Special: Russia-Ukraine Conflict Impacts American Economy and Foreign Policy

- Good evening and welcome to the Washington Week Extra. I'm Yamiche Alcindor. As Russia's invasion of Ukraine dominates the headlines, we're continuing our conversation on the challenges ahead. On Thursday, following the invasion, oil prices broke above $100 for the first time since 2014. Natural gas prices increased by 6.5% and stock markets dropped globally. President Biden promised to blunt the effects of all of this, but he acknowledged it won't be easy.

- As we respond, my administration is using the tools, every tool at its disposal to protect American families and businesses from rising prices at the gas pump.

- Joining me tonight to discuss this and more, Peter Baker, Chief White House Correspondent for the New York Times and David Martin, National Security Correspondent for CBS News. Thank you, both of you, for being here. Peter, I wanna start with you. What exactly can President Biden and the White House do to try to help gas prices stay lower than they would be if things get even worse, but also historically, in context, sort of, what have presidents been able to do in the past?

- Well, there are limits to a president's ability to affect this. There are a few things that they have at their disposal. They have the strategic petroleum reserve which is basically, you know, reserve the energy that could be released, but frankly, that's a short term fix. It won't do anything over a longer term. There's not enough oil in there to do that. You can go to the other producers around the world like Saudi Arabia and the other OPEC nations and try to get them to increase production. Some of them have capacity that they don't always use and you can try to, you know, some Democrats talking about lowering gas taxes, in other words, to have a holiday in effect on some of these taxes to lower the price in a short term range. All these are small fixes that probably won't work on a long term basis. In the broad scheme of things, we're gonna have to find new energy sources if you're gonna keep Russia off the market for a long time.

- It probably won't work is not what I wanted to hear, Peter, but that's, you know, that's the tough reality. I wonder, this of course is a large challenge now that President Biden is dealing with. Sticking with you, talk a bit about how much Russia and Ukraine, but also the domestic challenges that come from that will possibly factor into President Biden's State of the Union Address next week?

- Right, exactly. He's gonna go before Congress on Tuesday. It'll be his first official State of the Union Address and you're right, he's got an awful lot of things to talk about. He's got a new Supreme Court Justice he's just nominated. He's got this war, he's got the economy. He's got COVID. He's got his legislative agenda that has kinda stalled obviously. The Build Back Better Act and the voting rights legislation that haven't gone anywhere. So it's a real question, how does he wanna reset for this second year? And we thought we knew a few weeks ago where he might be going, but again, now this war in Ukraine, I think has come to throw everything out of sorts and he has to find a way to explain to the American people why it's important, why it's important what we do about it, and how it can affect them what he's planning to do to make sure that, you know, it won't affect the consumers that much. Now here's the problem, is that most Americans haven't rallied around him so far. There's usually a rally around the President effect in a crisis like this, but the polls suggests that he's only got somewhat less than half of the American population supporting his handling of this crisis at this point. Maybe that'll change, The State of the Union is a chance for him to reset in that way, but it's a big moment for him because it'll be the biggest audience he'll have probably this year to explain himself.

- A big audience, David. And I wonder, when you talk to your sources at the Pentagon when you talk to National Security Officials, how concerned are they about the domestic impact of this war happening in Eastern Europe especially when it comes to not only of course the economics of this, but also military families? There are American troops over there in Eastern Europe. What are you hearing?

- Well, this is for certain going to increase the number of troops that are deployed to Europe. When you add up all the troops that have already been committed to reinforcing these NATO countries, it comes to 14,000. We don't know how long they're gonna stay there, but they're gonna be there for a while. That costs money and the Pentagon was already worried about how it's going to cover all its responsibilities. It's trying to turn its back on the Persian Gulf and the Middle East so it can concentrate on China, but Iran's not going away and now you have Ukraine being the center of this new crisis in Europe which is obviously gonna attract attention and resources away from all the other things that the Pentagon wants to achieve.

- Yeah well, David sticking with you, you sort of really roped into and spoke into my next question, which is about the looming impact of Afghanistan, but also, when you think about the future, President Biden has always talked about China as being our number one adversary. He constantly talks about autocracy versus democracy. How are those two things, the past, but also the future factoring into the way that officials are thinking about this?

- You know, the, the way a war ends often sets the conditions for the next war. This war in Ukraine is surely going to end with Ukraine being back into Vladimir Putin's sphere of influence. The question is, will he be better off having done that or will the economic pain of these sanctions be greater than the security gain of having invaded Ukraine? And other countries are gonna be watching this, specifically China, with its designs on Taiwan, so right now, what we're witnessing is obviously a tragedy for the country and the people of Ukraine, but this really could be a turning point in history depending upon the end result.

- A turning point in history is a definite way, a good way, and an apt way to put it. Peter, I wanna come to you to talk a little bit more about China. They are watching all of this. They are weighing in a bit. What are you hearing from White House sources about sort of how the White House is viewing China's role, both currently, but also in the future as it relates to sort of this shifting power dynamic going on in Eastern Europe?

- Yeah well, first of all, of course, David is right that China looking for the precedent here and we're looking for the implications for its own territory for Taiwan and everything else. Secondly, of course there is this, you know, supposed alignment that you're seeing between Russia and China over this. President Putin, of course, went to Beijing at the beginning Olympics there and stood with Xian Ping and they, you know released a 5,000 word manifesto together and China has basically given sort of lukewarm support to Russia in this. They say that they support Ukrainian sovereignty but that gosh, Russia is right about NATO and hostility of the west and really it's all America's fault. And then you've got the reporting from my colleague Ed Wong in the New York Times. What he discovered was that the Biden administration went to Chinese officials, including the foreign minister and the ambassador here to Washington, six times, at least a half dozen times in the last few weeks, trying to get them to help reign in Russia. They showed them intelligence saying that the troops really are getting ready for an attack. You need to help us if you wanna keep stability on the world stage, be a big player as you wanna be by helping us influence Moscow into not invading its neighboring country. China basically blew 'em off, said we don't believe you and, to the extent that we do believe you, this is all your fault anyway.

- And David, last question to you. I talked to you a bit about this on the program. Nuclear weapons looming large in this conversation. If you're an average American who maybe isn't as plugged into Ukrainian history and Russian history, how worried do you think folks should be? How much are people in the building at the Pentagon talking about sort of the nuclear powers being a factor here? Or is that something that's just such a drastic step that folks don't really wanna even imagine thinking about what could happen there?

- I don't wanna raise any alarms about the possible use of nuclear weapons, but it more the conditions under which these nuclear weapons are going to exist going forward. We call this the new Cold War but it's really different from the old Cold War because that was two nuclear superpowers. the U.S. and then Soviet Union. This new Cold War is three because you have to add China, which is in the middle of a nuclear breakout, trying to reach something like parody with the U.S. We've got no experience how to manage a three-way nuclear standoff. The U.S. and Russia have years and years of experience and they've managed it. We've gone all these years without any kind of nuclear weapon being fired in anger, but adding China which has no experience in this field of escalation and all the abstract and abstruse theories of nuclear war, it's a whole new ballgame

- A whole new ball game is a good way to put it and also a good way to summarize this week. Thank you so much to both of you for joining me. We'll have to leave it there tonight. Thank you to Peter, to David for sharing your reporting and thank you at home for watching. I'm Yamiche Alcindor. Good night from Washington.