Congress Prepares for Crucial Week
Author: Greg Valliere
December 11, 2023
THE GREAT FEAR that has gripped central Europe for the past two years is closer to reality, as Congress prepares to leave town without approving military aid for Ukraine.
AND THE GREAT FEAR that has gripped much of the Southwest U.S. — facing 10,000 illegal immigrants per day — may not get the legislative reform that it desperately needs.
THE STAKES ARE HIGH — especially for Joe Biden’s electoral prospects — if Ukraine’s defenses begin to crumble later this winter, and if major U.S. cities give up trying to curb tens of thousands of immigrants.
IN A LAST-DITCH ATTEMPT to jump-start negotiations for a deal, Ukrainian President Volodymyr Zelensky will visit Washington tomorrow to meet with Biden and Congressional leaders. His message: Ukraine could run out of arms within weeks.
THERE SIMPLY MAY NOT BE ENOUGH VOTES in the House to pass a Ukraine bill without sweeping immigration and asylum reforms, which looks like an uphill fight with only a week left in this session of Congress.
BIDEN, WHO SPENT THE WEEKEND FUNDRAISING in California, has only recently indicated that he would consider an immigration deal. He almost certainly will have to scale back his call for $60 billion in aid to Ukraine.
COMPLICATING THIS NARRATIVE: Hungarian Prime Minister Viktor Orban, a far-right politician, will meet this week with Republican lawmakers and members of the Heritage Foundation to discuss an end to U.S. military funding for Ukraine.
MANY DEMOCRATS ARE URGING THE WHITE HOUSE to accept an immigration deal. Their issue isn’t Ukraine, but rather it could ease some pressure on big cities, which are being crushed by a tidal wave of immigrants; an astonishing 10,000 asylum seekers are arriving in south Texas per day, and as they head north, big cities cannot accommodate the flood.
BOTTOM LINE: We still think a bill will pass this winter to aid to Ukraine, Israel, Taiwan, etc. It would include immigration reform. But a deal before adjournment late this week looks unlikely, and a $110 billion package would get a significant haircut.
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RECOMMENDED READING: This morning’s Wall Street Journal has a front-page piece by Fed watcher Nick Timiraos on the next big issue for the central bankers — when do they start debating rate cuts? It’s certainly not coming at this week’s FOMC meeting, and perhaps not for many months to come.
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