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Presented by the Stop The HIT Coalition: Playbook is POLITICO's must-read briefing on what's driving the day Dec 18, 2018 View in browser
By Jake Sherman, Anna Palmer and Daniel Lippman

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DRIVING THE DAY
WE THOUGHT WE WERE SOMEWHERE, but in fact, we are nowhere. Yesterday afternoon, we started hearing that SENATE MAJORITY LEADER MITCH MCCONNELL was going to file a so-called minibus spending bill -- seven bills wrapped into one -- with an increase in border spending. He didn't, and Monday went by without appreciable progress in funding the government.

TIME IS DWINDLING, and Capitol Hill is waiting for PRESIDENT DONALD TRUMP to say what he would like to sign. At this point, it would be difficult to see Congress clear a seven-bill minibus in four days. So either the government shuts down Friday, or somehow both sides agree to a short-term spending bill.

THE PRESIDENT ISN'T GOING TO GET his $5 billion. No way, no how. So the question is what will he accept, and how much time will he give Congress to do it. The House isn't in until tomorrow night. At the moment, TRUMP isn't negotiating, nor is he stating how he'd like to see this standoff resolved.

THERE'S AN INTERESTING DYNAMIC that's sprouted up in recent days. Republicans have said absent a big spending deal, they'd be fine with a short-term stopgap bill because it would "interrupt" the early days of NANCY PELOSI'S majority. Trump would be fighting Pelosi on immigration in January or February instead of his own party. PELOSI, however, has been incredibly firm in her position that she does not want a short-term spending bill this month, and she is not for a wall.

THERE'S AN IDEA BOUNCING AROUND that government could shut down from Dec. 21 all the way until Jan. 3, and then the new House Democratic majority would open up the session by passing a clean stopgap and sending it to the Senate. But Senate folks tell us they wouldn't fall for that, and their larger majority in 2019 would amend the bill, and send it back to the House.

-- BURGESS EVERETT, JOHN BRESNAHAN and SARAH FERRIS: "Senate Democrats have effective veto power over any deal between Republicans and the president under the Senate's 60-vote threshold. Senate Minority Leader Chuck Schumer (D-N.Y.) said he's heard nothing from the White House since offering flat spending levels on border security to Trump last Tuesday.

"'We don't even know what their parameters or plans are. We've asked them, we've sent them two things, they haven't answered us. They've sent us nothing,' Schumer said on Monday. 'They don't seem to know where the president is at.' ...

"Senate Republicans would prefer not to pass a stopgap bill but acknowledged on Monday it was possible. That would likely result in House Democratic Leader Nancy Pelosi (D-Calif.) passing a long-term spending bill in January and denying Trump the $5 billion in wall funding he's demanding." POLITICO

-- WAPO'S SEUNG MIN KIM, ERICA WERNER and JOSH DAWSEY: "Top Republicans struggle to persuade Trump not to shut down the government"

-- NYT'S EMILY COCHRANE: "Lawmakers Consider Adding Measure Protecting Israel to Languishing Spending Bills"

SIREN ... OCASIO-CORTEZ EYEING A PRIMARY TO THE NO. 5 HOUSE DEMOCRAT ... LAURA BARRON-LOPEZ SCOOP: "Rep.-elect Alexandria Ocasio-Cortez is eyeing a new member of House Democratic leadership as a 2020 primary target: Rep. Hakeem Jeffries (D-N.Y.). ...

"But a person who has discussed the project with Ocasio-Cortez and her team said the congresswoman-elect has recruited an African-American woman to challenge Jeffries, who was just elected to replace Crowley as caucus chairman - the No. 5 House Democratic leadership position.

"Ocasio-Cortez's communications director denied that she had already recruited an anti-Jeffries candidate. 'We're not looking at recruiting people to run campaigns, we're looking at building a congressional staff,' said Ocasio-Cortez spokesman Corbin Trent.

"But when asked whether the congresswoman-elect is looking at Jeffries' seat, Trent said Ocasio-Cortez and her allies were 'disappointed' with Jeffries after the caucus chair race. 'We're disappointed in the way that the leadership elections went down, specifically that leadership election,' said Trent. 'We would have liked to have seen that be a more fair fight with less pressure.'

"Jeffries had a brief response to a potential challenge: 'It's a free country and democracy is a beautiful thing.' ... 'Spread love; it's the Brooklyn way,' Jeffries said, quoting a lyric by famed East Coast rapper Notorious B.I.G., or Biggie Smalls, whom Jeffries saluted on the House floor last year." POLITICO

A message from the Stop The HIT Coalition:

Small business employees and their families will pay, on average, nearly $500 more for their health care in 2020 if Congress allows the Health Insurance Tax (HIT) to return early next year. Congress can't let this $16 billion tax hit millions of hardworking Americans. It's time to Stop the HIT. Learn more.

THE TRUMP SLUMP ...

-- AP'S JONATHAN LEMIRE and CATHERINE LUCEY: "For Trump, the economy is a potential 2020 storm cloud": "The Dow Jones Industrial Average fell again Monday, the latest dip in the roller coaster markets amid the strain of Trump's trade war, rising interest rates and worries about a slowing global economy." AP

-- EUROPEAN/ASIAN MARKETS DOWN ... FT, via Michael Hunter in London, Peter Wells and Nicole Bullock in New York and Alice Woodhouse in Hong Kong: "Deepening concern about the outlook for global economic growth stalked stock markets on Tuesday, taking a sell-off on European bourses into a fourth session after Wall Street indices hit their lowest in over a year overnight and Asian indices fell sharply. ...

"Analysts said stocks had been hit by concern at a lack of a sustained improvement in trade relations between the US and China at a time when major central banks are ending an era of cheap money by tightening monetary policy, casting doubt on the outlook for growth." FT

-- REUTERS' TABITA DIELA, GABRIEL BURIN and JONATHAN SPICER: "From Jakarta to Buenos Aires, the world feels Fed's sting"

Good Tuesday morning.

ALEX ISENSTADT: "Trump machine swallows GOP for 2020: Unique structure of the president's reelection campaign is an expression of his iron grip on the party": "President Donald Trump is planning to roll out an unprecedented structure for his 2020 reelection, a streamlined organization that incorporates the [RNC] and the president's campaign into a single entity. It's a stark expression of Trump's stranglehold over the Republican Party: Traditionally, a presidential reelection committee has worked in tandem with the national party committee, not subsumed it.

"Under the plan, which has been in the works for several weeks, the Trump reelection campaign and the RNC will merge their field and fundraising programs into a joint outfit dubbed Trump Victory. The two teams will also share office space rather than operate out of separate buildings, as has been custom. The goal is to create a single, seamless organization that moves quickly, saves resources, and - perhaps most crucially - minimizes staff overlap and the kind of infighting that marked the 2016 relationship between the Trump campaign and the party." POLITICO

-- WAPO: "Republicans seek to expand Trump's support for 2020, but will the president cooperate?" by Michael Scherer

-- "Bernie tops progressive straw poll," by David Siders: "Sen. Bernie Sanders (I-Vt.) tops the first 2020 straw poll by the progressive political action committee Democracy for America by a wide margin, followed by former Vice President Joe Biden and Rep. Beto O'Rourke (D-Texas)." POLITICO

TRADE WARS ... RYAN MCCRIMMON: "Trump offering farmers extra $4.9 billion in trade relief": "The Trump administration announced today a second and 'final' round of trade aid for farmers and ranchers burned by retaliatory tariffs, including roughly $4.9 billion in additional direct payments for certain commodity producers." POLITICO

-- MICHIGAN GOP. REP. JUSTIN AMASH (@justinamash): "My fellow Republicans used to oppose bailouts. Now, they euphemistically call them 'market facilitation payments.' @POTUS's big-government trade policy hurt many farmers and ranchers, and he's responding with even bigger government."

K-FILE -- "Mick Mulvaney in October 2016: Trump would be disqualified from office in an 'ordinary universe,'" by CNN's Andrew Kaczynski: "Mulvaney made the comments in a previously unreported October 2016 radio interview in which he also said Trump is not a role model and has said 'atrocious things.' On October 7, 2016, a week before Mulvaney made the comments, the Access Hollywood tape of Trump making lewd comments about women, including bragging about grabbing them by the genitals, was made public.

"'My guess is worse stuff is going to come out in the last 30 days,' Mulvaney said on October 13, 2016 on the Jonathon and Kelly Show, a South Carolina-based radio show. ... 'In an ordinary universe, would both of these people's past activities disqualify them for serving for office? Yes. But that's not the world we live in today. The world we live in today, it's either him or her and for me that's still an easy choice.'" CNN

A WIN FOR JARED! -- "With long-sought criminal justice bill expected to become law, Kushner gets bipartisan credit for his role," by L.A. Times' Jen Haberkorn and Noah Bierman: "Kushner has been instrumental in helping his father-in-law secure a rare bipartisan victory: a long-sought overhaul of the criminal justice system.

"Both Republicans and Democrats who've worked on the bill in Congress credit Kushner as a key architect. He helped convince the two most powerful Republicans in Washington - his father-in-law and Senate Majority Leader Mitch McConnell, both of whom embrace the traditionally Republican tough-on-crime stance - to make the criminal justice system less punitive." LAT

-- MARIANNE LEVINE: "Fate of criminal justice reform bill hinges on Cotton amendments"

NEW ... THE SIX-PART Paul Ryan tax reform video. Watch it here

-- GARY COHN joins "CBS This Morning" in studio 57 in an installment of "Issues That Matter." The appearance comes as Republicans mark the anniversary of the tax bill's passage.

2020 WATCH -- SCOOP: "Warren bill would get feds into generic drug manufacturing," by Alex Thompson and Sarah Karlin-Smith: "Sen. Elizabeth Warren (D-Mass.), a likely 2020 presidential candidate, will release a bill on Tuesday that would effectively create a government-run pharmaceutical manufacturer to mass-produce generic drugs and bring down prices, several sources in her office told POLITICO on Monday in an exclusive preview of the legislation.

"The bill, dubbed the Affordable Drug Manufacturing Act, is unlikely to pass the Republican-led Senate, but it signals that a future Warren White House could try to radically revamp the federal government's role in the pharmaceutical market in order try to lower prices." POLITICO

-- "Cuomo Moves to Legalize Recreational Marijuana in New York Within Months," by NYT's Vivian Wang: "Gov. Andrew M. Cuomo announced that he would push to legalize recreational marijuana next year, a move that could generate more than $1.7 billion in sales annually and put New York in line with several neighboring states. ...

"The speech ... could prolong slow-burning speculation about Mr. Cuomo's presidential ambitions. It also showed, in striking detail, the governor's leftward evolution in his eight years in office, from a business-friendly centrist who considered marijuana a 'gateway drug,' to a self-described progressive championing recreational marijuana, taxes on the rich and a ban on corporate political donations." NYT

-- "Tulsi Gabbard Is Moving Toward An Unconventional Presidential Campaign. Her Fans See 'Bernie 2.0.,'" by BuzzFeed's Alexis Levinson


THE INVESTIGATIONS -- "Russian disinformation teams targeted Robert S. Mueller III, says report prepared for Senate," by WaPo's Craig Timberg, Tony Romm and Elizabeth Dwoskin: "Months after President Trump took office, Russia's disinformation teams trained their sights on a new target: special counsel Robert S. Mueller III. Having worked to help get Trump into the White House, they now worked to neutralize the biggest threat to his staying there.

"The Russian operatives unloaded on Mueller through fake accounts on Facebook, Twitter and beyond, falsely claiming that the former FBI director was corrupt and that the allegations of Russian interference in the 2016 election were crackpot conspiracies. One post on Instagram - which emerged as an especially potent weapon in the Russian social media arsenal - claimed that Mueller had worked in the past with 'radical Islamic groups.'" WaPo

-- "Roger Stone Admits Spreading Lies on InfoWars," by WSJ's Cezary Podkul and Shelby Holliday: "As questions swirl about his credibility, former Trump campaign adviser Roger Stone settled a defamation suit seeking $100 million in damages on Monday for publishing false and misleading statements on InfoWars.com, a far-right website known for promoting conspiracy theories. The agreement requires Mr. Stone to run ads in national newspapers, including The Wall Street Journal, apologizing for making defamatory statements about a Chinese businessman who is a vocal critic of Beijing.

"It also requires Mr. Stone to publish a retraction of the false statements on social media. Doing so exempts him from paying any of the damages. In a text message, Mr. Stone described his conduct as 'irresponsible' and added that 'I am solely responsible for fulfilling the terms of the settlement.'" WSJ

TRUMP'S TUESDAY -- The president will hold a roundtable discussion on the Federal Commission on School Safety report at 2:15 p.m. in the Roosevelt Room.
PLAYBOOK READS


PHOTO DU JOUR: Former FBI Director James Comey arrives to testify during a closed House Judiciary Committee meeting on Monday. | Saul Loeb/AFP/Getty Images

DAN DIAMOND'S PODCAST -- Surgeon General Jerome Adams told Diamond that that teen vaping is "epidemic": "The nation's top doctor joined POLITICO's 'Pulse Check' podcast to explain why he's issuing a rare warning that targets e-cigarettes. One problem: More than 20 percent of high school students now say they've recently used Juuls or other e-cigarettes.

"Another: The trend appears to be getting worse. 'My nine-year-old actually knows what Juuling is,' Adams told POLITICO. 'Kids are being exposed to these products through the games they play, through YouTube and at school - where in many cases the bathroom is now referred to as 'the Juuling room.'" Listen

DEEP DIVE -- "'Men for Others, My Ass': After Kavanaugh, Inside Georgetown Prep's Culture of Omerta," by Evgenia Peretz in February's Vanity Fair: "For generations, the renowned Jesuit prep school groomed its students to live up to the mantra 'men for others.' But after Christine Blasey Ford's testimony, the school and its alumni are contending with other demons." VF

VALLEY TALK -- "Facebook's Sheryl Sandberg Was Supposed To Change The World With 'Lean In.' So What Went Wrong?" by BuzzFeed's Caroline O'Donovan: "As Facebook COO Sheryl Sandberg grapples with an ongoing parade of company scandals, the women's movement she started is stagnant." BuzzFeed

FOR YOUR RADAR -- "Green Beret says he was charged with murder because of Fox News interview," by NBC's Carol Lee and Courtney Kube: "The Army Green Beret charged with premeditated murder in the killing of an Afghan man says he believes he's being unfairly targeted because of comments he made in a television interview more than two years ago.

"In an exclusive interview with NBC News, Maj. Matthew Golsteyn said he's convinced he never would have been charged were it not for his public admission that he killed the Afghan man during his 2016 appearance on Fox News to talk about military rules of engagement." NBC


WHAT WALL STREET IS READING -- "Goldman Sachs Ignored 1MDB Warning Signs in Pursuit of Asian Business," by WSJ's Tom Wright and Liz Hoffman: "Goldman Sachs Group Inc.'s push for Asian business and lax oversight of partners led the bank to dismiss warning signs in its dealings with a corrupt Malaysian investment fund, internal documents and interviews with people involved in the transactions show. When the fund, 1Malaysia Development Bhd., first sought Goldman's help raising money, the bond deal came before a committee of senior bankers in Hong Kong in 2012 for a key round of vetting.

"Among the concerns sketched out in the meeting's agenda: 'potential media and political scrutiny,' Goldman's unusual role as both financier and adviser, the colossal profit earned on what should have been a modest transaction-and how much of that haul would need to be disclosed. Not up for discussion: the young fund's scant track record. The deal happened anyway. It has ensnared Goldman in one of the largest financial frauds in history and darkened the early days of its new chief executive, David Solomon." WSJ

MEDIAWATCH -- "Former CBS chairman Les Moonves fired for cause, will not receive severance in wake of sexual misconduct allegations," by WaPo's Elahe Izadi and Travis Andrews: "Les Moonves, the once-powerful head of CBS, will not receive any severance payment in the wake of sexual misconduct allegations, CBS's board of directors announced Monday.

"The network made the announcement after the completion of a company investigation that found Moonves guilty of 'willful and material malfeasance' and a failure to comply with the investigation. He was set to receive as much as $120 million as part of his severance package, depending on the results of the inquiry. ... A lawyer for Moonves called the CBS board's conclusions 'without merit.'" WaPo

-- FIRST IN PLAYBOOK: DAVID HAWKINGS, DAVID MEYERS and ISSUE ONE are starting The Firewall, an independent digital publication that will cover political reform issues and launch in the spring. Hawkings most recently was senior editor of CQ Roll Call and wrote the "Hawkings Here" column, and Meyers most recently was VP of business operations for CQ Roll Call.

-- OLIVER DARCY in CNN's Reliable Sources: "Former staffers of The Weekly Standard are not happy about a note sent to the magazine's subscribers providing notification that subscriptions are being transferred to the 'expanded and redesigned Washington Examiner magazine.' I talked to several staffers Monday evening who expressed dismay that Clarity Media Group, after folding the magazine, would use The Weekly Standard's logo (and thus credibility) to explain to readers what happened.

"Staffers said the note, which effectively implied to subscribers that the Washington Examiner magazine would be better than The Weekly Standard, was insulting and dismissive of the product they had put out for the last 23 years." The letter to subscribers

-- BILL KRISTOL is joining Davidson College as the inaugural visiting Vann Professor of Ethics in Society next year.
PLAYBOOKERS
HUD DEPARTURE LOUNGE -- PAM PATENAUDE, the deputy secretary of HUD, is leaving office early next year. More from Katy O'Donnell

OUT AND ABOUT -- SPOTTED at the Trump hotel Monday night at a birthday party for Tommy Hicks, who's running for co-chair of the RNC unopposed and is supported by Trump: Kimberly Guilfoyle (who sang happy birthday to Hicks), Donald Trump Jr., Jared Kushner and Ivanka Trump, Reince Priebus, Jeff Miller, Jason Miller, Kelly Love, Sergio Gor, Tony Sayegh, Greta Van Susteren and John Coale, Charlie Kirk, Interior Secretary Ryan Zinke, Pete Marocco, Derek Harvey, Kiron Skinner, Charlie Glazer, Brian Walsh and Texas Lt. Gov. Dan Patrick.

-- SPOTTED at a White House reception Monday night hosted by Trump and first lady Melania Trump: Viktor and Amalija Knavs, Donald Trump Jr. and Kimberly Guilfoyle, Wisconsin Gov. Scott Walker and Tonette Walker, Interior Secretary Ryan Zinke, Education Secretary Betsy DeVos, Defense Secretary James Mattis, Chris Christie and Rudy Giuliani.

BIRTHWEEK (was yesterday): Jacqueline Sikoff of Princeton University's communications and public affairs office (hat tip: Ben Chang) ... (was Saturday): McCauley Mateja.

BIRTHDAY OF THE DAY: Frank Coleman, SVP of public affairs at the Distilled Spirits Council. How she got his start in his career: "In journalism as a stringer from 1982 to 1983 for Newsday in Long Island in college. I covered everything from police beat (murders and bombings) and protests (Shoreham Nuclear Reactor) to features and obits." Playbook Plus Q&A

BIRTHDAYS: Robb Watters, managing partner of the Madison Group ... Jeanne Cummings, political editor for the WSJ ... Nick Geale, COS at Dept. of Labor ... former U.S. Attorney General Ramsey Clark is 91 ... Lindsay Conwell, head of industry/nonprofits at Google ... Rep. Bill Posey (R-Fla.) is 71 ... Matt Schlapp, co-founder of Cove Strategies and chairman of the American Conservative Union, is 51 ... Brunswick's Linus Turner ... Rachel Streitfeld, senior producer for CNN's "State of the Union" ... Julie Donofrio (h/t Tammy Haddad) ... Jennifer Scoggins Hanks, director at DCI Group ... Rich Luchette ... POLITICO's Andrew Restuccia and Ryan McCrimmon ...

... Randi Weingarten, president of American Federation of Teachers, is 61 ... Google's Jesse Suskin ... Dwight Holton is 53 ... Elissa Dodge, EVP at Qorvis Communications (h/t Kristen Thomaselli) ... IEA's Jesse Glicker ... Max Mounkhaty ... Jon Prior ... Liz Halloran, deputy communications director for the Human Rights Campaign (h/t Olivia Alair Dalton) ... Philip Bennett ... Fred Sainz, director of corporate comms at Apple ... Denise Forte ... Noam Neusner ... Micah Lasher ... Brendan Kelly ... Lee Spieckerman ... Sarah Shulman ... Deborah E. Cunningham ... Kristina Budelis ... Spencer Sharp ... AP's Will Lester is 66 ... Wes Coulam, executive director of Washington Council Ernst & Young
... Anna-Claire Whitehead ... Tyler Lechtenberg ... Leonard Maltin is 68 ... McCall Johnson ... Wendy Strout (h/ts Teresa Vilmain)

A message from the Stop The HIT Coalition:

Congress must act now to stop the 2020 Health Insurance Tax (HIT) before it drives up the cost of coverage for millions of Americans. This costly, unfair and hidden tax increases the cost of health insurance for small businesses and millions of seniors, forcing our country's hardest working families to pay even more for their health care. Working families will pay $480 on average in additional premium costs for 2020 alone and senior couples enrolled in Medicare Advantage are expected to pay more than $480 in additional premium costs. It's time for Congress to act and protect Americans from the HIT. Learn more.

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