Obama endorses bi-partisan plan to cut debt and raise revenues, but will it pass the House? UN declares famine in Somalia, asks what's going on in Eritrea; Cameron faces 130 questions in parliament; Chinese security forces shoot 14 protesters, killing four; Pakistans spends US$4 million lobbying US lawmakers; and more
Top of the Agenda: Obama Supports "Gang of Six" Deficit Plan
President Barack Obama expressed his support for a deficit-reduction plan put forth by the bipartisan "Gang of Six" senators (BBC), reported to include a blend of new revenues and cuts to military and social spending to reduce the nation's budget deficit by about $3.7 trillion over the next decade. Meanwhile, conservative lawmakers in the House of Representatives passed a "cut, cap, and balance" plan that calls for steep spending cuts, a cap on future spending as a percentage of GDP, and an amendment to the Constitution requiring a balanced budget. Analysts say the bill is a symbolic gesture with no chance of becoming law.
The "Gang of Six" plan may inject new energy into Obama's attempts to achieve a broad deficit reduction compromise (FT) ahead of August 2, after which the government will default on its financial obligations. The bipartisan plan has a good chance of passing the Senate, but it remains to be seen whether it can survive a vote in the House, where conservatives have balked at increasing the government's revenue.
While some suggest the plan has little chance of passing intact (WSJ), other analysts say several components of the deal could be incorporated into a final package. The progress in negotiations is fragile, however, and lawmakers are wary things could easily fall apart in the next few weeks. Others claim there may not be enough time to finalize any legislation prior to the deadline (NYT).
As the debt-ceiling deadline looms, political wrangling has escalated, but lawmakers are likely to cobble together an agreement that avoids default, says this CFR Analysis Brief.
In this op-ed for the Washington Post, James M. Lindsay writes that a failure to raise the nation's debt ceiling could inflict significant and unnecessary harm to America's ability to wield and project its power in the world.
This article from the Economist discusses the theory of political compromise regarding the debt/deficit negotiations, and presents eight reasons to wonder whether the presumption of a deal is true or not.
As the United States approaches the deadline to raise its debt limit, economists warn of a fiscal crisis and higher borrowing costs for US businesses and homeowners.
PACIFIC RIM: Chinese Police Kill Rioters in Xinjiang
Chinese officials announced that security forces shot fourteen rioters (Xinhua) who allegedly attacked a police station in the Xinjiang Uygur autonomous region. A Communist party spokesman said four people were killed in the violent exchange.
Japan: Japanese authorities say they cannot rule out the possibility that beef contaminated with radiation (Bloomberg) has been exported. The government issued a ban on beef shipments from areas surrounding the Fukushima power plant after finding hundreds of cattle that had been fed tainted hay.