Biden donors split over US response to Israel-Hamas war

Good morning and welcome to US Election Countdown. Today we’re talking about:

• A Democratic donor divide over Gaza

• Trouble for Biden in Georgia

• Trump tariffs’ $500bn burden

The Israel-Hamas war is splitting the Democratic donor class.

George Krupp, a top contributor to Joe Biden, thinks that the conflict could be catastrophic for the president’s re-election bid [free to read]. The donor, who expects to raise $2.5mn for Biden at a Boston fundraiser that he’s co-hosting tonight, has urged the president to take the war issue “off the table” by suspending arms shipments to Israel.

“I think this Israel thing has been a catastrophe for him,” Krupp told the FT’s Alex Rogers. “I absolutely think that Biden needs to suspend arms shipments both for humanitarian and political reasons.”

Biden is trying to placate two camps: voters who want to see the Israeli incursion into Gaza end, and those who want US support for Israel to continue at full throttle.

This month, Biden halted a shipment of bombs to Israel over concerns about their use in densely populated civilian areas. Last week, however, Biden approved a $1bn military aid package to Israel.

The president’s “equivocation” over the war “is hurting” his campaign, Krupp said.

Megadonor Haim Saban represents the other side of the coin. “Bad, Bad, Bad, decision, on all levels, Pls reconsider,” Saban wrote in an email to White House senior officials, regarding Biden’s decision to pause the bombs shipment.

Biden is contending with domestic and diplomatic dilemmas as the International Criminal Court seeks arrest warrants for Israeli officials and senior Hamas leaders. Biden said it was “outrageous” to equate the conduct of Prime Minister Benjamin Netanyahu and defence minister Yoav Gallant with that of Hamas.

With Trump leading in the polls, Krupp and many Democrats fear that the war could determine the election’s outcome.

“I thought [Biden] would bring a measure of calm to the country, but the country is so polarised right now,” said Krupp. “I think if the election were held today, I think he’d lose.”

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Behind the scenes

Democrats are worried that Biden is losing the crucial southern swing state of Georgia.

He spent the weekend making his pitch to Black voters in both the southern state and Michigan.

“Biden’s biggest message was that the stakes are so high in this election — with ‘extremist forces’ ready to take over — that there was no alternative to engagement,” the FT’s James Politi told me.

But Democratic organisers on the ground in Georgia are flashing warning signs, says James:

Among Democratic activists charged with rallying the Black vote, which is so critical to Biden, there are troubling signs of resignation and apathy.

Dontaye Carter, a party organiser in Fulton County, warned that the Biden campaign is struggling to get its message across with Black Georgia voters who voted for Biden in 2020.

“Young folks are not excited about Biden, so how do we get them on board?” said Carter. And some are wondering what happened to policing and voting rights reforms Biden had pushed for, but were ultimately thwarted in Congress.

“We’ve got to be intentional about ensuring that we’re getting folks dialled in. And if there’s a disconnect, we got to find a way to fix it,” Carter added.

Datapoint

Economists are forecasting that Trump’s plan to introduce tariffs on all US imports would hit US consumers to the tune of $500bn, with the poorest Americans suffering the most.

Trump wants to impose a 10 per cent tax on all US imports, and a 60 per cent levy on goods coming from China, which would let him extend beyond 2025 a series of tax cuts he made as president in 2017.

The former president’s proposals are “sharply regressive tax policy changes, shifting tax burdens away from the well-off and towards lower-income members of society”, according to the Peterson Institute, a think-tank.

The group put the cost of existing tariffs plus Trump’s second-term plans at 1.8 per cent of GDP, implying that the cost of the new levies would be “nearly five times those caused by the Trump tariff shocks through late 2019”.

The new policies would cost middle-income households an average of $1,700 a year, with 3.5 per cent less in disposable cash for the poorest half of households.

Peterson Institute economist Mary Lovely said that with Biden’s new tariffs on Chinese goods, “we are not talking about a big burden” on consumers, “at least not yet”.

Viewpoints

Source: Economy - ft.com