The Hill’s Morning Report – Trump searches for backstops amid recession worries

 

 

 

Welcome to The Hill’s Morning Report. Happy Tuesday! Our newsletter gets you up to speed on the most important developments in politics and policy, plus trends to watch. Co-creators are Alexis Simendinger and Al Weaver (CLICK HERE to subscribe!). On Twitter, find us at @asimendinger and @alweaver22.

President Trump may argue the U.S. economy is roaring, but he clearly worries that a recession is not out of the realm of possibility next year and could jeopardize his bid for reelection.

 

“I don’t see a recession,” the president said on Sunday before he flew from New Jersey to Washington at the end of his summer break.

 

Back in the White House, Trump renewed criticism of Federal Reserve Chairman Jerome Powell, bellowing Twitter instructions to the independent central bank on Monday to prime the pump with lower interest rates. The president resists the view shared by many that his tariff policies added a drag on U.S. growth. He argues that American consumers, the engine of growth, will keep spending.

 

White House national economic adviser Larry Kudlow and Trump counselor Kellyanne Conway both worked Monday to tamp down market and analyst predictions that a recession looms next year, or by 2021 (The Hill).

 

Kudlow has scheduled briefing calls this week with state and local business leaders in an effort to talk up economic confidence, The Washington Post reports. A White House spokesman said the calls are about Trump’s economic agenda and “have been long-planned.”

 

The Associated Press: Seventy-four percent of U.S. business economists said on Monday in a new report they expect a recession in the U.S. by the end of 2021.

 

Later Monday, the White House knocked down a report that Trump’s economic team is in the early stages of discussing the virtues of a temporary payroll tax cut as a way to stimulate spending to potentially stave off a recession. The White House, which in general favors lower taxes, is open to weighing executive and legislative actions that could buoy a slowing economy into next year. But any GOP-favored legislative tax changes this year, in the absence of an economic crisis, would run into a brick wall in the Democratic-controlled House heading towards a presidential election.

 

Federal Reserve Bank of Boston President Eric Rosengren, who was one of two officials on the Federal Open Market Committee who dissented when the panel voted to cut interest rates in July, continued to push back on Monday against further interest rate cuts by the central bank. He says he’s not convinced that slowing trade and global growth will significantly hobble the U.S. economy (Bloomberg).

 

“We’re likely to have a second half of the year that’s much closer to 2 percent growth,” he said during a Bloomberg Television interview. “I’m not saying there are not circumstances in which I’d be willing to ease. I just want to see evidence we are going into something that is more a slowdown.’’

 

Markets and the White House will listen intently to Powell on Friday, looking for reassuring clues about Fed policy for the remainder of this year. Powell is giving a high-profile speech at the central bank’s annual economic forum in Jackson Hole, Wyo. (CNBC).  

 

Investors were cheered on Monday by stimulus measures adopted over the weekend in China and Germany, two major economies experiencing sluggish growth. China’s central bank unveiled a key interest rate reform to nudge borrowing costs lower for companies, while Germany signaled readiness to make available up to $55 billion worth of extra spending (Reuters).

 

The Wall Street Journal: Consumer luxury items, such as RVs, have seen a real decline in sales, considered a recession warning alert. “The RV industry is better at calling recessions than economists are,” said Michael Hicks, a Ball State University economist in Muncie, Ind.

 

The Associated Press: So, is a recession near?

 

The Hill: Five administration officials who shape Trump’s trade agenda. 

 

Gerald F. Seib: If economy sours, Democrats will face a tough choice.

 

 

 

LEADING THE DAY

CONGRESS: The pro-impeachment crowd gained a key new ally on Monday when Rep. Ben Ray Luján (D-N.M.), the No. 4 House Democrat who is running for the Senate and competing in a contested primary, came out in favor of the push, making him the highest ranking member of the caucus to do so.

 

Luján, the assistant Speaker and former chairman of the House Democratic campaign arm, said in a statement that he moved into the pro-impeachment column due to warnings that Russian efforts to interfere in U.S. elections have continued into the 2020 cycle (The Hill). 

 

“The Trump presidency is creating grave national security concerns,” Luján said in a statement. “Not only has he ignored the warnings that our Democracy is being targeted, but he has also actively encouraged Russian interference.” 

 

“President Trump’s lack of action is jeopardizing our elections, national security, and Democracy,” Luján said. “What is evident is that President Trump is abdicating his responsibility to defend our nation from Russian attacks and is putting his own personal and political interests ahead of the American people.”

 

Luján’s announcement adds to a majority of the House Democratic Caucus who now support opening an impeachment inquiry against the president. The total number is 123 lawmakers. Rep. Katherine Clark (D-Mass.) was the highest ranking member to back an inquiry before Luján’s announcement.

 

 

 

 

> Israel: Days after Reps. Ilhan Omar (D-Minn.) and Rashida Tlaib (D-Mich.) were barred from entering Israel for an official visit, the pair of progressive lawmakers urged their fellow members of Congress to visit and kept up their criticism of the president and Israeli Prime Minister Benjamin Netanyahu.

 

“I would encourage my colleagues to visit, meet with the people we were going to meet with, see the things we were going to see, hear the stories we were going to hear,” Omar said at a news conference in St. Paul, Minn. “We cannot let Trump and Netanyahu succeed in hiding the cruel reality of the occupation from us.”

 

The Muslim lawmakers were blocked by Israel from making the trip last week over their support for the boycott, divesture and anctions movement, a decision that was cheered by Trump. Omar and Tlaib had planned to visit the Israeli-occupied West Bank on a tour organized by a Palestinian group and make a stop in Jerusalem. The two are frequent critics of the Israeli treatment of the Palestinians. 

 

Despite being uninvited initially, Tlaib was granted a permit to visit on humanitarian grounds so she could see her grandmother in the West Bank. However, she declined, citing Israel’s “oppressive conditions meant to humiliate” her (The Associated Press). 

 

> Mueller fades away: Former special counsel Robert Mueller’s investigation has largely faded from the airwaves less than a month after his high-profile testimony on Capitol Hill, serving as a possible sign for Democrats that public interest in the probe is waning.

 

During a rally in New Hampshire last week, Trump did not launch into his usual diatribes criticizing the Mueller probe as a partisan “witch hunt” that aims to damage his presidency. Instead, the president opted for fresher targets by going after Omar and Tlaib over what he claims are “anti-Israel” views. 

 

The president is not the only one shifting focus away from the probe, which until recently dominated the cable news airwaves. In late July, the topic of Mueller’s investigation and impeachment were largely absent as the crowded bunch of Democratic contestants sought to debate each other over policy issues such as health care and who is the best bet to fight against Trump in the general election. 

 

A fading public interest in the Mueller probe would be an unwelcome change for House Democrats, particularly as Democrats on the House Judiciary Committee — many of whom viewed Mueller’s testimony as a hallmark moment for the pro-impeachment push — presses forward with its investigation into possible obstruction and potential abuses of power by the president (The Hill).

 

***

 

POLITICS & CAMPAIGNS: Nearly two months after she made waves in the first round of Democratic presidential debates, Sen. Kamala Harris’s (D-Calif.) campaign is facing a crucial moment.

 

As Amie Parnes reports, Harris has lost steam in polling consistently over the past month and has been unable to keep pace with former Vice President Joe Biden and Sen. Elizabeth Warren (D-Mass.), who pace the 2020 field, leaving some Democratic strategists to question how she’s positioned herself in the race. 

 

One Democratic strategist noted that she has pitched herself as both a progressive and a moderate, causing her to be viewed as “inauthentic.”   

 

“I still don’t think anyone really understands why she’s running,” the strategist said, adding that she’s come off as “inauthentic” due to her attempt to pitch herself as a progressive and a moderate. “And if you’re running for president and you don’t know why you’re running, no one else will either.” 

 

Facing the key moment in her campaign, Harris held three fundraisers over the weekend, including one on Martha’s Vineyard where she impressed Democratic donors, according to one fundraiser who was in attendance. 

 

> Biden up with Iowa TV ad: As the former vice president begins a week of campaigning in New Hampshire this week, his team is spending money in Iowa, launching his campaign’s first television ad there to target voters in Des Moines, Cedar Rapids, Quad Cities and Sioux City markets, campaign manager Greg Schultz announced. The 60-second advertisement before Labor Day argues the country has been “battered by an erratic, vicious, bullying president” while Biden has the experience to bring “strong, steady, stable” leadership to the Oval Office. Images of former President Obama with Biden are prominent in the six-figure ad campaign, accompanied by another six-figure digital investment stretching into “coming weeks,” according to the campaign.

 

The Washington Post: Sen. Kirsten Gillibrand (D-N.Y.) continues her summer sprint to make the debate stage in Houston.

 

The Associated Press: Sen. Michael Bennet (D-Colo.) banking on moderation in age of Trump.

 

 

 

 

> Warren apologizes (again): Warren waded back into the ancestry waters on Monday when she apologized to an audience of Native Americans for “harm I have caused” over her past claims of Native American ancestry, saying that it was a mistake on her end.

 

Warren’s remarks came from the outset of her address at a forum on Native American issues, where she pitched her newly-released policy plan aimed at those topics.

 

“Now, before I go any further in this I want to say this: Like anyone who’s been honest with themselves, I know that I have made mistakes,” Warren told the crowd. “I am sorry for harm I have caused. I have listened and I have learned a lot. And I am grateful for the many conversations that we’ve had together.”

 

“It is a great honor to be able to partner with Indian Country, and that’s what I’ve tried to do as a senator, and that’s what I promise I will do as president of the United States of America,” she said. 

 

The comments came after her decision late last year to release DNA results showing some Native American ancestry dating back six to 10 generations as she tried to put to bed accusations that she falsely claimed minority status for past employment. However, she has been questioned by some voters on the campaign trail about her decision and forced to apologize multiple times. None of this has stemmed attacks from Trump, who continues to derisively refer to her as “Pocahontas” (The Hill). 

 

The Hill: Soft levels of support mark this year’s Democratic primary.

 

The Hill: In a key Senate race, Sen. Martha McSally’s (R-Ariz.) lead early this year against her Democratic opponent, retired astronaut Mark Kelly (D), has evaporated, according to a survey released today by OH Predictive Insights, a Phoenix-based pollster.

 

HuffPost: Julián Castro to announce ambitious animal welfare plan.

 

The Associated Press: Democrats are spending millions of dollars to try to win statehouses.

IN FOCUS/SHARP TAKES

WHITE HOUSE & ADMINISTRATION: The administration, which has been torn about how best to punish Chinese tech giant Huawei as a risk to the United States, announced on Monday it will again extend the deadline before U.S. businesses are required to cut ties with the company. “It is another 90 days for the U.S. telecom companies,” Commerce Secretary Wilbur Ross said on Fox Business Network. “Some of the rural companies are dependent on Huawei. So, we’re giving them a little more time to wean themselves off. But there are no specific licenses being granted for anything.” Nov. 19 is the new deadline for the penalty. Trump reaffirmed on Sunday his commitment to a complete ban on U.S. business with Huawei and said he believes the company poses  a national security risk (The Hill). On Tuesday, Huawei said it does not expect to see any relief from U.S. sanctions but remains confident about company growth based on development of its own technology (The Associated Press).

 

> Justice Department: Attorney General William Barr removed the acting head of the Bureau of Prisons, replacing the agency’s top official in the wake of the pre-dawn suicide of inmate Jeffrey Epstein in his New York City cell. In a statement, Barr, who had said he was “appalled” at events at the Metropolitan Correctional Center, said Hugh Hurwitz, who had served in the acting position since last year, would return to the assistant director position he formerly occupied. Dr. Kathleen Hawk Sawyer, who led the bureau from 1992 to 2003, is the new director (CNN).   

 

> FEC: The chairwoman of the Federal Election Commission, Democrat Ellen Weintraub, sent Trump a letter on Saturday telling him there is no evidence of rampant voter fraud in 2016 or in any other U.S. election, suggesting he produce evidence of his claims of voter fraud or cease his repeated assertions of illegal voting. The president began making those accusations after he failed to win the popular vote in 2016. Trump subsequently put Vice President Pence in charge of a special commission to investigate allegations of election fraud, but the panel was quietly disbanded by the White House a year later without uncovering any evidence to back up Trump’s statement that 3 to 5 million ballots were illegally cast for Clinton (The Associated Press).

 

During a CNN interview, Weintraub said, “It is damaging to our democracy to spread information that … is baseless. … These are serious allegations … but if there is no proof, then these things really shouldn’t be said” (The Hill).

 

> North Korea: The administration is extending a ban for another year on the use of U.S. passports for travel to North Korea. A State Department notice released Monday said the ban will remain in place until Aug. 31, 2020, unless revoked by Secretary of State Mike Pompeo. The ban was imposed in 2017 by then-Secretary of State Rex Tillerson and renewed in 2018 (The Associated Press). 

 

> Venezuela: The United States, frustrated after unsuccessful international efforts to oust Nicolás Maduro from power, has made secret contact with Diosdado Cabello, who is considered the most powerful man in Venezuela after Maduro (The Associated Press).  …Axios reported over the weekend that Trump spoke with military advisers about a potential naval blockade of Venezuela’s coastline to enforce an international embargo. The president’s idea was described as impractical because of the size of the area and too costly for the U.S. military at a time of competing priorities.

 

> Iran: An Iranian tanker seized by Great Britain on July 4 was released on Monday and headed to Greece. Tehran warned against additional attempts to seize its tankers and accused the United States and its allies of trying to provoke a confrontation (Reuters). Secretary of State Mike Pompeo said it was “unfortunate” that the British Royal Marines released the tanker. “These are oil profits, when this is ultimately sold somewhere into the market, that will run back to Qasem Soleimani and the Iranian Quds force, their elite forces that have sown terror and destruction and killed Americans all around the world,” Pompeo said during a Fox News interview. “If they’re successful, they’ll have more money, more wealth, more resources to continue their terror campaign, to continue their assassination campaign in Europe.”

The Morning Report is created by journalists Alexis Simendinger and Al Weaver. We want to hear from you! Email: asimendinger@digital-stage.thehill.com and aweaver@digital-stage.thehill.com. We invite you to share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!

OPINION

Why President Trump must keep speaking out on Hong Kong, by Larry Diamond, opinion contributor, The Hill. https://bit.ly/2Zh2IYA 

 

Congress must exercise its power to ensure America has no war with Iran, by Kelly Magsamen, opinion contributor, The Hill. https://bit.ly/2KHTvAn 

WHERE AND WHEN

Hill.TV’s “Rising” at 9 a.m. ET features The Hill’s senior correspondent Mike Lillis, talking about Congress’s agenda next month, including gun measures; freelance journalist Zaid Jilani, discussing Biden’s China policy; and Nate Snyder, a former senior counterterrorism official with the Department of Homeland Security, unpacking the administration’s policy toward Huawei.

Find Hill.TV programming at http://digital-stage.thehill.com/hilltv or on YouTube at 10 a.m.

 

The House is in pro forma sessions until returning to Washington on Sept. 4 to begin consideration of legislation to respond to mass shootings.

 

The Senate continues to meet pro forma but is not scheduled to return for votes until Sept. 9. 

 

The president will have lunch with the vice president at 12:30 p.m. at the White House. Trump will host Romanian President Klaus Iohannis in the Oval Office for bilateral meetings this afternoon.

 

The vice president heads for Chantilly, Va., to chair the sixth meeting of the National Space Council. Pence will speak at 9:30 a.m. about “the administration’s commitment to expand space exploration” and leadership in commercial space. Location: Udvar-Hazy Center National Air and Space Museum.

 

Pompeo heads to New York City and meets with the Committee to Unleash Prosperity at 11:30 a.m. He will host a working lunch with Serbian President Aleksandar Vučić at 12:30 p.m. The secretary participates in a United Nations session on Middle East peace and security at 3 p.m. Pompeo joins a press conference with Polish Foreign Minister Jacek Czaputowicz at 6:10 p.m. and then meets with U.N. Secretary-General Antonio Guterres and 6:50 p.m. 

ELSEWHERE

➔ United Kingdom: Britain says it will end European Union freedom of movement rules immediately on Oct. 31 if the exit from the bloc occurs without a transition deal. Prime Minister Boris Johnson maintains his new government would not be hostile to immigration. “After Brexit, the government will introduce a new, fairer immigration system that prioritises skills and what people can contribute to the UK, rather than where they come from,” a spokesman for Britain’s interior ministry said in a statement (Reuters). On Monday, Trump and Johnson spoke by phone about trade, the global economy and Brexit, the White House said. 

 

➔ New York: Following five years of investigations and protests, the New York City Police Department on Monday fired Daniel Pantaleo, an officer involved in the 2014 chokehold death of Eric Garner, the unarmed black man whose dying gasps of “I can’t breathe” gave voice to a national debate about race and police use of force. Pantaleo, who is white, was terminated based on the recommendation of a department disciplinary judge, said Police Commissioner James O’Neill (The Associated Press). 

 

➔ NBA star Stephen Curry announced Monday that he is making a donation to Howard University in a bid to help restart the school’s long-dormant golf program. The two-time MVP will fund the program for the next six years as the school pushes to to have men’s and women’s teams ready for competition by the 2020-21 school year. “This is one of the most generous gifts in the history of Howard University,” said Kery Davis, the athletic director at the historically black university in Washington. Curry, an avid golfer himself, became interested in helping to revive the team after meeting Otis Ferguson IV, a Howard senior and golfer, during a campus visit in January (ESPN).

 

 

 

THE CLOSER

And finally … All the world’s a stage! Service dogs-in-training — poodles and golden retrievers who help humans with autism and post-traumatic stress disorder — last week attended a live theater performance in Canada of the hit musical “Billy Elliot” as part of the canine curriculum, and the photo of attentive pooches calmly watching the theatrics from their seats went viral. The point of the training is to help the dogs prepare to assist their humans wherever they may roam (Fox News).

 

“All of the dogs were fantastic and remained relaxed throughout the performance. Some even watched through the cracks of the seats,” said Laura Mackenzie, owner of K-9 Country Inn Working Service Dogs in Ontario. “The dogs loved the show almost as much as their handlers.”