Tales from the Trail

Washington Extra – Waiting for fireworks

July 1, 2011

Will we see fireworks in the debt talks next week?

So far the White House and lawmakers have been cranky about the state of negotiations, but no one has actually drawn a firm line in the sand – still hoping for a compromise.

Senators and staff can’t be happy about having their Fourth of July recess cancelled next week over debt talks, setting up a perfect environment for tempers to flare.

And no matter how much critics try to pooh-pooh the deadline for avoiding default, Treasury is sticking with Aug. 2 as the drop-debt date.

White House economic officials are expected to attend meetings on Capitol Hill next week. President Barack Obama and Vice President Joe Biden have been invited but it’s unclear whether they will venture over to that end of Pennsylvania Avenue.

They may have to tread carefully to avoid tantrums after Obama likened Congress to children earlier this week.

Here are our top stories from Washington…

Treasury warns crisis without debt deal by Aug 2

The Treasury stuck with an August 2 deadline for Congress to approve new borrowing and avoid a default, applying more pressure on lawmakers to break partisan gridlock and reach a budget deal. Treasury has shifted the date in the past, prompting some Republicans to question whether the country would actually face a default on its debt if the ceiling were not raised before then. The White House wants a deal even sooner.

For more of this story by Pedro Nicolaci da Costa and Deborah Charles, read here.

Some revenue hikes likely in U.S. budget deal

Republicans reject revenue increases in deficit-reduction talks, but the betting in Washington is that if and when a budget deal is brokered, at least a few of those Democratic ideas will be included. “At some point, they’ve got to sit down and talk turkey. This is too big to be handled just on the cost side of the ledger or just on the revenue side of the ledger,” said Bill Frenzel,a former Republican congressman who specializes in budget and tax policy at the Brookings Institution.

For more of this analysis by Richard Cowan, read here.

New defense chief sees tough budget choices

Leon Panetta was sworn in as defense secretary promising to keep the military strong while making tough choices on defense spending cuts. Panetta, who as CIA director helped oversee the operation that killed Osama bin Laden two months ago, arrives at a moment of transition in the wars in Afghanistan and Iraq and intense debate over the American role in Libya. But the budget battle may be as big a challenge as the wars he will inherit.

For more of this story by Phil Stewart, read here.

Clinton decries Belarus crackdown at democracy talks

Secretary of State Hillary Clinton criticized the repression of peaceful protests in Belarus as she urged nations to support fledgling democratic movements. “There are new democracies fighting for life. There are vicious autocrats clinging to power. There are interest groups pretending to support democracy and only waiting until they can assume power,” Clinton said at a pro-democracy gathering.

For more of this story by Arshad Mohammed and Nerijus Adomaitis, read here.

Google hires 12 lobby firms in wake of FTC probe

Google, facing a broad antitrust probe into its business practices, has hired 12 lobbying firms, a spokeswoman said. The FTC, which investigates violations of antitrust law, is expected to look into complaints that Google’s search results favor the company’s other services, among other issues. Google, which runs an estimated 69 percent of Web searches worldwide, can make or break a company depending on its search ranking.

For more of this story by Diane Bartz, read here.

From elsewhere…

Strauss-Kahn released from house arrest

Former IMF chief Dominique Strauss-Kahn was released from house arrest after prosecutors said the hotel maid who accuses him of attempted rape lied to a grand jury and made other false statements. Strauss-Kahn still faces charges that he sexually assaulted the woman but questions about her credibility appear to be shifting the case in his favor in a twist that could upend French politics again.

For more of this story, read here.

Minnesota government shutdown begins after talks fail

Minnesota’s state government began a broad shutdown going into the July 4 holiday weekend after the Democratic governor and Republican legislative leaders failed to agree on a budget.

For more of this story, read here.

Photo credit: Reuters/Hyungwon Kang (Independence Day fireworks in Washington, July 4, 2009)

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