HARI SREENIVASAN: The European Central Bank today signaled it will try to drive down high borrowing rates for distressed countries, especially Spain and Italy. Bank president Mario Draghi said the plan involves purchasing government bonds, but he gave few specifics. Instead, Draghi said policy-makers will work on a detailed plan over the coming weeks.
Markets here and abroad were disappointed that the European bank took no immediate action. On Wall Street, the Dow Jones industrial average lost 92 points to close near 12,879. The Nasdaq fell 10 points to close at 2,909.
Drought conditions grew even worse in part of the Plains states over the last week. A government report today said Kansas, Missouri, Nebraska, and Oklahoma are especially hard-hit. Meanwhile, the U.S. House passed a Republican drought bill to help livestock producers.
Democratic minority leader Nancy Pelosi said it would make more sense to pass a comprehensive five-year farm bill, as the Senate has done.
REP. NANCY PELOSI (D-Calif.): Make no mistake. We should be voting on a farm bill, not a drought bill. I have great sympathy for the needs of our cattlemen and those who are suffering from the drought. But I think that this bill is just another — another indication of we’re doing something that doesn’t meet the needs of the issue that our economy requires.
HARI SREENIVASAN: On the Republican side, House Speaker John Boehner said it was today’s drought measure, or nothing at all, because the farm bill is stalled.
REP. JOHN BOEHNER (R-Ohio): The House is pretty well divided. You have got the left concerned about reductions in the food stamp program. You have got the right who don’t think the cuts go far enough in the food stamp program to bring to — into compliance with what the law has been. And, frankly, I haven’t seen 218 votes in the middle to pass a farm bill.
HARI SREENIVASAN: The current farm bill is set to expire at the end of September. The House’s drought bill is not expected to survive in the Senate.
Legislation to prevent cyber-attacks on critical industries will have to wait. Senate Republicans blocked a final vote today. They argued the bill would mean new regulations that increase costs without doing much to reduce the risk of attacks. Democrats said the bill is needed now to protect everything from power grids to water supplies. Both sides said they will work on a compromise after the August recess.
Afghan security forces killed five insurgents in a predawn raid in Kabul today. Officials said they had foiled a plot to launch a large-scale attack in the capital. The raiding party found cars full of explosives and a compound filled with weapons and ammunition at the site.
When the insurgents returned, a gun battle erupted that lasted several hours. Separately, two NATO service members were killed in a bomb attack in the south. Six coalition troops have died in the first two days of August.
In Egypt, a new prime minister and cabinet formally took office. Prime Minister Hesham Kandil asked Egyptians to rally behind his new government. Four cabinet positions went to members of the Muslim Brotherhood, but Field Marshal Hussein Tantawi was kept on as defense minister, a sign that the military still wields great power.
Those are some of the day’s major stories.