Senate nears deal to reopen US government; China pushes for regional trade deal; Northern Korean cyber-attacks have caused $805 million damage; Italian Navy rescues hundreds of migrants; Afghan provincial governor killed; and more

Top of the Agenda: Senate Nears Deal to Reopen Government

Senate leaders could seal a deal on Tuesday that would reopen the government through January 15 and raise the $16.7 trillion debt ceiling (AP). European and Asian shares traded higher on Tuesday and the dollar held its value against other currencies, reflecting cautious optimism that the United States will avoid a default (Reuters). Meanwhile, central bankers from around the world, who were gathered in Washington at the annual meetings of the IMF and World Bank over the weekend, are drawing up contingency plans to keep financial markets functioning in the event of a U.S. default on outstanding debt (Bloomberg).

Analysis

"To most people from outside the U.S., it's kind of bizarre. You just can't really understand that a country's politicians could take a standoff to a point where they might voluntarily default. So they couldn't understand it, but they were worried about being part of really cataclysmic consequences. And I think Christine Lagarde of the—the managing director of the IMF, she put it rather well, and she said that people were bemused, confused, but amused," says the Economist's Zanny Minton Beddoes on PBS Newshour.

"What makes November 1 different is not just the large number of payments due that day, but also its composition: Social Security benefits, payments to Medicare Advantage and Medicare Part D plans, pay for active-duty members of the military, and benefit payments for civil service and military retirees, veterans, and recipients of Supplemental Security Income total around $67 billion. It is hard to imagine getting past November 1 without significant dislocations for those who are not paid," writes CFR Senior Fellow Robert Kahn.

"If the main outcome of the crisis is to suspend the medical-device tax or other health-care revenue measures, Washington will have proved only that making the deficit worse remains its basis for bipartisan agreement. Instead negotiators should aim, in talks after the government reopens, to ease the next round of sequester-mandated budget cuts, which otherwise will do severe harm to national defense, education, infrastructure and other priorities," the Washington Post writes in an editorial.

 

PACIFIC RIM

Obama's Absence in Asia Boosts China Trade Deal

U.S. president Barack Obama's absence from two Asian summits last week gave Chinese premier Li Keqiang an opening to push for the Regional Comprehensive Partnership, a trade deal that rivals the U.S.-led Trans-Pacific Partnership (FT).

SOUTH KOREA: North Korean cyberattacks on South Korean computer systems are estimated to have caused more than $805 million in damage between 2009 and 2013 (Yonhap).

ELSEWHERE:

Italian Navy rescues hundreds of migrants

Afghan provincial governor killed

 

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