Kushner Reportedly Wanted Means to Communicate With Russia Secretly

Nothing stays secret for long in Washington these days, and so the Washington Post has apparently discovered what Jared Kushner-related lead the FBI is looking into: That he went to the Russians (accompanied by Gen. Michael Flynn) and proposed they set up a secret communications channel in their embassy, so that the Trump campaign and Moscow could talk to each other without the U.S. government eavesdropping.

Needless to say, if this is true, it looks very bad for Kushner and for his father-in-law. First, because of the profound dishonesty it reflects. Why would a secret channel be necessary unless Kushner and other members of the campaign knew (or at least suspected) that what they were doing was unethical and/or illegal? At the same time, it also makes Kushner look—to be blunt—stupid. There is little chance that the Russians would allow an American, even a "friendly" one, access to their top secret communications equipment. And even if they did, Kushner would be taking an enormous risk that the communiques would be used against him, either by leaking them outright, or by holding them over his head for blackmail purposes (e.g. kompromat). And finally, the FBI didn't just fall off the turnip truck—they eavesdrop on the Russians, particularly when something suspicious happens, like an American making repeated visits to the Russian embassy. There is every chance that Kushner's "secret" communications wouldn't have remained so. For all these reasons, one FBI official opined that the whole plan, "seems extremely naive or absolutely crazy."

Now, is it possible the story is false? Yes; the Russians sometimes send fake messages back to Moscow to test whether or not anyone is listening. If the fake information becomes public, they know where it came from. However, intelligence officials concur that this would be an unusual fake item to plant, and so they tend to discount this possibility. It's also worth noting that if Kushner is indeed exposed due to a meeting he attended with Michael Flynn, it would help explain why Donald Trump is so eager to make the Flynn investigation go away. (Z)

Comey Wanted to Outrun Fake Russian Intelligence

Whenever former FBI Director James Comey gets before a Congressional committee, or talks to Robert Mueller, he's clearly going to have quite a story to tell. At least one piece of that story became public information on Friday: His somewhat abrupt announcement that the Clinton e-mail investigation was over was prompted by concerns over fake information from Russia that he feared was about to bubble to the surface.

The fake information was prompted by Bill Clinton's ill-advised chat with then-Attorney General Loretta Lynch on an airport runway. The Russians saw their opportunity, and prepared to circulate a story that Lynch had ordered the FBI to kill the Hillary Clinton e-mail probe. Comey concluded, probably correctly, that if the fake story became public, his investigation in particular, and the Justice Dept. in general, would be badly undermined. So, he announced an end to the probe before there was any "evidence" that he was acting on orders from Lynch.

This story illustrates just how deeply the Russians were involved in the 2016 election. There's also a certain irony that Donald Trump is now in trouble for doing the exact same thing the Russians tried to get Loretta Lynch (and the Clintons) in trouble for doing. Put another way, Trump managed to take a very damning bit of "fake news" and transform it into a very damning bit of real news. Ah, the powers of the presidency! (Z)

While Trump Is Away, Top Officials Give Contradictory Messages

One advantage for the party controlling the White House is that the messaging is normally unambiguous. If the president wants X, his party is for X. In contrast, the opposition party might have two or three or more contradictory messages. However, this is not a normal administration and the president isn't really interested in the details of policy, so Thursday, two of the top economic officials gave Congress completely different stories about the budget.

Budget Director Mick Mulvaney, already known as "Mick the Knife," said that massive tax cuts would be paid for by equally massive elimination of deductions (see below). A few minutes later, Treasury Secretary Steve Mnuchin said it would not be necessary to eliminate deductions, because the tax cut will stimulate the economy so much that government revenue will increase. These views are incompatible, and only one of them is even feasible: Mulvaney's. Cutting taxes by a trillion dollars and eliminating a trillion dollars worth of deductions is a political decision, but the math adds up. Mnuchin's view is warmed over supply-side economics that no serious economist believes—especially after George W. Bush tried it and it didn't work, and then Gov. Sam Brownback (R-KS) tried it and it flopped monumentally. Normally, the president gets to decide which one it is, but he is off in Europe fighting with America's allies and hasn't weighed in on it.

Another area where the administration has two incompatible policies is about breaking up the big banks. Director of the National Economic Council Gary Cohn wants to break up the banks by reviving the 1933 Glass-Steagall Act. Mnuchin opposes this. Again, Trump could break the tie, but it would mean saying "No" to one of his top economic advisers, and he hates to do that.

Actually, Cohn appears to be feeling a bit frisky these days, because he's also openly opposing the President's views on another issue: coal. Trump, of course, has promised the coal miners of West Virginia, Kentucky, Wyoming, etc. that he will rescue America's dying coal industry. Nobody really believes this is possible, even most of the coal miners, because coal can no longer compete economically with other sources of energy. On Friday, Cohn joined the chorus of coal skeptics, saying that it doesn't "make that much sense anymore." He endorsed natural gas, in particular, along with wind and solar power. We may soon learn if Trump still disagrees, as it will be difficult for the U.S. to honor the Paris climate accords and to keep mining coal. Trump's decision on the former, then, likely tips his hand as to the latter.

And while we are at it, Secretary of State Rex Tillerson also appears to have gone off script a bit. When Trump carelessly leaked Israeli intelligence, he followed his usual pattern of denial and obfuscation. By contrast, speaking on Friday, Tillerson took full responsibility for the careless leaks of British intelligence on the Manchester bombing, and apologized to his UK counterpart Boris Johnson. It's possible that Trump approved this, and that he's perfectly fine with apologies if he doesn't have to give them. However, it's a bit more likely that Tillerson recognized the necessity of smoothing things over, and took matters into his own hands. Whatever the case may be, the British are back to sharing intel with the U.S., after a temporary suspension. (V & Z)

Republicans May Have Found a Way to Increase Taxes Mostly in Blue States

Now that the border-adjustment tax much loved by Speaker Paul Ryan (R-WI) is off the table, Republicans are looking for other ways to raise a trillion dollars over the next 10 years so they can cut the top rates without losing any revenue. They may have hit on it now: The idea is to eliminate the deductibility of state and local taxes, something that has been on the books for 104 years. From the Republicans' point of view, the beauty of this scheme is that most of the burden falls on the states with the highest state income taxes and the highest property values—and most of those are blue states. A scheme to raise over trillion dollars, and have Mexico—oops, the blue states—pay for it may be hard to resist.

The only problem is getting such a provision approved by the Senate. Every Democrat would almost certainly vote against it, so the Republicans could afford to lose only two votes (assuming it could be passed using the budget reconciliation process). The problem is that although Texas does not have a state income tax, some red states do. Some of these (and their top rates) are: Iowa (9.0%), Idaho (7.4%), South Carolina (7.0%), Montana (6.9%), Arkansas (6.9%), and West Virginia (6.5%). Together, these states have 10 Republican senators, who might not be so keen on the plan. Four more red states (Georgia, Kentucky, Louisiana, and Missouri) all have top rates of 6.0% and two Republican senators each, so that is 18 Republican senators who have to be lobbied. If only 15 are convinced, the provision goes down. Nevertheless, the temptation to try will be enormous, as there aren't a lot of easy ways to raise a trillion dollars. (V)

Democrats Are Losing, but Less Badly than Before

We have now had three special elections since Donald Trump took office. Republicans won two of them outright (KS-04 and MT-01) and got more votes than the Democrats in the other one (GA-06). But as Axios shows, Democrats are improving on their historical performance in those districts. In KS-04, the district went from R+31 in 2016 to R+7 in the special election, a shift of 24 points towards the Democrats. In the GA-06, the district went R+31 in the 2016 election to R+2 in the special election primary, a shift of 29 points towards the Democrats. Finally, in Montana, in 2016 it was R+16 and this week it was R+6, a shift of 10 points towards the Democrats. While the Democrats haven't won any of these (yet—the Georgia runoff in June 20), the shifts are significant, an average of 21 points towards the Democrats. This should make Republicans in R+10 districts very nervous. Especially if those Republicans voted for the AHCA. (V)

Democratic 2020 Candidates Have Formed a "Hell, No" Caucus

Politico has gone through the Senate votes since Donald Trump was inaugurated, and noticed something interesting: the five senators who have opposed the most cabinet nominees just happen to be the five who are most often viewed as the top 2020 Democratic presidential candidates. The senators (and the number of nominees they backed) are Kirsten Gillibrand (1), Elizabeth Warren (2), Cory Booker (3), Kamala Harris (3), and Bernie Sanders (3). These are followed by Jeff Merkley (6), with the others backing more.

It is clear that all of them are playing to the party's activist base, which despises Trump and wants to impede him at every turn. The analysis did not count the three nominees confirmed unanimously. Gillibrand gave a succinct explanation for voting against all but one of them (Nikki Haley), using official Senate terminology: "If they suck, I vote against them. If they're worthy, I vote for them.

The New York Times has a scorecard listing how each senator voted on each nominee. The Democrats who rejected the fewest nominees are Joe Manchin (4), Heidi Heitkamp (5), Angus King (6), Mark Warner (6), Claire McCaskill (7), and Joe Donnelly (7). King is technically an independent, but caucuses with the Democrats. Manchin, Heitkamp, McCaskill, and Donnelly all face tough reelections in states that Trump won by huge margins, so saying "I hate Trump" is like saying "Goodbye, Senate, I enjoyed it while I was here."

This behavior doesn't mean the 2020 nomination will go to the Democratic who does the most to try to stop Trump. More centrist Democrats, such as Gov. Andrew Cuomo (D-NY), are likely to pitch themselves as bipartisan problem solvers, rather than as Trump's worst enemy. It will be quite a while before we know which approach works better. (V)

Boehner Slams Trump

Former speaker John Boehner sounds like a man who got out of Washington at just the right time. Beyond the fact that he's clearly enjoying his retirement, he also has little regard for Donald Trump, who he says "has been a complete disaster."

While Boehner gives the President some credit for getting a health care bill through the House, he had little else positive to say in a speech delivered before the KPMG Global Energy Conference. He is not optimistic about changes to the tax code, and said that the administration's current pronouncements on that issue are "just a bunch of happy talk." Such strong verbiage makes it sound like Boehner may be thinking about a run at the White House in 2020, but he insisted that is not the case, saying that in his Ohio home, "I wake up every day, drink my morning coffee and say, 'Hallelujah, hallelujah, hallelujah.'" If any Republican from the Buckeye State is going to make a run in 2020, it seems more likely to be Gov. John Kasich. (Z)

Fox Trolls Trump

Current world leaders have to play their cards fairly carefully with the sitting President of the United States. The same is not true of former leaders, however. And former Mexican President Vicente Fox has been getting much enjoyment, and much attention, out of trolling Donald Trump.

Fox's latest is a video posted to YouTube on Wednesday that is already approaching half a million views. In it, Fox mocks Trump's obsession with the size of his...inauguration crowd. He also acknowledges The Donald's poor attention span, and so uses a piece of chocolate cake to try to keep the President focused. Among the barbs, Fox also has a serious message for Trump: Worry less about the rich, and more about the poor. It's a noble effort, but one that Trump is very unlikely to see, and even less likely to actually hear. (Z)

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---The Votemaster and Zenger