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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 19, 2018 View in browser
By Jake Sherman, Anna Palmer and Daniel Lippman

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DRIVING THE DAY
HEADS UP ... THE FEDERAL RESERVE will announce whether it will continue to hike rates today at 2:30 p.m.

PRESIDENT DONALD TRUMP has urged the Fed to lay off another hike, but the FT puts it this way: "Fed officials have signalled they will boost rates by a quarter point at the meeting, and holding fire would look skittish, according to analysts and strategists. It would send a markedly downbeat signal about the economic outlook; it might indicate the Fed is overly influenced by market turbulence; and it would trigger claims that the president is influencing policy." FT

GOVERNMENT FUNDING UPDATE ... We are basically 65 HOURS from a government shutdown, and here are the dynamics after a day of reporting on Capitol Hill:

-- TRUMP: A BIT PLAYER ... THE WHITE HOUSE HAS CLEARLY DECIDED it wants to be on the sidelines for this fight. Democrats offered them two pathways in the Oval Office last week, and the administration hasn't responded to either of those. And yesterday, Sarah Huckabee Sanders took the position that they'll have to see what the Senate can produce, and then TRUMP will decide what to sign.

IT'S A CURIOUS STANCE, but they clearly want some space from this deal and to set up the public position that the president has no choice but to sign whatever Congress produces late Friday. It's a massive shift from last week, when the president was saying he'd own a shutdown, and he was looking to deal.

SENIOR WHITE HOUSE OFFICIALS have told us the following things: A shutdown is inevitable because the president will hold strong; he wants a seven-bill omnibus with $1.6 billion in border security and he'll declare that a victory; he wants a short-term spending bill to interrupt the beginnings of the Democratic House; he will not accept a short-term spending bill; he'll see what the Senate produces. All of these answers have come from the same institution: the Trump White House.

-- THE SENATE is talking, but not getting too far. MITCH MCCONNELL and CHUCK SCHUMER discussed a seven-bill deal that would fund government for a year, but it included a $1 billion pot of money that Trump could use for his immigration policies. That money could not be used to build a wall, but Democrats say it could be used for things like detention beds, so they aren't much interested in approving it.

AS FRIDAY draws closer and closer, a stopgap spending bill is becoming more and more likely. The Senate is likely to decide on this today. The short-term spending bill under discussion would provide funding through sometime in FEBRUARY. For Democrats, this is better than January, when NANCY PELOSI will be trying to get her majority stood up. BUT ... It practically guarantees a funding showdown in the second month of the new Democratic House majority. In February, the optics are better all around. This time, a shutdown would interfere with Christmas.

-- THE HOUSE is basically just watching at this point. There is some concern that attendance will stink this week but the GOP whip operation is somewhat confident that they will have people in town through Friday. The real problem will be if TRUMP continues to sit on his hands, some HOUSE REPUBLICANS will decide they aren't going to walk a plank for a president who can't say what he supports, senior Republicans tell us. HOUSE REPUBLICANS are meeting at 9 a.m. Thursday. They have their first votes of the week this evening.

HOUSE DEMOCRATS will clearly view anything that doesn't include wall money a victory. A stopgap funding bill until February isn't ideal, no question about that. But the ground shifts massively toward Democrats' favor next year.

-- THE WHITE HOUSE has indicated they are asking Cabinet secretaries to find money that can be reprogrammed for building a wall. The dig-in-the-couch-cushions strategy is fun, don't get us wrong. But it's not tethered to reality. Sure, some agencies can reprogram money, but only up to a certain amount until Congress needs to approve it.

THE LEADALLS ...

-- SARAH FERRIS, BURGESS EVERETT and ELIANA JOHNSON: "GOP talks Trump off the shutdown ledge"

-- WAPO'S ERICA WERNER, DAMIAN PALETTA and SEUNG MIN KIM: "Trump backs off demand for $5 billion for border wall, but budget impasse remains ahead of shutdown deadline"

-- NYT'S JULIE HIRSCHFELD DAVIS and KATIE ROGERS: "White House Signals Retreat on Shutdown Threat"

-- WSJ'S KRISTINA PETERSON and REBECCA BALLHAUS: "White House Signals Flexibility on Border-Wall Funding as Shutdown Looms"

STEVEN SHEPARD: "Poll: Voters would blame Trump, GOP for shutdown"

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.

BORDER TALES: "EXCLUSIVE: Advocates: Trump admin lying when it says it can't process any more asylum seekers," by NBC News' Julia Ainsley and Jacob Soboroff

Happy Wednesday. SPOTTED: Secretary of State Mike Pompeo meeting with Nancy Pelosi in her office in the Capitol Tuesday.

WAPO'S BOB COSTA and MIKE DEBONIS, "'He was the future of the party': Ryan's farewell triggers debate about his legacy": "Speaker Paul D. Ryan is using his final weeks in Congress to leave a lasting image of a brainy conservative warrior for lower taxes, free markets and a more muscular America abroad - in public appearances, a taxpayer-funded online video series and a farewell address set for Wednesday. But after two decades in the House and three years as speaker, the Wisconsin Republican's long-term legacy is already a matter of fierce debate inside his own party.

"While Ryan shepherded a broad GOP tax bill last year and negotiated major increases in military spending, his repeated promises to sweepingly address the solvency and growing costs of two mandatory government programs - Social Security and Medicare - never happened, even though Republicans controlled all levers of government for the past two years.

"Ryan often spoke of the imperative of fiscal discipline, especially during the eight years of the Obama administration. But the nation's red ink has grown since Ryan became speaker, soaring from $438 billion in 2015 to $779 billion this year. And many economists blame the tax cut as a culprit as next year's deficit is projected to hit nearly $1 trillion." WaPo

-- "Mnuchin Backs Off Trump's Promise of 10% Middle-Class Tax Cut," by Bloomberg's Laura Davison: "He downplayed the prospect of the middle-class tax cut that Trump campaigned on in the days leading up to the midterm elections. 'I'm not going to comment on whether it is a real thing or not a real thing,' Mnuchin said in a roundtable interview Tuesday at Bloomberg's Washington office. 'I'm saying for the moment we have other things we're focused on.'" Bloomberg

BURGESS EVERETT and ANTHONY ADRAGNA: "Manchin vs. Manchin: MAGA stalwart or liberal ally?"

ON THE WORLD STAGE -- "Hacked European Cables Reveal a World of Anxiety About Trump, Russia and Iran," by NYT's David E. Sanger and Steven Erlanger: "Hackers infiltrated the European Union's diplomatic communications network for years, downloading thousands of cables that reveal concerns about an unpredictable Trump administration and struggles to deal with Russia and China and the risk that Iran would revive its nuclear program.

"In one cable, European diplomats described a meeting between President Trump and President Vladimir V. Putin of Russia in Helsinki, Finland, as 'successful (at least for Putin).' Another cable, written after a July 16 meeting, relayed a detailed report and analysis of a discussion between European officials and President Xi Jinping of China, who was quoted comparing Mr. Trump's 'bullying' of Beijing to a 'no-rules freestyle boxing match.'" NYT

JOANNE KENEN and ALICE MIRANDA OLLSTEIN: "Obamacare's secret base: America's middle class"

BIG NEWS ... MARIANNE LEVINE -- "Senate approves Trump-backed criminal justice overhaul": "The Senate overwhelmingly passed Tuesday the biggest overhaul to the criminal justice system in decades, giving a win to President Donald Trump and a bipartisan group of advocates and lawmakers.

"Tuesday's vote caps more than a year of negotiations to create more rehabilitation programs and ease mandatory minimum sentences for some drug-related crimes. The bill, which passed 87-12, has brought together many unlikely allies, including a group backed by the conservative Koch Brothers, the American Civil Liberties Union, the White House and senators from both sides of the aisle." POLITICO

-- TICK TOCK -- "The bill that wouldn't die: The unlikely story behind the criminal justice overhaul," by CNN's Jeremy Diamond and Alex Rogers

THE INVESTIGATIONS ...

-- DARREN SAMUELSOHN and JOSH GERSTEIN: "Mueller appears victorious in mystery subpoena dispute": "A federal appeals court on Tuesday ordered a mystery corporation owned by a foreign country to comply with a subpoena that appears to be from special counsel Robert Mueller.

"The three-page opinion released by the U.S. Court of Appeals for the D.C. Circuit is the latest twist in an opaque dispute that POLITICO and other media outlets have tied to Mueller's probe into Russian interference in the 2016 presidential election. The ruling offers the intriguing detail that the entity fighting the Mueller subpoena is a foreign government-owned company, not a specific individual, as many experts had speculated." POLITICO

-- CNN'S KATE SULLIVAN: "Trump signed letter of intent for Trump Tower Moscow project despite Giuliani insisting he didn't": "A newly obtained document shows President Donald Trump signed a letter of intent to move forward with negotiations to build a Trump Tower in Russia, despite his attorney Rudy Giuliani claiming on Sunday the document was never signed. CNN's Chris Cuomo obtained a copy of the signed letter of intent that set the stage for negotiations for Trump condominiums, a hotel and commercial property in the heart of Moscow.

"The letter is dated October 28, 2015, and bears the President's signature. When asked on Sunday about the letter, Giuliani incorrectly told CNN's Dana Bash that it had not been signed. 'It was a real estate project. There was a letter of intent to go forward, but no one signed it,' Giuliani told Bash. The non-binding document is also signed by Andrey Rozov, owner of I.C. Expert Investment Co., the Russian firm that would have been responsible for developing the property." CNN ... The document

TV THIS MORNING -- Rep. Adam Schiff (D-Calif.), who will become chairman of House Intel in January, will appear on "CBS This Morning."


THE JUICE ...

-- POLITICO ADDS MUSCLE TO HILL TEAM: Paul Volpe and Mike Zapler sent a note this morning to the newsroom: "It can sometimes feel like being the general manager of the Yankees (or the Red Sox these days, sorry Bres) when we get to add more talent to an already loaded team. So, we're thrilled to announce two new additions to our Hill lineup - Andrew Desiderio and Melanie Zanona - and a new position for a veteran Politico, Nolan McCaskill.

"Andrew is currently The Daily Beast's congressional reporter, covering everything from national security and immigration to politics and elections. ... Melanie joins us from The Hill, where she is a congressional reporter focused on House leadership. She has written extensively about big legislative battles, internal party dynamics and the relationship between Congress and President Trump. ... She will take the helm of the Huddle newsletter where we expect her to break news and provide smart analysis on the new Congress.

"Nolan, who has had an impressive run as a congressional reporter and the author of Huddle, is turning his attention to the 2020 campaign as a national political reporter." The full memo

TRUMP'S WEDNESDAY -- The president will have lunch with Secretary of State Mike Pompeo at 12:30 p.m. He and first lady Melania Trump will attend Christmas receptions at 5:15 p.m. and 7:30 p.m.
PLAYBOOK READS


PHOTO DU JOUR: A resident looks out at scorched remains of a neighborhood in Manaus, Brazil, on Tuesday after a fire destroyed at least 600 wooden houses. | Edmar Barros/AP Photo

WOMEN RULE -- ANNA co-moderated a live podcast with "With Friends Like These" host ANA MARIE COX with actress and activist PIPER PERABO in the latest "Women Rule" podcast. Listen and subscribe to the full podcast

-- "Nevada makes U.S. history with first-ever female-majority state Legislature," by Reno Gazette Journal's James DeHaven

NEW INVESTORS IN THE WING ... Per a tipster: "The Wing, a network of working and community spaces designed for women, [have] raised 75M in their Series C funding, led by Sequoia Capital and participation from Upfront Ventures and Airbnb. Actress and producer Kerry Washington, former White House senior advisor Valerie Jarrett, and Time's Up Legal Defense Fund co-founders Hilary Rosen and Roberta Kaplan also joined the round as investors."

GEORGE SOROS is the FT's Person of the Year: "The Financial Times's choice of Person of the Year is usually a reflection of their achievements. In the case of Mr. Soros this year, his selection is also about the values he represents. He is the standard bearer of liberal democracy and open society. These are the ideas which triumphed in the cold war. Today, they are under siege from all sides, from Vladimir Putin's Russia to Donald Trump's America." FT

KAVANAUGH UPDATE -- "Judiciary dismisses 'serious' misconduct complaints against Brett M. Kavanaugh," by WaPo's Ann E. Marimow and Robert Barnes: "The judicial council reviewing dozens of misconduct claims against Supreme Court Justice Brett M. Kavanaugh has dismissed the complaints that coincided with his contentious nomination battle. 'The allegations contained in the complaints are serious,' said the order from a Colorado-based appeals court, but must be dropped because ethics rules for the judiciary do not extend as high as the Supreme Court.

"The 83 claims filed by lawyers, doctors, professors and other concerned citizens accuse Kavanaugh of making false statements during his Senate confirmation hearings, displaying a lack of judicial temperament, making inappropriate partisan statements and treating members of the Senate Judiciary Committee with disrespect, according to the 10-page order from the Judicial Council of the 10th Circuit." WaPo


VALLEY TALK - "As Facebook Raised a Privacy Wall, It Carved an Opening for Tech Giants," by NYT's Gabriel J.X. Dance, Michael LaForgia and Nick Confessore: "For years, Facebook gave some of the world's largest technology companies more intrusive access to users' personal data than it has disclosed, effectively exempting those business partners from its usual privacy rules, according to internal records and interviews. The special arrangements are detailed in hundreds of pages of Facebook documents obtained by The New York Times. ... Facebook also assumed extraordinary power over the personal information of its 2.2 billion users - control it has wielded with little transparency or outside
oversight.

"Facebook allowed Microsoft's Bing search engine to see the names of virtually all Facebook users' friends without consent, the records show, and gave Netflix and Spotify the ability to read Facebook users' private messages. ... Yahoo, The Times and others could still get Facebook users' personal information in 2017. ... The Times - one of nine media companies named in the documents - had access to users' friend lists for an article-sharing application it also had discontinued in 2011. A spokeswoman for the news organization said it was not obtaining any data." NYT

MEDIAWATCH -- "'I Think You Could Double the Size of this Company, Honestly': POLITICO's Robert Allbritton on Trump, A Record Year, Expansion, and Axios," by Vanity Fair's Joe Pompeo: "Despite some management upheaval, Politico has apparently been able to avoid the financial panic that has seized many of its peers. The company says it made $113 million in 2018, the highest revenue number in its history, and roughly double its 2013 total." VF

-- "Advertisers abandon Fox News host Tucker Carlson's show over anti-immigration comments," by CNN's Oliver Darcy: "More than a dozen companies have announced they will either pull or suspend their advertising from Tucker Carlson's Fox News show over comments about immigration he made last week.

"Land Rover, IHOP, Ancestry.com, Just For Men, Minted, Smile Direct, Pacific Life, ScotteVest, Nerd Wallet, TD Ameritrade, Bowflex, CareerBuilder, Zenni and the Chase United MileagePlus Explorer card had as of Tuesday afternoon all released statements saying that they would no longer advertise on 'Tucker Carlson Tonight.'" CNN

-- JASON SCHWARTZ: "Ousted NPR news chief, ex-Fox News execs team up on new site": "One was ousted from NPR amid allegations of sexual harassment. The other left Fox News shortly after writing a column widely panned as racist and anti-gay. Now they've been recruited to help launch a new digital news startup with the stated goal of restoring faith in media.

"Another former Fox News executive, Ken LaCorte, has enlisted former NPR news boss Michael Oreskes and former Fox News executive editor John Moody to join him in creating LaCorte News, which he said will be a truly 'fair and balanced' alternative in these polarized times. The site is expected to soft launch before the end of January and will feature a curated feed of aggregated news alongside some original content." POLITICO
PLAYBOOKERS
TRANSITIONS - Bill Miller will be the next president and chief executive of the American Gaming Association. He most recently was an SVP at the Business Roundtable and is a U.S. Chamber alum. (h/t Politico Influence) ... Adam Piper will be the new executive director of the Republican Attorneys General Association. He previously was policy director of RAGA and is a former senior aide to South Carolina Attorney General Alan Wilson. More from AP's Meg Kinnard

BIRTHDAY OF THE DAY: Shannon McGahn, SVP of government affairs at the National Association of Realtors. What she's been reading recently: "An article is about all I can commit to these days, so anything and everything on Lippman's curated list of reads, which probably should include Realtor.com's recent piece - 'King of the Clicks: What Was the Most Popular Home of 2018'? (Hint: it includes a story, of a lovely lady, who was bringing up three very lovely girls...)." Playbook Plus Q&A

BIRTHDAYS: journalist Ronan Farrow is 31 (hat tip: Shana Mansbach) ... Kerri Lyon, a managing director at SKDKnickerbocker ... Sen. Rob Portman (R-Ohio) is 63 (h/ts Mark Isakowitz and Peter Pasi) ... Joey Scarborough, social media editor at NBC News ... PBS Newshour's Daniel Yang ... Michael Duncan, founding partner at Cavalry ... Patrick Ventrell ... Jill Slabey ... Recode's Teddy Schleifer ... Ryan Jackson, COS at EPA ... Craig Winneker ... retired Marine Gen. Jim Jones is 75 ... Kelsey Moran ... Sam Littman ... John Vail ... Erin Taylor (h/ts Jon Haber) ... Henry Longley ... Molly Pattison ... Bronwyn Lance Chester ... Callie Schweitzer, founder and CEO of CSCH, a creative strategy and
consulting firm ... Ann McDaniel ... Ethan Todras-Whitehill, co-founder and executive director of Swing Left, is 38 (h/t Marc Smrikarov) ...

... Tomicah Tillemann (h/t JP Schnapper-Casteras) ... Michaela Balderston, SVP at Tusk Ventures ... NPR's Kelsey Snell ... Max McClellan of Efran Films and a CBS News alum ... Taara Rangarajan, senior director of global partnerships and programs at Global Citizen and an Obama alum (h/t Ben Chang) ... Tal Kopan, Washington correspondent at the San Francisco Chronicle ... Kate Mize ... Rebecca Edgar ... Maggie Polachek, MBA candidate at the University of Washington and a CAP alum ... Catherine Hormats ... Amy Best Weiss, VP of federal gov't affairs at American Express ... Kasey Hampton ... Jim Oberman ... Ashley Snee Giovannettone ... Rep. Adrian Smith (R-Neb.) is 48 (h/t Blake Waggoner) ...
Matt Wojtkun is 35 ... Michael Feinberg ... Sarah Scott ... Whitney Patton ... Russ Caso ... Patrick B. Donohue ... WashPost's Josh Freedom Du Lac ... Jenny Murphy ... CBS' Sean Gallitz ... Jeff Kiernan ... Shaun Doherty ... Anne Stewart ... Bernie Weinraub ... Ann Lewis ... John Pederson (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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