Editor’s Note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our s each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. WAKING UP TO A NEW REALITY — Late Wednesday night, Russia launched a new military action inside Ukraine. President Joe Biden has warned of a "decisive" response from the U.S. and its allies. Follow the latest from POLITICO. White House officials say they are confident they can mitigate the effects of a Russia-related energy shock on American households and businesses. Don’t bet on it, energy analysts say. The administration has been working for months to bring down gasoline prices — for example, by tapping federal emergency oil reserves — to little avail. And other options, such as suspending the federal gas tax, are unlikely to win support in Congress, our Josh Siegel reports. Bob McNally, president of research firm Rapidan Energy and a National Security Council energy adviser during the George W. Bush administration, tells Josh: “The Biden administration has learned by now, after this winter crash course in how oil and gas markets work, that there are no easy short-term solutions to rising gasoline prices.” Rising energy costs, especially at the gas pump, have been a political liability for the administration. Energy prices in January were up 27 percent from a year earlier, as gasoline prices climbed 40 percent and fuel oil rose 46.5 percent compared with January 2021. That contributed to a 7.5 percent increase in overall consumer prices last month, the biggest annual inflation gain in four decades. Daleep Singh, deputy national security adviser and deputy National Economic Council director, said Tuesday the administration is working with major oil producers on efforts to expand capacity if necessary, and suggested it could once again release oil from the U.S.’s Strategic Petroleum Reserve. But McNally put those plans “in the nothing-burger category.” Meanwhile, President Joe Biden, in remarks at the White House Tuesday, acknowledged “defending freedom will have costs for us as well. We need to be honest about that.” More sanctions on the way — Biden on Wednesday announced new sanctions on the Russian company that built the controversial Nord Stream 2 natural gas pipeline, a day after Germany blocked the pipeline’s certification because of Russia’s invasion of Ukraine. “Through his actions, President Putin has provided the world with an overwhelming incentive to move away from Russian gas and to other forms of energy,” he said. And the president last night said he would announce “further consequences” Thursday, after Putin declared a special military operation against Ukraine. Sen. Pat Toomey of Pennsylvania, the top Republican on the Banking Committee, said he was glad to see the Nord Stream 2 sanctions, but said it was “imperative that the U.S. imposes crippling sanctions on Russia’s financial sector to make them feel the impact of this invasion.” Deputy Treasury Secretary Wally Adeyemo on further sanctions — ““If he chooses to invade, what we’re telling him very directly is that we’re going to cut that off, we’re going to cut him off from Western technology that’s critical to advancing his military, cut him off from Western financial resources that will be critical to feeding his economy and also to enriching himself,” Adeyemo said on CNBC Wednesday. Survey says — A new POLITICO/Morning Consult poll conducted from Saturday to Monday found:
- 51 percent of voters said they favor imposing sanctions on Russia, up 7 percentage points from a Feb. 7 survey. Only 19 percent of voters support U.S. troop deployment to Eastern Europe
- 76 percent of voters said they would blame Vladimir Putin if the Russian invasion led to higher U.S. gas prices, with similar responses among Democratic and Republican voters
- By contrast, 58 percent said they would blame Biden, though Republicans were much more likely to blame the U.S. president — 73 percent, v. 44 percent of Democrats
IT’S THURSDAY — Victoria Guida will be your MM host tomorrow, and I’ll see you back here Monday. Make sure to send any tips, feedback and ideas to vguida@politico.com, aweaver@politico.com or on Twitter @vtg2 or @aubreeeweaver.
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