President Joe Biden spoke on the final day of a NATO summit and said Americans can expect to continue paying higher gas prices “as long as necessary.” (Kenny Holston/The New York Times)
MADRID — President Joe Biden issued a grim warning to Americans after Russian troops invaded Ukraine in February: Defying President Vladimir Putin could hurt the U.S. economy. “I’m not going to pretend this is going to be painless,” he said in remarks delivered in the East Room of the White House.
But few in the Biden administration imagined how much domestic political and economic pain could come from the bitter war in eastern Ukraine: growing anger over $5-a-gallon gas, deepening frustration with rising food and rent costs, and growing opposition to spending billions of dollars on a foreign conflict with no end in sight.
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At this week’s Group of 7 and NATO meetings in Europe, Biden and his allies made the case that they must stand united against Russia while drawing new and tougher lines against what they see as predatory economic practices by China.
But the meetings also highlighted the deep strain of war on Western leaders and consumers from energy costs that have jumped as a result of heavy sanctions imposed on Russia and could rise further.
For all the steps Biden and his allies have taken to counter Russian aggression — including a fast track to NATO membership for Finland and Sweden and a plan to cap the price of Russian oil exports — the leaders have failed to describe an end to the debt war of attrition.
Biden is already feeling political heat from his swift response to the invasion of Ukraine. His push to ban Russian oil imports shortly after the invasion was followed by global price spikes that undermined consumer confidence and threatened Democrats’ hold on Congress in the upcoming midterm elections. Republicans have tried to blame the president’s energy and climate policies, but the invasion and the Western response to it are the reasons for the spike.
If the war drags on and Biden fails in his plan to keep Russian oil flowing at a deep discount, some analysts say oil prices could skyrocket to $200 a barrel, which could mean $7 a gallon of gas or more – prices that, if held, would seriously damage Biden’s re-election hopes.
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An extended conflict would also require the United States and its allies to find additional money for military and other aid to Ukraine, on top of the $40 billion Congress has already approved this year. So far, only a small group of opponents have questioned the spending, but that discontent could spread, providing a line of attack for former President Donald Trump, who has signaled plans for a 2024 rematch with Biden.
These currents make the next few months crucial for Biden and his bold international coalition, a fact that administration officials have begun to acknowledge. Biden’s national security adviser, Jake Sullivan, told reporters on the sidelines of the G7 meetings in the German Alps that allies would try to help Ukraine’s superior forces gain as much leverage as possible in the war before winter because “an acute conflict is not in the interest of the Ukrainian people for obvious reasons.
Sullivan and Treasury Secretary Janet Yellen said this week that officials would move quickly to negotiate and implement the myriad unresolved details of a proposed cap on the price of Russian oil exports, promising that there would be relief for gas station drivers if place set. But many economists and energy experts doubt that a never-before-tested global cap like this can be effectively assembled anytime soon. Privately, some administration officials admit that could take until late fall or longer.
European leaders have grappled publicly this week with the pain of war for their citizens, particularly the availability and cost of energy. But in a few limited speeches in Germany and Spain, Biden expressed only firm resolve in the cause of deterring Putin’s aggression.
Asked at a press conference at the end of the NATO summit in Spain how long American drivers can expect to continue paying higher gas prices, Biden was blunt.
“As much as it takes,” he said, “so Russia can’t actually defeat Ukraine and go beyond Ukraine.”
Biden also said he expects his oil cap plan to help consumers. “We think it can be done,” he said. “It will lower the price of oil, as well as the price of gasoline.”
Data released by the Commerce Department on Thursday showed that prices affected by the war, such as those of food and energy, continued to rise in May, while the growth rate of other prices stabilized. Biden blamed Putin.
“The reason gasoline prices are going up is because of Russia,” he said at the press conference.
At least some temporary relief may be on the way for American drivers. The national average price has dipped slightly in recent weeks, and gasoline futures have declined much more, suggesting gas stations may cut prices in July. But many analysts say they think prices could jump again later this year as a European ban on Russian oil imports takes effect unless Biden’s price cap plan succeeds.
The president’s focus this week on the war, energy price inflation and looming threats from China came to the exclusion of many of the issues that dominated his 2020 campaign — and the current controversies animating his party at home.
He and his fellow leaders rarely mentioned the COVID-19 pandemic. Biden’s sprawling — and stalled — plans for new welfare programs were scrapped. Even climate change is reduced to tall promises in public forums rather than concrete promises of action.
The price cap proposal is just the latest example of Biden seeking solutions to consumer pain caused by the war.
Senior officials have reached out to Venezuela — a Russian ally that has been under U.S. sanctions for years — about the oil supply crisis. The administration also sought help from Turkish President Recep Tayyip Erdogan to move grain from Ukraine to ease food shortages.
And next month, Biden travels to Saudi Arabia and will meet in person with Crown Prince Mohammed bin Salman, after repeatedly calling on the Saudis and other major oil producers to increase production. Biden was asked Thursday if he would personally press the de facto Saudi ruler for an increase, despite once denouncing the prince as a “pariah” over the brutal killing of Jamal Khashoggi, a Saudi dissident, in 2018. Biden said he would not.
Nonetheless, the imperative to respond to the stirring effects of war has made Biden at least consider the once unthinkable. This underscores the reality for the president and his allies: There are few solutions to the current situation that don’t come with drawbacks.
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