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The bold Texas plan to stop migrants has hit a wall

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HUGO AND MAGALI Urbina used to consider Greg Abbott, Texas’s governor, a kindred spirit. At the start of the summer the conservative Christian retirees could be found fishing on the banks of the Rio Grande in Eagle Pass, where their pecan orchard abuts Texas’s border with Mexico. Migrants would wade through the water onto their land, where federal border agents usually picked the intruders up without much drama.

In July everything changed. Texas seized the strip of land along the river against the Urbinas’ will. State troopers laid down razor-wire and migrants bleeding from cuts began to climb ashore. Unlike the federal agents, state police were directed not to help the new arrivals and, by some accounts, were told to push them back into the river. By Christmas the couple had grown accustomed to finding little girls wandering alone in their orchard and seeing dead bodies beneath the trees. They blame Mr Abbott.

Three years ago, shortly after Joe Biden’s inauguration, the Texas governor launched “Operation Lone Star”. As migrant arrivals at the border surged, Mr Abbott reckoned it was up to Texas to use state power to stanch the crisis. He declared a “disaster” in dozens of Texas counties and deployed the Texas National Guard as well as state police officers. They had no power to enforce federal laws, but they arrested thousands of people for criminal trespass.

As a partisan gambit, the plan worked brilliantly. Texas Republicans have ignited a constitutional battle with Washington over whether their state has the right to police its own international border and even displace federal border agents. Mr Abbott meanwhile bused asylum-seekers to cities run by Democrats, contributing to a surge of arrivals that overwhelmed shelters and drained social-service budgets.

Democrats dismissed the busing as a stunt, which it unarguably was. Yet it compelled big-city mayors to confront the realities of skyrocketing migration and to lobby the Biden administration for help. In December Mr Abbott signed SB4, a law which allows Texas to arrest and deport people who have entered the state illegally. Most recently, state police blocked federal officers from entering Shelby Park, a busy stretch of the border near the Urbinas’ property in Eagle Pass.

Mr Abbott sometimes talks like an Old West marshal who must stand up for Texas citizens because Democrats in Washington won’t. “The only thing that we’re not doing is we’re not shooting people who come across the border because, of course, the Biden administration would charge us with murder,” the governor said on a talk-show in early January.

Texas’s actions are begging for constitutional review. In 2012 the Supreme Court struck down much of Arizona’s SB1070, a law that made illegal immigration a state crime and allowed cops to ask people to prove citizenship on demand. The recent policing in Texas constitutes a far more aggressive interpretation of state power, says Denise Gilman of the University of Texas at Austin. On January 22nd, in one of several cases challenging Operation Lone Star, the Supreme Court issued an emergency 5-4 ruling against Texas and for the Biden administration, holding that federal border agents had the right to cut razor-wire installed by Texas police.

More such litigation awaits, and the narrow margin in the razor-wire matter suggests the court’s expanded conservative majority may be unsettled about how far to go. In this instance, Justices John Roberts and Amy Coney Barrett were the only conservatives to join the court’s liberal minority in backing federal power. “This is not over,” Mr Abbott posted after the decision. Troopers could be seen installing more razor-wire in Shelby Park the next morning. A federal lawsuit challenging buoys erected by Texas in the Rio Grande is before the Fifth Circuit and another on SB4 sits with a district judge in Austin.

Mr Abbott’s political instincts may be sound, but state police have done no better than the feds at deterring migration. Last month, a record 10,000 people crossed into America from Mexico each day and around 40% came through Eagle Pass. There, a string of buoys takes up less than a fifth of a mile in a 1,200-mile-long river border. “It’s like putting a postage stamp in the middle of a football field and saying, hey, stop this running back that’s coming at you,” says Henry Cuellar, a Democratic border congressman. Shelby Park, where federal agents were expelled, is about the size of a small golf course. Though fewer migrants arrived in January, experts attribute the slowdown to seasonal ebbs and flows and to Mexico detaining more migrants across the river in Piedras Negras.

Texas has so far expended more than $4bn on its plan, but under prevailing rules, border counties can apply for grants only for law enforcement, jail operations, court administrations, lawyers for indigent defendants and human-remains processing. That has left many social and humanitarian needs unmet. The hospitals in Eagle Pass and El Paso are staggering under the burden of caring for wounded migrants. Eddie Morales, a Democrat who represents a border district, wants to pause asylum-processing to discourage arrivals until the frenzy calms. Texas officials defend their barriers as necessary deterrents to prevent crossings of a ‘‘dangerous river where many have lost their lives”, Christopher Olivarez, a spokesperson for the Texas Department of Public Safety, wrote on X (formerly known as Twitter) recently.

These days the banks of the Rio Grande are strewn with enough clothing and shoes to fill a shopping mall. Haribo wrappers and stray baby-socks are a reminder of the children coming through. On warmer days Mexicans wade into the water to collect items that they can sell back home, calling out to American soldiers to throw more garments over the razor-wire. The detritus is evidence of the ongoing toll of failed public policies. And politicians at every level of American government bear some responsibility.

Stay on top of American politics with Checks and Balance, our weekly subscriber-only newsletter, which examines the state of American democracy and the issues that matter to voters.

Economics

Donald Trump sacks America’s top military brass

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THE FIRST shot against America’s senior military leaders was fired within hours of Donald Trump’s inauguration on January 20th: General Mark Milley’s portrait was removed from the wall on the E-ring, where it had hung with paintings of other former chairmen of the joint chiefs of staff. A day later the commandant of the coast guard, Admiral Linda Fagan, was thrown overboard. On February 21st it was the most senior serving officer, General Charles “CQ” Brown, a former F-16 pilot, who was ejected from the Pentagon. At least he was spared a Trumpian farewell insult. “He is a fine gentleman and an outstanding leader,” Mr Trump declared.

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Checks and Balance newsletter: The journalist’s dilemma of covering Trump

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Checks and Balance newsletter: The journalist’s dilemma of covering Trump

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Germany’s election will usher in new leadership — but might not change its economy

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Production at the VW plant in Emden.

Sina Schuldt | Picture Alliance | Getty Images

The struggling German economy has been a major talking point among critics of Chancellor Olaf Scholz’ government during the latest election campaign — but analysts warn a new leadership might not turn these tides.

As voters prepare to head to the polls, it is now all but certain that Germany will soon have a new chancellor. The Christian Democratic Union’s Friedrich Merz is the firm favorite.

Merz has not shied away from blasting Scholz’s economic policies and from linking them to the lackluster state of Europe’s largest economy. He argues that a government under his leadership would give the economy the boost it needs.

Experts speaking to CNBC were less sure.

“There is a high risk that Germany will get a refurbished economic model after the elections, but not a brand new model that makes the competition jealous,” Carsten Brzeski, global head of macro at ING, told CNBC.

The CDU/CSU economic agenda

The CDU, which on a federal level ties up with regional sister party the Christian Social Union, is running on a “typical economic conservative program,” Brzeski said.

It includes income and corporate tax cuts, fewer subsidies and less bureaucracy, changes to social benefits, deregulation, support for innovation, start-ups and artificial intelligence and boosting investment among other policies, according to CDU/CSU campaigners.

“The weak parts of the positions are that the CDU/CSU is not very precise on how it wants to increase investments in infrastructure, digitalization and education. The intention is there, but the details are not,” Brzeski said, noting that the union appears to be aiming to revive Germany’s economic model without fully overhauling it.

“It is still a reform program which pretends that change can happen without pain,” he said.

Geraldine Dany-Knedlik, head of forecasting at research institute DIW Berlin, noted that the CDU is also looking to reach gross domestic product growth of around 2% again through its fiscal and economic program called “Agenda 2030.”

But reaching such levels of economic expansion in Germany “seems unrealistic,” not just temporarily, but also in the long run, she told CNBC.

Germany’s GDP declined in both 2023 and 2024. Recent quarterly growth readings have also been teetering on the verge of a technical recession, which has so far been narrowly avoided. The German economy shrank by 0.2% in the fourth quarter, compared with the previous three-month stretch, according to the latest reading.

Europe’s largest economy faces pressure in key industries like the auto sector, issues with infrastructure like the country’s rail network and a housebuilding crisis.

Dany-Knedlik also flagged the so-called debt brake, a long-standing fiscal rule that is enshrined in Germany’s constitution, which limits the size of the structural budget deficit and how much debt the government can take on.

Whether or not the clause should be overhauled has been a big part of the fiscal debate ahead of the election. While the CDU ideally does not want to change the debt brake, Merz has said that he may be open to some reform.

“To increase growth prospects substantially without increasing debt also seems rather unlikely,” DIW’s Dany-Knedlik said, adding that, if public investments were to rise within the limits of the debt brake, significant tax increases would be unavoidable.

“Taking into account that a 2 Percent growth target is to be reached within a 4 year legislation period, the Agenda 2030 in combination with conservatives attitude towards the debt break to me reads more of a wish list than a straight forward economic growth program,” she said.

Change in German government will deliver economic success, says CEO of German employers association

Franziska Palmas, senior Europe economist at Capital Economics, sees some benefits to the plans of the CDU-CSU union, saying they would likely “be positive” for the economy, but warning that the resulting boost would be small.

“Tax cuts would support consumer spending and private investment, but weak sentiment means consumers may save a significant share of their additional after-tax income and firms may be reluctant to invest,” she told CNBC.  

Palmas nevertheless pointed out that not everyone would come away a winner from the new policies. Income tax cuts would benefit middle- and higher-income households more than those with a lower income, who would also be affected by potential reductions of social benefits.

Coalition talks ahead

Following the Sunday election, the CDU/CSU will almost certainly be left to find a coalition partner to form a majority government, with the Social Democratic Party or the Green party emerging as the likeliest candidates.

The parties will need to broker a coalition agreement outlining their joint goals, including on the economy — which could prove to be a difficult undertaking, Capital Economics’ Palmas said.

“The CDU and the SPD and Greens have significantly different economic policy positions,” she said, pointing to discrepancies over taxes and regulation. While the CDU/CSU want to reduce both items, the SPD and Greens seek to raise taxes and oppose deregulation in at least some areas, Palmas explained.

The group is nevertheless likely to hold the power in any potential negotiations as it will likely have their choice between partnering with the SPD or Greens.

“Accordingly, we suspect that the coalition agreement will include most of the CDU’s main economic proposals,” she said.

Germany is 'lacking ambition,' investor says

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