Republicans Reject Zelensky Plea for More Aid to Ukraine

Plus: November deficit totals $314 billion ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Good evening! Here’s what’s happening — and, more importantly, what’s not happening — on this fine Tuesday. President Biden and Ukrainian President Zelensky held a joint news conference. (Reuters) Republicans Brush Off Zelensky Plea for More Aid to Ukraine Ukrainian President Volodymyr Zelensky met with leaders in Washington on Tuesday to urgently plead his case for continued U.S. funding for his nation’s war against Russia. It didn’t make much difference, as key Republicans insisted that no Ukraine aid bill would pass unless border changes are included, and that time had run out to reach a deal by year’s end. Zelensky met with senators at the Capitol for what he described as a “friendly and candid conversation” before sitting down privately with House Speaker Mike Johnson. The Ukrainian leader reportedly invoked Ronald Reagan in arguing that support for his country and its fight against Russian President Vladimir Putin’s aggression was in the vital interest of the United States. Senate Majority Leader Chuck Schumer said later that Zelensky’s message was that Ukraine will win the war if more aid is approved, but the contrary is also true — without more aid, Putin will win. “It’s that simple,” Schumer said. Republicans were unmoved, though. They continued to insist that any additional funding would be contingent on reaching a deal with Democrats on [policy changes]( at the southern border. “Here’s the problem,” Sen. Lindsey Graham reportedly told the Ukrainian leader. “It’s got nothing to do with you.” Johnson told reporters he needed to see more from the Biden administration. “What the Biden administration seems to be asking for is billions of additional dollars with no appropriate oversight, no clear strategy to win and none of the answers that I think the American people are owed,” he said. “I have also made very clear from Day 1 that our first condition on any national security supplemental spending package is about our own national security.” The ongoing fight over a proposed package of roughly $110 billion in aid to Ukraine, Israel and Taiwan along with funding for border security has devolved into a partisan blame game. Johnson said Tuesday that House Republicans had already passed their immigration policy bill, H.R. 2, and so the onus was now on the Senate and the White House to step up. Democrats have rejected that bill as extreme and have insisted that they stand ready to compromise if only Republicans would be more reasonable in their demands. “If Republican colleagues want an agreement on the border, they must meet us at the middle,” Schumer said. “They need to show us they are serious. So far, when they just ask for H.R. 2 or something like it, they’re not showing seriousness.” President Joe Biden said Congress needs to act. “We stand at a real inflection point in history,” he said while meeting with Zelensky in the Oval Office. “Congress needs to pass the supplemental funds” to provide more aid to Ukraine. Biden told reporters that he had signed another $200 million drawdown of aid already approved by Congress for Ukraine. It may be some time before Congress delivers a fresh round of assistance. Key Republicans have said this week that there isn’t enough time left to get a deal done this year. Senate Minority Leader Mitch McConnell told reporters it would be “practically impossible” for Congress to pass a bill on foreign aid and the border before the holidays. Schumer pushed back on that idea. He said that he had spoken by phone with Johnson last night to urge him to keep the House in session and allow time for the supplemental deal to come together. “After months of saying the border is a crisis, that we must get something done yesterday, many Republicans now seemingly prefer to go home rather than pass a bill,” Schumer said on the Senate floor. “If Republicans are serious about getting something done on the border, then why are so many of them in such a hurry to leave for the winter break? Has the border simply been an excuse to kill funding for Ukraine?” Johnson reportedly said on “The Hugh Hewitt Show” Tuesday morning that, absent an offer from the Senate, he was “not going to have everybody sit here through Christmas twiddling their thumbs.” The bottom line: Republicans say they won’t budge. A deal before the end of the week appears highly unlikely, though talks continue. Even if Senate negotiators reach an agreement, it’s not completely clear how much House Republican support for Ukraine funding can be swayed given that many in the party have grown skeptical of the war effort. Inflation Drops Ahead of Final Fed Meeting in 2023 The consumer price index rose a modest 0.1% on a month-over-month basis in November, according to [data]( released Tuesday by the Labor Department. Relative to a year ago, prices rose 3.1%, a slight drop from the 3.2% rate recorded in October. Both numbers were roughly in line with expectations, though the monthly figure came in one-tenth of a percentage point higher than expected. Overall, the results point to an ongoing if somewhat bumpy process of disinflation in the U.S. economy (see the chart below). The bumps were evident in some of the technical measures that economists use to evaluate underlying trends. The core CPI rate — a closely watched measure that strips out volatile food and fuel prices — accelerated slightly in November, rising from 0.2% on a monthly basis to 0.3%, while the annual core inflation rate clocked in at 4%, the same as in October. And the so-called super core services index — a measure favored by the Federal Reserve that strips out goods and shelter costs — rose 0.4% on a monthly basis and 3.9% on an annual basis, up two-tenths of a percentage point from a month earlier. Those increases could raise some eyebrows at the Fed, and some analysts are guessing that the central bank will delay rate cuts for longer in 2024 as officials wait to see more convincing evidence that the inflation rate has fallen sustainably to their 2% target. The latest report “reinforces this idea that it’s going to be a bumpy road to disinflation,” Blerina Uruci, chief U.S. economist at T. Rowe Price, [told]( The New York Times. “The Fed cannot cut interest rates too soon in the face of resilient services inflation.” At the same time, there is little in the report to suggest that officials will want to raise rates at their final meeting of the year, which concludes on Wednesday. “Even as November’s core inflation ticked up to a pace more consistent with 3% annual inflation, long-term measures suggest the Fed has made significant progress on disinflation over the past six months,” [said]( Bloomberg economists Anna Wong and Stuart Paul. Moody's Analytics Chief Economist Mark Zandi said the report provided “more good inflation news, with CPI steadily moderating.” But he also noted the economic toll inflation has taken: The “typical household must spend $1,031 more per month to buy the same things as 3 years ago due to inflation,” he [wrote](. Fortunately, household incomes have risen by $1,087 over the same period. “Want to see real income gains, but this is real progress,” Zandi said. Yellen sees soft landing: Treasury Secretary Janet Yellen said Tuesday that the U.S. appears to be successfully bringing inflation under control without triggering a recession. “To me, a soft landing is the economy continues to grow, the labor market remains strong and inflation comes down. And I believe that’s the path we’re on,” Yellen [said]( at an event hosted by The Wall Street Journal. Yellen added that she thinks the Fed’s 2% target is well within reach. “It’s certainly meaningfully coming down. And I see no reason, on the path that we’re currently on, why inflation shouldn’t gradually decline to levels that are consistent with the Fed’s mandate and targets,” she said. “I personally don’t see any good reason to think that the last mile is going to be especially difficult.” Still, some analysts caution that there are potential dangers ahead, including a possible reignition of inflation or a recession sparked by high interest rates. “The odds of a soft landing have certainly increased dramatically in recent months,” Greg McBride, chief financial analyst for Bankrate.com, [told]( The Hill. “There’s probably a better than 50-50 chance that we do get that very rare soft economic landing, but it’s too early for victory laps.” November Deficit Totals $314 Billion The federal government ran a deficit of $314 billion in November, up from $248.5 billion for the same month last year, according to Treasury Department data released Tuesday. The shortfall brings the deficit for the first two months of the 2024 fiscal year to $381 billion. According to Treasury’s [monthly statement]( total receipts in November were $275 billion, while total outlays were $589 billion. For the fiscal year, which began in October, total receipts were $678 billion, and total outlays were $1.06 trillion. The deficit hawks at the Committee for a Responsible Federal Budget calculated that the deficit so far comes to roughly $6 billion per day. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- Fiscal News Roundup - [Congress Struggles to Lock Down Key Funding Deal Before Heading Home]( – The Hill - [Zelenskyy’s Senate Visit Doesn’t Change Border Debate]( – Roll Call - [McConnell: Border-Ukraine Deal This Year 'Practically Impossible']( – Politico - [Amid Doubt on Ukraine-Border Deal, Johnson Holds Firm on GOP Asks]( – Politico - [Johnson on Ukraine Deal: ‘National Security Begins at Our Own Borders’]( – The Hill - [Here’s What Republicans Say They Want in Exchange for More Ukraine Aid.]( – New York Times - [U.S. Aid to Ukraine by the Numbers]( – New York Times - [Senate Leaders Face Conservative Rebellion on Annual Defense Bill]( – The Hill - [Freedom Caucus Elects New Chair: Bob Good, Who Voted to Boot McCarthy]( – Politico - [Congress Looks to Block US Agencies From Buying Americans’ Data]( – Roll Call - [Inflation Drops to 3.1 Percent as Fed Kicks Off Final Meeting of 2023]( – Washington Post - [Gas Prices Are Falling Fast, Helping Tame Inflation]( – New York Times - [New Drugs Can Fix Teenage Obesity, but Young People Don’t Get Them]( – New York Times Views and Analysis - [Fed Enters Last Leg of Inflation Fight With Little ‘Pain’ So Far]( – Matthew Boesler, Bloomberg - [Inflation Fears Down, Consumer Optimism Up: Economy May Start to Help Biden With Voters]( – Rebecca Picciotto, CNBC - [Watch What People Do, Not What They Say About the Economy]( – Paul Krugman, New York Times - [Congress at Christmas: A Debacle of Democracy]( – Walter Shapiro, Roll Call - [Red States and Blue States Are Becoming Different Countries]( – Jamelle Bouie, New York Times - [This Is Bigger Than COVID: Why Are So Many Americans Dying Early?]( – Pierre Kory and Mary Beth Pfeiffer, The Hill - [The Spiritual Unspooling of America: A Case for a Political Realignment]( – Sen. 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