DEMOCRATS RETAKING CONTROL OF US CONGRESS; LULA'S

UNCLAS BUENOS AIRES 000011 SIPDIS STATE FOR INR/R/MR, I/GWHA, WHA, WHA/PDA, WHA/BSC, WHA/EPSC CDR USSOCOM FOR J-2 IAD/LAMA SIPDIS E.O. 12958: N/A TAGS: KPAO OPRC KMDR PREL MEDIA REACTION SUBJECT: DEMOCRATS RETAKING CONTROL OF US CONGRESS; LULA'S RE-ELECTION; 01/04/07 ¶1. SUMMARY STATEMENT Today's leading international stories include Democrats retaking control of US Congress and announcing a rapprochement with Latin America; and expectations about Lula's second term in office. ¶2. OPINION PIECES - "The new US Congress will take office today" Leonardo Mindez, on special assignment in Washington for leading "Clarin," writes (01/04) "... Democrats will take control of US Congress. They have committed themselves to promoting a change of direction during their first 100 hours of work, i.e. two-and-a-half weeks of work. According to Nancy Pelosi, the first woman to chair the Lower House, they want to use this time to demonstrate that they have started to 'dry out the Republican swamp.' "The first bill that Democrats expect to approve this week will be a sign of internal housecleaning after the corruption scandals of recent years. The new legislation will seek firmer control of lobbying on Capitol Hill and a stricter code of ethics that will ban legislators from receiving expensive paid travel and gifts. "Next week, Democrats will seek to obtain the support of their low-income voters by approving an increase in the minimum wage paid by the USG... "Democrats received a nod from Republicans and George W. Bush himself for those bills. The rest of the initiatives promoted by Democrats will face some trouble. Many of them will involve powerful allies of the White House or go against depart from the main guidelines set forth by the official party in recent years. "Those bills include reduced subsidies for oil companies and a transfer of those funds to research on alternative sources of energy. "Perhaps, nothing will clash more with the White House and the US Republican Congress' conservatism than the Democrats' idea of allocating federal funds to stem cell research." - "Democrats promise a rapprochement with Latin America" Daily-of-record "La Nacion" reports (01/04) "For the first time in twelve years, the US Democratic opposition will formally take control of both chambers of the US Congress with the promise of greater rapprochement with Latin America together with an inherited agenda ruled by the increasingly unpopular war in Iraq. "Therefore, during the last two years of his second term in office, US President George W. Bush will have to live with an opposition Congress... "One day before taking control of Capitol Hill, several of the most important Democratic legislators charged the Bush administration with having overlooked Latin America and said they will seek rapprochement with the region. However, they avoided giving details about whether they will pass delayed immigration reforms... or on free trade agreements with the countries of the region that are pending US Congress' ratification. "Harry Reid, Democratic majority leader at the US Senate, said 'Latin America has been disregarded for too long by the government.'" ¶3. EDITORIALS - "Lula's second term in office" Daily-of-record "La Nacion" editorializes (01/04) "After Lula's sliding victory in the second round of Brazilian elections..., he has started his second term in office as the president of Brazil. "... The Brazilian president's pragmatism prompts speculation that there will not be major changes related in fiscal and monetary policies, foreign indebtedness, primary surplus, relative economic opening, hemispheric integration and trade agreements with countries outside the region. However, we should assume that he will strengthen social assistance programs... and speed up investment in infrastructure and public works in order to improve the competitiveness of Brazil's economy and create job opportunities. "As to his foreign policy, the big question is how Lula will manage to recover the hemispheric leadership Brazil is asking from him. Lula's leadership has recently been clouded by Hugo Chavez's radical proposals and attitudes, which the prudent Brazilian president has not backed. "Additionally, Lula has to solve the sensitive issue of Bolivian gas supply for the Brazilian market and find fair compensation for the Brazil's substantial investment in the energy sector, which has recently been nationalized. "In the international relations field, there are no signs of any substantial change in the US-Brazilian relationship, which is now certainly less confrontational and more compromising than that of some other leaders of the region... Regarding harmful agricultural protectionism by developed countries, Brazil will have to keep on trying to stop it... Presumably, the change in the US political scenario will not help him, bearing in mind that Democrats are less inclined than the current administration to dismantle trade protectionism." To see more Buenos Aires reporting, visit our classified website at: http://www.state.sqov.gov/p/wha/buenosaires WAYNE