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February 15, 2011 View this newsletter as a web page on CFR's website. EXECUTIVE SUMMARY - Obama Unveils Budget for 2012 - Iran Calls for Execution of Protest Leaders - Pakistan Eases on Diplomatic Immunity - Berlusconi to Stand Trial in Prostitution Case Top of the Agenda: Obama Unveils Budget for 2012 President Barack Obama released an overview of his budget for 2012 that outlines his plan to rebuild the U.S. economy and "win the future by out-innovating, out-educating, and out-building our global competitors and creating the jobs and industries of tomorrow." The budget strives to cut $1.1 trillion from the deficit over ten years (BBC), but observers explain this proposal as an opening bid in a drawn-out process of negotiation with House and Senate leaders of both parties. According to analysts, the blueprint makes concessions to legislators advocating bold reductions in spending in order to combat record deficits (WashPost). The $3.7 trillion budget calls for shrinking or outright ending over two hundred government programs, but economists suggests this will produce little savings in the short term. The plan also relies on $1.6 trillion in new revenue over the next ten years, to be gained primarily through higher taxes on industry (WSJ) and the wealthy--a proposition that worries American business leaders. Of particular concern to some groups is a plan to increase levies on multinational corporations over the next decade, which some suggest threatens U.S. competitiveness. Despite the budget's predictable austerity measures, the response from most liberal lawmakers (NYT) has been subdued. However, some Democrats argue many of the proposed cuts are aimed at lower-income Americans, and suggest rolling back what they see as excessive military spending. Analysis: The White House's proposed FY2012 budget tries to balance spending cuts with investment to boost competitiveness. Four CFR experts examine how well it achieves those aims. In this op-ed for the Washington Post, Dana Milbank argues the Obama budget is not responsibly confronting the problem of the deficit and national debt (WashPost). This editorial for the New York Times suggests the White House budget is a good starting point from which to engage Republican lawmakers looking for deeper spending cuts. MIDDLE EAST: Iran Calls for Execution of Protest Leaders Members of Iran's parliament condemned Monday's mass demonstration in Tehran (Haaretz) and called for the execution of prominent opposition leaders Mehdi Karroubi and Mir Hossein Mousavi. Iranian leaders issued support for the revolution in Egypt, but cracked down when activists in Iran marched against their government. Continued unrest in Egypt is stirring tensions between Iran's hardliners and opposition movement and stoking concerns that an Iran-friendly Egyptian regime could upset the regional balance of power. Bahrain: Violence between Bahraini security forces and the youth-led opposition movement claimed the life of a second protestor in the capital of Manama (WSJ). The country's main Shiite opposition bloc suspended their participation in parliament in a show of unity with protesters. Large numbers of unemployed youth have been behind the protests for change in the Middle East. Demographics expert Ragui Assaad says the region must move toward democracy and open economic systems to turn the youth bulge into an opportunity. PACIFIC RIM: Peace Talks Afoot for Philippine Insurgency In Oslo, formal talks restarted between Manila and Philippine Maoist guerrillas (FT) who have led a forty-year insurgency, one of Asia's longest. Analysts suggest the negotiations, which began in 1987, might not be completed before President Benigno Aquino III's term ends in 2016. China: A top U.S. Naval commander said China's new "carrier killer" missile (AP) will not force the United States to change the way it operates in the Pacific. Because of its speed from launch, the missile is believed to have the capability to avoid countermeasures and hit its target with pinpoint accuracy. SOUTH AND CENTRAL ASIA: Pakistan Eases on Diplomatic Immunity Officials say Pakistan will tell a court that most of its legal experts believe a detained American has diplomatic immunity. However government officials will leave it to a judge to rule on the standing of Raymond Davis (AP), a U.S. embassy worker charged with the murder of two Pakistanis in Lahore. Pakistan's stability is of great consequence to regional and international security. Examine the roots of its challenges, what it means for the region and the world, and explore some plausible futures for the country in CFR's Crisis Guide: Pakistan. Afghanistan: According to a White House official, former ambassador Marc Grossman will be named as the new U.S. special envoy to Afghanistan and Pakistan (CNN), replacing the late Richard Holbrooke. AFRICA: Rebel Militia Violence in Sudan Oil State A renegade band of soldiers in south Sudan's Jonglei oil state killed almost two hundred people according to the region's ruling party. The violence has raised concerns for the safety of the region where voters last month overwhelmingly voted for independence from the north (Reuters). Kenya: Prime Minister Raila Odinga initiated an investigation into the 1984 killing of thousands of ethnic Somalis at the Wagalla airstrip in Kenya (BBC). According to the Truth, Justice, and Reconciliation Commission, the event was the worst human rights violation in the country's history. AMERICAS: Chevron Hit with $8.6 Billion Fine in Ecuador An Ecuadorian court ordered Chevron (al-Jazeera) to pay $8.6 billion in fines associated with environmental damages from drilling contamination. The U.S. company rejected the court's decision as "illegitimate and unenforceable" and vowed to appeal. EUROPE: Berlusconi to Stand Trial in Prostitution Case A Milan judge ruled that Prime Minister Silvio Berlusconi will face trial for charges of paying for sex with an underage prostitute (Guardian) and then attempting to cover it up. The trial is set to begin in April. Berlusconi could face up to fifteen years in prison if convicted on both counts. Brussels: Belgian transport workers (DeutscheWelle) staged a spontaneous strike to protest poor safety conditions after a passenger attacked an underground train driver. In Athens, Greece, transportation workers have also been on strike since Monday, opposing what they claim to be overly harsh financial austerity measures. EXPLORE CFR's WEBSITE:     Regions      Issues      Experts     Publications     About CFR Find CFR on Twitter and Facebook. Privacy Policy The Council on Foreign Relations does not share email addresses with third parties. Council on Foreign Relations 58 East 68th Street New York, NY 10065 Tel. +1 212.434.9400 Fax: +1 212.434.9800 Learn about this and other newsletters offered by the Council on Foreign Relations. To pause your subscription, to switch between HTML and text-only versions of the newsletter, to change your email address, or to unsubscribe, click here.

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