It was never going to be a speedy process. On Feb. 24, Biden warned “this is going to take time” and asked for Americans to reevaluate the sanctions’ effectiveness one month later.
But, the president said, “the notion that this is going to last for a long time is highly unlikely, as long as we continue to stay resolved in imposing the sanctions we’re going to impose on Russia.”
Deputy National Security Adviser for International Economics Daleep Singh later told reporters that in Russia, over time, “you’ll see record capital outflows. You’ll see a weaker currency. You’ll see higher inflation. You’ll see lower purchasing power. You’ll see lower investment.”
- A half-year later, the conflict has turned into a grinding war of attrition in eastern Ukraine. Ukrainian President Volodymyr Zelensky promises to restore Kyiv’s control over Crimea, annexed by Russia in 2014. French President Emmanuel Macron is warning the conflict will drag on and is pleading with his people to be prepared to pay “the price of liberty and our values.”
One month out — remember Biden’s benchmark — it was pretty clear they were doing considerable damage, but without changing Putin’s calculus. Biden vowed to extend them “for the remainder of this entire year.”
Six months out? My colleagues Jeanne Whalen, Robyn Dixon, Ellen Nakashima, and Mary Ilyushina rendered their diagnosis in a thought-provoking piece Tuesday that paints a decidedly mixed picture of the impact.
“While most economists agree that Russia is suffering real damage that will mount over time, the economy — at least on the surface — does not yet appear to be collapsing. The ruble’s initial nosedive in value quickly reversed after the state limited currency transactions and after Russia’s imports plummeted — an economic picture that can hardly be described as healthy, but one that calmed public fears about a currency crisis. Unemployment hasn’t noticeably surged, and Russia continues to earn the equivalent of billions of dollars every month from oil and gas exports.”
The International Monetary Fund, they note, says Russia’s economy will shrink by 6 percent this year — painful, but not the “crater” Biden forecast.
Still, my colleagues note:
- “Manufacturing of autos and other goods has plummeted because companies can’t import components, creating pockets of disgruntled, furloughed workers in some towns.”
- “Airlines have slashed international flights to near zero and are laying off pilots and cannibalizing some planes for parts that they can no longer buy overseas.”
- “Thousands of highly educated people have fled the country; hundreds of foreign companies, including Ikea and McDonald’s, are shutting down, and Russia’s federal budget in July showed signs of distress.”
- Retail sales? Down 10 percent in the second quarter from 2021 levels.
The official unemployment rate is at roughly 4 percent because the Kremlin has pushed companies looking to lay off workers to put them on partially paid leave or give them fewer hours, according to Elina Ribakova, deputy chief economist at the Institute of International Finance, an association of banks and finance companies.
But, my colleagues noted, Ribakova diagnosed “[t]hat will help prevent unrest in the short term but is not sustainable in the long term.”
They also have this great detail about automaker AvtoVAZ, of Lada fame, struggling after majority owner Renault suspended operations and ultimately quit the Russian market:
“In June, the manufacturer resumed production with an ‘anti-sanctions’ car model that lacks air bags, anti-lock braking systems, air conditioning and emission controls.”
What would hurt Russia more? If you’ve been following the conflict, and America’s response, it’s really no secret: Weaning Europe off Russian energy.
“The United States and the United Kingdom have banned Russian oil and gas imports, but Europe, which relies heavily on Russian energy, has only agreed to restrict purchases over time.”
Some European countries have been, sometimes with U.S. help, looking for alternatives (coal, nuclear, oil and gas imports from elsewhere). But this will only get trickier as the weather gets colder, even if the European Union has committed to further restrict imports late this year.
And that gets to the war away from the battlefield. Can America and its allies stay united even as high gas and grocery prices fuel domestic unease with the conflict? So far, the answer has been yes. But can they outlast Russia? Time will tell.
Biden to cancel up to $10,000 in student debt for most borrowers and $20,000 for Pell recipients
“White House officials are planning to cancel up to $20,000 in student debt for recipients of Pell Grants as part of their broader announcement on Wednesday of student debt forgiveness, four people familiar with the matter said,” Danielle Douglas-Gabriel and Jeff Stein report.
- “The extra debt forgiveness for Pell recipients would be in addition to the expected cancellation of up to $10,000 in student debt for most other borrowers. The White House’s plans are only expected to apply to Americans earning under $125,000 per year, or $250,000 per year for married couples who file taxes jointly, the people familiar said.”
Biden announces nearly $3 billion in aid to Ukraine
“President Biden on Wednesday announced nearly $3 billion in additional security aid for Ukraine, marking six months of the nation fighting Russia’s invasion. The tranche of weapons and other equipment is the single largest to be sent to Kyiv since the war began. The timing of the announcement coincided with Independence Day in Ukraine,” John Wagner and Mariana Alfaro report.
House panel: Trump sought to pressure FDA on covid vaccines, treatment
“Trump officials repeatedly stalled the Food and Drug Administration’s plan to extend safety studies of coronavirus vaccines in fall 2020, as then-President Donald Trump pressed the agency for a faster timeline so the vaccines could be authorized before Election Day, according to emails, text messages and interviews conducted by a congressional panel probing the pandemic response,” Dan Diamond reports.
Federal ‘ghost guns’ rule takes effect despite court challenges
“A new Biden administration rule governing ‘ghost guns,’ the kits that had allowed people to assemble homemade firearms without serial numbers, took effect on Wednesday after two federal judges declined to block the measure,” Mark Berman reports.
U.S. hits Iranian-linked targets in Syria in response to drone attacks
“The U.S. military said it conducted airstrikes in Syria on Tuesday, targeting infrastructure used by groups with ties to Iran’s Islamic Revolutionary Guard Corps. The airstrikes, in the eastern province of Deir al-Zour, were carried out at President Biden’s direction after U.S. forces reported an attack by drone aircraft on one of their remote outposts last week,” Louisa Loveluck, Sarah Dadouch and Rachel Pannett report.
Japan PM Kishida orders new nuclear power plant construction
“Japan is entering a new phase in its nuclear energy strategy, with Prime Minister Fumio Kishida ordering the development and construction of next-generation nuclear power plants on Wednesday. This marks a major shift from the country’s post-Fukushima policy of backing away from the building of new nuclear power plants,” Nikkei Asia reports.
Lunchtime reads from The Post
Democrats nominate established candidates; gain new traction on abortion
“Democratic efforts to reframe the midterms around the debate over abortion gathered steam, with the party winning a special election for U.S. House in an evenly divided Upstate New York district Tuesday, where their candidate made the issue a centerpiece of his campaign,” Colby Itkowitz and David Weigel report.
“And in New York and Florida, Democratic primary voters nominated established candidates for governor and Congress in several closely watched intraparty contests, overwhelmingly choosing well-known officeholders aligned with party leadership over rivals who sought to steer the party in a different direction.”
Battle for Kyiv: Ukrainian valor, Russian blunders combined to save the capital
Paul Sonne and Isabelle Khurshudyan offer some key takeaways from the latest installment in the Post’s series on the war in Ukraine:
- In the run-up to the war, Ukrainian political officials downplayed the likelihood of a full-scale Russian invasion, but the Ukrainian military was making critical preparations.
- Russia directly and through an intermediary tried to get the Ukrainian government to capitulate in the initial hours of the war.
- Zelensky wasn’t opposed to resigning or leaving Kyiv — if it would end the war.
- Andriy Yermak, the head of Ukraine’s presidential administration, used gruesome photographs of the war to persuade partners.
- For a few days in the middle of March, Ukrainian forces defending Kyiv almost completely ran out of artillery ammunition.
Read their analysis here: 5 ways Ukraine fought and saved its capital from Russian invaders
Chris Wray was hired to be boring. Now, he’s guiding the FBI through threats and MAGA hate.
“Wray was chosen as [James] Comey’s replacement, ostensibly, to calm the waters: a head-down professional who would redirect the public focus to what the bureau was doing, rather than what was happening to it. But now, five years later, he has found himself personally targeted by MAGA world and his agents facing a surge of violent threats. If Republicans take control of the House after the midterms, his job will get even trickier,” Politico‘s Betsy Woodruff Swan reports.
Trump, without the presidency’s protections, struggles for a strategy
“The documents investigation represents the greatest legal threat Mr. Trump has faced in years, and he is going into the battle shorn of the protective infrastructure and constitutional armor of the presidency. After years of burning through lawyers, he has struggled to hire new ones, and has a small group of lawyers of varying experience,” the New York Times‘s Maggie Haberman, Glenn Thrush and Alan Feuer report.
“He is facing a Justice Department he no longer controls, run by a by-the-book attorney general, Merrick B. Garland, who has pursued various investigations into Mr. Trump methodically and quietly. Mr. Trump is serving as his own communications director and strategic adviser, seeking tactical political and in-the-moment public relations victories, sometimes at the risk of stumbling into substantive legal missteps.”
White House projects record drop in budget deficit
“The budget gap for fiscal 2022 will total an estimated $1 trillion — $1.7 trillion less than the deficit last year and about $400 billion less than officials projected in March, according to the White House’s mid-year budget update released Tuesday. That would be the lowest annual deficit since 2019, before the pandemic plunged the U.S. into a deep recession and prompted a wave of government spending to cushion the economy,” Politico‘s Kate Davidson reports.
White House strategy for monkeypox vaccines causing ‘chaos out in the field’
“It’s the latest hiccup the administration is facing amid broad criticism over its monkeypox response, its messaging to LGBTQ communities about the virus’s risks and its failure to supply enough vaccines to immunize those most susceptible to contracting it,” Politico‘s Megan Messerly and Krista Mahr report.
How your immune system learns, visualized
“A growing number of studies show that when the omicron variant infects, it causes the immune system to rapidly activate immune memory cells that are already on standby, created by previous vaccinations or infections,” Carolyn Y. Johnson reports.
Newsom’s dodge on safe injection sites in California adds to speculation about his ambition
“It’s not hard to see why [Gov. Gavin Newsom] was unwilling to touch the issue: Every move he makes is now being scrutinized nationally. He’s quickly become a Democratic contender for president, without ever saying he has any interest in the job. His veto has become the latest evidence of his national ambitions as he shows a wariness of swinging too far left and a willingness to anger the progressive wing of a party that helps keep him in office,” Politico‘s Jeremy B. White reports.
Most DeSantis-endorsed school board candidates win their Florida primaries
“The majority of local school board candidates backed by Gov. Ron DeSantis — at least 21 out of 30 — won their elections Tuesday, results that underscore how the Republican governor’s stance on education has gained support throughout Florida,” Politico‘s Andrew Atterbury reports.
Biden returned to the White House from Delaware this morning. He has nothing on his public schedule for the afternoon.
On Independence Day, Ukraine celebrates statehood Putin failed to destroy
“To mark its first Independence Day since Russian President Vladimir Putin sent his armies to conquer the country, Ukraine is holding a ghost parade,” Steve Hendrix, John Hudson and Serhiy Morgunov report.
“The ‘procession’ of more than 70 treadless tanks and crumpled artillery launchers is a bizarre inversion of the triumphant procession Russian commanders had hoped to conduct through a captured capital.”
Thanks for reading. See you tomorrow.
