Friday News Roundup — April 14, 2023
Greetings again from Washington, D.C. We are back from our break and we hope that all of you have been able to enjoy the start of spring. To those celebrating Passover, Easter, and Ramadan, we hope that you find blessings in the season of rebirth and renewal.
In Washington itself, there is the quiet of recess, but last week’s indictment of former President Trump has marked a new historical precedent; shifted 2024 nomination prospects further in Trump’s favor; led to follow-on salvos between the Manhattan DA and House Republicans; and adds to the broader legal drama with pending cases in Georgia and before the Special Counsel.
Officials moved yesterday to arrest 21-year old Air National Guardsman Jack Teixeira of North Dighton, Massachusetts, for the massive leak of intelligence briefing documents found on a Discord server. While the documents raised questions about the war in Ukraine and U.S. intelligence programs overseas, discrepancies in the documents raised questions about foreign intelligence manipulation as traditional and social media raced investigators over the past weeks to find the source.
Both transatlantic and transpacific relations were on the agenda, as President Biden traveled to Belfast, Dublin, and Counties Mayo and Louth, meeting with UK Prime Minister Rishi Sunak and Irish Taoiseach Leo Varadakar and also honoring the 25th anniversary of the Good Friday peace agreement. In California, Speaker McCarthy, the leaders of the Select CCP Committee, and others met with Taiwanese President Tsai Ing-wen at the Reagan Library. Beijing responded with PLA exercises, though analysts have noted for now that the military reaction appears more muted than when former Speaker Pelosi visited the island.
Joshua C. Huminski, the Director of the Mike Rogers Center for Intelligence & Global Affairs reviewed “Red Arctic” by Dr. Liz Buchanan. A fascinating look at Moscow’s policy towards the high north, Buchanan argues that the Kremlin wants, needs, and pursues a cooperative policy, at least for now. How the war in Ukraine may affect this policy remains to be seen, but could well push Russia into a more confrontational posture or drive Moscow closer to Beijing as it needs foreign investment to open the region.
Huminski also offered his reflections on the United Kingdom’s Integrated Review Refresh for Breaking Defense. A sensible balance of the urgency of supporting Ukraine and securing the Euro-Atlantic, the Review also outlines how London will “tilt” to the Indo-Pacific. Whether the Review survives a possible change in government is an open question.
In the Hill, Huminski pushed back against arguments that suggest supporting Ukraine or backing Taiwan is a binary choice. He suggested that such claims were too narrow in their conception of American power and that a broader view would see Washington’s influence in arms and alliances.
Ethan Brown, Senior Fellow for Defense Studies, argued this week in a piece for the Modern War Institute (West Point) that increased security force assistance — integrated security training, shared practices, and embedded personnel — offer a superior deterrent capability to vague strategy and weapons sales after that fact, and one that is much more cost-effective than force-shaping on the fly after crisis such as the Ukraine invasion.
In this week’s roundup, Dan Mahaffee looks at how allies abroad are building capabilities, but hedging their assumptions about U.S. leadership. Ethan Brown decries “spending for strategy”. Robert Gerber argues that the U.S. needs to worry more about the federal deficit, and Gracie Jamie covers Italy’s response to a surge in migration putting many in danger on the Mediterranean Sea.
Allies, Autonomy, and American Reliability
Dan Mahaffee
I was extremely fortunate to spend the last week in Tokyo. The conversations were engaging on a range of important issues — geotech, regional security, trade, etc. — and few if any can compare with Japanese hospitality. The timing was also fortunate as not only did I get to see the famed cherry blossoms in both capitals, but also I was thirteen time zones opposite the media circus of the Trump indictment. Leaving Washington and our politics — observing them from beyond the Beltway, or even more removed beyond our borders — is always a helpful shift in vantage point. New perspectives can lead to new insights; you can see how various threads come together. From abroad, you can see how our allies are looking at the state of our politics, the worrying dynamics of an era of competition, and, therefore, hedging and building their own capabilities.
As the 2024 election appears to be on the path to a Biden-Trump rematch, there is apprehension among friends of the United States. Like most Americans, they have their concerns about either candidate winning. Certainly President Biden has been a key leader of the western coalition during Russia’s invasion of Ukraine, but his economic approach has been unsatisfactory with concerns about subsidies and protectionism for green energy and little in the way of new trade dialogue (beyond the Indo-Pacific Economic Framework, which lacks market access). A return to office by President Trump brings greater fears of “America First” policies, the disruption of alliances and treaties, and broader questions about American democracy. With either candidate, there are frank questions about their age, and, regardless of nominees, our culture war hyper-politics do not appear to be abating. While our military power remains strong, there are questions about our political will to use it, as well as the economic underpinnings of our strength.
Our allies see this, and they hedge their position — sometimes loudly, sometimes more subtly. French President Macron has certainly demonstrated the former. His comments returning from Beijing have caused frustration and anger on both sides of the Atlantic, but despite the media coverage, this is not surprising. Macron has long spoken of strategic autonomy for Europe, and his approach to relations with Washington has always been more neo-Gaullist than atlanticist. It is welcome to see Europe having a frank discussion about its capabilities. The invasion of Ukraine laid bare Europe’s shaky defense footing as well as its energy dependence. The rise of U.S.-China tensions, as well as divisions in Europe’s approach to China, are forcing tough questions in European capitals, as well as the boardrooms of European multinationals. While most of the attention has been on the remarks regarding Taiwan, Macron’s comments on reducing reliance on the U.S. dollar should be even more concerning.
Japan on the other hand, reflects a more subtle hedging. The U.S.-Japan military alliance is seen as the cornerstone of Japan’s security. However, Japanese leaders have not forgotten President Trump openly questioning the value of U.S. alliances and whether allies in East Asia should be paying for the U.S. military presence — less an alliance and more a protection racket. In the face of Xi Jinping’s consolidation of power, Communist China’s military buildup, continued detentions of Japanese executives in mainland China, and repeated missile tests from North Korea, Japan could only look on as President Trump touted his friendship with Xi (at least until the pandemic) and embarked on quixotic diplomacy with Kim Jong-Un.
Therefore, Japan’s increase in military spending and acquisition of counterstrike capabilities is not only a response to the increasingly dangerous neighborhood, but also a realization that Japan may one day need its own capabilities independent of the United States. Like Europe, all of this comes with the complex backdrop of continuing economic ties, interdependence in fact, with China. Even the AUKUS relationship with Australia and the United Kingdom faces similar questions. There are the promising ties to be built in terms of submarine capabilities and a range of advanced technologies, but will there be the political will to continue these efforts, given their high cost and both countries’ economic ties to China. More strategically, how we expand AUKUS and other collaborative efforts will be critical to their reach and efficacy. It will also be necessary in words and actions to counter Chinese and Russian propaganda that paints U.S. alliances as the return of white, colonialist practices to audiences in the Global South.
On one hand, the more capabilities that our allies build and can bring to bear, the better. If we want Europe to carry more of the burden for its security, it will inevitably need to be more strategically autonomous. It is important for our Indo-Pacific partners to build up their capabilities and work to better interface with each other and with the U.S. military. On the other hand, we need to recognize at home that these trends are not just about the threat perception of Moscow or Beijing, but concerns about what happens in the United States as well.
Spending for strategy is a risky gambit
Ethan Brown
The war in Ukraine has, if nothing else, fundamentally altered the congressional appetite for spending in the name of national security. On the one hand, continued investment and expansion of the National Defense Authorization spending has yet to fall behind rates of inflation, yet any chance of streamlining and incentivising efficiency in the defense industrial base is the first reality to suffer. Further, as Eastern Europe remains the laser-focus of Western strategists and defense planners, there is a widespread, reactionary belief that the United States can outspend opposition in the security arena to deter aggression, defeat existing and present threats, and offset the risks to our own armed forces in advance of conflict…outsourcing a war when all the chaff and fodder is stripped from the lingo.
Two weeks ago, Defense Secretary Lloyd Austin notified congressional armed forces committees of his intent to authorize expanded security transfers to Taiwan, with the first pool exceeding $1 billion in weapons, equipment, and other security aid. The effort to do so will utilize the same congressional authorities employed by the Biden administration for Ukraine support, which would include White House requests to backfill transferred equipment from DoD coffers and warehouses that is being sent to Taiwan.
The 2023 NDAA already approved a total of $3 billion in aid to Taiwan, yet funding authorities from congressional appropriators did not pass voting in the FY23 spending bill. In short, there is paper saying $3 billion in security aid is planned for Taiwan, yet the actual dollars to fund this endeavor do not, and will not, exist in reality. This is what prompted Secretary Austin to circumvent the typical DoD-State Department management of transactional security transfers to partners and allies, and instead utilize the Presidential drawdown authorities which have largely underwritten the Ukraine aid program for the past 14 months. Of note, the Pentagon has also reportedly asked Congress to approve up to $2 billion in Foreign Military Financing — a State Department grant program allowing non-allies and emerging partners to purchase U.S. military tech — for Taiwan’s growing security demands. These were approved…sort of…in the form of a U.S.-backed 12-year term loan to Taipei.
And this analysis would be remiss in failing to reiterate that there is currently a $19 billion backlog in weapons sales to Taiwan, owing to an unwieldy, poorly managed, and poorly overseen Title 22 foreign military sales process managed by the Defense and State Departments, further contracted by an overwhelmed defense industrial base. Taiwan is one of many U.S.-supported entities who have taken a second-tier designation to the Ukraine aid provided by the U.S. government, who has been the sole recipient of such Presidential drawdown authorities over the past year, with another $2.5 billion soon crossing the Atlantic for the front lines and coming spring offensives. This takes the current tally to a staggering $35.1 billion in security aid alone. For context, the U.S. provided approximately $4.89 billion to Afghanistan in all of 2019 — the final year of concerted combat operations before U.S. forces began the tumultuous preparations for withdrawal in 2021.
Greater issues reside on the horizon for 2023 when it comes to defense spending, the resource pool from which both the promised Taiwan aid, and continued assistance to Ukraine depend — to say nothing of the expanding defense budget which is traditionally a bipartisan matter-of-course. That looming issue is one of a divided congress over the debt ceiling and continuing resolutions to cap defense spending at FY2023 levels. With the house now controlled by the Mccarthy regime, cutting government spending is, and will most certainly be, a leading priority as inflation continues to wreak havoc on American economies. The FY24 budget is one that is all but certain to hedge around significant cuts, even when defense spending historically serves as congressionally sacrosanct. The House is likely seeking to curb federal spending while leaving defense budgets intact, even with a FY2022 debt ceiling serving as the key negotiating point when it comes time to haggle over a FY2024 spending bill.
These two threads come together in one stark and high-risk reality: that American efforts to contend with adversaries, rivals, competitors and threats abroad has hinged on outsourcing the effort in a post-GWOT chapter of our history, meaning American taxpayers are increasingly footing the bills of our national security strategy. That strategy, the one released by the Biden administration in October of last year, prioritizes strengthening partnerships and cooperative security with a particular eye on Chinese and Russian aggression, while revitalizing our defense industrial capacity to evolve and support the proliferation of new and emerging technological and non-kinetic methods of competition.
The issue is that the only tool used to pursue this particular endeavor to date has been spending more money that isn’t appropriated on security aid that isn’t actually available, but the economic impact grows apace with the spending. Spending for strategy is not merely a risky gambit, but unsustainable when our export of security aid comes at a time when our own defense inventory is aged, outdated, and straining to evolve from a counter-terrorism construct to a new international arena of warfighting and operations below the threshold of warfare.
On one hand, critical review can understand and appreciate the need for a debt ceiling; it’s a hard sell arguing in favor of more government borrowing and spending when those appropriated funds hardly produce a viable return on investment. On the other hand, should the export of security aid suddenly and sharply end or contract, what message does it send to both allies and adversaries on American investment in a stable world order? There are few good answers, but continuing to foot bills with indeterminate payback options, and worse, an inability to fill the orders by eager partners who are counting on our aid, is no replacement for a coherent strategy for countering China’s growing influence and Russia’s clear and present danger to the liberal order.
A Tale of Two Economies
Robert W. Gerber
The streets are blocked off near the White House this week. This signals that the annual gathering of global finance ministers for the World Bank/IMF meetings is underway. Prognostications on the state of the world economy tend to accompany these meetings. This year’s expert estimates showcase what statisticians call a wide standard deviation because there are so many variables at play: energy prices, Beijing’s ambitions, climate change, and of course the war in Ukraine. IMF Managing Director Kristalina Georgieva said, “This war has distracted the world’s attention from many other pressing problems. It not only kills people. It is pushing up food prices. It is creating more geopolitical tensions.” In its global economic outlook, entitled “A Rocky Recovery”, the IMF is forecasting 2.8% global GDP growth this year, a slight reduction given concerns about the health of the banking sector. It expects the U.S. GDP to grow 1.6% although the U.S. Treasury Department is more bullish. Secretary of Treasury Janet Yellin said earlier this week, “I wouldn’t overdo the negativism about the global economy…I think we should be more positive.” She did however warn of unsustainable debt burdens in developing countries.
Certainly the U.S. economy has good things going for it. The Economist calls U.S. performance “astonishing.” The London-based publication cites the innovative nature of the American economy, which is attracting strong foreign investment and foreign talent in ways that other countries envy. The White House is broadcasting the fact that inflation numbers appear to be trending downward. Both are correct. But there’s a problem on the horizon that is convenient to ignore: federal deficits and debt — not just overseas, but here at home. The federal budget deficit hit $1.1 trillion in the first half of fiscal year 2023, a 63% increase over a year ago. The Congressional Budget Office said revenues fell 3% while spending increased 13%. Major drivers were expenditures on social security, medicare, student loan forgiveness, federal deposit insurance, and interest on debt. Total U.S. debt reached a record $31.46 trillion or 120% of GDP this year.
The debt problem is not only a future concern, it is also a “now” problem. The U.S. government is already spending 7% of its budget on debt payments and payments will go up because of higher interest rates. Debt financing crowds out spending on other priorities. It could also contribute to higher interest rates and general financial risk across the board. According to the Peterson Institute, “Federal borrowing competes for funds in the nation’s capital markets, thereby raising interest rates and crowding out new investment in business equipment and structures.” In a recent Pew Research Center poll, 57% of Americans cited reducing the budget deficit as a top priority for the president and Congress to address this year, up from 45% a year ago. Congress and the White House will soon have to negotiate a new debt ceiling. This is an important opportunity to address a problem that both parties helped create and a chance to put federal spending on a reasonable downward trajectory. In 2020, CBO offered 83 options for reducing the deficit, some of which might actually serve as a starting point for policymakers (I am not endorsing any particular measure). Concerted action would both help the inflation problem and put us on more solid footing to navigate the bumps in the road in a future uncertain world.
Italy Declares State of Emergency in Response to Migration Surge
By Gracie Jaime
On April 11, Italy declared a six-month national state of emergency in response to the country’s surge in migrants. The government stated the declaration was necessary “to carry out with urgency extraordinary measures to reduce congestion” in the Mediterranean. The decision came after the Italian Coast Guard escorted two boats holding 1,200 migrants to the Italian coast. Both ships had been stranded between Italy and Malta along the most common immigration route.
The first vessel came from the Libyan port city of Tobruk, leaving on April 4, before it ran out of fuel 170 miles southeast off the Calabrian coast of southern Italy. Along with fuel problems, water had entered the hull and many passengers needed medical attention. The boat’s captain left without a trace. The vessel first sent out a call on April 9 to Alarm Phone, but it had taken more than 24 hours for the Italian Coast Guard to reach the boat.
A spokesperson from Alarm Phone named Maurice Stierl noted, “Malta is not really taking any rescues, It means that these journeys become really long and really dangerous.” However, a spokesperson from Sea-Watch International said that Maltese authorities had sent a merchant’s vessel to the boat’s aid with fuel and water. He noted that the operation was “really, really tricky” due to weather conditions with waves reaching five feet tall. Meanwhile, the Italian Coast Guard sent out another rescue vessel for a notice of a fishing boat carrying around 800 people 120 miles southeast of Syracuse in Sicily. The ship endured intense overcrowding, which made the rescue operation difficult.
The topic of immigration continues to be an ongoing debate in Italy, particularly on the logistics of handling the arrival of migrants. Prime Minister Giorgia Meloni has stated the country will enact a “naval blockade” against migrant boats and limit the number of individuals the government can help. Organizations are calling for European countries to find a coherent way of handling migrant arrivals and devoting more resources. Advocates emphasize migrants’ lives are in danger. The concerns continue after many migrants are fleeing poverty and taking extreme risks through their journey.
The United Nations has estimated more than 28,000 migrants have arrived in Italy by sea since the beginning of the year. The highest number of migrants reported was in 2016, topping 181,436 sea arrivals that year alone. In 2022, the United Nations reported that 1,368 migrants were either dead or missing en route to Italy. The most common countries of origin this year are Côte d’Ivoire, Guinea, Bangladesh, Tunisia, and Pakistan.
News You May Have Missed
Brazilian President Lula Visits China
On April 12, President of Brazil Luiz Inácio Lula da Silva began a visit to China to discuss trade and to advocate for peace in Ukraine. Brazil hopes to make agreements to secure their massive trade relations with China, their largest export partner, and to receive investments for infrastructure projects. Lula’s visit to China comes two months after the Brazilian President visited President Biden at the White House to discuss climate change and support for the Amazon Fund to combat deforestation and promote sustainability.
North Korea Claims to Test Solid-Fueled Missile
The North Korean regime claimed that a recent ballistic missile test was a successful launch of a solid-fueled missile. Compared to more volatile liquid fuels, solid-fueled rockets can be launched more quickly and dispersed to less-complex launch sites. The test triggered alarm in Japan, and North Korea claims the missiles can reach the continental United States.
CCP Announces AI Rules
The Cyberspace Administration of China released a draft regulation on generative AI for public comment. The rules require AI to work in a manner consistent with “Core Socialist Values” and list a range of forbidden topics. As countries and their corporate leaders race to launch generative AI systems, questions about CCP censorship and its impact on China’s AI development will grow.
The views of authors are their own and not that of CSPC.