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Washington Report September 8, 2017

08 Sep 2017

Washington Report September 8, 2017

YES! The Washington Report is back. And there are only 45 Legislative Days left until the end of the year.

Hurricane Harvey Package and Debt Deal … Legislative Grenade … Deja Vu on Tax Reform … Healthcare Is Back … Dreamers … GOP Retirements … and other news of the week.
Our hearts are with those about to experience the NUCLEAR HURRICANE IRMA.

Best,

Joyce Rubenstein
Capstone National Partners

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HURRICANE HARVEY PACKAGE & THE DEBT DEAL

THE NEW ALLIANCE, CEMENTED — The House passed the debt ceiling/government funding/hurricane Harvey relief deal 316-90. All 90 of the no votes came from the Republican party.

BEHIND THE SCENES, REPUBLICANS FUME Axios “Among Republicans on Capitol Hill, “I’ve never heard members and senators so angry at the president of their own party,” [according] to one durable Washington hand.

The House cleared a package today to provide more than $15 billion in disaster aid for victims of Hurricane Harvey, raise the debt ceiling and fund the government for three months. President Donald Trump is expected to swiftly sign the bill, which delivered on the fiscal deal he struck with Democrats earlier this week. NO SHUT DOWN The agreement ends the threat of a government shutdown and a default on the national debt at the end of September, but just for three months. Congress now faces a Dec. 8 deadline to strike another deal to avert those fiscal cliffs.”

THE GOOD NEWS for lawmakers: Under the Harvey aid package that passed the Senate Sept. 7, they won’t have to vote on the debt limit again until 2018-with early estimates that the next debt vote will be in the spring.

THE BAD NEWS for lawmakers : There’s an outside chance a vote will take place a few months ahead of the midterm elections. … While the legislation temporarily suspends the debt limit through Dec. 8 — resetting it at a higher level Dec. 9 to include debt issued while the debt limit was not in effect — allows Treasury to reset its ‘extraordinary measures’ that give it some extra borrowing capacity, and thus extra time, once it nears the debt limit. The actual amount of time granted by the extraordinary measures will depend on various factors, including Treasury’s borrowing patterns, incoming receipts and the government’s rate at which it burns through cash.

“There is a small but real chance that extraordinary measures might meet the Treasury’s needs through the April 15 tax date. If that happens, the debt ceiling debate could stretch all the way to August or even September,’ Lou Crandall, chief economist with analytical firm Wrightson ICAP, told Bloomberg BNA.

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TRUMP: “THE PRESS HAS BEEN INCREDIBLE

Axios NYTs headline in Tuesday’s paper taunted Trump with an analysis declaring that Trump’s “first seven months in office have yet to produce any big deals. NYTs this morning, front-pager, “President Tries Taste of Comity As G.O.P. Stews,” reporting that Trump called Chuck Schumer and Nancy Pelosi to crow about the morning cable coverage: “The press has been incredible.” Our thought bubble for the president when he spontaneously made the fiscal package deal in front of a chagrined Mitch McConnell and Paul Ryan: “You say I can’t make deals anymore? Hold my Diet Coke, and watch this! You say I’m beholden to Mitch and Paul? Watch me make a big deal without them!” West Wing sources tell Axios’ that Trump was exuberant in the Oval yesterday.

Sources familiar with Trump’s thinking say the president saw an opening in the Oval Office meeting to do three impulsive/instinctive things:
1. Do something popular: Play the part of the magnanimous populist president rising above partisanship to cut a deal.
2. Get funding for Hurricane Harvey quickly and avoid a prolonged fight on Capitol Hill.
3. Stick the middle finger to McConnell and Ryan — especially McConnell, with whom Trump is fed up. (He believes McConnell is a failed leader with low energy.) Trump has enjoyed thinking about Ryan and McConnell squirming while he parades his surprise deal with “Chuck and Nancy.”

REGRETS? Trump has none. He revels in these moments when he can be unpredictable to the point where he confounds his own top aides and, especially, the press corps.
Be smart: If Trump gets to the fourth paragraph of the N.Y. Times story, he’ll be reminded: “He is a man of the moment, and the moment often does not last.”

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END THE LEGISLATIVE GRENADE (AKA DEBT CEILING)

WashPo “Trump is also reportedly open to working with the Democrats on another key issue: ending the debt ceiling. On Wednesday, Trump and [Chuck Schumer] reached what one senior White House official called a ‘gentlemen’s agreement’ to develop a plan that would no longer require Congress to routinely raise the limit on government borrowing. Details have not been worked out, and any plan would require approval from congressional Republicans, but the shift signifies a remarkable political evolution for Trump, who has long cheered weaponizing the debt ceiling, no matter the cost. … Trump’s discussions with Democrats on the debt ceiling could mark the end of Congress’s greatest political weapon — a legislative hand grenade that has never exploded but has unnerved financial markets for decades.” WHY DOES THE DEBT CEILING EXIST? … a graphic (click here).

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DEJA VU ON TAX REFORM

Roll Call “The closed-door process under which Republican congressional leaders and the Trump administration are crafting an overhaul of the United States tax code could impede the Senate’s timeline for the effort. … While there is a renewed commitment to get a tax overhaul complete this year, Republican senators expressed concern that the secretive process that ultimately doomed the effort to repeal the 2010 health care law will happen again.

The group known as the Big Six that has for months been working on the tax overhaul measure behind closed-doors includes Senate Majority Leader Mitch McConnell, Senate Finance Chairman Orrin G. Hatch, House Speaker Paul D. Ryan, House Ways and Means Chairman Kevin Brady, Treasury Secretary Steven Mnuchin and top White House economic adviser Gary Cohn.

While members of that group say they have made good progress, Republican senators have yet to receive any substantive information about it.

“Damned if I know,” Arizona Sen. John McCain said when asked when he expected to hear more details. “We need to have it out and the focus has got to be the regular order.”

IN THE WEEDS Republicans still intend to try to pass the tax legislation through the budget reconciliation process, which allows for passage with only a simple majority. To do that, however, Congress must first past a budget resolution and subsequent reconciliation instructions, something lawmakers say is difficult to do without details on the tax effort.

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IT’S JUST MATH

Politico “Trump still pushing for a 15% corporate rate,”… Trump is increasingly fixated on slashing the top corporate tax rate to 15% – a level that pretty much no one else working on the issue in the White House or Congress thinks is workable. In a White House meeting on Tuesday, Trump again expressed his strong desire to hit the 15% target, from today’s 35%. ‘You can’t get to 15% and anyone who has a back of an envelope can make that calculation,’ said a senior official working on tax reform. ‘And he may not like that truth, but it’s the truth. It’s just math.'”.

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HAPPENING NOW …

AT DEPARTMENT OF EDUCATION WashPo “Education Secretary Betsy DeVos said after a speech on campus sexual assault that she has begun the process of rescinding Obama-era guidelines on the issue. DeVos spoke to about 100 invited guests at George Mason University, where protesters had gathered outside, worried that she would announce changes to the way sexual violence cases are handled on campuses across the country. DeVos criticized a key element of Obama’s policy: that schools use a standard known as ‘preponderance of the evidence’ when weighing sexual misconduct cases … Rather than the ‘beyond a reasonable doubt’ standard used in criminal cases, or the ‘clear and convincing’ standard some universities had previously used for sexual assault investigations, schools now must use a ‘preponderance of the evidence’ standard, often described as ‘50 percent plus one,’ when determining responsibility in such cases.”

AT JUSTICE “The [DOJ] on Thursday filed a brief on behalf of baker Jack Phillips, who was found to have violated the Colorado Anti-Discrimination Act by refusing to [create] a cake to celebrate [a gay marriage] because it would violate his religious beliefs. The government agreed with Phillips that his cakes are a form of expression, and he cannot be compelled to use his talents for something in which he does not believe. The DOJ’s decision to support Phillips is the latest in a series of steps the Trump administration has taken to rescind Obama administration positions favorable to gay rights and to advance new policies on the issue.”

AT FAA The House is planning to vote next week on privatizing almost two-thirds of the Federal Aviation Administration’s (FAA) workforce. “More than 30,000 people — no one is quite sure of the exact number — would be shifted into a private, nonprofit corporation responsible for directing and modernizing the movement of airliners and private planes. … In the face of Democratic opposition in the House and bipartisan foes in the Senate, [Rep. Bill Shuster (R-Pa.), chairman of the House Transportation Committee,] devoted the summer to persuading those who will vote on the House floor.” But the bill faces an uphill climb in the Senate if it can pass the House.

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HEALTHCARE … IT’S BAAAACK

Sen. Lamar Alexander, the Republican chair of the Health, Education, Labor and Pensions Committee, said he hopes to soon reach a compromise on insurer payments with Democrats. WSJ “Alexander suggested he would be willing to authorize the subsidy payments for multiple years, as Democrats are demanding, in exchange for ‘structural changes’ to the ACA[.] … Alexander, who is crafting the package jointly with Sen. Patty Murray (D-Wash.), aims to win Congress’s final approval before the end of the month, when insurers will sign their ACA contracts for 2018.” — A bipartisan group of governors rallied around the proposed changes to stabilize the ACA during Thursday’s hearing. Meanwhile, Democratic Sen. Chris Murphy (Conn.) plans to propose legislation that would allow individuals and businesses to buy into Medicare as part of the ACA’s exchanges. The idea could provide a viable alternative to Democrats who are wary of Bernie Sanders’s single-payer plan. Murphy said that the proposal “may not be as big a leap for the health care system as single-payer, but I think it’s a big, easy-to-understand, and super-popular idea.”

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SENATE NDAA KICKS OFF MONDAY

MorningD “The Senate holds a procedural vote at 5:30 p.m. Monday to move forward with consideration of the National Defense Authorization Act. Majority Leader Mitch McConnell Thursday offered a motion to start debate as Senate leaders aim to complete the bill next week.”

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DREAMERS

@realDonaldTrump … For all of those (DACA) that are concerned about your status during the 6 month period you have nothing to worry about – No Action!

NYT “President Donald Trump on Thursday sought to reassure young undocumented immigrants who were brought to the US as children concerned about their future after speaking with House Minority Leader Nancy Pelosi, two sources tell CNN. In case you missed it, on Tuesday, the Trump Administration moved to end the Obama-era program that shields young undocumented immigrants from deportation …leaving it to lawmakers to protect the young immigrants. Just hours after the angry reaction to Mr. Trump’s decision, the president appeared to have second thoughts. In a late-evening tweet, Mr. Trump specifically called on Congress to “legalize DACA,” something his administration’s officials had declined to do earlier in the day.”
Mr. Trump also warned lawmakers that if they do not legislate a program similar to the one Mr. Obama created through executive authority, he will “revisit this issue!” — a statement sure to inject more uncertainty into the ultimate fate of the young, undocumented immigrants who have been benefiting from the program since 2012. Huh?

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HOUSE GOP RETIREMENTS

WashPost “Exhausted from his ideological battles with the House Freedom Caucus and clashes with Donald Trump’s White House, Rep. Charlie Dent (R-Pa.) has decided to retire. Dent is the co-chairman of the moderate Tuesday Group, which has about 50 center-right members. That’s more than the three dozen or so guys in the Freedom Caucus, but the tea partiers punch above their weight because they mostly vote as a bloc.The retirement gives Democrats a prime pick-up opportunity. … That surprise news came just one day after another seven-term moderate announced he will retire. Rep. Dave Reichert (R-Wash.), who represents a suburban Seattle district that Hillary Clinton carried, is chairman of the House Ways and Means subcommittee on trade. … A third moderate, Rep. Ileana Ros-Lehtinen (R-Fla.), also expressed concern about the direction of the party when she revealed her plan to step down this spring. The first Cuban American elected to Congress expressed confidence she’d get reelected, even though Clinton won her Miami district by 20 points.”

RATINGS CHANGE Roll Call “With 14 months to go before Election Day, the House battleground continues to take shape. Even though there is some uncertainty about what the political climate will look like next fall and whether normal historical midterm trends will hold under President Donald Trump, the House playing field is expanding, almost entirely in the Democrats’ direction. History puts the Republican Party at a disadvantage: The president’s party has lost seats in 18 of the last 20 midterm elections, with an average loss of 33 seats. Democrats need to gain 24 seats next year for a majority. Midterm elections are often a referendum on the president, and when voters disapprove of his performance, they punish his party because his name isn’t on the ballot. Historical trends are based on that dynamic.

THEN THERE’S TRUMP But what happens when voters perceive the president to be outside the traditional two-party system? Trump is technically a Republican because he ascended through the GOP nominating process. Still, many voters see him as his own brand rather than as a party leader. If that differentiation continues, GOP candidates could avoid the typical midterm disaster.

For now, [Roll Call] changed the Inside Elections ratings in 14 House races, all but one of them to a more favorable category for Democrats. Trump’s job approval rating continues to hover in mediocrity (39 percent of voters approved while 56 percent disapproved in the latest Real Clear Politics average), creating an uncertainty that is causing more GOP members to be potentially vulnerable. Our ratings (and these ratings changes) are the result of developments at the national and district level.

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RUSSIA

NYTs “The Fake Americans Russia Created to Influence the Election” – “The Russian information attack on the election did not stop with the hacking and leaking of Democratic emails … Far less splashy … was Russia’s experimentation on Facebook and Twitter.”
“On Twitter, as on Facebook, Russian fingerprints are on hundreds or thousands of fake accounts that regularly posted anti-Clinton messages. Many were automated Twitter accounts, called bots, that sometimes fired off identical messages seconds apart.”

WHY IT MATTERS “The fakery … helped fuel a fire of anger and suspicion in a polarized country. WashPost media columnist Margaret Sullivan writes that “there’s increasing reason to believe” that Facebook made Trump president “[F]or all its power and wealth, Facebook is a terribly opaque enterprise. Facebook … has never acknowledged the glaringly obvious — that it is essentially a media company, where many of its 2 billion active monthly users get the majority of their news and information. “Would Donald Trump be president today if Facebook didn’t exist? Although there is a long list of reasons for his win, there’s increasing reason to believe the answer is no.”

Sen. Mark Warner (D-VA) said Thursday that Facebook’s disclosure of selling about $100,000 in political ads to Russian troll farms during the U.S. election was just the “tip of the iceberg” when it came to election interference on social media. Adam Schiff, the top Democrat on the House Intelligence Committee, echoed Warner’s concern. “There is no software patch for what happened last year, there is no cyberdefense capable enough,” Schiff said. “If Russians want to get into the [DNC] in 2020, they’ll get in. If they want to get into the [RNC], they will get in.” (CNN’s Jeremy Herb)

WHY THIS IS ILLEGAL OR NOT … an explainer … “The law is clear that foreign nationals and foreign corporations are prohibited from making contributions or spending money to influence a federal, state or local election in the United States. The ban includes independent expenditures made in connection with an election. But whether the Russian company broke the law by running ads on Facebook comes down to two big questions: What was in the content of the ads, and did a U.S. campaign assist the company in placing the ads. If the Facebook ads were overtly political — that is to say, they advocated the election or defeat of a specific candidate — then they would violate the ban on foreign national spending, legal experts said. But if they were vaguer appeals, it’s less clear cut.”

But there is an important exception: “Russian-financed ads could have still run afoul of election law if they were placed on Facebook or targeted at certain voters in coordination with a campaign — one of the central questions of the ongoing Russia probes. In that scenario, the ads would not have to explicitly advocate for a candidate to be illegal.”

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LETTER FROM PYONGYANG

Next week’s New Yorker “This summer, the prospect of a nuclear confrontation between the United States and North Korea, the most hermetic power on the globe, entered a realm of psychological calculation reminiscent of the Cold War. More than any other capital that has been marooned by politics — Havana or Rangoon or Caracas — Pyongyang presents a panorama from another time. Soviet-era Ladas and ancient city buses ply the streets, while passengers stick their heads out the windows in search of cool air. Buildings are adorned with Korean-language banners hailing the “Juche ideology,” the official state credo, which glorifies self-reliance and loyalty.

On an embankment near a major intersection, workers in gray coveralls were installing an enormous red sign that praised the “immortal achievements of the esteemed Supreme Leader, comrade Kim Jong Un, who built the nuclear state of Juche, the leader in rocket power!”
Pyongyang is a city of simulated perfection, without litter or graffiti—or, for that matter, anyone in a wheelchair. Its population, of 2.9 million, has been chosen for political reliability and physical health. The city is surrounded by checkpoints that prevent ineligible citizens from entering. … Pyongyang is the emptiest, quietest capital in Asia. …

Iraq taught us the cost of going to war against an adversary that we do not fully understand. Before we take a radical step into Asia, we should be sure that we’re not making that mistake again.

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NEXT FOR APPLE … iPHONE NEW NAME AND MORE

Wired (ok, we are Apple Fans) “Few companies provide better tea-leaf-reading fun than Apple, especially in the weeks before its annual fall product launch extravaganza … next Tuesday, on September 12, 2017. If the leaks and reports are correct, Apple’s preparing a docket of announcements to mark the occasion (10th anniversary of intro of iPhone) including … (from Bloomberg):

  • A new iPhone, likely with a new name—no “iPhone 8” here. The new model will be virtually nothing but a gorgeous OLED screen wrapped in a stainless-steel case, save for a small notch at the top. It will use infrared facial recognition to unlock the phone, charge wirelessly, have improved and reconfigured cameras, and run on Apple’s latest software and hardware. It likely won’t have a home button, or Touch ID at all. And it definitely won’t have a headphone jack. It will be expensive, hard to buy, and probably the most desirable phone Apple’s ever made.
  • Two updated iPhones, called the iPhone 7s and 7s Plus, including upgrades to the iPhone 7 without re-thinking the design. They’ll have better cameras, faster processors, and potentially even a new display similar to the higher-end model. These models should have wireless charging, too.

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EQUIFAX DATA BREACH

Credit monitoring company Equifax said Thursday that a data breach could have exposed the Social Security numbers and other private information of 143 million U.S. consumers (FYI, for perspective, there are 323.1 million people in the U.S.). Equifax said the breach, discovered in July, also may have exposed private data such as names, birth dates, and driver’s license numbers of some customers. Meanwhile, three senior Equifax executives, including the company’s CFO and the head of information solutions, sold shares worth nearly $1.8 million just days after the breach was discovered. A spokeswoman for the company said they had “no knowledge” that an intrusion had occurred at the time.”

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