The Full Belmonte, 1/2/2024
“In a narrow majority, Israel's Supreme Court struck down a law approved by Prime Minister Benjamin Netanyahu in July that stripped the court of its power to overturn government appointments and decisions. The measure sparked months of protests in Israel at the time. Demonstrators accused the administration of weakening government checks and balances.
The court said the law would cause ‘severe and unprecedented harm’ to Israel as a democratic country, NPR's Daniel Estrin reports on Up First. He adds that while Israel's government is dissatisfied with the ruling, officials suggest they won't do anything further to overhaul the country's judiciary while the country is at war with Hamas.” [NPR]
Israel's looming political crisis
Israeli Prime Minister Benjamin Netanyahu (center) attends a weekly cabinet meeting in Tel Aviv yesterday. Photo: Abir Sultan/Pool via AP
“Israel's Supreme Court narrowly struck down part of the Netanyahu government's controversial judicial overhaul plan that destabilized the country's economy, military and foreign relations, Axios' Barak Ravid writes.
Why it matters: The dramatic 8-7 ruling could thrust Israel back into a constitutional and political crisis amid the war in Gaza and concerns about a potential war with Lebanon.
Zoom in: The legislation that was struck down, passed in July, would limit the high court's oversight of government actions and end its ability to strike down government decisions based on ‘reasonability.’
Before the Oct. 7 attack, Netanyahu and his right-wing coalition had faced mass anti-government protests over the plan for months.” [Axios]
“Israel's military has announced it would withdraw thousands of troops from the Gaza Strip to focus on targeted operations against Hamas. Dennis Ross, a former U.S. envoy to the Middle East, tells Morning Edition the conflict is gradually moving into a different phase. Ross adds that the military is focused on ensuring that Hamas loses political control of Gaza and the means to threaten Israel again, which he says is a more achievable goal than eliminating every Hamas agent.” [NPR]
Palestinians inspect the damage of a destroyed house following Israeli airstrikes on Khan Younis, southern Gaza Strip, Sunday, Dec. 31, 2023.
Mohammed Dahman, AP
Hamas, Israel far apart on hostage deal
Relatives and supporters hold portraits of Israeli hostages during a rally in Tel Aviv on Saturday. Photo: Ahmad Gharabli/AFP via Getty Images
“Israel rejected a proposal for a hostage deal that Hamas sent Sunday through Qatari and Egyptian mediators, Axios' Barak Ravid reports.
Why it matters: Israeli officials said the offer shows Hamas is ready to engage in negotiations as the fighting in Gaza continues. Hamas has said Israel must end the war before the group will negotiate a hostage deal.
Behind the scenes: The proposal included a three-phase process. Each phase would include a pause in fighting for more than a month in exchange for the release of hostages, an Israeli official said.
Under the proposal, Israel would begin pulling its forces out of Gaza during the implementation of the first phase of the deal, which would include the release of roughly 40 hostages. Some Palestinian prisoners would also likely be released.” [Axios]
Russian ballistic missiles strike Ukraine's largest cities, killing at least 4 people
“Ukraine's two largest cities came under attack from Russian hypersonic ballistic missiles on Tuesday morning, killing at least four people and injuring almost 100, officials said, as the war approached its two-year milestone and the Kremlin's forces stepped up their winter bombardment of urban areas. Ukraine President Volodymyr Zelenskyy said on his Telegram channel that four civilians were killed and 92 injured in the capital, Kyiv, and in northeastern Kharkiv as hypersonic Kinzhal missiles that can fly at 10 times the speed of sound slammed into city blocks.” Read more at USA Today
Ukrainian rescuers evacuate a wounded woman from a damaged residential building in the centre of Kharkiv after a missile strike on January 2, 2024, amid the Russian invasion in Ukraine.
SERGEY BOBOK, AFP via Getty Images
“South Korean opposition leader Lee Jae-myung was stabbed in the neck during a visit to the city of Busan. Lee was taken to Pusan National University Hospital and will be transported to Seoul for surgery. The attacker was arrested on the scene. A motive for the attack has yet to be released. The attack comes three months before South Korea's general elections.” [NPR]
Lee Jae-myung, South Korea’s opposition leader. Yonhap/EPA, via Shutterstock
“At least 48 people have died in Japan after a powerful magnitude 7.6 earthquake struck on New Year's Day. Prime Minister Fumio Kishida says police, firefighters and military officials worked through the night to rescue residents trapped in collapsed buildings. Seismic activity still rattles the area near the epicenter. Kishida warns residents to look out for magnitude 7 or bigger aftershocks in the coming days.” [NPR]
Race to rescue Japan quake survivors.
“Japan is frequently hit by earthquakes because of its location along the "Ring of Fire," an arc of volcanoes and fault lines in the Pacific Basin.” [USA Today]
This aerial photo provided by Jiji Press shows smoke rising from a house fire along with other damage along the coast in the town of Noto, Ishikawa prefecture on January 2, 2024, a day after a major 7.5 magnitude earthquake struck the region.
STR, JIJI PRESS/AFP via Getty Images
Japanese passenger jet engulfed
A Japan Airlines plane burns on the runway of Haneda Airport in Tokyo today. Photo: Kyodo News/AP
“All 379 passengers and crew escaped a Japan Airlines plane that burst into flames on the runway of Tokyo's Haneda Airport today, apparently after hitting another plane.
The Japanese coast guard, which operated the other plane, said its pilot escaped but five crewmembers are missing, AP reports.
Live footage showed the aircraft bursting into flames as it skidded down the tarmac after landing, per Reuters.
NHK TV reported that all occupants got out safely before the Airbus A350 was overwhelmed, despite rescue crews' efforts to control the blaze.” [Axios]
It's been 4 years since COVID hit. What's being done to prevent the next pandemic?
“On Jan. 1, 2020, public health officials in the United States woke up to the news of a strange new virus in China. At Columbia University in Manhattan, Dr. Ian Lipkin was already nervous. Four years later, Lipkin and his team are among those working to prevent the next pandemic. They have developed a system for quickly analyzing viruses, bacteria and fungi found in patients. The eight countries that have adopted this surveillance system, called GAPP, for the Global Alliance for Preventing Pandemics, have agreed to make their information rapidly public, which should allow another outbreak to be stopped before it spreads across the world.” Read more at USA Today
New laws
“Several state and federal laws went into effect this week that impact everything from minimum wage to gender-affirming care for minors. A total of 22 states, plus Washington, DC, raised their minimum wage on Monday, and more states have wage increases set for the coming months. Another marquee issue across state legislatures in 2023 was gender-affirming care for minors, with several Republican-led states moving to enact restrictions. Among the states that recently passed a ban on such treatments for minors are Idaho and Louisiana. On the other hand, many Democratic states passed laws protecting abortion rights, including two that took effect Monday in California and Washington.” [CNN]
Winter viruses
“ virus activity is high and rising across the US as experts stress the importance of vaccinations. During the week ending December 23, there were more than 29,000 hospital patients admitted with Covid-19, about 15,000 admitted with the flu and thousands more with respiratory syncytial virus, or RSV, according to data from the CDC. And while Covid-19 remains the leading driver of respiratory virus hospitalizations, flu activity is rising rapidly. The CDC estimates that there have been more than 7 million illnesses and 4,500 deaths related to the flu this season. Still, vaccine uptake remains low: just 19% of adults have gotten the latest Covid-19 vaccine and less than half have gotten the flu vaccine.” [CNN]
© The Hill / Greg Nash
Washington returns for jam-packed January
“Heading into a new year, Washington lawmakers have an incredibly full plate of old problems: federal spending, foreign wars, the border surge. It’s not going to be an easy welcome back for anyone.
Facing a Jan. 19 deadline before a partial government shutdown — that’s 17 days away — Congress must hash out a budget deal among House Republicans, the Democrat-controlled Senate and President Biden. All in an election year, and with the Iowa caucuses for Republicans only 13 days away.
Amid the struggle to fund the ongoing Israel-Hamas war and Ukraine's war with Russia, Republicans are ramping up pressure to address the crisis at the border (more on that below).
It is all setting things up to be a wild start to 2024.
Meanwhile, in the House ... The GOP caucus is still worried about showboat lawmakers who may be tanking efforts in the House’s razor-thin majority. The Hill's Emily Brooks reports that some are upset about the lack of consequences those members have faced.
Hard-liners are ruffling feathers among the rank-and-file and moderate Republicans who see lapsed deadlines or a government shutdown as the impact of their tactics that will likely continue into the new year.
For those hard-liners, peeving their colleagues is just a part of flexing their influence to achieve their goals.
‘Change can be very disquieting and uncomfortable. Are people upset by that? I think so,’ said Rep. Andy Biggs (R-Ariz.).
After a tumultuous 2023 that included the ouster of former Speaker Kevin McCarthy (R-Calif.) after his own struggles to be elected leader of the chamber, the House isn’t so harmonious.
SPEAKING OF ELECTIONS: Obviously, there is a presidential race, but all of the members of the House and a third of the Senate are also on the ballot this year. Here’s where the Cook Political Report currently has them rated.
The Associated Press recently analyzed how retirements are impacting the makeup of Congress.
From the AP's Kevin Freking's report: ‘More retirements can be expected after the holidays, when lawmakers have had a chance to spend time with families and make decisions ahead of reelection deadlines. But so far, the numbers don’t indicate the dysfunction in the House is causing a mass exodus for either party.’
‘Members sort of knew that this is what the institution is currently like when they chose to run for office,’ Molly Reynolds, a senior fellow at the Brookings Institution, told the AP. ‘Some of them may well be feeling frustrated at this point in time, but anybody who has been elected to Congress in recent years, they’re not surprised at what they’re finding when they are getting to Washington.’” [The Hill]
Immigration
“Hundreds of migrants were dropped off in New Jersey over the weekend to evade New York restrictions aimed at curbing the surge of arrivals in the state. This comes just one week after New York City Mayor Eric Adams issued an order that requires charter bus companies carrying migrants to provide manifests of their passengers to New York officials at least 32 hours in advance of their arrival. In recent months, Texas and several other Republican-led states have sent tens of thousands of migrants and asylum-seekers on planes and buses to major cities with Democratic mayors, often with little or no notice. New York City has received more than 14,700 new arrivals within the last month alone, Adams said.” [CNN]
Republican loyalty to Donald Trump and rioters has climbed since the Jan. 6 attack.
“What to know: Republicans are more sympathetic to those who stormed the Capitol and fewer hold Trump responsible three years after the attack, a new Post poll shows.
Why? The shift has partly been fueled by misinformation. It comes during a crucial election year in which Trump faces criminal chargesrelating to the riot.”
Read this story at Washington Post
Two pioneering mayors
Photo illustration: Axios Visuals. Photo: Gilbert Carrasquillo/GC Images
“Cherelle Parker will be sworn in today as Philadelphia's 100th mayor.
Why it matters: Parker, a Democrat, will become the city's first female chief executive as it faces a slew of challenges, including high levels of gun violence and poverty, Axios Philadelphia's Mike D'Onofrio reports.
Connie Boesen. Photo: City of Des Moines
Connie Boesen, who'll take the oath as Des Moines mayor at noon today, is the first woman to lead the city in its 180-year history.
Why it matters: The transition marks the first change in Des Moines' top elected position in two decades. Frank Cownie had been mayor since 2004, Axios Des Moines' Jason Clayworth writes.” [Axios]
January 2, 2024
By German Lopez
Good morning. We’re covering the challenge of federal deficits —
The U.S. Capitol. Haiyun Jiang for The New York Times
Less sustainable
“The federal debt starts the new year at a level that is hard to grasp: $34 trillion. That is 1.2 times the U.S.’s annual economic output. At the end of World War II, the ratio was only about 1.1.
Both parties have contributed to the situation. Republicans have passed large tax cuts. Democrats have enacted ambitious climate and health care initiatives. Both funneled money to Americans in response to the Covid pandemic.
For years, many economists believed the country’s debt was not a problem. Interest rates were low, which held down debt payments. Inflation was also low, which suggested the debt wasn’t hampering the economy. If anything, additional government spending helped create jobs when unemployment was elevated for much of the 2010s.
But times have changed, and federal deficits now look scarier.
In November, the financial firm Moody’s lowered its outlook on U.S. debt from ‘stable’ to ‘negative.’ Treasury Secretary Janet Yellen said that she disagreed with Moody’s decision, but she acknowledged that current economic circumstances could make the federal debt less sustainable. And Paul Krugman, the economist and Times columnist, wrote, ‘Serious deficit reduction, a bad idea a decade ago, is a good idea now.’
Source: St. Louis Federal Reserve | By The New York Times
Today’s newsletter will help you think about the new economics of debt.
A different situation
There are three big reasons to worry about the federal government’s finances.
First, interest rates have risen. A decade ago, the interest rate that the U.S. paid on inflation-protected bonds, which are used to finance debt, was near zero. Today, that rate is almost 2 percent.
This increase doesn’t change the cost of debt that the government has already accumulated. But it will have to pay more interest on future debt. So if the government does not hold down spending, debt payments will increasingly eat up money that could go to health care, the military and other programs.
Second, the unemployment rate has fallen to 3.7 percent. In the early 2010s, it was usually above 8 percent. Back then, government spending helped put people to work. Today, the private sector needs less help.
Third, inflation is a bigger problem than it used to be, and higher deficits could make it worse. When Congress spends more or cuts taxes, Americans have more money to spend. As they spend that extra cash, prices tend to increase. The reverse is true as well: A smaller deficit can ease inflation.
All of which means that the benefits of deficit spending are smaller than they were in the recent past and the costs are larger.
Risk of delay
Both parties have offered partial solutions to the growing debt. Democrats favor higher taxes on the rich, and Republicans favor cuts to Medicaid and some other federal programs. But each party has mostly blocked the other’s proposals, allowing deficits to add to the debt year after year.
Even if the preferred policies of each party eventually are enacted, they do not come close to solving the problem. Neither party is willing to cut the biggest government programs: Social Security, Medicare and the military. And both have ruled out tax increases on most households.
This dynamic — politicians criticizing deficits without offering a real solution — is not new. The shifting economic circumstances, however, could make the gridlock more damaging.
There is also a risk to procrastination: The longer the government puts off the issue, the harder it gets to solve. By acting sooner, officials could phase in higher taxes and lower spending over years to mitigate the downsides. Some experts argue that the country is already past that point. ‘We put off solutions for too long, and now we’ll have to take more drastic action,’ Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, told me.
The solution remains unclear. And the economy may be able to continue growing at a steady clip for years despite the debt. At some point, though, the federal government will likely need to raise taxes and cut spending in ways that many Americans will find unpleasant.” [New York Times]
Social Security benefits increasing this month. Here's the payment calendar
“Social Security recipients are getting a raise. More than 71 million Americans will see a 3.2 percent increase in their Social Security checks in 2024. That increase, which adds more than $50 per month on average, hit some checks Friday and will continue this month and throughout the year. The raise is due to a cost-of-living adjustment that the Social Security Administration said will help recipients keep up with expenses. It's the third year in a row inflation has prompted an increase in benefit payments.” Read more at Washington Post
Copyright is new AI battlefield
Illustration: Sarah Grillo/Axios
“Looming fights over copyright in AI are likely to set the new technology's course in 2024 faster than legislation or regulation.
Why it matters: After a year of lawsuits from creators protecting their works from getting gobbled up and repackaged by generative AI tools, the new year could see significant rulings that alter the progress of AI innovation, Axios' Megan Morrone reports.
What's happening: The copyright decisions — over both the use of copyrighted material in the development of AI systems, and the status of works that are created by or with the help of AI — are crucial to the technology's future and could determine winners and losers in the market.
The New York Times filed a lawsuit against OpenAI and Microsoft last week, claiming their AI systems depend on ‘widescale copying’ that constitutes mass copyright infringement.
‘Copyright owners have been lining up to take whacks at generative AI like a giant piñata woven out of their work,’ James Grimmelmann, professor of digital and information law at Cornell, tells Axios. ‘2024 is likely to be the year we find out whether there is money inside.’
‘If copyright law says that some kinds of AI models are legal and others aren't, it will steer innovation down a path determined not by what uses of AI are beneficial to society but one based on irrelevant technical details of the training process,’ Grimmelmann adds.
Reality check: The copyright system has ways to adapt to an AI world.
Jerry Levine, general counsel for ContractPodAI, a generative AI tool that helps lawyers analyze legal documents, said that if a chatbot response might violate a copyright, the tool could offer to summarize the text and link to the original, instead of reproducing the entire copyrighted work.
Threat level: This is another place the big could get so much bigger. The biggest risk to AI innovation could lie in a ruling that limits generative AI to players with the resources to fight lawsuits and license large amounts of data.” [Axios]
Breakout year for delivery drones
Illustration: Natalie Peeples/Axios
“After more than a decade of development, delivery drones are finally going mainstream, Axios transportation correspondent Joann Muller writes.
Why it matters: More electric drones in the sky means fewer noisy trucks on the road and less tailpipe emission.
What's happening: With some (but not all) regulatory hurdles cleared, retailers, medical centers and logistics platforms will start offering drone delivery in many more suburban neighborhoods in '24.
That means receiving meals, prescriptions and household items at your doorstep in less than 30 minutes.
Catch up quick: Until recently, commercial drone operators weren't permitted to fly their aircraft long distances without visual spotters.
Having observers staged every mile or so along a drone's route is impractical and costly, which is why companies couldn't afford to scale up drone deliveries.
Instead, they were limited to trips within a mile or so of retail partners, including Walmart and Walgreens.
That changed last fall when the FAA began authorizing some drone operators to fly their aircraft ‘beyond the visual line of sight’ (BVLOS).
That key breakthrough has opened the door for companies like Zipline, Wing and Amazon to begin more widespread drone deliveries this year.
Amazon — where executive chairman Jeff Bezos first floated the idea of drone delivery back in 2013 — is ramping up toward a goal of 500 million drone deliveries a year by the end of the decade.
Amazon has been operating in just two communities (Lockeford, Calif., and College Station, Texas) using dedicated drone fulfillment hubs.
In 2024, Amazon will add a third U.S. site, plus two more in Europe, before accelerating its push in subsequent years.
It's also introducing a smaller, quieter delivery drone, which will be fully integrated into Amazon's delivery network this year.
That means Amazon trucks, vans and drones will depart from the same building, giving customers access to faster delivery of a greater selection.
Wing, a subsidiary of Alphabet, has completed over 350,000 deliveries so far, the vast majority in Australia.
In the U.S., it's making deliveries for Walmart within a 6-mile range of two superstores in the Dallas area and for certain retailers in Christiansburg, Va.
Other companies, including Walmart-backed DroneUp and Israel's Flytrex, are also planning to expand this year without the limitation of human observers.” [Axios]
Markets want some bad news
Illustration: Natalie Peeples/Axios
“We wouldn't be surprised to see the S&P 500 rally after any deterioration in economic data — since that likely brings investors' hope for lower interest rates closer to fruition.
Why it matters: The tension between traders fixated on lower interest rates — and a Fed that's leery of giving them before killing off inflation — will dominate markets in early '24, Axios' Matt Phillips writes.
What's happening: Fed policy committee projections suggest as many as three rate cuts over the next 12 months.
Market watchers expect they'll start in Q1.
Our thought bubble: There's no more heartfelt passion among equity investors than for interest rate cuts — which, for various technical reasons, have the quasi-magical effect of raising market valuations across the board.
It's free money, more or less, at least as far as the stock market is concerned. And the markets like free money.” [Axios]
Michigan and Washington advanced to college football’s title game.
“What happened: Michigan beat Alabama, 27-20, yesterday in the Rose Bowl. And Washington survived a late scare to defeat Texas, 37-31, last night in the Sugar Bowl.
What’s next: The College Football Playoff national championship game, next Monday in Houston, featuring two undefeated teams. It kicks off at 7:30 p.m. Eastern on ESPN.”
Read this story at Washington Post
Michigan Wolverines quarterback J.J. McCarthy holds the Rose Bowl trophy after the wolverines defeated the Alabama Crimson Tide in the 2024 Rose Bowl college football playoff semifinal game at Rose Bowl.
Photo: Butch Dill/AP
“Above: On the final play of the Sugar Bowl, Washington cornerback Elijah Jackson hits the ball before Texas wide receiver Adonai Mitchell can catch it, sealing a wild 37-31 win. The Huskies barked back at a ferocious final-minutes comeback by the Longhorns.
"Purple Rain" echoed through the Superdome in New Orleans as Washington celebrated on the field.” [Axios]