The debt ceiling showdown appears to be on the verge of resolution, pending a vote in the Senate, with a deal between President Joe Biden and House Speaker Kevin McCarthy to suspend the debt ceiling in exchange for a cap on some federal spending. The deal would roughly freeze discretionary spending at current levels for the coming year. But one area of federal spending received a reprieve from Republican fiscal conservatives, the defense budget. The budget will receive a 3 percent increase in the coming year, in line with the White House’s $886 billion spending proposal.
Over half of the Pentagon’s spending goes to contractors and the CEO of the biggest weapons firm in the world, Lockheed Martin, is already taking a victory lap. Speaking at the Bernstein Annual Strategic Decisions Conference for investors, Lockheed head James Taiclet celebrated the defense budget hikes as a win for his company, telling the audience today:
"Now, there's been the political activity going on around the debt ceiling lately. Even with that, the current agreement on the table, it's not passed all the way through yet, the Senate's still got to address it, is 3 percent growth for two years in defense where other areas of the budget are being reduced. And I think, again, that's as good an outcome as our industry or our company could ask for at this point."
Lockheed Martin received 73 percent of its net sales from the U.S. government in 2022 and invested $13 million in lobbying the federal government. Their lobbyists heavily focus their efforts on the defense budget, according to OpenSecrets. And Taiclet, whose $24 million compensation consists largely of performance related bonuses, is already celebrating in anticipation of a Senate vote on a bill that will lock in growth of the defense budget and pad his bottom line while imposing austerity on other areas of federal spending.
Eli Clifton is a senior advisor at the Quincy Institute and Investigative Journalist at Large at Responsible Statecraft. He reports on money in politics and U.S. foreign policy.
Images: Dennis Diatel via shutterstock.com and Screen grab via Atlantic Council/YouTube
Russia announced this week that its bilateral trade with China has almost completely moved away from using the U.S. dollar, highlighting the two countries’ commitment to reducing their reliance on the U.S.-led economic system.
Aside from reducing dependency on the Western-dominated global currency, these ‘de-dollarization’ efforts allow Russia and China to avoid the myriad sanctions now preventing Moscow from doing business on the international market.
Western sanctions have helped lead to a boom in trade between Moscow and Beijing since 2022, rising 26% to $240 billion this year. China has also become the world’s leading importer of Russian oil.
De-dollarization isn’t the only scheme Russia is deploying to avoid crushing sanctions. Russian officials announced last week at a United Nations meeting that the Kremlin is spending billions of dollars to dodge Western sanctions by developing new trade routes in Asia.
This plan includes two new transport corridors — one that would link Russia to Kyrgyzstan via the Caspian Sea, and another that would stretch from Belarus to Pakistan. The efforts build on previous plans to redirect trade, including the North-South Corridor, a railway route first conceived in 2000 that would connect Russia to the Indian Ocean via Iran.
After years of delays, Moscow loaned Tehran 1.3 billion euros last year to build its leg of the North-South route. Sergei Ivanov, Russia’s presidential envoy for environmental issues, said that the corridor gives Russia full access to the Persian Gulf, and that “no sanctions will affect it.” The newly announced routes would similarly allow Russia to bypass sanctions and access Asian markets.
Russia and Iran have also boosted their ability to transact with one another by linking their banking systems, as both face sanctions that limit their abilities to transact with the West.
The U.S. and European countries have heavily sanctioned Russia since its 2022 invasion of Ukraine, particularly hampering the Kremlin’s ability to export oil to the West and sell it at competitive market prices. If Russia transports goods through overland corridors that are outside of the jurisdiction of the sanctioning countries, it becomes much more difficult for Western powers to interdict, noted Markus Jaeger of the Atlantic Council.
“They want to reduce the dependency and vulnerability vis-a-vis unfriendly third parties,” Jaeger said.
But if history is any guide, Russia isn’t quite in the clear yet. Sanctions on Iran, including the maximum pressure sanctions imposed during the Trump administration, played a major role in slowing the development of the North-South route. Russia is now loaning money for construction to Iran and is expected to spend approximately $3.5 billion on the project by 2030, according to Russia’s Deputy Prime Minister Marat Khusnullin.
U.S. pressure has also complicated Russia’s economic rapprochement with China, which could face consequences from the West for its support of Moscow, according to Jaeger. He pointed to U.S. Secretary of State Antony Blinken’s planned visit to China this week, where he reportedly intends to warn Chinese President Xi Jinping that Washington is concerned about Beijing’s provision of aid to Russia’s military.
Jaeger said that, as China engages more economically with sanctioned countries or entities in Iran or Russia, the risk of becoming the target of European and American sanctions will increase.
“For the U.S., imposing secondary sanctions that affect Chinese entities is seen as a very antagonistic step by China, which risks leading to further tensions in U.S.-Chinese relations,” he said.
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Iraqi Prime Minister Mohammed Shia al-Sudani and Turkish President Recep Tayyip Erdogan attend a welcoming ceremony at Baghdad International Airport in Baghdad, Iraq, on April 22, 2024. REUTERS/Thaier Al-Sudani
Turkish President Recep Tayyip Erdogan visited Iraq Monday for the first time since 2011, marking a potential thaw in relations between the two neighboring countries, which have long clashed over Turkish attacks on Kurdish groups in Iraq’s north.
“For the first time, we find that there is a real desire on the part of each country to move toward solutions,” Iraqi Prime Minister Muhammad Shia’ al-Sudani said during a recent event at the Atlantic Council in Washington, D.C.
Sudani noted that the trip comes after more than a year of talks focused on addressing the biggest issues in the bilateral relationship. “For the first time, sensitive discussions are being held on every issue that represented barriers to the relationship,” he said. “And we agreed on all of these topics after a series of meetings and bilateral trips.”
The trip is a crucial part of the Sudani government’s efforts to stabilize Iraq and move forward from years of internal strife and war — a campaign made more urgent in recent weeks by escalating tensions in the region, as Iran and Israel’s shadow war has come out into the open.
Erdogan’s visit comes as Sudani returns from a week-long trip to Washington, where the Iraqi leader pitched a “new chapter” in U.S.-Iraq relations that could include a withdrawal of American troops from the country, which have become targets for Iraqi militias since the Gaza war began last year. He also sought new economic agreements and encouraged U.S. businesses to invest in Iraq.
Back in Iraq, Sudani and Erdogan were set to discuss enhanced cooperation to counter Kurdish fighters from the Kurdistan Worker’s Party (PKK), which Turkey and the U.S. consider a terrorist group. Turkey has for years mounted cross-border attacks on the PKK that have drawn backlash from the Iraqi government, citing sovereignty concerns.
In a notable shift, the two countries now say they are cooperating to fight the group. This will not, however, include joint military operations, according to Iraq’s defense minister. Questions remain about whether Iraqi officials are prepared to join Erdogan in his pledge to “permanently” destroy the organization in an operation later this year.
On the economic side, Sudani hopes the visit will lead to new agreements on trade to augment Iraq’s $17 billion “Development Road” project, which aims to increase Iraq’s capacity to serve as a transit hub for goods traveling between Asia and Europe.
Another deal will likely address the two countries’ shared water resources. Turkey controls the headwaters of the Tigris and Euphrates rivers, which provide most of Iraq’s freshwater, and Iraqi officials are hoping to persuade Turkish leaders to increase the amount of water that reaches their country.
Is America experiencing a crisis of confidence? That is the assessment of some world leaders from allied and partner nations in recent months.
Former NATO Secretary General Anders Fogh Rasmussen criticized the U.S. at the start of the year, “Recent global events in the Taiwan Strait, in the Middle East, in Ukraine are all results of American hesitance to actually lead.”
As he addressed Congress earlier this month, Japanese Prime Minister Fumio Kishida chided his audience for what he called “an undercurrent of self-doubt among some Americans about what your role in the world should be.”
One implication of these complaints is that the world would supposedly become more stable and secure if the U.S. simply possessed and demonstrated greater resolve. Given the wreckage created by American hubris during the first part of this century, we know that this is not true.
Another implication is that the U.S. should never reconsider or question its “leadership” role, as if the arrangements that were made after 1945 or 1991 are immutable for all time. According to this view, adopting a different strategy, shifting burdens to allies, or reducing commitments are all beyond the pale and a sign of irresolution.
The critics are mistaken about all this, and Americans should have the confidence to ignore them.
One of the biggest problems with our foreign policy is that U.S. policymakers remain enthusiastic about a “leadership” role that is ill-suited to current realities. American power is in relative decline, but our foreign policy is still defined by the pursuit of dominance in every region. Our political leaders are eager to reaffirm and expand U.S. commitments without any real debate over the risks or the resources that will be needed to make good on those commitments.
Consider the last few years. NATO expands as if on autopilot. The president pledges to send U.S. forces to defend Taiwan when we have no treaty obligation to do so. Every commitment to every ally, partner, and client is said to be “ironclad” and therefore beyond serious scrutiny.
Is this the behavior of a government that is hesitant and unsure about its international role, or is it the record of one that can’t say no to new entanglements? Far from suffering from a crisis of confidence, the U.S. still seems far too sure of itself. The U.S. doesn’t need to hear self-serving cheerleading from allies about how “indispensable” it is. It needs sober advice on how it can responsibly unwind the many unnecessary commitments it has accumulated over generations.
Instead of cutting back, the U.S. keeps taking on new dependents as if its power and resources were unlimited. The reality of overstretch becomes harder to ignore with each new addition. To the extent that U.S. resolve is being questioned in other capitals, it is the result of spreading around so many promises of support that it becomes difficult to believe them all.
Americans absolutely should be questioning our country’s role in the world. Besides being an essential part of democratic self-government, a thorough reassessment of our foreign policy is long overdue. One of the reasons why U.S. foreign policy has been so dysfunctional and destructive in so many places is that core assumptions about the U.S. role in the world haven’t been challenged and interrogated often enough.
The U.S. would avoid a lot of pitfalls if it didn’t arrogate to itself the role of dictating terms to other states and policing their behavior. What Prime Minister Kishida calls self-doubt is a hard-earned sense of humility that some Americans have learned from decades of costly and bloody policy failures. U.S. foreign policy has been marred by misguided ideological zeal for so long that we could stand to have a lot more doubting and questioning.
A major flaw in our foreign policy debates is that our policymakers often fail to recognize policy failure and insist on plowing ahead with more of the same. The continued U.S. use of broad sanctions is one example of this. Despite considerable evidence over the decades that they achieve none of the government’s stated policy goals and cause significant harm to the civilian population of the targeted countries, the U.S. relies on the economic weapon more heavily now than ever before.
Waging economic war on recalcitrant states is one of the ways that Washington routinely exercises its “leadership,” and in practically every case that exercise of “leadership” has backfired and exacerbated the problem that the sanctions were supposed to ameliorate. The terrible results of the “maximum pressure” campaigns against Venezuela, Iran, and North Korea speak for themselves. If anything should cause people in Washington to doubt U.S. “leadership,” it is the repeated failure of sanctions, but nothing like that has happened.
Refusing to question the current U.S. role in the world is a path to stagnation and eventually exhaustion. An overcommitted U.S. cannot honor all the promises it makes. If nothing changes, that will set the U.S. up for humiliating climbdowns or dangerous conflicts in the future. It would be far wiser for Washington to begin shifting responsibilities to capable allies now instead of trying to shore up an unsustainable status quo.
The U.S. must be able to adapt its foreign policy to present-day realities, and that will necessarily involve reassessing the nature and extent of U.S. involvement in several regions. Clinging to tired dogmas about “leadership” that were created for a different world locks the U.S. into an overly ambitious and dangerous strategy whose costs far exceed the benefits.
The U.S. needs to have the confidence to reject a strategy that does such a poor job of advancing and securing American interests.