Washington Extra – From Russia With(out) Love

November 16, 2010

Not a great day for US-Russia relations. The United States won the extradition of Russian arms dealer Viktor Bout from Thailand against Moscow’s vehement objections. The Russian government said the extradition of the man known as the “Merchant of Death” was not only illegal but also the result of “unprecedented political pressure from the United States.” Earlier this month we had news that a key Russian spymaster and double agent had defected to the United States after unmasking the spy ring here. And then to top it all off, Republicans signaled they would block ratification of the START Treaty this year.  It looks like more of a meltdown than a reset in US-Russia relations.

THAILAND-BOUT/Not that START is dead yet, with Joe Biden leading the charge today to twist arms in the Senate and Hillary Clinton due on the Hill tomorrow. But if anyone was hoping President Barack Obama would rescue the second half of his presidency by focusing on foreign policy, it has hardly been an auspicious couple of weeks, after the debacle of the G20 meeting, the failure to strike a trade deal with South Korea and now this.  Still, here’s hoping the president can strike peace in the Middle East or negotiate a successful exit from Afghanistan.

The best news on the foreign stage so far this week has a British flavor (or a British flavour, to be more accurate). And no, I am not talking about the Royal engagement. It’s news that the Beatles will finally be available on iTunes. Three years after the two big Apples settled their trademark dispute, the Fab Four’s 13 albums will finally be available on the world’s biggest digital retailer. You don’t know how lucky you are boys…

While you work out which song that line was from, here are our top stories in Washington today:

Extradition, START rows darken U.S.-Russia ties

Spies, senators and an alleged arms dealer dubbed the “Merchant of Death” all appear to be working against one of President Barack Obama’s few foreign policy success stories: the “reset” in relations with Moscow.

For more of this story by Andrew Quinn, read here.

US drive to ratify nuclear treaty faces setback

The No. 2 Senate Republican does not think the START nuclear treaty with Russia could be brought to a vote by January, A blow to President Obama’s push for ratification by year’s end. Senator Jon Kyl, who has taken the Republican lead in negotiations, issued a statement saying he had told Harry Reid there was not enough time to resolve differences over the treaty by January. Senate aides say Kyl is the key to ratification this year.

For more of this story, read here.

Rangel convicted of ethics violations

Democratic Representative Charles Rangel was convicted by fellow lawmakers of ethics violations. An eight-member panel found Rangel guilty of 11 counts, including failing to report rental income, improper use of a rent-stabilized apartment and soliciting charitable donations from people with business before Congress. The House ethics committee will now consider punishment, which will likely be a public denunciation by the full House, possibly this week.

For more of this story by Thomas Ferraro, read here.

Reid to allow Senate vote on earmark ban

Senate Democratic leader Harry Reid he would oppose banning the congressional pet projects known as “earmarks” that many Republicans see as examples of wasteful government spending. But he said he would schedule a Senate vote on the topic.

For more of this story, read here.

Bush-era tax deal could include jobless benefits

A deal on a temporary extension of the Bush-era tax rates could emerge that would also renew unemployment benefits for 2 million Americans about to lose them.

For more of this story by Kim Dixon and Richard Cowan, read here.

Senate panel backs Fed nominee Diamond

A Senate committee approved Peter Diamond’s nomination to the Federal Reserve Board over Republican objections, sending it to the full Senate for a vote three months after it was blocked. Diamond, a professor at MIT who was awarded the Nobel prize in economics this year, was backed by the same committee in July. However, the full Senate never voted because a lawmaker used a procedural obstacle to stall the confirmation in August. Diamond was later renominated by President Barack Obama.

For more of this story, read here.

Republicans want Fed focus solely on inflation

Two Republican lawmakers said the Federal Reserve should focus solely on inflation and ditch its “dual mandate” to promote both price stability and full employment. The pressure from Senator Bob Corker and Representative Mike Pence adds to the pile of international criticism over the plan to buy an additional $600 billion in government bonds.

For more of this story, read here.

Cost issue simmering in Medicare’s Dendreon review

When a Medicare advisory panel reviews Dendreon’s new prostate cancer therapy, there will be an issue on everyone’s mind that advisers cannot consider: its $93,000 price tag. The vaccine was approved in April to treat men with advanced prostate cancer after company data showed it help men live another 4.1 months. Now it faces another test by CMS, which is deciding whether to pay for the treatment for the millions of older men in the nation’s Medicare insurance program

For more of this analysis by Susan Heavey, read here.

US solar industry wants grant program extended

A grant program aimed at spurring investment in the solar industry expires at the end of this year, and its supporters are scrambling to get it extended in the lame-duck session of Congress. Prospects for renewal dim considerably come January when a new Congress takes over as many Republicans want to reverse the Obama administration’s policy of focusing on renewable energy sources.

For more of this analysis by Sarah McBride and Tom Doggett, read here.

Panel sounds foreclosure warning, industry downplays

Widespread problems in how lenders documented foreclosures could spark a wave of legal challenges resulting in massive losses to banks and serious new troubles for the housing market, the Congressional Oversight Panel warned. In the best-case scenario, concerns about the paperwork mess are “overblown” and banks would be able to proceed with foreclosures as soon as invalid court documents were replaced with proper paperwork. But in the worst-case scenario, it warned that banks could face billions of dollars in losses.

For more of this story by Dave Clarke and Corbett Daly, read here.

Wholesale prices fall, output flat

Core producer prices recorded their largest fall in more than four years in October and industrial output was flat. Economists said the data supported the Fed’s decision to ease monetary policy further. “Today’s PPI data shows you that beneath the surface there is not a whole lot of inflation and tomorrow’s (consumer price) data is likely to show the same thing,” said one analyst.

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

US sees “huge” cyber threat in the future

The United States faces a major threat in the future from cyber technologies that will require civil-military coordination to shield networks from attack, Defense Secretary Robert Gates said. “I think there is a huge future threat. And there is a considerable current threat,” Gates told The Wall Street Journal CEO Council. “And that’s just the reality that we all face.”

For more of this story, read here.

FDA reviewers criticize Mela skin cancer device

Health regulators said Mela Sciences’ experimental device to help diagnose skin cancer could cause harm because of the potential for misdiagnosis, wiping out more than half of the company’s market value.

For more of this story by Susan Heavey and Esha Dey, read here.

U.S. to ban alcohol drinks with caffeine – lawmaker

Regulators plan to crack down on companies selling alcoholic beverages that include a jolt of caffeine amid pressure from groups that contend the drinks are dangerous.

For more of this story by Susan Heavey, read here.

What we are blogging…

Murkowski rates write-in campaign courageous or crazy

“Political courage or just plain crazy.” That’s the explanation Alaska Republican Lisa Murkowski gives for why, against her party’s wishes, she waged a write-in campaign to hang on to her Senate seat. The ballots are still being counted, but Murkowski looks set to make history as the first senator elected in a write-in campaign since Strom Thurmond in 1954.

For JoAnne Allen’s full post, click here.

The Lunchbox Index

The Dow, the FTSE, the Hang Seng — all these are economic indices of a sort. But in Washington, there’s another. Let’s call it the Lunchbox Index. Decades ago, lunching out used to be an integral part of the Washington working day. That still goes on, but more often than not, lunch is a meal to be grabbed on the fly, close to a phone and a computer. Those who can afford the time to go out to lunch might have second thoughts about paying $20 or more for a daily mid-day meal. Enter the Lunchbox Index, a totally unscientific measure of how financially pressed Washingtonians feel in economic hard times.

For Deborah Zabarenko’s full post, click here.

From elsewhere…

Beatles hits come to Apple’s iTunes store

It’s been a long and winding road, but the Beatles are finally available on iTunes.

For more of this story, read here.

Photo credit: Reuters/Sukree Sukplang (suspected Russian arms dealer Viktor Bout escorted by police in Bangkok Oct. 5, 2010)

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