Aug. 31

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New Senate: DEM 48             GOP 52

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Mueller Teams up with Schneiderman

It was all-but-inevitable from the moment that Donald Trump pardoned Joe Arpaio, thus sending a none-too-subtle message that those who remained loyal to the President would be entitled to a "get out of (federal) jail free" card. And now, it's happened. Special counsel Robert Mueller and aspiring Democratic, New York attorney general Eric Schneiderman are joining forces and combining their respective investigations into the finances of former Trump campaign chair Paul Manafort.

Since Manafort lived, and did much of his business, in New York, this is all kosher. While no charges have been filed yet, and reportedly none are imminent, the noose is nonetheless tightening around Manafort's neck. His offices have been raided, his records have been subpoenaed, and pressure has been put on his family members and business associates. If he escapes this unscathed, it would be something of a minor miracle. And if it is Schneiderman who files the charges, then Trump's pardon power is moot, since he can pardon only federal crimes. Aspiring Democratic presidential, New York governor Andrew Cuomo could issue a pardon, but that's about as likely as Mexico paying for the wall. Once Mueller is in a position to really put the screws to Manafort, with the only way to avoid jail being a plea bargain, the former campaign manager is likely to flip and spill his guts. In short: Check, Mr. President. And, very possibly, mate. (Z)

'Talking is not the answer,' Says Trump; 'Yes, it is,' Says Mattis

Donald Trump does not want to talk with Kim Jong-Un, and certainly does not want to grant him any concessions. To so do would be weak. And, quite probably, sad. Or, more accurately, Sad! In case there was any doubt on this point, Trump reiterated his views via Twitter on Wednesday morning:

The U.S. has been talking to North Korea, and paying them extortion money, for 25 years. Talking is not the answer!

— Donald J. Trump (@realDonaldTrump) August 30, 2017

Trump refuses to accept that, as distasteful as working with Kim might be, the alternatives are even worse.

Sec. of Defense James Mattis accepts it, though. And so, just minutes after Trump's tweet, Mattis contradicted him. This happened so quickly that one is left with the impression that the Secretary saw the tweet and burst from his office, running to wherever he knew he could find some reporters. "We're never out of diplomatic solutions," Mattis declared (or wheezed, perhaps; he may have still been catching his breath).

This marks the third time in a week that a high-ranking member of the Trump administration has defied the President. First it was Chairman of the National Economic Council Gary Cohn, who openly expressed displeasure with Trump's handling of Charlottesville. Then it was Sec. of State Rex Tillerson, who said on "This Week" that "American values" and "Trump values" are not the same thing. Now, Mattis has publicly corrected the President on foreign policy.

We know that Trump is willing to terminate staffers with whom he is angry, but that willingness does not seem to extend to Cabinet-level positions. The survival of AG Jeff Sessions would seem to indicate as much, and the fact that he's still in his job may have sent a message to other high-ranking members of the administration. Recall that all the people Trump has sent packing were in jobs that did not require Senate approval. He may recognize that trying to get a new Defense Secretary or a new Secretary of State through the Senate could be a long, difficult, embarrassing process. This doesn't help Gary Cohn, whose job is not Senate-approved, but it does suggest that Mattis and Tillerson may be free to do as they please when it comes to foreign policy or transgender solder bans or the like.

We already know that the members of Congress—at least, the ones who run the show—have been tuning the President out. That's a little unusual when the president and the majority are of the same party, but it's not unheard of (see, for example, Harry S. Truman or Woodrow Wilson). However, for the members of the executive branch to ignore the president? That's almost unprecedented. And Trump won't be happy to hear that the last time it happened—Andrew Johnson—the president ended up being impeached and nearly convicted. (Z)

Trump Talks Taxes

In a speech in Missouri yesterday, President Donald Trump pitched tax reform and told the Missouri voters to get rid of Sen. Claire McCaskill (D-MO) if she won't vote for his as-yet-nonexistent tax bill. It is hard to tell if the event was about economics or politics, probably some of both. Except that Trump offered no clue to what he wants in his tax bill. Previous presidents have worked out their economic programs in detail and then handed them to Congress to chew on. They didn't always get what they wanted, but at least when their party was in the majority in at least one chamber, the plan was taken as a starting point. The only specific item Trump mentioned was cutting the top rate for corporations from 35% to 15%. No serious economist thinks that will create a lot of jobs and no serious politician thinks it has even the longest of long shots chance of passing both chambers of Congress. The biggest problem is the massive hole it would blow in the budget.

During his speech, Trump thanked a number of people for helping him work on tax reform. These included First Daughter Ivanka Trump, Chief of Staff John Kelly, Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross, and even Small Business Administration head Linda McMahon. Anybody missing here? How about Gary Cohn, who along with Mnuchin are the two real heavyweights in the administration on tax matters? Is this payback for Cohn not being on board with treating Nazis and anti-Nazis equally? Who knows?

The tax fight in Congress will be nasty. Senate Minority Leader Chuck Schumer (D-NY) has already rejected the idea of a bill that primarily cuts corporate taxes and those of the richest Americans. He said Democrats and allied groups are planning an intensive advertising and advocacy campaign all over the country to rev up opposition. If all Democrats oppose any tax-reform bill, Trump will need to get nearly all Republicans behind it (especially in the Senate) for it to pass. That is unlikely since the Republicans are badly divided on whose taxes to cut, by how much, whether to fill the resulting holes in the budget, and if so, how. Tax policy changes always have winners and losers and the losers tend to fight harder than the winners to keep what they already have. It is certainly possible that some bill emerges from Congress and Trump gets a claim a win, but we are months away from that, and there is a real chance that the whole project fails. (V)

Richard Trumka: White House Was Split between Racists and Wall Streeters

AFL-CIO President Richard Trumka panned Donald Trump's economic plans yesterday with the pungent remark that the White House is split between racists and Wall Streeters. Trumka said that one faction (led by former Chief Strategist Steve Bannon) had economic ideas that he and his members liked. These included a lot of the "America first" themes, including eliminating trade agreements that ship jobs overseas, putting tariffs on imported goods, etc. Now it turns out that Bannon is a racist and Trumka is apparently happy to see him go. The rest of the White House are Wall Streeters (e.g., Gary Cohn, Steve Mnuchin, Rex Tillerson, and much of the rest of the cabinet). Trumka has no use for them at all.

Why is this significant? A large piece of Trump's support came from blue-collar workers—the very people Trumka represents. If this is a warning sign that they are no longer happy with Trump, it could be a problem for him. What Trumka would like, obviously, is someone with Bannon's economic ideas but without the racism. Currently there is no high-level person in the White House who fits the bill. (V)

Prosecutors Assert that Menendez Has Been Taking Bribes for Years

The trial of Sen. Robert Menendez is scheduled to begin next week. In preparation, the Justice Dept. filed a document yesterday laying out its case. The document says that Menendez was on the take practically from the minute he got into the Senate in 2006. It alleges that ophthalmologist Dr. Salomon Melgen treated Menendez. But not for an eye condition. He treated him to all-expense paid trips to the Dominican Republic for years. Once the news got out, however, Menendez repaid Melgen $58,000 for transportation. The Justice Dept. also alleges that Melgen paid for Menendez's hotel accommodations in Paris in 2010. Menendez never reimbursed him for this. He did do various favors for the doctor, however, such are helping get three of his "girlfriends" from the Dominican Republic U.S. visas, and more. (V)

Christie Slams Cruz

Gov. Chris Christie (R-NJ), never one to mince words, called Sen. Ted Cruz (R-TX) a hypocrite yesterday, perceiving a wee bit of inconsistency in the Senator's willingness to pay for hurricane relief in Texas, but not in New Jersey. Christie also said: "He talks about playing politics. That's what he did with people's lives in 2012 and 2013. He was playing politics to make himself try to look like the most conservative guy in town." Democrats are saying the same thing, of course, but it cuts more deeply coming from a Republican.

Cruz didn't like this at all. His response to Christie was: "I'm sorry that there are politicians who are really desperate to get their names in the news and are saying whatever they need to do that." Cruz claimed that the bill to help victims of Hurricane Sandy was mostly pork, which is why he voted against it. Christie didn't like that much either, replying that the senator, "just made it up. Ted's particularly good at that. He just made it up. You know it and I know it. He made it up because it sounded good." According to both Politifact and FactCheck, the evidence is largely on Christie's side here. In any case, expect this kind of back-and-forth to really rev up when actual legislation is debated in Congress. Also expect Democrats to say to Republicans something like, "What would Ayn Rand do? Why can't the private sector solve this problem? Why do you need the bad big government to solve all your problems?"

In the end, a relief bill will surely pass Congress, but Democrats may try to attach riders that forbid rebuilding in areas that are flood prone, so as to turn them into wetlands that can absorb water in times of flooding. Republicans aren't going to like this, but if the House Freedom Caucus balks at the price tag, Speaker Paul Ryan (R-WI) may need Democratic votes to pass a bill, so the Democrats may be able to include some items they want in it. (V)

Harris to Co-Sponsor Sanders' Single-Payer Bill

Sen. Bernie Sanders (I-VT) wants single-payer healthcare, and is preparing a bill that he will introduce in the Senate. On Wednesday, Sen. Kamala Harris (D-CA) announced that she will be a sponsor of the bill.

This may seem a fairly inconsequential development, inasmuch as such a bill is dead on arrival in a GOP-controlled Congress. However, it's significant on a "reading the tea leaves" level, as one of two things must be true (and maybe both of them). The first is that Kamala Harris, a rising star in the party and an aspiring presidential candidate (perhaps as soon as 2020), is now firmly aligned with the progressive wing of the party. Given her "law and order" background, she might have crafted a more centrist image and gotten away with it, but now the die is pretty much cast.

The second is that the Democrats may be preparing to make single-payer, which seemed a nonstarter as recently as a year ago, a centerpiece of their pitch. Given the flaws of Obamacare, coupled with the difficulties in finding a "conservative" alternative, the American people may be ready to climb on board. This would be an economic issue, of sorts, which could help win back the Obama-Trump voters. And it would give the Party something big to stand for, as opposed to merely being the Trump opposition. We may get a clearer picture once we see how many additional Democrats sign on to the bill as co-sponsors.

To see how serious the Democrats are, check back later to see if Sanders introduces an actual bill. That is, a document that gets a label like S.100. A PowerPoint presentation with noble goals is not a bill. One of the things the Republicans did wrong when they were in the wilderness was fail to produce an actual bill to repeal Obamacare as soon as they controlled all the levers of power. If Sanders produces an actual bill that the Senate could vote on if the Democrats ever take back the majority in the Senate, then we know he and the co-sponsors are serious. If crafted right, the bill could get a lot of support from many companies, since it would get them out of the health-insurance business and save them a lot of money. They could put pressure on Republicans to vote for it.

The big catch is how to pay for single payer. Taxes are going to have to go up somewhere. If the Democrats don't come up with a clear plan where the math adds up, it's never going to fly. The revenue part of the equation is the tough part, not the benefits part. (Z & V)

Jerry Springer May Run for Governor of Ohio

Now that it has been established that outrageous celebrities can win high public office, Jerry Springer—certainly one of the more outrageous ones around—is mulling over a run for governor of Ohio. Unlike Kid Rock, who is thinking about running for the Senate in Michigan but who has no governmental experience at all, Springer actually has a resume apropos to the job. He was once mayor of Ohio's third-largest city: Cincinnati. Of course, this leak could just be a publicity stunt, but Springer is clearly interested in public office. In 1970 he ran for Congress as a Democrat and got 45% of the vote in a Republican district. In 1982 he ran for the Democratic nomination for governor of Ohio and lost. One of his more unusual commercials featured the fact that he had once visited a prostitute, paid by check, and owned up to it, claiming that he is honest, even when it hurts. At 73 and in an era where being a celebrity may help more than it hurts, he might just take the plunge. (V)

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