The budget crisis in the U.S. is still unresolved

Read Time:9 Minute, 49 Second

After the end of the Christmas holidays, which became a respite in the confrontation between the White House and Congress, the issue of “financial confrontation” and the adoption of the U.S. budget for 2024, which failed to be resolved in December, came to a head again. The main formal reason for blocking the budget was the issue of military tranches for Ukraine and migration decisions on the U.S.-Mexico border. Thus, the White House felt strongly that there was almost no money left to maintain the Ukrainian project, which only fueled the Republicans’ blackmail. The Pentagon allocated the last tranche at the end of December, and without new appropriations from Congress, the U.S. will not be able to deliver anything big to Kiev. At the start of the new negotiations, the budget deadline was about two weeks away, and many believed it was still the last two weeks of uncertainty. If Congress did not approve the new funding, the U.S. government would face another shutdown and, in the harshest of circumstances, two wars in which the Pentagon was mired and escalating confrontations in Asia in both the Middle East and the Pacific. An additional painful factor was that things were no better in Europe. New Ukrainian budgets were not planned to be agreed upon by Brussels unless they managed to bypass Hungary’s veto. And there it will be obviously less than the 50 billion euros requested by Kiev. The White House is forcing the Europeans to share their weapons more actively, but their arsenals are already empty. The last tranche from Germany included only one artillery self-propelled vehicle and 9,000 shells for 2-3 days of fighting. Air defense systems and ammunition for these systems are also in acute shortage amid attempts to find at least a thousand missiles for Patriot. And now Belgium has decided to postpone the delivery of F-16s to Kiev for 1-2 quarters. Already in June, Belgium has a choice, and the right-wing Flemish nationalist party Vlaams Belang, which opposes tranches to Ukraine, is leading in the polls in Flanders. Soon the Eurosceptics could become critically stronger in the heart of the EU, as recently in the Netherlands, and that would be a real disaster for the Eurobureaucracy in Brussels, making the position of the Ukrainian lobbyists quite deplorable. This would be a blow to the U.S. and Joe Biden’s international image, which would give him even more incentive to fight for the final budget approval.

However, in early January, after lengthy negotiations, there was at least some progress in the “budget wars between Congress and the White House”. Thus, both sides fixed the size of the future budget which is $1.6 trillion. Of this, 890 billion will go to military spending, and $710 billion for social services. The Democrats wanted to index spending to inflation, but the Republicans forced to cut spending by $30 billion, although in the scale of the entire state budget it is not so much. The downside of this compromise was the understanding that it would not be possible to solve the budget crisis and stabilize the U.S. national debt, which recently passed the record $34 trillion. The main budget items, such as defense, social services and interest payments on the national debt, will remain untouched, so the budget deficit and the debt will continue to grow rapidly. Congress, 10 days before the “point of no return”, wanted to spread an agreed-upon $1.6 trillion across all programs. The money was still not allocated as much as the White House had hoped, so they had to save money. Republicans demanded to cut spending on the U.S. Internal Revenue Service and send the savings to strengthen security at the southern border, which was stormed by 300,000 illegal migrants in December, which was unacceptable to Biden not for financial reasons, but for purely political ones. In a possible end to the budget rift, both sides had to hurry because Washington was facing a shutdown after January 19. Believing that this time the budget would definitely be adopted, Ukrainian lobbyists were already at a low starting point, preparing to get at least some tranches for themselves, albeit in a reduced amount. However, the situation turned out to be much more complicated and confusing, and the situation with migration in Texas came to the fore.

Against this background, the right wing of the Republicans tried to sink Speaker Mike Johnson’s budget deal with the White House, and they demanded more cuts in government spending, not the ridiculous $30 billion that Johnson had managed to “negotiate” in the new budget. But what was important was that at the same time the situation on the migration issue was also escalating. After his visit to the U.S. southern border, which is being stormed by hundreds of thousands of illegal immigrants, some Republicans announced their desire to organize a shutdown and suspend the U.S. government in order to somehow force Biden to strengthen border security and start deporting illegal immigrants. Because of the war with the cartels in Ecuador, Washington expected the number of illegals to skyrocket, even though more than 100,000 Ecuadorians crossed the U.S. border in 2023, a 370% increase. Texas deported illegals to the Democrats in New York and Chicago in retaliation, although there is no place to house them there. In New York, the migrants have to be housed in schools, and children have to be transferred to online education because of this. New York will have to spend $12 billion on the maintenance of illegal immigrants, and because of the lack of funds it is necessary to cut spending on social services and police. 130 thousand migrants have arrived in the city so far, which is already a disaster, and it is not clear what to do when they become 2-3 times more. Because of all that was going on, Speaker Johnson urgently called Biden to ask him to do something about the migrants, but the White House took an unconstructive stance, refusing even to recognize the problem. The individual states had to self-organize amid Washington’s paralysis, and the migration crisis turned into one of the key factors of the U.S. split, destabilizing the situation in America closer to the elections and preventing the budget from being approved to the chagrin of Ukraine and American citizens who receive their salaries from the state.

Because of the migration issue, just before the “X hour”, the budget deal in Congress was on the verge of failure. The Democrats flatly refused to make concessions to the Republicans on the migration issue. These were demands to start mass deportation of illegal immigrants, as well as to close 900 miles of the border with new fences and a wall, without the fulfillment of which no movement on budget approval could begin. Because of this, the allocation of tranches to Ukraine, which used to be in Biden’s care and is now held hostage to his “budget wars”, was also in question. Democrats began to accuse Speaker Mike Johnson of deliberately trying to derail the allocation of tranches to Kiev by tying them to the issue of migration and making his liberal political opponents guilty. Politically, from the Republican point of view, this was a sound strategy, because two-thirds of Americans demand a quick resolution to the migration crisis, and more than half of the U.S. population is already in favor of cutting the tranches to Ukraine. Democrats, on the other hand, appear to be the party that refuses to take popular action on migration and instead agitates for the continuation of an unpopular war. “The Ukrainian issue” was really not the best attempt to divert attention away from the migration crisis, and the media background became increasingly negative around this military conflict. Scandals about corruption and embezzlement of military tranches were added to the general problem, as well as the news about the death of right-wing American blogger Gonzalo Lira, who was constantly being arrested for criticizing Zelensky and was apparently a victim of Ukrainian intelligence services. To transfer all this negativity to Biden, it immediately angered many Republican speakers like Tucker Carlson. There is also a growing fatigue in the U.S. with militarism in general. The President was immediately pounced upon for his love of wars, and was attacked in Pennsylvania for organizing genocide in the Middle East. 55% of Americans favor solving domestic problems instead of waging endless wars, and this undermines the Democrats who persist in suggesting spending taxpayer money on distant and dubious conflicts.

In the end, all these factors did not play in favor of the White House, and the budget “agony” was lasting two more months. Congress postponed the new “financial battle” to mid-March, hastily adopting another short-term budget just to avoid the January 19 shutdown of the U.S. government. Amid the divisiveness in Washington, it will probably now have to live this regularly, finding month-to-month funds for the state. Right-wing Republicans tried to shove their initiatives to fight illegal immigration into the budget text, but to no avail. They were also outraged that Speaker Mike Johnson went along with the Democrats and didn’t bring the matter to a shutdown. In the week following the failure to pass the budget, immigration reform and the problem of tranches for Ukraine were already on the agenda of Congress. Here, Trump joined the right-wing Republicans and demanded that the Speaker not make concessions to the Democrats. For Trump, there is an obvious personal interest in this, because the worse things get on the U.S. southern border and the Ukrainian front, the easier it is for Trump to defeat Biden. Speaker Johnson was simultaneously threatened with the start of recall proceedings to discount him as Kevin McCarthy. He realized the precariousness of his position, so the chances that the migration deal would be quickly agreed upon were obviously slim. Accordingly, the discussion of new tranches to Kiev could drag on for two months, making the situation of Ukrainian lobbyists quite deplorable. While the budget wars stretch on for a long time, Congress is opening a new front in the fight against Biden. Lloyd Austin, who has so far “hidden” from everyone after his illness, has been invited to the hearings, while Hunter Biden was testifying at the end of February. By then, articles of impeachment against Biden may be prepared, stabbing him in the back in the middle of the Democratic primary.

Expectedly, the migration deal in Congress was also on the verge of failure. When the hearings on migration reform on the Capitol just started, the positions of the parties were completely opposed and did not imply compromise. Democrats demanded amnesty for all illegals, while Republicans want to deport them all. And the right wing of the Republicans, Trump supporters, outlined their “red line”. This is the refusal of any tranches to Kiev for an indefinite period, although earlier the Republicans had the idea of giving out money monthly depending on the situation on the front, but in revenge of Biden’s intransigence it was seriously tightened. More than a hundred Republicans voted against the short-term budget until March, and they were rather ready to shut down the U.S. government, as they did on the “Ukrainian issue” in spite of Biden. And they also continue to throw Mike Johnson off the Speaker’s desk if he makes a deal on migration and Ukraine. Washington’s unwillingness to make concessions on the migration issue has given rise to the conflict with Texas, which has become a separate landmark event that deserves a separate and detailed analysis.