Good morning. Here’s your Daily SITREP for Tuesday, 12 September 2023.
- READ TIME: 5 Minutes, 42 Seconds
- Inside the Beltway
- (1) Biden Admin Scrambles to Prevent UAW Strike
- (2) Perry: Trio of Spending Bills Won’t Make It to House Floor
- (3) McCarthy to Formalize Impeachment Inquiry Against Biden
- Domestic INTSUM
- (4) WSJ: Voters Feel Better About the Economy but Don’t Credit Biden
- (5) Secretaries Distance Themselves From 14A Trump Argument
- Global SITREP
- (6) China Cracks Down on U.S. Dollar Purchases
- (7) U.K. Can’t Muster Will to Label China a Threat
- (8) Chinese Military Delegation to Visit Mexico
- (9) Niger Claims France Amassing Invasion Force in Africa
INSIDE THE BELTWAY
- (1) BIDEN ADMIN SCRAMBLES TO PREVENT UAW STRIKE: Deputy Treasury Secretary Wally Adeyemo said former Obama economic advisor Gene Sperling and Acting Labor Secretary Julie Su are involved in talks between the United Auto Workers (UAW) union and the “Big Three” automakers, and that the Biden administration expects a contract agreement will be made before a potential strike on 15 September.
- Why It Matters: The Biden administration is scrambling to prevent an economic double-whammy of a major strike and possible government shutdown hitting simultaneously. UAW President Shawn Fain signaled over the weekend that a strike is coming and has previously criticized Biden Admin statements on the possibility of a deal. – R.C.
- (2) PERRY: TRIO OF SPENDING BILLS WON’T MAKE IT TO HOUSE FLOOR: House Freedom Caucus Chair Scott Perry (R-PA) said a trio of appropriations bills funding the Department of Defense, the State Department, and the Department of Homeland Security will not make it to the House Floor for a vote this month, and there aren’t enough votes in the Republican Conference to pass them.
- A House Republican, speaking anonymously, said the bills are unlikely to pass with the spending cuts Freedom Caucus members want, and if House Speaker Kevin McCarthy (R-CA) tries to pass them anyway, Freedom Caucus members will use procedural rules to kill the bills.
- Why It Matters: The House Freedom Caucus has already signaled it will fight tooth-and-nail for spending cuts, possibly even if it means losing the House to Democrats in 2024. McCarthy will now have to decide if he wants to risk losing his leadership position to a Motion to Vacate, which Rep. Matt Gaetz (R-FL) signaled over the weekend that he will invoke, or risk losing the chamber for Republicans. With control over the Rules Committee and enough votes to use parliamentary procedure to tank these spending bills, McCarthy may risk losing control of the House even if he sides with the Freedom Caucus. – R.C.
- (3) MCCARTHY TO FORMALIZE IMPEACHMENT INQUIRY AGAINST BIDEN: House Speaker Kevin McCarthy (R-CA) is expected to endorse a formal impeachment inquiry against President Biden during a closed-door meeting with the Republican Conference on Thursday, 14 September.
- Rep. Matt Gaetz (R-FL) said if McCarthy stood in the way of an impeachment, he would move to invoke a Motion to Vacate and remove McCarthy from the Speakership.
- Why It Matters: A formal impeachment inquiry will create another conflict between House Republicans, Democrats, and the White House heading into a possible government shutdown on 01 October. McCarthy appears to be siding with House Freedom Caucus Republicans over moderates, increasing the chance of both sides failing to come together to avert a shutdown with a Continuing Resolution. – R.C.
- (4) WSJ: VOTERS FEEL BETTER ABOUT THE ECONOMY BUT DON’T CREDIT BIDEN: The economic outlook has improved since December – especially among Democrats – but Americans don’t like how President Biden has handled the economy, according to the latest Wall Street Journal poll.
- Two-thirds of voters who usually vote Democrat say the economy is in excellent or good condition – up 9 points from December – but only 36% of independents view the economy favorably.
- About 60% of voters polled disapprove of Biden’s overall economic management, and 63% don’t like how Biden has handled inflation.
- Why It Matters: We’ll likely be in an official recession by next fall, but inflation could remain high due to low oil supplies, other commodities, and skilled labor. Swing voters and independents who already disapprove of Biden’s economic policies will be a challenge to his 2024 re-election campaign. – H.B.
- (5) SECRETARIES DISTANCE THEMSELVES FROM 14A TRUMP ARGUMENT: NBC News said it reached out to all 51 Secretaries of State and that most chose not to weigh in on whether former President Donald Trump should be disqualified from the 2024 ballot by the third section of the 14th Amendment, the so-called “insurrection” clause.
- Georgia Secretary of State Brad Raffensperger said disqualifying Trump from the ballot would “only reinforce the grievances of those who see the system as rigged or corrupt” and denying Americans the vote to choose was “un-American.”
- Why It Matters: The 14th Amendment argument was a longshot put forward by legal academics and used by political operatives to file lawsuits in a few states to try and bar Trump from the 2024 ballot. So far, most states are rejecting this argument, likely to avoid inflaming already high political tensions going into 2024. – R.C.
- (6) CHINA CRACKS DOWN ON U.S. DOLLAR PURCHASES: The People’s Bank of China (PBOC), the country’s central bank, is increasing its scrutiny of dollar purchases by domestic companies, according to a Reuters report.
- “The recent yuan depreciation has indeed been too severe,” said a PBOC source.
- Chinese companies that need to purchase $50 million or more will now need approval from the PBOC.
- Why It Matters: China is diversifying away from the U.S. dollar when the yuan’s value is plummeting. This year, the yuan has declined by about 6% against the U.S. dollar and is at the lowest level since the 2008 Global Financial Crisis. Meanwhile, China’s U.S. Treasury holdings since 2020 have declined from $1.1 trillion to $835 billion – a 24% drop. Expect more actions by China’s currency regulators to prop up the yuan’s value as U.S. interest rates and the dollar rise. – H.B.
- (7) U.K. CAN’T MUSTER THE WILL TO LABEL CHINA A THREAT: British government officials resisted calls to label China a threat after revelations that Beijing had run a spy network in Parliament for years.
- The revelation follows the arrest of a researcher in Parliament for spying – a charge which Beijing called a “malicious smear.”
- U.K. Business Secretary Kemi Badenoch said using labels like “foe” or similar language could escalate tensions between London and Beijing.
- Why It Matters: Despite obvious espionage against the British government, U.K. officials could not muster the courage to call out Beijing for its behavior. Badenoch reportedly said, “China is a country we do a lot of business with,” when challenged on her milquetoast critique of Beijing. This latest inaction by the U.K. demonstrates the fallacy of Western governments employing harsh economic sanctions against Beijing as a deterrent against an attack on Taiwan. – M.M.
- (8) CHINESE MILITARY DELEGATION TO VISIT MEXICO: A military delegation from China’s People’s Liberation Army plans to pay a five-day visit to Mexico starting Wednesday.
- The Mexican Defense Ministry invited the Chinese delegation to attend the celebration of Mexico’s Independence Day.
- This year marks the ten-year anniversary of the China-Mexico comprehensive strategic partnership.
- The Mexican government, meanwhile, has proposed an 81% increase in the country’s defense budget.
- Why It Matters: The PLA delegation visit to Mexico comes as several formerly U.S.-aligned South American countries have increased formal ties with China. Mexico’s socialist government is likely looking towards Beijing for assistance in improving its military capabilities after relations between Mexico and the U.S. have cooled over President Andrés Manuel López Obrador’s refusal to crack down on drug and human smuggling along the U.S. southern border. – M.M.
- (9) NIGER CLAIMS FRANCE AMASSING INVASION FORCE IN AFRICA: Niger’s new military junta accused France of building up a military invasion force in the West African ECOWAS political bloc countries.
- The junta’s spokesman said France had deployed military aircraft and armored vehicles in nearby Ivory Coast, Senegal, and Benin.
- French President Emmanuel Macron refused to comment on the allegations, saying that he would only take action at the demand of deposed Nigerien leader Mohamed Bazoum.
- Why It Matters: Niger has ordered both French and U.S. forces to leave Niger and revoked diplomatic recognition of the French ambassador after he refused to leave the country last week. France has taken a leading role in opposing the new military junta in Niger, although other Western nations, like the U.S., are cool to the idea of a military response to the coup. France appears to be dragging its feet on leaving the country and still has around 1000 troops in Niger – likely positioned to support an ECOWAS military option. – M.M.
— 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
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