Daily SA: McCarthy: Biden Probe Rising to Level of Impeachment Inquiry (Tue, 25 July 23) – Forward Observer

Daily SA: McCarthy: Biden Probe Rising to Level of Impeachment Inquiry (Tue, 25 July 23)

Good morning. Here’s your Daily Situational Awareness for Tuesday, 25 July 2023.


  • READ TIME: 5 Minutes, 14 Seconds
  • Inside the Beltway
    • (1) House Taking Up Chinese Fentanyl Sanctions Bill
    • (2) McCarthy: Biden Probe Rising to Level of Impeachment Inquiry
    • (3) Biden Aides Worried Over Losing Unions on Green Push
    • (4) Carmakers Waiting on New Emissions Rules
  • Domestic INTSUM
    • (5) U.S. Employment Data Strong
    • (6) Fed’s Balance Sheet Falling
  • Russia-NATO SITREP
    • (7) Russia’s Urals Oil Price Rising
    • (8) Kiev Asks for Halt to European Ban on Ukraine Grain
  • China & Indo-Pacific SITREP
    • (9) China Delegation Heads to North Korea


  • (1) HOUSE TAKING UP CHINESE FENTANYL SANCTIONS BILL: The House is scheduled to vote on the Stop Chinese Fentanyl Act of 2023, which would define Chinese entities and some government officials as foreign opioid traffickers, making them potential sanctions targets.
    • Senator Sherrod Brown (D-OH) said it is difficult to quantify the wealth fentanyl trafficking produces for China, and sanctions could cost them a lot of money.
    • President Biden’s homeland security advisor Elizabeth Sherwood-Randall traveled to Mexico on Monday to discuss the fentanyl crisis with Mexican and Canadian officials.
    • Why It Matters: Chinese government officials are key figures in cartel money laundering operations and fentanyl precursor smuggling into Mexico. Addressing the Chinese connection to fentanyl has strong bipartisan support, and this bill is likely to pass in both the House and the Senate. – R.C.
  • (2) MCCARTHY: BIDEN PROBE RISING TO LEVEL OF IMPEACHMENT INQUIRY: House Speaker Kevin McCarthy (R-CA) said the House GOP investigation into Biden family business dealings and the allegations the Justice Department attempted to cover up potential crimes is “rising to the level of an impeachment inquiry.”
    • McCarthy said an impeachment inquiry would provide Congress with the strongest power to gather information on allegations against President Biden and Hunter Biden.
    • Why It Matters: McCarthy is under pressure from Freedom Caucus Republicans to move on articles of impeachment introduced by Rep. Lauren Boebert (R-CO), but a formal impeachment, which requires a two-thirds vote to convict, is likely to end in an acquittal in the Democrat-controlled Senate. The House investigation and potential impeachment could present an opportunity for an alternate candidate, like California Governor Gavin Newsom, to supplant Biden as the Democratic nominee when most Democratic voters are looking for an alternative. – R.C. 
  • (3) BIDEN AIDES WORRIED OVER LOSING UNIONS ON GREEN PUSH: White House senior staff said the administration is concerned about the distance between President Biden’s economic policies and the United Auto Workers (UAW) and Teamsters Unions set to strike in the coming months.
    • The UAW union is withholding its endorsement of Biden, saying subsidies for domestic EV and battery manufacturing are going to “right-to-work” states unfriendly to unionization instead of well-paying union jobs. 
    • Why It Matters: The Biden campaign is concerned that losing the endorsement of the UAW could flip Michigan, which former President Trump won in 2016. At the same time, the Biden administration has to balance union endorsements with economic concerns over potential strikes in August and September. – R.C.
  • (4) CARMAKERS WAITING ON NEW EMISSIONS RULES: U.S. car makers are nervously awaiting two new National Highway Traffic Safety Administration (NHTSA) and Environmental Protection Agency (EPA) rules intended to push manufacturers to make more EVs.
    • The Alliance for Automotive Innovation, representing 42 car manufacturers in the U.S., said the Biden administration’s goal of EVs being 67% of all vehicle sales by 2032 was “neither reasonable nor achievable.”
    • Why It Matters: The U.S. grid is incapable of handling the mass adoption of EVs, and the Biden administration is simultaneously pushing rules that will force car makers to phase out internal combustion engines and rules that will decrease generation by pushing fossil fuel plants out of business. – R.C.


  • (5) U.S. EMPLOYMENT DATA STRONG: The latest U.S. employment data is some of the strongest reported in decades.
    • 80.9% of Americans 25-54 years old, the prime-age working population, are employed – the highest number since 2001.
    • In June, half of U.S. states posted either record-low unemployment or within 0.1% of a record low.
    • Why It Matters: Unemployment data, a lagging economic indicator, is not warning of a recession. Meanwhile, the Conference Board Leading Economic Index – including new manufacturing orders, new building permits, and eight other components – says we’re already in a recession. Considering all this data, our highest probability case is a recession in 2024. – H.B.
  • (6) FED’S BALANCE SHEET FALLING: The Federal Reserve’s balance sheet is the lowest since September 2021.
    • The central bank is quietly selling off about $80-85 billion of Treasuries and mortgage-backed securities each month.
    • Why It Matters: Unless financial institutions and foreign countries buy more Treasurys, interest rates on long-dated bonds will rise. Higher rates on sovereign bonds would increase rates on 30-year mortgages and corporate bonds, further tightening the housing supply, limiting economic growth, creating more shortages, and fueling another round of inflation. – H.B.



  • (7) RUSSIA’S URALS OIL PRICE RISING: Russia’s Urals grade of oil recently traded over $60 per barrel – the Group of Seven (G7) countries’ oil cap set in December 2022.
    • OPEC+ export cuts and high Asian demand for Russian oil pushed prices above the G7’s price cap.  
    • Most Greek shippers, which transport 33% of Russia’s oil, have respected the G7’s price cap, but Russia has built a shipping network to end-around the sanctions.
    • Why It Matters: President Biden’s oil strategy is failing. The Russian oil cap is no longer effective, so Moscow’s revenue will climb. Biden has drained America’s Strategic Petroleum Reserve (SPR), but oil prices are now increasing. In a desperate move, U.S. policymakers could further drain the SPR and introduce new sanctions against Russia. But OPEC+ can keep global supplies tight, so oil prices should rise. – H.B.
  • (8) KIEV ASKS FOR HALT TO EUROPEAN BAN ON UKRAINE GRAIN: Ukrainian President Volodymyr Zelensky asked the European Union to ensure that a ban on Ukrainian grain imports in some E.U. countries is lifted by a Sept. 15 deadline.
    • Zelensky called the grain bans “unacceptable and clearly non-European.”
    • Five E.U. states, including Poland, have banned Ukrainian grain imports and transits through their country to protect their agricultural economy from grain dumping by Ukrainian merchants.
    • Why It Matters: Ukraine exported agricultural products into Eastern Europe during the first year of the conflict as a path of least resistance, disrupting local economies. Now those countries have banned Ukrainian grain imports as a protection measure; however, with the termination of the Black Sea grain deal and low water levels on the Danube River, Ukraine has no way to move its grain to market. Expect some concessions from E.U. countries to enable the transport of agricultural products to destinations outside of Europe, but with significantly increased countermeasures to prevent grain from ending up in local markets. – M.M.

China & Indo-Pacific SITREP

  • (9) CHINA DELEGATION HEADS TO NORTH KOREA: A high-level Chinese Politburo delegation will visit Pyongyang this week, reportedly for celebrations marking the 70th anniversary of the end of the Korean War.
    • U.S. officials had previously asked Beijing to intercede with Pyongyang to de-escalate regional tensions over North Korea’s belligerent activity and continued ballistic missile and nuclear weapons programs.
    • Why It Matters: While it is unknown whether the visit by Chinese politburo member Li Hongzhong is due to the U.S. request, it is likely that Li will discuss North Korea’s recent ballistic missile launches and nuclear saber-rattling. If not on behalf of the U.S., then on behalf of Beijing and its strategic plans to reunify Taiwan with the mainland. Pyongyang’s repeated provocations are alarming Seoul and Tokyo at a time when Beijing would like them more relaxed and pliable to accept its plans vis-a-vis Taiwan. – M.M.

Low Intensity Conflict SITREP (Next 48 hours)

  • Suffolk County, NY – Suffolk County Democrats, climate activists, and other far-left activists are planning a protest against Suffolk County Republicans’ majority legislature denial of water and sewer expansion funding. The protest is scheduled for 1000 EDT on Tuesday, 25 July, at 725 Veterans Memorial Hwy, Smithtown, NY.


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

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