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1. Congress voted yesterday to keep the US government up and running through September. The budget deal was passed by a comfortable margin in the House and by a 4-to-1 margin in the Senate. The debate over the FY 2012 budget now begins in earnest. 2. Yesterday’s vote was widely seen as a test of House Speaker John Boehner’s leadership. He passed, but the 59 Republican “no” votes on the budget deal were a warning shot from the party’s right flank.
3. Treasury Secretary Tim Geithner told the Financial Times yesterday that there was “no conceivable way Congress would risk default” and that it would have to vote to lift the debt ceiling. Mr. Geithner was on a media merry-go-round yesterday, trying to reassure investors that America would meet its debt obligations.
4. Gillian Tett writes that bankers are beginning to make contingency plans in case the debt ceiling is not raised and a technical default occurs. JPMorgan Chase CEO Jamie Dimon talked about contingency plans as well.
5. At the centre of the fight over federal spending is the wildly popular Medicare program. Ron Brownstein has an excellent column today that outlines how President Obama views Medicare and how Rep. Paul Ryan views Medicare and why this may well be the pivotal political debate of the 2012 election cycle.
6. New York Governor Andrew Cuomo said yesterday that the Empire State is “functionally bankrupt” and that therefore public employee union workers should not expect raises any time in the next three years.
7. “Lawmakers and governors in 21 states are seeking to curb union clout in government-funded construction projects by limiting the use of wage requirements that generally favour union workers,” The Wall Street Journal reports. “At issue are so-called prevailing-wage rules, which require contractors working on government projects to pay workers a rate that usually closely tracks union wages.”
8. California Gov. Jerry Brown hopes to put a tax initiative on the ballot this fall, to get voter approval for extending existing taxation to help close the state’s $15.4 billion budget gap. Influential union leaders are questioning whether voters would support a fall ballot measure and are calling instead for the legislature to extend the taxes on its own. California, like New York, is “functionally bankrupt.”
9. The Associated Press reports: “A judge has dismissed one of three lawsuits challenging Wisconsin’s divisive law that restricts union rights.” This is a win for Wisconsin Governor Scott Walker (R).
10. Bahrain is looking to ban the main Shia opposition group, the Financial Times reports, “dashing hopes for a political solution to a worsening sectarian crisis.”
11. Finland used to be the lapdog of the European Union, ever-obedient to the bureaucrats of Brussels. The rise of the populist True Finns party has changed all that.
12. The war in Libya continues to go badly. US, British and French leaders published a joint statement pledging to maintain the military campaign until Muammar Gaddafi leaves office. The statement was widely viewed as defensive and weak.
13. The Wall Street Journal reports: “Riots erupted in the capital and towns across (the African nation of Uganda) after police shot Uganda’s main opposition leader with a rubber bullet while trying to arrest him and arrested other opposition leaders during protests over escalating food and fuel prices.”