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Council on Foreign Relations Daily News Brief
February 12, 2014

Top of the Agenda

House Raises Debt Ceiling

After three years of brinksmanship over the borrowing capacity of the United States government, the House of Representatives voted 221-201 to increase the debt ceiling until March 2015 in a so-called "clean bill" that doesn't include extra strings to satisfy political demands (WaPo). The Senate is expected to hold a final vote on the bill this week. Raising the debt ceiling without legislating spending cuts was seen as a major departure for Republicans, as the party decided to keep the political focus on Obama's health-care law rather than the nation's credit (AP). Stocks increased on the news on Tuesday, and global shares, also boosted by trade data in China and a U.S. Federal Reserve pledge to keep interest rates low, continued the rally and rose on Wednesday for a sixth straight day, the longest winning run in five months (Reuters).

Analysis

"Before it created the debt ceiling in 1917, Congress had to vote to approve each new government bond issue, specifying the amount to be borrowed and the terms. This is in stark contrast to today's practice, when Treasury is generally free to borrow at will until it hits the statutory borrowing limit. Congress could repeal the debt ceiling and go back to approving each new debt issue," the Wall Street Journal writes in an editorial.

"Now that's it become clear that this White House and all future ones can refuse to negotiate over the ceiling, forcing Congress to raise it every time, the purpose of the ceiling is lost. Republicans now hate the division and embarrassment these votes cause; and Democrats will almost always vote to raise it no matter what. So why go through the motions? Just suspend the debt ceiling permanently. The country has enough problems to handle without creating one every year," writes David Firestone in the New York Times.

"Democrats undermined their own position by talking too much about raising the debt limit—and not talking about the consequences of sending the country into default… The word 'default' didn't even show up in the debate during the first round of this fight in 2011. We shared this linguistic analysis with top Democrats and recommended a simple, but critical, change in their message: Stop talking about the 'debt limit.' Start the conversation with the word 'default,'" write Doug Hattaway and Steve Pierce in Politico.

 

Pacific Rim

China’s Premier Tries to Enforce Building Ban

Chinese premier Li Keqiang has called for a complete halt to construction of new government buildings, training centers, and hotels, in an effort to reinforce the five-year ban on new official buildings that was announced in July and hasn't been effectively implemented (SCMP).

CHINA: Exports and imports rose sharply in January, raising concerns among analysts that Chinese companies may be over-invoicing, which distorts economic indicators (FT).

 

South and Central Asia

Pakistan Court Orders Government to Produce Missing Activist

A Pakistani court ordered the government to produce Kareem Khan, an anti-drone activist who was allegedly detained on February 5 before he could testify before European parliamentarians, at a hearing on February 20 (AFP).

INDIA: The chief minister of Delhi accused India's richest man, Reliance Industries chief Mukesh Ambani, and senior politicians of colluding to overcharge consumers for gas (BBC).

 

Middle East

Russia Says It Will Veto Syrian Aid Resolution

Russia said it would veto a UN Security Council resolution on humanitarian aid access in Syria in its current form, which the deputy foreign minister said is crafted "to create grounds for future military action against the Syrian government" (Reuters).

This CFR Backgrounder explains the Syrian conflict and the global response to the crisis.

EGYPT: Military chief Abdel Fattah al-Sisi is in Russia for a two-day trip to discuss bilateral cooperation with Moscow. The trip follows a high-level Russian visit to Cairo in November (al-Jazeera).

 

Africa

Sudan, South Sudan Talks Continue Amid Conflict

Former South African president Thabo Mbeki, who has led mediations between Sudan and South Sudan on behalf of the African Union, said talks between the two countries continues despite the violence in South Sudan (All Africa).

CENTRAL AFRICAN REPUBLIC: International peacekeepers have failed to prevent the ethnic cleansing of Muslim civilians in the western part of the country, Amnesty International said in a report.

 

Europe

Slovenia Bitcoin Exchange Halts Withdrawals

Bitsmap, one of the largest Bitcoin exchanges based in Slovenia, has suspended withdrawals after its website was hit with a denial-of-service attack, the latest setback for the virtual currency following a disruption at a Tokyo-based exchange last week (Bloomberg).

Gavin Andresen, chief scientist at Bitcoin Foundation, discusses the growth and challenges of the digital currency at this CFR meeting.

BELGIUM: Legislatures in Belgium, where euthanasia is legal, are expected to remove age restrictions on who can be put to death, which would allow children suffering from terminal illnesses to ask to be euthanized (AP).

 

Americas

Clapper: U.S. Intelligence Systems Still Vulnerable

James Clapper, the director of national intelligence, said the technology to prevent an insider like Edward Snowden from stealing secret data on a large scale has not yet been fully implemented (NYT).

This CFR Backgrounder explains the controversy over U.S. domestic surveillance.

 

 

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