China Politics and U.S. Budget

L . Thomas Block
Key Takeaways
  • Secretary of State Blinken's meeting with China's Xi Jinping bodes well for chances of a Biden-Xi meeting in November,
  • President Biden made some subsequent remarks that displeased Chinese officials, but "more cooperation" still seems to be on the agenda.
  • House Republican factions are divided over federal spending levels for the next fiscal year, and this foreshadows a government shutdown on October 1.

Secretary of State Tony Blinken had a relatively good trip to Beijing last weekend culminating in a 30-minute meeting with President Xi Jinping.  While both the Chinese and American delegations had expected the meeting, both sides acknowledged that if the talks went off the rails, the Xi meeting would not occur.  The no-troubles meetings also enhanced chances that Biden and Xi could meet in November, when both leaders are expected to attend a meeting of the Asian Pacific Economic Cooperation in California. 

The good progress was somewhat mitigated when President Biden, in what was supposed to be an off-the-record event, called President Xi a dictator and went on to say XI was not aware of the spy balloon.  The Chinese government reacted with strong statements, but the main theme of “more cooperation” seems to be on track.

Budget

The problems in Washington surrounding the passage of a spending plan for Fiscal Year (FY) 2024 remain front and center. House Republicans continue to talk about slashing spending to levels established in FY 2022, which would require cutting over $100B from current spending levels.  This would need to be done even while defense spending is increased. 

Speaker McCarthy is trying to walk a tightrope between his most conservative members and the moderates who generally supported the spending levels established in the deal struck between the Speaker and President Biden.  The new battle cry of the conservative Republicans is that the debt/budget deal established a ceiling on spending but not a floor, and cuts can be made without violating the agreement. At this point, it isn’t clear what spending formula can get 218 votes in the House.

All signs point to a budget deadlock and a likely government shutdown on October 1.  As with so much in DC – stay tuned.

Disclosures (show)