Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.
President Barack Obama and House Speaker John Boehner will meet at a budget summit today, aimed at agreeing on a plan to reduce the deficit and lift the national debt ceiling ahead of an August deadline. Obama and Boehner have been in talks since the weekend (WSJ) over a full overhaul of the budget, which could include a significant revision of the tax code and a revamp of the government's three safety-net programs: Social Security, Medicare, and Medicaid.
Obama, who is set to meet at the White House today with a bipartisan group of Congress members, has indicated that he wants to see savings over the next decade that are significantly higher than the $2 trillion (NYT) sought in earlier negotiations.
In a concession by Democrats, the president is expected to propose cuts in Social Security (WashPost) and Medicare, while extracting Republican support for increased tax revenues.
At the same time, the House began debating a bill that would boostdefense spending (LAT) by $17 billion for 2012, the only spending bill to move through the Republican-controlled House that would increase funding over 2011 levels. However, The Hill reports that in an effort to avoid tax increases, many Republicans may break with party orthodoxy on defense spending and support national security cuts of $700 billion over a decade to reach a deal on raising the debt limit.
With the U.S. share of global output shrinking, its share of defense spending is neither steady nor sustainable (FT), writes CFR's Sebastian Mallaby.
Democrats and Republicans could save upward of $1 trillion (WSJ) by reorganizing the federal government's bureaucracy, writes Paul C. Light, a professor at New York University's Wagner School of Public Policy.
CFR's Peter Orszag argues that the United States must address both the weak labor market and an unsustainable fiscal path over the medium and long term.
MIDDLE EAST: Libyan Rebels Take Key Western Town
Libyan rebels took control of the western mountain town (al-Jazeera)of al-Qawalish from forces loyal to Libyan leader Muammar al-Qaddafi, as they inched closer to securing a route to the Libyan capital of Tripoli.
Israel: A confidential United Nations report (WSJ) to the UN Security Council accused Israel of violating its 2006 cease-fire agreement with Lebanon when Israeli forces used live ammunition this past May against Palestinian protesters who tried to cross over an Israeli security fence on the Lebanese border.
PACIFIC RIM: South Korea Wins Bid for 2018 Winter Olympics
The South Korean city of PyeongChang won the bid (Yonhap) to host the 2018 Winter Olympic Games following a decisive vote by the International Olympic Committee on Wednesday, bringing the Winter Games to the country for the first time.
China: Chinese state media have denied reports by a Hong Kong television station that former President Jiang Zemin has died (Reuters), news that is fueling speculation over next year's expected leadership transition.
SOUTH AND CENTRAL ASIA: North Korea ‘Paid Bribes’ to Pakistan for Nuclear Secrets
The architect of Pakistan's nuclear weapons program, Abdul Qadeer Khan, claimed that in the late 1990s, the North Korean governmentbribed top Pakistani officials (WashPost) for sensitive nuclear technology. Khan, who says he personally transferred upwards of $3 million in payments by North Korea to Pakistani officers, released an alleged copy of North Korea's 1998 letter to him outlining the deal.
Afghanistan: Taliban militants based in northwest Pakistan launched an attack (BBC) on the neighboring Afghan province of Nuristan. At least seventy-eight people have been killed in heavy fighting between the militants and Afghan security forces over the past two days.
This CFR Analysis Brief says heightened cross-border tensions and militant activity underscore the possible risks to the region as the United States prepares for its phased troop pullout from Afghanistan.
AFRICA: Rice to Lead U.S. Delegation to South Sudan
U.S. Envoy to the United Nations Susan Rice will lead a U.S. delegation to a ceremony marking South Sudan's official independence (AFP) from Sudan this weekend.
Even as southern Sudan is set to celebrate its independence from the north, lingering questions remain unanswered, such as the region's new ill defined border and any oil revenue sharing plan, writes CFR's John Campbell on his blog Africa in Transition.
Nigeria: Four soldiers in the Borno state capital of Maiduguri are thought to be dead following a bomb attack (DailyTrust) by the militant Islamist sect Boko Haram.
AMERICAS: U.S. and Mexico Agree on Truck Deal
The United States and Mexico agreed Wednesday to end a two-decade ban on Mexican trucks entering the United States, after the ban wasdeclared a violation (WSJ) of the North American Free Trade Agreement.
EUROPE: Politicians Lash Out at Credit Rating Agencies
European Commission President Jose Manuel Barroso and other European politicians said the decision by credit rating agency Moody's – one of the “Big Three” U.S. raters – to downgrade Portugal's debt to “junk” status was unwarranted (DeutscheWelle). It would only make it more difficult for eurozone leaders to help Portugal, Greece, and Ireland manage an on-going debt crisis, they said.
This CFR Backgrounder says the eurozone, once seen as a crowning achievement in the decades-long path of European integration, is buffeted by a sovereign debt crisis of nations whose membership in the currency union has been poorly policed.
France: Marine Le Pen's National Front, a French right-wing populist party, is attracting new voters because of its tough stance against immigration and globalization (DerSpiegel), posing a potentially serious challenge to French President Nicolas Sarkozy in next year's elections.