Good morning. Here’s your Daily SITREP for Tuesday, 05 September 2023.
TODAY’S BRIEFING:
- READ TIME: 4 Minutes, 34 Seconds
- Inside the Beltway
- (1) Biden Demands Increase Chance of Shutdown
- (2) Senate GOP Questions McConnell’s Future in Leadership
- Domestic INTSUM
- (3) O’Leary: Economic Chaos to Start in September
- (4) Proud Boys Sentenced for Seditious Conspiracy and Terrorism
- Global SITREP
- (5) Kim to Visit Putin, Discuss Weapons Transfers
- (6) Ukraine Defense Minister Gets the Boot
- (7) Iranian Enriched Uranium Stocks Increasing
- (8) Xóchitl Gálvez Wins Broad Front Primary
INSIDE THE BELTWAY
- (1) BIDEN DEMANDS INCREASE CHANCE OF SHUTDOWN: The White House sent a list of “anomalies” to Congress demanding increases to certain discretionary spending programs that cover refugee resettlement and welfare programs be included in a Continuing Resolution (CR).
- An Office of Management and Budget spokesman said the agency is urging lawmakers to include the “anomalies” in a combined CR to avoid “severe disruptions in government services.”
- Why It Matters: Biden’s demands will increase the likelihood of a government shutdown on 01 October by demanding increased discretionary spending that Freedom Caucus Republicans in the House are pushing against. The Senate returns from August recess today, and the House returns on 12 September, giving Congress and the White House only two weeks to work out differences over a CR, which is more likely than 12 Appropriations bills before the deadline. – R.C.
- (2) SENATE GOP QUESTIONS MCCONNELL’S FUTURE IN LEADERSHIP: A group of Republican Senators is considering calling for a special meeting, requiring only five Senators to convene, to discuss Senate Minority Leader Mitch McConnell’s (R-KY) health and future in the party leadership.
- McConnell ally Sen. Mike Rounds (R-SD) said McConnell is “perfectly capable” of carrying out his leadership position and that his competitors would “like to take him out.”
- Why It Matters: McConnell is a key figure for establishment Republicans to hold off a populist takeover of the party. America First Republicans Josh Hawley (R-MO) and J.D. Vance (R-OH) could see this as an opportunity to push McConnell out. McConnell is already gathering allies to counter this move, and some are making media appearances to counter coverage about McConnell’s health issues. – R.C.
DOMESTIC INTSUM
- (3) O’LEARY: ECONOMIC CHAOS TO START IN SEPTEMBER: Kevin O’Leary, investor and “Shark Tank” star, warned that already struggling small and medium-sized U.S. businesses could be in survival mode starting this fall.
- “60% of America is small business,” O’Leary said. “That’s where 60% of jobs come from. We’ve given nothing [fiscal stimulus] to them, so they’re struggling.”
- Higher interest rates and tighter regional bank regulations are preventing small companies from getting affordable lines of credit and operating their business like they used to, according to O’Leary.
- Why It Matters: While some small and medium-sized businesses will struggle, we’ll see some of the biggest U.S. companies, boosted by trillions of taxpayer stimulus through the CHIPS and Science Act and Inflation Reduction Act, power through the next recession. This separation between “haves” and “have nots” will spur political action in a Presidential election year. The same politicians who voted for trillions in spending, which benefited large corporations, will likely call for higher corporate tax rates and other punitive measures. – H.B.
- (4) PROUD BOYS SENTENCED FOR SEDITIOUS CONSPIRACY AND TERRORISM: Ethan Nordean and Dominic Pezzola, former leaders of the Proud Boys organization, were sentenced to 18 years and 10 years, respectively, for multiple felony charges, including Seditious Conspiracy.
- U.S. District Judge Timothy J. Kelly applied the federal terrorism sentencing enhancement due to charges that Nordean and Pezzola destroyed government property on January 6th.
- Why It Matters: Judicial observers say the recent Seditious Conspiracy and Conspiracy Against Rights convictions of the Proud Boys could act as a test case for charges against former President Donald Trump. Special Counsel Jack Smith brought new charges against Trump in the Espionage Act indictment in Miami and could do the same with Seditious Conspiracy for the January 6th case in Washington. – R.C.
Global SITREP
- (5) KIM TO VISIT PUTIN, DISCUSS WEAPONS TRANSFERS: North Korean dictator Kim Jong Un is expected to travel to Russia and meet with President Vladimir Putin this month to discuss arms sales for Russia’s Ukrainian war effort.
- U.S. officials say North Korea wants to offer artillery shells and anti-tank missiles in exchange for satellite and nuclear submarine technology.
- According to an unnamed U.S. senator, Putin is likely inviting North Korea to participate in a Russia-China naval exercise. The senator cited classified intelligence from South Korea.
- Why It Matters: Western military observers have cited Russia’s dwindling munitions for over a year now. That’s been a point of contention, however, and much less of a problem if North Korea ramps up its materiel support to Russia. – M.S.
- (6) UKRAINE DEFENSE MINISTER GETS THE BOOT: Ukrainian defense minister Oleksii Reznikov has been fired and will be replaced by a Crimean lawmaker named Rustem Umerov.
- Reznikov, who beat earlier accusations of corruption, was caught up in a scandal surrounding the military procurement of jackets. Reznikov billed the defense minister for three times the purchase price of the jackets.
- Why It Matters: Western intelligence agencies have repeatedly warned of endemic corruption in the Ukrainian defense ministry. Reznikov was previously identified as a key player in bilking the defense ministry out of billions in aid money. However, he survived an earlier putsch that saw a majority of his high-level staff removed. Given the renewed push to root out corruption by Kiev, it is likely that further firings of senior defense officials are imminent. – M.M.
- (7) IRANIAN ENRICHED URANIUM STOCKS INCREASING: The International Atomic Energy Agency (IAEA) reported on Monday that Iran has increased its stocks of 60% enriched Uranium despite attempts by intermediaries to slow the pace of enrichment.
- Uranium is considered weapons-grade once it is enriched to 90%.
- There has been no progress in talks with Tehran on reports that enriched uranium traces were found by IAEA inspectors at undeclared sites,
- Why It Matters: Iran already claims to have sufficient weapons-grade uranium and the technology to build at least one nuclear weapon – although it denies it has assembled a weapon. Iran continues its march towards a full nuclear weapons capability despite Western sanctions and resistance by the U.S. and Israel. Israel is likely to launch a military operation to destroy or disrupt Iran’s nuclear program once Iran obtains an operational level of weapons-grade fissile material. – M.M.
- (8) XÓCHITL GÁLVEZ WINS BROAD FRONT PRIMARY: Mexican Senator Xóchitl Gálvez will be the opposition presidential candidate after winning the Frente Amplio (Broad Front) presidential primary.
- Why It Matters: Gálvez was widely expected to win the Frente Amplio primary and will be the “conservative” – by Mexico’s standards – presidential candidate in the June 2024 elections. The ruling leftist Morena Party is scheduled to choose their nominee to succeed Mexican President Andrés Manuel López Obrador (AMLO) tomorrow. Former Mexico City Governor Claudia Sheinbaum, who is closest to AMLO, will likely win the Morena nomination. According to recent polling data, Sheinbaum is beating Gálvez in head-to-head polling by 10 points. – 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
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