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Presented by the National Association of Manufacturers: Playbook is POLITICO's must-read briefing on what's driving the day Dec 11, 2018 View in browser
By Anna Palmer, Jake Sherman, Daniel Lippman, Eli Okun and Garrett Ross

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WE'VE NEVER SEEN ANYTHING LIKE THAT BEFORE. PRESIDENT DONALD TRUMP opened part of his meeting with SENATE MINORITY LEADER CHUCK SCHUMER and HOUSE DEMOCRATIC LEADER NANCY PELOSI, and it was a useful reminder of how messy divided government will be.

-- ONE THING THAT STUCK OUT: Conversations between Pelosi, Schumer and Trump are not really going to be terribly useful since they can't even agree to stick to a basic sets of facts.

A FEW NOTES ...

-- PELOSI tried to call Trump's bluff. Trump said, "If I needed the votes for the wall in the House I'd have it." Pelosi said, "So go do it. ... The fact is you do not have the votes in the House." Trump: "Nancy, I do. ... We need border security."

-- TRUMP tried to say that Pelosi doesn't have the room to maneuver in the meeting because she is in the middle of a speaker race. Pelosi told Trump not to characterize the strength she brings to the meeting.

THE TWO SIDES ARE ABSOLUTELY NOWHERE.

POST-MEETING PRESSER ... SCHUMER said he offered two solutions: Do a yearlong stopgap for all seven appropriations bills, or pass six and do a yearlong stopgap for DHS. PELOSI said she hopes Trump prays on this. SCHUMER said the president had a "temper tantrum."

-- ONE WEAK ARGUMENT FROM TRUMP: He says the border money he got last year is working so well. Schumer is trying to extend the funding structure from last year.

ABSENT A MASSIVE REVERSAL by Trump, it looks like government is headed for a shutdown late this month. There seems to be a recognition in the Capitol that this shutdown could last from Dec. 21 through to Jan. 3, when the new Congress is seated.

-- THE QUOTE THAT COULD HAUNT REPUBLICANS: "I am proud to shut down the government for border security, Chuck." 59-second video

THIS PROBABLY HELPS PELOSI INTERNALLY ... She went toe to toe with the president on live television.

NO SWEAT! ... THE HOUSE will be out of session Monday and Tuesday next week, leaving just Wednesday, Thursday and Friday to solve a government shutdown.

-- THIS WILL, in effect, help the House jam whatever is on the table down the throats of the members.

SENATE MAJORITY LEADER MITCH MCCONNELL says the Senate will take up the criminal justice reform bill this year, and warned that the chamber might have to work between Christmas and New Year's to get it done. ... MCCONNELL also said he is working with the administration to secure $5 billion for border security.

-- BURGESS EVERETT: "McConnell revives Trump's criminal justice reform"

Good Tuesday afternoon. SPOTTED: U.S. Ambassador to Germany Ric Grenell in the West Wing twice in the last two days.

FIRST IN PLAYBOOK ... CORRY BLISS, who led the House GOP-linked super PAC CLF and its nonprofit affiliate American Action Network, is joining FP1 Strategies as a partner.

A message from the National Association of Manufacturers:

End the HIT now! Americans already struggle with rising health care costs. Congress must protect Americans from the Health Insurance Tax (HIT), the Medical Device Tax and the "Cadillac" Tax. After 2019, the HIT will impact approximately 140 million Americans, increasing health care costs for manufacturers and workers. http://go.politicoemail.com/?qs=43f863550da0f0e8f5a04bce63924bfda590d664a1ad9dfb47f00abc2f30817def6ac756845dfb00352896c20b89b665

BULLETIN -- WAPO'S ELLEN NAKASHIMA and DAVID LYNCH: "Trump administration to condemn China over hacking and economic espionage, escalating tensions between superpowers"

VALLEY TALK -- "Lawmakers clash over claims of Google's anti-GOP bias," by Cristiano Lima and Ashley Gold: "Republican and Democratic lawmakers at a House Judiciary Committee hearing with Google CEO Sundar Pichai on Tuesday clashed over GOP allegations that the company is biased against conservatives ... House Majority Leader Kevin McCarthy in an unusual move delivered opening remarks despite not sitting on the committee. ...

"'We should not let the delusions of the far right distract us from the real issues that should be the focus of today's hearing,' [ranking member Jerry] Nadler said in opening remarks." POLITICO

SOME NUGGETS from the sixth annual WOMEN RULE SUMMIT today ...

-- REP.-ELECT ABIGAIL SPANBERGER (D-VA.) on voting against NANCY PELOSI for speaker on the floor: "This is my first opportunity to keep my promise to my soon-to-be constituents, and that's exactly what I'll do." More from Rebecca Morin

-- REP.-ELECT CAROL MILLER (R-W.VA.) on working from the minority: "The most important thing is finding people of like mind in both parties and working on policy that way."

-- "Republican women leaders tell Trump to chill," by Matthew Choi: "'I'm sorry but I am Republican because of a set of principles that I follow,' [Mia] Love said. 'My job is not to walk in lockstep with somebody just because they're sitting in the White House.' ...

"[Elise] Stefanik also said that she has called for Trump to stop distracting the party with his tweets and instead focus on policy. The New York Republican didn't limit her criticism to Trump alone, mentioning institutional challenges that may discourage women from running." POLITICO

-- SEN. JONI ERNST (R-IOWA), asked if she would campaign with PRESIDENT DONALD TRUMP when she is up for re-election in 2020, said: "I feel pretty comfortable about doing my own campaigning, but President Trump still does feel pretty good across the voters about his favorability ratings, so yes, I will welcome the president, absolutely, into Iowa."

HIGHLIGHTS THIS AFTERNOON ... CARRIE BUDOFF BROWN will interview RNC CHAIR RONNA ROMNEY MCDANIEL at 1:20 p.m. ... LIVE WOMEN RULE PODCAST TAPING with ANNA and ANA MARIE COX, host of "With Friends Like These," will interview actress and activist PIPER PERABO at 3:40 p.m. ... ELIANA JOHNSON will interview SARAH HUCKABEE SANDERS at 4:10 p.m. The agenda and livestream

ONE VIEW ... NATIONAL JOURNAL'S ALLY MUTNICK and KYLE TRYGSTAD: "Emmer, NRCC Start to Rebuild for 2020": "The GOP lost 40 seats in all, with casualties from Seattle to San Diego to Miami to Maine, and generally in areas where the president is less popular. 'There's a narrative that people are trying to build out there that somehow there's been this shift, this political realignment in the suburbs,' Emmer said. 'That's not true. It isn't there.'" NJ

AP'S DARLENE SUPERVILLE (@dsupervilleap): ".@KellyannePolls tells @FoxNews that CoS John Kelly 'will stay on the job through Jan. 2, at least,' adding that it would be up to Trump and Kelly whether Kelly stays past that while the search for a permanent replacement continues."

KYLE CHENEY: "Top Democrat praises Trump chief of staff prospect Meadows": "'I have a good relationship with Mr. Meadows. We don't agree on probably 85 percent of things, of issues, but he is not disagreeable,' said Rep. Elijah Cummings (D-Md.), the top Democrat on the House Oversight Committee on which Meadows also sits. ... Speaking to reporters on Monday, Meadows cited his relationship with Cummings as an asset in his potential bid to become Trump's chief of staff." POLITICO

SPEAKER RACE UPDATE -- "House Democrats to Wait 'Til Next Year in Term Limit Discussion," by Roll Call's Lindsey McPherson: "[Colorado Rep. Ed] Perlmutter has declined to talk to reporters about the discussions, but some news reports have indicated that he and others were seeking a deal on term limits in order to back Pelosi for speaker. With the discussion being punted until likely after the speaker vote, it's unclear if there's still a deal for Perlmutter to make.

"Oregon Rep. Kurt Schrader, another Pelosi opponent, said that the larger group of anti-Pelosi Democrats has not been involved in the negotiations over term limits, only a small subsection of the group. He said a deal on term limits would not persuade him to support Pelosi but suggested he may still be open to a specific succession plan for her speakership." Roll Call

TRADE WARS ... BLOOMBERG: "China Moves on U.S. Car Tariff Cut Trump Tweeted About": "A proposal to reduce tariffs on cars made in the U.S. to 15 percent from the current 40 percent -- bringing the U.S. back in line with what other countries pay -- has been submitted to China's Cabinet to be reviewed in the coming days, according to people familiar with the matter. Shares of carmakers including Daimler AG, Ford Motor Co. and Tesla Inc. rose on the news.

"The step hasn't been finalized and could still change. While reversing the retaliatory duty is a major climb-down by Beijing, it could re-focus the two sides toward implementing the trade-war truce agreed earlier this month." Bloomberg

-- WSJ'S BOB DAVIS in Washington and LINGLING WEI in Beijing: "U.S., China Kick Off a New Round of Trade Talks": "The U.S. and China started the latest round of trade talks with a phone call involving Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He. The three senior officials discussed Chinese purchases of agricultural products and changes to fundamental Chinese economic policies during the phone call ...

"As part of the trade truce reached between Mr. Xi and Mr. Trump, Chinese officials are also considering making changes to the Made in China 2025 plan, a state-led industrial policy aimed at enabling Chinese companies to dominate a number of industries such as artificial intelligence and robotics, said people familiar with the matter. " WSJ

-- POLITICO EUROPE'S DAVID HERSZENHORN: "Trump's man in Brussels slams 'out of touch' EU": "Washington and Brussels have been engaged in high-stakes trade talks since a meeting at the White House in July between Trump and Commission President Jean-Claude Juncker. At that meeting, Trump agreed to hold off on his threat to impose tariffs on EU-made cars, a move that would dramatically escalate a trade war he initiated ... But [Gordon] Sondland's remarks made clear that Washington is now fed up with what it views as egregious delaying tactics by Brussels. The EU has rejected the accusation and says it remains fully committed to the July agreement." POLITICO Europe

THE TRUMP ADMINISTRATION -- ANNIE SNIDER: "Trump proposes to roll back decades of water protections": "The EPA's proposed rule would overwrite a stricter Obama-era regulation, in yet another attack on the legacy of President Donald Trump's predecessor. But the rollback would go much further than just erasing Barack Obama's work.

"The Trump proposal represents the latest front in a decades-long battle over the scope of the landmark environmental law, whose requirements can impose major costs on energy companies, farmers, ranchers and real estate developers. Reversing Obama's water regulation was one of Trump's top environmental priorities - he signed an executive order directing the new rule barely a month after taking office, even as he repeatedly said he wanted 'crystal clear water.'" POLITICO

STORY OF THE DAY -- "How the IRS Was Gutted: An eight-year campaign to slash the agency's budget has left it understaffed, hamstrung and operating with archaic equipment," by ProPublica's Paul Kiel and Jesse Eisinger: "Over time, the IRS has slowly transformed, one employee departure at a time. The result is a bureaucracy on life support and tens of billions in lost government revenue. ProPublica estimates a toll of at least $18 billion every year, but the true cost could easily run tens of billions of dollars higher. ...

"The last time the IRS had fewer than 10,000 revenue agents was 1953, when the economy was a seventh of its current size. And the IRS is still shrinking. ... Without enough staff, the IRS has slashed even basic functions. It has drastically pulled back from pursuing people who don't bother filing their tax returns. ... Corporations and the wealthy are the biggest beneficiaries of the IRS' decay." ProPublica

ON THE WORLD STAGE -- "Iraqi Who Once Killed Americans Is a U.S. Dilemma as He Gains Political Power," by WSJ's Isabel Coles, Ali Nabhan and Ghassan Adnan in Baghdad: "[Qais al-]Khazali's evolution-from outlaw to aspiring statesman-illustrates Iraq's changing political landscape and the Trump administration's dilemma as it tries to curb Iran's influence in Iraq and across the Middle East. As the U.S. tries to weaken Iran's proxies ... some of them are now boosting their profile through the very democratic process the U.S. introduced to Iraq. ...

"[I]n the U.S., the House this week passed a bill that would require the president to impose sanctions on groups that threaten stability and peace in Iraq and to designate them as terrorists." WSJ

2020 WATCH -- "Potent Weapon or Poison Pill? Super PACs Pose Quandary for 2020 Democrats," by NYT's Shane Goldmacher: "The choice will represent one of the earliest and potentially more consequential crossroads of the nascent primary, and has been the subject of fierce debate within the inner circles of some candidates.

"Is it worth giving up possible seven-figure checks for the chance to campaign more effectively as the candidate of the little guy? Or, put another way, can a Democrat risk embracing unlimited money in an era when small donors and the party's seemingly ascendant left wing may pummel PAC-backed candidates as allies of the rich?" NYT

-- CHRIS CADELAGO: "Kasich's camp slams GOP effort to head off primary vs. Trump": "Trump-aligned Republican activists in New Hampshire are quietly maneuvering to fortify his standing and avoid a potentially disruptive primary challenge in 2020.

"In the most far-reaching move, Donald Trump's allies are looking to scrap the state GOP's tradition of remaining neutral in the primary - to clear the way for an endorsement of the president. They're also moving to install one of their own as head of the state Republican Party." POLITICO

THE INVESTIGATIONS ... DARREN SAMUELSOHN: "Trump's biggest 2020 win: Avoiding prosecution": "Prosecutors say [Michael] Cohen's payments to the women constituted illegal campaign contributions, and some legal experts say Trump could be vulnerable to criminal charges as a result. But long-standing Justice Department protocol dating to the Watergate scandal holds that a sitting president can't be prosecuted when he's in office.

"That would change as soon as Trump transitions from sitting president to former president. ... That means the presidency itself may amount to Trump's best legal defense." POLITICO

MEDIAWATCH -- John Drescher will be deputy editor for national politics investigations at WaPo. He previously was executive editor at the News & Observer in Raleigh, N.C.

SPOTTED: The Amazon Prime show "Jack Ryan" filming at the FTC building.

HOLIDAY PARTY CIRCUIT -- SPOTTED at the Economic Club of Washington's holiday party at the Top of the Hay on Monday night: Carol Melton, Jack Evans, Singaporean Ambassador to the U.S. Ashok Mirpuri, Icelandic Ambassador to the U.S. Geir Haarde, Mary Brady, Susan Neely, Clarine Nardi Riddle, Terri McClements, Gina Adams, Susan Molinari, Teresa Carlson, Phil de Picciotto, Brian Kelly, Dave McCurdy, Gary Shapiro, Mark Ein, Ximena Hartsock, Tom McMillen, Kyle Dropp and Jeff DeWitt.

TRANSITIONS -- Brad Jenkins is starting Enfranchisement Productions, a D.C.-based creative agency. He previously was executive producer at Funny Or Die D.C. and is an Obama WH alum ... Lane Lofton will be chief of staff for Rep.-elect Joe Cunningham (D-S.C.). He previously was VP of government relations at NCTA. ...

... Kenneth Jarrett is now a senior adviser at Albright Stonebridge Group in Shanghai. He previously was president of the American Chamber of Commerce in Shanghai. ... Michael Mullen is now chairman of TechMet's advisory board. He was chairman of the Joint Chiefs of Staff from 2007-11.

BONUS BIRTHDAY (was Saturday): Debra Saunders, Las Vegas Review-Journal White House correspondent.

A message from the National Association of Manufacturers:

The Health Insurance Tax (HIT) increases insurance premiums for a family of four by almost $500 a year. Congress delayed the HIT for 2019, but middle-class families, including manufacturing workers, need Congress to act now to delay it again-or even better, end it altogether. With rising health care costs, families cannot afford added expenses, especially when the HIT does nothing to improve health care outcomes. Americans do not want the government collecting taxes off their health care. In fact, 70 percent say they oppose the HIT. It is nothing more than a sales tax on health coverage-a tax we cannot afford. Learn more about why manufacturers oppose the HIT at
http://go.politicoemail.com/?qs=43f863550da0f0e8fe67b33c4b2aa3552cc33d48323f87bea668d74a34f9e5cb5428a55bb0b76e5ac10d9a3c5ab3b1f3

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