Good morning. Here’s your Daily Situational Awareness for Monday, 07 August 2023.
ADMIN NOTE: You can catch today’s DailySA livestream briefing here: https://youtube.com/live/uxUbs0OIGPE. We’re working on adding additional platforms. – M.S.
- READ TIME: 6 Minutes, 28 Seconds
- Inside the Beltway
- (1) House to Investigate Energy Secretary CCP Communications
- (2) Manchin: Fitch Fired a Warning Shot
- Domestic INTSUM
- (3) Republican Voters Losing Faith in Electoral System
- (4) 9th Circuit Saves Biden Border Policy
- (5) Ruger: So Far, No Increase in Election Year Gun Demand
- (6) FERC Threatens Financial Penalties for Transmission Providers
- Russia-NATO SITREP
- (7) Russia’s Economy Projected to Grow
- (8) Jeddah Peace Talks Inconclusive
- China & Indo-Pacific SITREP
- (9) China Blocks Resupply of Philippine Marine Outpost
- Global SITREP
- (10) Argentina Opposition Vows “No BRICS”
- (11) India Think Tank Says World War III Already Started
- (12) Netanyahu: Bet on Closer Saudi Ties
INSIDE THE BELTWAY
- (1) HOUSE TO INVESTIGATE ENERGY SECRETARY CCP COMMUNICATIONS: House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) said the committee would demand answers from Department of Energy Secretary Jennifer Granholm after news broke that she contacted her Chinese government counterpart days before the Biden administration announced Strategic Petroleum Reserve (SPR) releases beginning in 2021.
- Rodgers said Granholm undermined U.S. energy security by making SPR releases for political purposes and has since sold millions of barrels from the SPR to China.
- Why It Matters: In conjunction with the connections the Biden family has through Chinese energy firms and the money given to President Biden’s think tank by Chinese entities, the administration appears to be a successful target for elite capture. – R.C.
- (2) MANCHIN: FITCH FIRED A WARNING SHOT: Senator Joe Manchin (D-WV) welcomed Fitch’s downgrade of U.S. credit and said that U.S. policymakers should get the country’s finances in order.
- Fitch’s downgrade comes 12 years after Standard & Poor’s (S&P) downgraded U.S. credit.
- Why It Matters: After Congress returns from this month’s recess, they’ll only have two weeks to pass spending bills that will prevent an October government shutdown. A spending fight was already guaranteed, and Fitch’s recent credit downgrade will raise the tension on Capitol Hill. – H.B.
- (3) REPUBLICAN VOTERS LOSING FAITH IN ELECTORAL SYSTEM: According to a Monmouth University poll, 70% of Republican voters and over 25% of Independents polled said President Biden won in 2020 due to voter fraud.
- Democratic Senators facing tough reelections in states former President Trump won or only slightly broke for President Biden in 2020 are avoiding public comments on multiple Trump indictments over concerns that they have to win Republican voters to maintain their seats.
- Why It Matters: Republican distrust of elections risks lowering voter turnout needed to win key states, decreasing the perceived legitimacy of Democratic administrations, and could increase the chance of domestic unrest going into the 2024 election. – R.C.
- (4) 9TH CIRCUIT SAVES BIDEN BORDER POLICY: A three-judge panel from the 9th Circuit Court of Appeals saved the Biden administration’s post-Title 42 immigration policy, pausing a ruling by a lower court that would have ended new asylum restrictions the White House says caused a decrease in illegal crossings.
- House Democrats from New York are pressuring the White House to expedite work permits and legal status for migrants to take the burden of supporting them off of the city and state governments.
- “Folks had been focused in D.C. for the last three weeks, and then they showed up home, and they’re like, ‘Oh shit,’” a Democratic aide said.
- Why It Matters: The Biden administration is concerned that alleviating the financial burden of cities and states could incentivize more people to attempt to cross the border. Border encounters already jumped by 30% from June to July. The possible end of Title 8 asylum restrictions and the White House stepping in with federal money to alleviate pressure on local and state governments could set up another significant increase in illegal crossings this month. – R.C.
- (5) RUGER: SO FAR, NO INCREASE IN ELECTION YEAR GUN DEMAND: Ruger’s CEO said that despite the U.S. Presidential election just over a year away, retail traffic at gun shops is down, typical of this time of the year.
- Overall, Americans’ gun demand is still strong – July 2023 was the 48th month in a row with over one million background checks.
- Why It Matters: As summer winds down, Americans are focused on vacations before school starts, not the 2024 U.S. Presidential election. But the first Republican debate is on 23 August, so the Presidential race will get harder to ignore. Gun control shouldn’t be a top discussion item in this debate, but more Americans may start to anticipate policy changes from the next Congress, which gun control advocates could lead. – H.B.
- (6) FERC THREATENS FINANCIAL PENALTIES FOR TRANSMISSION PROVIDERS: The Federal Electricity Reliability Corporation (FERC) published a new rule it says will streamline the transmission permit process for hooking up green energy projects by financially penalizing transmission providers for missing certain study deadlines.
- Trade association WIRES executive director Larry Gasteiger said the new rule angers providers because missed study deadlines are outside their control.
- Why It Matters: The FERC is taking the same position as the rest of the Biden administration on new green energy initiatives that punishing energy companies will force the industry to bend to its will. In this case, there don’t seem to be any moves transmission providers can make to speed up timelines, as impact studies are not under their control. – R.C.
- (7) RUSSIA’S ECONOMY PROJECTED TO GROW: Despite Western sanctions, the International Monetary Fund expects that Russia’s Gross Domestic Product (GDP) will grow by 1.5% this year.
- In 2022, Russia was the most sanctioned country in the world, and its GDP fell 2.1%.
- Western sanctions prevented Russia from getting microchips and other technical components, but Russian policymakers eventually found sanction loopholes through neighboring countries.
- Why It Matters: The U.S.-led economic war against Russia has failed and has pushed Russia and China closer together. Moscow and Beijing have increased trade, and the BRICS+ countries are expanding their influence around the world at the expense of the United States. – H.B.
- (8) JEDDAH PEACE TALKS INCONCLUSIVE: Peace talks concerning the war in Ukraine ended Sunday with inconclusive results.
- The talks, originally planned to discuss Western security guarantees for Ukraine, branched into potential peace plans to end the war in Ukraine.
- China, which participated in the later stages of the talks, shunned Western calls to condemn Russia’s invasion.
- Why It Matters: The talks included delegations from 40 countries but were dominated by Ukraine’s demands for a total Russian withdrawal from occupied territories. Russia was not invited to participate in the talks, leading to one-sided proposals that Moscow labeled “doomed.” Until Russia is brought into the peace process, there is little hope of a negotiated settlement. Continued calls for Moscow to quit the war and go home are unrealistic and appear insincere and more of a Western information operation. – M.M.
China & Indo-Pacific SITREP
- (9) CHINA BLOCKS RESUPPLY OF PHILIPPINE MARINE OUTPOST: China used a water cannon against a Philippine military supply ship attempting to resupply an outpost a the Second Thomas Shoal in disputed South China Sea waters.
- The U.S. State Department said China’s “repeated threats to the status quo in the South China Sea were directly threatening regional peace and stability.”
- Why It Matters: China has laid illegitimate claims to a significant portion of the South China Sea, including territory within the Economic Exclusive Zones of the Philippines, Vietnam, and Japan. China’s increasingly aggressive behavior signals it is undeterred by U.S. security agreements with neighboring Pacific nations – a sign that Beijing feels unrestrained in its expansionist goals. – M.M.
- (10) ARGENTINA OPPOSITION VOWS “NO BRICS”: Two opposition candidates ahead of October’s elections in Argentina are vowing to reverse course away from China and reject membership in the BRICS economic alliance.
- “We are not going to BRICS,” said Patricia Bullrich, a presidential candidate who was once a leftist guerrilla under Perón and is now known for her hard right stance against criminal violence and protests.
- Javier Milei, another right-wing candidate, vowed to “break off relations with China because they are communists.” [READ MORE]
- Why It Matters: Bullrich is vying for the presidential nomination under Argentina’s center-right Together for Change coalition, which is leading the left-wing Union for the Homeland in polls. Milei is a longshot candidate, currently 10 points behind. Either candidate appears likely to end talks or potentially reverse a decision to join BRICS if they win in October. The BRICS annual summit runs 22-24 August, and Argentina is a leading contender to join soon after. – M.S.
- (11) INDIA THINK TANK SAYS WORLD WAR III ALREADY STARTED: Robinder Sachdev, president of the New Delhi-based Imagindia Institute, told Russian state media that he believes World War III has already started.
- Sachdev also called for BRICS and the Shanghai Cooperation Organization (SCO) to merge, as both organizations have similar goals.
- Sachdev said that new leadership is “needed now to shape the New World Matrix.” [READ MORE]
- Why It Matters: Joining the SCO is already seen as a stepping stone to BRICS+, with Iran most recently becoming a full SCO member and expected to join BRICS+ in the future. It seems more likely that SCO members join BRICS+ than the two organizations merging, as the SCO focuses on central Asian economic cooperation. – M.S.
- (12) NETANYAHU: BET ON CLOSER SAUDI TIES: Israeli Prime Minister Benjamin Netanyahu told reporters that closer ties between his country and Saudi Arabia would have “enormous economic consequences for investors.”
- Netanyahu added that the two countries could have increased business and trade ties without official diplomatic relations.
- Why It Matters: According to reports, Netanyahu believes that increased commerce between Israel and Saudi Arabia will deter Iranian aggression due to the potential for regional fallout. Analysts are skeptical that the Saudis will accept, but it’s clear that both countries are focusing on improving their economic prospects as the region shifts economic alliances eastward. – M.S.
— END REPORT
M.S. indicates analyst commentary from Mike Shelby
M.M. indicates analyst commentary from Max Morton
J.V. indicates analyst commentary from Jared Vaughn
R.C. indicates analyst commentary from Robert Cook
H.B. indicates analyst commentary from Harrison Burge