Daily News Briefing: Monday, August 13, 2012

Published by: Clark Barrow

Clark Barrow

DAILY BRIEFING - SUMMARY

  • DEFICIT - The U.S. federal budget deficit increased $70 billion in July 2012 and is on track to top $1 trillion for the fourth straight year.
  • CONGRESS - The U.S. House Oversight Committee is expected to file its contempt of Congress lawsuit against U.S. Attorney General Eric Holder on Monday.
  • CONGRESS - In the Republican weekly radio and Internet address, U.S. Senator Roger Wicker (R-Miss.) charged Saturday that President Obama and Washington Democrats have failed to work in good faith to roll back looming automatic spending cuts that would hit the military.
  • INTERNSHIP - The U.S. Agriculture Department spent $2 million on an internship program in which only one intern was hired, according to a new inspector general report.
  • ISRAEL - Amid intensifying Israeli news reports saying that Prime Minister Benjamin Netanyahu is close to ordering a military strike against Iran’s nuclear program, his deputy foreign minister called Sunday for an international declaration that the diplomatic effort to halt Iran’s enrichment of uranium is dead.
  • SYRIA - Al Qaeda has advanced beyond isolated pockets of activity in Syria and now is building a network of well-organized cells, according to U.S. intelligence officials, who fear the terrorists could be on the verge of establishing an Iraq-like foothold that would be hard to defeat if rebels eventually oust President Bashar Assad.
  • EGYPT - President Mohamed Morsi of Egypt forced the retirement on Sunday of his powerful defense minister, the army chief of staff and several senior generals, in a stunning purge that seemed for the moment to reclaim for civilian leaders much of the political power the Egyptian military had seized since the fall of Hosni Mubarak last year.

WHAT WE KNOW

ECONOMIC NEWS

  • DEFICIT - The U.S. federal budget deficit increased $70 billion in July 2012 and is on track to top $1 trillion for the fourth straight year.
    • The deficit for the first 10 months of the 2012 budget year, which ends Sept. 30, totaled $974 billion, the U.S. Treasury Department said Friday. That's 11.5 percent less than the $1.1 trillion gap in the same period last year.
    • A slightly better economy has boosted income tax receipts, which have increased 6 percent so far this year. Corporate income tax receipts rose nearly 30 percent compared to a year ago. Spending has dipped 0.3 percent.
  • Monday morning futures on the Dow Jones Industrial Average fell 27 points to 13,145.
  • Monday morning futures on the Standard & Poor’s 500 index fell 2.8 points to 1,399.60.
  • Monday morning futures on the Nasdaq-100 index fell 2.3 points to 2,720.50.

COMMODITIES

  • The U.S. national average for a gallon of regular gasoline is $3.69.
    • 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 99 percent higher than they were when Mr. Obama became president.
  • Crude oil for September delivery added $0.95 to end at $93.82 a barrel on the New York Mercantile Exchange.
  • Gold for December delivery advanced $4.00 to settle at $1,626 an ounce on the New York Mercantile Exchange.

NEWS TO WATCH

  • ELECTION - As of today, there are 85 days until the November 2012 presidential election
  • CONGRESS - The U.S. House Oversight Committee is expected to file its contempt of Congress lawsuit against U.S. Attorney General Eric Holder on Monday.
    • The move comes after the House in June voted to hold Holder in contempt over the department's response to inquiries into Operation Fast and Furious.
    • The civil court case was expected, as congressional Republicans anticipated they would have to take their case to a judge to try and compel the Obama administration to turn over documents pertaining to the failed anti-gunrunning program.
  • CONGRESS - In the Republican weekly radio and Internet address, U.S. Senator Roger Wicker (R-Miss.) charged Saturday that President Obama and Washington Democrats have failed to work in good faith to roll back looming automatic spending cuts that would hit the military.
    • Wicker charged that the automatic cuts, which are moving forward because of the failure of last year’s supercommittee, could have been avoided altogether if Obama had offered more assistance to the deficit-reduction panel.
    • The Mississippi Republican added that U.S. House Republicans had already passed a plan to postpone the sequestration cuts, and that top GOP lawmakers from both chambers had offered to work with the White House on a bipartisan way to wring out budget savings.
  • WHITE HOUSE - In his weekly radio and Internet address, President Obama pledged a wide-ranging response to the worst drought in a quarter-century.
    • Obama said his administration is giving farmers and ranchers access to low-interest emergency loans, is opening more federal land for grazing and is distributing $30 million to get water to livestock.
    • Lawmakers have asked Obama to relax ethanol production targets, citing low corn supplies and spiking prices. An Obama spokesman says officials are keeping a close eye on corn yields but have made no decision.

PRESIDENT’S SCHEDULE

  • In the morning, President Obama will depart Chicago, Illinois and travel to Council Bluffs, Iowa where he will begin a three-day bus tour.
  • Later in the morning, the president will hold a grassroots campaign event at Baylis Park in Council Bluffs, Iowa.
  • In the afternoon, the president will hold a grassroots campaign event at Herman Park Pavilion in Boone, Iowa.
  • The president will remain overnight in Des Moines, Iowa.

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

FEDERAL GOVERNMENT

  • INTERNSHIP - The U.S. Agriculture Department spent $2 million on an internship program in which only one intern was hired, according to a new inspector general report.
    • The finding was part of a larger USDA inspector general audit that focused on the agency’s multi-million dollar effort to improve information technology security.
    • The audit found the agency’s information systems “are still at risk” because the improvement projects were poorly managed “even after expending $63.4 million of funding increases received” in fiscal years 2010 and 2011.

FOREIGN POLICY

MIDDLE EAST

  • ISRAEL - Amid intensifying Israeli news reports saying that Prime Minister Benjamin Netanyahu is close to ordering a military strike against Iran’s nuclear program, his deputy foreign minister called Sunday for an international declaration that the diplomatic effort to halt Iran’s enrichment of uranium is dead.
    • Referring to the Iran negotiations led by the five permanent members of the United Nations Security Council plus Germany, the minister, Danny Ayalon, told Israel Radio that those nations should “declare today that the talks have failed.” After such a declaration, if Iran does not halt its nuclear program, “it will be clear that all options are on the table,” Mr. Ayalon said, not only for Israel, but also for the United States and NATO.
    • The comments came after reports over the weekend suggested that Mr. Netanyahu was close to a decision on whether to attack Iran unilaterally this fall. The reports contained little new information, but the tone was significantly sharper than it had been in recent weeks, with many of Israel’s leading columnists predicting a strike despite the opposition of the Obama administration and many military and security professionals within Israel.
  • IRAN - Prime Minister Benjamin Netanyahu said on Sunday that most threats to Israel's security were "dwarfed" by the prospect of Iran obtaining nuclear weaponry, which local media reports charged Iran had stepped up its efforts to achieve.
    • The comments at a weekly cabinet meeting and the front-page reports in the liberal Haaretz, a frequent Netanyahu critic, and in the conservative, pro-government Israel Hayom came as Israeli debate intensified about whether to go to war against Iran - and soon - over its disputed atomic projects.
    • The debate seemed to defy appeals by U.S. President Obama, seeking re-election in November, to allow more time for international diplomacy. Tehran says its nuclear ambitions are peaceful and has threatened wide-ranging reprisals if attacked.
  • SYRIA - Al Qaeda has advanced beyond isolated pockets of activity in Syria and now is building a network of well-organized cells, according to U.S. intelligence officials, who fear the terrorists could be on the verge of establishing an Iraq-like foothold that would be hard to defeat if rebels eventually oust President Bashar Assad.
    • At least a couple of hundred al Qaeda-linked militants are already operating in Syria, and their ranks are growing as foreign fighters stream into the Arab country daily, current and former U.S. intelligence officials say. The units are spreading from city to city, with veterans of the Iraq insurgency employing their expertise in bomb-building to carry out more than two dozen attacks so far. Others are using their experience in coordinating small units of fighters in Afghanistan to win new followers.
    • Meanwhile, the head of Syria's main opposition group in exile called Sunday for international powers to impose a no-fly zone in border areas to protect civilians who are coming under increasingly intense attacks by regime warplanes and helicopters.
    • The president of the Syrian National Council, Abdelbaset Sieda, told The Associated Press that such a move by the international community would show President Bashar Assad's regime that his opponents around the world are serious.
    • The Syrian opposition has been calling for a no-fly zone over Syria for months. But Sieda renewed the plea a day after U.S. Secretary of State Hillary Rodham Clinton said Washington and Turkey were discussing a range of steps including a no-fly zone over some parts of Syria as the regime increasingly uses its air force to attack rebels.

AFRICA

  • EGYPT - President Mohamed Morsi of Egypt forced the retirement on Sunday of his powerful defense minister, the army chief of staff and several senior generals, in a stunning purge that seemed for the moment to reclaim for civilian leaders much of the political power the Egyptian military had seized since the fall of Hosni Mubarak last year.
    • Mr. Morsi also nullified a constitutional declaration, issued by the military before he was elected, that eviscerated the powers of the presidency and arrogated to the military the right to enact laws. It was not immediately clear whether he had the constitutional authority to cancel that decree.
    • The changes were part of the continuing fallout from the killings of 16 Egyptian soldiers one week ago in the Sinai Peninsula, which deeply embarrassed the military and exposed shocking intelligence failures. In the aftermath of the attack, Mr. Morsi moved swiftly to assert his newfound authority, firing his intelligence chief and the governor of Northern Sinai Governorate, and replacing several other top security officials.