Daily News Brief

July 8, 2011

EXECUTIVE SUMMARY

- White House and Congress Seek Broader Cuts
- Syria Accuses U.S. of Interference
- Pakistan Lashes Out at U.S. Military Chief
- Former Cameron Spokesman Arrested

Top of the Agenda: White House and Congress Seek Broader Cuts

Following negotiations between President Barack Obama and Congressional leaders Thursday, Democrats and Republicans agreed to seek broader budget cuts (NYT) to reduce the national deficit, which would result in savings of nearly $4 trillion over ten years. The two sides tried to hash out a deal to raise the government's debt borrowing limit and avoid default ahead of an August 2 deadline.

The deficit-reduction plan (WSJ) being discussed would require spending cuts for domestic programs, defense, and entitlement programs such as Medicare and Medicaid, while also increasing tax revenues.

House Speaker John A. Boehner endorsed the president's plan (WashPost) to dramatically overhaul the budget, but faced skepticism from fellow Republicans on the issue of raising taxes. Meanwhile, Democrats voiced concern (Politico) over cuts to entitlement programs like Medicare and Social Security. Talks are set to reconvene on Sunday, allowing both parties time to rally support for the package.

Analysis:

As the U.S. approaches the deadline to raise its debt limit, the White House and top lawmakers are attempting to set a course for the nation's long-term fiscal health. The talks have profound national security implications, as this CFR Issue Guide explains.

Economists warn of a fiscal crisis and steeply higher borrowing costs for U.S. businesses and homeowners in the absence of a deal to raise the debt ceiling, explains this CFR Backgrounder.

Politico's Jonathan Allen and Carrie Budoff Brown compile a list of five crucial reasons why Republicans and Democrats could actually reach a budget deal to raise the nation's debt ceiling, the first of which being: “For Obama, failure is not an option.”

Pimco CEO Mohamed El-Erian argues that U.S. talks on the debt ceiling fall short (FT) of what is required to accelerate job creation and enhance medium-term fiscal sustainability.

MIDDLE EAST: Syria Accuses U.S. of ‘Interfering’

Syria accused the United States of “interfering” in its domestic politics after Washington sent U.S. Ambassador Robert Ford from Damascus to the restive city of Hama (al-Jazeera) Thursday, the site of a sustained security crackdown following peaceful anti-government protests.

This CFR analysis brief says a crackdown in Hama and Amnesty International's call for reporting Syria's government to the ICC place new focus on the Assad regime's stability, yet international response has been muted.

Yemen: Embattled Yemeni President Ali Abdullah Saleh appeared on television Thursday night from Saudi Arabia in his first public appearance (National) since being injured in an explosion at his compound in the capital Sanaa early last month. Saleh, whose country is confronting a worsening political stalemate, did not indicate if he will resign.

PACIFIC RIM: China Warns U.S. on Meeting Dalai Lama

The Chinese foreign ministry warned U.S. officials Thursday not to meet with the Dalai Lama during his visit to Washington (Reuters) this week, while accusing the exiled Tibetan spiritual leader of trying to split China to establish an independent Tibet.

The Dalai Lama's visit to Washington ushered in a rare moment of bipartisanship in U.S. politics, writes Politico.

Malaysia: Malaysian police said they will block access to the capital Kuala Lumpur for twenty-four hours in anticipation of a planned pro-electoral reform rally (BBC) by a group known as the Bersih 2.0 coalition.

CENTRAL AND SOUTH ASIA: Pakistan Lashes Out at U.S. Military Chief

The U.S. Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, indicated Thursday that the Pakistani government was behind the murder (Dawn) of investigative Pakistani journalist Saleem Shahzad, prompting outrage by Pakistani officials, who called Mullen's comments “extremely irresponsible.”

In this CFR video interview, Pakistan representative for Human Rights Watch Ali Dayan Hasan indicates that it was the country's top spy agency, the ISI, which was complicit in Shahzad's killing.

Pakistan: More than ninety people have been killed in Karachi (ExpressTribune) following four straight days of fighting between ethnically-based political parties.

AFRICA: U.S. Says U.N. Peacekeepers Must Remain in Sudan

Ahead of tomorrow's succession (Reuters) by South Sudan from the northern part of the country, the United States ambassador to the United Nations, Susan Rice, called for UN peacekeepers to be allowed to stay on in the disputed border states of Southern Kordofan and Blue Nile, despite resistance from Khartoum.

Meanwhile, Kenyan President Mwai Kibaki, whose country was the mediating state in the Sudan Comprehensive Peace Agreement, called on the north and south to forge bilateral relations (DailyNation) following tomorrow's succession. 

CFR's John Campbell writes that South Sudan's independence could encourage secession efforts elsewhere in sub-Saharan Africa, but elites in those countries will likely stymie those attempts at challenging colonial borders, at least for now.

AMERICAS: IMF Calls Argentine Economy ‘Frying Pan’

The head of the International Monetary Fund's Western Hemisphere Department, Nicolas Eyzaguirre, called the Argentine economy a “frying pan with boiling oil,” as he warned of a possible overheating (MercoPress) amid high-priced commodities and a low U.S. dollar.

EUROPE: Former Cameron Spokesman Arrested

In connection with a phone hacking scandal at Rupert Murdoch's British tabloid the News of the World that will see that paper cease publication Sunday, Andy Coulson, the paper's editor until 2007 and the former spokesman for Prime Minister David Cameron, was arrested today (BBC).

By sacrificing the News of the World the Murdoch dynasty lives to fight another day, writes Emily Bell in the Guardian.