Swoop: Washington’s World: March 29th – April 4th, 2010

Swoop: Washington’s World: March 29th – April 4th, 2010
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As we predicted, Congressional approval of President Obama’s healthcare reform legislation was both close and messy. Nonetheless, this represents a significant victory for the Administration, energizing both the Democratic leadership and the base. Democratic strategists are now less fearful that November’s mid-term elections will inflict devastating losses on the party.

For their part, the Republicans are also energized, feeling that they have a majority-winning issue for the elections. The stage is thus set for a period of bitter political confrontation.

The Democrats calculate that their best way forward is to pursue an activist agenda. It has stepped up aid for homeowners facing foreclosure. On the reform side, our contacts in the Administration tell us that financial overhaul will take first priority. We expect a reform package will be adopted in the coming months, but its scope will be significantly less wide-ranging than originally envisaged. Its impact on the way Wall Street does business will be modest.

The Administration is also looking for gains in foreign policy. Obama’s new found self-confidence was on display in his tough line with visiting Israeli Prime Minister Netanyahu. There is little doubt that US-Israeli relations are experiencing genuine tension, but it is worth noting that US arms transfers to Israel continue uninterrupted.

Elsewhere, the new START treaty on nuclear arms reductions to be signed by the US and Russian Presidents in Prague on April 8th represents a high profile success for the Administration. The treaty faces an uncertain future in the Senate, but, unlike health care, it will draw on some Republican support. The outcome of the Iraqi elections is more problematic. While the State Department has welcomed the results, officials we have spoken with in the Intelligence Community are deeply concerned that a period of political instability with a high potential for violence lies ahead. This could complicate US withdrawal plans.

Finally, relations with China remain vulnerable to the decision by the Treasury due on April 15th on whether to label China a currency “manipulator.” Both sides, we understand, are working to avoid this outcome.

Source: http://theswoop.net/sys/index.php?PHPSESSID=9f5378f1ea2fe34571c7d12c5021cc44