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Presented by Google: Playbook is POLITICO's must-read briefing on what's driving the day Jan 31, 2019 View in browser
By Jake Sherman, Anna Palmer, Daniel Lippman, Garrett Ross and Eli Okun

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NEW ... TEEING UP A TRUMP TWEET ... FROM THE U.K., FRANCE and GERMANY: "Joint statement on the new mechanism to facilitate trade with Iran: French, German and UK Foreign Ministers announce the creation of 'INSTEX' a new mechanism for facilitating legitimate trade with Iran in order to preserve the Iran nuclear deal" The details

THE DAY THE WALL DIED ...

-- SPEAKER NANCY PELOSI on the conference committee: "There's not going to be any wall money in the legislation." ... Pelosi did keep the door open to increased fencing -- so-called Normandy fencing already exists on the border. Pelosi said the president is free to call that a wall if he chooses. She compared questions about a wall to asking someone whether they want a landline or a smartphone. (The House Dems' border security offer)

-- PRESIDENT DONALD TRUMP tweets at 8:21 a.m.: "Republicans on the Homeland Security Committee are wasting their time. Democrats, despite all of the evidence, proof and Caravans coming, are not going to give money to build the DESPERATELY needed WALL. I've got you covered. Wall is already being built, I don't expect much help!"

AND THAT'S JUST ABOUT THAT, RIGHT? It seems like, if he wants his wall, the president will be forced to try to build it on his own. Inside the White House, there's pretty widespread recognition that the president's emergency declaration will be tied up in court for some time.

CNN'S MANU RAJU asked PELOSI if she believes the Kremlin has something compromising on Trump. PELOSI: "I think it's a question. By the way, I've been asking that question for two years. ... What is this? Something is wrong with this picture."

Good Thursday afternoon. SPOTTED: Stacey Abrams heading into the Delta Sky Club at ATL on Wednesday. ... Jason Miller having lunch with Jerry Seib at Morton's on Wednesday. ... Senate Minority Leader Chuck Schumer (D-N.Y.) on Wednesday night in the private Cactus Room at Mission in Navy Yard for a post-Senate Democratic retreat dinner with Sens. Tim Kaine (Va.), Dick Durbin (Ill.), Dianne Feinstein (Calif.), Amy Klobuchar (Minn.), Mark Warner (Va.), Tammy Duckworth (Ill.), Bernie Sanders (I-Vt.) and other Democratic senators. ...

... Former Rep. Darrell Issa (R-Calif.), former Rep. Tom Davis (R-Va.) -- both former House Oversight and Government Reform chairmen -- and others having dinner in a back private room at Ocean Prime. ... Former Sen. Orrin Hatch (R-Utah) on a Delta flight this morning from IAD to SLC in seat 1B.

DEPT. OF WHERE ARE THEY NOW ... BLOOMBERG'S JENNIFER JACOBS: "Trump Considering Herman Cain for Federal Reserve Board, Sources Say": "Cain, 73, was in the White House on Wednesday, according to people familiar with the matter. Two seats on the Fed board are vacant, but nominating Cain raises the prospect of a Senate confirmation hearing focused on the sexual harassment and infidelity accusations that ended his presidential campaign. ...

"Cain had a long corporate career and is also familiar with the Federal Reserve system. From 1992 to 1996, he served as a director of the Federal Reserve Bank of Kansas City, as well as deputy chairman and then chairman." Bloomberg

-- FLASHBACK ... ANNA, JONATHAN MARTIN, MAGGIE HABERMAN and KEN VOGEL in POLITICO in 2011: "Exclusive: 2 women accused Cain of inappropriate behavior"

AT 1600 PENN ... NBC'S LAURA STRICKLER and PETER ALEXANDER: "'Whistleblower' in White House security clearance office gets suspended": "A White House security specialist has been suspended without pay for defying her supervisor Carl Kline, less than a week after NBC News reported Kline approved Jared Kushner for top secret clearance over the objections of career staff.

"The specialist, Tricia Newbold, had filed a discrimination complaint against Kline three months ago. Newbold's two-week suspension from the White House security office was for failure to supervise, failure to follow instructions and defiance of authority, according to the suspension decision notice obtained by NBC News. Security office chief Crede Bailey first proposed the suspension on Dec. 3, 2018." NBC

-- CBS' FIN GOMEZ: "White House makes significant additions to press shop": "Steven Groves, who currently serves in the White House as assistant special counsel, will be now be deputy press secretary handling issues related to the Department of Justice and legislative affairs. He will oversee the response to congressional investigations into the administration. ...

"[Sarah Huckabee] Sanders said that she has also officially elevated Hogan Gidley to be her second in command as principal deputy press secretary. ... Judd Deere, who was formerly the White House director of media affairs, has been promoted to White House deputy press secretary, where he will focus on topics that include energy, the Department of Housing and Urban Development and NASA." CBS

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TRADE WARS ... DOUG PALMER: "Trump: China talks 'going well,' will meet with Xi soon"

THE INVESTIGATIONS ... L.A. TIMES' CHRIS MEGERIAN: "Mueller's team says files turned over to defense team were leaked by hackers in a cyber-disinformation effort": "Prosecutors working with special counsel Robert S. Mueller III claimed Wednesday that more than 1,000 nonsensitive files turned over to the defense team for an indicted Russian company were leaked by hackers in a cyber-disinformation campaign that appeared to be aimed at discrediting the government's investigations of 'Russian interference in the U.S. political system.'

"The prosecutors made the allegation in a federal court filing Wednesday as they asked a U.S. judge to reject a request by lawyers from Concord Management and Consulting to share sensitive evidence outside the United States in trial preparation with Concord's owner and indicted co-defendant, Russian businessman Yevgeniy Prigozhin." LAT

-- CNN'S SHIMON PROKUPECZ (@ShimonPro) "DOJ: The evidence collected against Roger Stone includes: Apple iCloud accounts, email accounts, financial records,cellular phones, computers, and hard drives. The information in iCloud accounts, email accounts and on hardware 'span several years.'"

-- CAITLIN OPRYSKO: "Trump says he'll let Justice Department make decision on Mueller report release": "In an interview with The Daily Caller, the president said he had 'never' spoken to acting Attorney General Matt Whitaker about the probe and that when Mueller wraps up his investigation 'they'll have to make their decision within the Justice Department' as to whether they will release the report publicly or not.

"Trump pointed to Whitaker's comments earlier this week that Mueller was close to finishing his inquiry into Russian interference in the 2016 election, saying that 'I think after almost two years it certainly should be' coming to a close." POLITICO ... Daily Caller interview transcript

WAR REPORT ... AP'S ROBERT BURNS: "Report: Afghan forces still shrinking, security gaps growing": "As the Trump administration pushes for peace in Afghanistan, a new U.S. watchdog report says Afghan security forces are shrinking, gaps in security are growing, and the Taliban are largely holding their own despite a surge in American bombing.

"These trends reflect what U.S. military officials call a stalemated war, more than 17 years after U.S. forces invaded following the Sept. 11, 2001, attacks. Gauges of battlefield momentum have changed little over the past year, according to a watchdog agency known as the Special Inspector General for Afghanistan Reconstruction. In a report to Congress on Thursday, it said the Afghan government controls or influences 54 percent of districts, down from 56 percent a year earlier, and the Taliban's share slipped from 14 percent to 12 percent. Contested territory increased from 30 percent to 34 percent." AP

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2020 WATCH -- ALICE MIRANDA OLLSTEIN: "Harris dives into 'Medicare for all' minefield": "Medicare for All has become a litmus test for 2020 Democrats, but the party is struggling to balance the grassroots enthusiasm for the cause with the political challenges of making it a reality. ...

"Harris' struggle shows just how hard it is for Democrats to sell a more ambitious universal health care vision demanded by the activist left of the party while trying to appeal to the broader general election audience that shies away from Medicare for All proposals that abolish private health care coverage - all while remaining vulnerable to attack by the GOP and much of the health care industry as 'socialized medicine.'" POLITICO

-- THE ATLANTIC'S ISAAC DOVERE: "Michael Bloomberg's Secret Plans to Take Down Trump": "While no final decision has been made, his aides have been working on a fallback that only a man worth $40 billion can afford. Bloomberg is pouring hundreds of millions of dollars into a data-centric political operation designed to ensure one goal: crush Donald Trump.

"Though a budget has not been set, this effort would almost certainly become the biggest and most powerful political organization in the country overnight. It would also be the only real counter to the operation that Trump's campaign put together in 2016, which reached out to millions of voters in a more targeted, under-the-radar way, and helped deliver the election to Trump by shaping voters' thinking for months and then activating them on Election Day." The Atlantic

-- HOLLY OTTERBEIN: "Pennsylvania Democrats rocked by indictment of top political boss": "The bombshell charges announced Wednesday against building trades leader John 'Johnny Doc' Dougherty - a Philadelphia labor kingpin whose union is the single biggest independent source of campaign funding in the state - threaten to sap statehouse and congressional Democrats of a mega-donor, slow the party's momentum in the Philadelphia suburbs, and sideline the man who orchestrated the Democratic takeover of the Pennsylvania Supreme Court. ...

"Dougherty's tentacles spread so far that Republicans already think it could be a boon for President Donald Trump's election chances in 2020." POLITICO

BEYOND THE BELTWAY -- AP'S MIKE CATALINI in Trenton, N.J.: "Some ex-GOP lawmakers in 3 states have a new title: Democrat": "Over the past two months, as lawmakers were sworn in and this year's statehouse sessions got underway, Republicans in California, Kansas and New Jersey switched their party affiliations to become Democrats.

"They cited various reasons, but the party-switchers have one thing in common: They say the GOP under President Donald Trump has become too extreme. ... The political landscape in the party-switchers' seats has been changing for some time, which also helps explain the shifts." AP

TRANSITION -- Jessica Johnson will be of counsel at Holtzman Vogel Josefiak Torchinsky PLLC. She previously was general counsel at the National Republican Senate Committee.

HAPPENING THIS WEEKEND -- Get "Freezin' for a Reason" on Saturday with Special Olympics DC. POLITICO is thrilled to partner with the "Polar Plunge," an annual event that supports more than 1,600 Special Olympics DC athletes on Saturday. Attendees will enjoy ICE YARDS festivities, including icy cocktails and local D.C. brews, fun activities, live music, an ice bar, food from neighborhood restaurants, D.C.'s largest group shotski attempt and so much more. You can register as an individual, as a team or join an existing team and take the plunge. Register

-- OPERATIVES PARTICIPATING -- Adrienne Watson, the DNC's war room director, and Michael Ahrens, the RNC spokesman/rapid response director, are plunging together.

BONUS BIRTHDAY OF THE DAY: Ray Kerins, SVP of corporate affairs for Bayer. Playbook Plus Q&A

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