PM clears slate for Obama meeting

John Key arrives in Washington today with possibly fewer distractions from his important business at hand - trade, defence, the economy - than were looming yesterday.

The last thing the Prime Minister needed was a domestic distraction as big as the story that Mossad was suspected to have been operating in Christchurch during and after the February earthquake.

The story emerged yesterday just as Mr Key was arriving at Facebook in Silicon Valley in California, where he stoked the story by refusing to answer most questions put to him by the travelling media contingent.

By the time he reached the San Francisco Yacht Club, seven hours later, it was clear that the say-nothing option was not sustainable and the story threatened to overshadow the meaty end of his trip.

He answered more fully, and while many questions remain unanswered, he has probably answered enough to have a clear run at Washington over the next two days.

The other domestic issue with the potential to overshadow his trip has been the American debt ceiling crisis that has been dominating the news in the US for weeks.

It all hinges on the need for the Democrat-dominated Senate and Republican-dominated lower House of Congress to extend the US$14.3 trillion ($16.7 trillion) debt cap by August 2 to allow the US to meet all its obligations such as interest payments and Medicare assistance to the elderly.

The wrangle is over what conditions should be attached to a new approval in the way of spending cuts versus taxes (although you won't hear that word pass President Barack Obama's lips - it's "revenues").

And yesterday, light emerged from the heated debate on Capitol Hill.

A new compromise based on an earlier one may get bipartisan support, it is emerging, but the politicians are cutting it fine.

The Wall St Journal reported White House officials as saying a framework had to be finished by tomorrow to have enough time to pass into law by August 2.

Tomorrow is also the day Mr Key meets President Obama. There is no prospect of the appointment being canned.

But his appointments on the Hill could be affected, if not in the actual meetings with the two leading Republican and Democrat Senators who are up to their necks in compromise, Mitch McConnell and Harry Reid, then in gaining their undivided attention.

Mr Key is due to be taken on to the floor of the Senate by Senator John Kerry, a former presidential contender who is chairman of the Senate foreign relations committee.

The meetings tomorrow with the greatest personal interest will be with Federal Reserve chairman Ben Bernanke and Treasury Secretary Timothy Geithner, who needs the Congress authorisation.

Mr Key knows he won't be able to influence Mr Bernanke's actions. And his mere hint of a third round of quantitative easing (increasing the money supply) led to a rise in the Kiwi dollar against the greenback.

But for a former currency trader like Mr Key, a look inside the thinking of the second most powerful man in the United States will be a highlight, distractions or not.