Oct. 05

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New Senate: DEM 48             GOP 52

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Dem pickups: (None)
GOP pickups: (None)

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Senate Panel: Russia Meddled in the Election

After interviewing more than 100 people and processing 100,000 pages of documents, the Senate Intelligence Committee has come to the conclusion that Russia interfered with the 2016 election and is planning a repeat performance in 2018. In a press conference yesterday, Chairman Richard Burr (R-NC) and ranking member Mark Warner (D-VA) said that Russia ran an extensive campaign to influence the 2016 election campaign. Burr said that the Russians did not change the outcome, however.

Nevertheless, Warner noted that the Russians hacked into political files, released those files, and probed the vulnerabilities of state election systems in 21 states. The Russians also used social media, both with paid ads and false accounts spreading and encouraging fake news. Their goal he said, was to sow chaos and drive division in the U.S.

Warner also criticized Twitter's response to the Russian meddling. saying it was "frankly inadequate on every level." Twitter has admitted that Russia Today spent $274,000 buying 1,800 tweets.

While Burr and Warner said that the Russians didn't change the results, what they undoubtedly mean is that the Russians didn't hack the software that added up the votes and substitute incorrect tallies for correct ones. No one has suggested that they did that. What they might have done, however, is hack the voter registration databases in as many as 21 states and delete thousands of voters in Democratic-leaning precincts. That would be just as effective as changing vote totals. So far, no one has addressed this issue. (V)

Cabinet Dysfunction Goes Public

Donald Trump has been in office for 258 days, and has had a full, permanent cabinet for 94 of those. That's barely more than a third of his term, and things are not trending in the right direction. Homeland Security is open right now, thanks to John Kelly's move into the chief of staff role, while Health and Human Services is also vacant, thanks to Tom Price's personal frequent flier program. Now, it is looking like the State Department could soon join the list.

It is already one of the worst kept secrets in Washington that Donald Trump and Secretary of State Rex Tillerson don't much care for each other. However, new reporting from NBC News dumps a tanker truck full of fuel onto the fire. According to their sources, Tillerson—who has a long association with the Boy Scouts of America—was infuriated by the President's highly-political speech to the organization's annual jamboree back in July. So great was his irritation that he called Trump a "moron" and declared his intention to resign, only to be talked into staying by Vice President Mike Pence.

Following the publication of the NBC story on Wednesday morning, Tillerson called a press conference to refute it. He said that he has never threatened to resign, and did not have to be calmed down by Mike Pence. When asked if he had called the President an moron, the Secretary said, "The places I come from, we don't deal with that kind of petty nonsense. I'm just not going to be part of this effort to divide this administration." Notice the absence of "no" or "certainly not" or "I never said that." NBC is standing by its reporting, and given Tillerson's non-denial denial, as well as the fact that this is not the first time he's been rumored to have thrown a temper tantrum, the odds are pretty good that they have the right of it.

Meanwhile, if Tillerson's personal intrigues were not enough, there's little question that he's been a poor Secretary. Between Trump's rhetoric, and Tillerson's lack of leadership, and both men's seeming disdain for America's diplomatic corps, state department careerists are leaving in droves. These individuals, many with decades of experience, are not easily replaced. Meanwhile, Tillerson has made little headway on America's biggest diplomatic challenges, in part because of his own shortcomings, and in part because he does not appear to be on the same page as Trump.

Adding it all up, this does not appear to be a situation that can last much longer. Tillerson might decide he's fed up, or Trump might decide for him. After all, the Secretary has now embarrassed the President, which is no-no #1. Friday, aka "Firing Day," is just 24 hours away, though it's probably more likely that everyone hangs on until the end of 2017 for appearance's sakes. (Z)

Trump Is Losing the Senate

If Donald Trump's cabinet difficulties were not enough, he's also got major problems with his party's Senate caucus. Bob Corker (R-TN) is on his way out the door in 14 months or so, and so is now freely sharing his opinions with anyone who is interested. Speaking with reporters, he declared, "I think Secretary Tillerson, Secretary Mattis and Chief of Staff Kelly are those people that help separate our country from chaos." Asked if, by "chaos," he meant "Donald Trump," Corker said, "They [Mattis, Kelly and Tillerson] work very well together to make sure the policies we put forth around the world are sound and coherent. There are other people within the administration that don't. I hope they stay because they're valuable to the national security of our nation." Translation: "Yes, yes I do mean Donald Trump."

This is a pretty dramatic turn for someone who was once considered among the President's closest allies in the Senate. And he is not the only Senate Republican who has disembarked from the SS Trump. John McCain (AZ), who similarly has little to lose, is now more likely to oppose Trump than to support him. Moderates like Lisa Murkowski (AK) and Susan Collins (ME) have been distancing themselves from the President and his agenda. Rand Paul (KY) has always been a loose cannon, and he's gotten looser in recent months. He may soon be joined by another loose cannon in the form of Roy Moore, who's favored to claim Luther Strange's Senate seat on December 12. That's six senators whose votes are now in doubt when it comes to any of the President's initiatives, or three more than the number necessary to sink any legislation. Like, for example, Trump's tax proposal, which most of the sextet has already expressed reservations about. It's getting more and more likely that Trump makes it to the one-year mark without a single major legislative accomplishment. (Z)

Trump Speaks, Wall Street Freaks, White House Dekes

Following his visit to Puerto Rico, Donald Trump was interviewed by paragon of journalistic excellence Geraldo Rivera. And during that interview, the President casually tossed off a bombshell: "They owe a lot of money to your friends on Wall Street and we're going to have to wipe that out. You can say goodbye to that. I don't know if it's Goldman Sachs, but whoever it is, you can wave goodbye to that."

Even given his propensity for Montezuma's Revenge of the mouth, it's shocking that Trump would say something like this off the cuff. Surely he knows that Wall Street, whose support he badly wants, is going to hang on his every word when he talks finance. And they most certainly were listening; within 12 hours of the Rivera interview, one Wall Street insider described Puerto Rico bondholders as "suicidal." While the President cannot actually wipe out the existing debt, he could throw his weight behind the issuance of new bonds to stabilize the island's economy. These new bonds would likely take precedence over the existing ones, meaning that holders of existing bonds would get paid off sometime between "when pigs fly" and "when hell freezes over." And since a great many of the bonds are held by large mutual fund brokerages, like T. Rowe Price, OppenheimerFunds, and Franklin Templeton, the effects would ripple across the markets.

In view of this response, members of the administration quickly tried to dance their way around their boss's promises. "I wouldn't take it word for word with that," Budget Director Mick Mulvaney told CNN. "We are not going to deal right now with those fundamental difficulties that Puerto Rico had before the storm." In other words, when the President speaks, you shouldn't pay attention to the things he says, you should pay attention to...well, it's not clear what part Mulvaney thinks is worth taking note of. In any event, there are a lot of people in the financial sector right now who are praying that the President's budget director knows the President's fiscal policy better than, you know, the President. (Z)

Report: Mueller Is Looking at the Steele Dossier

Reuters is reporting that special counsel Robert Mueller is investigating the dossier on Donald Trump compiled by former British spy Christopher Steele. When asked, Mueller refused to comment on the matter. Previously, the FBI had been looking into the Steele dossier, but if the report is correct, now Mueller has taken it over. Four U.S. intelligence agencies have said that Steele was a credible source and they were looking into the dossier.

Three Russian businessmen named in the report have sued a Washington firm that was involved in preparing the report, claiming they were libeled. Such an action is typically intended to scare someone, to compel them to repudiate objectionable material. The businessmen most likely are bluffing here; they certainly do not want to receive subpoenas for themselves or documents related to the case, which would certainly happen if the case were to go to trial. (V)

Arpaio Pardon Sustained

Former sheriff Joe Arpaio (or his lawyers, at least) returned to court Wednesday. He was granted Donald Trump's first—and thus far only—presidential pardon, so it was not necessary for him to head back to court. However, a pardon is usually just a waiver of punishment, and in most cases does not quash the original conviction. Arpaio wanted to be fully exonerated.

The ex-lawman was certainly playing a risky game. There is a compelling argument to be made that Trump exceeded the powers granted to him by the Constitution, which raised the possibility that the pardon itself could be vacated by the judge. This would certainly have pleased a lot of people who don't like Trump and/or Arpaio, but might also have triggered a constitutional crisis. In the end, Judge Susan Bolton didn't feel she could go there, so she killed the conviction and sustained the pardon. Arpaio thus avoids prison, and Trump avoids a serious embarrassment. It's a small victory, but these days, he will surely take what he can get. (Z)

Rep. Tim Murphy to Retire

Rep. Tim Murphy (R-PA) is a dyed-in-the-wool Christian who is one of the most outspoken opponents of abortion rights in Congress. It turns out, however, that he's squarely in the, "do as I say, not as I do" camp. First, because he has a wife and a mistress, a state of affairs that most versions of the Bible definitely frown upon. Second, because when his mistress got pregnant, he aggressively pushed her to get an abortion.

In view of these revelations, Murphy has decided to retire at the end of the current term. "After discussions with my family and staff," he said in a statement, "I have come to the decision that I will not seek reelection to Congress at the end of my current term." Probably a sound decision in his Jesus-loving, staunchly conservative (R+11) district. Pennsylvania Democrats are hopeful that the now-open seat is a pickup opportunity in 2018, but given the demographics of PA-18, along with the fact that the voters there have sent a Democrat to Congress only two times in the last 140 years, that would require a tsunami-level Democratic wave. (Z)

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