Aug. 23

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Trump's Arizona Speech Was Environmentally Correct, Using Only Recycled Material

There was relatively little that was surprising when Donald Trump appeared in Phoenix for yet another campaign rally. Indeed, it wouldn't have been too hard to write a recap of the President's address before it even happened, given that it was a melange of Trumpian greatest hits. To wit:

Arguably the only real "news" on Tuesday night—that is to say, the only thing that happened that we couldn't have predicted with certainty a week ago—was that Trump declined to pardon former sheriff Joe Arpaio on the spot, because he didn't want "controversy." However, the President followed that by observing that, "I think he'll be just fine," strongly implying a pardon is forthcoming.

In the end, the 1,500 or so people who showed up to the rally were certainly enthused, and enjoyed chanting things like "CNN sucks!" On the other hand, the several thousand protesters outside were not, and they turned unruly when the speech was over, causing the police to hit the crowd with tear gas. Since the event took place in the Pacific time zone, there hasn't been time for a lot of opinion out of Washington, where many people were in bed by the time the rally ended. However, former lieutenant general and Director of National Intelligence James Clapper managed to weigh in. He called the President's speech "downright scary and disturbing," slammed Trump's "behavior and divisiveness and complete intellectual, moral and ethical void" and wondered, "How much longer does the country have to, to borrow a phrase, endure this nightmare?" Clapper also said he's gravely worried that Trump's finger is on the nuclear trigger.

Trump's next event of this sort is scheduled for September 16 on the National Mall, and is already being dubbed—by Trump supporters—as the "Mother of All Rallies." The goal is to bring "one million patriots to Washington DC" to support the President. That seems optimistic, since that's roughly 666 times as large a crowd as showed up on Tuesday (really; do the math). Neo-Nazis and white supremacists are being told they are not welcome, which makes the odds even longer. Just 24 days until we find out. (Z)

Don't Tell the President: Monday Speech Drew Mediocre Ratings

If there's one thing that Donald Trump cares about even more than the size of the crowds at his rallies, it's his TV ratings. And so, he's not going to be happy if he learns that his address on Afghanistan attracted a fairly pedestrian 28 million viewers. By comparison, the President's February address to Congress attracted 48 million, Barack Obama's address on Afghanistan drew 41 million, and Trump's introduction of SCOTUS nominee Neil Gorsuch got 33 million.

Why the poor showing? Could be Trump's fading popularity. Or war weariness. Or the lack of advance notice about the speech—we learned it was coming only 24 hours before it came. Maybe it's all of the above. Whatever the case may be, 28 million is pretty anemic for a president's first prime-time address, and is certainly not going to stem the President's general unhappiness with his job. (Z)

Trump and McConnnell Are at War

There is no nice way to put this. Donald Trump and Senate Majority Leader Mitch McConnell (R-KY) are at war with each other. They haven't spoken in weeks and McConnell is privately expressing the view that the administration may not be salvageable. One huge point of contention is Trump's badmouthing senators who openly disagree with him. McConnell hates this and instinctively springs to the defense of all members of his caucus.

The break comes at a crucial moment, with many key bills up in September, including raising the debt limit, next year's budget, and changing the tax code. Having the president openly feuding with the leader of the Senate is not a good sign. There is still a lot of bad blood about McConnell's inability to repeal Obamacare. In all fairness, though, McConnell was never going to get the vote of Susan Collins (R-ME). John McCain doesn't take orders from McConnell and Trump's interior secretary threatened Sen. Lisa Murkowski (R-AK), sealing the bill's doom.

McConnell is cautious and pragmatic and wants to get bills passed, but if Trump follows the advice of one of his strategists, Roger Stone, and tries to take down Republican senators, McConnell will be beyond furious. McConnell is popular with his caucus and if Trump thinks he can browbeat McConnell the way he has intimidated so many of his business partners in the past, he will be very surprised. We already knew that the tortoise beat the hare, soon we may see if the turtle beats the hair. (V)

Menendez's Trial To Begin This Week

A very high-profile and critical trial will begin this week when Sen. Bob Menendez (D-NJ) goes on trial for corruption. Defense lawyer Abbe Lowell knows that the only things hinging on the outcome are whether the senator goes to prison and whether the Trump administration can carry out its legislative program (including health care). Other than that, the trial is no big deal. Of course, for a lawyer who has successfully defended Jack Abramoff, former senators John Ensign and John Edwards, New York state Senate Majority Leader Joe Bruno, and who has Jared Kushner as a client now, it's all in a day's work.

The facts are not in dispute. A wealthy doctor, Salomon Melgen, asked for Menendez's help in getting visas for three of his "girlfriends," holding onto a government contract one of Melgen's companies has, and fighting off a federal investigation concerning a multimillion dollar Medicare dispute. Melgen also gave $750,000 in political donations to Menendez and gave him free private jet flights and luxury hotel rooms. The question is: "Were these bribes, or were these merely gifts from a wealthy and grateful friend who appreciated the senator going to bat for him?"

Working for Menendez is that he reported the $750,000 donations to his campaign fund correctly. Working against him is that he hid the free plane trips and hotel rooms. However, also working for Menendez is a recent Supreme Court decision to throw out a lower court conviction of former Virginia governor Bob McDonnell. In that case, a wealthy donor showered McDonnell with lavish gifts and McDonnell helped him with the sale of his dietary supplement. The Supreme Court ruled in that case that having a wealthy constituent give expensive presents to a politician who is doing him favors is not corruption in the absence of a specific agreement to the effect "If you do x, I will pay you $y." Needless to say, Lowell has practically memorized that decision and is probably going to quote from it at length in Menendez's trial.

If Menendez is found not guilty, nothing changes. If he is found guilty, he might resign from the Senate, but he doesn't have to, certainly not until the appeals courts and probably the Supreme Court have weighed in. Senate Republicans could try to pass a motion to expel him from the Senate after a lower court verdict of guilty, knowing that Gov. Chris Christie (R-NJ) would then get to appoint a new senator—for example, the-soon-to-be-unemployed Chris Christie. This would give the Republicans 53 seats in the Senate and they might revisit the health-care bill that failed with only 49 votes. With Menendez out and some Republican in his seat, the bill could get 50 votes and pass. Of course, if the Senate expelled Menendez before his appeal could be heard, the Democrats would scream "partisan politics," and would surely withhold support, which would then leave Mitch McConnell short of the 67 votes he needs. The blue team will surely not even consider expulsion until January, when a Democrat is expected to take over the governor's mansion in New Jersey; then that governor would simply replace Menendez with another Democrat.

Jury selection should be lots of fun. The trial will be held in Newark, home to many (black) Democrats. Many of them probably have voted for Menendez in the past and may actually like him. If Lowell tries to make the case that the whole charge is a corrupt attempt by the Republicans to pick up a Senate seat, some of the jurors may vote to acquit, regardless of the evidence. When Lowell defended John Edwards, who used campaign funds to cover up the fact that he was having an affair with a videographer (while his wife was dying of cancer), he got a hung jury. For the Democrats, a hung jury might push any subsequent trial up a few months, by which time Christie may have been replaced by Democratic gubernatorial candidate Phil Murphy. In the Edwards case, the prosecution simply gave up after a hung jury, fearing the same result in the next trial. So, Lowell's skills could have far-reaching consequences for the Trump administration and tens of millions of Americans. (V)

Mueller is Zeroing in on Manafort

If Donald Trump's former campaign manager Paul Manafort isn't nervous, then he isn't paying attention. McClatchy is now reporting that Manafort earned between $80 million and $100 million from Russian and pro-Russian Ukrainian clients in the past decade. This is far more than the $12.7 million that had been previously reported. Special counsel Robert Mueller, who can subpoena Manafort's tax returns should he wish to do so, is curious about whether Manafort paid taxes on this income. Manafort used a labyrinth of off-shore shell companies to shield his income, but the investigators are now looking closely at them. They also want to know if he engaged in any money laundering practices. If Mueller can nail Manafort over tax evasion or money laundering, he will try to pressure Manafort into spilling the beans on Trump in return for leniency.

One item in particular that Mueller is interested in is why Manafort bought three homes a decade ago (including a condo in Trump Tower) and paid for the $8 million in purchases with cash. Large purchases for cash are often a sign that undeclared and possibly laundered income is being used. The suspicion that Manafort is worried about money laundering charges was heightened after the FBI raided one of his homes last month and Manafort promptly dropped his attorney and hired Kevin Downing, a specialist in defending people accused of money laundering.

If Mueller were to get the goods on Manafort, the former campaign chairman would have to decide whether to cooperate with Mueller or ask Trump for a pardon. One thing that Manafort has to consider, though, is that Trump cannot pardon him for violating state laws, such as evading Virginia income tax. (V)

White House Staffers Are Plotting to Break a Major Campaign Promise

During the presidential campaign, one of the things Donald Trump promised to do in his first 100 days in office was to rescind Barack Obama's order not to deport "Dreamers," that is, people brought into the country illegally as children. He called Obama's order "amnesty" and fiercely opposed it. Now some of the top people in the White House, including Chief of Staff John Kelly, first daughter Ivanka Trump, and first son-in-law Jared Kushner are pushing the President to protect, rather than deport, the estimated 800,000 Dreamers and use that as a bargaining chip for a larger immigration deal. For example, he could allow the Dreamers to stay in return for funding for a border wall, more detention facilities, and a better way for businesses to identify whether job applicants are in the country legally.

Anti-amnesty forces around the country are very nervous about what Trump might do. On the other hand, polls show that close to 80% of registered voters think that the Dreamers should be allowed to stay. This puts Trump in a bind: Much of his base fervently wants him to follow through on his promise to deport all the Dreamers but most voters oppose the idea. Trump often has difficulty dealing with situations that require painful trade-offs. (V)

The Big Six Are Making Progress on Tax Overhaul

In July, Donald Trump released a six-paragraph tax plan that basically said he wanted to cut taxes. A one-page plan like that cannot be submitted to the House and Senate for a vote. Behind the scenes, however, a group of six key figures is working on actual legislation. The six are: Director of the National Economic Council Gary Cohn, Treasury Secretary Steve Mnuchin, Mitch McConnell, Speaker Paul Ryan (R-WI), Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways & Means Chairman Kevin Brady (R-TX). All of these are heavyweights who know what they are doing. Nevertheless, tax legislation is always tough because it affects all individuals and all companies.

One decision that has already been made is a one-time requirement that U.S. companies bring back overseas earnings and pay a low tax rate on them. Most large businesses strongly support this. The group has also decided to reduce the corporate tax rate from 35% to the range of 22% to 25%, depending on how much money can be raised from other sources.

There is no shortage of ideas about how to raise revenue to pay for the corporate tax cut. One idea is to tax the money that workers put in their 401(k) retirement accounts up front. This proposal will create a firestorm of resistance, not only from individuals, but also from the financial services industry, especially the big banks. Another idea is to cap the home mortgage deduction. Expect the real estate industry to go bonkers over this one. Also on the table is the elimination of deductions for state and local taxes. Since taxes are higher in blue states than in red states, that sounds like a good idea politically—unless you happen to represent a high-tax blue state in the Senate, as Sen. Pat Toomey (R-PA) or Sen. Ron Johnson (R-WI) do. And what about the 14 Republican representatives from California or the 9 Republican representatives from New York? How are they going to explain a vote to eliminate those deductions to their constituents? In short, making a plan is the easy part. Getting it through Congress is something else. (V)

Trump Nominee Clovis Is in the Spotlight

We've already noted that Sam Clovis is woefully unqualified for the post to which Donald Trump has appointed him, namely to be the USDA's chief scientist. The statute requires that the nominee be a "distinguished scientist," which certainly should disqualify Clovis, since he's not a scientist at all. In fact, he's more like an anti-scientist, denying global warming and engaging in all manner of non-fact-based theorizing and conspiracy thinking. His degrees, for what they are worth, are in public administration and business.

Now that the microscope is on Clovis, and the glare is growing intense, we also learn that he has some curious views on homosexuality. And by "curious," we mean "reprehensible." In his career as an academic and radio talk show host, he's declared that being gay is a choice, and said that position is supported by "science." He also insisted that if gay marriage is legalized, then legal pedophilia will soon follow. Because, of course, there's nothing better than a slippery slope argument to demonstrate the soundness of your position.

Needless to say, this kind of verbiage would not be tolerated if directed at any other group. If Clovis said that being injured in combat was a "choice," and that if we start paying for veterans' hospital bills, the next thing you know we'll be having to buy them Rolls Royces, he'd be run out of Washington on a rail. If this is the best that Trump can come up with, it is beginning to suggest that no one wants to work in the Trump administration, and Trump is having to scrape the bottom of the barrel to find nominees. That's why his choices are full of splinters. (Z)

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