What to Know in Washington: Trump Pressed to Fill Pentagon Job

President Donald Trump faces pressure to choose a new Pentagon chief quickly amid rising tensions with Iran, but the abrupt and messy withdrawal of his previous pick, Patrick Shanahan, has raised questions about the rigor of the administration’s vetting process.

Senators said they were blindsided yesterday when Shanahan took his name out of consideration after reports about domestic violence episodes in his family. Trump later told reporters he learned about the 2010 events only on Monday.

Trump said he will name Army Secretary Mark Esper as acting defense secretary, as the Pentagon enters its seventh month without a Senate-confirmed leader. Even if Trump formally nominates Esper — as he said he’s “most likely” to do — the vetting and confirming process could drag on for weeks if not months.

Lawmakers were already grappling with Trump’s plan to send 1,000 additional troops to the Middle East in response to an attack on two tankers in the Persian Gulf, which the administration attributed to Iran. The leadership turmoil casts new uncertainty on the question of who’s in charge of orchestrating U.S. military strategy in the fast-moving situation.

But the need for speed may conflict with a demand for more thorough vetting — by the FBI, the Trump White House and senators. Lawmakers questioned how conflicting allegations of domestic violence between Shanahan and his ex-wife took so long to surface and escaped those supposedly rigorous investigations when the Senate Armed Services Committee recommended Shanahan as deputy defense secretary and the full Senate confirmed him on a 92-7 vote in 2017. Read more from Steven T. Dennis.

Photographer: Stefani Reynolds/Bloomberg
Shanahan at a Senate Armed Services Committee hearing in April.

Spending Talks

Senators Reach Border Funding Deal: Senate Republicans and Democrats have struck a deal on $4.6 billion in emergency money to handle a surge in migration at the U.S. border with Mexico, people familiar with the deal said yesterday.

Trump requested the funds May 1, including $3.3 billion to be used to shelter undocumented migrants at the southern border and $1.1 billion for operations. Senate Majority Leader Mitch McConnell (R-Ky.) has said the chamber will vote on a border measure by the end of next week.

Because of squabbles over immigration policy, the border funding was kept out of a $19.1 billion disaster aid package signed into law earlier this month. Senate Appropriations Chairman Richard Shelby (R-Ala.) and ranking member Patrick Leahy (D-Vt.) reached an agreement and plan to unveil details before a committee vote on their bill this morning, the people said.
The House plans to vote on a separate border package next week, according to Rep. Henry Cuellar (D-Texas), who has become a point person on the issue for Speaker Nancy Pelosi (D-Calif.). If that plan differs from the Senate effort, the House and Senate could convene a conference committee to work out the differences. Read more from Erik Wasson.

House to Finish First Spending Bill: In more appropriations news, the House is set to vote today on passage of the nearly $1 trillion spending package that includes Defense, Labor-HHS-Education, State and Foreign Operations, and Energy and Water appropriations. For a complete look at that measure, read the BGOV Bill Summary overview of the package.

House Begins Consideration of Second Spending Bill: After wrapping up work on the first measure, the House will begin consideration of a second a five-bill spending package. The House Rules Committee last night made in order 290 amendments for floor consideration.

The White House yesterday threatened to veto the measure in a statement of administration policy, citing the overall spending level and a rider that would block the Census citizenship question, among other issues.

Also Happening on the Hill

Pilots, Attendants Take Aim at Boeing: Pilots and flight attendants, who have been critical of Boeing’s handling of the beleaguered 737 Max, will air their concerns today with lawmakers probing actions by the company and its regulators in the run-up to two fatal crashes.

Leaders of the Allied Pilots Association and the Association of Flight Attendants-CWA are scheduled to testify before a House aviation panel investigating the two crashes, in Indonesia and Ethiopia, that killed a total of 346 people. The tragedies led to the worldwide grounding of the jet, damaged the reputation of the planemaker and raised questions about the U.S. Federal Aviation Administration’s oversight. Pilot and flight attendant unions have emerged as counterweights to the measured statements of airlines and regulators. They’ve publicly and privately demanded greater transparency, training and accountability from Boeing. Ryan Beene previews the hearing.

Bipartisan Coalition Warns Against War With Iran: A bipartisan Senate group is telling Trump his administration doesn’t have the authority to start a war with Iran without authorization from Congress. Sens. Tim Kaine (D-Va.) and Mike Lee (R-Utah) sent a letter to Trump asking for his explanation on a decision to deploy more troops to the Middle East. “We remain concerned that increasingly escalatory actions by both sides will lead to an unnecessary conflict. Given that growing risk,” the senators said, “we want to reiterate that, as of this date, Congress has not authorized war with Iran.” Kim Chipman has more.

Drugmakers Get Win in Patent Bill: The drug industry scored a major victory this week as a senior lawmaker moved to rewrite legislation designed to rein in patent abuses. Sen. John Cornyn (R-Texas) is redesigning his measure, unveiled with Sen. Richard Blumenthal (D-Conn.), that would have allowed the Federal Trade Commission to sue drugmakers that use the federal patent system to keep competitors from making low-cost copies of their products. He’s now looking at using the Food and Drug Administration to target specific instances where firms seek to extend their exclusive licenses for drugs by making “cosmetic changes” to the products. Alex Ruoff has more.

Deal Said Close Over Insider Trading Bill: House Financial Services Committee members Jim Himes (D-Conn.) and Patrick McHenry (R-N.C.) said negotiators are close to agreement on technical changes to a bipartisan bill that would provide the first statutory definition of insider trading. The panel last month approved the bill by voice vote after Himes agreed to work with McHenry on technical changes before the proposal goes to the chamber floor. Read more from James Rowley.

Facebook Fury Over Crypto Project: Facebook’s plans to create a new cryptocurrency that can be used for everything from commerce to money transfers is facing pushback from angry U.S. lawmakers. House Financial Services Chairwoman Maxine Waters (D-Calif.) urged the company to halt development of the token until Congress and regulators can examine it. Other lawmakers demanded hearings and questioned whether the coin, called Libra, will have appropriate oversight. Read more from Jesse Westbrook.

Meanwhile, the company and other technology platforms such as YouTube could face a flood of lawsuits unless they can demonstrate their treatment of users’ content is politically neutral, under a measure that Sen. Josh Hawley (R-Mo.) unveiled today, Ben Brody reports. The proposal reflects allegations by others in his party, including Trump, that the platforms are biased against conservative opinion. His bill would strip large tech companies of legal immunity for user-generated content unless the platforms can show their content-moderation practices have no political tilt.

Blocking Deutsche Bank Subpoena Hits Appeals Court: Congress’s battle for Trump’s financial records shifted into one of the nation’s most important courts as the president asked a federal appeals panel to block House Democrats from getting his records from Deutsche Bank and Capital One. Trump’s attorneys yesterday filed an opening legal brief with the court, urging it to reverse a lower-court ruling that denied his request to halt subpoenas from House committees to the banks. Read more from Bob Van Voris.

Elections and Politics

Trump Launches 2020 Bid: For one night in a packed arena in Orlando, Trump tried to recapture the insurgent energy and anything-might-happen feel of the campaign that fueled his bid for the White House four years ago.

Trump’s challenge as he took the stage, however, was that a lot has happened, and not all of it lent itself to a rip-roaring rally. He opened with a familiar litany of complaints about Special Counsel Robert Mueller’s investigation and his political opponents that stirred the thousands in attendance. But as he wound through a laundry list of presidential accomplishments, the energy in the audience waned. Some people sat down, checked their phones or made an early exit.

Thick with grievance, the 78-minute speech also showed the dark underbelly of his re-election bid. He made clear that he’ll seek to animate his formidable political base by exploiting the nation’s political divisions and by appealing to their fears of immigrants and their hostility toward the Democratic Party. Justin Sink recaps the speech.

Biden Says He Doesn’t Want to ‘Demonize’ Rich: Former Vice President Joe Biden said to affluent donors yesterday he wants their support and—perhaps unlike some other Democratic presidential candidates—would not be making them political targets because of their wealth.

“I got in trouble with some of the people on my team, on the Democratic side, because I said, you know, what I’ve found is rich people are just as patriotic as poor people,” Biden said. “It doesn’t mean I want to demonize anybody who’s made money.” Former Treasury Secretary and Deputy Secretary Robert Rubin and Roger Altman, both of whom spent decades on Wall Street, were some of the attendees at the event. Read more from Jennifer Epstein.

Engel Gets Another Primary Challenge: Bronx middle school principal Jamaal Bowman announced a primary campaign challenge against Rep. Eliot Engel (D-N.Y.), who chairs the House Foreign Affairs Committee, according to a statement by Justice Democrats, a progressive activist group. Engel has already drawn a primary challenge from Andom Ghebreghiorgis (D), also an educator in New York, Caitlin Webber reports.

Harris Would Rejoin Iran Deal: Democratic presidential candidate Sen. Kamala Harris (D-Calif.) said that the U.S. would rejoin the Iran nuclear agreement if she were elected president. “I would also look toward expanding it,” Harris told Lawrence O’Donnell on “The Last Word” program on MSNBC. “To be honest with you, I would like to see it also cover ballistic missile testing.” The U.S. has accused the Tehran government of intensifying its efforts to develop ballistic missile technology in defiance of a United Nations resolution and earlier this month asked the U.N. Security Council to take action. Read more from Chelsea Mes.

Democrats Scoff at Sanctions Bid in Russian Plot Suit: The Trump campaign’s bid to use the Mueller report to push for sanctions against Democrats who sued over allegations that the campaign conspired with Russia defies common sense, the Democratic National Committee said. The Trump campaign effort “rests on a logical error: It falsely suggests that because the special counsel couldn’t prove a conspiracy between Russia and the Trump campaign beyond reasonable doubt, the campaign must be innocent,” the DNC said in a response in federal court in Manhattan. Read more from Edvard Pettersson.

What Else to Know

Fed Signals Law on its Side With Powell: The world’s most powerful central bank is making clear it thinks the law is on its side if Trump tries to remove Jerome Powell as Federal Reserve chairman. White House lawyers have equipped Trump with a possible blueprint for demoting Powell by stripping him of his chairmanship and leaving him as only a governor, according to people familiar with the matter. But the Fed, which faces frequent attacks from Trump for not being more accommodating to his economic agenda, has hinted for the second time that it won’t back down easily.

In response to inquiries yesterday about the White House review of the legality of removing Powell, Fed spokeswoman Michelle Smith offered a direct response, saying the chair can “only be removed for cause.” Read more from Saleha Mohsin, Christopher Condon and Jennifer Jacobs.

• Meanwhile, the Federal Open Market Committee is likely to hold interest rates steady today while opening the door to a cut — by dropping its commitment to being “patient’’ in its policy statement, according to a Bloomberg survey of economists. The decision will be announced at 2 p.m. and Powell will hold a press conference 30 minutes later. Read more from Steve Matthews.

Wage Official Revokes Aides’ Enforcement Power: The Trump administration’s chief wage enforcer has spent her early weeks in office seizing command of routine casework from her agency’s regional offices and blocking approval of Obama-era investigation tactics, according to Labor Department sources and internal emails. Cheryl Stanton, who was sworn in as administrator of the Labor Department’s Wage and Hour Division April 29, quickly rescinded all authority previously delegated to her subordinates. The move ensures the former business lawyer ha s the final say on many of the minimum wage, overtime pay, and family leave investigations that her agency’s vast bureaucracy handles in a given week. Read more from Ben Penn.

More Movers & Shakeups: Trump yesterday named seven people to be members of the advisory committee to the Pension Benefit Guaranty Corp., according to a White House statement. He also nominated Anthony F. Godfrey to be U.S. ambassador to Serbia and Leslie Meredith Tsou to be U.S. ambassador to Oman, Chelsea Mes reports.

U.S. Sued for Seizing Student Borrower’s Tax Returns: A student borrower who was deceived by her college is suing the Education Department after having her tax refunds seized. The school in question, Minnesota School of Business, was a for-profit school that was found to have “made false, deceptive, and misleading statements” to prospective students by both a Minnesota state court and the Education Department, Emily Wilkins reports.

The state court found the school had misled the plaintiff, Tamara Blanchette, and others, about their criminal justice program. The college advertised it would be possible to become a probation officer in Minnesota with their associate’s degree—even though the school knew a bachelor’s degree was required.

While students who were misled by their college can have their federal loans forgiven through a department regulation, the suit alleges the department did not inform Blanchette about that option. The lawsuit was filed by the National Student Legal Defense Network, which was founded by former Education Department officials.

New ‘War on Coal’ Effort Can’t Save Industry: Trump is scaling back sweeping Obama-era curbs on greenhouse gas emissions from power plants burning coal, his biggest step yet to fulfill his campaign vow to end the “war” on the fossil fuel. Yet the Environmental Protection Agency’s rewrite of the Clean Power Plan to be unveiled today will do little to halt a nationwide shift from coal and toward more cost-effective electricity generated by wind, solar and natural gas. Jennifer A. Dlouhy has more.

Tax Law Hurt Charitable Giving, Nonprofits Say: Americans gave less money to charities last year partly because the Republican tax law changes made many people ineligible for tax breaks that can inspire donations. Giving by individuals last year fell an estimated 3.4%, after adjusting for inflation, a report yesterday from Giving USA said. The numbers reflect the first year of the 2017 tax revamp that expanded the standard deduction, a simpler way of filing taxes, but it also excluded millions of taxpayers from claiming a tax break for donating to charity. Read more from Laura Davison.

Trump Weighs Turkey Sanctions: The Trump administration is weighing three sanctions packages to punish Turkey over its purchase of the Russian S-400 missile-defense system, according to people familiar with the matter. The most severe package under discussion between officials at the National Security Council and the State and Treasury departments would all but cripple the already troubled Turkish economy, according to three people familiar with the matter, who asked not to be identified discussing internal deliberations. Read more from Nick Wadhams and Saleha Mohsin.

Trump Doesn’t Apologize for Central Park Five Role: Trump again declined to apologize for peddling false accusations against five black and Latino teenagers convicted and later exonerated of the rape of a jogger in New York City in 1989. Trump has long been attached to the case of the “Central Park Five” because he ran a full-page ad in The New York Times under a month after the attack calling for New York to “bring back the death penalty” for violent criminals. Read more from Justin Sink.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com

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