FP’s Situation Report: Obama isolated as fallout from GOP’s midterm victory continues; Win already impacting foreign policy; New strikes against the Khorasan Group; U.S. unable to kill Islamic State leadership; and much more

By David Francis with Sabine Muscat

The fallout from the GOP’s midterm victory continued in Washington Wednesday. As Democrat’s tried to make sense of the events that gave control of Congress back to Republicans, the GOP rejoiced. After eight years without control of the House and Senate at the same time, the party finally has a chance to shape, not simply disrupt, the Obama administration’s agenda. Now, questions remain about how effective Obama, who entered office carrying the highest hopes for Democrats since John Kennedy, can be in his final two years in office.

Obama is now an island, writes FP’s David Rothkopf: "The isolation starts with the fact that from the beginning, for the president and his campaign team, it was never about the Democratic Party. It was never about the rest of their team in the administration. It was never about a network of international relationships. It was always about one man who was the product, the messenger, the mission, and the raison d’être all wrapped into one. And for the next two years, it seems highly likely that any brave post-election faces they try to put on this to the contrary, Obama will reap the results of his political and policy narcissism in a way that will not only be difficult for him personally but will be bad for America and its role in the world." More here.

The wreckage left behind by the Democratic Party is stunning. North Carolina’s incumbent Democratic Senator Kay Hagan, up some ten points at the beginning of September, lost her seat to the state’s Speaker of the House Thom Tillis. Tillis oversaw the gutting of North Carolina school budgets and convinced voters that Ebola and the Islamic State were a threat to voters. In Maryland, lack of turnout in Baltimore allowed Republican Larry Hogan to defeat Anthony Brown-a candidate groomed for years to serve as governor. The Washington Post called the Maryland race a "stunning upset."

As an organized labor source close to the Democratic Party told me last night, "Everything that could go wrong went wrong."

The GOP’s victory already has implications for American foreign policy. On Wednesday, the White House made clear that it was willing to work with Republicans on a host of issues-from the Islamic State and the response to Ebola in West Africa to Israel and Iran. In recent months, the White House has attempted to maneuver around Congress on all of these.

The Washington Post’s Karen DeYoung, on the Islamic State: "Obama pledged nearly 18 months ago to work with lawmakers to ‘refine and ultimately repeal’ what he said were the outdated 2001 Authorization for the Use of Military Force, or AUMF, against al-Qaeda and the 2002 authority against Saddam Hussein in Iraq." More here.

Obama also said that he would bring Congress into the Ebola response in West Africa, announcing the administration is "seeking $6.18 billion through an emergency funding request to Congress to enhance our comprehensive efforts to address this urgent situation." But it’s likely that the fight against the Islamic State — a fight that many Republicans believe needs to be ramped up — would be the focus of cooperation between Congressional Republicans and the White House.

More on the foreign policy dynamic between Obama and Republicans below.

Republicans are inheriting a fight in Syria. This fight worsened yesterday. Breaking news from FP’s Kate Brannen: "The U.S. targeted senior leaders of the shadowy Khorasan Group Wednesday night with airstrikes conducted in Sarmada, a town in northwestern Syria near the city of Idlib…In total, the U.S. conducted five airstrikes with a combination of manned and unmanned aircraft, a defense official told FP. The official said the military is still assessing whether specific individual targets may have been killed…The Pentagon said it had seen reports of the strikes, but that it could not confirm them." More here.

While the Pentagon turns its sights to the elusive Khorasan Group, FP’s Brannen questions why the United States has been unable to kill the Islamic State’s leadership. "The tactic’s absence from the military campaign is particularly glaring because hunting high-value militants has become a cornerstone of the Obama administration’s counterterrorism strategy in other parts of the world." More here.

More on the Islamic State below.

Welcome to Thursday’s edition of the Situation Report.

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Who’s When Where Today

11:00 a.m. General Lloyd Austin, Commander, US Central Command, speaks on the Islamic State and U.S. strategy in the Middle East at the Atlantic Council. 1:15 p.m. House Speaker John Boehner holds a news conference. 1:15 p.m. Principal Deputy Under Secretary of Defense, Acquisition, Technology and Logistics Alan Estevez, provides remarks to the Coalition for Government Procurement at the JW Marriott in D.C. 1:20 p.m. Acting Department of Defense Chief of Information Officer Terry Halvorsen delivers remarks at FedTalks 2014 at the Andrew Mellon Auditorium.

What’s Moving Markets

Ahead of a European Central Bank meeting today, European stocks were down.  Investors are waiting to see if the bank would pass stimulus measures to revive the EU’s stagnant economy. More here.

With Republicans in control of the Senate, some are speculating that sequestration cuts might be rolled back. DOD’s chief weapons’ buyer is "not highly optimistic" this will happen. More from Marcus Weisgerber at Defense One, here.

Forbes‘ Loren Thompson on how the GOP victory is a good thing for the defense industry. "Don’t expect anyone in the defense sector to be talking in public this week about what a good night it was for the industry on Tuesday. But it was." More here.

Stocks surged yesterday after the GOP victory. At Barron’s, investment strategist Bob Doll puts the phenomenon in longer-term perspective: The gains may be short-lived since the underlying fundamentals of the economy are still the factor that matters most. More here. 

FP’s Jamila Trindle: With the Export-Import Bank on the chopping block, American companies tried to get requests in under the wire. More here. 

Election Fallout

The Washington Post‘s Griff Witte and Anna Fifield say the U.S. election results resonate globally, with fears of a deepening leadership void: "[F]rom London to Tokyo, observers said the bruising defeats suffered by Obama’s Democratic allies will probably leave him with less clout to navigate global troubles — and could add to a leadership void that Republicans seized on to help gain advantage with voters." More here.

Writing for FP, Peter D. Feaver on the view from a punch-drunk White House: " I think the Obama administration would be well-served to do the first-part of the Bush response to the 2006 midterm — take a cold, hard look at the critique and take on board what is legitimate. A critique that mobilized the electorate to produce a result as stunning as yesterday’s — more stunning than the 2006 results in many ways — is not likely to be entirely without merit." More here.

FP’s Gordon Adams on how foreign policy issues drove the midterms: "The question now is whether this reversal of fortune will lead to dramatic changes in foreign policy and the resources behind America’s international engagements. Not as much as you think, it turns out." More here.

China’s nationalistic Global Times blames Western democracy for gridlock in Washington: "The Americans have elected a Congress that counters the president. The U.S., even though a master of Western-style democracy, cannot manage the situation well. In the next two years, perhaps the U.S. will not make any major decisions. Washington will be the stage for a showdown between the president and Congress." The editorial also foresees a tougher stance on China under a Republican Congress. More here.

FP’s John Hudson on Republicans who will drive foreign policy in the next Congress. More here.

Islamic State

The Daily Beast’s Eli Lake says Republicans might already have a plan to fight the Islamic State: "In an interview Wednesday, Sen. John McCain, the incoming chairman of the Senate Armed Services Committee, said he has already discussed a new national security agenda with fellow Republicans Bob Corker and Richard Burr, the likely incoming chairmen of the Senate Foreign Relations Committee and Senate Select Committee on Intelligence." More here.

An exclusive from FP’s Colum Lynch: the U.N. says a campaign against the Islamic State fuels jihad. "The Islamic State has been able to reach, and inspire, a far broader audience through the sophisticated use of social media, crowdsourcing, and the constant bombardment of propaganda in multiple languages. For instance, one speech by the group’s spokesman, Abu Mohammad al-Adnani, was translated into seven languages." More here.

Ben Hubbard in the New York Times on how the Islamic State is weakening: "Today, roughly a third of Iraq is dotted by active battle fronts, with intense fighting and occasional Islamic State victories. But analysts also say the days of easy and rapid gains for the jihadists may be coming to a close in Iraq, as the group’s momentum appears to be stalling." More here.

Ukraine

The Wall Street Journal’s Christopher M. Matthews and Andrew Grossman on an investigation into Putin’s inner circle: "U.S. prosecutors have launched a money-laundering investigation of a member of Vladimir Putin’s inner circle, several people familiar with the efforts said, in a politically sensitive escalation of pressure on the Russian president’s cadre of billionaire supporters." More here.

Bloomberg Businessweek‘s Kateryna Choursina, Patrick Donahue and Gregory Viscusi on new sanction warnings as the truce in Ukraine is on the verge of breaking: "Merkel said the EU should consider expanding the list of Russian-linked individuals under sanctions to punish those responsible for ‘illegitimate’ elections in eastern Ukraine." More here.

From AFP, Ukraine cuts finances to separatist regions in the east until "terrorists" leave. More here.

Israel

Isabel Kershner for The New York Times: "Amid soaring tensions fueled by religious fervor and Palestinian anger over control of East Jerusalem, two drivers on Wednesday plowed their cars into Israelis in separate episodes, killing one police officer and injuring three soldiers." More here.  

From the Telegraph‘s Kate Shuttleworth: "Israel was feared to be descending into a third intifada on Wednesday night after a police officer was killed and 14 people injured in a car attack, the second such incident in two weeks coming amid continued rioting in Jerusalem’s holiest places." More here.

Iran

The Washington Post‘s Carol Morello on Secretary of State John Kerry’s desire to get a nuclear deal done: "Now, negotiators from the United States and five other world powers are facing a looming deadline to forge a groundbreaking deal with Iran to reduce and limit its nuclear capacity. In return, the West is prepared to ease and ultimately lift sanctions against the economically strapped country." More here.

But obstacles remain. From Reuters‘ Fredrik Dahl: "A U.N. watchdog report this week is expected to show little progress in an investigation into suspected nuclear weapons research by Iran, diplomats said on Wednesday, a potential sticking point in six world powers’ diplomacy with Tehran." More here.

From Reuters‘ Parisa Hafezi, Mehrdad Balali: Iran hardliners want a deal, but no ties with D.C.: "Hostility to the United States has always been a rallying point for the clerical establishment, despite the decades of political isolation and sanctions-related economic hardship that estrangement has cost. Take this bogeyman away, and the ideological glue that holds together the faction-ridden leadership would weaken, analysts say." More here.

Afghanistan

The Washington Post‘s Missy Ryan reports that Afghan casualty rates are unsustainable: Lt. Gen. Joseph Anderson "attributed much of that rise to the intensified combat that Afghan forces have faced since they took full responsibility for security from foreign troops in mid-2013. That shift has put the country’s relatively inexperienced military more directly in the line of fire against a resilient Taliban insurgency." More here.

The Wall Street Journal’s Julian E. Barnes on ransoms: "Rep. Duncan Hunter (R., Calif.) said a payment was made to an Afghan intermediary early this year to help secure the May 31 release of Sgt. Bowe Bergdahl, who was held for nearly five years by the Haqqani Network in Pakistan, which is classified as a terrorist organization. Pentagon officials have denied paying cash to secure the release of Sgt. Bergdahl, who was captured in Afghanistan in 2009. A senior defense official reiterated that denial when asked about Mr. Hunter’s letter." More here.

The Navy Times on the Navy SEAL who shot bin Laden: "Robert O’Neill, a SEAL turned public speaker, has been named by the U.K.’s Daily Mail and the special operations community blog SOFrep.com as the member of SEAL Team 6 who fired the shots that killed bin Laden." More here.

From the Associated Press: "The head of NATO paid an unannounced visit to Kabul on Thursday, where he vowed that the Western alliance would continue supporting the country after foreign combat troops withdraw at the end of the year." More here.

Revolving Door

From the Washington Business Journal‘s Jill R. Aitoro: "One of Northrop Grumman Corp.’s highest-ranked women executives is retiring, the company said in a filing with the Securities and Exchange Commission…Linda Mills, corporate vice president of operations, will step down Jan. 3, 2015. She’s been with the Falls Church-based company since 1979, holding various executive roles along the way, including president of the information systems group. She’s 64 years old, turning 65 later this year." More here.

And finally, FP’s Elias Groll tells us how a NASA contractor bid "do svidaniya" to Soviet-Era rocket engines. More here.