Where did $230 million in parts go?; Iran inches toward a deal, Afghans make inroads; Welsh cancels a media visit; Swenson gets a medal, Arlington makes an exception; Tea Party Baby: no peas; and a bit more.

By Gordon Lubold

Iran outlines a possible deal in PowerPoint – which could amount to a big deal. The NYT’s Michael Gordon and Thomas Erdbrink: "Speaking in English and using PowerPoint, Iran’s foreign minister outlined a proposal to representatives of the big powers on Tuesday that would constrain his country’s nuclear program in return for a right to enrich uranium and an easing of the sanctions that have been battering the Iranian economy. After the discussions, Iran’s deputy foreign minister, Abbas Araqchi, and his team met for about an hour at the United Nations headquarters here with the American delegation, led by Wendy Sherman, a senior State Department official. The substance was not disclosed, but the meeting itself was unusual. The proposal presented by the foreign minister, Mohammad Javad Zarif, at negotiations on Iran’s disputed nuclear program, called for "an end to an unnecessary crisis and a start for new horizons," according to Iranian officials. In a possible sign that the negotiations have turned serious after years of delay and obfuscations, a senior State Department official suggested that the discussions had been workmanlike. A State Department official, to the NYT: "For the first time, we had very detailed technical discussions, which carried on this afternoon… We will continue the discussions tomorrow." The rest of the Times story here.

But Dems at home may be a stumbling block to lifting sanctions on Iran. FP’s Yochi Dreazen and John Hudson: "The White House has already signaled a potential openness to that kind of deal, but a wide array of powerful Democrats — including the top members of both the Senate and House foreign affairs committees — strongly oppose lifting any of the existing sanctions on Iran unless Tehran offers concessions that go far beyond anything Zarif has talked about in Geneva. ‘If the president were to ask for a lifting of existing sanctions it would be extremely difficult in the House and Senate to support that,’ Rep. Steve Israel (D-NY), chairman of the Democratic Congressional Campaign Committee, told FP. ‘I’m willing to listen but I think that asking Congress to weaken and diminish current sanctions is not hospitable on Capitol Hill.’" The rest here.

How much are sanctions really hurting? The Christian Science Monitor’s Ariel Zirulnick: "Most observers say that the punishing sanctions have brought the Iranian economy to its knees, and that dire conditions were the catalyst for Iran’s rapid push for a nuclear agreement since the June election of moderate cleric Hassan Rouhani as president. But there are others who argue that Iran is coming from a much stronger economic position than world powers are acknowledging, and scoff at the growing chorus warning of a collapse. The new leadership sees much to gain from making concessions to regain access to the global financial system – something that will play well among Iranians who want to return to business as usual." More here.

But, is America’s prestige diminishing because of its current dysfunction? Writing for the WSJ today, Thomas Catan: "…observers say that prestige may have been badly dented by Washington’s latest display of fiscal dysfunction, limiting the U.S.’s ability to get things done abroad." The CEO of the world’s largest asset manager said a few days ago that he detected ‘a pronounced sadness from our trading partners and our friends’ as he tried to explain the fiscal impasse during his recent travels abroad," according to the Catan. Laurence Fink, CEO of the New York-based asset manager BlackRock at a conference of banker recently: "It is embarrassing for me to have these conversations."

Wednesday’s edition of Situation Report. Sign up for Situation Report here or just e-mail us at gordon.lubold@foreignpolicy.com and we’ll stick you on. And if you have a report you want teased, a piece of news, or a good tidbit, send it to us early for maximum tease, because if you see something, say something — to Situation Report. That and please follow us @glubold on the Tweeter machine.

Is it over yet? Fox News this morning, on the deal to re-open government and figure out the debt ceiling. Fox: "Senate leaders scrambled to restart talks on a plan to raise the U.S. debt ceiling and end the partial government shutdown after efforts by House Republicans to advance their own proposal dramatically fell apart late Tuesday. House GOP leaders, after initially planning to vote on their plan sometime before midnight, shelved the proposal Tuesday evening after leaders struggled to round up the votes. ‘It is over,’ one GOP aide told Fox News late Tuesday. With that decision, focus shifted back to the Senate and talks between Senate Democratic leader Harry Reid and his Republican counterpart, Sen. Mitch McConnell. A spokesman for Reid issued a statement late Tuesday saying, ‘Senator Reid and Senator McConnell have re-engaged in negotiations and are optimistic that an agreement is within reach.’" More here.

There’s no such thing as a (Marine) runner scorned. If the government doesn’t re-open by Saturday, Marine Corps Marathon organizers say they may have to shut down the Marathon, scheduled for Oct. 27.  A statement from organizers: "Since the government shutdown occurred, the Marine Corps Marathon continues its coordination with hopes of a conclusion in time to host the event without impact. Without a resolution to the government shutdown this week, the MCM as planned is in jeopardy of being canceled," officials said in a statement on his Facebook page. Saturday, the organizers said, is their go/no-go decision time, at which point they’ll notify runners.

Why did the Air Force’s Mark Welsh cancel tomorrow’s DeeDubyaGee? Air Force Chief of Staff Gen. Mark Welsh was supposed to appear tomorrow morning at a breakfast meeting with reporters, part of a long-running media-and-the-military breakfast forum in Washington known as the Defense Writers Group, or DWG. But Welsh cancelled due to the government shutdown. We wondered why the shutdown would stop a service chief from eating breakfast with a bunch of scribblers. Air Force officials tell Situation Report that shutdown-related guidance dictates that the general should not appear. Indeed, some public affairs activities are not covered under the Pay Our Military Act and therefore some PA-supported events may be cancelled. But Col. Steve Warren of the Pentagon’s Office of the Secretary of Defense’s public affairs office tells us that "there’s no specific guidance that tells military officers and/or civilian leaders not to appear in media forums or events during the shutdown.  That said, public affairs is not an excepted activity so leaders make their own judgment calls on what to participate in and what to cancel." The Pentagon’s guidance on #governmentshutdown, here.

ICYMI: Leon Panetta rebuked Obama. The former Defense Secretary, Leon Panetta, did not spare President Barack Obama in his assessment of the current crisis, calling him out for not reaching out. He told a group at an event sponsored by the WSJ: "We govern either by leadership or crisis. .?.?. If leadership is not there, then we govern by crisis… Clearly, this town has been governing by crisis after crisis after crisis." The rest of Ruth Marcus’ piece today in the WaPo, here.

The Tea Party, peas, carrots and getting your way or the highway. A video short of negotiations that we would call "There’s a Fire in the House," on Upworthy, here. (thanks, Doctrine Man.)

Afghan forces are fighting a hard fight – and maybe they’re winning. The NYT’s Page Oner today, by Rod Nordland, Thom Shanker and Matthew Rosenberg: "When the Taliban announced the beginning of their spring offensive, they saw few limits to their ambitions: to kill top Afghan officials across every major ministry, to plot even more infiltration attacks against Americans and to bloody, break and drive off the Afghan security forces who were newly in charge across the country. Now, Afghan and American officials are cautiously celebrating a deflation of the Taliban’s propaganda bubble, the militants’ goals largely unmet. With this year’s fighting season nearly over, the officials say the good news is that the Afghan forces mostly held their own, responding to attacks well and cutting down on assassinations. But at the same time, the Afghans were unable to make significant gains and, worse, suffered such heavy casualties that some officials called the rate unsustainable." Read the rest here. 

A whole new set of Pentagon hammers, Afghanistan version. The Center for Public Integrity reports on what Pentagon auditors have found but what many folks already suspected: when it comes to buying spare parts, the Defense Department buys more than what they need. And guess what? They also pay too much for them. Writing on FP, the Center for Public Integrity’s R. Jeffrey Smith: "A partly-plastic roller wheel for an aircraft ramp worth a bit more than $7 is billed to the Pentagon at $1678. "Commander" seats for Stryker armored vehicles are purchased long after they became obsolete. A 38-year supply of parts is stocked for an aircraft with a much shorter lifespan. ‘Do we have enormous warehouses sitting around with stuff that no one is going to use?; asked a senior defense official who briefed reporters over breakfast on these and other episodes earlier this year. ‘Yes.’

"Now, in an act of generosity, the Pentagon has successfully exported its spare parts mismanagement to Afghanistan. It seems that a multinational, U.S.-led military office called the Combined Security Transition Command-Afghanistan (CSTC-A) spent $370 million from 2004 through the middle of this year on spare parts for vehicles operated by the Afghan National Army. But last year, it confirmed that it could not account for $230 million worth of the spare parts, according to an Oct. 16 report by the Special Inspector for Afghanistan Reconstruction." Read the rest of his bit here.

The link to a story we referenced on ProPublica yesterday was broken – here it is again. The story by Cora Currier, "In Big Win for Defense Industry, Obama Rolls Back Limits on Arms Exports," can be found here.

Validation in Section 60: Arlington reverses itself on its cleaning procedures after a WaPo story. A few weeks ago, the WaPo’s Greg Jaffe wrote about how maintenance crews at Arlington National Cemetery had abruptly removed pictures, worry rocks, love letters and other mementos left by the loved ones by the headstones of fallen service members in the area of the cemetery where the recently fallen – from Iraq and Afghanistan – are buried. Despite a notice on the cemetery’s Web site, few people saw it until they arrived to visit their service members’ gravesite to see, to their horror, that everything had been removed and most of it discarded. Seems like someone could have imagined the inevitable headlines. Now they’ve reversed course, sort of. Jaffe: "Arlington National Cemetery officials, responding to complaints from upset families, will allow small photos and other mementos to be left next to headstones in Section 60, where the Iraq and Afghanistan war dead are buried… Cemetery officials apologized to the family members for throwing out their mementos at a three-hour meeting held recently on the Arlington grounds. The cemetery’s executive director also offered to temporarily suspend Arlington’s cleanup policy in the section. For the next seven months, when the cemetery’s grass is cut less frequently, family members will be permitted to leave small photos and other handmade mementos as long as they are not taped to the headstones." Scrambling to find "flexibility:" "We are looking for flexibility within Arlington’s current policies to meet their needs," Jennifer Lynch, a spokeswoman for the cemetery, told Jaffe.  Read the rest of the story here.

Will Swenson was the first Army officer since Vietnam to receive the Medal of Honor yesterday. He is the sixth living person from the wars in Iraq and Afghanistan to receive it. ICYMI: The backstory of the controversial MOH for Swenson, in the WaPo, here. An excerpt, from the WaPo’s David Nakamura: "But for Swenson, the award stands for more than his personal bravery during the seven-hour battle in the Ganjgal valley, near the Pakistan border, on Sept. 8, 2009. It is also a measure of vindication. After returning from the battlefield, Swenson engaged in a lengthy and bitter dispute with the military over the narrative of one of the Afghan war’s most notorious firefights. The questions he raised resulted in reprimands for two other officers and what he and others say was an effort by the Army to discredit him. His account also cast doubt on the exploits of another Medal of Honor recipient from the same battle, Dakota Meyer of the Marine Corps. United in war, the two men have taken far different paths since. Meyer has found celebrity and success, with a book and a personal assistant, boosted by a story that Swenson considers an inflated and misleading account of that harrowing day."

Meet the NSA’s new Codebreakers: they’re hackers, break-in artists, corporate liaisons and shadow salesmen, as Matthew Aid writes on FP. Aid: "Even so-called "hacktivists" play an unwitting role in helping the NSA gain access to computer networks — both hostile and friendly. Just about the only place that’s somewhat immune to the NSA’s new style of codebreaking attacks? North Korea, because it’s so disconnected from the rest of the world’s networks. Former U.S. intelligence officials confirm that the more than 1,500 cryptanalysts, mathematicians, scientists, engineers, and computer technicians who comprise NSA’s elite cryptanalytic unit, the Office of Cryptanalysis and Exploitation Services, have had a remarkably large number of codebreaking successes against foreign targets since the 9/11 attacks. But these wins were largely dependent on clandestine intelligence activities for much of their success in penetrating foreign communications networks and encryption systems, and not the more traditional cryptanalytic attacks on encrypted messages that were the norm during the Cold War era." Read the rest here.

Hill to Penty: Please don’t take away the Office of Net Assessment. It’s a perennial issue. Congress hates to see the Pentagon’s Office of Net Assessment, essentially the Pentagon’s internal think tank, messed with; the Pentagon, now in a particular budget crunch, must find ways to cut costs. Defense News’ Marcus Weisgerber: "The Pentagon is considering reorganizing its internal think tank, an organization credited with helping the US win the Cold War, according to defense sources. The office has been around since 1973, and is the ultimate rarity in Washington, where senior officials come and go like the seasons. Andrew Marshall, who is over 90 years old, was its boss on Day 1 and continues to be its boss. But now as the Pentagon looks to build itself for the decade ahead, a period with fewer spending cash, the revered office could be reorganized or, as some have suggested, eliminated. Defense officials stress that no final decision has been made, however DoD is in the midst of reducing its headquarters staffs by 20 percent over the next five years, a move intended to save the Pentagon billions of dollars. Any change in the office’s status has prompted concern on both sides of the political aisle."

For example… "Forbes told Hagel that the Marshall-led office "has been at the forefront of the most innovative defense strategies of the last two generations." Forbes:  "Given the critical contributions to U.S. national security made by the office during its forty-year history and its role as a central repository for long-range strategic thinking, we believe it would be a serious error to further consider its abolition." Defense News’ article here. The letter written to Hagel from Reps. Forbes, Courtney, Wittman and Hanabusa, here.