Good morning. Here’s your Daily SITREP for Monday, 02 October 2023.
- READ TIME: 7 Minutes, 11 Seconds
- Inside the Beltway
- (1) Biden Hints That Media, Internet Need Controls
- (2) Newsom Appoints Democrat Fundraising “Juggernaut” to Senate
- (3) Biden Signals Growing Third-Party Concern
- (4) Shutdown Averted With Clean CR
- Domestic INTSUM
- (5) UAW Expands Strike
- (6) Student Loan Payments Resume
- (7) Scalise: Biden Oil Lease Plan “Too Little, Too Late”
- Global SITREP
- (8) U.K. Putting Boots on The Ground in Ukraine
- (9) Polish Opposition Puts 1 Million Into the Streets
- (10) European Union Promises Kiev Funding Increase to Make Up For U.S. Cuts
- (11) Shots Fired in Taiwan Straits
INSIDE THE BELTWAY
- (1) BIDEN HINTS THAT MEDIA, INTERNET NEED CONTROLS: During an interview with ProPublica on Sunday, President Biden said one of the “big problems” with media is that “there are no editors anymore,” adding that people get their news from the internet but “have no idea if it’s true or not.”
- Why It Matters: President Biden stopped short of explicitly calling for censorship of protected political speech, but according to federal courts, the administration has engaged in effective censorship of political speech online. Biden compared the internet and social media platforms to the transformative effect the Gutenberg press had on European society and access to information with a negative connotation. This is another indicator heading into 2024 that the Biden administration will lean hard into fighting misinformation, likely using new tools and methods that will make censorship of protected speech more effective than previous election cycles. – R.C.
- (2) NEWSOM APPOINTS DEMOCRAT FUNDRAISING “JUGGERNAUT” TO SENATE: California Governor Gavin Newsom is expected to announce the appointment of EMILY’S List President Laphonza Butler to the open Senate seat of recently deceased Senator Dianne Feinstein (D-CA) without any conditions on Butler running for reelection in 2024.
- Why It Matters: Butler is heavily tied into California politics, was president of the Service Employees International Union (SEIU) and longtime labor organizer in Maryland and California, was a partner in consulting firm Bearstar Strategies with Newsom’s top political advisors, and has been a political ally of VP Kamala Harris since 2010. Newsom likely made this move to shore up support for his future presidential run when Butler could provide a significant boost to campaign fundraising and Newsom’s labor bona fides. – R.C.
- (3) BIDEN SIGNALS GROWING THIRD-PARTY CONCERN: President Biden said the effort by the bi-partisan No Labels group to mount a third-party presidential campaign would only serve to help elect a Republican, adding that former Senator Joe Lieberman’s effort “is going to help the other guy, and he knows.”
- Robert F. Kennedy Jr. said he would “create a sea change in American politics,” hinting that he could leave the Democratic primary to run as a third-party candidate.
- Why It Matters: Democratic lawmakers and party operatives have publicly remained lock-step behind a Biden reelection. But in the face of polling showing a vast majority of Democratic voters don’t want a Biden-Trump rematch and polling showing Trump pulling ahead in 2024, the Biden campaign is now taking the threat of a third-party candidate seriously. – R.C.
- (4) SHUTDOWN AVERTED WITH CLEAN CR: Congress passed a last-minute Continuing Resolution (CR) to extend 2023 funding levels for federal agencies until 17 November and extend Federal Aviation Administration (FAA) authorities until 31 December.
- Why It Matters: House Speaker Kevin McCarthy (R-CA) made a last-minute deal with House Democrats to get a clean CR passed in the House. Rep. Matt Gaetz (R-FL) said he will introduce a Motion to Vacate to attempt to oust McCarthy from the Speakership, which will likely fail. Whether McCarthy is successfully removed and replaced with someone less likely to reach across the aisle to Democrats or McCarthy remains with now as many as 90 Republicans opposing him, the stage is being set for the Democrats to flip the House in 2024. – R.C.
- (5) UAW EXPANDS STRIKE: The United Auto Workers (UAW) union expanded its strike to a Ford factory in Chicago and a General Motors plant in Michigan, citing a lack of progress on negotiations. UAW is not escalating the strike with Stellantis due to favorable negotiations.
- “We will win. Our strategy is working,” said UAW President Shawn Fain.
- 17% of UAW members – about 25,000 workers – across the Big 3 automakers are now on strike.
- Why It Matters: Fain has rewarded car companies that gave up more ground in talks and gradually expanded the walkouts to gain more leverage. The union’s latest work stoppages hit plants that make popular seven-passenger SUVs but have not yet expanded to factories that make big trucks and the largest SUVs – the car companies’ biggest moneymakers. – H.B.
- (6) STUDENT LOAN PAYMENTS RESUME: The three-year pause on federal student loan payments ended yesterday, leaving 40 million Americans with another monthly bill and less disposable income.
- “The economy will struggle in the fourth quarter, in meaningful part due to the end of the student loan payment moratorium,” said Mark Zandi, Chief Economist at Moody’s Analytics.
- U.S. consumers will reallocate around $7-8 billion per month to student loan payments, according to R5 Capital, a consumer research consulting firm.
- Why It Matters: Millions of U.S. households with student loan balances will be in financial trouble starting this month. More than one-third of new car buyers since 2020 had student loans, and now these Americans will owe an additional $350 per month on average in student loan payments. Retailers are bracing for lower quarterly sales and a disappointing Christmas buying season. – H.B.
- (7) SCALISE: BIDEN OIL LEASE PLAN “TOO LITTLE, TOO LATE”: House Majority Leader Steve Scalise (R-LA) said the Biden administration’s delayed five-year Outer Continental Shelf Oil and Gas Leasing Program is the most restrictive oil and gas lease program in U.S. history, adding that it is “too little, too late.”
- Scalise added that the White House intentionally delayed the plan for over a year and “has attempted to sabotage American energy at every turn.”
- Why It Matters: The proposed oil and gas lease program includes only three lease sales for the 2024 to 2029 period, a significant cut from the 14 lease sales in the previous plan. The Energy Information Agency quietly released a report in late August showing that green energy projects, including solar and wind, have received 80% of all Federal subsidies from the Department of Energy since 2016, with more than half of that in the last three years, but only account for 21% of generated power. This new program seems designed to constrain oil supply and force the adoption of more renewable energy sources that, according to the EIA, are significantly less efficient and more expensive, even with supply constraints. – R.C.
- (8) U.K. PUTTING BOOTS ON THE GROUND IN UKRAINE: British Defense Secretary Grant Shapps said on Sunday that he plans to put U.K. military forces in Ukraine and play a more active role against Russia in the Black Sea.
- Shapps said he intends to move U.K. military advisors and training for Ukrainian forces into western Ukraine and increase the British defense industry presence there.
- Russia’s Deputy Chairman of the National Security Council, Dmitry Medvedev, called the move foolish and said that Russia would definitely target British military forces inside Ukraine.
- Why It Matters: Such a move by the U.S. ally would escalate the conflict and almost assuredly result in Moscow specifically targeting U.K. military personnel and defense contractors. The U.K. is likely looking for a provocation it can use to generate a NATO Article V intervention as Ukraine’s military falters in its long-winded counteroffensive. Should the U.K. make such a move, Washington will likely attempt to follow – a move that could take the U.S. one step closer to a near-peer war and widen the divide between America outside of Washington and its ruling-class government. – M.M.
- (9) POLISH OPPOSITION PUTS 1 MILLION INTO THE STREETS: A collection of Polish opposition groups put an estimated 1 million protesters into the streets for a rally on Sunday, two weeks ahead of national elections.
- The leftwing groups are opposed to Poland’s nationalist government, led by the Law and Justice party (PiS), which has snubbed European Union pressure to accept greater immigration from outside of Europe.
- An opposition leader, Donald Tusk, promised to make climate change and acceptance of E.U. policies on women and minority rights a major agenda item.
- Why It Matters: PiS has pushed back on EU policies by cracking down on illegal immigration and focusing on traditional Polish culture. PiS is favored to win the election, but foreign money is flowing into Poland to support the opposition. It is possible that PiS could win, but not with enough seats to form a strong government. Poland is slightly ahead of the U.S. in the global movement to oppose mass immigration and diversity policies, and its survival in power could be a bellwether for the U.S. 2024 election. – M.M.
- (10) EUROPEAN UNION PROMISES KIEV FUNDING INCREASE TO MAKE UP FOR U.S. CUTS: E.U. foreign policy chief Josep Borrell said that Brussels would increase military support to Ukraine after the U.S. Congress passed a stopgap funding bill late on Saturday that omitted aid to Ukraine
- Borrell made the comments during a meeting with Ukrainian Defence Minister Rustem Umerov on Sunday.
- Why It Matters: Russia is a greater threat to the E.U. than the U.S., although the U.S. has provided the lion’s share of military aid to Ukraine at over $46 billion compared to the E.U. $27 billion. The E.U. increasing military aid to Ukraine would be consistent with its obligations and interests, although it lacks the industrial capacity to provide sufficient ammunition and weapons stocks to Kiev. If the U.S. Congress blocks further military aid in the coming budget, expect to see a rapid shift in focus to a negotiated settlement in the war. – M.M.
- (11) SHOTS FIRED IN TAIWAN STRAITS: A Taiwan Coast Guard cutter fired on a Chinese fishing vessel that rammed the cutter after it was caught illegally fishing 18km off the Taiwan coast.
- The Taiwan Coast Guard cutter eventually conducted an opposed boarding of the vessel and arrested 17 Chinese citizens.
- It is the second incident this year of Chinese fishing vessels ramming Taiwan’s coast guard during visit board search and seizure operations.
- Why It Matters: The fishing vessel in question had improvised armor and was likely part of China’s naval militia. It is possible the incident was a planned gray-zone action by Beijing to test the willingness of Taipei to police its territorial waters against aggressive Chinese naval militia. In the last such incident, the Chinese vessel escaped capture. With its aggressive naval militia activities against Taiwan, Beijing may be seeking a casus belli for larger military action against Taiwan – potentially pulling the U.S. into a conflict in the region. – 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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