Good Thursday evening! Lots going on today, but we’ll take a moment to note the passing of Stephen Wilhite, a computer programmer and creator of the animated GIF, who died earlier this month at age 74, according to The New York Times. Wilhite, by the way, insisted that GIF should be pronounced with a soft G. “The Oxford English Dictionary accepts both pronunciations,” the Times quotes him as saying. “They are wrong.” We beg to differ — the G stands for graphics, after all — but that debate can wait for another day.
Biden Announces Another $1 Billion in Humanitarian Aid for Ukraine
The Biden administration announced on Thursday that the U.S. will provide more than $1 billion in new funding for humanitarian aid for those suffering due to Russia’s invasion of Ukraine. The money will be used to “provide food, shelter, clean water, medical supplies and other forms of assistance” to victims of the aggression, the White House said in a statement.
The U.S. will also accept as many as 100,000 Ukrainian refugees fleeing the Russian attack, the White House said. And the U.S. will provide $320 million to promote democracy and human rights in Ukraine and neighboring countries.
Officials estimate that about 3.5 million people have fled Ukraine since the start of the war, and that 10 million have been displaced.
More broadly, the White House said that the U.S. will provide $11 billion over the next five years to support food security and combat malnutrition around the world in response to disruptions created by the war, which involves two major global food suppliers whose output could be reduced significantly.
Increasing pressure on Russia: In remarks delivered in Brussels following meetings with NATO and G-7 leaders, President Biden expressed support for expelling Russia from the G-20 group of industrialized nations. If those nations do not agree to do so, Biden said that Ukraine should be invited to the next G-20 meetings.
Biden also highlighted the military aid provided to Ukraine so far. “The United States is committed to provide over $2 billion in military equipment to Ukraine since I became president. Anti-air systems, anti-armor systems, ammunition and our weapons are flowing into Ukraine as I speak,” he said.
The president expressed confidence that the economic sanctions imposed by the U.S. and its allies would ultimately be effective. “The maintenance of sanctions, the increasing the pain and the demonstration of why I asked for this NATO meeting today is to be sure that after a month, we will sustain what we're doing, not just next month, the following month, but for the remainder of this entire year. That's what will stop him,” Biden told reporters.
Ukraine asks for more: Although he said he was grateful for the aid already provided to his country, Ukrainian President Volodymyr Zelensky asked for more military assistance Thursday. “One percent of all your planes, 1% of all your tanks,” Zelensky said in a video conference with NATO leaders. “We can’t just buy those. When we will have all this, it will give us, just like you, 100% security.”
But Western leaders made it clear that they are trying to avoid getting directly involved in the conflict, for fear of sparking a wider war. “We are determined to do all we can to support Ukraine,” NATO Secretary-General Jens Stoltenberg said. “At the same time, we have a responsibility to prevent this conflict from becoming a full-fledged war in Europe, involving not only Ukraine and Russia, but NATO allies and Russia. That will be more dangerous and more devastating.”
Biden Defense Budget Request to Top $800 Billion: Report
President Biden is expected to release his 2023 budget request on Monday and he’s reportedly set to ask for $813.3 billion in defense and national security spending.
The forthcoming request, reported by Bloomberg News, represents an increase of $31 billion, or 4%, over the $782 billion provided in the 2022 annual funding bill Biden signed last week — and a $43 billion boost compared to the White House budget office’s 2023 projection from a year ago.
The defense topline would include $773 billion for the Pentagon and billions more for the Department of Energy's nuclear weapons and national security programs at other agencies.
“The budget reflects the increasing military challenge from China and the development of costly new defense systems -- from upgrading the nation’s aging nuclear arsenal to development of new hypersonic weapons,” Bloomberg’s Anthony Capaccio and Roxana Tiron note. “The request will include $130.1 billion for research and development --the Pentagon’s largest-ever request in that category -- that will be steered to categories such as accelerated research into hypersonics and artificial intelligence. That’s about $15.6 billion more than the budget office had projected last year.”
Republicans press for more: A group of 40 Republican members of the House and Senate Armed Services Committees wrote to Biden Wednesday urging him to seek a 5% increase above inflation for defense spending. They cited Russia’s invasion of Ukraine as well as threats from China, North Korea and Iran in arguing that “the threats to our national security have grown exponentially” over the last year.
“This is a crucial period for our national security,” the letter said. “If we do not make the investments our military needs today, we will not be able to defend our nation or our allies in the future. The security of the free world depends on a credible American military.”
The letter was led by Rep. Mike Rogers (R-AL) and Sen. Jim Inhofe (R-OK), ranking members of the House and Senate Armed Services Committee.
Biden’s budget request last April sought more than $6 trillion in spending, including $753 billion for defense, a 1.7% increase. Lawmakers ultimately upped the defense number to $782 billion.
The bottom line: Defense spending is set to rise as lawmakers eye inflation, geopolitical developments and the need for U.S. military and nuclear modernization. Biden’s request is just that, and while progressives may again push back on rising military spending, Congress appears likely to again top the president's defense budget request.
We’ll have much more next week on Biden’s budget.
Jobless Claims Drop to Lowest Level Since 1969
Initial jobless claims fell to 187,000 in the week ending March 19, the Labor Department announced Thursday. The results were well below expectations and mark the lowest level of new unemployment claims since the fall of 1969.
Continuing claims also fell, to 1.35 million in the week ending March 12, the lowest level since 1970.
Robert Frick, an economist at Navy Federal Credit Union, said the report shows that “the labor market is growing even tighter and we should expect hiring to stay at least as strong as it’s been over the last few months” as the economy continues to strengthen.
The report will likely boost expectations that the Federal Reserve will move more aggressively on interest rate hikes. “There isn't much more to say about the labor market,” Jefferies economists Thomas Simons and Aneta Markowska said in a note. “It is extremely strong and this data is exactly the sort of evidence that has given the Fed confidence that they can raise rates more quickly to battle inflation.”
Chart of the Day: Big Change for the IRS
“For the past few decades, policymakers have increasingly relied on the tax code to deliver major social spending initiatives,” say Alex Muresianu and Garrett Watson of the conservative-leaning Tax Foundation. That’s one reason the IRS has fallen so far behind in processing tax returns, Muresianu and Watson claim, as the tax agency struggles to keep up with expanded responsibilities amid a shrinking budget.
The chart below shows just how much things have changed for the IRS as it took on responsibility for administering programs like the Child Tax Credit and the Earned Income Tax Credit, and then the massive pandemic relief programs that provided cash payments directly to millions of Americans.
Muresianu and Watson argue that the country would be better off if agencies such as the Social Security Administration handled those types of programs, rather than the federal tax agency. “In the long term, the most stable solution is to move social spending out of the tax code and let the IRS focus its resources on revenue collection,” they say.
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News
- U.S. to Accept 100,000 Ukrainian Refugees – Washington Post
- Windfall Profits Tax, Consumer Rebate Options Under Discussion – Roll Call
- After Slow Start, U.S. States Spend Billions in Emergency Rent Relief – Bloomberg
- Biden’s Mounting Midterm Threat: Inflation Angst Outweighing Historic Job Growth – Politico
- House Republicans Look to Counter Biden Agenda – Roll Call
- Another Stimulus Check Could Help Fight Inflation but a Fourth Is Unlikely, Experts Say – The Hill
- U.S. Union Chief Cautions Fed Against ‘Rashly’ Raising Rates – Bloomberg
- As BA.2 Spreads, Biden Administration Officials Call on Congress to Pass Covid-19 Funding – Politico
- Officials Say Fourth Doses Are Coming ... if They Can Buy Them – Politico
Views and Analysis
- Why We Need a 2023 Budget Deal Right Now — and How to Get It – John G. Ferrari, The Hill
- Congress Is Leaving Americans to Fend for Themselves Against Omicron BA.2 – Alex Shephard, New Republic
- The Bond Market Is the One Behind the Curve Now – Jenny Paris, Bloomberg
- Managing the Covid/Ukraine Inflation – Paul A. London, The Hill
- Is America’s Economy Entering a New Normal? – Jeanna Smialek, New York Times
- We’re in a Fossil Fuel War. Biden Should Say So. – Farhad Manjoo, New York Times
- Democrats Need to Fix Rural Economies—and Get the Credit for It – Nick Hanauer, American Prospect
- Democrats Are Kicking Rural America to the Curb. Again – Art Cullen, Washington Post
- Progressives Want to Put Medicare for All Back on the Table – Aída Chávez, The Nation
- Why Your Tax Refund May Be Bigger This Year – Alexis Leondis, Bloomberg
- Putin and Xi Exposed the Great Illusion of Capitalism – John Micklethwait and Adrian Wooldridge, Bloomberg