Washington Extra – Theater of the absurd

December 14, 2011

No one said extending the payroll tax cut in Congress by December 31 would be a walk in the park. But did we really expect it to turn into another marathon with multiple detours?

After a rare display of bipartisanship on Monday on a spending bill to keep the government running through 2012, Tuesday gave way to another day of bitter back and forth, in which Democrats and Republicans aimed to out-maneuver and out-smart each other.

The Republicans managed to pass their payroll tax cut bill in the House with the controversial measure to speed up the decision on green-lighting the Keystone oil pipeline. It almost certainly won’t make it through the Senate and the White House made clear today that President Obama will veto it if it does. He’s decided the Keystone pipeline has to wait until after the elections and won’t be dragged into this debacle.

In theory, the House-approved bill clears the way for the two sides to compromise and get the payroll tax cut and unemployment benefits extended by year end. It’s pretty clear that most Republicans and Democrats want to give the boost to voters and the fragile American economy. And the White House says it still expects an “eleventh hour” deal. But after watching the elaborate political theater that played out on Tuesday, it’s anyone’s guess when cooler heads might prevail.

Here are our top stories from Washington…

U.S. lawmakers in showdown over payroll tax cuts
U.S. Republican and Democratic lawmakers are locked in an end-of-year fight that threatens a government shutdown, an effective tax hike for 160 million Americans and the loss of benefits for millions of unemployed. With just days left to resolve the crisis, both parties traded recriminations on Tuesday even as they tried to out-maneuver each other for political advantage in a high-stakes battle that will likely carry over into the 2012 elections.

For more of this story by Caren Bohan and Rachelle Younglai, read here.

Obama winds down Iraq war but verdict elusive
“Mission Accomplished” are two words President Barack Obama will not use as he winds down the most unpopular U.S. military venture since Vietnam and declares an end to another war without victory. Obama’s visit to Fort Bragg, North Carolina, on Wednesday will be a chance to tout the completion of a troop pullout from Iraq by year-end, fulfilling a promise that helped him win the presidency in 2008 and which he hopes will help him keep it in 2012. ”

For more of this story by Matt Spetalnick, read here.

Obama campaign shifts, targets barbs at Gingrich too
So much for that focused anti-Mitt strategy. President Barack Obama’s campaign signaled on Tuesday it would attack the new Republican presidential front-runner Newt Gingrich just as hard as Mitt Romney, the longtime leader in the race, and forecast – to its delight – a long battle between the two men for their party’s nomination.

For more of this story by Jeff Mason, read here.

Fed sees risks from Europe, some improvement in U.S.
The Federal Reserve pointed to turmoil in Europe as a big risk to the U.S. economy, leaving the door open to a further easing of monetary policy even as it noted some improvement in the U.S. labor market. The central bank characterized the U.S. economy as expanding moderately despite an apparent slowing in global growth, and said that while there had been “some” improvement in the job market, unemployment remained elevated and housing depressed.

For more of this story by Mark Felsenthal and Pedro da Costa, read here.

From elsewhere…

US lawmakers freeze $700 mln to Pakistan, ties strained
A U.S. Congressional panel has frozen $700 million in aid to Pakistan until it gives assurances it is helping fight the spread of homemade bombs in the region, a move one Pakistani senator called unwise and likely to strain ties further. Pakistan is one of the largest recipients of U.S. foreign aid and the cutback announced is only a small proportion of the billions in civil and military assistance it gets each year. But it could presage even greater cuts. The aid freeze targets funds used to fight Taliban insurgents.

For more of this story, read here.

For more stories from our Washington correspondents visit www.reuters.com and stay informed.


Photo Credits: REUTERS/Brian Snyder (Gingrich); REUTERS/Joshua Roberts (A statue in Capitol Rotunda)

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