the nation’s debt, and the Dow Jones industrial average fell 265.87 points, or 2.2%—what spooked the market were dismal government statistics on income and consumption, with personal spending falling 0.2%, the first such drop in nearly two years;
  • Wages and income were flat in June, the Commerce Department said, and consumers upped their savings’ rate from 5% to 5.6%—that would usually be a good thing, but not in an economy stuck in neutral; it is consumption, not savings, that’s needed to spark hiring.

August 3, 2011

1.        Congressional leaders have two weeks to name panel members for a powerful “super committee” that is supposed to recommend at least $1.5 trillion of additional deficit reduction measures—names of candidates were circulating on Capitol Hill, and some lawmakers have been quietly promoting themselves or their friends for spots on the 12-member panel, which will consist of equal numbers of Republicans and Democrats from the House and Senate:

  • The panel, known as the Joint Select Committee on Deficit Reduction, will have three months, until November 23rd, to forge an agreement on divisive issues that have defied solution for decades—congressional leaders say that this panel has a better chance than many of its predecessors because the debt deal creates a strong incentive for bipartisan agreement: if the committee fails to agree or to win approval for a plan from the House and the Senate, the government will automatically cut at least $1.2 trillion over ten years from hundreds of military and non-military programs, biting into the priorities of both parties.

2.        Joining a growing chorus of economists raising alarms about a double-dip recession, former top White House advisor Lawrence Summers said that there is at least a 33 percent chance the U.S. economy will slip into another economic downturn:

  • Summers, who stepped down at the end of last year to return to Harvard University, also predicted that the unemployment rate would be above 8.5% at the end of next year—Summers’ projection is in line with those of other economists, and adding to the jittery outlook was word that service businesses, such as restaurants, hotels, and financial companies, experienced their weakest growth in 17 months in July.

August 4, 2011

1.        Stocks plummeted as investors fretted about weakening economic conditions and emergency steps announced by the European Central Bank that only heightened worries that big economies, led by Italy and Spain, are in deep trouble:

  • The Dow was down more than 300 points much of the day, ultimately shedding 512.76 point, and the S&P fared no better, losing 60.27 points, while the Nasdaq fell 136.68 points—the drop followed a breather on August 3rd that broke an 8-day slide, the worst since October 2008 when the U.S. financial system was in meltdown.

2.     The Interior Department granted Royal Dutch Shell conditional approval of its plan to begin drilling exploratory wells in the Arctic Ocean next summer, a strong sign that the Obama administration is easing a regulatory clampdown on offshore oil drilling that it imposed after last year’s deadly accident in the Gulf of Mexico:

  • The move confirms a willingness by President Obama to approve expanded domestic oil and gas exploration in response to high gasoline prices and continuing high levels of unemployment—it comes as the issuance of drilling permits in the Gulf is quickening, including the granting of a permit for a Shell floating drill rig for a 4,000-foot-deep well.

3.        Defense Secretary Leon Panetta warned of dire consequences if the Pentagon is forced to make cuts to its budget beyond the $400 billion in savings planned for the next decade:

  • The initial round of Pentagon cuts is part of a debt-reduction package that would slice about $1 trillion from agency budgets over ten years—a second round of cuts, totaling as much as $1.2 trillion, will be prepared by a bipartisan congressional panel later this year.

4.     The debate over raising the debt ceiling, which brought the nation to the brink of default, has sent disapproval of Congress to its highest level on record and left most Americans saying that creating jobs should take priority over cutting spending, according to the latest New York Times/CBS News poll:

  • A record 82 percent of Americans now disapprove of the way Congress is handling its job, the most since The Times began asking in 1977, and even more than after a political stalemate led to a shutdown of the federal government in 1995—Republicans in Congress shoulder more of the blame for the difficulties in reaching a debt ceiling agreement than President Obama and the Democrats, the poll found, and the public opinion of the tea party movement has soured in the wake of the debt ceiling debate.

5.     New data from July show that the retail economy is locked on two tracks—one for businesses that cater to the well to do and the other for everyone else:

  • Sales at stores open at least a year rose 4.4% in July at the 25 retailers tracked by Thomson Reuters, but while expensive stores turned in strong results, including a startling 15.6% increase at Saks 5th Avenue, almost double what analysts had predicted, middle- and low-end stores were largely dependent on marked-down summer clothes for their increases—the divide has extended all the way to grocery stores.

August 5, 2011

1.     The U.S. had its AAA credit rating downgraded for the first time by Standard & Poor’s on concern that spending cuts agreed on by lawmakers to raise the nation’s borrowing limit won’t be enough to reduce record deficits:

  • The other rating agencies, Moody’s and Fitch, have said they have no immediate plan to downgrade the country’s credit rating, giving the government more time to make progress on debt reduction—the lowering of the country’s rating could rattle confidence and raise borrowing costs for the government and consumers, impeding the already fragile recovery.

2.        President Obama proposed tax credits and training programs to help thousands of U.S. service members returning from war in Iraq and Afghanistan find jobs in the shaky economy at home:

  • For some military veterans, the economic outlook is more dismal than the nationwide unemployment rate, which is still more than nine percent—the White House said that one million military veterans are unemployed, and among those who joined the military after the September 11th attacks, the unemployment rate was 13.3% as of June;
  • Obama asked Congress to authorize a “Returning Heroes” credit for 2012-13, which would give companies that hire unemployed veterans up to a $2,400 tax credit to increase to $4,800 if the veteran has been unemployed for six months or more, and he asked that Congress extend the “Wounded Warriors” tax credit, which gives companies that hire veterans with service-related disabilities a $4,800 credit, increased to $9,600 if the veteran has been unemployed for six months or more—the president challenged private companies to hire or train 100,000 veterans or their spouses by the end of 2013, and the White House said that several companies, including Lockheed Martin, Microsoft, and Siemans, had already committed to that effort.

3.        President Obama signed a temporary funding extension for the FAA, ending a two-week impasse that left the agency in a partial shutdown—the move allows roughly 4,000 FAA employees to return to work August 8th:

  • The measure, passed by the Senate August 5th, also puts an estimated 70,000 construction workers back to work on a number of stalled airport projects and reauthorizes the FAA to collect ticket taxes—Transportation Secretary Ray LaHood said that he would work with lawmakers to provide back pay to furloughed employees.

4.     A soothing government report on unemployment in July eased concerns that the U.S. might slide back into a recession, and the Dow Jones industrial average rose as much as 171 points soon after trading began—but the fragile economy loomed large, as well as fears that Europe’s growing debt crisis might threaten U.S. banks:

  • After the early rise, the blue-chip stock index bounced up and down, ending the day up 61 points—investors worry that the federal government is more likely to hurt the economy than help it and that, instead of them spending more, the government is trying to reduce it budget deficits by spending less.

5.        Consumers borrowed more money in June than during any other month in nearly four years, relying on credit cards and loans to help get through a difficult economic stretch:

  • The Federal Reserve said that consumers increased their borrowing by $15.5 billion in June, the largest one-month gain since August 2007 and three times the amount that consumers borrowed in May.

August 6, 2011

1.        Economists say that S&P’s decision to strip the U.S. of its strong AAA credit rating for the first time and move it down one notch, to AA+, deals a blow to the confidence of consumers and businesses at a dangerous time:

  • The Obama administration made its displeasure known quickly after the downgrade was announced, and the Treasury Department said S&P acted on an analysis that had a $2 trillion error—Senate Majority Leader Harry Reid (D-Nevada) said that the S&P decision showed that the Democrats’ preferred solution to long-term debt, a mix of tax increases on the wealthy and budget cuts, was the right answer, but House Speaker John Boehner (R-Ohio) said that he hoped Democrats would learn they can’t “tinker around the edges” of the U.S. debt problem, while the Republican presidential candidates for 2012 laid blame on Obama.

2.        President Obama made history when he nominated Sonia Sotomayer, the first Latino justice on the Supreme Court, and he did it again with his second nominee, Elena Kagan, raising the number of women on the nation’s highest court to three:

  • Obama’s administration has placed a higher percentage of ethnic minorities among his nominees into federal judgeships than any other president—so far, out of 97 confirmed judicial nominees, nearly half are women, compared with 23 percent out of 322 for President George W. Bush and 29 percent out of 372 for President Bill Clinton;
  • From these judicial nominees, some 21 percent are African American, compared with seven percent under Bush and 16 percent under Clinton, while 11 percent are Latino, compared with nine percent under Bush and seven percent under Clinton—of the nearly two dozen nominees awaiting a Senate confirmation vote, more than half are women, ethnic minorities, or both;
  • Race is not the only measure of diversity: John Oetken of the Southern District of New York was the first openly gay man to be confirmed to the judiciary, and Obama has presented three other openly gay nominees to the Senate—getting nominees confirmed has proved to be a challenge, with the Constitutional Accountability Center reporting that the federal judiciary has had more than 750 days with at least 80 vacancies.

3.     U.S. officials said that insurgents shot down a U.S. military helicopter during fighting in eastern Afghanistan, killing 30 Americans, most of them belonging to the same elite Navy SEALs’ unit that killed Osama bin Laden, as well as seven Afghan commandos—it was the deadliest single loss for American forces in the decade-old war:

  • The downing was a stinging blow to the lauded, tightly-knit SEAL Team 6, but it was also a heavy setback for the U.S.-led coalition as it begins to draw down thousands of combat troops fighting what has become an increasingly costly and unpopular war—none of the 22 SEAL personnel killed in the crash were part of the team that killed bin Laden in a May raid in Pakistan, but they belonged to the same unit.

 WEEK ONE HUNDRED & THIRTY-TWO July 24, 2011         House Speaker John Boehner and Senate Majority Leader Harry Reid were preparing separate backup plans to raise the nation’s debt ceiling after the leaders were unable to end an increasingly grim standoff over the federal budget:

  • The leaders of both parties variously negotiated together over the phone, talked separately, conferred with their caucuses, and tried to game out an end to the debt crisis that would assure the capital markets around the world that the U.S. would meet its debt obligations—as the August 2nd deadline for lifting the debt ceiling nears, warnings are growing that the nation’s economy may be damaged by the protracted stalemate, and a downgrade of the nation’s credit rating, which could raise the cost of borrowing, seemed more likely, deal or no deal;
  • Reid was trying to cobble together a plan to raise the government debt limit by $2.4 trillion through the 2012 election, with spending cuts of about $2.7 trillion that would neither touch any of the entitlement programs dear to Democrats nor raise taxes, which is an anathema to Republicans, while Boehner’s plan seemed likely to take the form of a two-step process, with about $1 trillion in cuts, an amount the Republicans said was sufficient to clear the way for a debt limit increase through years’ end—Obama will veto any debt legislation unless it extends the ability of the nation to borrow into 2013, the White House chief of staff, William Daley, said.

July 25, 2011

1.        Democrat and Republican congressional leaders shopped competing debt-crisis solutions and President Obama cancelled fund-raising appearances as a politically grid-locked capitol lurched into a climatic last full week before the August 2nd default deadline:

  • Even amid acknowledgments by U.S. leaders of the need to reassure jittery investors, world markets fell and both the Dow Jones and Standard & Poor’s 500 opened down at Wall Street’s opening bell with the August 2nd deadline to raise the government’s borrowing limit fast approaching—efforts to break the impasse intensified as Republican Speaker John Boehner and Senate Democratic Leader Harry Reid planned to lobby their deficit reduction plans with their respective House and Senate caucuses after the Obama White House and Congress made little apparent headway in private talks over a long weekend.

2.     With President Obama trying to employ the power of the presidency to force an agreement, House and Senate leaders said that votes could occur as soon as July 27th on competing proposals to slash spending in exchange for increasing federal borrowing authority that the Treasury Department says will be exhausted August 2nd, raising the prospect that federal bills will go unpaid:

  • The back and forth began when House Republicans ruled out a deficit reduction plan that would allow the $14.3 trillion federal debt limit to rise immediately by about $1 trillion in exchange for $1.2 trillion in spending cuts, and tie a second increase early next year to the ability of a new bipartisan congressional committee to produce more deficit-reduction measures—Democrats countered with a $2.7 trillion menu of spending cuts and an increase in the debt limit through 2012, but neither plan would require any new revenue.

July 26, 2011

1.        House Speaker John Boehner (R-Ohio) pushed ahead with his two-step plan, a short-term bill to cut spending about $1.2 billion and extend the debt ceiling for about six months, that could come to a vote on July 27th—the House GOP scheduled a second vote on a balanced-budget constitutional amendment long favored by rank-and-file conservatives:

  • In the Senate, Majority Leader Harry Reid (D-Nevada) challenged Republicans to back his competing legislation, arguing that the no-taxes, government-cuts proposal was just what they wanted—in a prime-time address on July 25th, President Obama pleaded for compromise and urged Americans to contact their lawmakers: “We can’t allow the American people to become collateral damage to Washington’s political warfare,” he told the nation.

2.        House Republican leaders said that they planned to delay a scheduled vote on their plan to raise the nation’s debt ceiling as conservative lawmakers expressed skepticism and congressional budget officials said it did not deliver the promised savings:

  • The scramble to come up with a plan that could be put to a vote represents a test of House Speaker John Boehner’s ability to lead his restive caucus—the expected showdown over the legislation is the culmination of months of efforts by tea party-allied freshmen and fellow conservatives to demand a fundamentally smaller government in exchange for raising the federal borrowing limit;
  • President Obama and the Democratic leadership oppose Boehner’s plan, saying it’s only a short-term plan that will lead to market uncertainty and instability—Sen. Harry Reid, the majority leader, waiting to see how Boehner’s measure fares, has not brought his own debt legislation to the floor.

3.     The U.S. Chamber of Commerce, which spent millions of dollars last year helping elect Republicans to congressional seats, is struggling to convince the House it helped build that the debt ceiling must be increased:

  • The chamber and other business groups have pressed with increasing urgency for Congress to raise the maximum amount that the government can borrow, cataloging the consequences of default at meetings, parties, dinners, and over drinks—today, the chamber threw its weight behind the proposal of House Speaker John Boehner, telling recalcitrant Republicans that a pending vote on the plan was a with-us-or-against-us moment that would be remembered during the next election campaign.

4.        Agriculture Secretary Tom Vilsack announced that Oregon will receive a big slice of $45 million in federal funds expected to help jump-start liquid biofuel production across the U.S.:

  • More than $17 million will go toward cultivating hybrid poplar trees for cellulosic biofuel near Boardman and about $1.6 million will go toward producing camelina, an oil seed often used as a rotation crop for wheat, in Oregon and Washington—the rest goes to other projects in California, Kansas, Montana, and Oklahoma as part of the Biomass Crop Assistance Program.

July 27, 2011

1.        House Republicans and Senate Democrats gained substantial support within party ranks for their separate plans to resolve a looming debt crisis, but the momentum seemed to be pushing both sides further apart from an ultimate compromise:

  • Early in the day, at a House hearing, a representative of one of the credit-rating agencies said that although the U.S. was unlikely to default on its obligations, its credit rating could still be cut if Congress failed to come up with a plan to reduce spending sufficiently, and in the markets, investors sought alternatives to Treasury bonds and pushed down U.S. stock prices for the fourth straight day as reverberations from the legislative impasse appeared to take a toll—House Speaker John Boehner began mustering support for his budget-cutting plan early in the day as he cracked a verbal whip in meetings with his members even as Sen. Harry Reid, the majority leader, made it clear the House legislation was dead on arrival in his chamber.

2.     The Senate extended the term of FBI Director Robert Mueller for up to two years, a day after President Obama signed legislation making an exception to the ten-year limit for an FBI chief to serve—the vote was 100-0:

  • Mueller was nominated to the office by former President George W. Bush and took office a week before the September 11, 2001, attacks—Obama asked him to stay in office as two other major positions in his security team, the defense secretary and the CIA director, were undergoing changes.

3.     A U.S. district judge, Judge Royce Lamberth in Washington, D.C., ruled that the federal government could continue to fund embryonic stem cell research:

  • The decision threw out a 2009 lawsuit that challenged an Obama administration policy that expanded funding for the controversial research, which had been limited under President George W. Bush.

4.     With time running out to avoid August 2nd’s debt limit default deadline, two Democratic leaders of the House, Rep. John Larson of Connecticut (the House Democratic caucus chairman) and Assistant Democratic Leader James Clyburn of South Carolina, renewed calls for the president to resolve the standoff all by himself by invoking an obscure provision in the U.S. Constitution, but White House spokesman Jay Carney insisted that fix will not fly:

  • Larson and Clyburn suggested that President Obama draw on Section 4 of the 14th Amendment to essentially make an end-run around Congress by simply asserting that he holds authority to raise the debt limit to protect the full faith and credit of the U.S. government—Carney and Obama have acknowledged that the White House consulted attorneys to determine if it was an option, and Obama told a town hall meeting that his lawyers “are not persuaded that that is a willing argument.”

5.     The economy worsened in much of the country early this summer, hampered by high unemployment, weak home sales, and signs of a slowdown in manufacturing:

  • A survey by the Federal Reserve found that weak consumer spending, slow job growth, and tight credit are restraining growth into the second half of the year—further such evidence came in a separate report from the Commerce Department, which found that businesses reduced orders for airplanes, autos, heavy machinery, and other long-lasting manufactured goods in June.

July 28, 2011         House Republican leaders put off a vote on legislation to avert a threatened government default and slice federal spending by nearly $1 trillion—the decision created fresh turmoil as a divided government struggled to head off a default threatened after August 2nd that would leave the Treasury without the money needed to pay all its bills:

  • The White House poked fun at Republicans led by Speaker John Boehner, and Senate Democrats pledged to scuttle the measure—if it ever got to them—to force a final compromise.

July 29, 2011

1.     After a 24-hour delay and concessions to conservatives, House Republicans pushed through a fiscal plan that Senate Democrats quickly rejected in a standoff over the federal debt ceiling that was keeping the government on a path to potential default:

  • Demonstrating the deep partisan divide over the budget fight, the House voted 218-210 to approve the plan endorsed by Speaker John Boehner to increase the federal debt ceiling in two stages—no Democrats supported the measure, 22 Republicans opposed it, and the White House condemned it as a “political exercise”.

2.        President Obama and automakers ushered in the largest cut in fuel consumption since the 1970s with a deal that will save drivers money at the pump and slash heat-trapping gases coming from tail pipes:

  • The agreement pledges to double overall fuel economy to 54.5 mpg by 2025 (cars and trucks on the road today average 27 mpg), bringing even greater under-the-hood changes to the nation’s autos starting in model year 2017 and introduces more electric and hybrid technology to pickups.

July 30, 2011         The White House and congressional leaders attempted to avoid a government default, with President Obama warning, “There is very little time left:”

  • In an unusual Saturday session, the House voted down legislation drafted by Senate Majority Leader Harry Reid to raise the government’s debt limit by $2.4 trillion and cut spending by the same amount—the rejection came before the Senate even voted on it;
  • Obama met with top Democrats at the White House and spoke by phone with Senate Republican Leader Mitch McConnell, and increasing numbers of Democrats signaled their readiness for a compromise that would cut spending without raising taxes—Oregon Democrats Kurt Schrader and David Wu bolted from their party, voting against a plan to cut spending and raise the debt ceiling that Democratic leaders in the Senate said was the best, and perhaps only, remedy for preventing a historic government default.

  WEEK ONE HUNDRED & THIRTY-ONE  

July 17, 2011   A bipartisan effort in the Senate to allow President Obama to raise the federal debt ceiling in exchange for about $1.5 trillion in spending cuts over ten years gained momentum as leaders agreed they would have to act in the next two weeks to avert a default by the U.S. government:

  • The growing sentiment for raising the federal limit on U.S. borrowing sets the stage for a week of largely scripted actions on Capitol Hill, where leaders in both chambers are looking to build support for the plan crafted by Senate Majority Leader Harry Reid (D-Nevada) and Senate Minority Leader Mitch McConnell (R-Kentucky)—although the debt-limit plan has broad support in the Senate, the prospects in the House are less clear and rely largely on whether House Speaker John Boehner (R-Ohio) will bring the proposal up for a vote and how many Democrats would support it since few Republicans are expected to get behind it.

July 18, 2011

1.        Republican lawmakers moved ahead on a doomed plan to amend the U.S. Constitution to require a balanced federal budget one day after President Obama met with the top two House GOP leaders in hopes of reaching a debt-limit agreement that could win approval from the hostile House:

  • Beyond requiring that the budget be balanced each year, the so-called cut, cap, and balance measure would require that the constitutional provision include annual spending caps and a super majority to approve tax increases, and that plan faces almost certain defeat in the Senate, where many lawmakers moved ahead with a compromise proposal—Obama issued a cautionary threat to veto the House measure should it pass Congress.

2.     Gen. David Petraeus handed over command of the Afghanistan war, leaving behind a country racked by deep political instability whose fledgling security forces are fighting a weakened but deadly insurgency that kills coalition troops and Afghani civilians and officials nearly every day:

  • His successor, Gen. John Allen, will confront those challenges, and many more, as he guides NATO-led forces through the hand-off of security control to Afghani forces by the end of 2014, a process that is still in its earliest stages.

July 19, 2011

1.        President Obama seized on the re-emergence of an ambitious bipartisan budget plan in the Senate to invigorate his push for a big debt-reduction deal, and he summoned congressional leaders back to the bargaining table this week to “start talking turkey”:

  • The bipartisan proposal from the so-called Gang of Six senators to reduce deficits by nearly $4 trillion over the coming decade, and its warm reception from 43 other senators of both parties, renewed the hopes for a deal, days after talks between Obama and congressional leaders had reached an impasse—financial markets rallied on the news, and with time running out before the August 2nd deadline to raise the government’s $14.3 trillion debt ceiling, Obama’s quick embrace of the plan left House Republicans at greater risk of being politically isolated if they continue to rule out any compromise that includes higher tax revenue;
  • Rep. Eric Cantor, the House majority leader who has led opposition to any deal including tax increases, issued a statement saying the bipartisan Senate plan includes “some constructive ideas to deal with our debt,” but he stopped far short of endorsing it—Republicans increasingly are showing signs of splintering, and some conservatives within Congress and outside have become increasingly vocal in asserting the party is at risk of putting ideological purity ahead of the chance for a major deficit reduction that includes substantial Democratic concessions, including cuts in Social Security, Medicare, and Medicaid spending.

2.        President Obama will endorse a bill to repeal the law that limits the legal definition of marriage to a union between a man and a woman, the White House said, taking another step in support of gay rights:

  • If the measure passes, it would make same-sex couples eligible for certain federal benefits that have been previously available only to heterosexual married couples—the new legislation, which is being sponsored by Sen. Dianne Feinstein (D-California), is unlikely to pass Congress this year.

July 20, 2011

1.     The top Democrat in the House, Nancy Pelosi of California, reacted positively to a new bipartisan budget plan emerging in the Senate, even as a top House GOP military hawk, House Armed Services Committee Chairman Howard “Buck” McKeon, said that it would cut defense way too much:

  • The group’s budget, which would slash the deficit by almost $4 trillion over a decade through a mix of spending cuts and new tax revenue, has also earned praise from President Obama and many senators—speaking on the Senate floor, Democratic Leader Harry Reid said that he was confident Obama and congressional negotiators could avoid a government default, but that the Senate still needed to hear from the House.

2.     With the clock ticking down, President Obama and congressional leaders began a final effort to forge a broad deficit-reduction plan even as new cracks appear among House Republicans over how to proceed:

  • The White House suggested for the first time that Obama might be willing to extend by a few days the August 2nd deadline for legislation to increase the government’s debt ceiling if a deal was in sight, stepping up the pressure on the two parties to come to terms—with an eye on the calendar, the president summoned leaders of both parties to build on July 19th’s release of the $3.7 trillion deficit-cutting plan by the Senate’s Gang of Six.

3.        People are buying homes at the weakest pace in 14 years—this year’s pace is lagging behind the 4.91 million homes sold last year, the fewest since 1997, and in a healthy economy, people buy roughly six million homes per year:

  • Another problem is that a growing number of contracts are being cancelled before sales are finalized, many because of lower appraisals that are scuttling loans, and the slowdown in hiring is making people think twice about taking on extra debt—high unemployment, millions of foreclosures, and tighter credit are likely to keep people from buying homes in the second half of the year, economists say, and even low home prices and cheap mortgage rates are unlikely to draw buyers to the market.

4.     More than 100 pastors from Oregon signed an open letter to President Obama and Congress last week, arguing that the federal budget is “not just a fiscal document, but a moral one”:

  • Sojourners Magazine had hoped that 1,000 members of the clergy would sign the letter, which was published in Politico—more than 4,000 did so; 
  • The letter, printed on Sojourner’s website, says that Christian pastors “look at every budget proposal from the bottom up—how it treats those Jesus called ‘the least of these’ (Matthew 25:45).  They do not have powerful lobbies, but they have the most compelling claim on our consciences and common resources.”

July 21, 2011

1.        House Speaker John Boehner predicted that a majority of House Republicans would end up supporting some kind of compromise as the Senate began debating a House-passed effort to tie an increase in the debt ceiling to conservative demands for a balanced budget amendment to the Constitution:

  • Majority Leader Harry Reid (D-Nevada) called up the measure to placate Republicans demanding a vote, but he said it “does not have one chance in a million of passing the Senate”—meanwhile, White House spokesman Jay Carney reported little progress from private meetings President Obama held July 20th with Boehner and House Majority Leader Eric Cantor, and separately with congressional Democratic leaders.

2.        President Obama and House Speaker John Boehner once again struggled against resistance from their respective parties as they tried to shape a sweeping deficit-reduction agreement that could avert a government default in less than two weeks:

  • Congressional and administrative officials said that the two men, who had abandoned earlier talks toward a deal when leaks provoked Republicans’ protests, were closing in on a package calling for as much as $3 trillion in savings from substantial spending cuts and future revenue produced by a tax code overhaul, and if it could be sold to Congress, the plan could clear the way for a vote to increase the federal debt ceiling before an August 2nd deadline—this time the blowback came mostly from senior congressional Democrats who are angry at some of Obama’s concessions and at being excluded from the talks.

July 22, 2011

1.     The Senate blocked a House Republican bill to require Congress to slash spending and pass a balanced-budget amendment before raising the nation’s borrowing powers—the vote left unresolved, with just days to go, the urgent issue of how to lift the debt limit to avoid a U.S. government default:

  • The 51-46 Senate vote against the Tea Party-backed measure, which had been expected in the Democratic-run chamber, came shortly after House Speaker John Boehner (R-Ohio) told reporters that he and President Obama had not reached a separate agreement to resolve the debt crisis—for his part, Obama made it clear that the biggest obstacle to striking a deal remains a large block of conservative House Republicans.

2.        Transportation Secretary Ray LaHood says that the government will lose about $200 million a week in airline ticket taxes and that $2.5 billion in airport construction projects will come to a halt if the FAA is forced to shut down:

  • A shutdown looks increasingly likely because Congress has not been able to come to an agreement on legislation to extend the FAA’s operating authority by midnight—if that happens, airlines would no longer collect ticket taxes and about 4,000 FAA workers would be furloughed.

3.     The House greeted the official opening of the new Consumer Financial Protection Bureau by voting (241-173, mostly along party lines) to change its structure and reach:

  • Republican sponsors said that they were trying to make the bureau more transparent and accountable—Democrats said that Republicans wanted to cripple the agency before it gets on its feet;
  • The vote sent the legislation to the Democratic-led Senate which is not expected to support it—the White House has issued a veto threat, saying the bill would “expose American consumers and the nation’s economy to the same risks that led to the 2008 financial crisis.”

4.        Negotiations over a broad deficit reduction plan collapsed in acrimony after House Speaker John Boehner broke up talks with President Obama, raising the risk of an economy-shaking default:

  • A visibly angry Obama, in a hastily scheduled White House news conference, demanded that congressional leaders come to the White House tomorrow morning—Obama said that Boehner had stopped returning his calls when it became clear that rank-and-file House Republicans would not agree to raise revenues on wealthy Americans as part of a debt-reduction deal, despite Obama’s concessions on reducing future spending on Medicare, Medicaid, and Social Security;
  • In a letter to his Republican colleagues, Boehner said, “A deal was never reached and was never really close,” and that Obama wanted to raise taxes too high and did not make “fundamental changes” to entitlement benefit programs such as Medicare—but according to White House officials, Obama agreed, over the coming decade, to cut $250 billion to $300 billion from Medicare spending and $200 billion from other domestic entitlement programs, such as farm subsidies, and Obama was willing to change the formula for Social Security cost-of-living adjustments, which many economists say would more accurately reflect inflation, for savings of about $125 billion more, and all of Obama’s concessions on the benefit programs would be contingent on Boehner and Republicans agreeing to higher taxes for wealthy individuals and corporations.

5.        President Obama formally signed off on ending the ban on gays serving openly in the military, doing away with a policy that’s been controversial from the day it was enacted and making good on his 2008 campaign promise to the gay community:

  • The president joined Defense Secretary Leon Panetta and Adm. Mike Mullen, the Joint Chiefs of Staff chairman, in signing a notice and sending it to Congress certifying that military readiness will not be hurt by repealing the 17-year-old “don’t ask, don’t tell” policy—that means that 60 days from now, the ban will be lifted.

6.        Efforts to avert a shutdown of the FAA failed amid a disagreement over a $16.5 million cut in subsidies to 13 rural communities, ensuring that nearly 4,000 people will be temporarily out of work, and federal airline taxes will be suspended:

  • Lawmakers were unable to resolve a partisan dispute over an extension of the agency’s operating authority, which expired at midnight July 22nd—the subsidy cut was included by Republicans in a House bill extending operating authority for the FAA, which has a $16 billion budget—Senate Democrats refused to accept the House bill with the cuts, and Republican senators refused to accept a Democratic bill without it.

July 23, 2011         President Obama met with Republican and Democratic leaders—but only briefly—the day after Speaker John Boehner abruptly broke off his own once-promising compromise talks with the White House:

  • But congressional aides labored to produce at least a framework agreement to raise the nation’s debt limit by July 25th, congressional officials said, and even that would allow scarcely enough time for the House and Senate to clear legislation in time for Obama’s signature by the August 2nd deadline, little more than a week away—lawmakers fear a big drop in investor confidence in stocks and bonds could start in Asia and sweep toward Europe and the Americas, causing U.S. stock values to plunge July 25th.

WEEK ONE HUNDRED & THIRTY

July 10, 2011         President Obama, saying “we need to” resolve the debt-limit issue quickly, held a 75-minute meeting with congressional leaders that failed to end the impasse over how to cut deficits—the bipartisan group agreed to reconvene July 11th at the White House:

  • Congressional sources said that the sides remain fixed: Democrats want a big deal, perhaps totaling $4 trillion, that includes tax increases and spending cuts, while Republicans want any tax increases offset by other tax cuts—Obama is set to take his case to the American public early July 11th at a news conference, his second on the issue in two weeks.

July 11, 2011 .       

1.       President Obama declared there would be no deal on raising the government’s debt limit if Republicans will not compromise, and he said that he would not sign a short-term extension—raising the stakes on volatile negotiations with the clock ticking toward an August 2nd deadline:

  • The president warned that failure to reach an agreement could create another recession and throw millions of Americans out of work, painting a picture of a catastrophe if a partisan stalemate is not broken and Congress fails to act—he criticized politicians who say the debt ceiling does not need to be raised.

2.        President Obama made no apparent headway in his effort to forge a crisis-averting budget deal, but he put on full display his effort to position himself as a pragmatic centrist willing to confront both parties and address intractable problems:

  • At a news conference preceding the latest round of talks with Republican and Democratic congressional leaders, Obama said that he would not accept a temporary agreement to kick the problem down the road a few weeks or months, and he continued to insist on “the biggest deal possible”, saying that now is the best opportunity for the nation to address its long-term fiscal challenges—Republicans dismissed his performance as political theater.

July 12, 2011

1.     In unusually blunt and combative language, the Senate’s top Republican, Mitch McConnell, says that White House offers to cut long-term spending amount to “smoke and mirrors” and directly challenged President Obama’s leadership in debt limit negotiations: “After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is unattainable:”

  • Obama has been pushing for $4 trillion in a ten-year deficit reduction proposal, but House Speaker John Boehner, after seeking to forge a deal of that magnitude, told the president that a smaller, $2 trillion to $2.4 trillion deal was more realistic—a deal is essential to win Republican votes to increase the nation’s debt ceiling by August 2nd or risk a government default.

2.     The House rejected a bill to reverse the phase-out of the traditional incandescent light bulb, a requirement that Republicans said is an example of government overreach:

  • The legislation, which needed two-thirds support, failed in a 233-193 vote (all Oregon representatives except Walden voted no)—the bill sought to invalidate standards in a 2007 energy bill signed by President George W. Bush requiring light bulbs to be about 30% more effective, and the standards effectively push most conventional incandescent bulbs off the market starting next year.

3.        Republicans offered a last-ditch backup plan for raising the nation’s debt limit as White House and congressional negotiators failed for a third straight day to break an increasingly ugly impasse:

  • At the Capitol, Senate Republican Leader Mitch McConnell suggested an agreement would be “unattainable” with President Obama in the White House, but he later presented a plan to increase the nation’s debt limit in three stages—the White House said that it would continue to push for a more sweeping plan to cut the deficit, and White House spokesman Jay Carney said in a statement, “Sen. McConnell’s proposal today reaffirmed what leaders of both parties have stated clearly, that defaulting on America’s past-due bills is not an option.”

4.     The U.S. trade deficit surged in May to the highest level in more than 2½ years, driven wider by a big increase in oil imports and a decline in exports: ·        

  • The Commerce Department said that the deficit increased 15.1% to $50.2 billion in May, the largest imbalance since October 2008—analysts said that the wider deficit in May means that the economy probably grew at an even slower pace in the April-June quarter than they had previously forecast.

July 13, 2011

1.        Federal Reserve Chairman Ben Bernanke said that the central bank is prepared to provide additional stimulus if the current economic lull persists, and during his twice-a-year economic report to Congress, Bernanke laid out three options the central bank would consider:

  • Bernanke said that the Fed could launch another round of Treasury bond buying, the third such effort since 2009;
  • It could cut the interest paid to banks on the reserves they hold as a way to encourage them to lend more;
  • he Fed could also be more explicit in spelling out just how long it planned to keep rates at record-low levels—that would give investors confidence about the Fed’s efforts to continue supporting the economy.

2.        President Obama’s re-election campaign raked in $86 million in the second quarter of the year, far eclipsing the amounts raised by his Republican opponents and bolstering his accounts for an ongoing clash with well-funded GOP-allied groups:

  • Obama raised $47 million through his presidential campaign and an additional $38 million jointly with the Democratic National Committee, which can collect much larger sums—the campaign total broke the previous second-quarter record of $35 million raised by George W. Bush’s re-election effort in 2003, but the record for any quarter in a pre-election year is $50 million, achieved by Bush in the third quarter of 2003.

3.     The latest bipartisan negotiating session ended in heightened tension if not outright discord:  Republicans said that Obama had abruptly walked out in an agitated state, while Democrats described the president as having summed up with an impassioned case for action before bringing the meeting to a close and leaving:

  • The stakes are high: for the economy, the financial market, and both parties, but the pressure was particularly intense on Republican leaders, who only weeks ago seemed to be on the offensive and in a strong position to extract major concessions from Obama and the Democrats—now Republican leader, Sen. Mitch McConnell of Kentucky is pushing his plan that would allow a debt limit increase to clear Congress without Republican fingerprints.

July 14, 2011

1.     Testy lawmakers pointed fingers at one another and at President Obama as negotiations over raising the national debt limit entered a dangerous endgame—Wall Street eyed the standoff with growing anxiety, warning of catastrophe if the U.S. defaults on its obligations:

  • None of it was a promising prelude to negotiations scheduled to resume at the White House this afternoon, less than three weeks before an August 2nd deadline for increasing the government’s borrowing authority—meanwhile, behind the scenes, legislators and White House officials continued to work on a backup plan offered by Senate Republican Leader Mitch McConnell to avoid government default.

2.     A mixed slate of reports showed the economy is being held back by high gas prices and sluggish hiring:

  • Economists are forecasting a pickup in growth in the second half of the year, but the latest data revealed only faint signs of a turnaround—the number of people who applied for unemployment benefits dropped last week by 22,000 to a seasonally adjusted 405,000, the lowest level in three months, but applications have been above 400,000 for 14 straight weeks, reflecting the weak job market.

3.        President Obama prepared to bring bipartisan talks over the debt to a close, as Senate leaders worked across party lines to craft an alternative strategy to raise the nation’s $14.3 trillion debt limit and avert a government default:

  • “It’s decision time,” Obama told congressional leaders after meeting at the White House for a fifth straight day, and Obama gave Republicans until early July 16th to tell him whether any of the three options for trimming the federal budget would win GOP support—a breakthrough in the White House talks looked unlikely, however, leaving the Senate framework (Senate Minority Leader Mitch McConnell’s “Plan B”, an elaborate legal framework to raise the debt limit by $2.5 trillion that would place the entire political burden for the unpopular move on Obama) as the chief option for raising the debt limit before August 2nd.

July 15, 2011

1.        President Obama declared that Congress has a “unique opportunity to do something big” and stabilize the economy for decades by cutting deficits even as it raises the national debt limit ahead of a critical August 2nd deadline:

  • He said that he was willing to make tough decisions himself, including trimming Medicare benefits for wealthy beneficiaries, but said, “We are running out of time”—he said of the Republicans, “If they show me a serious plan, I am ready to move.”

2.        Secretary of State Hillary Clinton said that the U.S. recognizes Libya’s main opposition group as the country’s legitimate government, a decision intended to boost a foundering rebellion that’s approaching its sixth month as Moammar Gadhafi remains in control of the capitol:

  • At a meeting in Istanbul, where more than 30 countries and international bodies backed a plan for Gadhafi to give up power and for the rebel Transitional National Council to lead a move to a new democratic government, Clinton said, “The U.S. views the Gadhafi regime as no longer being any legitimate authority in Libya. . . until an interim authority is in place, the U.S. will recognize the TNC as the legitimate governing authority for Libya, and we will deal with it on that basis”—the U.S. decision, long awaited by the rebels, allows the rebels to access billions of dollars in Libyan assets in U.S. banks, which had been frozen under sanctions on Gadhafi’s regime, and it could also boost the morale of the rebels and NATO, which has struggled with deepening divisions among its members over the length of the military campaign.

3.     In response to a request from the Obama administration, the 9th U.S. Circuit Court of Appeals is allowing the military to temporarily continue its “don’t ask, don’t tell” policy for openly gay service members:

  • The court said that its decision was based on newly provided information on federal plans for implementing the repeal of the policy this year—despite the delay dismantling the policy, the decision bars the federal government from investigating, penalizing, or discharging anyone pursuant to “don’t ask, don’t tell”.

4.        Republican leaders have begun to prepare their troops for politically painful votes to raise the nation’s debt limit, offering warnings and concerns to move the hard-line majority toward a compromise that would avert a federal default:

  • At a closed-door meeting, GOP leaders turned to their most trusted budget expert, Rep. Paul Ryan of Wisconsin to explain to rank-and-file members what many others have come to understand: a fiscal meltdown could occur if Congress fails to raise the debt ceiling—House Speaker John Boehner underscored the point to dispel the notion that failure to allow more borrowing is an option: “He said if we pass August 2nd, it would be like Star Wars,” said Rep. Scott DesJarlais, a freshman from Tennessee.

5.     A Republican lawmaker is looking to make the Obama administration pay a price for what he sees as its defiance of Congress in pursuing cooperation with China in science and space technology:

  • A proposal by Rep. Frank Wolf (R-Virginia), a fierce critic of Beijing, would slash by 55% the $6.6 million budget of the White House science policy office—the measure was endorsed by a congressional committee this week, but it faces more legislative hurdles;
  • President Obama has sought to deepen ties with China, which underwrites a major chunk of the vast U.S. national debt and is emerging as a challenge to American military dominance in the Asia-Pacific region.

July 16, 2011         President Obama held a White House meeting with the Dalai Lama, a fellow Nobel Prize laureate, hours after China called on the U.S. to rescind an invitation that could sour relations with Beijing:

  • The White House said that during the 45-minute private session in the Map Room, Obama underscored the importance of the protection of human rights of Tibetans in China, and in a statement, the White House also said that Obama reiterated his support for the preservation of Tibet's religious, cultural, and linguistic traditions--Obama restated U.S. policy that it does not support Tibetan independence, a goal that the Dalai Lama said he also does not seek.

WEEK ONE HUNDRED & TWENTY-NINE

July 5, 2011

1.        Obama administration officials are offering to cut tens of billions of dollars from Medicare and Medicaid in negotiations to reduce the federal budget deficit, but the depths of the cuts depend on whether Republicans are willing to accept any increases in revenue:

  • Administration negotiators say the money can be taken from healthcare providers such as hospitals and nursing homes without directly imposing new costs on needy beneficiaries or radically restricting either program—before the talks led by Vice President Biden broke up 12 days ago, negotiators said, they had reached substantial agreement on many cuts in the growth of Medicare, and those proposals are on the table when Congress reconvenes this week, aides said, and are serious options that Democrats could accept in exchange for Republican concessions that raise revenue.

2.     For the second time in the past two years, the Department of Interior has gone into court to withdraw a plan written under the Bush administration to increase logging in Western Oregon:

  • The department filed a motion in federal court in Washington D.C. July 2nd to take back the Western Oregon Plan Revisions, a management plan for 2.1 million acres of Oregon and California Railroad trust lands—the plan would also take into account the recently released recovery plan for the northern spotted owl, released last week by the U.S. Fish and Wildlife Service.

3.     With Congress edging back into the battle over immigration reform, the leading House proposal is drawing opposition from Oregon businesses:

  • The Coalition for a Working Oregon, an organization of 22 Oregon business groups, is fighting the proposal, putting members at odds with Republicans and some other business groups—the legislation, introduced by House Judiciary Committee Chairman Lamar Smith (R-Texas) would require all employers to use a federal database known as E-Verify to confirm that a prospective worker is legal, and Jeff Stone, executive director of the Oregon Association of Nurseries, calls the legislation “a recipe for disaster, not only for agriculture but for the national economy.”

4.        President Obama is calling congressional leaders to the White House for talks this week on raising the national debt limit, deepening his involvement in the political standoff to head off a potential crisis of a federal government default:

  • Obama asked to meet with House and Senate leaders of both parties July 7th as the White House seeks a July 22nd resolution to the impasse that, if left unsolved, threatens a financial market upheaval—Republicans want at least $2.4 trillion in spending cuts in exchange for a comparable amount of new debt, and in advance of the meeting, Republicans dug in to fortify their no-taxes stance, insisting not even measures to close loopholes would win support in Congress.

5.     The White House is offering to keep up to 10,000 troops in Iraq next year, U.S. officials say, despite opposition from many Iraqis and key Democratic Party allies who demand that President Obama bring home the American military as promised:

  • Any extension of the military’s presence, however, depends on a formal request from Baghdad, and Iraq is not expected to decide until September at the earliest, when the 46,000 U.S. forces left in the country had hoped to start heading home—already, though, the White House has worked out options to keep between 8,500 and 10,000 active duty troops to continue training Iraqi security forces during 2012, according to senior Obama administration and U.S. military officials in interviews with The Associated Press.

July 6, 2011

1.     The White House is counting on Republican lawmakers to support new tax revenues as part of an overarching plan to reduce long-term deficits and pave the way to increase the government’s borrowing authority:

  • White House spokesman Jay Carney said that President Obama is confident that there are enough lawmakers from both parties to support a deal that would reduce the debt by more than $2 trillion over the next ten years with spending cuts and tax increases—the president is siding with House Speaker John Boehner in insisting that negotiators resist the temptation to “kick the can down the road” and settle for a makeshift, short-term solution to stave off a first-ever U.S. default next month.

2.        Republicans showed new signs of flexibility to break a budget impasse, but the White House raised the ante—pushing for more deficit reduction and taking a pugnacious turn casting the GOP as defenders of corporate tax giveaways:

  • House Majority Leader Eric Cantor (R-Virginia) declared he was open to closing tax loopholes that the White House says are wasteful and ineffective and that would generate some money toward reducing deficits over the long term—“If the president wants to talk loopholes, we will be glad to talk loopholes,” Cantor said, but in the Senate, Republican leader Mitch McConnell appeared to douse the idea, “To sort of cherry pick items in the context of this current negotiation at the White House strikes me as pretty challenging,” he said;
  • But even as White House officials expressed confidence that negotiators would ultimately succeed, Obama took a combative approach: "The debt ceiling should not be something that is used as a gun against the heads of the American people to extract tax breaks for corporate jet owners or oil and gas companies that are making billions of dollars"--the president was referring to existing tax benefits that allow corporate jets to depreciate faster than commercial jets and to tax subsidies available to energy corporations, and Obama proposed ending both as part of an effort to reduce deficits with new tax revenue.

3.     A federal appeals court ordered the U.S. government to immediately cease enforcing the long-standing ban on openly gay members of the military:

  • In a brief two-page order, a three-judge panel of the 9th Circuit Court of Appeals in San Francisco said that the “don’t ask, don’t tell” policy must be lifted now that the Obama administration has concluded that it is unconstitutional to treat gay Americans differently under the law—the ruling came in response to a motion brought by Log Cabin Republicans, a group for gay GOP members, which last year persuaded a lower court judge to declare the ban unconstitutional.

July 7, 2011

1.        Signing up for Medicaid could improve your health and financial security, says a surprising new study that offers clues on how President Obama’s healthcare overhaul might affect millions of low-income uninsured Americans:

  • Led by economists at Harvard and MIT and released today by the National Bureau of Economic Research, the study found that having Medicaid significantly increased the chances people will perceive their health as being good to excellent, while decreasing the likelihood they will have to borrow money or skip paying other bills because of medical expenses—Medicaid is a federal-state program for low-income and severely disabled people now covering about 60 million Americans, and starting in 2014, it will also pick up about half the more than 30 million uninsured people gaining coverage under the new healthcare law.

2.     The number of people applying for unemployment benefits fell last week to the lowest level in seven weeks, although applications remain elevated:

  • The Labor Department says applications for benefits dropped by 14,000 to a seasonally adjusted 418,000 in April and have shown only modest improvement since.

3.        Washington and congressional negotiators have dived into a three-day marathon of talks to determine if Democrats and Republicans can strike a grand balance on taxes and benefit programs to avert a default on the federal debt and curb the nation’s huge deficit:

  • Among the proposals being discussed are a change in the way cost-of-living increases are calculated for Social Security; an increase in the payments that upper-income seniors make for Medicare; an overhaul of the corporate tax system; elimination of a variety of tax breaks that primarily benefit upper-income taxpayers; and significant cuts in the military budget, farm programs, and other domestic spending—if Congress does not raise the debt ceiling by August 2nd, Treasury Department officials said, the government would no longer be able to pay all its bills, raising the prospect of a default for the first time in U.S. history.

4.     The House voted to bar military aid to Libyan rebels battling Moammar Gadhafi but stopped short of prohibiting funds for U.S. involvement in a NATO-led mission in its fourth month:

  • The House voted 225-201 (with 48 Democrats backing the Republican-sponsored measure) for an amendment to bar the Pentagon from providing “military equipment, training, or advice or other support for military activities” to an outside group, such as rebel forces, for military action in or against Libya, but moments later, on a vote of 229-199, with 67 Democrats breaking with the administration to support the amendment, the House rejected a measure that would have prohibited funds for the U.S. military to continue its limited role.

5.        Pollution that blows hundreds of miles from coal-fired plants into other states will be reduced under a final plan announced by the EPA:

  • The rules, a revision of a Bush-administration plan, will require pollution reduction in 27 states from Texas and Minnesota on the west to the East Coast—the EPA said that the rule would prevent up to 34,000 premature deaths a year when its phased in by 2014.

July 8, 2011

1.     Top congressional Republicans said that a report that few new jobs were created last month shows that this is not the time for the government to be raising taxes, but the GOP House Speaker also said that the gloomy numbers underscored the need for a deal on raising the federal debt limit and cutting massive budget deficits:

  • House Speaker John Boehner also stressed the need to reach a deal before the government starts defaulting on its debt on August 2nd—Boehner said that congressional leaders and President Obama were not near a debt-limit agreement.

2.     On a 336-87 vote, the Republican-led House overwhelmingly backed a $649 billion defense spending bill that boosts the Defense Department budget by $17 billion—the strong bipartisan embrace of the measure came as the White House and congressional negotiators face an August 2nd deadline on agreeing to trillions of dollars in federal spending cuts and raising the borrowing limit so the U.S. does not default on debt payments:

  • While the House Republican leaders agreed to slash billions from the proposed budgets for other agencies, hit food aid for low-income women, health research, energy efficiency, and much more, the military budget is the only one that would see a double-digit increase in its account beginning October 1st—only 12 Republicans and 75 Democrats opposed the overall bill (all Oregon representatives except Walden voted no).

3.     The Pentagon instructed the military to stop removing personnel who are gay from service and to begin accepting applications from homosexual recruits who are qualified to serve:

  • On July 7th, the 9th U.S. Circuit Court of Appeals issued an injunction that would prevent the previous “don’t ask, don’t tell” policy from being enforced, leading to the announcement—the policy implemented by the Clinton administration was repealed by Congress in December.

4.        Hiring slowed to a near-standstill last month, raising doubts that the economy will rebound in the second half of the year:

  • The report baffled economists who had predicted much stronger job creation, and it escalated a debate in Washington over how to spur hiring and energize the economy while cutting federal spending—the Labor Department said that the unemployment rate rose to 9.2%, the highest rate of the year.

July 9, 2011

1.        House Republican negotiators have abandoned plans to pursue a $4 trillion, ten-year deficit reduction package in the face of stiff GOP opposition to any plan that would increase taxes as part of the deal:

  • House Speaker John Boehner informed President Obama that a smaller agreement of about $2 trillion was more realistic, and in a statement, Boehner said, “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes”—the White House had no immediate reaction.

2.     Al-Qaida’s defeat is within reach, Defense Secretary Leon Panetta said during his first visit to Afghanistan as Pentagon chief—he said that eliminating as few as ten of the group’s top figures could cripple its ability to strike the West:

  • Panetta’s assessment could stoke the debate in Washington over how soon to pull the U.S. military from the land where Osama bin Laden’s network launched the September 11, 2001, attacks against the U.S., and some question why a continued military commitment is necessary if al-Qaida’s end is in sight, given that it was the reason the U.S. began the war—although not as specific as Panetta about what it will take to break al-Qaida, the top military commander in Afghanistan, Army Gen. David Petraeus said in a separate interview that he agrees the group is on the ropes.

3.     The Obama administration is suspending and, in some cases, canceling hundreds of millions of dollars of aid to the Pakistani military in a move to chasten Pakistan for expelling American military trainers and to press its army to fight militants more effectively:

  • Three senior U.S. officials said that altogether, about $800 million in military aid and equipment, or over one-third of the more than $2 billion in annual American security assistance to Pakistan could be affected—Washington, however, depends on Pakistan as a major supply route into Afghanistan, and American officials want to monitor as closely as they can Pakistan’s burgeoning nuclear weapons arsenal.

WEEK ONE HUNDRED & TWENTY-EIGHT

June 27, 2011     The White House said that a “significant deal” could be reached to raise the federal debt ceiling and cut trillions of dollars from future federal budget deficits before the U.S. defaults on its loans:

  • The optimism came as President Obama and Vice President Biden met at the White House with Senate Majority Leader Harry Reid (D-Nevada) days after Biden-led bipartisan talks collapsed with Republicans saying they will not accept tax increases—Reid called the session with Obama and Biden “productive”, but Senate Minority Leader Mitch McConnell (R-Kentucky), in a speech on the Senate floor hours before his own meeting with Obama, urged Reid not to push for tax increases as part of the solution.

June 28, 2011

1.        Leading congressional Democrats immediately recoiled from a new proposal to cut $600 billion in Medicare spending over the next decade, in part by raising the eligibility age:

  • Sens. Joe Lieberman (I-Connecticut) and Tom Coburn (R-Oklahoma) unveiled the proposal as part of a bipartisan effort to produce the kind of savings necessary to achieve the $2 trillion in debt reduction both parties say is needed to persuade reticent lawmakers to vote to raise the debt ceiling—it would raise Medicare’s eligibility age from 65 to 67 and assess higher premiums on wealthier seniors, but the swift rejection among Democrats reflects the significant obstacles that remain to any agreement to cut the deficit and raise the nation’s legal borrowing limit.

2.        Following a string of bad economic news, consumer confidence fell to a seven-month low in June on continuing worries about high unemployment and stagnant wages, according to a report released by the Conference Board’s Consumer Confidence Index, a private research group:

  • The index has lost momentum since it hovered between the high 50s and low 60s last year, and then climbed to a three-year high in February—June’s results marked the lowest point since December 2010.

June 29, 2011

1.     In a blunt challenge to Republicans in Congress, President Obama insisted that elimination of selected tax breaks for oil companies and the super-wealthy must be included in any deficit reduction plan:

  • At his first White House news conference in three months, Obama also called on Congress to renew a payroll tax cut that took effect on January 1st, one of several steps he said lawmakers can take quickly to help reduce 9.1% unemployment;
  • On the deficit and the economy, Obama said both parties must be prepared to "take on their sacred cows" as part of the negotiations, with Democrats accepting cuts in government programs.

2.        President Obama’s healthcare overhaul survived its first test before a federal appellate court, as the 6th Circuit Court of Appeals in Cincinnati concluded that the law’s insurance requirement is constitutional:

  • Notably joining the majority opinion was Judge Jeffrey Sutton, an appointee of President George W. Bush and a former law clerk to conservative Supreme Court Justice Antonin Scalia—Sutton is the first Republican appointee on the federal bench to affirm the constitutionality of the so-called individual mandate.

3.     After months of saying his position on same-sex marriage is evolving, President Obama traded that language for comments that stopped just short of endorsing the notion that gay people have the right to marry:

  • Obama has been under pressure from gay-rights advocates to clarify his position in the wake of the vote in Albany, N.Y., and his own comments at a fundraiser last week, in which he suggested the marriage question should be left to the states—the remarks infuriated even some allies, who suggested that Obama, a former constitutional law professor and the child of an interracial marriage, was invoking arguments once used to defend segregation.

4.        President Obama sharply intensified pressure on congressional Republicans in negotiations over the federal debt, depicting GOP leaders as supporting tax breaks for jet-setting corporate executives at the expense of college scholarships or medical research:

  • Obama’s decision to chastise Republican leaders in an hour-long televised news conference moved the debt talks out of the realm of closed-door Washington meetings and into full public view, setting up a high-stakes effort to mobilize public opinion—reacting to the criticism, senators considered abandoning a weeklong July recess, and House leaders said that they would stay in session until negotiations were finished.

5.        Joining a roster of professional athletes, President Obama, Lady Gaga, 13 U.S. senators, including Oregon Sen. Ron Wyden, and thousands of everyday people, added their voices to the “It Gets Better” campaign to support equality and lesbian, gay, bisexual, and transgender youth who have been bullied or harassed:

  • The “It Gets Better” project was founded by Seattle writer Dan Savage who grew alarmed in 2010 by the number of suicides among young people who identify themselves as gay, lesbian, bisexual, or transgender—the effort has turned into a worldwide movement, inspiring over 20,000 user-created videos viewed over 35 million times.

June 30, 2011

1.     Older adults of the same age and income with similar medical histories would pay different amounts for private health insurance due to what appears to be an unintended consequence of the new healthcare law:

  • The Obama administration says that it is working on the problem—it is unclear whether the Obama administration can fix the problem with a regulation, or whether it will have to go back to Congress, and in the case of the latter, it will have to deal with Republicans eager to repeal the healthcare law.

2.        President Obama surprised Defense Secretary Robert Gates with the Presidential Medal of Freedom, paying tribute to his four decades of public service at a regal ceremony outside the Pentagon:

  • Gates, who served in various roles under eight presidents and as defense secretary under two, plans to retire to Washington state—he will technically remain defense secretary until his successor, Leon Panetta, is sworn into office July 1st.

3.        Federal debt talks remained at a stalemate as both sides continued their weeklong battle of blaming each other for the stymied negotiations over allowing the Treasury to continue borrowing money to finance government operations:

  • Democratic officials familiar with the talks said that the negotiations have moved into a new phase, in which party leaders must decide what their troops can support—they expressed optimism that a deal is still within reach to trim at least $2 trillion from projected borrowing over the next decade.

4.     The Senate unanimously confirmed Gen. David Petraeus as director of the CIA, turning over the nation’s intelligence operations to the man credited with turning back insurgencies in Iraq:

  • The nomination of Petraeus was approved by a 94-0 vote—Petraeus is a West Point graduate who holds a doctorate in international relations from Princeton University, and he will replace outgoing director Leon Panetta whose appointment as defense secretary sailed through the Senate last week.

5.     Amid a growing debate over how to bring down the government’s debt, a new study has concluded that U.S. involvement in Afghanistan, Iraq, and Pakistan has cost up to $4 trillion over the past decade:

  • The study, by the nonpartisan Eisenhower Research Project based at Brown University’s Watson Institute for International Studies, also estimates that at least 225,000 people, including civilians, troops, and insurgents, have died as a result of the conflicts—of that number, an estimated 6,000 were uniformed U.S. military personnel.

July 1, 2011

1.     June was the deadliest month in nearly a year for U.S. service members in Afghanistan and Iraq even as the U.S. said that improved security in both countries allows it to reduce troops in those war zones:

  • The last time the U.S. lost that many troops in a month was last July, when 65 American service members died in Afghanistan and four were killed in Iraq—the rise comes as Iraq leaders are weighing whether to ask for some U.S. troops to stay beyond their scheduled departure at the end of the year, and it puts the Obama administration in the uncomfortable position of addressing rising combat deaths nearly a year after declaring the end of U.S. combat operations in Iraq.

2.     Two years after economists say the recession ended, the recovery has been the weakest and most lopsided of any since the 1930s:

  • After previous recessions, people in all income groups tended to benefit, but this time, ordinary Americans are struggling with job insecurity, too much debt, and pay raises that have not kept up with prices at the grocery store and gas station—the economy’s meager gains are going mostly to the wealthy.

July 2, 2011         President Obama said, “Nothing can be off-limits” in the budget debate, even though Republicans have said taxes increases are, and the president said every tax break and federal program must be under scrutiny:

  • With an August 2nd deadline looming to raise the government borrowing limit, the president used his weekly radio and Internet address to call on Congress to make a deal—with both sides dug into their positions, it is not clear how compromises will be reached, though the Senate cancelled its plans to take a July Fourth recess next week to stay in Washington and work on the problem, but Obama expressed confidence a deal could be made and instead of singling out Republicans as the barriers to agreement, he directed his message to Democrats and Republicans alike.

WEEK ONE HUNDRED & TWENTY-SEVEN

June 19, 2011        Outgoing ambassador, Karl Eikenberry, lashed out at Hamid Karzai in a carefully calculated and candid rebuke of the Afghani president’s increasingly inflammatory criticisms against coalition forces in Afghanistan:

  • Although Eikenberry never mentioned the president by name, his comments were clearly intended as a warning to Karzai that he was testing U.S. patience at a crucial time, as President Obama is weighing troop reductions, and support for the war and its mounting costs is eroding both in Congress and around the country—Karzai did not immediately respond to the comments.

June 20, 2011     The American Medical Association will continue to support a key tenet of the healthcare law that requires Americans to buy health insurance—by a ratio of two-to-one, the AMA’s policy-making House of Delegates said that the organization will continue to back the so-called “individual mandate”:

  • The action rejected efforts by dissident groups from within the nation’s largest doctor group to snub a controversial part of the regulation signed into law in March 2010 by President Obama—the results of the vote were 326 in favor and 165 opposed.

June 21, 2011

1.     The Senate unanimously confirmed Leon Panetta as secretary of defense, putting the Pentagon in the hands of a former Democratic congressman and budget expert amid growing political discontent over the cost and reach of President Obama’s military engagements:

  • Panetta, who spent two years as director of the CIA, will replace Robert Gates, who is retiring after serving in two consecutive administrations—his confirmation comes as Obama is poised to reduce troop levels in Afghanistan and as Congress is expressing frustration over the administration’s stance on the U.S. military role in Libya.

2.     Key senators urged giving the White House authority for a one-year, limited mission in Libya, but sentiment was growing in the House of Representatives to cut off the effort’s funding:

  • Senate Foreign Relations Committee Chairman John Kerry (D-Massachusetts), who proposed the one-year measure, and Sen. John McCain (R-Arizona) are pushing a measure that would authorize the use of U.S. armed forces “to advance national security interests in Libya as part of the international coalition” that is involved in that country—discussions were underway on possible House action, including denying funds for the operation as part of a defense-spending bill that is expected to be considered beginning June 30th.

June 22, 2011

1.        President Obama said that the U.S. would withdraw 10,000 troops from Afghanistan this year and bring another 23,000 home by the end of summer in 2012:

  • The decision was endorsed by the president’s team of advisors, including Defense Secretary Robert Gates and Secretary of State Hillary Clinton, but administration officials said that the top Afghanistan commander, Gen. David Petraeus, preferred to see more troops stay in the near term—the Pentagon had been hoping to limit the initial withdrawal to 3,000 or 4,000, but the killing of Osama bin Laden by U.S. forces in Pakistan, combined with budget and political pressures, pushed Obama toward a steeper reduction, according to officials familiar with the internal debate.

2.     In a study that underscored the stakes for Vice President Biden and negotiators working on a sweeping plan to reduce red ink, the Congressional Budget Office warned that the rapidly growing national debt could soon spark a European-style crisis unless Congress moves forcefully:

  • The study reverberated through the Capitol as Biden and senior lawmakers spent several hours behind closed doors—economists warn than rising debt threatens to devastate the economy by forcing interest rates higher, squeezing domestic investment, and limiting the government’s ability to respond to unexpected challenges like an economic downturn.

3.     The economy’s continuing struggles are not just confounding ordinary Americans, they have also stumped the head of the Federal Reserve:

  • Fed Chairman Ben Bernanke told reporters that the central bank had been caught off guard by recent signs of deterioration in the economy, and he said the troubles could continue into next year—it was the Fed chief’s most explicit warning yet that the economy will face serious challenges next year.

June 23, 2011

1.        Congressional Democrats are leading the criticism of President Obama’s plan for withdrawing U.S. troops from Afghanistan, arguing that his timeline for bringing 33,000 troops home by next summer is too slow:

  • Some Republicans worry that the draw down will be too fast, however, and the nation’s top military officer, Navy Adm. Mike Mullen, said that the plan is riskier than he originally considered prudent—an initial draw down of 10,000 troops is expected to take place in two phases, with 5,000 troops coming home this summer and 5,000 more by the end of the year, while an additional 20,000-plus are to follow by September 2012.

2.        Congressional Republicans abandoned budget talks aimed at clearing the way for a federal debt limit increase, leaving the outcome in doubt as they vowed not to give in to a Democratic push for new tax revenues as part of any compromise:

  • This week’s talks were considered to be crucial as the August 2nd deadline for an increase in federal borrowing authority nears—the Republican maneuvering threw the talks into disarray in a week when those taking part had hoped an accelerated schedule of meetings could produce a breakthrough that would persuade members of both parties to support a debt ceiling increase in the coming weeks.

June 24, 2011

1.     The House overwhelmingly rejected a measure giving President Obama the authority to continue the U.S. military operation against Libya, a major repudiation of the commander in chief:

  • The vote was 295-123 (all Oregon representatives except for Blumenauer voted no), with Obama losing the support of 70 of his Democrats one day after Secretary of State Hillary Clinton had made a last-minute appeal for the mission—the vote marked the first time since 1999 that either House has voted against a military operation, and the last time was over President Bill Clinton’s authority in the Bosnian war.

2.     A day after debt-reduction talks led by Vice President Biden appeared to have broken down, the White House announced that President Obama would directly intervene in the negotiations, beginning one-on-one meetings with key lawmakers next week:

  • Obama will start by meeting with Senate Majority Leader Harry Reid (D-Nevada) and Senate Minority Leader Mitch McConnell (R-Kentucky) on June 27th—but a quick compromise seemed unlikely as House Speaker John Boehner (R-Ohio) reiterated his pledge to oppose any comprehensive deficit deal that increases taxes.

WEEK ONE HUNDRED & TWENTY-SIX

June 13, 2011

1.        Defense Secretary Robert Gates said that he sees no road blocks to ending the ban on openly gay military service, and if the top military officials of each service recommend moving ahead on the repeal before the end of the month, he will endorse it:

  • The move to end the ban on gay service could be one of Gates’ final acts as defense chief, but Gates stressed that he is not trying to hurry the process along, and that if it is not ready by the end of the month, Leon Panetta (awaiting Senate confirmation) can take action when he steps in—if approved by Gates before he leaves office, the repeal could be fully implemented in September.

2.        Facing opposition from congressional Republicans and industry over a broad range of new air-quality regulations, the EPA said that it was delaying by two months the release of a proposed rule on greenhouse gas emissions from power plants and other major pollution sources:

  • The rule would have a major impact on the nation’s efforts to reduce emissions of gases blamed for climate change, and its postponement is the latest by the EPA to slow the issuing of regulations that critics say will slow economic growth, drive up energy costs, and reduce employment—its delay is a tacit admission that the regulations pose political, economic, and technological challenges that cannot be addressed on the aggressive timetable that the agency set for itself early in the Obama administration.

3.     Beset by a grim employment picture, President Obama pledged to ease the way for businesses to expand hiring and offered assurances to an anxious public that he is focused on creating jobs—the top political issue heading into the 2012 election and the Achilles heel of his presidency:

  • Obama called for more high-tech workers, announcing a plan to train 10,000 new American engineers every year through a public-private partnership, and he also held a high-profile meeting with top CEOs who make up his advisory jobs council, offering encouragement for several ideas, including a plan that could create an estimated 114,000 jobs by increasing energy efficiencies in commercial and apartment buildings—Obama said that the economy had made “great strides” from where it stood in 2008, but he said that even though jobs were being created, they were not being created fast enough.

June 14, 2011

1.     The Senate rejected a proposal to do away with annual ethanol subsidies in a vote that was closely watched for clues about the willingness of Republicans to take on tax breaks and loopholes:

  • Despite the measure’s defeat, conservative Sen. Tom Coburn (R-Oklahoma.) won support from 40 senators (both Oregon senators voted no) to end the ethanol credit, and that was interpreted as evidence that some Republicans are willing to end loopholes despite the conservative view that such steps are tantamount to tax hikes—many Republicans consider any action that results in more federal revenue to be a tax increase, while Democrats argue that ending tax breaks and closing loopholes are essential to reducing deficits.

2.        President Obama kept his campaign promise to become the first U.S. president since John F. Kennedy to make an official visit to Puerto Rico:

  • Residents of Puerto Rico are U.S. citizens but can’t vote in presidential general elections, only in primaries, and reaching out to Puerto Ricans is part of a broader effort to court Latinos, who accounted for more than half the U.S. population increase over the past decade—about 4.6 million Puerto Ricans live on the mainland.

June 15, 2011

1.        Republicans have maneuvered to quietly prevent a bill that makes cuts in domestic and international food programs from chipping away at federal farm subsidies:

  • The GOP move to head off $167 million in cuts in direct government payments to farmers, regardless of crop prices and yields, highlights how difficult it will be for Congress to come up with even a fraction of the more than $2 trillion in long-term budget savings lawmakers have promised—the annual bill to pay for food and farm programs next year would cut food aid for low-income mothers and children by $685 million, about a ten percent reduction from this year’s dollar level.

2.        Pushing hard against criticism in Congress over the deepening air war in Libya, the White House asserted that President Obama had the authority to continue the military campaign without congressional approval because U.S. involvement fell short of full-blown hostilities:

  • In contending that the limited U.S. role did not oblige the administration to ask for authorization under the War Powers Resolution, the report asserted that “U.S. operations do not involve sustained fighting or active exchanges of fire with hostile forces nor do they involve U.S. ground troops”—still, the White House acknowledged the operation has cost the Pentagon $716 million in its first two months and will have cost $1.1 billion by September at this rate.

3.        Falling energy prices cooled overall inflation in May, offering some relief to consumers who have been coping for months with higher gas prices:

  • Still, Americans paid more for cars, clothing, and hotel rooms in May, and that drove the so-called “core” consumer prices, which exclude volatile food and energy, up by the most in nearly three years—economists downplayed the increase in core prices, noting that it is more important that consumers are finally getting some relief from high gas prices, down nearly 30 cents since peaking last month at a national average of $3.98 per gallon.

July 16, 2011

1.     The Senate approved an amendment by Sen. Dianne Feinstein (D-California) to the Public Works and Economic Development Act that would end tax credits for ethanol that refiners blend into motor fuel:

  • The measure passed on a 73-27 vote (both Oregon senators voted yes), although the House would still need to approve a comparable measure before it could be signed into law—the Feinstein amendment would abruptly eliminate the tax credits, which cost the federal government about $6 billion a year on July 1st and would also eliminate the 51-cents-a-gallon protective tariffs that discourage imports;
  • Supporters of the ethanol tax credit say it helps corn growers while reducing American reliance on petroleum imports, but critics say that the tax credit is a burden on tax payers and food consumers alike and that the nation cannot afford it in a time of big budget deficits—the U.S. ethanol industry produces about 900,000 barrels a day, cutting U.S. oil imports by about 600,000 barrels a day because ethanol has only about two-thirds of the energy content that gasoline does.

2.        President Obama’s top general in Afghanistan has given him a range of options for withdrawing American forces as a July deadline for starting the draw down approaches:

  • White House officials did not divulge the details of the options Obama is considering, but while no broad decisions have been made, Pentagon leaders said that about 800 Army National Guard troops scheduled for deployment to Afghanistan will now go to Kuwait early next month, in what will be one of the first phases of the draw down.

3.        Republicans and Democrats derided President Obama’s claim that U.S. air attacks against Libya do not constitute hostilities and demanded that the commander in chief seek congressional approval for the three-month-old military operation:

  • In an escalating constitutional fight, House Speaker John Boehner threatened to withhold money for the mission, pitting a Congress eager to exercise its power against a dug-in White House—the 1973 War Powers Resolution prohibits the military from being involved in actions for more than 60 days without congressional authority, plus a 30-day extension, and the 60-day deadline passed last month with the White House saying it is in compliance with the law.

June 17, 2011

1.        President Obama rejected the views of top lawyers at the Pentagon and the Justice Department when he decided that he had the legal authority to continue U.S. military participation in the air war in Libya without congressional authorization, according to officials familiar with internal administration deliberations:

  • Instead, Obama decided to adopt the legal analysis of several other senior members of his legal team, including White House counsel, Robert Bauer, and State Department legal advisor, Harold Koh, who argued that the U.S. military’s activities fell short of hostilities—under that view, Obama needed no permission from Congress to continue the mission unchanged.

2.     The Obama administration is ending a controversial program that allowed employers to avoid a key requirement of the new federal healthcare law:

  • Beginning in September, employers that offer health coverage to their workers will no longer be able to seek a waiver from rules mandating that their plans provide at least $1.25 million worth of coverage annually—the law was designed to eliminate plans with low annual limits, often called mini-med plans, that critics said offered little protection to customers.

3.        Moving to repair an immigration enforcement program that has drawn rising opposition from governors and police chiefs, senior immigration officials announced steps they said would focus the program more closely on deporting immigrants convicted of serious crimes:

  • In a fix likely to have broad practical effect, John Morton, the head of Immigration and Customs Enforcement, issued a memorandum that greatly expanded the factors immigration authorities can take into account in deciding to defer or cancel deportations—agents are now formally urged to consider how long an immigrant has been in the U.S., or whether the immigrant was brought here illegally as a child and is studying in high school or college.

4.     The top lawyer for the National Labor Relations Board told a congressional committee that while an NLRB complaint against Boeing may make South Carolina workers feel vulnerable and anxious, the legal action is aimed at protecting the rights of workers everywhere:

  • The NLRB is suing the aeronautics giant, alleging the manufacturer located its new 787 jet assembly line in South Carolina to retaliate against workers in Washington state who were on strike in 2008—the NLRB wants that work returned to Washington state, even though the company opened its $750 million South Carolina plant (the single largest industrial investment in the history of South Carolina, a right-to-work state) last week.

5.     The International Monetary Fund said that it expects the U.S. economy to grow at a slower pace this year than previously estimated, dragged down by higher oil prices and lower factory output:

  • The lending organization also warned that the European debt crisis poses a threat to the global economy—the Washington-based fund has 187 member nations and lends money to countries in financial distress and has played a key role in negotiating and financing European Union bailout packages for Greece, Ireland, and Portugal.

June 18, 2011      President Hamid Karzai acknowledged that the U.S. and Afghan governments have held talks with Taliban emissaries in a bid to end the nation’s nearly 10-year war, even as suicide attackers launched a bold assault in the heart of the country’s capitol, killing nine people—the White House neither directly confirmed nor denied Karzai’s statement:

  • Reports about such talks have surfaced in recent months, but Karzai’s statement was the first public confirmation of U.S. participation—publicly, the Taliban say there will be no negotiations until foreign troops leave Afghanistan.

 WEEK ONE HUNDRED & TWENTY-FIVE

June 6, 2011

1.        Finishing his final trip to Afghanistan as defense secretary, Robert Gates told troops there, “I think we should not let up on the gas too much, at least for the next few months”—Gates met over the weekend with the U.S. commander in Afghanistan, Gen. David Petraeus, who is hammering out a suggested schedule for the draw-down, which is to begin in July:

  • The Pentagon knows that plan will run into skepticism in the White House that keeping troops around for another fighting season next spring makes strategic or political sense—in Washington, senior military officials say that the withdrawal of U.S. forces depends in large part on the ability of the Afghans to defend themselves, an effort they concede is still a work in progress and makes them reluctant to draw down too quickly.

2.        President Obama will order a “real draw-down” of U.S. forces from Afghanistan starting in July, the White House insisted, a milestone in a long war that is testing the patience of the American people and Congress after the killing of al-Qaida leader Osama bin Laden:

  • Roughly 100,000 U.S. forces are in Afghanistan, three times as many as when Obama took office, and U.S. forces are expected to remain there through 2014—sometime this month, Obama is likely to announce how many troops will start coming home.

June 7, 2011

1.     U.S. officials said that Yemen President Ali Abdullah Saleh was burned over 40 percent of his body and suffered bleeding in the brain from last weekend’s attack on his palace, indicating his wounds were worse than initially reported—the revelation casts doubts on a quick return to Yemen and spells a deepening power vacuum:

  • The U.S. fears that al-Qaida’s branch in Yemen, one of the terror network’s most active and blamed for two attempted anti-U.S. attacks, will take advantage of the chaos to strengthen its base in the country—Washington and Saudi Arabia are pushing Yemeni officials to seize the opportunity of Saleh’s evacuation to immediately begin a transfer of power and formation of a new government.

2.        Shrugging off last week’s dismal May jobs report, Federal Reserve Chairman Ben Bernanke said that he expects the U.S. economic recovery to revive later this year as headwinds from outside factors will ease:

  • Speaking to an international monetary conference in Atlanta, Bernanke said that high energy prices and spillover effects from the devastating natural disaster in Japan have hurt U.S. growth since April, but these headwinds are likely to dissipate in coming months” and “growth seems likely to pick up somewhat in the second half of the year”—President Obama, appearing with German Chancellor Angela Merkel at the White House also suggested that the recent spate of weak economic indicators is likely to be transitory, singling out gasoline prices as weighing on consumer psychology and family budgets.

June 8, 2011

1.     A resolution before the Senate pressures President Obama to seek congressional consent for continued U.S. military involvement in Libya and requires the administration to provide a detailed justification for the decision to go to war:

  • Sens. Jim Webb (D-VA) and Bob Corker (R-TN) introduced the resolution, expressing the same frustration with Obama as House members who voted May 3rd to rebuke the president for failing to get authorization from Congress when he ordered air strikes beginning March 19th against Moammar Gadhafi’s forces—initially, the White House brushed off the non-binding measure, but today it said that it will respond to detailed questions on the U.S. mission in Libya within a two-week deadline.

2.     Libya leader Moammar Gadhafi, increasingly cornered by a strong upturn in NATO air strikes, lashed back with renewed shelling of the western city of Misrata, killing ten rebel fighters:\

  • The international alliance said that it remained determined to keep pounding Gadhafi forces from the air, but would play no military role in the transition to democratic rule in the oil-rich North African country once the erratic leader’s 42-year rule was ended—U.S. officials said that Defense Secretary Robert Gates pointedly prodded five allied nations to share more of the burden of the NATO-led air campaign against Libya, but none committed to do more.

June 10, 2011

1.     The federal budget deficit is on pace to break the $1 trillion mark for a third straight year, and record deficits are putting pressure on Congress and the Obama administration to come up with a plan to rein in government spending:

  • This year’s deficit will likely exceed last year’s $1.29 trillion imbalance and nearly match the $1.41 trillion record reached in 2009—the latest Treasury report does show that more people are working and paying taxes this budget year, a positive sign, but one of the fastest growing parts of the budget is the interest on the national debt, and the government is at risk of defaulting on its debt payments which would probably happen if Congress fails to raise the nation’s $14.3 trillion borrowing limit by early August.

2.        Outgoing Defense Secretary Robert Gates lashed out at some of America’s closest allies, complaining that NATO’s shaky air assault in Libya had laid bare shortcomings that are pushing the alliance toward “collective military irrelevance”:

  • Gates’ address came after two days of private meetings with fellow defense chiefs at NATO headquarters in Brussels, and U.S. officials said that his critique was even more blunt during those sessions—as Gates gave his harsh assessment, the Obama White House begins closed-door deliberations on how quickly to withdraw the U.S. military from the decade-old war in Afghanistan, where forces from several NATO nations have also taken part.

3.     Rep. Dana Rohrabacher (R-CA), after a “very frank” exchange with Iraqi Prime Minister Nouri al-Maliki, announced bluntly that his subcommittee is investigating whether forces under al-Maliki’s command had committed a “crime against humanity”:

  • esponding to the assertions by Rep. Rohrabacher, al-Maliki asked the U.S. Embassy to remove the U.S. delegation immediately, government spokesman Ali Dabbagh said on Alhurra TV—it is highly unusual for a congressional committee on an official visit to another country to announce an investigation of the host government’s actions on its own territory and equally as rare for an official delegation to be told to leave.

WEEK ONE HUNDRED & TWENTY-FOUR

May 29, 2011

1.        President Obama made his third trip to America’s heartland in about a month to offer comfort and support for people grappling with disaster—in late April, he went to Tuscaloosa, Alabama, after tornados savaged that city and other parts of the South, and just under two weeks later, in Memphis, he viewed the swollen Mississippi River, whose overflowing banks and tributaries caused widespread flooding along a swath of the country, and this time, he was in Joplin, Missouri, a city of around 50,000 residents that lost 140 of its citizens, with 43 still unaccounted for, in the deadliest tornado of what has been the deadliest tornado season in the 60 years that records have been kept:

  • During his brief visit, Obama toured part of the devastated area, praised the residents for coming together in the face of tragedy, and promised, “We will be with you every step of the way until Joplin is restored.”

2.        Senate Minority Leader Mitch McConnell of Kentucky, the top Republican in the Senate, said on NBC’s “Meet the Press” that he supports the plan by House Budget Committee Chairman Paul Ryan (R-WI) to transform Medicare into a voucher-type system in which future beneficiaries, those now 54 and younger, would get subsidies to buy health insurance rather than have the government directly pay their doctor and hospital bills:

  • \he House plan has come under a sustained assault from Democrats who charge it would “end Medicare as we know it,” and they successfully used the charge in winning a House special election in a strongly Republican district in upstate New York last week—asked whether he would concede that the Ryan Medicare plan will not be part of a budget deal this week, McConnell said: “No.  It is on the table.”

May 30, 2011

1.     For the first time, Medicare will soon track spending on millions of individual beneficiaries, reward hospitals that hold down costs, and penalize those whose patients prove most expensive:

  • The Obama administration plans to establish “        Medicare spending per beneficiary” as a measure of hospital performance, just like the mortality rate for heart-attack patients and the infection rate for surgery patients—this plan has drawn fire from hospitals, which say they have little control over services provided after a patient’s discharge, and in many cases, do not even know about the services.

2.        President Obama moved to complete an overhaul of his national security team, selecting Army Gen. Martin Dempsey as the next Joint Chiefs of Staff chairman amid a protracted battle in Afghanistan, U.S. involvement in the NATO-led effort against Libya’s Moammar Gadhafi, and a winding down of the war in Iraq:

  • The president also announced he has chosen Navy Adm. James Winnefeld to succeed Marine Gen. James Cartwright as vice chairman of the Joint Chiefs and Army Gen. Ray Odierno as his candidate to replace Dempsey as Army chief of staff—the nominees have to be approved by the Senate.

May 31, 2011

1.     The vote in the House against a “clean” debt-limit increase—one with no budget cuts attached—was largely a political exercise from both parties:

  • The 318-97 vote (all Oregon representatives except Blumenauer voted no) against increasing the nation’s $14.3 trillion debt limit, a figure reached a few weeks ago, was organized by Republicans who were against such a move unless it included major spending cuts, while Democrats wanted a debt-limit increase with no strings attached—Vice President Biden is leading bipartisan talks aimed at finding budget cuts and perhaps new ways of raising revenue.

2.     The Obama administration, expanding a program created by the new healthcare law, moved to make health insurance more affordable and accessible for Americans who have been denied coverage because they are sick:

  • Across the country, the federal government is reducing premiums on special coverage available to uninsured people with pre-existing conditions such as cancer or diabetes—these plans were created by the healthcare overhaul that President Obama signed last year to provide temporary aid to sick Americans until 2014, when insurance companies will no longer be allowed to deny coverage to people who are sick.

June 1, 2011

1.     It was supposed to be one of those closed-door sessions in which political leaders can get beyond partisanship in discussing a tough problem, but it did not work that way when busloads of House Republicans met with President Obama at the White House on the issue of federal deficits:

  • Instead of lowering the temperature, the two sides traded complaints and accused each other of partisanship and posturing in a vivid illustration of the tetchy atmosphere that dominates the capitol these days—Republican Rep. Paul Ryan of Wisconsin, architect of a Medicare overhaul aimed at slashing the cost of a popular entitlement program by reducing the government’s open-ended commitment to senior citizens, accused Obama of “mis-describing” his proposal and implored the president to ease up on the “demagoguery”;
  • In reply, Obama said that he was no stranger to cartoonish depictions, reeling off a list of conservatives’ favorite attack points: “I am the death-panel-supporting, may-not-have-been-born-here president,” Obama said, according to people familiar with his remarks—after an hour and 15 minutes of talks in the East Room, the two sides parted company having made little progress on either front.

2.        Forecasters are dialing back their annual growth predictions for the U.S. economy after a spate of lukewarm readings:

  • In recent weeks, there has been less than stellar data coming out of manufacturing, housing, car sales, consumer confidence, and other commodities; debt troubles in Europe; and cooling growth in Asia—taken together, it all points to half-speed economic growth ahead, below what is needed to get the U.S. and global economies on firmer footing.

3.        Under pressure from Congress, the Obama administration is backing away from a plan to make millions of acres of undeveloped land in the West eligible for federal wilderness protection—Interior Secretary Ken Salazar said in a memo that his agency will not designate any of those public lands as “wild lands”, but will, instead, work with members of Congress to develop recommendations for managing millions of acres of undeveloped land in the West:

  • Salazar’s decision reverses an order issued in December to restore eligibility for wilderness protection to millions of acres of public lands, overturning a Bush-era approach favoring commercial development—a budget deal approved by Congress prevented the Interior Department from spending money to implement the wilderness policy.

4.        House Republicans are pushing back against Obama administration efforts to promote healthy lunches, saying the Agriculture Department should rewrite rules it issued in January meant to make school meals healthier—they say the new rules are too costly:

  • The bill, approved by the House Appropriations Committee, also covers a government proposal to curb marketing of unhealthy foods to children and urges the Food and Drug Administration to limit rules requiring that calorie counts be posted on menus—the overall spending bill would cut billions from USDA and FDA budgets, including for domestic food programs and international food aid.

June 3, 2011

1.     The House harshly scolded President Obama for launching U.S. military forces against Libya without congressional approval, fiercely disputing constitutional powers and flashing bipartisan frustration over a nearly three-month-old conflict with no end in sight—however, lawmakers rejected a more draconian resolution to order an outright end to U.S. involvement in Libya with a vote of 265-148:

  • Over White House objections, the House adopted a resolution chastising Obama for failing to provide a “compelling rationale” for the Libyan mission and demanding answers on the operation’s objective, its costs, and its impact on the nation’s two other wars in Iraq and Afghanistan within the next 14 days, and while the resolution is nonbinding, it says U.S. ground forces must not be used in the conflict except to rescue an American service member—the vote was 268-145 for the measure with 45 Democrats joining 223 Republicans in a challenge to the president (all Oregon representatives, with the exception of Blumenauer, voted yes).

2.     The May jobs report from the Labor Department confirmed earlier data pointing to a U.S. economic recovery in deceleration, but the same report also contained signs that a slide back into recession is unlikely:

  • After two consecutive months of strong hiring, the pace slowed precipitously in May with employers adding just 54,000 jobs as the jobless rate ticked up one-tenth of a point to 9.1%, according to the Bureau of Labor Statistics—the broader government report actually showed more robust private-sector hiring at 83,000 jobs, but the overall national jobs number was dragged down by continued layoffs by state and local governments, which shed another 29,000 posts.

3.     The Oregon Department of Transportation announced that AeroVironment has been chosen to build eight level-three DC fast-charging stations between Eugene and the California border under a $700,000 federal stimulus grant:

  • AV  Vice President Kristen Helsel said that the company hopes to start building by the end of summer and to have the charging stations up and running before the end of December—John MacArthur, a project manager at Oregon Transportation Research and Education Consortium in Portland said that by 2012, fast-chargers should start showing up on the Oregon coast, in the Cascades, and along I84.
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