1. October 26, 2012
DOMESTIC POLICY MATTERS
Budget, Sequestration, & the Economy. On Wednesday, the Commerce Department released a report
showing that new home sales increased by 5.7 percent from August to September, the largest jump since
April 2010. On Friday, the Department reported that U.S. Gross Domestic Product grew by a stronger-than-
expected two percent for the third quarter of 2012. A day earlier, more than 80 executives from large U.S.
companies called on Congress and the White House to reach an agreement on deficit reduction and tax
policies after the election. The executives stated their support for a tax code overhaul that would include
revenue increases, and they blamed sluggish economic growth and hiring delays on the looming threat of the
fiscal cliff. A report released Friday by the National Association of Manufacturers predicted almost 12% U.S.
unemployment in 2013 if Congress and the Administration fail to avoid the fiscal cliff.
2012 Elections. On Monday night, President Obama and Republican presidential nominee Mitt Romney
participated in the third and final presidential debate in Boca Raton, Florida. While the debate focused on
foreign policy, the candidates also used the opportunity to make statements about domestic issues like
sequestration and deficit reduction. According to most political pundits and instant polling, President Obama
scored his second straight modest debate win. However, the majority of national polling now shows
Governor Romney slightly ahead of the President. Governor Romney’s rise in the polls also appears to have
helped Republicans’ already strong chances of maintaining control of the House of Representatives. On the
other hand, President Obama maintains a slight lead in most polls of the heavily contested states that are
crucial to an Electoral College majority. In addition, the majority of recent polling suggests the chance of
continued Democratic control of the Senate is solidifying. On Tuesday, Richard Mourdock, the Republican
nominee in the close Senate contest in Indiana, condemned rape but called any resulting pregnancy
“something that God intended.” Mourdock’s Democratic opponent, Congressman Joe Donnelly, called the
comments “insulting and wrong to women….” On Wednesday, the Obama campaign released 3.5 million
copies of a new blueprint for the President’s vision for a second term in office. The campaign primarily will
distribute the blueprint in battleground election states. President Obama also promised Tuesday to pass
major immigration reform next year if he is reelected. A poll released the following day showed that
approximately 74 percent of Latino voters support the President over Governor Romney, which could be a
major factor in swing states with sizeable percentages of Hispanic voters, including Colorado, Florida, Iowa,
Nevada, North Carolina, and Virginia.
All Members of the Senate Health, Education, Labor and Pensions (HELP) Committee, with the exception of
Senator Rand Paul (R-Kentucky), signed a letter Thursday to the Massachusetts pharmaceutical board and
the company that produced the reportedly contaminated steroid linked to the meningitis outbreak. The
Senators seek background information on the company, how the drugs became contaminated, and state
regulatory procedures. While more than 300 people have been injured and 24 killed, the Centers for Disease
Control announced Thursday that most of the remaining exposed people have moved beyond the high-risk
period. This week, leaders of the HELP Committee and the House Energy and Commerce Committee
released a draft bipartisan bill to set standards for tracking prescription drugs throughout the supply chain.
Former Senator George McGovern (D-South Dakota), the Democratic nominee for President in 1972, died
Sunday at the age of 90. Vice President Biden attended the Senator’s memorial service Thursday to pay
tribute to the man he said gave him the “courage” to enter politics through his strong advocacy against the
Vietnam War. House Oversight and Government Reform Committee Chairman Darrell Issa (R-California)
subpoenaed the Obama Administration Monday for documents and communications related to a Medicare
Advantage pilot program initiated by the Department of Health and Human Services (HHS), after he
deemed unresponsive the documents previously provided by HHS. House Ways and Means Committee
Chairman Dave Camp (R-Michigan) and Oversight Subcommittee Chairman Charles Boustany (R-Louisiana)
sent a letter to HHS Secretary Kathleen Sebelius Wednesday demanding information about the alleged use of
taxpayer dollars to promote President Obama’s healthcare overhaul.
On Wednesday, House Majority Leader Eric Cantor (R-Virginia) released a report on President Obama’s
legislative agenda entitled “The Imperial Presidency.” The report alleges that President Obama has shown
a disregard for separation of powers. The White House dismissed the report, arguing that House
Republicans have blocked several of President Obama’s key legislative proposals. Although Majority Leader
Harry Reid (D-Nevada) has announced plans to bring cybersecurity legislation to the Senate floor during
the lame-duck legislative session, Senate Homeland Security and Government Affairs Committee Chairman

2. Joe Lieberman (I-Connecticut) said Wednesday the bill he drafted with Ranking Member Susan Collins (R-
Maine) is “less than 50/50” to pass at that point, in light of opposition from most Republicans and some in the
private sector. Homeland Security Secretary Janet Napolitano indicated this week that an Executive Order
setting up a cybersecurity framework is not a foregone conclusion.
FOREIGN POLICY MATTERS
The September 11 attack on the U.S. Consulate in Benghazi, Libya, remained a topic in the foreign policy-
oriented final presidential debate, but less directly than in the prior town hall format. Governor Romney
emphasized the “tumult” in Syria, Iran, Libya, northern Mali and Egypt in citing examples of his view of “an
American policy in the Middle East that is unraveling.” Romney also stated he would pursue “a pathway to get
the Muslim world to be able to reject extremism.” President Obama stated his “first job as Commander-in-
Chief…is to keep the American people safe.” He cited examples of his Administration’s accomplishments:
ending the war in Iraq, transitioning out of Afghanistan, guiding the U.S. role in the international coalition efforts
for Libya, and refocusing attention on al Qaeda’s core leadership, which included the killing of Osama bin
Laden. On Thursday, Senate Intelligence Committee Chair Dianne Feinstein (D-California) and Vice Chair
Saxby Chambliss (R-Georgia) announced the Committee will hold a closed-door hearing on the Benghazi
attack on November 15th. The Committee also has plans for subsequent hearings on the attack.
With respect to the Department of Defense’s budget at the Monday debate, Governor Romney committed to
“not cut our military budget by a trillion dollars, which is the combination of the budget cuts the President has,
as well as the sequestration cuts.” President Obama countered that Romney has proposed “…another $2
trillion on military spending that our military has not asked for.” The President added his view that
sequestration was a Congressional proposition that “will not happen”. In response to Governor Romney’s
allegation that the U.S. Navy is smaller now than any time since 1917, President Obama suggested
capabilities are more important than size. Meanwhile, this week, Secretary of Defense Leon Panetta urged
four agenda items for the Congressional lame-duck session to strengthen U.S. national security: (1) block
sequestration from taking effect, (2) pass the National Defense Authorization Act, (3) pass cybersecurity
legislation, and (4) confirm President Obama’s nominees to head the NATO and Afghanistan theater of
operations. Tuesday, Senator Claire McCaskill (D-Missouri) and Senator Rob Portman (R-Ohio) wrote Army
Secretary John McHugh to demand a probe into allegations of possible alcohol and drug abuse and fraud by
U.S. contractors and Army officials while in Afghanistan.
Iran. Late Thursday, intelligence officials reported Iran is nearing the final installation of 3,000 centrifuges at
the Fordo military site, putting Iran closer to being able to build a nuclear weapon. While the New York Times
reported the United States and Iran had reached an agreement in principle Sunday to hold direct talks after the
U.S. presidential election, President Obama denied the report but said in Monday’s debate he is open to such
talks. Responding Thursday to allegations of infringement of free expression, the Iranian Government said,
“Establishment of (a) cyber council for securing domestic Internet relates to security and sovereignty of states
rather than an issue dealing with promotion and protection of human rights." Meanwhile, on the eve of Eid al-
Adha, Iran’s Ayatollah Ali Khamenei blamed the United States and Israel for the 19-month civil war in Syria.
Syria. Despite U.N.-Arab League Special Envoy Lakhdar Brahimi’s efforts to produce a ceasefire over Eid al-
Adha, just hours before the truce was scheduled to begin, the Syrian regime shelled Damascus. Also
Thursday, Syrian activists reported rebel fighters pushed into predominantly Christian and Kurdish
neighborhoods in northern Aleppo that had been held by pro-Assad forces. Early Friday, a car bomb
detonated in Damascus, killing at least five people. While this week the Russian Foreign Ministry alleged U.S.
coordination of the delivery of weapons to Syrian rebels, the State Department maintains the United States is
only providing non-lethal assistance. In the debate, President Obama highlighted his Administration’s targeted
assistance to the Syrian opposition. Governor Romney said the United States “should be playing the
leadership role” in Syria, and the opposition must “have the arms necessary to defend themselves”.
On Monday, Secretary of State Hillary Clinton traveled to northern Haiti to participate in the formal opening of
the Caracol Industrial Park. On Wednesday, the Secretary held a bilateral meeting in Washington with
Brazilian Foreign Minister Antonio de Aguiar Patriota, who was in town for the fourth meeting of the Global
Partnership Dialogue. Secretary Clinton thanked the Minister for Brazil’s contributions to Haiti. Also
Wednesday, the State Department announced the Secretary will travel next week to Algeria, Bosnia and
Herzegovina, Serbia, Kosovo, Albania, and Croatia. On Thursday, the State Department expressed concern
about reports this week of increasing ethnic and sectarian violence in Burma’s Rakhine state, urging all
parties to halt all attacks.
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