Daily News Briefing: Tuesday, August 7, 2012

Published by: Clark Barrow

Clark Barrow

DAILY BRIEFING - SUMMARY

  • HOUSING MARKET - According to the National Association of Home Builders/First American Improving Markets Index (IMI) for August 2012, a total of 80 metropolitan areas across 32 states and the District of Columbia were listed as improving housing markets.
  • WHITE HOUSE - The Obama administration will formally begin granting some young undocumented immigrants legal status and work permits later this month under a controversial new policy first announced by President Obama in June.
  • SEQUESTRATION - The U.S. Defense Department (DOD) is abandoning its push for wide-scale base closures in the continental United States, focusing instead on plans to draw down military installations overseas, Secretary Leon Panetta announced Monday.
  • OBAMACARE - Companies on average expect to pay 7 percent more for their employees’ healthcare next year than in 2012, according to a new survey of 82 of the country’s largest companies by the National Business Group on Health.
  • MEDICAID - Meanwhile, about 31 percent of doctors across the U.S. do not accept new patients who are covered by Medicaid, the federal-state insurance program that is supposed to enroll millions more low-income Americans as part of the Obama administration's health overhaul, according to the National Center for Health Statistics.
  • IRAN - U.S. intelligence analysts watching for indicators of Israeli military action recently reported that there are signs the Israel plans an attack against Iran in October 2012.

WHAT WE KNOW

ECONOMIC NEWS

  • HOUSING MARKET - According to the National Association of Home Builders/First American Improving Markets Index (IMI) for August 2012, a total of 80 metropolitan areas across 32 states and the District of Columbia were listed as improving housing markets.
    • A total of 75 markets that retained their places on the list along with five new ones, while nine areas fell from the list due primarily to slight movements in house prices.
    • The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas.
  • The Dow Jones Industrial Average ended up 21.34 points, or 0.2%, to 13,117.51.
  • The S&P 500 rose 3.24 points, or 0.2%, to 1,394.23.
  • The Nasdaq Composite rose 22.01 points, or 0.7%, to 2,989.91.

COMMODITIES

  • The U.S. national average for a gallon of regular gasoline is $3.63.
    • 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 96 percent higher than they were when Mr. Obama became president.
  • Crude oil for September delivery rose 80 cents, or 0.9%, to settle at $92.20 a barrel on the New York Mercantile Exchange.
  • Gold for December delivery advanced $6.90, or 0.4%, to end at $1,616.20 an ounce on the Comex division of the New York Mercantile Exchange.

NEWS TO WATCH

  • ELECTION - As of today, there are 91 days until the November 2012 presidential election.
  • SIKH SHOOTING - President Obama said on Monday that mass killings like the shooting rampage at a Sikh temple in Wisconsin were occurring with "too much regularity" and should prompt soul searching by all Americans, but he stopped short of calling for new gun-control laws.
    • The gunman who killed six worshipers at a Sikh temple in Wisconsin was identified as a 40-year-old U.S. Army veteran and authorities said they were investigating possible links to white supremacist groups and his membership in skinhead rock bands.
    • The assailant, shot dead by police at the scene on Sunday, was identified as Wade Michael Page. He served as a soldier in the Army from 1992 to 1998, said police chief John Edwards in the Milwaukee suburb of Oak Creek where the 400-member temple is located.
    • Top U.S. State Department officials including U.S. Secretary of State Hillary Clinton have been working behind the scenes to assuage Indian anger following the attack on a Sikh temple in Wisconsin.
  • CONGRESS - A group of Republican U.S. senators is pressing the Internal Revenue Service for more information on its plans to consider changing regulations of politically active non-profit groups like Karl Rove’s Crossroads GPS, which have been accused of misusing their tax-exempt status to influence elections.
    • The letter from Sen. Orrin Hatch (R., Utah), the top Republican on the Senate Finance Committee, and nine other Republican Senators is the latest in a battle that involves tax-exempt groups like Crossroads GPS, which has been trying to boost Republican presidential candidate Mitt Romney. The group, known as a 501c(4) after the section of the tax code under which it operates, has spent more than $50 million on television ads in the last three months alone, either to attack U.S. President Barack Obama or promote Mr. Romney.
    • The money has drawn the attention of groups like Democracy 21, which has asked the IRS to investigate Crossroads GPS and to tightly define which groups can qualify for 501c(4) status, which allows the groups to keep the identity of their donors a secret. The IRS wrote last month that it would “consider proposed changes in this area.”
  • WHITE HOUSE - The Obama administration will formally begin granting some young undocumented immigrants legal status and work permits later this month under a controversial new policy first announced by President Obama in June.
    • The U.S. Department of Homeland Security today announced details of the application and approval process for the DREAM Act-like program, outlining specific eligibility requirements and a $465 fee. It will begin Aug. 15.
    • Illegal immigrants younger than 30 who came to the United States before age 16, have lived here for at least five years continuously, attend or have graduated from high school or college, and have no criminal convictions are eligible to submit requests for so-called deferred action (legalese for an official exemption from deportation).
    • The administration said documentation provided by each applicant will be reviewed individually on a case-by-case basis at one of four service centers run by the U.S. Citizenship and Immigration Service. It’s unclear how long each review will take, but some immigrants are expected to receive temporary legal status before Election Day.
  • WHITE HOUSE - President Obama announced Monday that he supports legislation that would eliminate federal taxes on Olympic Games medals and prize money.
    • The White House was referring to legislation offered by Republican U.S. Senator Marco Rubio to exempt American winners from federal taxes on their gold, silver or bronze—and the cash prizes that come with the medals.
    • Medal-winners in London scoop up cash prizes—$25,000 for gold, $15,000 for silver and $10,000 for bronze—and the U.S. Olympic Committee pays for medals as well. Some individual sports' national associations also have cash rewards. The bill would not apply to some of the biggest and most visible Olympics-related paydays: corporate sponsorships.

PRESIDENT’S SCHEDULE

  • In the morning, President Obama will receive the presidential daily briefing at the White House.
  • In the afternoon, the president will meet with the White House Rural Council to discuss ongoing efforts in response to the drought.
  • Later in the afternoon, the president will meet with U.S. Defense Secretary Leon Panetta at the White House.
  • In the evening, the president will attend a campaign event at The W Hotel in Washington, D.C.

HAPPENING IN THE U.S. CONGRESS

U.S. SENATE

  • The U.S. Senate will convene for a pro forma session today.

U.S. HOUSE OF REPRESENTATIVES

  • The U.S. House is in session today.

TOPICS OF INTEREST

NATIONAL SECURITY

  • SEQUESTRATION - The U.S. Defense Department (DOD) is abandoning its push for wide-scale base closures in the continental United States, focusing instead on plans to draw down military installations overseas, Secretary Leon Panetta announced Monday.
    • Secretary Leon Panetta said maintaining unnecessary U.S. bases across the globe as the department sheds thousands of soldiers, sailors, airmen and Marines from its payrolls is the very definition of hollowing out the military force.
    • As the Pentagon stares down the barrel of a $500 billion budget cut passed by Congress under last year's debt-ceiling deal, and possibly an additional $500 billion in automatic cuts under sequestration, it would have been "irresponsible" to not consider cutting back U.S. military installations around the world, Panetta said.

HEALTH CARE

  • OBAMACARE - Companies on average expect to pay 7 percent more for their employees’ healthcare next year than in 2012, according to a new survey of 82 of the country’s largest companies by the National Business Group on Health.
    • As a result of the cost increases that they face themselves, 60 percent of the businesses expect to hike the percentage of premiums that employees must pay next year, although the majority of those businesses plan an increase of less than 5 percent.
    • The survey was conducted in June before the U.S. Supreme Court upheld most of the healthcare reform law. So the planned increases may well have increased since then.
    • Meanwhile, about 31 percent of doctors across the U.S. do not accept new patients who are covered by Medicaid, the federal-state insurance program that is supposed to enroll millions more low-income Americans as part of the Obama administration's health overhaul, according to the National Center for Health Statistics.
    • Most of the doctors cited the low reimbursement from Medicaid. By contrast, 18% of the doctors said they weren't taking new patients with private insurance, and 17% said they weren't taking new patients who had coverage through Medicare, the federal program for the elderly.
    • The health law passed by Democrats in March 2010 was supposed to expand coverage to around 16 million low-income people by signing them up for Medicaid. The Supreme Court decision in June effectively gave states the chance to opt out of the expansion. It isn't yet clear how many will do so, although it's likely to be a hot political issue. Either way, the coverage gained by low-income Americans could be less useful if they are unable to find a doctor to see them.

FOREIGN POLICY

MIDDLE EAST

  • SYRIA - Nearly 20 high-ranking Syrian military officers defected to Turkey on Monday, says an opposition source who added Bashar al-Assad's regime "is falling apart."
    • While some officials and analysts have warned in recent weeks that regime and rebel forces likely will remain engaged in a bloody stalemate for some time, the opposition source says "something definitive is going to happen because we do not have a stalemate at this point in time."
    • The Assad regime has yet to issue a formal statement about Monday's defections. Reports from Syria describe a state television statement that indicated Hijab has been dismissed from his post.
  • IRAN - U.S. intelligence analysts watching for indicators of Israeli military action recently reported that there are signs the Israel plans an attack against Iran in October 2012.
    • The Obama administration, meanwhile, is preparing to provide logistical support for a military strike but is pressing Israel to delay any action until the administration’s policy of sanctions have had more time to work, and that any attack would be put off until after the November presidential election.
    • U.S. opposition to any pre-election strike was discussed during the recent visit to Israel by White House National Security Adviser Thomas Donilon and a later visit by Defense Secretary Leon Panetta, according to U.S. officials.
    • Any Israeli military attack is expected to be carried out with little or no warning, which has meant stepped up monitoring of Israel by U.S. intelligence agencies for all indicators of an impending attack.

AFRICA

  • EGYPT - With the relationship between Egypt’s new Islamist leader and Israel still in its fragile infancy, the terrorist attack on the Egypt/Israel border over the weekend presented a critical opportunity and a crucial test.
    • Several high-ranking officials inside Israel’s government and numerous independent experts on Israel-Egypt relations said Monday that the attack — in which masked gunmen killed 16 Egyptian soldiers on Sunday night and then barreled into Israeli territory in a stolen truck and armored vehicle — is the best evidence yet that the two countries are both threatened by lawlessness in the Sinai Peninsula.
    • Now the question is whether Egypt’s new president, Mohamed Morsi, will make the Sinai a priority amid other challenges, and whether Israel will make concessions in modifying the 33-year-old peace treaty between the nations to allow for a more aggressive Egyptian military presence.

ASIA

  • AFGHANISTAN & PAKISTAN - Tensions are rising between Pakistan and Afghanistan over deadly cross-border attacks on both sides of the porous border.
    • Each country accuses the other of harboring militant groups that easily cross the border and launch deadly attacks.
    • Afghanistan says the Pakistan military has been shelling areas inside Afghanistan, displacing and killing civilians. Pakistan says it is defending itself from militants who are crossing the border from Afghanistan and killing Pakistani soldiers and civilians.

EUROPE

  • EURO ZONE - The International Monetary Fund, facing discontent among its members about the huge sums it has lent to the euro zone, is pushing the currency bloc's governments to take steps to lighten the burden of the bailout loans they made to Athens, officials familiar with continuing discussions said.
    • The IMF pressure—which officials said has been clear in private discussions among Greece's official lenders—comes in response to mounting evidence that Greece's deep recession has thrown the country's bailout program woefully off track from targets set earlier this year.
    • IMF officials maintain Greece's debt must be reduced to "sustainable" levels before the fund releases billions more euros to keep Athens from running out of cash, some officials said. The most effective way to do this would be for Greece's bailout lenders to forgive some of the debts Greece owes them.