Biden Goes to Europe

Yesterday, Joe Biden took off on his first foreign trip, heading to Europe to try to repair some of the damage Donald Trump did to America's relationships with its best allies. And while he is there, he will also attend a G7 summit.

It won't be easy for Biden. The problem isn't that he is a foreign policy newbie. He was a long-time member of the Senate Foreign Relations Committee, eventually rising to be its chairman. The problem is also not his lack of knowledge of foreign countries and their leaders. As vice president for 8 years, he met most of the major world leaders, a number of whom are still in power. No, the problem is that there is no good answer when a foreign leader says to him: "How can we trust you for a long-term relationship when Donald Trump might be elected in 2024 and then bail on it?" Biden will have to emphasize solidarity when dealing with Russia and China now, and possibly after 2024. He won't have an impossible task in front of him as most foreign leaders want him to succeed, but it will still be challenging.

The G7 meeting will occur in the small village of St. Ives. Yes, that St. Ives, the same one with the traveler who met a famous bigamist (septuagamist?) with all the spouses, baggage, and menagerie. Among the topics under discussion will be vaccine diplomacy, trade, climate change, and ways to counter China's growing influence in the world. One of Biden's pet ideas—a 15% minimum tax on all large multinational corporations—is sure to be a topic of conversation as well.

There are a number of areas where the U.S. and Europe do not see eye to eye. These include the following:

• Tariffs: Donald Trump slapped a number of tariffs on European products. The E.U. responded by putting tariffs on U.S. products, specifically on products that affected important U.S. politicians (e.g., Kentucky bourbon). Biden hasn't removed the tariffs. Will the talks result in removing the tariffs?
  
  
• Vaccine patents: Many people in Europe want the U.S. to waive patent rights on the COVID-19 vaccines to allow any company anywhere to produce them. Pfizer and Moderna are wildly against doing this and have said if these patents can be suspended, then there will be more suspensions of patents in the future and no drug company will do research any more. The U.S. has thus far declined to force Pfizer's and Moderna's hands. How will this play out?
  
  
• Data: Europe has a law that guarantees people's data privacy. The U.S. has no such law. What happens when a company wants to export data on E.U. citizens to the U.S.? The E.U. says that absent an agreement, that is not allowed. Will this topic come up?
  
  
• China: In December, while China was hamstringing Hong Kong and locking up Uyghurs without trials, the E.U. signed a big investment deal with China. The U.S. opposes the deal. Also, the U.S. bans imports from the Xinjiang region, where slave labor is common, while the E.U. has no such ban. Can Biden convince the European leaders to ban products made with slave labor?
  
  
• Cost of drugs: The U.S. often complains that Europe doesn't pay enough for drugs, leaving U.S. companies reliant on U.S. customers to keep the companies healthy. But progressives want Medicare to negotiate with the drug companies to lower U.S. prices. If the U.S. and the E.U. both get low prices, will the drug companies remain in business?
  
  
• Taxing big tech: Europeans are eager to tax the big U.S. tech companies that do business in Europe. The U.S. hasn't really made up its mind on this, although Biden's proposal for a 15% minimum tax is a step in that direction. Will there be a tax on digital services, like Facebook?
  
  
• AI: Europe wants to put controls on artificial intelligence. The U.S. does not. Both sides are worried about what authoritarian states will do if they get their hands on powerful AI. For example, there is already software that can examine a photo of a crowd of demonstrators, recognize the faces, and produce a nice list of all the people with their names and addresses for the police. It's not perfect yet, but we're getting there. The U.S. doesn't want to take any action, whereas Europe does. Will Biden push on this, or is it too early to do anything?
  
  
• Pricing carbon: The U.S. and E.U. have very different approaches to driving down pollution. The E.U. is doing it by taxing emissions, putting polluters at a price disadvantage. Republicans in Congress are wildly opposed to this scheme and prefer to leave it up to the private sector to figure out how to do this. Is there any hope for agreement here?
  
  
• Carbon tax: Given the taxes on carbon emissions, the E.U. also wants to put a tax on the import of steel, aluminum, cement, fertilizer, and electricity, to prevent companies from moving their production elsewhere to evade the cap on emissions. Taxing U.S. exports to Europe would be very contentious. What will Biden offer to get the E.U. to drop its plans?
  
  
• Green agriculture: Europe wants farming to be greener, something that will be harder for the U.S. to achieve due to pushback from Big Ag. On the other hand, Europe rejects genetically modified "frankenfoods," which the U.S. allows. Getting agreement here will be difficult and could drastically affect trade in agricultural products, which is huge.
  
  
• Nord Stream 2: Russia wants to export natural gas to Germany via an undersea pipeline. Some European countries oppose it and want Biden to pressure the E.U. to kill the project on security grounds. Biden is not playing ball because Germany wants the project to go through. Will Biden get involved in an intra-European fight?
  

After the 3-day meeting, Biden will head to London to meet the Queen. He met her once before, in 1982, in his capacity as a senator. Perhaps he will wish her a happy 95th, since Trooping the Colour, the official celebration of her birthday, is taking place during his visit. Or maybe he won't, since her actual birthday was back in April. Then Biden will head to Brussels to talk to the leaders of the European Union and NATO. These talks will focus on how to deal with China and Russia rather than things like trade and taxes.

After that, the tone will suddenly change. Instead of talking to friends and allies, the last stop will be in lovely Geneva, where Biden will meet with not-so-lovely Vladimir Putin. Putin had good relations with Donald Trump, who was a pushover for the former KGB lieutenant colonel. Biden will definitely not be a pushover. Biden will undoubtedly bring up the subject of repeated Russian cyberattacks on the U.S., including the SolarWinds attack and the one on the Colonial pipeline, not to mention Russian interference in Ukraine. Putin will deny all of this. Each man will take measure of the other to try to gain some potential advantage in the future.

Will there be a lot of specific agreements on the trip? Probably not. It is more a matter of Biden meeting all the current leaders and the current leaders meeting him. There is a pretty good chance of him hearing more than once something to the effect of "You will never believe how glad I am it is you representing the United States this time." (V)

Gang of 10 Wants to Do Infrastructure without Raising Taxes

Now that the talks between Joe Biden and Sen. Shelley Moore Capito (R-WV) have failed, a bipartisan group of 20 senators is taking over. But 20 is unwieldy, so a subgroup of 10 senators is taking the lead. The Republicans in the subgroup are Bill Cassidy (LA), Susan Collins (ME), Lisa Murkowski (AK), Rob Portman (OH), and Mitt Romney (UT). The Democrats in the group are Joe Manchin (WV), Jeanne Shaheen (NH), Kyrsten Sinema (AZ), Jon Tester (MT), and Mark Warner (VA).

They have barely begun, but the Republicans have already come to two conclusions. First it will be around $900 billion, rather than the $2.3 trillion Biden had asked for. Second, they want to do it without raising taxes. Mitt Romney said point blank yesterday: "We're not raising taxes." Sen. Rob Portman (R-OH) said: "Taxes would be a huge mistake and I think the Biden administration understands that."

Actually, Biden doesn't understand that at all. He promised to pay for the entire program by increasing (corporate) taxes. Of course, the actual companies that will fix the roads, bridges, tunnels, and other infrastructure expect to get paid, so where will the money come from? The government could borrow money and raise the debt, but Republicans hate that. The government could just print more money, but Republicans hate that, too. The only other option is to redirect money from existing programs. Democrats might propose greatly reducing the Pentagon's budget to pay for infrastructure, but Republicans hate that, too. Well, some Republicans hate that. Donald Trump was actually a big fan of taking money from the Pentagon for infrastructure, specifically for building walls, which definitely fall in the category of hard infrastructure.

The one thing the Republicans do like is taking back the money already appropriated for COVID-19 relief, which they never liked in the first place. Trouble is, Democrats aren't keen on de facto retroactively undoing the relief bill they passed without any Republican votes. So where is the money going to come from? That is probably a much bigger challenge than the size of the plan. We think it is very unlikely that Democrats will agree to any plan that fails to pay for the infrastructure, and Republicans will balk at any plan that raises taxes or touches the 2017 tax-cut bill. It is hard to see any bill coming out of this group, and even harder to see one that could get 60 votes in the full Senate. We're not the only ones. Minority Whip John Thune (R-SD) said that he didn't expect the gang to succeed. Tester said he'd give it a week, then declare the effort dead.

It is a little hard to understand the Republicans' position. On something like H.R. 1, which the Democrats can't do alone unless the filibuster is "reformed," the Republicans can just obstruct and get their way. But on infrastructure, their choices are fundamentally:

• Make a deal and get a $1-trillion (or so) package with the least-objectionable taxes
• Have the Democrats go it alone and get a $2.3-trillion bill with taxes they really, really hate

This ought to be a no-brainer, but that's not how the modern Republican Party works. (V)

Democrats Can't Figure Out What Manchin Wants

Several times this week we have admitted how befuddled we were by the op-ed Joe Manchin (D-WV) wrote in the Charleston Gazette-Mail in which he said he won't vote for H.R. 1. Now The Hill has talked to a number of Senate Democrats and they can't figure it out either. Usually when a politician opposes a bill his own party wrote, he or she can point to specific sections that are objectionable and say: "If you remove those or replace them with my versions, I'm OK with the bill." That is simply not the case here. He says that he wants a bipartisan bill, but doesn't appear to be working with Republicans to write one, probably because no Republican wants to protect voting rights, so he can't find any partners to work with. That itself ought to be a message to Manchin, but it apparently isn't.

What makes the Manchin Mystery even more Mysterious is that he supported essentially the same bill in the previous session of Congress. That bill was written by Sen. Jeff Merkley (D-OR) and former senator Tom Udall of New Mexico. Manchin even signed on as a cosponsor. Now he is strongly against what is functionally the same bill. If bipartisanship is so important to him, how come it wasn't in the previous session of Congress and now is a Big Deal?

Sen. Amy Klobuchar (DFL-MN), chairwoman of the Rules Committee, which is in charge of the bill, made some technical changes to last year's bill in part as a result of talking to the secretaries of state, who wanted the changes to make it more practical. But fundamentally, it has the same goal as the old bill Manchin supported: to make it hard for any state to monkey with elections. She said: "There's always room for more [changes] so we're waiting to see what he wants to see in a bill." (English translation: "If you want $50 billion for West Virginia, just speak up.")

Merkley, the lead sponsor, said: "The bill is essentially the same bill, it's essentially the same bill as it was introduced. There were minor tweaks here and there based on input from legal [experts]." When a reporter asked Sen. Chris Coons (D-DE) why Manchin had changed his mind, Coons said: "You're asking me questions you should probably ask Joe Manchin." Sen. Dick Durbin (D-IL) said: "I want to talk to him personally on it and make sure I understand completely. There are a dozen different ways to deal with the filibuster." An anonymous senator said: "If you can figure out what Joe Manchin is about, let me know because I can't." As to the lack of bipartisan cooperation, another anonymous Democratic senator said: "You can't solve for that in Mitch McConnell's Senate."

On Tuesday, the Democrats held their usual caucus lunch to discuss the bill and what to do. Manchin didn't show up and was spotted leaving the Capitol at 1:30 p.m. His spokesperson said he had a conflicting meeting. The long and the short of it is that Senate Democrats don't seem to know what is going on any better than we do. (V)

Transcript of McGahn Hearing Is Released

On June 4 (last Friday), former White House counsel Don McGahn visited the House Judiciary Committee for a nice, long, closed-door chat with them. Yesterday, the Committee released a transcript of the testimony. Here are the major takeaways:

• On multiple occasions, Donald Trump pressed McGahn to have special counsel Robert Mueller fired (something that only then-Deputy AG Rod Rosenstein actually had the power to do). McGahn said that this made him feel "trapped," and that he (obviously) refused to do it. He compared it to the infamous Saturday Night Massacre and said that if he had complied, Rosenstein would presumably have resigned, and the administration would have reached "the point of no return."
  
  
• Trump also tried to get McGahn to investigate Mueller, including potential conflicts of interest caused by...Mueller's golf club memberships.
  
  
• Furthermore, Trump tried to get McGahn to encourage then-AG Jeff Sessions to resign.
  
  
• McGahn confirmed that when Mueller was appointed, Trump said: "This is the end of my presidency. I'm fu**ed."

McGahn avoided some questions and, of course, he has every motivation to make himself look good, so his descriptions of his own reactions and behaviors should be taken with a grain of salt. Also, by terms of the agreement that led to his appearance, the committee could only ask questions related to Mueller and the Russia probe, and not other incidents that McGahn was witness to.

Ultimately, the transcript tells us little that we did not know before, inasmuch as pretty much all of this was in the public version of the Mueller Report. The primary purpose of collecting McGahn's testimony was actually to underscore the point that people cannot avoid Congressional subpoenas, and that they will testify, sooner or later. Still, this does serve the purpose of reminding everyone, once again, that Trump almost certainly obstructed justice. It is still not clear whether or not AG Merrick Garland intends to pursue that, however. One wonders if he might be waiting for possible indictments to come down in New York, such that a second legal case (or third, if Georgia also indicts) would look a little less like a political witch hunt than at first. The Georgia case is especially important here since that one is about Trump trying to "obstruct" a fair election, which is close to obstructing justice. In contrast, the New York case is about financial crimes done before Trump was president. (Z)

Report: Police Did Not Clear Protesters for Trump's Photo-Op at Church

On June 1, 2020, police cleared demonstrators from Lafayette Park using crowd control weaponry, including a helicopter. Shortly thereafter, Donald Trump came out and held a Bible in front of the church for a photo-op. It had been widely assumed that the crowd was moved in order to allow Trump to have his photo-op.

But a report from the Dept. of the Interior's inspector general has concluded that the police action was not ordered by Trump so he could have his picture taken. The dispersal was related to a plan from the day before to allow a contractor to place fencing there. The report says that the U.S. Park Police began implementing the fencing plan hours before they even knew about Trump's planned visit. The report specifically says: "The evidence we obtained did not support a finding that the USPP cleared the park to allow the President to survey the damage and walk to St. John's Church."

So the conclusion that people have drawn for over a year is likely wrong. Trump did not order the protesters removed for his photo op. They were removed to allow a fence to be put there, unrelated to Trump. (V)

The Primary Battle Has Begun

No, not the battle of who is running in which lane. This battle is over which states will go first in 2024. Currently, Iowa, New Hampshire, Nevada, and South Carolina lead off, in that order. The Nevada legislature has passed a bill declaring that Nevada must go first. Gov. Steve Sisolak (D) hasn't signed it yet, but probably will. New Hampshire has a law stating that its primary must come before any other primary and gives the secretary of state the power to set the date to ensure that. He can schedule the 2024 primary for Oct. 1, 2021 if he feels there is any danger of being scooped by Nevada. Clearly if two states both have laws saying they have to have the first primary, there is a problem. Traditionally, Iowa goes first (with a caucus), but Iowa botched that so badly in 2020, many people want to send it to the end of the line in 2024. After all, you can't make a whole state stand in the corner wearing a dunce cap.

Democrats, in particular, would like Nevada to go first because it is ethnically much more representative of the country than the nearly all-white Iowa and New Hampshire. Republicans, however, are quite happy giving white folks an oversized role in winnowing the field, to increase the chances of getting a white nominee. The four GOP chairmen of the early states have now made that clear. In a joint statement, Jeff Kaufmann (IA), Stephen Stepanek (NH), Michael McDonald (NV), and Drew McKissick (SC) wrote: "As the GOP leaders of the four carve-out states, we want to make clear that we stand together in protecting the presidential nominating schedule as it has existed for many years."

Theoretically, the parties don't have to run their primaries on the same days, but it is much simpler and cheaper if they do so. That said, each party has its own reasons for determining the order, and in the end they might not agree. After all, they don't agree on anything else. The national committees play a big role here and DNC Chairman Jaime Harrison (who ran unsuccessfully for the Senate in South Carolina in 2020) hasn't stated what he wants yet, although earlier he suggested that South Carolina should move up in the list. That would give Black voters a far bigger say in who the Democratic nominee is. Ultimately, the DNC and RNC will meet (separately) later this year to start making decisions about the order of the primaries. While the order of the primaries is definitely inside baseball, it is in fact very important. Winning the first two primaries is not a golden ticket to the nomination, but getting 2% or 3% in each of them is definitely a ticket back to your old job. (V)

Special Master Is Appointed to Vet Electronics Seized from Giuliani

In April, FBI agents paid a visit to Rudy Giuliani's residence and left with 18 electronic devices, including phones and computers. Why Giuliani had so many devices is an interesting question, but that is not the subject of this item. Giuliani has claimed attorney-client privilege for his work for Donald Trump—which, if true, would exclude the evidence found on them from being used in court cases against either one. However, the mere fact that Giuliani has a law degree doesn't mean that everything on his devices is suddenly quarantined and can't be used in court. Only items directly relating to his work representing Trump in legal matters is covered. Work Giuliani did for Trump in illegal matters is not covered. So the work Giuliani did in his capacity as Trump's attorney has to be separated from everything else. What may be significant is whether Giuliani was actually Trump's attorney. To be considered Trump's attorney, Giuliani would have needed an agreement, either written or oral, describing the services he is to provide and the compensation he is to receive for these services. Absent some sort of (implicit) agreement, the court might not accept Giuliani as Trump's attorney. A question that could come up is whether Giuliani sent Trump an invoice for services rendered and whether Trump paid it. A lot is up to the judge.

To do the separation, Manhattan-based U.S. District Judge Paul Oetken has appointed former federal judge Barbara Jones as a special master to sort things out. She was the obvious choice since she did exactly the same thing 3 years ago when the feds seized a bunch of electronic devices from Trump's so-called lawyer, Michael Cohen. The result of that case was that Cohen was sent to prison for 3 years, one of which he spent behind bars. Then he was released to house arrest on account of the spread of COVID-19 in the nation's prisons.

The case in which Giuliani is embroiled involves whether he broke laws requiring foreign agents to register with the U.S. government as such. If Giuliani was working as Trump's lawyer, documents relating to that won't be admissible in court. But if Giuliani had a side gig for lobbying Trump on behalf of Ukrainian politicians (for big bucks), evidence about that would definitely be admissible. Jones' job will be to sort the millions of files on all the devices into admissible and not admissible.

The feds have already unlocked 11 of the devices, copied all the content onto their own computers, and returned the devices to Giuliani. On seven others, they don't have the password, so they will have to hack their way in, which could take time. In addition, the feds have a cell phone belonging to Victoria Toensing, an ally of Giuliani.

The judge also ordered the government to turn over to Jones documents they already had on Giuliani and the search warrants used to get them. He also gave lawyers for Giuliani a week to talk to Jones and establish a schedule and timeline for her to do her work. They also have to (try to) agree on a procedure to resolve disputes, particularly when Jones says a document is not covered by attorney-client privilege and Giuliani's lawyers say it is. When Jones vetted Cohen's devices, it took her about 4 months to do the job, so she has some idea of what she might be in for this time. (V)

Val Demings Is Officially Running against Marco Rubio

Rep. Val Demings (D-FL) is now officially in the race to unseat Sen. Marco Rubio (R-FL). In her official announcement, she said: "I'm running for U.S. Senate because I will never tire of standing up for what is right. Never tire of serving Florida. Never tire of doing good."

Although Demings represents only a smallish (516 square miles) highly urban, majority-minority (28% Black, 25% Latino, 5% Asian) district that covers the western part of Orlando and its western suburbs, she is one of the best known Democrats in Florida. Her 15 minutes of fame came from her stint as an impeachment manager on Donald Trump's second Senate trial. She was also on Joe Biden's short list of possible veeps. Here is her announcement video, which takes a pot shot at Donald Trump.

One thing going for Demings is that she served as an officer in the Orlando Police Department for 27 years, rising to become its police chief before running for Congress. She is also Black, so she potentially can get votes from both BLM supporters and police supporters. But before she can take on Rubio, she first has to win the nomination. So far her only opponent is former representative Alan Grayson, but others could join later. Grayson ran in the Democratic primary in 2016 and was beaten badly, so he may not be such a big threat. Also, Grayson was born in New York and grew up there, whereas Demings is a Florida native who went to elementary school, high school, and college in Florida. Her personal story will also help her: Her father was a janitor and her mother was a maid.

On the other hand, Democrats had trouble in South Florida in 2020 and her base is in Orlando. That won't help, especially when Rubio's base is Miami. What also won't help is that Black voters make up about 17% of the population while Latinos are 26%. Demings may well be the strongest Democratic challenger to Rubio, but he is still the solid favorite. (V)

Keystone XL Pipeline, 2010-2021

The Keystone XL Pipeline, part of a larger system of pipelines owned and operated by TransCanada Keystone Pipeline GP Ltd, was not expected to be controversial when it was announced. But, of course, it was. The other portions of the pipeline that were announced at that time were constructed without much opposition, and are currently in operation. But XL quickly became a lightning rod, in part because its path took it through much land that is Native American and/or protected (particularly the Sandhills in Nebraska), and in part because it became a proxy for the battle between petroleum and current-day economic prosperity on one side and environmentalism and long-term global warming on the other.

In 2015, once Keystone XL had become a political football, Barack Obama imposed a temporary delay on the project (which, of course, was announced during his first term). Restoring the Keystone XL permit was among the very first things Donald Trump did upon taking office (specifically, he issued the order on Jan. 24, 2017). And then, yanking the permit again was among the very first things that Joe Biden did when he took office (specifically, on Jan. 20, 2021, which means he took action mere hours after being inaugurated).

Now, TransCanada Keystone Pipeline GP Ltd has decided to throw in the towel. Or, because they are Canadian, perhaps we should say they have put the Pipeline in the penalty box, for good. Yesterday, they formally canceled the project. Biden certainly wasn't going to change course, and if he or some other Democrat wins election in 2024, then restoration of the permit would be at least 8 years away. Maybe 12, or even 16 years away. And that is before we consider the fact that there are also lawsuits from various tribal and state authorities to be resolved. With that kind of uncertainty, coupled with the fact that the Pipeline is not absolutely needed (the other portions can still move the oil around, just less efficiently), tying up the massive amount of capital involved in a project like this was no longer justifiable.

What will the impact on American politics be? Well, first of all, a hot-button issue is now dead. Beyond that, the activists who brought down the Pipeline will undoubtedly be buoyed by their success, and will likely turn their attention to other, similar projects, like Line 3 or Dakota Access. So those could quickly replace Keystone XL as hot-buttons. (Z)

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