The Note's Must-Reads are a round-up of today's political headlines and stories from ABC News and the top U.S. newspapers. Posted Monday through Friday right here at www.abcnews.com

Compiled by ABC News' Carrie Halperin, Jayce Henderson, Will Cantine, and J.P. Lawrence

TERROR ALERT

USA Today's Michael Winter: " U.S. embassies to close Sunday over unspecified threat" An apparent al-Qaeda threat to U.S. diplomatic facilities in Muslim countries prompted the State Department on Thursday to order that all American embassies and consulates be closed Sunday, several news organizations are reporting. State Department spokeswoman Marie Harf said only during a daily news briefing in the morning that "certain" U.S. sites normally open on Sundays would close "out of an abundance of caution and care for our employees and others who may be visiting our installations." LINK

BUDGET

The New York Times' Jonathan Weisman and Jackie Calmes: "G.O.P. Rifts Lead Congress to Spending Impasse" Hours before leaving on summer recess, Congress on Thursday hit a seemingly intractable impasse on government spending, increasing the prospects of a government shutdown in the fall and adding new urgency to fiscal negotiations between the White House and a bloc of Senate Republicans. The group of eight lawmakers headed to the White House to find a way forward after Senate Republicans filibustered a housing and transportation spending measure, saying it violated a spending deal struck two years ago. LINK

The Washington Post's Lori Montgomery: "Budget truce seems out of reach as congressional recess looms" The House bill would have embraced the sequester, deep automatic budget cuts designed to shrink the federal government. The Senate bill would have ended it, restoring billions of dollars for housing, roads and bridges. This week, congressional Republicans tacitly rejected both approaches to next year's budget, leaving frustrated lawmakers wondering how they will manage to keep the government open past September, much less resolve a broader conflict over the rising national debt. LINK

The Los Angeles Times' David S. Cloud: "Pentagon Urges Congress To Rein In Sequester Cuts To Defense Budget" Senior Pentagon officials pleaded with Congress on Thursday to halt or at least delay additional budget cuts, arguing that they would produce an undersized, ill-equipped military that would have to scale back its operations around the world. "It will be truly shameful if we allow this force to travel further down the path to becoming hollow," Adm. James Winnefeld, vice chairman of the Joint Chiefs of Staff, told the House Armed Services Committee. "We need your help in removing the risk of financial uncertainty." LINK

HEALTH CARE

Politico's John Bresnahan and Jake Sherman: " Capitol Hill's Obamacare crisis solved" Lawmakers and staff can breathe easy - their health care tab is not going to soar next year. The Office of Personnel Management, under heavy pressure from Capitol Hill, will issue a ruling that says the government can continue to make a contribution to the health care premiums of members of Congress and their aides, according to several Hill sources. LINK

The Washington Times' Tom Howell Jr.: " Administration readies income checks for Obamacare" The Obama administration is set to unveil new procedures that will greatly expand the government's ability to verify the income of Americans who seek government subsidies under the federal health care law. "We're going to be sampling 100 percent. There's new information," Gary Cohen, deputy director of the Centers for Medicare and Medicaid Services, told the House Ways and Means Committee on Thursday. LINK

SNOWDEN

The Wall Street Journal's Paul Sonne: " Snowden Asylum Hits U.S.-Russia Relations" Russia granted asylum to National Security Agency leaker Edward Snowden on Thursday, defying and embarrassing an Obama administration that threatened to scale back diplomatic relations between the two countries. In the U.S., lawmakers across the spectrum heaped scorn on Moscow, branding the move as a slap in the face and calling for retaliatory measures from the White House. LINK

ABC News' John Parkinson and Arlette Saenz: " With Snowden Loose, Lawmakers Urge Obama to Nix Russia Trip" After Russia today granted NSA leaker Edward Snowden asylum for one year, top lawmakers in the U.S. Congress warned that the diplomatic move jeopardizes the bilateral relationship between the former Cold War adversaries and suggested that President Obama reconsider an upcoming trip to meet with the Russian president. LINK

Bloomberg's Terry Atlas and Nicole Gaouette: " Snowden Asylum Undercuts Obama's Efforts on Russia Ties" Russia's decision to grant temporary asylum to fugitive National Security Agency leaker Edward Snowden is a blow to President Barack Obama's desire to "reset" U.S. relations with its Cold War enemy. The Russian action yesterday puts in doubt a summit planned for next month between Obama and Russian President Vladimir Putin, and drew calls from U.S. lawmakers for retaliatory actions likely to further strain relations between the two military powers. The U.S. is evaluating the "utility" of a summit, according to White House spokesman Jay Carney, who said the president is "extremely disappointed." LINK

SENATE CONFIRMATION

The Hill's Jeremy Herb: " Senate Again Confirms Dempsey As Joint Chiefs Chairman" The Senate confirmed Chairman of the Joint Chiefs Gen. Martin Dempsey to a second two-year term by voice vote on Thursday. The Senate approved Dempsey's nomination as part of a large package of nominations that were approved by voice vote before the Senate kicked off its month-long August recess. LINK

ELIOT SPITZER The New York Daily News' Annie Karni: " Eliot Spitzer Ignores Questions About Having A Girlfriend As Wife Is Absent From Campaign Trail" Eliot Spitzer, who has been living apart from his wife, sidestepped questions Thursday whether he now has a sweetie on the side. During a campaign stop, the disgraced Love Gov did not say "no" when a reporter asked three times whether he has a girlfriend. "I am so tired of the personal attacks and I've answered all those questions," said Spitzer, who is running for city controller. LINK

ABC NEWS VIDEO

" Harry Reid Scolds Senators: 'Sit Down and Shut Up'" LINK

" Edward Snowden Granted Asylum" LINK

BOOKMARKS

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