Politics: Daily Briefing: Chinese telecom companies may pose security threat to the United States

Published by: Clark Barrow on Monday October 8th, 2012

Clark Barrow

DAILY BRIEFING - SUMMARY

  • CONGRESS - Chinese telecom companies are bracing for a new U.S. congressional report that is likely to accuse them of posing a security threat to the United States.
  • CONGRESS - Companies that want to export coal to Asia could find roadblocks in their path if Sen. Ron Wyden (D-Ore.) becomes chairman of the U.S. Senate Committee on Energy and Natural Resources.
  • WHITE HOUSE - In his weekly radio and Internet address Saturday, President Obama said the new report showing that the unemployment rate has dropped below 8 percent is a sign the still-sluggish economy is moving forward. But Obama said more needs to be done.
  • ATTACK - U.S. congressional investigators have issued a subpoena to a former top security official at the US mission in Libya. The official is Lt. Col. Andy Wood, a Utah National Guard Army Green Beret who headed up a Special Forces "Site Security Team" in Libya.
  • DEFICIT - The U.S. federal government notched a $1.1 trillion deficit in fiscal year 2012 — the fourth straight year over $1 trillion — according to a preliminary estimate that the U.S. Congressional Budget Office released Friday.
  • LAYOFF - After new White House guidance prompted defense contractors to back off from their threats of issuing layoff notices in the face of possible mandatory budget cuts, Republican lawmakers last week accused the Obama administration of politicking and vowed not to support its promises to contractors.
  • VENEZUELA - Controversial Hugo Chavez was re-elected as president of Venezuela on Sunday for a fourth term after almost 14 years in office.

NEWS TO WATCH

ECONOMIC NEWS

  • PART-TIME - The U.S. Bureau of Labor Statistics announced Friday that the U.S. unemployment rate decreased to 7.8 percent in September 2012, the first reading below 8 percent since January 2009.

o   The BLS report gave two different readings on hiring: so-so job growth of 114,000 gain as measured by the establishment survey and the massive 873,000 jump in jobs captured in the household survey.

o   The surveys often tell two different job stories month-to-month (but converge over longer time frames), the September difference was a historically large gap.

o   That’s because the household survey also shows 582,000 of those new jobs were involuntary part-time positions. Workers told the U.S. Labor Department they took part-time work (usually 35 hours of less) because of slack business conditions or because it was the only job offered. Part-time jobs now account for 6% of all jobs, double their share before the Great Recession.

o   The report also said the number of people with part-time jobs who wanted full-time work rose 7.5 percent to 8.6 million in September 2012, the most since February 2009.

o   According to the WSJ, part-time work generally doesn’t include benefits such as health care and retirement plans, adding further financial challenges to households without full-time employees.

o   Economists at Capital Economics estimate the loss of income for part-timers who would prefer full-time work has probably subtracted about 0.5% from gross domestic product.

  • Monday morning futures on the Dow Jones Industrial Average fell 49 points, or 0.4%, to 13,487.
  • Monday morning futures on the Standard & Poor’s 500 index fell 5.3 points, or 0.4%, to 1,450.20.
  • Monday morning futures on the Nasdaq-100 index fell 14 points, or 0.5%, to 2,790.25.

COMMODITIES

  • The U.S. national average for a gallon of regular gasoline is $3.81.

o   When President Obama was inaugurated, in January 2009, the U.S. national average for a gallon of regular gasoline was $1.85. Average gasoline prices are currently 106 percent higher than they were when Mr. Obama became president.

  • Oil for November delivery fell $1.44, or 1.6%, to $88.43 a barrel on the New York Mercantile Exchange.
  • Gold for December delivery dropped $10.20, or 0.6%, to $1,770.60 an ounce on the New York Mercantile Exchange.

IN THE DISTRICT

  • ELECTION - As of today, there are 30 days until the November 2012 presidential election.
  • CONGRESS - Chinese telecom companies are bracing for a new U.S. congressional report that is likely to accuse them of posing a security threat to the United States.

o   On Monday, the U.S. House Intelligence Committee will release the findings of its yearlong investigation into the Chinese companies Huawei and ZTE. The chairman of the panel, Rep. Mike Rogers (R-Mich.), hinted last week that the report wouldn’t be favorable to the telecom giants. "The report will explain why there may be reasons for concern," Rogers said at an event in Washington.

o   Some officials worry that the Chinese government could use the companies to spy on Americans or sabotage communications networks.

  • CONGRESS - Companies that want to export coal to Asia could find roadblocks in their path if Sen. Ron Wyden (D-Ore.) becomes chairman of the U.S. Senate Committee on Energy and Natural Resources.

o   Exporters have identified five ports in Oregon and Washington from which to send coal to Asia. Nations in that region, which have rapidly expanding economies and loose environmental standards, are a coveted destination for coal producers as use of the fossil fuel drops in the United States.

o   But Wyden, who is expected to replace retiring Sen. Jeff Bingaman (D-N.M.) as committee chairman if Democrats retain the Senate, is skeptical about sending coal abroad. He has called for more rigorous environmental reviews of the process, which many say could hold up coal exports from the Pacific Northwest.

  • WHITE HOUSE - In his weekly radio and Internet address Saturday, President Obama said the new report showing that the unemployment rate has dropped below 8 percent is a sign the still-sluggish economy is moving forward. But Obama said more needs to be done.

o   The president called on Republicans in Congress to work with Democrats on a plan to cut taxes for 98 percent of Americans and on another bill to help families refinance their homes at lower interest rates. Obama also said Congress should approve his plan for a veterans jobs corps to help former members of the military find work as police officers, firefighters and park rangers.

o   Obama got much-needed good news Friday following his disappointing debate performance as the unemployment rate dropped to 7.8 percent, the lowest level since Obama took office in 2009.

o   Meanwhile, Governor Mitt Romney highlighted that the underemployment rate for September 2012 – including part-time workers seeking full-time work and those who want work but have given up looking – remained at 14.7 percent. Romney pointed out that two-thirds of the new employment reported in the household survey reflected people getting part-time work who actually want full-time jobs.

o   Romney also noted that the number of unemployed and underemployed individuals increased in September 2012 form from 23.1 to 23.2 million.

PRESIDENT’S SCHEDULE

  • In the morning, President Obama will depart from Los Angeles, California and travel to Keene, California.
  • Later in the morning, the president will deliver remarks to announce the establishment of the Cesar E. Chavez National Monument in Keene, California.
  • In the afternoon, the president will depart Keene, California and travel to San Francisco, California.
  • Later in the day, the president will hold a fundraising event in San Francisco, California.
  • The president will remain overnight in San Francisco, California.

HAPPENING IN THE U.S. CONGRESS

U.S. SENATE

  • The U.S. Senate is not in session today.

U.S. HOUSE OF REPRESENTATIVES

  • The U.S. House is not in session today.

TOPICS OF INTEREST

NATIONAL SECURITY

  • ATTACK - U.S. congressional investigators have issued a subpoena to a former top security official at the US mission in Libya. The official is Lt. Col. Andy Wood, a Utah National Guard Army Green Beret who headed up a Special Forces "Site Security Team" in Libya.

o   The subpoena compels Lt. Col. Wood to appear at a U.S. House Oversight Committee hearing this week that will examine security decisions leading up to the Sept. 11 Muslim extremist terror assault on the U.S. compound at Benghazi. U.S. Ambassador Christopher Stevens and three of his colleagues were killed in the attack.

o   Lt. Col. Wood has told CBS News and congressional investigators that his 16-member team and a six-member State Department elite force called a Mobile Security Deployment team left Libya in August, just one month before the Benghazi assault. Wood says that's despite the fact that US officials in Libya wanted security increased, not decreased.

o   Wood says he met daily with Stevens and that security was a constant challenge. There were 13 threats or attacks on western diplomats and officials in Libya in the six months leading up to the September 11 attack.

o   Sources critical of what they view as a security drawdown say three Mobile Security Deployment teams left Libya between February and August in addition to the 16-member Site Security Team on loan from the military. That's 34 highly-trained security personnel moved out over a six month period.

  • TERRORIST - The radical Islamic preacher known as Abu Hamza al-Masri and two alleged al Qaeda operatives made their first appearances in a U.S. court on Saturday after years of fighting their extradition from Britain.

o   Mr. Hamza, who was indicted in New York in 2004, faces 11 charges related to a kidnapping conspiracy in Yemen in 1998 that led to the deaths of four hostages and allegedly attempting to set up a terrorist training camp in Bly, Ore., in 1999 and 2000. Hamza entered no plea and is set to be arraigned Tuesday.

o   Two other Islamic individuals were arraigned before a U.S. District Court in New York on Saturday. They pleaded not guilty to charges in connection with the 1998 attacks on U.S. embassies in Kenya and Tanzania that killed 224 people, including 12 Americans. This comes as two other Islamic individuals were arraigned and pleaded not guilty before a U.S. District Court in Connecticut on Saturday.

o   All five terror suspects have unsuccessfully tried for years to block their extradition in British and European courts, according to the U.S. Federal Bureau of Investigation.

o   However, Rep. Peter King (R., N.Y.), one of the most ardent GOP critics of President Obama's policy on terrorism detainees, said Friday that he was satisfied with the handling of the five U.K. suspects. "I'd prefer they'd be tried in military court, but the British wouldn't have released them there," Mr. King said. "We have more capability than Britain in keeping them in prison for a long time."

FEDERAL GOVERNMENT

  • DEFICIT - The U.S. federal government notched a $1.1 trillion deficit in fiscal year 2012 — the fourth straight year over $1 trillion — according to a preliminary estimate that the U.S. Congressional Budget Office released Friday.

o   That’s still an improvement over 2011, when the deficit reached $1.3 trillion, and it marks the lowest deficit of President Obama’s four years in office.

o   The CBO report said the better picture was due to higher revenue from taxes. Spending was about the same in 2012 as it was a year earlier.

o   The CBO said revenue from corporate taxes was up by 34 percent in 2012, which the agency said was due to the expiration of some rules governing how quickly businesses were able to deduct the costs of equipment investments.

o   CBO analysts said defense and basic domestic spending both fell, particularly due to a $30 billion drop in unemployment benefit costs.

o   But the two big federal entitlement programs, Social Security and Medicare, both grew, offsetting the other spending cuts.

  • LAYOFF - After new White House guidance prompted defense contractors to back off from their threats of issuing layoff notices in the face of possible mandatory budget cuts, Republican lawmakers last week accused the Obama administration of politicking and vowed not to support its promises to contractors.

o   Bethesda-based Lockheed Martin, the Arlington-based U.S. business of BAE Systems and Herndon-based EADS North America had all warned that they might be required to issue layoff notices under the Worker Adjustment and Retraining Notification Act, or WARN Act, given the prospects that the sequestration process would begin in January.

o   But they moved away from those plans last week, citing a new White House memo. In the memo, the administration said if sequestration occurs and an agency terminates or changes a contract that results in a plant closing or mass layoff, the contractors’ liability and litigation costs under the WARN Act would be “allowable costs” covered by the contracting agency.

IMMIGRATION

  • FRIENDLY FIRE - The head of the U.S. Border Patrol agents union says the agent killed last week in a shooting in southern Arizona apparently opened fire on two fellow agents thinking they were armed smugglers and was killed when they returned fire.

o   National Border Patrol Council president George McCubbin said Sunday that the two sets of agents approached an area where a sensor had been activated. He says they arrived from different directions early Tuesday when Agent Nicholas Ivie opened fire.

o   The FBI announced Friday that the shooting appeared to be a case of friendly fire.

  • RELEASED - Jose Antonio Vargas, the writer and activist who went public last year with his status as an undocumented immigrant, was arrested for a driving infraction in Minnesota on Friday, but federal immigration authorities did not detain him or take any other action, officials said Saturday.

o   Vargas was arrested by the state patrol and put in jail for not having a valid driver’s license, Roeske said. He was released several hours later and is slated to appear in district court on Oct. 18.

o   An ICE official with knowledge of the situation wrote in an email that “Mr. Vargas was not arrested by ICE and no detainer was issued.” An immigration detainer is a notice issued from the Department of Homeland Security to federal, state and local law enforcement agencies that tells them, “ICE intends to assume custody of an individual in [those agencies’] custody.”

FOREIGN POLICY

MIDDLE EAST

  • ISRAEL - Lebanon's state news agency says Israeli warplanes staged mock raids on Sunday over villages in southern Lebanon, breaking the sound barrier.

o   The exercise comes a day after the Israeli military shot down a drone that crossed deep into Israel from the Mediterranean Sea, marking the first time in at least six years that a hostile aircraft has penetrated Israeli airspace.

o   It was not immediately clear who launched the drone, but suspicion quickly fell on the Lebanese militant group Hezbollah. The Iranian-backed group is known to have sent drones into Israel on several previous occasions.

  • SYRIA - The continued exchange of artillery fire between Syria and Turkey raises additional concerns that the conflict may escalate and spread to neighboring countries, U.S. Defense Secretary Leon Panetta said Saturday.

o   Mr. Panetta said the U.S. is using its diplomatic channels to relay worries about the fighting in the hopes that it won't broaden. His comments came on the heels of warnings from Turkey's prime minister that his country isn't far from war with Syria.

o   Turkey and Syria traded artillery fire Saturday as rebels clashed with President Bashar al-Assad's forces near the border, heightening the fears that the crisis could erupt into a regional conflict. Turkish Prime Minister Recep Tayyip Erdogan on Friday cautioned Damascus not to test Turkey's "limits and determination" and said Ankara wasn't bluffing in saying it won't tolerate such acts.

o   Meanwhile, many Saudi Arabian and Qatari officials now fear that the fighting in Syria is awakening deep sectarian animosities and, barring such intervention, could turn into an uncontrollable popular jihad with consequences far more threatening to Arab governments than the Afghan war of the 1980s.

o   Already, there are signs of an uptick in the number of young men crossing illegally into Syria from Saudi Arabia and other Muslim countries, and of private fund-raising efforts across the gulf to help the rebels acquire heavier weapons. The fighting has also spilled into Turkey, which shelled Syria for four days last week after a Syrian shell killed five Turkish civilians.

  • IRAN - Iran is ratcheting up pressure on the U.N. agency responsible for overseeing the country’s nuclear program, accusing its inspectors of engaging in spying and sabotage and threatening to restrict U.N. access to Iranian nuclear facilities.

o   So strident has been Iran’s criticism of the International Atomic Energy Agency in recent weeks that some Western officials fear that the country is preparing to officially downgrade its cooperation with the nuclear watchdog. The Vienna-based agency is the only international body allowed to routinely visit Iran’s most sensitive nuclear installations.

o   The IAEA’s notoriously troubled relations with the Islamic Republic deteriorated sharply last month after Iran reported attacks by alleged saboteurs on electrical grids serving its two uranium-enrichment plants. Since then, Iranian officials have alleged the agency was directly involved in the attacks, accusations leveled in private meetings as well as in public statements, according to Western diplomats and government officials briefed on the exchanges.

ASIA

  • SOUTH KOREA - South Korea says the U.S. has agreed to allow it to develop longer-range missiles that could strike all of North Korea.

o   Under a 2001 accord with Washington, Seoul has been barred from developing and deploying ballistic missiles with a range of more than 186 miles due to concerns of a regional arms race. As a result, some North Korean military facilities have been out of South Korea's missile range.

o   South Korea said Sunday that South Korea and the U.S. have revised the accord to allow Seoul to have missiles with a range of up to 500 miles to better cope with North Korea's nuclear and missile threats.

SOUTH AMERICA

  • VENEZUELA - Controversial Hugo Chavez was re-elected as president of Venezuela on Sunday for a fourth term after almost 14 years in office.

o   Chavez survived the closest-run contest yet following a bitter campaign in which the opposition accused him of unfairly using Venezuela's oil wealth and his near total control of state institutions to his advantage.

o   After a long wait for the results, fireworks exploded over Caracas amid a cacophony of horn-honking by elated Chavez supporters waving flags and jumping for joy outside the presidential palace.