Politics: Daily Briefing: Lacking votes, Boehner pulls his Plan B

Published by: Clark Barrow on Friday December 21st, 2012

Clark Barrow

By CLARK BARROW - Also, CEOs urging deal to fix budget turn gloomy.

DAILY BRIEFING - SUMMARY

· DISAPPOINTMENT - A long line of America's top chief executives have rotated through Washington in recent weeks, loudly urging lawmakers and the White House to reach a broad deal to fix the budget. They once sounded optimistic. Now many of them aren't talking, and if they are, they're gloomy.

· CONGRESS - U.S. House Republicans’ “Plan B” to avert the “fiscal cliff” came crashing to a halt Thursday night after party leaders realized they didn’t have the votes to pass it, and pulled it from the floor.

· WHITE HOUSE - President Obama is scheduled to leave for his family vacation to Hawaii on Friday, but senior administration officials say the president will remain in Washington until Congress’s schedule is clear.

· WHITE HOUSE - Vice President Biden held the first meeting of the White House's gun-violence working group on Thursday, convening law enforcement officials and Cabinet secretaries for a meeting at the Eisenhower Executive Office Building.

· INVESTIGATION - Congressional hearings to help unravel details behind the September consulate attack in Benghazi, Libya, morphed into a political face-off Thursday as Democrats and Republicans sought to position themselves and their parties for the months and years ahead—possibly including 2016, the next presidential election year.

· SHUT DOWN - American Electric Power, or A.E.P., the nation’s biggest consumer of coal, announced that it would shut its coal-burning boilers at the Big Sandy electric power plant near Louisa, Ky., a 1,100-megawatt facility that since the early 1960s has been burning coal that was mined locally.

DOMESTIC POLICY

ECONOMIC NEWS

· GDP - The U.S. economy grew more quickly than previously stated in the July-to-September quarter due to stronger trade, faster health-care spending and increased local government construction, the U.S. Commerce Department estimated Thursday.

o The U.S. Commerce Department said third-quarter gross domestic product grew at a seasonally adjusted annual rate of 3.1% in the third quarter, which is the fastest rate of growth since the 4.1% pickup in the final quarter of 2011.

o Government spending also was stronger than previously estimated, showing 3.9% instead of 3.5% growth, due to local and state government construction. The big increase in government spending during the third quarter is expected to be a one-time affair, driven by a temporary surge in defense maintenance costs.

o The gross domestic product for the second quarter of 2012 was 1.3 percent.

· DISAPPOINTMENT - A long line of America's top chief executives have rotated through Washington in recent weeks, loudly urging lawmakers and the White House to reach a broad deal to fix the budget. They once sounded optimistic. Now many of them aren't talking, and if they are, they're gloomy.

o Mark Bertolini, chief executive of health-insurance company Aetna Inc., called the state of play "pitiful and embarrassing," saying the chances are growing that a deal might not be reached by the end of the year to avert $500 billion in tax increases and spending cuts.

o The White House and House Speaker John Boehner (R., Ohio) had negotiated for weeks in hopes of reaching a deficit-reduction agreement, and their talks appeared to gain momentum recently when both sides offered concessions on taxes. But talks abruptly ended Monday when House Republicans began a push for a separate process that would preserve all Bush-era tax rates for income under $1 million.

IN THE DISTRICT

· FISCAL CLIFF - As of today, there are 10 days until the fiscal cliff takes effect on January 1, 2013.

· CONGRESS - U.S. House Republicans’ “Plan B” to avert the “fiscal cliff” came crashing to a halt Thursday night after party leaders realized they didn’t have the votes to pass it, and pulled it from the floor.

o The move is a serious blow to U.S. House Speaker John Boehner, who had hoped to gain leverage in his negotiations with President Obama, and it signals that conservative Republicans are unwilling to allow any rise in marginal income-tax rates.

o Mr. Obama had already threatened to veto the bill and U.S. Senate Majority Leader Harry Reid had said he wouldn’t even bring it to his chamber’s floor for a vote.

o After a closed-door conference meeting, the Speaker said it was now up to U.S. Senate Majority Leader Harry Reid (D-Nev.) and President Obama to find a way to avert tax hikes and spending cuts set to be triggered in January that economist want could start a recession. Mr. Boehner said the U.S. House has already passed bills previously that avert the spending cuts and tax increases, and challenged the U.S. Senate to take those up instead.

o Earlier Thursday the U.S. House had passed a Republican plan to avert the $110 billion in defense and domestic spending cuts due on Jan. 2 as part of last year’s debt deal. The Republican bill, which passed 215-209, would have instead cut from health care and other parts of the president’s agenda.

o The U.S. House and Senate both announced Thursday that they will remain in recess until after Christmas day.

· CONGRESS - The U.S. House of Representatives approved the final version of the annual defense policy bill on Thursday, authorizing $633.3 billion in defense spending for 2013.

o The U.S. House approved the 2013 National Defense Authorization Act by a vote of 315-107. The measure must still be approved by the U.S. Senate before it can go to President Obama to be signed into law.

o The White House says its position has not changed on the threat to veto the defense authorization bill over restrictions on transferring Guantanamo detainees. The administration had issued a veto threat to both the House and Senate versions of the defense bill over the Guantanamo restrictions and other provisions in the bill.

o Despite the veto threat, most defense observers don’t expect the White House to actually follow through vetoing the sweeping $633 billion package that includes things like pay raises for troops.

· CONGRESS - Two Republican congressmen called Thursday for a national travel boycott of Mexico until the country releases imprisoned former Marine Jon Hammar, urging "all Americans" to campaign for the war veteran's freedom by turning off the tap on America's tourism dollars.

o The statements from Reps. Michael Grimm, R-N.Y., and Duncan Hunter, R-Calif. -- both Marine combat veterans -- came as dozens of lawmakers pressed the Obama administration to more aggressively petition for Hammar's release. Hammar, who is locked up in a notorious Mexican prison on what his family says is a trumped-up weapons charge, is increasingly gaining the attention of Congress.

o This comes as any hope that Jon Hammar, the Marine imprisoned in Mexico on a disputed gun charge, might be freed in time for Christmas has apparently been dashed by a terse letter a top Mexican diplomat sent to Hammar’s congresswoman.

o The two-page missive from Mexican Ambassador to the United States Arturo Sarukhan to Rep. Ileana Ros-Lehtinen (R-Fla.), who has been aggressively advocating for Hammar's release, leaves little hope of a diplomatic solution. In it, Sarukhan takes a thinly veiled swipe at the U.S., blaming it for gun proliferation south of the border.

· WHITE HOUSE - President Obama is scheduled to leave for his family vacation to Hawaii on Friday, but senior administration officials say the president will remain in Washington until Congress’s schedule is clear.

o During the payroll tax cut extension negotiations last year, First Lady Michelle Obama and their two daughters traveled separately to Hawaii, while Obama waited to sign the extension.

o Recent estimates of the total cost of the vacation to Hawaii and federal taxpayers, including funding for travel, staff and protection, is at least $4 million. Obama’s vacations are more expensive than those of previous presidents because of the huge costs to fly Air Foce One and an accompanying cargo plane for nine hours or so to Hawaii.

· WHITE HOUSE - Vice President Biden held the first meeting of the White House's gun-violence working group on Thursday, convening law enforcement officials and Cabinet secretaries for a meeting at the Eisenhower Executive Office Building.

o Biden said the group would work to find "a comprehensive way in which to respond to the mass murder of our children that we saw in Connecticut." He said he felt it was important to launch the effort with a "frank" discussion among those who saw the aftermath of gun violence on a daily basis.

o The vice president said he would also call on the law enforcement officials to help in a legislative push against "everything from cop-killer bullets to type of weapons that should be off the street," adding there was "no reason" why an updated assault weapons ban could not pass Congress.

FEDERAL GOVERNMENT

· DEFENSE - After months of warning that the looming across-the-board cuts would devastate the military, Defense Secretary Leon Panetta advised his three million employees on Thursday not to panic.

o Mr. Panetta, in a memo on his plans to deal with fiscal-cliff cuts if they take effect in January, assured Defense Department employees that there were no imminent layoffs or dramatic changes in the works.

o The memo represents a change in tone for the Defense secretary, who has long warned that the so-called sequestration was a "meat ax" that would devastate the Pentagon budget. Administration officials said the memo was based on language provided by the Office of Management and Budget to all federal agencies and departments, which were given little latitude to alter the tone of the message.

o Unless President Obama and Congress come to a deal in the coming days, a federal law will trigger $1.2 trillion in automatic spending cuts starting Jan. 2, with $500 billion coming from the Pentagon budget through 2021.

NATIONAL SECURITY

· INVESTIGATION - Congressional hearings to help unravel details behind the September consulate attack in Benghazi, Libya, morphed into a political face-off Thursday as Democrats and Republicans sought to position themselves and their parties for the months and years ahead—possibly including 2016, the next presidential election year.

o Sen. John Kerry (D., Mass.), chairman of the U.S. Senate Foreign Relations Committee, used his hearing Thursday to articulate views on American foreign policy that went well beyond the Benghazi assault and called for a well-funded and diplomatically aggressive State Department in the coming year.

o Republicans, meanwhile, took the opportunity during the hearings to hone criticism of Mrs. Clinton, a possible future presidential candidate, over her State Department record as she prepares to leave that post in the coming weeks. They pressed top State Department officials on when and what Mrs. Clinton knew about the rising extremist threats to Americans in Libya and why her office didn't do more to protect the U.S. missions in Benghazi before the September assault and deaths of U.S. Ambassador Christopher Stevens and three other Americans.

o Hearings before the U.S. Senate Foreign Relations Committee and U.S. House Foreign Affairs Committee delved into findings of an independent review board that concluded this week that "systemic failures" at the State Department prevented an adequate response to security threats in Libya.

ENERGY

· SHUT DOWN - American Electric Power, or A.E.P., the nation’s biggest consumer of coal, announced that it would shut its coal-burning boilers at the Big Sandy electric power plant near Louisa, Ky., a 1,100-megawatt facility that since the early 1960s has been burning coal that was mined locally.

o Big Sandy this year became a symbol of the plight of the coal industry nationwide. Strict new environmental regulations are forcing large utilities to spend billions of dollars to retrofit old coal-burning plants or shut them down, replacing them in most cases with equipment that uses cleaner-burning natural gas.

o A.E.P., which is based in Ohio, has repeatedly changed its mind over what to do with Big Sandy, a big employer in eastern Kentucky, both at the 120-employee plant itself and in the Appalachian-area coal mines that feed it 2.5 million tons of coal each year.

o In May, the power company withdrew a plan to spent $1 billion to retrofit Big Sandy so that it could continue to operate. But that would have required a 31 percent increase in electricity rates for eastern Kentucky residents.

o A total of 55 plants, including Big Sandy, have closed or have announced plans to shut down, according to a count by the Sierra Club. That will leave 395 coal-burning plants in the United States, compared with 522 in 2010, according to the Sierra Club.

STATE ISSUES

· OHIO - Ohio's Republican Governor Johns Kasich on Thursday signed into law a measure that would slightly weaken the state's law on carrying concealed weapons, less than a week after a Connecticut school massacre focused national attention on gun control.

o The bill would require Ohio residents demonstrate competency with the weapon only once rather than each time the concealed carry permit expires. It also would allow carrying concealed weapons in the parking garage of the State Capitol.

o Kasich foreshadowed the action earlier in the week, telling reporters he would sign it: "Whatever we do, we don't want to erode the Second Amendment rights of law abiding citizens."

FOREIGN POLICY

MIDDLE EAST

· ISRAEL - Israel's U.N. envoy urged the Security Council on Thursday to condemn what he described as significant rearming by Hezbollah, saying the Lebanese militant group now possessed an arsenal of tens of thousands of missiles capable of hitting Israel.

o Israel's U.N. Ambassador Ron Prosor said in a letter to the 15-nation council that the buildup was in clear violation of a U.N. arms embargo. Israel has long complained that the U.N. arms embargo on Lebanon has been unsuccessful.

o Prosor said an explosion in the southern Lebanese town of Tair Harfa on Monday was at a weapons depot. A Lebanese security source said Monday's blast was caused by a rocket that had been fired into Lebanon during Hezbollah's 2006 war with Israel but which did not detonate on impact.

· SYRIA - Russian President Vladimir Putin distanced himself further than ever before from his longtime ally in Syria on Thursday, saying he understands Syria needs change and that he is not protecting its president.

o Putin, however, warned that efforts to unseat Bashar Assad could plunge Syria even deeper into violence. He insisted that Russia has not changed its stance and believes that only a negotiated settlement can end the civil war.

o Putin's assessment came a week after Russia's top envoy for Syria was quoted as saying Assad's forces were losing control of the country. Although the Foreign Ministry backpedaled on that statement, analysts have suggested for months that the Kremlin is resigned to Assad's fall.

· IRAN - Iran is becoming increasingly creative in dodging Western sanctions, managing to sell a rising volume of fuel oil to generate revenue equal to up to a third of its crude exports, which have been badly hit by restrictions.

o Compared with the first half of the year, Iran has on average exported more fuel oil per month since July, when European Union oil and shipping insurance sanctions came into effect and more than halved its crude exports.

o Meanwhile, arguing that further sanctions "are unlikely to stop Iran's nuclear pursuits," a group of Iran experts and senior former officials are calling on the White House to pursue realistic, "serious, sustained negotiations" with Tehran that they say are the best chance to prevent a nuclear-armed Iran.