World News Brief, Wednesday July 27

No solution yet for US debt--Obama and Boehner both seek support from American people via TV addresses; US will default on loans if compromise not reached by Aug 2; territorial feud between China and Philippines heats up; Britain and France come to agreement on Qaddafi; US military funds meant for transportation contract diverted to Taliban; and more

Top of the Agenda: Obama, Boehner in Deadlock over Debt Deal


U.S. President Barack Obama and House Speaker John Boehner used separate nationally televised addresses last night to attack one another over a failure to reach a compromise over a so-called grand bargain, deficit-reduction plan that would allow the United States to raise its debt limit ahead of next week's August 2 deadline. Warning of an economic calamity (NYT) if the United States were to default on its debt obligations, Obama blamed House Republicans for holding up a compromise because of their steadfast resistance to any tax increases. In response to the president, Boehner said that Obama was unfairly insisting on a "blank check" from Congress.

Earlier on Monday, the Senate and House unveiled new, competing plans (WSJ) to raise the debt ceiling. Boehner proposed a $3 trillion deficit-reduction package that would allow for raising the debt limit in two stages, a move Obama strongly rejects. Meanwhile, Senate Majority Leader Harry Reid announced a plan to increase the limit just enough to allow the United States to pay its bills through 2012, coupled with equal spending cuts. House and Senate votes on the respective plans could come as early as Wednesday.

However, Boehner's new proposal also faces resistance (WashPost) from conservative members of the House, making it unclear whether his own caucus will support him. Reid, who has the backing of his own party, is working to win over Senate Republicans who criticize his budget savings as "accounting tricks."

Obama and Boehner's compromise plan fell apart Friday (Politico) when the Speaker pulled out of the talks. Obama's address was an effort to reassert himself into the debate, and appeal to the American public directly over what he deemed a potentially new economic crisis caused by Washington.


President Obama's speech on the debt limit can be found here.

Speaker Boehner's speech on the debt limit can be found here.

While the Senate plan to cut spending and raise the debt ceiling may be gimmicky and flawed, it is better than the irresponsible plan put forward by the House, says the Washington Post.

Despite many hours of negotiation, the leaders of the two chambers and the president cannot even agree on what amount of deficit-reduction they are aiming for, let alone how to reach it, and a self-inflicted crisis draws nearer, says the Economist.

Even if lawmakers cobble together a plan to raise the debt ceiling ahead of the August 2 deadline, lawmakers will still need to hash out a long-term deficit-reduction package to avoid market disruption and preserve U.S. global standing, says economist C. Fred Bergsten in this CFR Interview.


PACIFIC RIM: Philippines Warns China on Spratly Islands


President Benigno Aquino III warned China in a national speech that the Philippines would defend its Spratly Islands claims (AP) and would elevate the territorial feud to a U.N. tribunal. Escalating hostilities between China and its neighbors over competing claims to the South China Sea is a test of China's growing strength and a diplomatic challenge for the United States, says CFR's Joshua Kurlantzick.

Taiwan: Two Chinese fighter jets pursued a U.S. spy aircraft (FT) across an unofficial dividing line in the Taiwan Strait in late June, according to defense sources from Taiwan and China. The incident marked the first time in more than a decade that Chinese military aircraft have entered Taiwan's side of the strait.



- Britain, France Agree on Qaddafi Plan
- U.S. Trucking Funds Diverted to Taliban

This is an excerpt of the Daily News Brief. The full version is available on