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Washington Report February 3, 2017
03 Feb 2017

Washington Report February 3, 2017

A week of policy changes and agenda setting (often on Twitter).
Inside the GOPs plans for 2017 … Alienating Key Allies, And Adversaries, While Congress Does Damage Control …. Farewell to Dodd-Frank? … Mentally Ill to be Allowed to Buy Guns (or put another way, Obama Administration gun-control regulations gutted) … Trumps Enemies Within … Bannon and the Supreme Team … and … (stop me!) … other news of the week.


Joyce Rubenstein
Capstone National Partners

INSIDE THE GOPs 2017 PLANS Politico “House Republicans are beginning to get specific on what they need to do — and by when — in this new Congress. Here is a detailed cheat sheet — distributed by House GOP leadership in a closed-door session Thursday morning — about the 14 key deadlines in 2017. The document provides a skeleton for what needs to happen over the next year. …. SO FAR there has been no clear guidance from the White House about an infrastructure package, which is why it’s left out for now. We expect late-year action on that.

THE FUTURE OF HEALTH INSURANCE (ACA) AND TAX ARE TIED TOGETHER, IN A SENSE. Republicans can’t start tax reform until health care is done. On health care, there is a “three-bucket strategy.” Once Rep. Tom Price (R-Ga.) is confirmed as HHS secretary, he plans to begin to unravel Obamacare administratively. The second plan focuses on a repeal and replace strategy — under reconciliation. And a third bill would be a health care package with various other elements.


CLASHING COALITIONS ON BORDER-ADJUSTMENT TAX Politico “Two new groups are joining the coming fight over House Republicans’ border-adjustment tax. On one side is the American Made Coalition, a new group announced Thursday backing the tax measure. The group won’t release the full list of the more than 25 businesses that make up the coalition, but GE and Boeing have confirmed they’re involved. On the other side is Americans for Affordable Products, a coalition made up of more than 100 companies and groups that’s fighting the proposed tax. They include Abercrombie & Fitch, AutoZone, Best Buy, Crate & Barrel, The Gap, IKEA, Macy’s, Nike and Wal-Mart.”

*What’s the ‘border-adjustment tax?” It doesn’t even exist in a legislative bill yet … but the idea is to stop subsidizing imports of products and materials into the United States with a 20% border adjustment tax on imports.


TRUMP TO DISMANTLE DODD-FRANK WSJ “President Donald Trump plans to sign an executive action to scale back the 2010 Dodd-Frank financial-overhaul law, in a sweeping plan to dismantle much of the regulatory system put in place after the financial crisis. Mr. Trump also plans another executive action aimed at rolling back a controversial regulation scheduled to take effect in April that critics have said would upend the retirement-account advisory business.” THAT WOULD BE TO REPEAL THE FIDUCIARY RULE (define “Fiduciary” – a legal standard that means advisers have to always offer advice that’s in the best interests of their client.) Vox “Last year, the Obama administration passed a new regulation designed to deal with financial advisers who don’t always act in the best interests of their clients. The idea, raise the ethical standards that govern the industry. They were particularly concerned that financial advisors were steering clients toward investments that pay the largest commissions, rather than the ones that are in the client’s best interest. So Obama’s rule would have required advisors to put clients’ interests first, a rule that could open them up to lawsuits if they continued to engage in ethically dubious sales tactics. The new rule was supposed to take effect in April. But now the WSJ is reporting that Trump is planning to reverse this rule. Trump advisor Gary Cohn says the rule “limits consumer choice.” Huh? … The financial services industry is supporting repeal.


IN THE DEPT. OF ‘CAN YOU BELIEVE THIS?’ NYMag “House Republicans voted Thursday to allow mentally ill people to buy guns (or put another way, voted to gut an Obama administration gun-control regulation that would have helped prevent some mentally ill people from purchasing firearms). The rule, which the NRA opposed and the House struck down 235–180, would have applied to people who receive Social Security disability or Supplemental Security Income (SSI) benefits and are unable to manage their own finances because of a documented mental illness, including schizophrenia or bipolar disorder. It would have covered about 75,000 people, reports USA Today.

Under the rule, which was finalized in the last days of the Obama administration and now will no longer be, the Social Security Administration would have reported these particular individuals to the FBI, so their names would have come up in a background check if someone tried to purchase a firearm. The SSA would also notify those potentially affected by the rule, and implement a system so people could appeal their placements on the background-check list, if necessary. Second Amendment and some disability advocates opposed the rule, calling it discriminatory and a violation of due process. Those in favor argued that if someone is unable to work or manage his or her affairs because of a severe mental illness, perhaps he or she should not easily be able to purchase a firearm.”

REMEMBER THIS … THE ‘CONGRESSIONAL REVIEW ACT’ Congress is knocking down these and other regulations put in place in the last six months of Obama’s tenure under the authority of the Congressional Review Act. Under this law, the Senate only needs a simple majority to strip away a rule, so Democratic support isn’t necessary to revoke these and other policies.

IN THE NAME OF EXCESS REGULATION The Senate also voted 54-45 to repeal the ‘Stream Protection Rule’ – a rule that restricts coal companies from dumping waste in streams and waterways. The House took a similar vote, now awaiting Trump’s signature. Coal companies will now have a freer hand in dumping mining debris in streams. Appalachian Voices, an environmental group, estimates that coal companies have buried over 2,000 miles of streams in the region through mountaintop removal mining. And studies have found that when this debris and waste gets into water supplies, it can have dire health impacts for the people living nearby In theory, there’s a law to mitigate this. The 1977 Surface Mining Control and Reclamation Act says that companies should not cause “material damage to the environment to the extent that it is technologically and economically feasible.” But that language is awfully vague. And the agency responsible for enforcing this law, the Office of Surface Mining Reclamation and Enforcement (OSMRE), hasn’t clarified what this language means since publishing a “stream buffer rule” in 1983.


Trump Gets His Man at State Department – Rex Tillerson was confirmed as Secretary of State.

BETSY DeVOS’s IS ONE NAIL BITING VOTE AWAY FROM BECOMING ED SECRETARY The Fix “[DeVos is one GOP defention aways from being the first Cabinet defeated by a Senate from the same party in nearly a century. Two moderate GOP senators, Susan Collins of Maine and Lisa Murkowski of Alaska, said Wednesday that they can’t support Betsy DeVos, largely because of her inexperience in public schools. Republicans have a 52 to 48 majority in the Senate, so if all members of the Democratic caucus join Murkowski and Collins in opposition, DeVos could be the first Cabinet nominee ever to require a tie-breaking vote by the vice president to be confirmed. If even one more GOP lawmaker opposes DeVos, her nomination fails.

The narrow margin for DeVos is holding up the confirmation of Senator Jeff Sessions as attorney general. Because Republicans need Sessions in the Senate to vote for DeVos, he’ll have to wait an extra few days to take his new job, despite the fact that it’s one of the most important positions in the government. While Democrats are stalling votes as long as they can under the chamber’s procedural rules, Republicans next week hope to push through DeVos, Sessions, Steve Mnuchin for treasury secretary, and Representative Tom Price for health and human services secretary.


HOW [NOT] TO MAKE FRIENDS Politico “Earlier this week, President Donald Trump mocked Senate Minority Leader Chuck Schumer (D-N.Y.) for crying about the plight of immigrants, saying he was faking, and wondering aloud from the White House who his acting coach was. Yesterday, he followed that up by calling him “Fake Tears Chuck Schumer” to his 23 million Twitter followers. Now he’s asking Schumer to expedite the consideration and support Neil Gorsuch, his nominee for the Supreme Court. Do you think that’s how this works, Mr. President?


ALIENATING KEY ALLIES … AND ADVERSARIES Fix ” Wednesday, Trumps post-inauguration call with Australia PM turned confrontational … Thursday Trump tangled with Iran, in an in-your-face and apparently less-than-diplomatic fashion put Iran “on notice” … and then there’s the U.S.Mexico border wall that Trump continues to promise to force Mexico to pay for – this led to Mexican President Nieto to cancel his planned trip to DC — then in a call on Wednesday Trump mentioned the possibility of sending U.S. troops to Mexico to deal with the ‘bad hombres’ there … Trump’s post-election phone call with the president of Taiwan ran afoul of long-standing protocol with China. …And then there are the seven countries from which
Trump has banned refugees …. Echoing what Trump said a fews days before, Peter Navarro, the head of the new National Trade Council, said this week that Germany is using its currency to “exploit” its European neighbors and the United States – Trump has long been critical of the E.U.’s usefulness and praised Britain’s vote to leave it, but the new comments particularly target Germany as the wizard behind the curtain. And also, Japan, Canada, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam (& Mexico and Australia again) — the countries in the Trans-Pacific Partnership, a trade deal spearheaded by Republicans and President Barack Obama, which Trump withdrew from with his first executive order … Lastly, Ukraine, Trump has long professed a desire for better relations with Russia, despite its incursion into Crimea having raised concerns across the Western world. And in recent days, as Russian-backed forced have stepped up the fight, Trump has been conspicuously silent to some.”

CONGRESS DOES DAMAGE CONTROL Politico ” … in the area of foreign relations, particularly when it comes to longstanding American allies like Australia, Democrats and Republicans have been unified in discontent, and sometimes horror. They were displeased with Mr. Trump’s statements endorsing torture. They were made anxious by President Trump insulting the Iranian government on Twitter, seemingly his preferred medium for foreign confrontations.They have routinely pushed back on his suggestions that the NATO and the European Union are outdated. The phone fracas with the leader of Australia was merely the latest. “The president says ‘America First,’ and I agree,” said Senator John Cornyn of Texas, the No. 2 Republican in his chamber, “But obviously we have important allies around the world.”

Sen. Ben Cardin (D-MD) said he would soon be visiting Mexico “to repair some of that relationship.” He and Senator Bob Corker of Tennessee, the chairman of the committee, recently met with Sigmar Gabriel, the German foreign minister, and King Abdullah II of Jordan. Both senators said they picked up on significant concerns. “ EVEN PAUL RYAN echoed the sentiments in a news conference. “Prime Minister Turnbull was in my office a couple months ago,” he said. “He’s a very important ally. Australia is a very central ally, they are and they will continue to be.”

MCCAIN THE SOOTHER Politico “McCain sought to assure Australia on Thursday that the US values its longstanding alliance with the country after news broke that President Donald Trump chewed out the Australian prime minister during a call last week. McCain called Australia’s ambassador to the United States, Joe Hockey, ‘to express my unwavering support for the U.S.-Australia alliance,’ the Arizona Republican said in a statement.” Sen. Jack Reed of Rhode Island, the top Democrat on the Armed Services Committee, also spoke on the phone with Australia’s ambassador to reiterate America’s commitment to its ally.”

PENTAGON TO ADVOCATE FOR VISAS Stars and Stripes. “The Pentagon will advocate for visas for ‘proven’ partners who have assisted U.S. forces in any of the seven majority-Muslim nations affected by President Donald Trump’s immigration ban – not just Iraq, spokesman Capt. Jeff Davis said Thursday.”

NDAA MARKUP COULD COME LATE: HASC Chairman Mac Thornberry (R-Texas) has signaled his committee may mark up the National Defense Authorization Act later than in recent years. The Defense Department will now send its full fiscal 2018 budget request to the White House OMB by May 1, months later than usual.


“Trying to nail down who who the leakers are is like trying to count the cockroaches under the couch,”
– longtime Trump adviser

TRUMPS ENEMIES WITHIN Politico Magazine “The examples are notable both for the speed in which they are coming and the obvious skepticism they convey from within the executive branch both about the merits of Trump’s agenda or the methods by which he is trying to impose it.
…On Trump’s first full day in office, he called National Park Service Director Michael Reynolds and ordered him to produce photos that would buttress Trump’s claims that reporters had falsely described the magnitude of his inaugural crowds. Trump’s intervention quickly found its way into the media.
…. A draft executive order directing the CIA to consider reviving interrogation techniques widely regarded as torture was quickly publicized without White House approval—as was the news that Defense Secretary James Mattis and CIA Director Mike Pompeo were allegedly “blindsided” by the proposal.
… More than 1,000 State Department officials signed and submitted a “Dissent Channel” memo criticizing Trump’s executive order halting refugees from several predominately Muslim countries from entering the country. A memo from acting Attorney General Sally Yates to Justice Department officials telling them not to defend the order was quickly publicized, leading to Yates’ firing by Trump a few hours later.
… Extensive details of Trump’s combative phone calls with the leaders of Mexico and Australia—calls that ordinarily are private or are described in anodyne terms—were leaked shortly after the calls were over, from sources that likely included U.S. officials concerned by Trump’s unconventional brand of diplomacy.
… Reconstructions of a botched commando raid on Al Qaeda in Yemen—Trump’s first use of military force—noted that the decision-making meeting was attended by Trump’s son-in-law Jared Kushner and counselor Steve Bannon, an involvement by primarily political aides that offends many career national security officials. FULL ARTICLE

1978 PRESIDENTIAL RECORDS ACT Officials at the National Archives met with Trump’s staff [this week] to make sure they understand retention rules, according to a person familiar with the meeting. They want to ensure the administration is hewing to the rules laid out in the 1978 Presidential Records Act, which mandates the preservation of all presidential documents.


THE GANG THAT COULDN’T SHOOT STRAIGHT The Fix “A big part of the pushback over President Trump’s controversial travel ban is the idea that it’s a solution in search of a problem — that terrorism caused by refugees and immigrants is oversold, and especially from the seven majority-Muslim countries that were singled out.
Kellyanne Conway on Thursday [said] that Trump’s refugee ban was justified because of the “Bowling Green Massacre.” And she blamed the media for not covering it. Well, it didn’t get covered because it didn’t happen; there was no Bowling Green massacre. As The Post’s Samantha Schmidt writes, there were Iraqi citizens, living in Bowling Green, Ky., who were attempting to send weapons to al-Qaeda in Iraq, in 2011, but it never came to fruition. They were arrested, and their arrests were covered plenty. SLIP OF THE TONGUE? But in context, it just more evidence of a White House messaging operation that doesn’t have its shoes on the right feet.

  • On his first full day as press secretary, Sean Spicer delivered easily disprovable and baseless claims about Trump’s inauguration crowd.
  • In response to the furor over Spicer having delivered incorrect information, Conway argued on NBC’s “Meet the Press” that he was merely presenting “alternative facts.” Spicer later likened “alternative facts” to conflicting weather reports.
  • After the widely panned implementation of the travel ban over the weekend, Spicer on Tuesday took issue with the media describing Trump’s ban as a “ban” — despite his having used the word the day before. And Trump having used it multiple times. And Conway having used it on a Sunday show.
  • After the press wondered aloud why Trump wasn’t pushing for an investigation into his baseless allegation of 3-5 million illegal votes in the 2016 election, Spicer had no good answer for why Trump hadn’t and used data that say nothing about actual fraud to back up Trump’s claims.
  • Trump made some, well, awkward comments about Frederick Douglass at a Black History Month event on Wednesday morning — which some saw as him thinking Douglass may be a living person. Later in the day, Spicer struggled through his own explanation of what had just happened.”


JOHNSON AMENDMENT. DESTROY IT. Politico “At the National Prayer Breakfast, President Trump vowed to “destroy” a law that he says prevents religious groups and churches from engaging in political activities. The law known as the Johnson Amendment was first enacted in 1954. Contrary to Trump’s assertions, the Johnson Amendment doesn’t restrict the right of congregations to “worship according to our own beliefs.” Instead, it prohibits registered 501(c)(3) organizations from endorsing a candidate for public office and participating in political campaign activities. (Not all tax-exempt organizations fall under the 501(c)(3) designation, but most do.) The Johnson Amendment doesn’t only target churches. About a million and a half organizations in the US are registered as tax-exempt, many of which are 501(c)(3). Per the Johnson Amendment, an organization in that category “may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.” As of May 2016, only 312,373 of those organizations are congregations (this includes congregations of all religions). As the IRS interprets the Johnson Amendment, tax-exempt organizations — those that fall under the 501(c)(3) designation — include those which are “religious, educational, charitable, scientific, literary, testing for public safety, to foster national or international sports competition, or prevention of cruelty to children or animals organizations.” (an yes, includes organizations like the Clinton and Trump Foundations.


A Vancouver artist’s cartoon featuring a diminutive Donald Trump sitting on Steve Bannon’s lap has been widely shared on social media this week.
NYT “The defining moment for Mr. Bannon came Saturday night in the form of an executive order giving the rumpled right-wing agitator a full seat on the “principals committee” of the National Security Council — while downgrading the roles of the chairman of the Joint Chiefs of Staff and the director of national intelligence, who will now attend only when the council is considering issues in their direct areas of responsibilities. It is a startling elevation of a political adviser, to a status alongside the secretaries of state and defense, and over the president’s top military and intelligence advisers.

In theory, the move put Mr. Bannon, a former Navy surface warfare officer, admiral’s aide, investment banker, Hollywood producer and [White Nationalist] Breitbart News firebrand, on the same level as his friend, Michael T. Flynn, the national security adviser, a former Pentagon intelligence chief who was Mr. Trump’s top adviser on national security issues before a series of missteps reduced his influence. But in terms of real influence, Mr. Bannon looms above almost everyone except the president’s son-in-law, Jared Kushner, in the Trumpian pecking order, according to interviews with Trump insiders.”


THE SUPREME TEAM theSkimm “President Trump tapped federal appeals court Judge Neil Gorsuch to fill the empty seat on the Supreme Court. TELL ME ABOUT HIM Gorsuch is a right-leaning judge who once clerked for Justice Anthony Kennedy. Claim to fame: back in 2013, he was part of the lower court that sided with Hobby Lobby. That’s the private company that successfully argued that Obamacare violated its religious beliefs by requiring it to cover birth control for its employees. Gorsuch is considered an “originalist” – meaning he believes the Constitution should be interpreted exactly how the Founding Fathers wrote it. If approved, he’d be filling the seat of another originalist, Justice Antonin Scalia, who died almost exactly a year ago. REMIND ME WHY THIS TOOK SO LONG Under the Constitution, the President nominates a Justice and the Senate has to approve. But the GOP didn’t think former President Obama should fill the seat in an election year. Obama went ahead and picked centrist federal appeals court Judge Merrick Garland anyway. But since the GOP controlled Congress, it blocked Garland all year. Dems were less than pleased. WHAT ARE PEOPLE SAYING Supporters say this is exactly what they wanted: a right-leaning justice who’ll keep the Supremes to the right, to the right. Critics remember Trump’s campaign promise to appoint someone who’d overturn Roe v Wade – and worry Gorsuch could help make that happen. SO WHAT’S NEXT Gorrsuch has a job interview with the Senate. And since the Dems are super thrilled to be interviewing Gorsuch instead of Garland, they’ll be giving him extra scrutiny. They may even choose to filibuster (read: block) his confirmation. If that happens, the GOP could ‘go nuclear’ – aka change the rules so they wouldn’t need the Dems to approve Trump’s pick at all. Some people voted for Trump specifically because they wanted a conservative Justice to fill this seat. The stakes are especially high in this fight since, at 49, Gorsuch would be the youngest Justice to join the court in decades.”

Politico ‘Yes, we expect Gorsuch to get confirmed. But Democrats are saying they want him to get 60 votes, daring Republicans to push him through on a majority vote. Gorsuch passed the Senate unanimously in 2006 when President George W. Bush nominated him, but that matters little when talking about today’s political dynamics. Eight Democrats would need to join with Republicans to break the expected Democratic filibuster. AT LEAST SEVEN Democratic senators have gone on the record saying they won’t filibuster Trump’s Supreme Court Nominee. Senate Minority Whip Dick Durbin (Ill.), Richard Blumenthal (Conn.), Chris Coons (Del.), Heidi Heitkamp (N.D.), Joe Manchin (W.Va.), Claire McCaskill (Mo.) and Jon Tester (Mont.). A lot more about Gorsuch in the coming months.


STAFFERS SECRET WORK ON IMMIGRATION RATTLES THE CAPITOL Politico “Turns out several government employees signed a non-disclosure agreement to secretly work on immigration for the Trump team. And House Judiciary Chairman, Bob Goodlatte didn’t know about it.


WHITE HOUSE ICES OUT CNN “The White House has refused to send its spokespeople or surrogates onto CNN shows, effectively icing out the network from on-air administration voices. … A CNN reporter, speaking on background, was more blunt: The White House is trying to punish the network and force down its ratings. ‘They’re trying to cull CNN from the herd,’ the reporter said.


ISN’T THIS UN-AMERICAN? The Fix “South Dakota Republicans just did something that backfired spectacularly for congressional Republicans earlier this year: They got rid of an independent ethics commission designed to watch over them. Ethics advocates say the situation in South Dakota is even more egregious than the one in Washington given the independent ethics commission was approved by the voters themselves this November. Along a mostly party-line vote this week, lawmakers passed a bill that repeals that voter-approved ethics reform package. Among other things, it aimed to set up the state’s first ever independent ethics commission and put limits on campaign finance and lobbying access. Gov. Dennis Daugaard (R) signed the repeal bill into law on Thursday.

HOODWINKED BY SCAM ARTISTS GOP lawmakers claimed voters — who approved the package by 51% — were tricked into the reform package. In his December budget address, Daugaard declared that voters were “hoodwinked by scam artists who grossly misrepresented these proposed measures.” Republicans repealed the bill under a “state of emergency,” which prevents voters from putting it back on the ballot in the next election.”


DELETEUber The Verge As part of the widespread #DeleteUber protest that erupted on social media over the last week, more than 200,000 Uber accounts were deleted, according to a report from The New York Times. [Uber’s] problems started when Uber turned off surge pricing for trips to New York’s JFK Airport amid protests of Trump’s immigration ban. Critics and rivals interpreted Uber’s actions as a sign of support for Trump’s executive order banning immigration from seven Muslim-majority nations, and a movement on Twitter—#DeleteUber—then sprouted. Uber users were pushed to leave the ride-hailing service.Rival car-hailing service Lyft, which seized the moment to pledge $1 million to the ACLU, overtook Uber in total App Store downloads on Sunday. Under pressure from angry users, Kalanick then left Donald Trump’s business advisory council Thursday, just a day before the group was scheduled to meet with the president.”

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