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Supreme Court Ruling on Trump's Taxes Will Be Released Today

In what could be hugely important decisions—or a giant anticlimax—the Supreme Court will release its decisions in two cases relating to Donald Trump's taxes today. Then the justices will leave town and head for the hills before the bomb goes off. No matter how they rule, one or more people will be very unhappy. There are two separate cases and the results in them might not be the same.

One case, Trump v. Vance, is about a grand jury subpoena from Manhattan DA Cyrus Vance to Trump's accountant, Mazars. Vance is undoubtedly interested in knowing whether Trump claimed his hush-money payments to porn stars Stormy Daniels and Karen McDougal as deductible business expenses. If he did, that could be tax fraud. Vance tests whether a sitting president can be criminally investigated and potentially indicted while in office.

If the Court rules that Vance can have the documents he seeks, Mazars has said it will comply. However, Vance needs them in conjunction with a grand jury proceeding, and by New York State law, grand jury proceedings must be kept secret from the media and the public. Vance will no doubt make it very clear to the grand jurors that they are not to speak a word to anyone about what they learn from the tax returns. A leak here is always possible, but unlikely. The judge has the authority to release grand jury documents, although that is rarely done.

The other case, Trump. v. Mazars, consolidated four House subpoenas to Mazars and Deutsche Bank and tests Congress' authority to get information it wants. The two cases are very different both in terms of precedents and consequences. In Vance, Trump could ultimately be indicted, tried, convicted, and imprisoned. In Mazars the only risk for Trump is political.

The key question in Mazars is whether subpoenas issued by a House committee are a legitimate exercise of congressional power. In Kilbourn v. Thompson (1880), the Supreme Court made a comment that Congress may use its subpoena power only to further its legislative function. In Hutchinson v. United States (1962), Justice Brennan wrote: "Investigation conducted solely to ... punish the investigated, either by publicity or prosecution, is indefensible..." If the Court concludes that Congress is merely on a fishing expedition, it could easily invalidate the subpoenas because they don't relate to a legislative function.

If the Court doesn't want to handle this hot potato right now, it could send it back to the lower court on various technical grounds. We will know shortly.

The House also filed a lawsuit to get Trump's tax returns based on a 1924 law that indisputably gives the Chairman of the House Ways and Means Committee the authority to demand anyone's tax returns and indisputably requires the Secretary of the Treasury to comply. However, the judge put that case on hold pending the outcome of another case that is not going to be resolved for many months at the earliest. (V)

CDC Capitulates to Trump and Will Issue New Guidance on School Openings

Current CDC guidelines require schools to take a number of measures to protect the health of students and teachers before they can open. Many of these measures, such as having much smaller classes so students can sit far apart, require money that is not available (e.g., to rent extra classroom space and hire more teachers).

Donald Trump opposes his own administration's guidelines because schools are the key to having the Dow Jones index go up and thus the key to his reelection. If schools are (partially) closed, many parents will have to stay home to babysit their children, making it impossible for the economy to run at full strength. If the economy isn't back to normal, the Dow won't go back to 29,000 and Trump fears he will lose. If teachers, children, and the children's parents get sick, that is just collateral damage that goes with running a modern economy. No sacrifice is too great, as long as it's someone other than the President who is doing the sacrificing.

Consequently, Trump bullied the CDC into agreeing to issue new guidance about opening schools. It is clear that the guidance he wants is that schools can reopen in the fall more-or-less normally, health risks be damned. Mike Pence confirmed this by saying the new guidelines would provide "more clarity." Actually, the old guidelines were perfectly clear: Schools can't open unless they are safe. But that isn't the result Trump wants.

Part of the cabinet chimed in to support Trump. Secretary of Education Betsy DeVos said: "Ultimately it's not a matter of if schools should reopen, it's simply a matter of how." Secretary of Labor Eugene Scalia argued that schools had to reopen to let their parents go labor. Secretary of HHS Alex Azar said: "Reopening schools safely may be the single most important thing that we can do to support healthy families during this pandemic." Each secretary spun it from the perspective of his or her department. A few cabinet members missed out, though. AG William Barr could have said that some judges have children and unless we can get those kids out of the house, the judges can't go back to work and dispense justice. Secretary of HUD Ben Carson could have said: "On account of my job, I am the expert on houses, and I know that kids don't belong in houses during the daytime. They belong in schools."

In order to bully schools into fully opening, Trump said he would withhold federal emergency funds from schools that are not fully open. Most schools badly need those funds to deal with the extra costs the pandemic has thrust upon them. Trump has no authority to withhold funds Congress has appropriated, so a school that doesn't get its special funding can sue him. Of course, it will be 3-5 years before the Supreme Court rules on the case.

Trump is not going to get his way in his former hometown, as it is the states and cities that make the calls about opening. In particular, Mayor Bill de Blasio (D-New York City) has announced that in the fall, schoolchildren in New York City will attend classes one to three days a week in order to reduce class size for social distancing. The obvious consequence is that parents who don't have access to daycare aren't going to be able to work full time, thus slowing the economic recovery. In one of the many ironies the virus has caused, grandparents who miss their grandchildren dearly, and who are perfectly capable of helping them with their online learning, are strongly advised to keep away from them for health reasons.

In a related action by Trump to force schools to open, he ordered DHS to issue a directive saying that international students would be required to leave the U.S. if their colleges and universities were not fully open so they could attend classes in person. After all, if they can watch lectures on their computers, they can do that from India or China or wherever, even if the classes are at 4 a.m. local time. The idea here is to force the schools to fully open because many universities charge international students a much higher tuition than they charge American students and don't provide scholarships for them. As a consequence, rescinding the visas of international students could cost many universities a lot of money, precisely at a time when they need every dollar to help remodel their campuses and dorms for social distancing. The order was a twofer. It would send a bunch of foreigners home and it put heavy pressure on universities to fully open, thus setting an example for K-12 schools.

In response, friendly rivals from the opposite ends of Massachusetts Ave. in Cambridge, namely Harvard and MIT, filed a joint lawsuit asking a judge for an injunction preventing the government from enforcing the directive. MIT doesn't have a law school, but Harvard has a pretty good one with more than a few law professors who would be quite happy to argue this case in court without asking for any extra money. In a statement, Harvard President Larry Bacow said: "The order came down without notice—its cruelty surpassed only by its recklessness. It appears that it was designed purposefully to place pressure on colleges and universities to open their on-campus classrooms for in-person instruction this fall, without regard to concerns for the health and safety of students, instructors, and others."

As an aside, Harvard announced that it was not going to reduce its $50,000 tuition, even though it could easily do so due to its large endowment. Although all classes will be online in the fall, that doesn't actually save Harvard much money except a bit on light and heat in the empty classrooms. Professors still have to be paid, routine building maintenance still has to be done, and now the computer infrastructure needs a major upgrade to allow thousands of students to watch lectures online at the same time. It is likely that the tuition decision wasn't made on account of the money, but to avoid putting pressure on other universities with no endowments and which can't afford to reduce their tuitions. The DHS directive is just another example of how Trump tries to get his way by bullying people he sees as weaker than himself. Whether the Harvard Law School is weaker than he is should be known fairly soon. (V)

Republicans Are Split over the Convention

When Donald Trump unilaterally moved the Republican National Convention from Charlotte to Jacksonville, he thought he'd show Gov. Roy Cooper (D-NC) who was boss. But Cooper may end up having the last laugh. Cases of COVID-19 are exploding in Florida, with the Sunshine State now in fourth place in terms of total cases, but rapidly catching up to third-place Texas. And you thought everything was bigger in Texas.

As a consequence of the coronavirus being everywhere and the city of Jacksonville ordering masks for large gatherings, some Republican officials and delegates are having second thoughts about attending. Republican Sens. Lamar Alexander (TN), Susan Collins (ME), Chuck Grassley (IA), Lisa Murkowski (AK), and Mitt Romney (UT) have already said they are not coming, and more surely will follow in their footsteps (or not follow in their non-footsteps).

On the other hand, some senators are going to be holding their noses (rather than covering them) and will attend as a show of fealty. In 2016, Sen. Lindsey Graham (R-SC) skipped the RNC as a form of protest against Trump, saying "I can watch it on TV." This year he will be front and center, largely because he may be in for a tough reelection battle and needs to show the (white) voters of South Carolina that he is as Trumpy as they come. Sen. Joni Ernst (R-IA) is also in a tough reelection battle and has said she will attend.

Trump doesn't especially like any of the no-show senators listed above (and especially dislikes Romney) so their absences won't bother him. However, he is clearly getting worried that some of the delegates might decide the risk of being one of 15,000 people packed into a hall in a virus-infected city isn't worth it. The last thing he needs is more photos of him speaking to a largely empty hall, like the one in Tulsa.

To allay the potential fears of the delegates, the convention planners have said they will test everyone on the way in to the hall. But how long will it take to test 15,000 people every day and what good is it if the results don't come back for 3 days? Also, what happens if they can somehow get test results back quickly, and on day 2, it turns out 50 delegates are infected and may have already infected more people? Will the show still go on?

Duval County, where Jacksonville is located, has become a COVID-19 hotspot. In early June, about 100 people a day were being admitted to hospitals there. Now it is over 700 a day. Jacksonville has also been designated one of three Florida cities where surge testing is scheduled, due to the explosion in cases.

One insider has reported that big donors are not expressing much interest in going. That could be partly due to the virus, but also partly due to the polls. Many of the donors are older and thus high risk. The thinking here is: "Why risk your life to lobby an official who may be out of power in 5 months?"

If the convention fizzles, it could be very demoralizing to Trump as he feeds off the energy of the crowd. If there is not much of a crowd and/or if the folks present decide to wear masks and therefore can't hoot and holler much, Trump's speech could fall flat. Also, going forward in the fall, if he is unable to hold big rallies with thousands of adoring fans cheering him on, he is going to be very unhappy and it will show. People don't like voting for a beaten-down candidate. The inability to hold rallies the way he did in 2016 is going to crimp his style and make him very unhappy. In contrast, Joe Biden will be happy to stay in his basement until Nov. 3, broadcasting recorded (and carefully) vetted videos instead of venturing out. It is in Biden's interest to let Trump dominate the news, shooting himself in the foot almost every day. What Biden needs is to make the election a referendum on Trump, not a choice between two candidates. By staying in his basement, he can make that happen.

It might be easier for Trump and the Republicans to figure out what to do if they just had some sort of data to work with. Say, a case study for what happens when you gather a bunch of people into an enclosed space to hoot and holler right in the middle of a pandemic. Oh, wait, we do have a case study, namely the June 20 rally in Tulsa. You get three guesses as to what's happened, and the first two don't count. Yep, COVID-19 cases are surging in the city, and the rally appears to have turned into a superspreader event. In fairness to the President, that outcome was only foreseeable to people who were born on or before June 18, 2020. Oh, and the state GOP convention in Texas—that's the state that's just barely ahead of Florida in COVID-19 cases—has just been canceled. When it comes to the convention in Jacksonville, these are what political scientists call "bad omens."

Is the connection between a rally and a spike in COVID-19 going to change Trump's campaign strategy? Nope, not until a causal link between rallies and death from the disease is crystal clear. In fact, Trump is planning a big rally in New Hampshire on Saturday. Will people attend? Probably, but not the state's Republican governor, Chris Sununu, who has said he will pass on the invitation.

Nevertheless, the campaign understands that having people who come to Trump rallies get sick 2 weeks later is not likely to increase attendance going forward, so it is adapting the style of the rallies. The one in New Hampshire will be outdoors, close to a large airplane hangar in case it rains. If this format works, it could be the model for future rallies. Holding outdoor rallies at airports is also very efficient in terms of Trump's time. He can fly in, get out of the plane, talk for half an hour, get back in the plane, and fly to the next rally with no time wasted getting from the airport to a downtown arena. Also, airports typically have good access roads and large parking lots. In 3 weeks or so we should know how well this new model worked.

The Democrats, for their part, haven't fully formulated their convention plans, but a big convention with 10,000+ people and lots of balloons is not in the cards. The initial thought was to hold 51 miniconventions in the states and D.C. and have them each get some television time to pitch things important to their voters. But depending on the health situation in August, even those may have to be canceled. (V & Z)

What If It Really Gets Crazy?

Here is the top of Politico's front page yesterday (without the banner ad):

Headline: Trump drops out. Biden gets sick. Pence is fired. What if 2020 gets really crazy?

Note: This was from Politico, not The Onion. The story highlights all the crazy things that have happened already this year and based on talks with insiders, what might yet happen. None of these are likely, individually. But in the aggregate? Certainly one (or even two or three) of these could come to pass. Here are some things that people are starting to see as real possibilities:

On the positive side (for us), it is unlikely that some day in the fall we will have just one headline, with the text: "There was no news yesterday. Please come back tomorrow." (V)

Trump Has a Problem in the Suburbs

In 2016, Donald Trump won the suburbs nationally by 4 points, 49% to 45%, which gave him his margin of victory in Wisconsin, Michigan, and Pennsylvania. Ivanka Trump and Kellyanne Conway went there in 2016, several times, to talk to white suburban women who were uncomfortable with Hillary Clinton. That's not going to work so well this year because on a number of the hot issues, suburban voters and Trump are on opposite sides. One of them is what to do about monuments and military bases honoring Confederate generals, all of whom levied war against the United States (the textbook definition of treason) in order to preserve slavery.

Another potential problem is Trump's support for sports teams whose name or mascot is clearly racist (e.g., the Washington football team, the Cleveland baseball team, etc.). Overt racism doesn't generally play well with college-educated women.

Finally, Trump wants to reopen all the schools in the fall, even if the schools aren't able to ensure the safety of the children (see above). That one is a mixed bag because while suburban mothers clearly don't want their kids to get sick, some of them need to have their kids go somewhere so they can get back to work. Employed single moms who need the income may be more aligned with Trump than married housewives who don't mind helping their offspring learn at home.

All in all, on account of these issues and more, Trump is in big trouble in the suburbs. A recent Marist College poll has Trump behind in the suburbs 35% to 60%. That's a 29-point drop from 2016 in a key (and large) part of the electorate. Fixing that is not going to be easy, no matter how many times Kellyanne visits Michigan. (V)

Trump Has Coattails in the Suburbs

And not in a good way. As he sinks, he is dragging GOP House candidates down with him. The House elections of 2018 were a disaster for the Republicans and it looks like Donald Trump's presence on the ballot in 2020 is going to make a bad situation even worse. Before the 2018 election, Republicans held 40% of the House districts that have more college graduates than the national average. Now it is down to 25% and heading in the wrong direction.

If this keeps up, it will indicate a major realignment of the parties. Affluent, college-educated suburban voters have traditionally been Republicans. Noncollege voters used to be Democrats (and were the core of the coalition FDR built). These demographic groups are rapidly changing teams. This is bad news for the GOP because not only do college-educated voters have better turnout than noncollege voters, but they also have more money to donate to their favorite candidates.

This movement is going to frustrate the NRCC's attempt to dislodge the 40 first termers the Democrats elected in 2018. Worse yet, it is putting Republicans in white-collar districts in Pennsylvania, Georgia, Indiana, and especially Texas, in danger. Tom Davis, who used to run the NRCC, recently said: "The suburban exodus has continued, and my gut is as long as Trump is identified as the leader of the party, that continues." What Davis didn't say (because he doesn't know) is what happens when Trump has exited stage right. Will those voters ever come back? Many of them voted Republican on tax policy even though they are socially liberal on abortion, immigration, racism, gay rights, and the environment. The 2017 tax bill, which limited the deduction for state and local taxes combined to $10,000, hit suburban voters in blue states especially hard. If a potential Biden administration reverses that, then those voters are going to see that they are in agreement with the Democrats on nearly everything and with the Republicans on almost nothing, so many of them will switch party registration and vote for the blue team henceforth, also in House races.

Recent polls highlight the GOP's problem in the suburbs. The newest Monmouth University poll shows that college-educated white voters prefer a generic House Democratic candidate to a generic House Republican candidate 59% to 36%, putting the Republican 23 points under water among white suburbanites. Among Black suburbanites, it is undoubtedly worse. In 2018, the exit polls showed that the Democrats did 8 points better in suburbia, so the GOP's chances have deteriorated substantially from a year in which they lost 40 House seats.

The Democrats are going to focus on the 41 Republican districts with more than the average number of college graduates. Reps. Brian Fitzpatrick (R-PA), Ann Wagner (R-MO), Chip Roy (R-TX), Don Bacon (R-NE), David Schweikert (R-AZ), and Steve Chabot (R-OH) are going to be top targets. Some Republicans think that Trump's strategy of trying to squeeze every last vote out of his base of noncollege voters and to hell with everyone else is going to cost them dearly.

The good news for the Republicans is that 36 Democrats are in districts with a Republican PVI, only some of them suburban. The trouble here is that the PVI ratings are based on how the districts voted in 2012 and 2016, not how the voters there are currently leaning. Also good for the GOP is that there isn't much low-hanging fruit left for the Democrats to snatch. Just one Republican (John Katko in NY-24) is in a district with a Democratic PVI and there are no Republicans left in districts with a PVI of EVEN. There are, however, 19 Republicans in districts ranging from R+1 through R+5 who could drown in a blue wave. Unless the Republican Party is able to expand its base, the House may remain Democratic for years to come. (V)

Republicans Could Lose Almost Half of Their Female Senators

Currently, nine of the 53 Republican senators are women (vs. 17 of the 47 Democrats). There is a fair chance that almost half of them (four) could lose their seats in November. They are Susan Collins, Joni Ernst, Kelly Loeffler (GA), and Martha McSally (AZ). All four of them are currently trailing in the polls and two of them were appointed rather than elected (Loeffler and McSally), meaning they have never won a statewide election before. Historically, appointed senators win their first election less than 40% of the time. In addition, the two elected senators (Collins and Ernst) will be running against women, so any advantage they might have had with female voters will be canceled.

Unfortunately for the four women, all are running in battleground states and are subject to being dragged down if the voters reject Donald Trump. Ticket splitting is increasingly rare and when a state goes one way for president, it usually goes the same way for the Senate unless the senatorial candidate is exceptionally well known and popular. One state where that could happen is Montana, which could very well vote for Trump but also for Gov. Steve Bullock (D-MT). But there, gender isn't an issue since Bullock's opponent is Sen. Steve Daines (R-MT).

Collins is clearly desperate. She has announced that she will not campaign against her former Senate colleague, Joe Biden, with whom she served from 1997 to 2009. She said that she knows him very well from that period. She has also not said if she plans to vote for Trump. The danger in saying she will vote for Biden is that it would cost her many Republican votes and probably not gain her many Democratic votes. So, it is best for her to pretend there is no presidential race going on and just focus on her own race.

Loeffler is a special case due to Georgia's special-election laws. On Nov. 3, she will take part in a jungle primary featuring another high-profile Republican, Rep. Doug Collins (R-GA), and two and a half high-profile Democrats: Rev. Raphael Warnock and Matt Lieberman (plus extra added attraction Ed Tarver). If she makes it into the top two, she gets to face off against the other top vote-getter in a runoff on Jan. 6, 2021. Thus, to keep her seat, she has to win two elections (unless she gets 50% of the vote on Nov. 3, which is inconceivable).

As every voter in Georgia knows by now, on Jan. 24, 2020, the day Loeffler got a confidential Senate briefing on the likely economic impact of the coronavirus, a little birdie told her financial advisers to sell off the stocks she owned in hospitality companies and buy stocks in medical supply companies and a company that makes teleworking software. Loeffler denies knowing birdspeak, so she couldn't have told the little birdie about the impending stock market crash. We might be more likely to buy that if she conceded that while she doesn't know birdspeak, she does speak parseltongue.

There are a few bright spots for the Republicans, though. Sens. Shelley Moore Capito (R-WV) and Cindy Hyde-Smith (R-MS) are expected to glide to reelection and former representative Cynthia Lummis, who has won statewide election in Wyoming six times, is certain to replace the retiring Sen. Mike Enzi (R-WY). (V)

Vindman Retires but Duckworth Is Not Backing Down

Lt. Col. Alexander Vindman, a key witness at the impeachment hearings of Donald Trump, is retiring from the Army due to his being bullied by the president. He was slated to be promoted to bird colonel, but apparently that was killed on Trump's orders, so he retired.

Not so fast, though. Sen. Tammy Duckworth (D-IL), who lost both of her legs when the Army helicopter she was piloting in Iraq was shot down by enemy soldiers, is not too keen on the military being politicized. Consequently, she has put a hold on 1,123 promotions to higher ranks until Secretary of Defense Mark Esper assures her in writing that Vindman will not be punished for testifying. So far, Esper has not done so and the hold is still in place. This could end up being a game of chicken. Senate rules allow a single senator to prevent a vote on a bill, in this case a routine bill to promote over 1,000 Army and Navy officers. If Duckworth sticks to her guns, Esper may have to give her the promise she is demanding. Of course, once the bill has passed, Trump will pressure him into breaking his promise. While Duckworth doesn't have legs, she certainly has guts, as well as steel in her spine, which is more than can be said for many senators. We probably haven't heard the end of this story. (V)

Bollier Raises $3.7 Million

If you understand the importance of that, kudos to you. Otherwise, here's the scoop. Former Republican but current Democratic state senator Dr. Barbara Bollier is running for the open U.S. Senate seat being vacated by the retiring Sen. Pat Roberts (R-KS). In Q2, she raised $3.7 million for her race. That's more money than any candidate has raised in any quarter while running for any federal, state, or local office in the entire history of Kansas. And remember, this is a state that hasn't elected a Democrat to the Senate since 1932. The primary is on August 4, but Bollier is virtually certain of winning the Democratic nomination.

The reason Democrats are pouring money into Bollier's campaign is that Republicans could possibly hand them the seat on a silver platter. The GOP primary is a bitter affair, with 11 candidates. One of them is right-wing firebrand Kris Kobach, who managed to lose a gubernatorial race to a Democrat in 2018. Many Republicans are afraid that if Kobach gets the nomination, he'll lose to Bollier, especially now that she is so well financed. Republicans up and down the line are trying to sabotage Kobach and are backing Rep. Roger Marshall (R-KS). The problem is that millionaire businessman Bob Hamilton is also among the Republican candidates and there is a danger that Marshall and Hamilton will split the non-Kobach vote, allowing Kobach to win the primary and then Bollier to win the general election. Kansas doesn't have runoffs like the Deep South does, so the Republican who gets the most votes on August 4 will face Bollier. (V)

House Democrats Want to Fund Election Security

The Democrats on the House Appropriations Committee, led by Rep. Nita Lowey (D-NY), have voted to include $500 million in the annual funding bill to enhance election security. It specifically states that the money may be used only for states to replace their all-electronic voting machines with new ones that produce a paper trail that can be audited after the fact in a close election.

About 16 million Americans are expected to vote using equipment that can potentially be hacked and which cannot be audited. States in which some or all of the voting machines do not leave a paper trail include Texas, Louisiana, Kansas, Alabama, Tennessee, Kentucky, Indiana, and New Jersey. Verified Voting has a nice county-level map showing the many kinds of voting equipment in use. In addition, some states and counties use a ballot marking device for the disabled that could be compromised. A few states use a device that prints out a paper ballot but includes a bar code, which may or may not encode the same information as is printed on the ballot, making it vulnerable to hacking.

The new appropriation is expected to face Republican opposition because the party line is that elections are up to the states and none of the federal government's damn business—not even for federal elections. In the past, Mitch McConnell has said that funding for election security is a "liberal wish list item" that he opposes. If the House passes the appropriations bill with the funding in place, the Senate is likely to strike it, leading to a lot of sausage making in the conference committee. It is doubtful that the Republicans will be willing to shut down the government just before an election because they oppose election security. Most likely, the amount of money will be reduced (substantially) and the House negotiators may have to give the Republicans something on the GOP's wish list. But you never know; Speaker Nancy Pelosi (D-CA) & Co. have gotten pretty good at playing chicken in the past few years. (V)


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