Tales from the Trail

Washington Extra – Happy Thanksgiving

dinnerHappy Thanksgiving! Washington Extra will return on Monday.

Here are our top stories from Washington today…

U.S. vows unified response to North Korea, eyes restraint

The U.S. urged restraint following a North Korean artillery attack on South Korea and vowed to forge a “measured and unified” response with major powers including China.

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

N.Korea pulls U.S. back to a “land of lousy options”

North Korea‘s artillery attack on South Korea poses the second test in three days of Washington’s vow that it will not reward what it deems bad behavior with diplomatic gestures, and underscores that options are limited without serious help from China.

For more of this analysis by Paul Eckert, read here.

Bernanke’s plea for fiscal help goes unanswered

Federal Reserve Chairman Ben Bernanke’s unusually blunt plea for fiscal help will probably go unanswered, leaving the economy too limp to put people back to work any time soon. Bernanke has warned that the country is on an economic trajectory that will leave millions unemployed or underemployed for many years, and he said there were limits to what the central bank alone could do to help.

For more of this analysis by Emily Kaiser and Andy Sullivan, read here.

Fed pondered radical steps amid weaker outlook

A weaker economic outlook prompted Federal Reserve officials to consider more radical steps before settling on $600 billion in bond purchases. According to meeting minutes that showed a resolute but divided central bank, policymakers sharply revised down their forecasts for economic growth next year, and saw unemployment at significantly higher levels than they had in their last forecasts in June.

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

For a factbox on Fed staff forecasts, click here.

IRS holds key to preventing tax hikes on Jan 1

If lawmakers fail to renew Bush-era tax cuts before the end of the year, the IRS could offer millions of Americans an immediate respite from higher taxes.

Washington Extra – Bad behavior

“We will not be drawn into rewarding North Korea for bad behavior,” State Department spokesman P.J. Crowley said today, after revelations that the world’s most reclusive state showed off its latest advances in uranium enrichment. “They frequently anticipate doing something outrageous or provocative and forcing us to jump through hoops as a result. We’re not going to buy into this cycle.”

Those are sound intentions, although analysts are already predicting the United States will find a way to restart six-party talks in the next six months or so if only as a containment strategy,  despite the fact that North Korea appears completely unwilling to talk seriously about denuclearization.

kimJack Pritchard, a former State Department official responsible for dealings with North Korea who visited the country earlier this month, said Kim Jong-il’s effort to build the credibility of his son and heir apparent, Kim Jong-un, meant “they can’t negotiate away what little leverage they have.”

Washington Extra – No Refuge

Not only does Barack Obama face a united and hostile Republican Party at home, he cannot easily take refuge in foreign policy in the second half of his term. From Afghanistan to Russia and the Middle East, from climate change to nuclear weapons, there are more problems than easy solutions out there.obama1

But if all that wasn’t bad enough, the president is facing a few problems even keeping his fellow Democrats on side. As we report today, the Dems are in disarray about what to with the expiring tax cuts, and there is a distinct feeling of post-election disappointment with the president. As one aide told Reuters, many congressional Democrats felt they got their fingers burned for backing Obama’s healthcare plan and are wary of getting hurt again.

“Our guys aren’t sure what comes next,” the aide said. “Will Obama help them in 2012, or will just be focused on getting himself re-elected?”

Washington Extra – A late start

obama_gmIt must be more than a little frustrating to win the Nobel Peace Prize for your best intentions — ridding the world of nuclear weapons – and then struggle to even get the START Treaty ratified this year. Not surprising, then, that President Barack Obama told his deputy to work “day and night” to get this thing through.

But whatever the temptation to throw a little egg on the president’s face, many security analysts still find it amazing to see Republicans blocking a treaty that the U.S. military so strongly backs. Welcome to bipartisan Washington, again, I guess.

Despite the uneven start to the week, Wednesday was not a bad day for Obama by any means.

Washington Extra – Stood up

Welcome to the new bipartisan Washington, where Obama and the Republicans are not only at odds over tax cuts, they can’t even agree when to have dinner. OBAMA/

Republicans apparently pulled out of the November 18 meeting called by President Barack Obama because of “scheduling conflicts.” Which is about as convincing a reason for not going to dinner as “I have to stay in and wash my hair.”  Apparently some Republican aides had been grumbling that Obama had called the meeting without consulting with their bosses.

In this sort of atmosphere, it wasn’t entirely surprising today to learn that Republican Senator Orrin Hatch poured cold water on the Democrats suggested compromise on taxes, a permanent extension for the middle class and a temporary one for wealthier Americans. Still, there is an element of brinksmanship about all of this, and Washington Extra still wouldn’t bet against a deal before year end.

Washington Extra – From Russia With(out) Love

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…

Washington Extra – Northern Exposure

Strange characters, quirky storylines and weird happenings out in Alaska.

Anyone hoping for a remake of Northern Exposure would have been disappointed by Sarah Palin’s Alaska, her new television series that aired last night and delivered a much straighter diet of “family adventure” and “flippin’ fun.”sarah3

The reality show, which drew a record five million viewers to TLC, showed the human side of a politician who is among the most polarizing in American politics today. It is the kind of positive media exposure money can’t buy, and got everyone talking again this morning about whether the former vice presidential nominee will run for the top job in 2012.

Washington Extra is not taking a position on that question. But after watching some of the shots of Alaska, I know where we are planning our next family vacation in 2011.

Washington Extra – The elections are over, time to start campaigning

The final result of the mid-term elections is not even in yet, but it’s never too early to start the campaign for the White House in 2012. Former First Lady Nancy Reagan invited Republican candidates to take part in the first presidential debate, to be held next spring at the Ronald Reagan Presidential Library and Museum in California.debate

There are plenty of potential candidates, including Mitt Romney, Minnesota Governor Tim Pawlenty and even former House Speaker Newt Gingrich. Then there’s Mississippi Governor Haley Barbour, Indiana Governor Mitch Daniels and South Dakota Senator  John Thune. And of course, if no one suitable throws their hat in the ring, Sarah Palin has offered to step up to the plate. Honestly, spring seems such a long time to wait.

Finally, a nod to the latest twist in the post-Cold War spy drama, with the unmasking of a Russian double agent who betrayed a Russian spy ring in the United States in June before defecting. The Russian paper which broke the story quoted a Kremlin official as saying a hit squad was probably already planning to kill him.  ”We know who he is and where he is,” the unidentified official said. “Do not doubt that a Mercader has been sent after him already.”

Washington Extra – A snowball’s chance?

American voters made their feelings very clear last week. U.S. government borrowing is too high and needs to be reduced. How sad, then, that the presidential commission tasked with coming up with a credible plan to cut the deficit is already being dismissed as a non-event.erskine

“This is the most predictable economic crisis we have ever faced,” Erskine Bowles rightly said today as he unveiled his joint proposals with co-chair Alan Simpson.

What is lacking, though, is not a realization of this fact, but the political will and bipartisanship to find a solution. Already, some members of their own commission have expressed skepticism about the plan or dismissed it entirely, while the wider audience in Congress is hardly rushing to embrace the ideas.

Washington Extra – Under fire

benHe is not quite the loneliest man in the world, but Fed chairman Ben Bernanke must be feeling in need of a friend these days. First those nasty Tea party types stormed the capital with their distinctively un-Fed-friendly views. Dismiss them as extremists if you will, but they seemed to have been joined by an array of world leaders in their criticism of quantitative easing, the Fed’s purchases of U.S. government debt in an attempt to stimulate the economy.

The rest of the world fears the Fed’s action amount to a backhand form of competitive currency devaluation. Many Republicans fear the Fed is enabling profligate U.S. budgetary policy. Even Fed governors and regional presidents are uneasy. Governor Kevin Warsh warned on Monday the Fed was not “a repair shop for broken fiscal or regulatory policies” and that the Fed could lose its “hard-earned credibility – and monetary policy can lose its hard-earned sway – if its policies overpromise or underdeliver.” Dallas Fed Reserve Bank President Richard Fisher then chimed in, calling quantitative easing “a bridge loan to fiscal sanity.”

In the end, the effects of the Fed’s latest move on economic growth may not be that dramatic. Its effect on the Fed’s long-term credibility, though, are less clear, and perhaps more worrying.