What to Know in Washington: Trump to Restrict Foreign Telecom

President Donald Trump plans in coming days to sign an executive order that would prohibit American firms from using gear made by foreign telecommunications companies that pose a security threat, according to an administration official.

The official, who was granted anonymity to discuss a sensitive issue, said last night that the order was not meant to single out any country or company. U.S. officials have said that equipment made by Huawei Technologies Co., a Chinese telecommunications firm, could be used to spy on behalf of the Beijing government. Huawei has denied the allegations.

The official also said that the order, which could be signed as soon as today, has nothing to do with the recent escalation of the trade conflict with China.
In January, the administration was preparing the action, which could significantly restrict Chinese state-owned telecom companies from operating in the U.S. over national security concerns, people familiar with the matter said at the time.

The order, as it was conceived earlier this year, would not outright ban U.S. sales by the companies, but would give greater authority to the Commerce Department to review products and purchases by firms connected to adversarial countries, including China, one of the people said.

China’s Foreign Ministry accused the U.S. of “deliberately discrediting” Chinese companies. Read more from Margaret Talev.

Photographer: Qilai Shen/Bloomberg via Getty Images
The Huawei Technologies Co. logo is displayed on a glass wall in front of a cloud computing and server display in the exhibition hall at the Huawei Technologies Co. headquarters in Shenzhen, China, on March 6, 2019.

China Vows ‘People’s War’ on Trade: Among China’s most surprising responses to the trade war has been its reluctance to use its vast state media empire to rally the home front. That’s changed since Trump’s latest tariff barrage.

In recent days, the once-banned phrase “trade war” has roared back into widespread use in Chinese media. Meanwhile, official news outlets gave high-profile play to commentaries urging unified resistance to foreign pressure, including an editorial from the nationalist Global Times calling the trade dispute a “people’s war” and threat to all of China. Such sentiments have found an eager audience, with a state television video vowing a “fight to the end” attracting more than 3 billion views since Monday. The clip was the most-read piece on China’s Twitter-like social media platform Weibo earlier yesterday.

The rhetorical shift underscores the risks that China’s Communist Party veers toward a more nationalistic position as the trade war drags on and weighs on economic growth. Chinese President Xi Jinping, like Trump, has promised to rejuvenate his country and can’t afford to look weak in the face of foreign power. Read more.

Politics and Probes

Trump Jr. to Testify After Reaching Deal: Donald Trump Jr. has agreed to give limited additional closed-door testimony in June in a deal with the Senate Intelligence Committee, three people familiar with the arrangement said, which headed off an increasingly bitter dispute that divided Republicans. Chairman Richard Burr (R-N.C.) had issued a subpoena for Trump’s son, subjecting the veteran Republican lawmaker to sharp criticism from fellow Republicans.

The questioning will last for two to four hours and will focus on five or six specific topics, according to one of the people, who said this will be the last time Trump Jr. will have to appear before the committee. Another person said the committee will be able to pose the major questions it wants to ask. Read more from Jennifer Jacobs and Steven T. Dennis.

Trump Lawyers’ Role in Cohen Testimony Probed: The House Intelligence Committee is investigating whether four lawyers tied to Trump, his family and businesses helped to devise false testimony given by Trump’s long-time lawyer Michael Cohen to Congress in 2017. The committee is demanding they turn over documents and agree to interviews, Chairman Adam Schiff (D-Calif.) said. Schiff said the focus is on “unresolved concerns about obstruction” of the panel’s investigation into the Trump Organization’s failed efforts during the 2016 campaign to build a Trump-branded tower in Moscow. Read more from Billy House.

Mueller Report to Get Marathon Reading: Democrats plan to deliver a marathon public reading of Special Counsel Robert Mueller’s 448-page report on Russian meddling in the 2016 election, staged in a House committee room.

“This report illustrates a presidency founded in opportunism, devoid of respect for public service and the rule of law,” Rep. Mary Gay Scanlon (D-Pa.), vice chairwoman of the House Judiciary Committee and a leader of the reading effort, said in a statement. “This administration and its enablers do not want the American people hear the contents of this report.” Read more from Billy House.

Happening on the Hill

House Democrats Restart Russia Sanctions Debate: House Democrats are restarting the debate over additional Russia sanctions as punishment for the 2016 election meddling detailed in the Mueller report. Draft legislation that would target Russian sovereign debt, energy sector and financial institutions was added to the agenda for a Wednesday House Financial Services subcommittee hearing on the use of sanctions to address national security challenges. The bill has not been formally introduced in the House, and there is no current timeline to bring it to the House floor for a vote. The purpose of the bill is to gather ideas and hear from experts about how to more effectively implement sanctions, according to a person familiar with the committee’s plans. Read more from Daniel Flatley and Austin Weinstein.

Blue Water Veterans Bill Passes: For the second time in less than 12 months, House lawmakers passed legislation that expands disability compensation for Vietnam-era veterans who say they suffer from illnesses linked to Agent Orange exposure. The bill’s fate in the Senate, however, remains unchanged and unclear. The legislation (H.R. 299), which the House passed on a 410-0 vote, would expand a presumption of benefits to approximately 90,000 former service members who served on deep water ships in southeast Asia. Veterans who had “boots on the ground” already receive these benefits but the Department of Veterans Affairs has opposed attempts to expand coverage to service members who served miles off the coast.

A similar bill was overwhelmingly passed by the House in the 115th Congress, but hit a roadblock during the waning weeks of that Congress in the Senate. House lawmakers are pushing the Senate to take up the legislation sooner rather than later. “I challenge the Senate to get this done before Memorial Day,” House Veterans Affairs Chairman Mark Takano (D-Calif.) said yesterday at a press conference. Read more from Megan Howard.

Stand-Alone Flood Insurance Extension: The House yesterday easily passed a measure to extend the National Flood Insurance Program, giving the Senate less than three weeks to act to avoid a lapse. The House passed H.R. 2578 on an uncontested voice vote yesterday. Financial Services Chairwoman Maxine Waters (D-Calif.) said this bill would be the 11th short-term extension of the insurance program since 2017. Read more from David Schultz.

Democrats Try to Extend Wind, Solar Aid: Tax credits worth billions of dollars for the wind and solar industries are set to expire or begin phasing out next year — part of a 2015 deal Democrats struck that ended a 40-year-old ban on the export of crude oil. But some Democrats are seeking to extend the credits, saying Trump’s tariffs on solar panels and moves to roll back Obama-era climate-related policies has changed the equation. The push comes amid an intra-party squabble over climate policy that has pitted progressives against mod erates who favor a less radical approach. Read more from Ari Natter.

New CBO Chief: House and Senate budget leaders have chosen the next director of the Congressional Budget Office, Roll Call reported last night. Senate Budget Committee Chairman Mike Enzi (R-Wyo.) will announce the selection of Phillip Swagel later this week, according to Roll Call, which cited several unnamed sources. Swagel would replace current director Keith Hall. Swagel was an assistant secretary in the Treasury Department from 2006 to 2009 and served as a member of the Troubled Asset Relief Program investment committee, according to a biography on the website of the University of Maryland School of Public Policy, where he’s a professor of economic policy. Read more from Chelsea Mes.

Politics & Elections

Biden Surge Tests Left: Joe Biden’s growing lead in the Democratic presidential race is turning into a test of strength for a vocal and active progressive wing that’s been trying to wrest control of the party for the past four years. The left’s ascent in the Democratic Party is embodied in the fervent followers of 2020 contender Sen. Bernie Sanders (I-Vt.) and young liberal stars like Rep. Alexandria Ocasio-Cortez (D-N.Y.).

They rejected the notion of compromising with Republicans and are attempting to make sweeping proposals like Medicare for All and the Green New Deal litmus-test issues, asserting that is what Democratic voters want. Biden has promoted consensus-building and given a cold-shoulder to Medicare for All. Yet he’s leading his nearest rival, Sanders, by 20 to 32 points in five national polls taken since he began his campaign on April 25. Read more from Sahil Kapur.

California a Must-Win for Democrats: California has long been a piggy bank for Democratic presidential hopefuls. In 2020, it’s got something just as compelling as money: a potentially decisive role in the nomination race. The state’s presidential primary is moving back into the so-called Super Tuesday round of voting next year, joining at least 13 other states on March 3 after an initial shake-out for the campaigns in Iowa, New Hampshire, Nevada and South Carolina. At stake is the biggest cache of delegates available in the nominat ion race, three times the number available in the first four contests combined. That gives California Democrats the chance to either reshuffle or solidify the standings in the party’s biggest-ever field of candidates. Read more from Jeffrey Taylor, Christopher Palmeri and Jennifer Epstein.

Bishop Wins North Carolina House Primary: State Sen. Dan Bishop won the Republican primary in the North Carolina House district where the 2018 election was rescinded, the Associated Press projects. Bishop will face Democrat Dan McCready, a Marine Corps veteran and solar-energy businessman, in the 9th district special election on Sept. 10. McCready was the Democratic nominee in a close November 2018 election that the North Carolina elections board invalidated after an investigation showed a political operative for Republican candidate Mark Harris led a team that illegally tampered with absentee ballots.

What Else to Know

Putin Says Russia Seeks Stronger U.S. Ties: Russian President Vladimir Putin said he’s committed to improving ties with the U.S. now that Mueller’s probe showed a “demonstrated absence of any kind of traces, of any kind of collusion” between Moscow and Trump’s presidential campaign. “My impression is that the president is set to restore Russian-American relations, contacts, to jointly resolve issues that are of mutual interest to us,” Putin told Secretary of State Mike Pompeo. “For our part, we have repeatedly said that we would also like to restore full-format relations.” Read more from Ilya Arkhipov and Nick Wadhams.

U.S. Resists Shielding Venezuela From Creditors: The U.S. is unlikely to grant a request from the Venezuelan opposition for an executive order protecting the nation’s assets from creditors, according to people familiar with the matter. That means National Assembly President Juan Guaido, who’s recognized as head of state by the U.S. and more than 50 countries, will need to make a critical bond payment by the end of this month to ensure that investors don’t try to seize Citgo. Read more from Ben Bartenstein and Saleha Mohsin.

Turkey Keeps U.S. Consular Worker in Jail: A Turkish court ruled today to keep a U.S. consulate employee in jail on terrorism-related charges and put off the verdict in a high-profile case that the Trump administration is watching closely. Metin Topuz, a Turkish employee of the American mission in Istanbul, has been jailed for over a year on charges that include attempting to overthrow President Recep Tayyip Erdogan’s government. He is also accused of having links to the outlawed network of Fethullah Gulen, the U.S.-based cleric blamed f or orchestrating a failed coup attempt in 2016. The Istanbul-based court today decided to hold the next hearing on June 28. The embassy employee could face up to 35 years in prison if convicted. Read more from Cagan Koc and Selcan Hacaoglu.

Trump Promises New Louisiana Bridge: Trump promised to rebuild an old and dilapidated interstate highway bridge in Louisiana—if he’s re-elected next year. Trump said in a speech Tuesday at a natural gas terminal in Lake Charles, Louisiana, that if he wins in 2020, “we’re giving you a brand new I-10 bridge” starting the day after the election. The declaration was met by a standing ovation from his audience. “I didn’t know it was going to be that popular,” the president remarked. Read more from Justin Sink and Jennifer Jacobs.

Federal HR Office Would Be Part of GSA Under Proposal: The government’s HR office would become an agency within the General Services Administration under a legislative proposal expected to be unveiled Friday, Margaret Weichert, the acting director of the Office of Personnel Management, told reporters yesterday. The OPM oversees the HR program for about 2.1 million civilian federal employees, while also covering about 8 million enrollees in the Federal Employee Health Benefits Program, including current and retired federal employees, their families, and survivors. Without changes, it will be increasingly difficult for the OPM to continue fulfilling its mission, Weichert said. Read more from Louis C. LaBrecque.

Examining Trump’s Financial Losses: In 1992, Trump, the real-estate developer, lived in a New York luxury apartment, traveled by limousine and had personal bodyguards. That year, he also reported a negative $750 million adjusted gross income to the IRS. How the future president could live so large while reporting such huge losses has been a question since the New York Times revealed a decade of Trump’s tax information last week. While the president claims there were paper losses that could be chalked up to real-estate activities, four tax experts said that for the president to have claimed such a giant negative income, his businesses must have bled money for years. Read more from Joe Light.

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