Washington Extra

August 5, 2010

As the administration focuses on Iran, we take a look today at the fallout – a disturbing deterioration in relations between the United States and Brazil.lula_brazil

Our exclusive report from Washington and Brasilia describes how a row over Iran has pushed relations between the two Western hemisphere economic giants to “rock bottom.” The fallout from Iran remains worse than either side will acknowledge publicly, and there is a real risk of a longer-term drift that could threaten trade and business ties. “They’re in the freezer,” was how an upper-level source in Brasilia characterized relations.

It is especially disappointing, of course, since both sides had anticipated improved ties under President Barack Obama, who made a point of fawning over his Brazilian counterpart Luiz Inacio Lula da Silva last year, calling him “my man” and “the most popular politician on Earth.”

For the full story by Brian Winter and Natuza Nery, read here.

For a graphic on how the United States is losing ground to China on trade with Brazil, click here.

On Iran, Obama was at pains on Wednesday to leave open a “pathway” for a peaceful settlement with Tehran over the nuclear issue, even as U.N. sanctions start to bite.  On Thursday, the State Department declared Iran the biggest state sponsor of terrorism in the world, and said its backing for extremists “threatened economic stability in the Gulf, jeopardized the tenuous peace in southern Lebanon, and undermined the growth of democracy.”

A carefully nuanced policy from the administration, or wanting to have it both ways? Depends on your interpretation and political leaning.


Here are our other top stories from today…

Obama unveils Ford loan guarantees to boost US exports President Barack Obama defended his decision to bail out U.S. auto makers as he unveiled a new loan guarantee for Ford Motor Co that will help to meet a White House goal of doubling U.S. exports. “Don’t bet against the American worker. Don’t lose faith in the American people. Don’t lose faith in American industry. We are coming back,” he said in a rousing campaign-style speech to a cheering crowd of hundreds at a Ford assembly plant.

For the full story by Jeff Mason, click here.


Senate approves Obama nominee Kagan to top court

President Barack Obama’s nomination of Elena Kagan to the Supreme Court won Senate approval on Thursday, his second appointment to the highest U.S. court that decides abortion, death penalty and other contentious cases. The Democratic-led Senate voted largely along political party lines, 63-37, to confirm the former Harvard Law school dean as the fourth female justice in U.S. history and the 112th high court member.

For more of this story by James Vicini and Rick Cowan, read here.


Senate approves $26 billion for state aid

The Senate approved an election-year jobs bill that would send states $26.1 billion to help them cope with historic budget shortfalls and give Democratic lawmakers a victory to tout on the campaign trail. In a vote of 61 to 39, the Senate passed a bill that would send the states $16.1 billion for Medicaid, the healthcare program for the poor, and $10 billion to prevent teacher layoffs. States could face total budget gaps this year of $120 billion.


For the full story by Lisa Lambert and Richard Cowan, click here.

Al Qaeda, Taliban resilient terrorist threats

Al Qaeda’s core leadership in Pakistan remains the most formidable terrorist threat to the U.S. homeland and al Qaeda’s growing presence across Africa challenges many states, the State Department said. Terrorist attacks worldwide and their death toll in 2009 were at their lowest levels in some four years, according to the State Department’s annual “Country Reports on Terrorism” publication.

For the full story by Paul Eckert and Emma Ashburn, click here.

US presses Iran, Obama signals openness to talks

The United States declared Iran the biggest state sponsor of terrorism, ratcheting up pressure on its long-time foe even as President Barack Obama signaled he was still open to talking to Tehran about its nuclear program. Iran provided financial, material and logistic support for terrorist and militant groups throughout the Middle East and Central Asia, the State Department said in its annual “Country Reports on Terrorism” publication.

For more of this story by Ross Colvin, read here.

Jobless claims rise, cast a pall on economy

New claims for unemployment benefits unexpectedly rose last week to the highest level since early April, highlighting a weak labor market and the fragile economic recovery.

For more of this story by Lucia Mutikani, click here.

Pentagon tells WikiLeaks: “Do right thing”

The Pentagon demanded that whistle-blower web site WikiLeaks immediately hand over about 15,000 secret Afghan war records it had not yet published and erase material it had already put online.

For more of this story by Sue Pleming, read here.

What we are blogging…

In Brown vs. Kagan, the decision is in

Just because he introduces you to his colleagues, doesn’t mean he’ll vote for you. That’s what Supreme Court nominee Elena Kagan found out about Senator Scott Brown.

To read Toby Zakaria’s full blog, click here.

Photo credit: Reuters/Chris Wattie (Obama and Lula at G20 summit in Pittsburgh)

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