In the News

What to Know in Washington: Democrats Line Up Ukraine Witnesses

Bloomberg Government
10/03/19

Democrats have set a blistering pace for their impeachment inquiry of Donald Trump with a lineup of depositions — including the recently departed U.S. envoy to Ukraine — stoking the president’s fury and feeding efforts to discredit the investigation.

Kurt Volker, who stepped down last week from his unpaid role representing American interests in Ukraine, will give a closed-door deposition today to the three House committees looking into Trump’s pressure on a foreign power to investigate a political rival, Joe Biden.

Lawmakers want to talk to Volker and others mentioned in the whistleblower complaint about Trump’s July 25 call with Ukrainian President Volodymyr Zelenskiy.

As the committees delve into the allegations, Trump has made it clear that the impeachment process will be met not only with broad stonewalling, but also with fierce accusations leveled at those leading it, especially House Intelligence Chairman Adam Schiff (D-Calif.).

Trump yesterday used Twitter and a press conference to denounce his political enemies, possibly setting the tone for the rest of this year — as well as the 2020 presidential election.

Trump can call on reinforcements, most crucially administration officials like Secretary of State Michael Pompeo — responsible for responding to the congressional subpoenas, even though he has been named in the allegations.

The president also has a cohort of surrogates and conservative media personalities echoing and fueling his outrage, most notably Rudy Giuliani, his personal lawyer. Giuliani says he has made it his personal mission to bring attention to what he calls shady dealings by Biden and his son Hunter in Ukraine.

These factors have amplified the drama and seeped into material collected as part of the impeachment inquiry, including documents disclosed during a closed-door Capitol Hill briefing yesterday from State Department Inspector General Steve Linick. Justin Sink and Billy House have the latest.

Pompeo Aides Warned Against Ukraine Conspiracies: Aides to Pompeo cautioned against unfounded reports suggesting that the U.S. Embassy in Ukraine was a hotbed of Democratic support, according to documents turned over to Congress Wednesday by the State Department’s watchdog. The warnings were made even though Trump has echoed some of the claims.

Emails from March detailing the State Department staffers’ concerns were included in a package of files sent to Linick and obtained by Bloomberg News. He shared them with congressional investigators pursuing an impeachment inquiry into Trump. The emails, sent to senior Pompeo adviser Ulrich Brechbuhl from Phil Reeker, the acting assistant secretary of State for Europe, show Reeker and other officials discussing a series of articles by conservative writers that suggested the U.S. ambassador to Uk raine, Marie Yovanovitch, was a Trump opponent and that Ukraine had worked to sway the 2016 U.S. election for Hillary Clinton. Read more from Nick Wadhams and Billy House.

Perry Could Be Called to Testify: Energy Secretary Rick Perry may be called to testify before Congress in the House’s ongoing impeachment inquiry, Rep. Jamie Raskin (D-Md.) said yesterday. Documents and communications related to Perry’s attendance at Zelenskiy’s inauguration and a White House meeting days later are among the records being sought by House Democrats in a subpoena of Giuliani.

“Obviously he’s had some involvement with Ukraine issues,” Raskin told reporters. Raskin is a member of the House Oversight and Reform Committee, one of the panels involved in the impeachment probe, and said no final decisions have been made, Ari Natter reported.

Elections & Politics

Impeachment Takes Oxygen Out of the Room: The impeachment inquiry has roiled the long-held plans of the Democrats who hope to replace him, stealing their most precious commodity: time to make their case. The investigation is crowding out campaigns on cable news and social media, wreaking havoc on their messaging and hurting lower-tier candidates’ chances of breaking out. The drama is building with the approach of a Oct. 15 debate in the key state of Ohio, with another debate coming in November. Read more from Ryan Teague Beckwith.

Biden Warns Trump: Biden yesterday gave a preview of a potential general election face-off with Trump by taking a more aggressive tone and assailing the president for his “abuse of power” and for “smearing” him and his family. “Let me make something clear to Trump and his hatchet men and the special interests funding his attacks against me — I’m not going anywhere,” Biden said to applause in a speech in Reno, Nev. “You’re not going to destroy me. And you’re not going to destroy my family.” Biden said that “like e very bully in history,” Trump is “afraid. He’s afraid of just how badly I would beat him next November.” Read more from Sahil Kapur.

Booker Takes Aim at Childhood Poverty: Democratic presidential candidate Sen. Cory Booker (D-N.J.) today unveiled a plan that he says would cut childhood poverty by two-thirds through a proposed child tax credit and by bolstering existing welfare programs. The tax credit would give a $300-a-month “child allowance” to families with “younger kids,” and $250 to families with children up to the age of 18. The credit would be indexed to inflation. Read more from Emma Kinery.

Trump Has ‘Weighty Constitutional Issues’: The Justice Department is siding with Trump’s request to delay enforcement of a subpoena for his tax filings and other financial records to give his legal team time to address the “weighty constitutional issues” involved in the case. The Justice Department yesterday told U.S. District Judge Victor Marrero that the government agrees with Trump that the case should be heard in federal court, not New York state court, as Manhattan District Attorney Cyrus Vance Jr. said. And the lawyers said Marrero should impose a “short delay” of the deadline for enforcement of the subpoena if the parties can’t agree to one themselves. Bob Van Voris and Christian Berthelsen have more.

Senate Race Ratings: Projections for two closely watched 2020 Senate races were updated by Larry Sabato’s Crystal Ball this morning. Democrats’ most vulnerable senator, Sen. Doug Jones (D-Ala.), moved from Toss-up to Leans Republican, while Sen. Thom Tillis (R-N.C.) moved from Leans Republican to Toss-up.

On Lawmakers’ Radars

Boeing Engineer Interview Sought by Panel: The House Transportation and Infrastructure Committee has asked Boeing to make available for an interview a company engineer who filed an internal ethics complaint earlier this year that raised questions about Boeing’s safety culture. The committee earlier this year began investigating the certification of Boeing’s 737 Max plane after two crashes killed a total of 346 people, prompting a worldwide grounding of the company’s top-selling jetliner. In a statement, Chairman Peter DeFazio (D-Ore.) said the committee also asked that Boeing ensure the panel had access to the internal complaint. Read more from Ryan Beene.

Lawmakers Ask Fed to Explore Digital Currency: House Financial Services Committee members asked the Federal Reserve to “take up the project of developing a U.S. dollar digital currency.” The “nature of money is changing” and more than 40 countries have already developed or are working on their own national digital currencies, Reps. Bill Foster (D-Ill.) and French Hill (R-Ark.) said in a letter to Federal Reserve Board Chairman Jerome Powell. The two members lead the committee’s Artificial Intelligence Task Force. Hill is also the senior Republican on the committee’s Fintech Task Force. Read more from Lydia Beyoud.

Private Equity Flexes Muscle in Washington: As Republicans set out to overhaul the federal tax code in 2017, the private equity world leveraged its influence to protect the wildly lucrative tax break that’s helped mint more billionaires than almost any other industry. KKR & Co., for example, had a former head of the Republican National Committee rounding up lawmakers on Capitol Hill to fight for private equity’s cause.

The industry now appears to be heading into an even bigger war to preserve the generous tax breaks and loose oversight that helped it amass more than $4 trillion in assets. Sen. Elizabeth Warren (D-Mass.), climbing in polls as she seeks the Democratic presidential nomination, has laid out proposals that would dramatically rein in its profits if she’s elected next year. Read more from Heather Perlberg and Ben Bain.

Defense & Foreign Affairs

U.S. Tariffs Europe Planes, Whiskies: The price of Scotch, French wine, cheese and other European exports is set to go up in the U.S. after the administration announced new tariffs on billions of dollars of EU products starting Oct. 18. The president got the go-ahead from the World Trade Organization yesterday to levy tariffs on as much as $7.5 billion worth of European exports yearly in retaliation for illegal government aid to Airbus. The award is the largest in WTO history. The U.S. plans to levy a 10% tariff on large civil aircr aft from France, Germany, Spain and the U.K. It will also slap 25% levies on a range of other items including Irish and Scotch whiskies; wine, olives and cheese; as well as certain pork products, butter and yogurt from various European nations, according to the U.S. Trade Representative’s Office. Read more from Bryce Baschuk.

DOD Retailer Drops Bid to Avoid Trump’s Tariffs: A Pentagon retailer that sells goods and services on Army and Air Force military installations worldwide has decided not to seek relief from Trump’s tariffs on Chinese goods. The Army & Air Force Exchange Service had filed for exclusions with the White House from 25% duties on backpacks, duffels and about 40 other items. But the Exchange said in a statement it’s rescinded all requests for tariff waivers, without giving a reason. Trump often boasts about how much funding he’s secured to upgrade t he military and has admonished companies for importing goods from China, saying that if they want to avoid the duties, they should make their goods in the U.S. Read more from Mark Niquette.

Failed U.S.-Iran Diplomacy Sets Stage for New Tensions: Failed efforts to ease U.S.-Iran tensions on the sidelines of the United Nations have left both sides hardening their positions and diplomats warning of growing mistrust and a risk of escalation. French President Emmanuel Macron, Pakistan’s prime minister, Imran Khan, and Japanese Prime Minister Shinzo Abe each tried unsuccessfully to bridge the gap between Donald Trump and Hassan Rouhani as they shuttled around midtown Manhattan during the UN General Assembly last week.

Now, European officials are increasingly grim about how the crisis they long sought to prevent will evolve: Iran has continued installing powerful new centrifuges and could soon seek to reconstitute its stockpile of enriched uranium, according to the International Atomic Energy Agency. The U.S. has modestly bolstered its forces as well as Saudi and United Arab Emirate defenses in the Middle East, with officials warning more pressure is coming. Read more from David Wainer, Glen Carey and Gregory Viscusi.

North Korea Hails Sub-Based Missile: North Korea called the first test of its new submarine-launched ballistic missile a major boost for its national security, saying it strengthens its hand to defend itself against adversaries. The report from the official Korean Central News Agency also said that leader Kim Jong Un was absent from the test of its Pukguksong-3 missile a day earlier, a possible indicator that wants to distance himself personally from the move, which came just days before his state is set to resume long-delayed nuc lear talks with the U.S. Read more from Jon Herskovitz.

Around the Administration

Google Joins Ivanka Trump’s Hire American Vow: Google CEO Sundar Pichai plans to announce today the internet-search giant is signing on to presidential daughter and senior adviser Ivanka Trump’s pledge to train American workers. The company will offer access to the Google IT Support Professional Certificate program, which is designed to help prepare individuals for entry-level tech jobs through an online course that can be completed within six months, according to a senior official with the company who requested anonymity to preview the anno uncement. Read more from Justin Sink.

Trump Medicare Order Sparks Fear of Cuts: The White House has been tight-lipped for months about Trump’s executive order on Medicare to be released today. The directive, delayed since August, is expected to strengthen the private Medicare Advantage plans that cover more than 22 million people while criticizing Medicare for All proposals being championed by Democratic presidential candidates. The chief executive officer of the National Committee to Preserve Social Security and Medicare, Max Richtman, worries Medicare could be targeted fo r cuts by congressional Republicans eager to pay down the deficit if Trump is re-elected in 2020. Read more from Tony Pugh.

Federal Workers to Pay Extra for Insurance: Millions of federal workers will see their health-care premiums jump an average of 5.6% in 2020 due in large part to the return of a congressionally mandated health provider tax and ballooning medical costs, the Office of Personnel Management announced yesterday. The announcement came as the agency released its annual list of health-care plans accessible to federal workers, retirees, and their families through the Federal Employees Health Benefits Program, the country’s largest employer-sponsored health benefits plan. Read more from Andrew Wallender.

Green Card Wealth Test Wins Brief Reprieve: A Trump administration policy aimed at denying legal status to immigrants who receive most public assistance survived its first court showdown without being immediately derailed. But the reprieve may be short-lived given that a federal judge indicated yesterday she’s open to temporarily blocking the new rule from going into effect in at least part of the U.S. Read more from Robert Burnson.

Apple CEO Wades Into DACA Fight: Apple executives Tim Cook and Deirdre O’Brien waded into the battle over immigration, filing a brief with the Supreme Court in favor of the Deferred Action for Childhood Arrivals program, which provided legal protection to people brought into the U.S. as children. In its brief, Apple profiled five DACA recipients, known as Dreamers, and said it employs 443 of these people from more than 25 countries. “We are distressed at the prospect of ripping our DACA colleagues from the fabric of our company ,” the executives wrote. “This issue is a moral one: Our country made a deal with a highly vulnerable population interested in a bright future, and we should keep that deal.” Read more from Mark Gurman.

U.S. Jobs Outlook Is Weak: The last time U.S. payroll forecasts were this low, hurricanes had slammed the country in 2017, temporarily closing businesses. Or go back to 2013 when there was a federal government shutdown. But for the September jobs report due tomorrow, Wall Street economists see a more persistent storm at play: The trade war and manufacturing recession. Those factors are starting to permeate the economy at a time when companies are already struggling with a shrinking pool of qualified workers.

The combination of forces has pushed down the median estimate for private payrolls to a gain of just 130,000 last month. That’s the weakest projection heading into a jobs report in seven years, outside of months affected by events such as major storms or the shutdown. Read more from Katia Dmitrieva.