this is "gps" the global public square, welcome to all of you in the united states and around the world. i'm fareed zakaria coming to you from new york city. here's my take. the word that probably best describes the biden administration's efforts in public policy is ambitious. most of its initiatives from infrastructure funding to support for green transformation to aiding ukraine are big and bold. now the white house is trying to put together another major effort that, if successful, will be a game changer. the saudi-israeli normalization.

there are many complications that could derail the negotiations, but if a deal comes together the middle east strongest military and most technically advanced power, israel, will be allied to the region's strongest economic power, saudi arabia which is still the swing supplier of the world's oil all under an american security architecture. that would be a major win for washington. for over a decade now the u.s. has been searching for a role in the middle east that is not the old quasi imperial one and yet skurs american interest in this crucial region allowing washington to focus on the larger challenges posed by russia and china. by organizing a soft alliance between israel and saudi arabia, biden can rely on these two countries to anchor the region economically and militarily. there is a price, of course, and

it's substantial. saudi arabia wants an american security guarantee and american technology to build a nuclear energy industry. that includes the domestic enrichment of uranium which the u.s. has facilitated in another country and of course, many countries with homegrown nuclear industries enrich their own uranium from india and france. the two sides are close to agreement on the nuclear issue which which will likely involve an american-controlled enrichment facility in saudi arabia. it will not contain a version of nato's article 5 guarantee, but rather a softer commitment to respond and take action if saudi arabia is attacked. this will require careful language to ensure that the clause is not invoked if the saudis precipitate a crisis as they have in recent years. it would have to include some assurances that saudi arabia

would accommodate u.s. interests on the price of oil, exclude chinese military facilities from its territory and keep denominating in u.s. dollars assuming these issues can be overcome. washington should open up its security umbrella to saudi arabia. the truth is that ever since the carte carter doctrine of 1980 which declared the persian gulf was an area of vital interest to the united states, washington has recognized that intervention in the gulf by a hostile power would threaten the economic lifeblood of the industrial world. and when search an attack took place against kuwait in 1990 directly threatening saudi arabia the u.s. did, in fact, come to the rescue of riyad. the largest challenge is with israel. this deal would be concluded with the most extreme right-wing government in israel's history. one that is trying to trying to alter the constitutional makeup of the country and moving to

make a palestinian state an impossibility, but saudi arabia and the u.s. have a lot of leverage. israel needs this deal more than they do and in particular, israel's prime minister benjamin netanyahu who faces mass protests and ongoing trial and a restless coalition of extremists. if washington and riyad work together they might be able to pull off a new u.s.-saudi-israel alliance that could also make greater progress on palestinian rights that has taken place in decades. both riyad and washington should make clear to netanyahu that he has to take hard steps to keep open the path for a two-state solution. that means a freeze on the expansion of jewish settlements in the west bank, an end to the legalization of illegal outposts and the opening up of areas currently under israeli control to allow the palestinians to expand their towns in the west bank. this would enrage bibi's most

extreme coalition partners who want to annex all of the west bank, but there is a way out of the impasse as martin, a former u.s. ambassador to israel told me, biden should present bibi with a strategic grand bargain that includes action on the palestinian issue. let bibi figure out how to manage his coalition or how to break it and form a new one. what biden is proposing is good for the united states, saudi arabia and israel. extremists in netanyahu's government should not be allowed to veto it. bibi is banking on the notion that the saudi government actually doesn't give a damn about the palestinians and will sell them out for token rhetorical concessions, but he may be mistaken in this assumption. crown prince muhammad bin salman has kept his religious conservatives at bay while he's opened up the country and opened up major economic and social reforms. he might not want to anger them by,a bandoning the palestinians,

as well and he insists it's possible that biden will back him up, and some democratic senators will probably make it clear to bibi that the price of senate ratification is a real movement on the two-state solution. in that case, bibi netanyahu will have to decide what he wants more, a truly historic advance in israel's security or keeping afloat his ricchetti, controversial and extremist contribution. for go to my washington post column this week.

with fewer than three hours to go before the federal government shutdown, the senate passed legislation late last night to keep it funded for only another 45 days. as i've said before, the u.s. is the only nation that i'm aware of where legislators approve spending and then have to approve paying for that spending when the bills come due.

it is nonsense, and it points to america's fiscal irresponsibility which is exactly what i want to talk about to katherine campbell about, she's is an opinion columnist at" the washington post" and a commentator here at cnn. brilliant. why are the maga republicans, you know, dying on this sword which is spending cuts? i thought that was the tea party republicans. i thought that was the paul ryan wing of the republican party. trump came in saying i don't want to cut medicare. i don't want to cut spending. i want to increase spending which he did, so what's going on? >> i think it's performative. they're not really interested in cutting spending. this performative desire to get pi fiscal deficits under control is at odds with the policies on the table.

they have ruled out spending cuts to all of the places where spending is actually a major problem, long-term trajectories and i'm talking about entitlements, social security, medicare as well as other parts of the annual diskrcretionary, defense, they're not interested in touching those either. when you rule out all of the major categories of spending as well as revenue increases which they've already done, you end up fighting over a very, very tiny share of the budget, each category of which would be very unpopular to cut. so, yeah, i don't think they really mean it. >> so 45 days from now we're back to the same? because they're not actually proposing anything real. >> no. i mean, they have put on the table some pretty dramatic cuts to specific programs, things like, for example, rental assistance or food assistance, but none of that is going to get through. >> 0.1% of the budget.

>> the share of the budget that they actually fund every year as opposed to being on autopilot is less than a third of total spending. so if you rule out all of the obvious places to cut and then you also rule out within that annual discretionary budget things like border patrol or law enforcement you end up having to propose very deep cuts to a few programs which would devastate those programs and make virtually no difference to the long-term debt trajectory. how do we get here because we do have -- we're running deficits now in the 8% to 10% range. how do we get here? >> i think if there's any bipartisan agreement within washington, it is that we should not cut entitlements and we should not raise revenues on at least 98% of the population. so that is a recipe in and of itself for having larger deficits, but then on top of that, you have, as you mentioned, trump was very into

increasing spending despite the rhetoric about being a tight-fisted businessman and bringing budgets under control. if you look at not only the tax cuts which caught a lot of attention under trump and cost $2 trillion. if you look at how much he added in new spending before covid it was $3 trillion and additional spending after covid hit. >> which was about five. and then biden, of course, added more spending to the budget in response to covid and some of those spending programs were not specifically about the pandemic, of course, and then you have on top of that a number of very expensive industrial policies that have been put in place which you can debate on the merits, but you can't debate that for the most part they do cost quite a bit money. all of those things add up. so we already had in the backlog these unsustainable deficits coming and then we made them worse especially because neither party has put forward any

realistic approach to undoing those problems and in fact, they're exacerbating them. they're adding spending and biden, for example, has excited to extending the majority of the trump tax cuts at this point. >> so it feels to me that what you began by saying is the core of the issue which is ever since ronald reagan comes in and he decides he's going to do these big tax cuts and he'll increase defense spending, what i think became clear is the american people are very comfortable with republicans on taxes and democrats on spending. in other words, they like republican levels of taxes and democratic levels of spending, but there's a huge gap between that. that means you have a huge amount and you make that up by borrowing. >> yes. absolutely. for a while, interest rates were very low so it was relatively costless for us to continue borrowing. today, the ten-year treasury is at 4.5%. over 4.5%, that starts to get a lot more painful in the years ahead because the amount of

money that we will be forced to spend on just servicing the debt alone will increasingly crowd out other priorities. to be clear, there are categories of spending that we should be devoting more resources to, things that will pay off. making sure there's no lead in the pipe so kids can grow up to be productive, healthy adults and workers. universal pre-k and things like that that would pay off. all of those kinds of priorities are getting crowded out by the fact that we have shown so much cowardice in making tough choices about the things that are on autopilot as well as the other kinds of policy measures that seem popular, but that were not funding. even if they're popular, we need to find a way to pay for them. >> we were able to do all of this because interest rates were low, but now the ten-year treasury is 4.5. would you share the interesting piece saying we used to run

deficits that were like ever other industrialized country, around 3% of gdp. we are now running 8% of gdp. at some point does this -- is this unsustainable? >> if something can't go on forever, it won't. that's sort of where we are. we're not facing a crisis today, obviously. markets do seem to be responding to some extent to these long-term fiscal challenges in the united states. the least one one way to interpret the long-term treasury rates have gone up and so far the world is continuing to lend to us. they have shrugged off and other governments around the world have shrugged off the challenges that we face and as we continue to see more political dysfunction including in the shutdown threat and including to needlessly default on the debt when we could have paid it off. i wonder how sustainable that will be and it will start to become more painful to continue

to run these deficits when the world seems a little less willing. the marks seem less willing to lend to us essentially for free. >> catherine, always a pleasure. thank you so much. >> next on "gps" one of the ways kevin mccarthy avoided a government shutdown was keeping ukraine funding out of the legislation. we'll talk about the west's apparent waning interest in ukraine when we come back.

let's get right to the rest of the world with today's terrific panel zanny minton bellows is the editor in chief of "the economist" and richard hawes is the professor emeritus on the council of foreign relations. welcome both. you were in kyiv about the same time i was and you interviewed zelenskyy, and there was an interesting thing that came across in your interview which i thought was zelenskyy saying i hear all these western leaders

telling me they're with me, but i look in their eyes, and i wonder and think maybe they're not. >> he said exactly that. before that he said i have good intuition and my intuition has served me well and he made this point and quite a powerful point because i think he really does realize that the support that was there is in certain quarters perhaps not as strong as it was and he came to washington after you and i saw him and he felt that very strongly and it was a very different reception from the last time he was in washington. i'm not sure how dangerous it is right now. i'm particularly worried about the u.s. i think in the u.s. going into an election year, it is going to be difficult to sustain support. in europe there are countries and we have a tough winter with higher energy prices, too, and in europe there's much more of a recognition of the stakes in this and there are existential stakes for ukraine and frankly existential stakes for europe

and the challenge and you and i spoke about this while we were in ukraine and i saw him, i saw his wife ask and a bunch of peo and most of the key players in the government and the realization is this war is not going to be over any time soon. it is a war of attrition and the front has barely moved and so the focus has to shift to how ukraine as a country and the economy survive and thrive while it is still at war in the eastern front and that means much more focus on air defense and much more focus on ukrainian capability and the fact that they're building up their drone capa capability means a different approach to ukraine and that makes me question if the west can do that. >> you put a very interesting essay in foreign affairs basically to try to begin the process of a negotiation and i was in ukraine about this and what their response was and particularly this was private.

publicly it's we're fighting to get everything back. a couple of people said to me, look, the problem is richard haas' proposal is premature because we cannot -- to zanny's point, we cannot function as a nation right now as an independent economy without being able to have odesa. without being able to export the grain out of odesa and right now because of the russians control the sea of azov and control the black sea and we need the south as much as we cannon tr control and that will be hard. >> it hasn't quite delivered. that's the nature of warfare. there's something of a letdown. more broadly, they've got a bigger problem. in foreign policy you always run into difficulty when there's a

gap between your ends and your means and i would say it's increasingly apparent that there's a gap between ukraine's ends and we have to have economic reparations and war crimes and what their means are, what their military means are. at some point, they and the united states and the europeans will have to reckon with the gap and decide what they do. do they change the ends? do they change the means? we will get to that point. yes, maybe we were premature and this process has to begin. i think it actually has begun privately in ukraine and at some point it's going to have to begin between the united states and ukraine and it will be unsustainable to max mlizalize ends and however desirable it is, it's not feasible. >> i say this with trepidation to the great richard haass and you're right in the end the territorial ambitions are going back to the pre -- the 1991 borders and to be honest people

in ukraine realize that. >> even the 2014 was very hard. >> absolutely. where i think i disagree with you is the notion that there's any realistic hope of negotiating with putin. one, vladimir putin clearly thinks he can outlaf st the wes that the west is tiring and he's waiting for '24 and hoping trump will win and i think anything that is predicated on a negotiated settlement right now -- >> let me take issue with the great zanny. he wants to wait us out and see what happens in '24. there's still potentially an argument not because putin will jump at it, but to shape the debate in the west. i believe it becomes less difficult to sustain support for ukraine and if they can put something on the table the russians balk at it and then it's easier for the president for the president and others to say, hey, we put something on

the table and you don't have to compromise your long-term goals. >> this is a plan because they currently have a peace plan and everything back -- we want everything, 1991 borders. >> it's always good to have proposals for peace plan, and i'm not against that, but what i think is very important now is to change the mindset particularly in this country where there is a view that this war needs to be over and then we'll start rebuilding ukraine. this is not going to be like this. this is going to be an extended conflict and an extended frozen conflict and the right way to think about it is much more like israel. how do we ensure this country thrives with an aggressive, belligerent -- >> which is long-term help, potentially eu and that's part of the long term deal. >> when we come back, we'll talk about something very interesting and tragic that has happened in the news. the disappearance of the flight of three-quarters of the armenians from there, why did it

happen? what happened? when we come back. we are ba

with the economist zanny minton bedois and richard haass on the council of foreign relations. nagorno karabakh was this armenian enclave within azerbaijan and it had declared itself an independent republic and no other country had recognized it and it had been protected and azerbaijan is running it over. it's a huge, huge human tragedy. what's the geopolitical angle here? >> it is essentially disappearing and a human tragedy. geomritecly, the most interesting part of this is about russia. for 30 years this special situation has been maintained and russia allowed it or in some ways enabled to to be maintained. >> there were russian peacekeepers.

100% and they stopped and watched this all unfold, the tragedy of it. i don't think it's that cynical. i don't think they wanted it and my guess, and you and zanny may disagree with me that they simply don't have the capacity. they've got a lot on their plate right now in u kkraine and elsewhere and the plate is pretty small. we think of russia is a great power. it's less than that. it has capabilities, yes, but it doesn't have great power and it can't multitask in many ways and -- this is one of the consequences of combat and it's just going to be miserable for these innocent people. >> i totally agree. you can see one side of that, russia increasing defense spending by 70%. that means they're running out of everything, too. >> absolutely. for me, the striking thing is the length of time this has been going on and the nagorno-karabakh war started when i first lived in ukraine 30 years ago and i went to the caucuses and that was the big conflict that we would go and

cover literally in the beginning of my career. now 30 years on and it's over in a matter of hours practically, and i completely agree with you, richard, i think it is a function of russian weakness and so focused russia has to be on ukraine that it is both unable to focus on others and others around the rest of the russian federation are taking advantage of that, and so i think this is, to me, a sign of russian weakness and not russian strength. to your point, the russians are mobilizing, shifting huge, huge share of their economy on to a war footing. that's not so great for ukraine because although the western partners of ukraine that collectively have a much bigger gdp than russia, we're not going to shift that much to increase defense spending that much, but russia is, that's why i think this will go on for years and years because russia is mobilizing. >> russia's economy is 15 times the size of ukraine's. there's so much to talk about. one thing that struck me about -- in the united states,

dianne feinstein, you know, dying before she retired she is, unfortunately, not the only person in the u.s. senate who you wonder if they'll die before they retire. what is it about american politics that is attracting a kind of gerontocracy. >> mitch mcconnell has had sev several freezing episodes and two likely candidates for the presidency and one will be pushing 80 and near his early 80s, and we are an aging society and maybe our politicians reflect it. clearly, incumbayy, and much of the societiy is much younger and doesn't identify with each other and they have a difficulty understanding it and these are demanding jobs. i was in government when i was a lot younger and the idea of

working those kinds of days, seven days a week now, that to me is a somewhat troubling prospect. >> you have a very young prime minister in britain. >> we do. this is one area where the rest of the world looks at the u.s. and rolls their eyes. we just cannot understand that in a country with 300 million+ people there are the same group of gerontokcrats and i'm not surprised that younger americans are disillusioned. living to 120, so if you'll stick with these people -- >> they're only 80. >> the other thing that i've been tracking is china. it feels like to me like the chinese government, everybody has been waiting and maybe i should start with you on this, zanny. everyone is waiting for china's plan to get out of its economic troubles. they've had economic troubles in the past that people forget and

they had many bubbles and real estate, but they always had this technocratic government that figured a way out of it. right now it seems more frozen than i would have expected. >> you're absolutely right. they seem to be flailing in a way that we've not ever thought china would. remember in the great recession of 2008 and 2009 the chinese did a huge stimulus and essentially supported the world economy whereas this time it was probably a year ago we were having this conversation and the expectation was the u.s. would have a hard landing and the china lifted and the covid restrictions and the economy would come roaring back and quite the opposite has happened and the u.s. looks remarkably strong at the moment and the chinese economy hasn't. it's a function of several things and they have a property bust -- >> they can't spend their way out. >> they could boost consumption and then you get into what seemed to be ideological concerns of xi jinping that he doesn't want to give welfare pages and they're reluctant to

do that. he's massively killed off animal spirits by randomly locking up senior political leaders and then the, you know, fight with the u.s., the economic constraints and the export controls are making a difference to china. so you add all of that up and in the short term the economy is in trouble. and the loss of confidence is -- for the first time when i talked to the chinese whether it was corporate types and everyone i talked to in the last few months from china has been so downbeat about the prospects for the economy there. >> what does a china with this kind of economic profile translate into foreign policy? >> i think in the short run you see the interest in re-establish a more normal diplomatic relationship in the united states particularly in the economic realm. i think that's what the chinese are most interested in. in the long run, that's the big conversation that you and i and others are having, does the chinese leadership that can't get its legitimacy in public

support in getting high economic returns, do they reform economically or do they look to foreign appr foreign policy and that's what frightens a lot of people if the economy continues to encounter headwinds for the next few years at some point in the third term, or even if he begins a fourth, does xi jinping say that's going to be my legacy and that's the source of my legitimacy because the economy can't provide it for me. >> we will have to have both of you back to talk about that because it's a huge, huge subject. thank you, zanny minton bedois and richard haass. >> next on "gps," are we reaching a tipping point in the wold use of fossil fuels? i will discuss that with the head of the international energy agency who says yes.

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in recent months surging past $90 a barrel. that's partly due to recent supply cuts from countries like russia and saudi arabia. it's also because despite all of the money and effort being put into the clean energy transition, global oil consumption is expected to hit record levels this year. according to new research from the international energy agency world demand will peak by 2030 which means in just a few years oil consumption will finally start declining. will that come fast enough to avert catastrophic climate change and what do we need to do to decarbonize faster? i spoke to the executive director of the international energy agency. >> fatih, pleasure to have you on. >> thank you very much. >> you have a unique global perch from which to look at energy. give us the big picture. what is happening over the next decade or two? >> i see a clean energy economy

is emerging. emerging fast and faster than many people realize. just let me give you one example. this year, of all new power plants in the world, installed in the world, more than 80% is renewables. wind and others, but they're dominating the game and mainly because they are becoming cheaper. the transportation sector because cars, trucks and others, also we see a major electrification wave. only two years ago, one out of 25 cars sold in the world was electric, and this year one out of five cars sold as electric. it has grown exponential. china, u.s. and other parts of the world so these are changing the picture of energy mix and in that context we may expect that

the oil use globally can peak before the end. >> so that last part of what you said has gotten you into some controversy. you have said first coal then oil and then natural gas are all going to peak. saudi arabia has attacked you for saying this. others in opec has attacked you. you stand by what you say which is that fossil fuels are going to peak 2030. >> you are right. some oil producers have a different view, which i respect. we are looking at the data and this is the result. it doesn't mean that as of 2030 we don't use any more oil or gas or whatever, we will use it, but we will need less. and if we want to reach our climate targets we should even use much less than what we have

today, even the use of oil and coal, the temperature increase would be still in line with 2.4 degrees celsius which is significantly higher than what scientists tell us it should be 1.5 degrees celsius. there is a big difference between 1.5 and 2.4 degrees celsius which is -- which means a lot of external weather events as we have seen this summer more of that for the several years to come. >> what do you think of what president biden and the congress have done, the inflation reduction act which has a huge number of green subsidies? >> in my view, this is the 2015 agreement which is the single most important climate action. it is going to give a big push for clean energies, that's extremely important for the united states and for the rest of the world. >> it seems to me the most

important transition that could take place with technology we already have is to move from coal to natural gas. gas emits half this year to coal, is there a plan? is that likely to happen? >>. >> it challenges emissions significant, and what would be the best is from coal to renewable energies, solar, wind, hydropower. >> don't you need base load capacity? you need a backup because the sun doesn't always shine. >> you are completely right, if there's no sun, and there's no wind you may be in trouble if you do not have nuclear power or hydropower or batteries in the case and many countries are building this bedrock and chinese, one them building nuclear power one after another and hydropower. >> and also a lot of coal. >> they do a lot of coal and it is one of the issues that china has to deal with. in fact, on one hand, china is

the champion of clean energy investment today, but they are building the coal plants, but i believe it will be short lived and we are going to see even in china coal use will decline very soon. >> what are you seeing on nuclear? >> i know that the biden administration has finally made it easier, but it still takes a long time, very expensive, can we see a real nuclear revival? >> nuclear is coming back. >> the invasion of ukraine by russia reminded many governments that the electricity is very important and therefore generating electricity at home is very important and one of the options here, in addition, the renewables and nuclear power, this invasion game boosts >> we have to leave it at that. pleasure to have you on, sir. >> thank you very much, sir. thank you. next on "gps", canada said

the indian government may have killed a canadian citizen on canadian soil. how is this story playing out in india? i'll give you a hint. not the way you think.

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and now for the last look. two weeks ago, prime minister justin trudeau made a startling announcement. canadian security forces, he said, are investigating a credible allegation linking agents of the indian government to the murder of a canadian citizen on canadian soil.

45-year-old har deep singe nijjar was head of a sikh temple in british columbia who was gunned down in the temple parking lot in june. perhaps trudeau thought that by publicly raising these allegations he might shame the indian government into cooperating with canada's investigation. in the west, the news that india may have ordered a hit on canadian soil is shocking. and analysts note gravely that such an act could only hurt india's ambitions on the foreign stage. an ttony blinken has asked themo cooperate in the investigation and outlets like the financial times and the economist calls for consequences should the allegations be proven. but in india, the reaction is very different. and reveals that, in fact, justin trudeau blew it. just look at the indian press. story has released a spasm of

jingoism in which they cast canada not as the multi-cultural haven and stable democracy you or i may know. but as a rogue state, bent on protecting terrorists. >> justin trudeau, the supporter of terrorism. the open terror back with sympathies for terrorists. these are the point of no return. >> one commentator threatened canada with a nuclear attack. the indian scholar serene describes the country's reaction welcome. if we did it, it was right. if we didn't, you were wrong. and an analysis piece in the hindu stan times conjured up ganging up against india claiming that nijjar's killing would be a rallying point for the anglo-saxon block to come together against india. indian officials have strenuously denied canada claims and in the same breath has accused canada of providing a safe haven for terrorists.

that might sound like a puzzling and absurd allegation but it is a reference to the fact that nijjar was a sikh separatist, one of many sikhs abroad who advocate for a separate country for indian sikhs. homeland is called hallistan and it goes back decades and the effort includes an armed militancy in india that peaked in the 1980s. as the economist noetes, the movement was responsible for the death of thousands in the 1980s and '90s but has since become more than an idle talking point in the sikh de as poria and has negligible support in india. tensions between india and canada over sikhs have been long running and as the f.t. notes, india's accusation that canada is too soft deserves some scrutiny. but it is also true that playing up this kind of threat to india

is politically useful for prime minister narendra modi and his party. you see, justin trudeau's whole strategy of naming and shaming india fundamentally misunderstands the dynamics of the behind yu nationalism which is rooted in the belief that india's hindu majority has been passive for two long in face of threats from minorities and foreigners. when presented with an opportunity, modi knows how to translate it into political gold. take one example, in 2019, a suicide bomber carried out the world attack in cashmere in decades, killing dozens of indian soldiers. indian blamed pakistan and sent in the indian air force to carry out strikes on what it said was a militant training facility in pakistan. though pack tan denied the strikes hit much of anything. but nonetheless it was the first

time a cos border operation had been carried out in 50 years. as noted in bloomberg, modi went on a victory lap saying in a campaign speech that he believes in barging into the house of terrorists and killing them. he implied, without any evidence, that the opposition party sympathies lay with the terrorists. pollsters reported a boost in modi's approval ratings after the strike. now modi faces another election. next spring. and he will surely be helped if he could run by standing up to sikh separatism and a western bullying, regardless of how real or dangerous either threat actually is. thanks for being part of my program this week. i will see you next week.