The document summarizes various domestic and foreign policy matters from July 20, 2012. On domestic issues, it discusses ongoing congressional debates around the fiscal year 2013 budget and efforts to repeal parts of the Affordable Care Act. It also covers developments regarding sequestration and cybersecurity legislation. On foreign policy, key topics included the ongoing civil war in Syria, tensions with Iran over its nuclear program, a terrorist attack in Bulgaria, and trade relations with Russia.

1. July 20, 2012
DOMESTIC POLICY MATTERS
Fiscal Year (FY) 2013 Appropriations. The House Appropriations Labor, Health, and Education
Subcommittee approved along party lines (8-6) its appropriations bill on Wednesday, sending it to the full
committee for mark-up next week. Much of the Subcommittee’s debate focused on Republican efforts to
repeal portions of the President’s healthcare law. The House passed (326-90) its FY 2013 Defense
appropriations bill Thursday. A bipartisan amendment offered by Congressman Mick Mulvaney (R-South
Carolina) passed 247-167 to cap the $606 billion bill at FY 2012 levels – $1.1 billion less than the amount
recommended by Republican leadership, but still more than $6 billion over the caps set in last summer’s
Budget Control Act (BCA). The House also adopted amendments to cut funding for operations in Pakistan
and Afghanistan. Senator Jim DeMint (R-South Carolina) and several other House and Senate conservatives
circulated a letter Thursday announcing they would accept a Continuing Resolution for FY 2013 at the $1.047
trillion level set in the BCA if it is passed before the August recess and continued well into the next Congress.
Sequestration. On Tuesday morning, the Aerospace Industries Association unveiled an updated report
projecting 1.09 million jobs lost next year, if sequestration takes effect. Also on Tuesday, former Vice
President Dick Cheney spoke to House and Senate Republican leaders about the need to avoid mandatory
cuts to defense accounts. Leaders of several defense companies testified at the House Armed Services
Committee’s first hearing on sequestration Wednesday. Later that day, the House passed (414-2) the
Sequestration Transparency Act of 2012, a bill that would require the Obama Administration to submit a
report within 30 days outlining how it would carry out sequestration.
The Obama Administration announced Thursday that it will expedite its permitting process for modernization
and expansion projects at five ports along the East Coast, including those in Jacksonville, Miami,
Savannah, New York/New Jersey, and Charleston. Senate Democrats circulated draft legislation Monday
that would extend the “Bush tax cuts” for most Americans, but allow them to expire for households with
income greater than $250,000. The legislation would also raise the rate on dividends and capital gains from
15 to 20 percent. Senate Minority Leader Mitch McConnell (R-Kentucky) said Senate Republicans would
block any tax increase. Senate Majority Leader Harry Reid (D-Nevada) asserted Wednesday that the Senate
must pass cybersecurity legislation before turning its attention to the annual defense authorization bill.
President Obama penned an op-ed published in the Wall Street Journal Thursday urging Congress to pass
comprehensive cybersecurity legislation. Senate Homeland Security and Governmental Affairs Committee
Chairman Joe Lieberman (I-Connecticut) introduced revised cybersecurity legislation Thursday. On
Thursday, the Senate Judiciary Committee approved a two-and-a-half-year extension of expiring provisions
that allow warrantless surveillance of foreign targets. A committee-approved House measure would renew
the provisions for five years. At a House Armed Services Committee hearing Thursday, Defense Secretary
Leon Panetta reportedly assured lawmakers that the recent series of intelligence leaks did not emanate from
the Pentagon and that procedures are in place to prevent or limit or prevent future leaks.
President Obama released a statement early Friday morning after a mass shooting hours earlier at a movie
theater in Colorado, stating his commitment “to bringing whoever was responsible to justice, ensuring the
safety of our people, and caring for those who have been wounded.” So far, 12 people are dead and at least
59 others are injured. The President called the shooting “senseless” late Friday morning during a campaign
stop in Florida. A top Political Action Committee (PAC) supporting presumptive Republican Presidential
nominee Mitt Romney raised $20 million in June, representing more than three times the amount the top
“super PAC” supporting President Obama raised in the same month, while the latest polls continue to show
a national electorate closely divided in their preferences for control of the White House and Congress.
FOREIGN POLICY MATTERS
Syria. On Sunday, the Red Cross formally declared the Syrian conflict a civil war, a status with implications
for potential war crimes prosecutions. On Wednesday, in a reflection of the growing rebel presence in
Damascus, a bombing attack killed the Syrian Defense Minister and other senior Syrian officials. President
Obama called Russian President Vladimir Putin on Wednesday regarding the violence in Syria, but at
Thursday’s U.N. Security Council (UNSC) meeting, Russia and China again vetoed the latest Western-
sponsored Chapter 7 sanctions resolution. The United States expressed disappointment after the vote,
saying all options remain on the table. On Friday, the UNSC approved a 30-day extension to the U.N.
monitoring mission, which will allow sufficient time for the mission to shut down.

2. Iran. Citing new intelligence, U.S. government officials said Thursday Iran has developed plans to disrupt
international oil tanker traffic in the Strait of Hormuz and/or attacking oil facilities inside and outside the
Persian Gulf. After the World Intellectual Property Organization (WIPO) issued a statement Thursday it would
conduct an internal review of how the organization could have provided sophisticated U.S.-origin technology
to sanctioned regimes like Iran (and North Korea), House Foreign Affairs Committee Chair Ileana Ros-
Lehtinen (R-Florida) and Ranking Member Howard Berman (D-California) issued a statement Friday
demanding WIPO instead authorize an independent, external investigation.
On Wednesday, a suicide bomber targeted a bus carrying Israeli tourists in Bulgaria, killing five. President
Obama called the terrorist attack “barbaric” and “outrageous,” and he spoke with Israeli Prime Minister
Benjamin Netanyahu to offer his condolences and assistance. On Thursday, Prime Minister Netanyahu said
the attack was "perpetrated by Hezbollah, Iran's leading terrorist proxy," although no public evidence of
Hezbollah’s role has yet emerged. Also Thursday, Bulgarian Prime Minister Boiko Borisov announced
officials had recovered an allegedly false U.S. driver’s license that appeared to belong to the bomber.
Trade. On Wednesday, the Senate Finance Committee unanimously sent to the Senate floor a bill to confer
Permanent Normal Trade Relations (PNTR) with Russia and Moldova. The Senate bill repeals the Cold
War-era Jackson-Vanik trade restrictions on Russia, replacing them with targeted sanctions on Russian
officials involved in the death of Russian lawyer Sergei Magnitsky and other human rights abuses. Senator
Chuck Grassley (R-Iowa) argued during the mark-up that U.S. pork producers face "unjustifiable" Russian
sanitary and phytosanitary standards, reportedly securing an amendment to the bill that would require the
U.S. Trade Representative to keep negotiating with Russia for a separate bilateral agreement. On Thursday,
House Ways and Means Chair Dave Camp (R-Michigan), Ranking Member Sander Levin (D-Michigan),
Trade Subcommittee Chair Kevin Brady (R-Texas) and Trade Subcommittee Ranking Member Jim
McDermott (D-Washington) announced they will introduce legislation and mark-up a House PNTR measure
next week. All four acknowledged the Magnitsky legislation – which already passed the House Foreign
Affairs Committee – would be combined with Russia PNTR before a House floor vote. Neither Senate
Majority Leader Harry Reid (D-Nevada) nor House Speaker John Boehner (R-Ohio) has yet indicated when a
floor vote may occur in their respective chambers. With Russia on schedule to join the World Trade
Organization in August, U.S. businesses are pressing for passage of PNTR before Congress breaks for its
month-long recess in early August. Also Wednesday, the Senate Finance Committee reported out a bill that
reauthorizes the Administration’s ability to ease or re-impose sanctions on Burma and another bill that
extends through September 2015 the Third-Country Fabric Program for Sub-Saharan Africa. The
legislation added South Sudan to the list of countries covered by the program.
By a vote of 333-61 on Tuesday, the House passed what Foreign Affairs Committee Chair Ros-Lehtinen
characterized as a “carefully targeted” FY 2013 Foreign Relations Authorization Act (H.R. 6018). The
measure establishes a coordinator for cyber issues in the Secretary of State’s office, paves the way for
increased satellite exports, and directs the President to report annually to Congress on U.S. efforts to
strengthen multilateral export control regimes.
Secretary of State. In Cairo last Saturday, Secretary Clinton met with new Egyptian President Mohammed
Morsi and later with Foreign Minister Mohamed Kamel Amr. The Secretary said a U.S. business delegation
will visit Egypt in early September to explore new opportunities and said the United States will create the
U.S.-Egypt Enterprise Fund, with $60 million in U.S. funding. On Sunday, Secretary Clinton met with
Egyptian Field Marshall Mohamed Hussein Tantawi. The Secretary was in Jerusalem Monday, meeting
separately with Israeli Prime Minister Netanyahu, President Shimon Peres, Foreign Minister Avigdor
Lieberman, and Defense Minister Ehud Barak, as well as Palestinian Authority Prime Minister Salam Fayyad
and Quartet Representative Tony Blair. Topics of discussion included Israeli-Palestinian peace efforts, Egypt,
Syria, and Iran. On Friday, the Secretary swore-in Richard Morningstar as U.S. Ambassador to Azerbaijan.
On Tuesday, President Obama announced his intention to nominate James Cunningham and Richard Olson
as the U.S. Ambassadors to Afghanistan and Pakistan, respectively. White House Press Secretary Jay
Carney issued a statement Wednesday praising Libya’s confirmation of the July 7th National Congress
election results – and also congratulating all the parties and candidates who won seats in the new General
Congress, led by Mahmoud Jibril’s moderate National Forces Alliance. The United Kingdom's Department for
Transport said Tuesday a small number of U.S. Transportation Security Administration officials will assist with
airport screenings for the Summer Olympic Games. This comes on the heels of a decision by the British
Government to call in additional British military and police personnel to help with security for the Games.
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