Daily News Briefing: Friday, August 17, 2012

Published by: Clark Barrow

Clark Barrow

DAILY BRIEFING - SUMMARY

  • TAXMAGEDDON – According to a report by the Tax Foundation, Georgia residents would have to pay an additional $1,954 on average annually if the U.S. Congress lets the Bush tax cuts lapse. 
  • FOREIGN DEBT - The money the U.S. government owes to foreign entities rose to a record $5.2923 trillion in June, according to the U.S. Treasury Wednesday.
  • WHITE HOUSE - The White House is "dusting off old plans" for a potential release of oil reserves to dampen rising gasoline prices and prevent high energy costs from undermining the success of Iran sanctions, a source with knowledge of the situation said on Thursday. 
  • FEDERAL PENSION - More than 21,000 retired federal workers receive lifetime government pensions of $100,000 or more per year, a USA TODAY/Gannett analysis finds.
  • CARBON DIOXIDE - In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the U.S. has fallen dramatically to its lowest level in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal.
  • ARIZONA - In Arizona, which passed one of the nation's toughest anti-immigration laws, Gov. Jan Brewer signed an executive order Wednesday directing state agencies to deny driver's licenses and other public benefits to illegal immigrants who obtain work authorizations under a new federal program.  

 

WHAT WE KNOW

ECONOMIC NEWS

  • FEDERAL RESERVE - The U.S. Federal Reserve's "hawks" are speaking out against additional action by the central bank to spur the economy.
    • The Fed has moved despite this group's opposition before. Thus, the comments now don't represent a signal from the central bank that it is backing away from its statement earlier this month that it might act. But the remarks do highlight the complicated decision Fed policy makers face as they consider whether to launch a new bond-buying program, known as quantitative easing, at their meeting next month.
    • Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said in an interview Wednesday with The Wall Street Journal that additional action by the Fed would be of minimal long-term benefit to the economy. Moreover, he said, the Fed could do little on its own to address problems out of its control which are holding back growth, including public uncertainty about government budgets in Europe and the U.S.
  • TAXMAGEDDON – According to a report by the Tax Foundation, Georgia residents would have to pay an additional $1,954 on average annually if the U.S. Congress lets the Bush tax cuts lapse.  Georgia is one of 29 that will be impacted less than $2,000 a year.
    • Hit hardest would be Connecticut, where residents would on be on the hook for an additional $5,783 annually on average.
    • Least impacted would be Mississippi, where residents would have to pay an additional $1,310 annually on average.
  • The Dow Jones Industrial Average rose 85.33 points, or 0.7%, to 13,250.11.
  • The S&P 500 rose 9.98 points, or 0.7%, to 1,415.51.
  • The Nasdaq Composite rose 31.46 points, or 1%, to 3,062.39.

COMMODITIES

  • The U.S. national average for a gallon of regular gasoline is $3.71.
    • 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 100 percent higher than they were when Mr. Obama became president.
  • Crude for September delivery advanced $1.27, or 1.4%, to end at $95.60 a barrel on the New York Mercantile Exchange.
  • Gold for December delivery advanced $12.60, or 0.8%, to end at $1,619.20 an ounce on the Comex division of the New York Mercantile Exchange.

NEWS TO WATCH

  • ELECTION - As of today, there are 81 days until the November 2012 presidential election.
  • FOREIGN DEBT - The money the U.S. government owes to foreign entities rose to a record $5.2923 trillion in June, according to the U.S. Treasury Wednesday.
    • The U.S. government’s indebtedness to foreign interests has grown by 72.3 percent during President Barack Obama’s term in office. In January 2009, when Obama was inaugurated, the U.S. government owed $3.0717 trillion to foreign entities, according to the Treasury Department. That has increased by $2.2206 trillion—or 72.3 percent—to the record $5.2923 trillion reported for yesterday.
    • Total U.S. debt purchased by the U.S. Federal Reserve and U.S. federal government entities is more than $6.3 trillion. The U.S. Federal Reserve owns more than $1.6 trillion. China currently holds more than $1.1 trillion in U.S. debt.
  • WHITE HOUSE - The White House is "dusting off old plans" for a potential release of oil reserves to dampen rising gasoline prices and prevent high energy costs from undermining the success of Iran sanctions, a source with knowledge of the situation said on Thursday.
    • U.S. officials will monitor market conditions over the coming weeks, watching whether gasoline prices fall after the September 3 Labor Day holiday, as they historically do, the source said.
    • It was too early to say how big a drawdown would be from the U.S. Strategic Petroleum Reserve and, potentially, other international reserves if a decision to proceed was taken, the source said.

PRESIDENT’S SCHEDULE

  • In the morning, President Obama will receive the Presidential Daily Briefing at the White House.
  • Later in the morning, the president will meet with senior advisers at the White House.

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

  • TERRORISM - Questions are being raised about the consistency of the government's standard for what qualifies as "terrorism," as recent high-profile shootings bear that label while tragedies like the Fort Hood massacre do not.
    • According to the Patriot Act, domestic terrorism is defined as an act of violence that is intended to "intimidate or coerce a civilian population, to influence the policy of a government by intimidation or coercion or to affect the conduct of a government by mass destruction, assassination, or kidnapping."
    • The shooting earlier this month at a Sikh temple in Wisconsin where six were killed by an alleged neo-Nazi military veteran was publicly described by the attorney general as an act of terrorism motivated by hate. The shooting Wednesday in Washington, D.C., of a security guard at the conservative Family Research Council is also being handled as an act of domestic terrorism. But the federal government has declined to label other tragedies as such.

FEDERAL GOVERNMENT

  • FEDERAL PENSION - More than 21,000 retired federal workers receive lifetime government pensions of $100,000 or more per year, a USA TODAY/Gannett analysis finds.
    • Of these, nearly 2,000 have federal pensions that pay $125,000 or more annually, and 151 take home $150,000 or more. Six federal retirees get more than $200,000 a year.
    • Some 1.2 percent of federal retirees collect six-figure pensions. By comparison, 0.1 percent of military retirees collect as much.
  • GOVERNMENT MOTORS - Three years into their forced marriage with GM, the American taxpayers have seen the value of their investment in GM deteriorate by approximately $24 billion, largely due to continuing European losses. Exposure in Europe has contributed to crushing the value of GM's stock due to its chaotic and failing Opel unit in Germany.
    • GM Europe was packaged and ready for sale to new European buyers in 2009 before the new Obama GM Board of Directors stopped the deal, throwing GM into its current value free-fall. In fact, the decision to not sell the Opel operations (which has not been profitable for more than a decade) in 2009 after GM cleared bankruptcy was the very first major decision of the new Obama Board. Had Opel been sold, GM stock would be much higher than it is today.

ENERGY

  • WIND FARM - A large proposed wind farm off the Massachusetts coast gained regulatory approval Wednesday amid complaints from GOP lawmakers that the White House inappropriately pushed for its acceptance.
    • The U.S. Federal Aviation Administration (FAA) determined the 130-turbine Cape Wind project, located in the Nantucket Sound, posed no danger to air travel. The project has been in the planning process for more than a decade.
    • "This FAA Determination of No Hazard is extremely robust, comprehensive and complete,” Mark Rodgers, spokesman for Cape Wind, told The Hill on Thursday. “We are pleased that the FAA was able to ignore political pressure of project opponents and that they did their job in a professional way reaching the same decision they have on three other occasions including twice under the Bush Administration to approve this project.”

ENVIRONMENT

  • CARBON DIOXIDE - In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the U.S. has fallen dramatically to its lowest level in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal.
    • Many of the world's leading climate scientists didn't see the drop coming, in large part because it happened as a result of market forces rather than direct government action against carbon dioxide, a greenhouse gas that traps heat in the atmosphere.
    • In a little-noticed technical report, the U.S. Energy Information Agency, a part of the Energy Department, said this month that total U.S. CO2 emissions for the first four months of this year fell to about 1992 levels. The Associated Press contacted environmental experts, scientists and utility companies and learned that virtually everyone believes the shift could have major long-term implications for U.S. energy policy.

DOMESTIC ISSUES

STATE ISSUES

  • ARIZONA - In Arizona, which passed one of the nation's toughest anti-immigration laws, Gov. Jan Brewer signed an executive order Wednesday directing state agencies to deny driver's licenses and other public benefits to illegal immigrants who obtain work authorizations under a new federal program.
    • Gov. Brewer said the federal program doesn't give immigrants legal status and she's following the intent of the current state law denying public benefits to them.
    • To be eligible for the federal program, called "Deferred Action for Childhood Arrivals" immigrants must prove they arrived in the United States before they turned 16, are 30 or younger, have been living in the country at least five years and are in school or graduated or served in the military. They cannot have been convicted of certain crimes or otherwise pose a safety threat.

FOREIGN POLICY

MIDDLE EAST

  • SYRIA - Rebel fighters squaring off against Syrian government troops in brutal fighting near the city of Aleppo could turn to Al-Qaeda for support if Western powers do not take military action against President Bashar Assad.
    • "We don't want Al-Qaeda here, but if nobody else helps us, we will make an alliance with them," Abu Ammar, a rebel commander stationed in Aleppo, told Reuters on Thursday.
    • Fighters from Al-Qaeda's Iraqi faction have been streaming into the country over the past year, looking to take advantage of the brewing civil war between government troops and paramilitary forces loyal to Assad and rebel forces battling to oust the longtime Syrian president.
  • SYRIA - The United States and its allies are discussing a worst-case scenario that could require tens of thousands of ground troops to go into Syria to secure chemical and biological weapons sites following the fall of President Bashar al-Assad's government, according to U.S. and diplomatic officials.
    • These secret discussions assume that all of Assad's security forces disintegrate, leaving chemical and biological weapons sites in Syria vulnerable to pillaging. The scenario also assumes these sites could not be secured or destroyed solely through aerial bombings, given health and environmental risks.
    • A U.S. official said the United States still has no plans to put boots on the ground in Syria. But U.S. officials said under a worst-case scenario, adding U.S. forces would likely play a role in such a mission. Two diplomatic sources said as many as 50,000 or 60,000 ground forces may be needed if officials' worst fears are realized, plus additional support forces.
  • IRAN - Shimon Peres, Israel’s president and elder statesman, spoke out Thursday against the prospect of a lone Israeli military strike on Iran’s nuclear facilities, a message that contradicts the hawkish, go-it-alone line emanating from the offices of Israel’s prime minister and defense minister.
    • The president’s comments came amid a wave of speculation in Israel and abroad that Prime Minister Benjamin Netanyahu and his defense minister, Ehud Barak, might be weighing the option of a unilateral strike even before the American presidential elections in November, while Israel’s limited military capabilities might still have an impact.
    • It remains unclear to what extent Mr. Netanyahu and Mr. Barak are serious about attacking, or whether the idea is more to use the credible threat of an attack to press Washington and rest of world into imposing tougher sanctions on Iran or even into declaring a commitment to American-led military action at some later date.

ASIA

  • RUSSIA - Three members of Russian punk band Pussy Riot have been convicted of hooliganism over an anti-Putin demonstration in a church. Vladimir Putin's opponents said the trial in Moscow was part of a wider crackdown by him to crush their protest movement.
    • The three defendants, two of whom have young children, were found guilty of hooliganism connected to religious hatred, and prosecutors want them jailed for three years.
    • In February, the trio had stormed the capital's main cathedral and performed a "punk prayer" at the altar, asking the Virgin Mary to rid Russia of the then prime minister Mr Putin. At the time, he was on the verge of winning a new term as Russian president.