Good morning. Here’s what you need to know:
1. President Obama, in a short speech to the nation last night, said that he had ordered the withdrawal of 10,000 US troops from Afghanistan by the end of this year and that he would draw down another 23,000 troops by the end of next year. Roughly 70,000 US troops would remain in Afghanistan after these withdrawals. The transcript of the speech is here.
2. The Washington Post‘s Karen DeYoung reports that the Afghanistan battlefield will now move to the eastern provinces that border Pakistan: “One of the reasons Obama has had difficulty in sustaining support for his Afghan strategy has been the absence of al-Qaeda from the southern battlefields, which has raised questions about why the United States is fighting in Afghanistan. But if the administration identifies the fight more directly with the battles in the east and in Pakistan, the case for the war is likely to be easier to make.”
3. General David Petraeus, who led the push for a “surge” of US troops in Afghanistan and who led those troops in the war, opposed President Obama’s withdrawal timetable. Gen Petraeus wanted more troops for another fighting season.
4. The economic recovery is stalling. The outlook for next year has gotten worse. Federal Reserve Chairman Ben S. Bernanke said both things on Wednesday, to no one’s surprise. He also said that the Fed would end a program of buying vast sums of Treasury bonds at the end of June as scheduled and gave no hint that the Fed is contemplating new action (QE3).
5. The Wall Street Journal reports: “The bipartisan deficit-reduction talks led by Vice President Joe Biden grew more contentious Wednesday as Democrats and Republicans became increasingly entrenched on key issues, people familiar with the matter said.” The Washington Post has a similar report.
6. A new study, by two of the nation’s leading experts on state and municipal finance, says that U.S. state and local governments will need to raise taxes by $1,398 per household every year for the next 30 years to fully fund their pension systems.
7. Americans have turned decisively against Rep. Paul Ryan’s plan to “transform” Medicare, according to a new “Bloomberg” poll. Roughly 57% of all American oppose the Ryan plan (as they understand it). A third favour the plan.
8. Greece’s opposition leader says that his party will vote against the government’s newest round of austerity measures, ending hopes that the nation’s political elite might unite to prevent a sovereign debt default.
9. Does the eurozone have a hidden AIG? That’s the question that haunts financial markets as the inevitable default of Greece nears. The world of derivatives is so murky that no one knows for sure, but there is real fear that some company (or companies) might be on the hook for hundreds of billions of dollars in CDS.
10. Dozens of Al Qaeda fighters escaped from a Yemeni prison, as chaos there continued.