Republicans Notch Initial Debt-Ceiling Victory

Happy Thursday! Don McLean transcends. 

Quick Hits: Today’s Top Stories

• The House voted 217-215 Wednesday to pass a bill that would raise the debt ceiling by $1.5 trillion or through March 2024, cut discretionary spending to 2022 levels and add a 1 percent yearly growth cap, claw back unspent COVID-19 aid, and block President Joe Biden’s student debt relief plan, among other measures. The bill won’t pass the Democratic-controlled Senate—and Biden has vowed to veto the act if it did—but its passage was a victory for House Speaker Kevin McCarthy, who has struggled to unite his fractious conference and goad Biden to the negotiating table.
• Biden and South Korean President Yoon Suk Yeol announced Wednesday the United States will deploy a nuclear-armed submarine to South Korea—which will not pursue a nuclear arsenal of its own—to strengthen deterrence against North Korea, which has tested an increasing number of weapons in recent years. Also under the “Washington Declaration,” the U.S. and South Korea will form a Nuclear Consultative Group to plan deterrence and response to nuclear incidents in the region.
• Chinese leader Xi Jinping and Ukrainian President Volodymyr Zelensky spoke Wednesday for the first time since the Russian invasion began last year. Xi has close ties with Russian leader Vladimir Putin—he spent three days in Russia last month—and has been portraying China as a peacemaker in the conflict. Zelensky described the call as “long and quite rational” and said the leaders discussed how to achieve peace, which he insisted cannot come “at the expense of territorial compromises.” After the call, China’s Foreign Ministry announced it will send an envoy to Ukraine and other countries to discuss a political settlement, and Ukrainian officials announced the appointment of an ambassador to China.
• Jailed Russian opposition leader Aleksei Navalny said Wednesday Russian authorities have announced new extremism and terrorism charges against him which could mean life imprisonment. An anti-corruption activist and Kremlin critic who returned to Russia in 2021 after a poisoning attempt he blamed on the Kremlin, Navalny is already serving a sentence for fraud and contempt of court, and his health has declined while behind bars.
• White House National Security Council spokesperson John Kirby confirmed Wednesday a second American has been killed during fighting between forces supporting two rival generals in Sudan. A family spokesperson said the victim was Bushra Ibnauf Sulieman, a doctor teaching in Sudan. Kirby said many of the estimated 16,000 Americans still in Sudan don’t want to leave and the U.S. has no plans for military-run evacuations, but the State Department reportedly plans to send a consular team to the Port of Sudan to help fleeing Americans. More than 400 people have been killed and thousands injured in the fighting so far, which has continued despite a U.S.-brokered 72-hour ceasefire.
• At least 57 bodies have washed ashore in Libya after two migrant boats sank off its coast this week in the Mediterranean. Meanwhile, Italy’s coast guard said Monday it had rescued 47 boats—including 35 from Tunisia alone—carrying around 1,600 migrants in the previous two days amid a sharp increase in migrants headed from Tunisia to the Italian coast. The United Nations’ International Organization for Migration recorded that 441 migrants died attempting similar crossings in the first quarter of this year.
• The Walt Disney Company filed a lawsuit against Gov. Ron DeSantis and other state officials on Wednesday, alleging their decision to revoke the company’s special district kicked off “a targeted campaign of government retaliation” resulting in unconstitutional “punishment for Disney’s protected speech.” A DeSantis spokeswoman dismissed the suit, saying the governor’s office is “unaware of any legal right that a company has to operate its own government or maintain special privileges not held by other businesses in the state.”
• Former Arkansas Gov. Asa Hutchinson, 72, officially announced Wednesday he’s running for the Republican presidential nomination. In a kick-off speech, he criticized the Biden administration’s spending and withdrawal from Afghanistan while opposing some of his fellow Republicans’ turn toward isolationism. He’s currently polling at about 1 percent.

Republicans United on Debt Limit—For Now

Late-night negotiations stretching into the early morning. A frenzy over which Republican lawmakers will support Kevin McCarthy and which ones will defect. Democrats standing by and watching the infighting with glee. No, you haven’t been transported back in time to the January speakership fight. But McCarthy did face another test yesterday, and he passed it: After months of horse-trading and days where consensus seemed impossible, the unruly Republican conference rallied around a bill to raise the debt ceiling. It’s dead on arrival in the Senate, but McCarthy & Co. hope it will force the White House to the negotiating table.

When we wrote to you last week on the House GOP’s efforts to pass a debt ceiling bill, it was far from certain whether McCarthy would be able to get the legislation through the House with the razor-thin Republican majority. Three Republican factions potentially stood in the way: deficit hawks who typically balk at any debt-limit increase, members concerned that proposed cuts to spending and incentives would affect their constituents, and the performative nihilists who care more about attention than governing.

But in the wee hours of Wednesday morning, Republican leadership hammered out changes to the bill—something McCarthy wasn’t willing to do just two days ago—that satisfied (barely) enough Republicans: expediting the implementation of work requirements for Americans receiving food stamps and Medicaid, and preserving certain biofuel and renewable energy incentives. The former was designed to please the deficit hawks, while the latter sought to allay the concerns of a group of eight Midwestern members, including Iowa’s entire congressional delegation. (Iowa is the country’s leading producer of biodiesel.)

Some of the last remaining holdouts flipped into the yes column after meeting one-on-one with McCarthy. Rep. Nancy Mace of South Carolina was concerned the bill didn’t do enough to balance the budget and worried about certain green energy provisions that could affect the solar industry in her state. “I feel heard by the speaker,” Mace told reporters yesterday after throwing her support behind the bill. Rep. Victoria Spartz of Indiana remained undecided going into the vote, but ultimately backed the effort.

In the end, McCarthy secured exactly enough support to advance the bill—and no more. Four Republican members opposed the legislation–Reps. Andy Biggs of Arizona, Ken Buck of Colorado, Tim Burchett of Tennessee, and Matt Gaetz of Florida—but GOP leadership’s efforts to court the conference’s most hardline members early and often in the bill’s drafting paid off, preventing any further defections. “[Rep.] Chip [Roy of Texas] has been in probably 90 percent of the meetings we’ve had,” Rep. Garret Graves of Louisiana—a close McCarthy ally—said earlier this month.

As we noted last week, the package would raise the debt ceiling by $1.5 trillion or suspend it until March 2024—whichever comes first—in exchange for a cap on discretionary spending for next year at fiscal year 2022 levels and a limit on spending growth of no more than 1 percent per year. The legislation would also put a number of Biden administration priorities on the chopping block—student loan forgiveness, boosted IRS funding, green energy tax credits—and claw back unused pandemic relief. According to the nonpartisan Congressional Budget Office, the bill released last week would secure $4.8 trillion in savings over the next decade—but an updated estimate on the version that passed yesterday has yet to be released. 

Republicans know the Senate and White House won’t accept the bill as is, but argued the onus is now on Democrats to counter with a proposal of their own. “We lifted the debt limit,” McCarthy said at a press conference following the vote. “We’ve sent it to the Senate; we’ve done our job.” 

Biden disagrees. “Happy to meet with McCarthy,” the president said at a press conference before the vote yesterday. “But not on whether or not the debt limit gets extended. That’s not negotiable.”

McCarthy has asked Biden repeatedly in recent months to sit down with him and hammer out a way forward, but the president has rebuffed him at every turn. “The White House’s position here … is, ‘We won’t negotiate,’” Liam Donovan, a lobbyist and former Republican Senate campaign operative, told TMD. “It’s not that Republicans are asking too much. It’s not that their bargaining position is unrealistic. It’s that there are no conditions that they would accept.” Now that the bill is passed, the pressure will be on Biden to soften his position.

Expect McCarthy to keep hammering that point home. “Right now, [the House] is the only place that has lifted the debt limit,” he said Wednesday. “So, the Democrats are putting the country in jeopardy.” The speaker even levied terms of his own: “No clean debt ceiling is going to pass the House.”

The challenge now will be finding a resolution that allows both Republicans and Democrats to save face. “The tricky part here isn’t coming up with terms that Biden could support or that Republicans could live with,” Donovan said. “It’s figuring out how to make sure nobody looks like they gave anything. Biden has been saying all along, he’s not going to give in on the debt limit. But he will talk on budget. Republicans are saying, ‘Well, we want something in exchange for the debt limit.’ There kind of has to be sort of a wink-wink understanding that there’s a path forward on the debt limit, but we need to talk particulars on the budget to unlock that. Right now, those things aren’t synced.”

Thankfully, lawmakers may have a little more breathing room than we thought last week. The Treasury Department reported more tax revenue than expected, prompting Goldman Sachs to move back the so-called X date—the projected date of default—to July.

But while Republicans may have notched a small win in the debt ceiling battle, their most difficult days are still ahead of them. Yesterday’s bill—which included zero input from Democrats and which everyone involved knew was not going to actually become law—passed by only two votes. “It’s not that it improves their bargaining position,” Donovan said of the bill. “It gives them one.”

Fighting Fentanyl—Alone?

Mexico’s Sinaloa cartel feeds its victims to tigers—and fentanyl to the United States. But ask Mexican President Andrés Manuel López Obrador (AMLO) what’s responsible for the fentanyl epidemic, which killed more than 71,000 Americans in 2021 (the latest year for which data is available), and he’ll say, “a lack of love, of brotherhood, of hugs and embraces” in his country’s northern neighbor.

It’s one thing Mexico and China can agree on: The fentanyl problem is America’s alone.

The Biden administration—joined Tuesday by a bipartisan group of senators—is moving to crack down on several elements of the globe-spanning fentanyl production network and its footholds in China and Mexico. But, when tackling such a complex problem with international stakeholders who don’t always play nice, it isn’t always clear what solutions will move the needle. 

“Fentanyl is not heroin 2.0,” David Luckey, a senior researcher at the RAND Corporation who recently worked on Congress’ Commission on Combating Synthetic Opioid Trafficking, told TMD. “It’s not just more of the same problem. There are various novel aspects to this problem that we need to more fully understand and then address.” 

Most of the fentanyl killing Americans comes from Mexican cartels, who synthesize the drug in Mexico using ingredients supplied by Chinese pharmaceutical manufacturers. The cartels smuggle it across the southern border—largely via designated ports of entry—to the U.S., where it’s sold wholesale and then to users. Unlike heroin, which is derived from a crop with a growing season, fentanyl can be continuously produced as long as there are sufficient ingredients. Manufacturers often use it to cut other, more expensive drugs like heroin or cocaine as a cost-effective way to punch up their potency.

But fentanyl’s potency makes accidental overdoses all too easy. It’s about 50 times more powerful than heroin, and a lethal two-milligram dose is the equivalent of about 10 to 15 grains of table salt, small enough to make accurate measurements challenging for manufacturers and users—with deadly results. One advocacy group, Families Against Fentanyl, estimated that fentanyl overdoses were the number one cause of death for Americans ages 18 to 45 in 2020, ahead of COVID-19, suicide, and car accidents. By the end of 2022, the Drug Enforcement Agency said it had confiscated enough lethal doses of fentanyl to kill every single American. Seizures of the synthetic opioid at the southern border in March 2023 were almost three times what they were in the same month last year.

In a coordinated effort earlier this month, the Justice Department and the Treasury Department tried to strike at the Mexican and Chinese origins of the deadly drug. On April 14, Attorney General Merrick Garland announced charges against 28 total defendants—including eight in custody overseas awaiting extradition to the U.S.—who participated in the fentanyl supply chain. The defendants included chemical suppliers in China selling precursor chemicals to Mexican cartels, producers at illicit cartel-run fentanyl labs, and the leaders of the Chapitos faction of the Sinaloa cartel—the four sons of infamous drug lord Joaquín “El Chapo” Guzmán, a former cartel boss now in U.S. federal prison in Colorado. “The charges unsealed today demonstrate the comprehensive approach the Justice Department is taking to disrupting the entire fentanyl trafficking ecosystem,” Garland said in remarks unveiling the indictment.

Meanwhile, the Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned two Chinese pharmaceutical companies and five people in China and Guatemala for supplying fentanyl precursor chemicals to the cartels. 

China, for its part, rejected any culpability for the crisis. “The U.S. itself is the root cause of the drug abuse,” the Chinese Ministry of Foreign Affairs tweeted a few days after the sanctions were announced. “With 5 percent of the world’s population, the U.S. consumes 80 percent of the world’s opioids.” (The specific figures in that claim are disputed, but it’s directionally correct.)

China was once open to working with the U.S. to handle the supply-side challenges, at least rhetorically. But relations with China on the fentanyl crisis—as on almost everything else—have deteriorated in recent years. The Trump administration sanctioned China’s narcotics monitoring agencies in May 2020 for their role in human rights abuses in Xinjiang province, and more recent negotiations aimed at boosting China’s monitoring of precursor chemicals broke down entirely when then-House Speaker Nancy Pelosi visited Taiwan in August 2022. 

Mexico is also deflecting blame. AMLO claimed earlier this month there is no fentanyl being made in his country, despite the U.S. Drug Enforcement Agency’s (DEA) assessment that “most of the fentanyl trafficked by the Sinaloa and [Jalisco New Generation] Cartels is being mass-produced at secret factories in Mexico.” While the DOJ’s indictments indicate the degree to which the DEA has infiltrated the cartels and offer the possibility of accountability for drug traffickers, AMLO called the investigation “abusive, arrogant interference that should not be accepted under any circumstances.”    

While the Biden administration’s latest efforts are unlikely to untie the Gordian knot that is fentanyl trafficking, Luckey says the focus on precursor chemicals is a step in the right direction. “When looking at the supply aspect of this problem, it’s better to stop things earlier in the supply chain, which would be at those precursor chemicals,” Luckey told TMD. 

Some Republican lawmakers have also suggested cutting to the chase and designating the Mexican cartels as foreign terrorist organizations, which would give the U.S. more sanctions options and increase legal consequences for aiding the groups. A few lawmakers have even suggested military strikes. “It’s time now to get serious and use all the tools in our toolbox,” Republican Sen. Lindsey Graham said last month after two Americans were killed by cartel members in Matamoros, Mexico. “Not just in the prosecution way, not just in the law enforcement lane, but in the military lane as well.” 

Such an aggressive step, however, could alienate Mexico—one of the U.S.’s largest trading partners—even further, making enforcement efforts more challenging. “As difficult as it is to work with China, as difficult as it is to work with Mexico, we need to keep doing that [to achieve the ultimate objective],” Luckey told The Dispatch, “which is saving lives.” 

Worth Your Time

• What are evangelical Iowans thinking about ahead of the next election? That’s easy: everything. For Christianity Today, Kelsey Kramer McGinnis reports on the issues animating these voters. “Jacob Taylor, a 24-year-old lighting tech from Oskaloosa, is hopeful for a strong leader who will address top issues like gender, inflation, trade, energy independence, foreign policy, and abortion,” McGinnis writes. “‘Christians always think that you should have a nice person that you’re voting for, that plays nice with everyone,’ Taylor said. ‘I had friends that didn’t like Trump because of the things he would say. He was putting America first. He didn’t put up with any … I guess ‘BS’ is what I’ll say.’” McGinnis writes there’s a current of alarm running under all the specific issues: “Although there was no singular policy concern on the minds of the state’s evangelicals, the themes of fear and uncertainty permeated remarks from the microphone and comments by those in the audience.”

Presented Without Comment

CNN: When a Young Joe Biden Criticized His Opponent’s Age

“In 1972, Biden, then 29 years old and a local Delaware councilman, was running against incumbent Republican Sen. Cale Boggs who was 63 years old, a former two term governor and the state’s senior senator. ‘Cale doesn’t want to run, he’s lost that old twinkle in his eye he used to have,’ Biden said of Boggs.

Also Presented Without Comment

Reuters: Peter Thiel, Republican Megadonor, Won’t Fund Candidates in 2024

“Thiel is unhappy with the Republican Party’s focus on hot-button U.S. cultural issues, said one of the sources. … The bulk of his $35 million in donations [last year] went to two former colleagues running for the Senate as Republicans: J.D. Vance, who won, and Blake Masters, who lost a race pundits considered winnable even though he received some $20 million from Thiel.”

Also Also Presented Without Comment

Variety: John Stamos Had the Olsen Twins Fired From ‘Full House’ at 11 Months Old Due to Crying

“John Stamos revealed on the ‘Good Guys’ podcast (via Insider) that he had Mary-Kate and Ashley Olsen booted from ‘Full House’ when they were 11 months old as their persistent crying on set drove him crazy. The firing only lasted a couple of days, as the replacement babies for the Olsen twins proved even worse to be around.”

Toeing the Company Line

• In the newsletters: Jonah asks what (🔒) Biden’s campaign slogan actually means, Scott argues China (🔒) is eating our economic lunch in developing countries, Nick weighs in on (🔒) Trump hinting he’ll skip primary debates, and the Dispatch Politics team reports on former Vice President Mike Pence’s “Make Fusionism Cool Again” message and the tricky campaign trail ahead for Trump’s challengers.
• On the podcasts: On the latest Dispatch Podcast, Pence joins Sarah and Steve to defend his record on abortion, weigh in on entitlement reform debates, and discuss the evolution of the GOP under his former boss. Plus: National Review’s Jack Butler joins Jonah to talk about the state of conservatism among young people, and Sarah and David dive into the dynamics of the establishment clause. 
• On the site today: Harvest explains Abby Grossberg’s lawsuit against Fox News and Berny Belvedere makes the case for Asa Hutchinson’s presidential bid.

Let Us Know

When it comes to the United States’ fentanyl crisis, do you consider supply or demand to be the bigger problem?