What to Know in Washington: Democrats’ Oversight Rankles Trump

President Donald Trump warned Congress in his State of the Union on Tuesday that “there cannot be war and investigation” if lawmakers want “peace and legislation.”

The president was unsuccessful in his pleas for House Democrats to limit their oversight efforts. And today, he lashed out at them on Twitter.

“So now Congressman Adam Schiff announces, after having found zero Russian Collusion, that he is going to be looking at every aspect of my life, both financial and personal, even though there is no reason to be doing so,” he wrote, referring the House Intelligence Committee chairman’s decision to probe whether foreign governments or individuals had improper leverage over Trump or his business interests.

“Never happened before! Unlimited Presidential Harassment,” Trump tweeted. “The Dems and their committees are going ‘nuts.’ The Republicans never did this to President Obama, there would be no time left to run government. I hear other committee heads will do the same thing. Even stealing people who work at White House! A continuation of Witch Hunt!”

Trump’s tweets also come as the House Judiciary Committee prepares for two days of confrontation over Democratic plans to force Acting Attorney General Matthew Whitaker to discuss his conversations with the president and his oversight of Special Counsel Robert Mueller’s Russia investigation.

Judiciary Chairman Jerrold Nadler (D-N.Y.) scheduled a vote this morning to authorize a subpoena of Whitaker if he tries to avoid answering questions when he comes before the panel tomorrow.

It would be the first known subpoena issued by Democrats since they took control of the House in January, with plans to step up investigations of Trump and those around him. The vote comes after Trump said in his State of the Union address on Tuesday that the nation’s “economic miracle” could be stopped by “ridiculous partisan investigations.”

The Justice Department views an advance authorization of a subpoena as unprecedented and unnecessary, according to a U.S. official who asked not to be identified speaking about internal matters. Whitaker is willing to testify voluntarily in an open session tomorrow and has been preparing for weeks, including practicing questions and answers within the department, the official said. But that’s no guarantee he will answer some key questions that Nadler has warned he’ll ask — including about any conversations he’s had with Trump concerning Mueller’s Russia investigation and other probes into the president and his associates.  Read more from Chris Strohm and Billy House.

Trump Tax-Return Battle Begins: House Democrats are also facing off with Republicans for a battle that could turn intensely personal for Trump and risks a backlash against the chamber’s new majority — how to get their hands on the president’s tax returns. Ways and Means Chairman  Richard Neal (D-Mass.) has said he is all too aware of the political dangers of delving deep into Trump’s personal finances. Neal has delegated the task to his oversight subcommittee, which holds its first hearing today on the matter.

The effort is being met with outright hostility from Republicans and skepticism even within Democratic ranks. Ways and Means member  Ron Kind  (D-Wis.), considered one of the most centrist House Democrats, said he thinks the idea could be a waste of time. “I’d suspect that Bob Mueller and his team are looking at that already and hopefully it’s part of a report that is submitted to us shortly,” Kind said.

Democrats say they want to see Trump’s returns to be sure he’s complying with tax laws, to examine his financial connections abroad, and find out to whom he owes money. Trump, unlike some of his predecessors, hasn’t divested from his real estate and licensing business since becoming president. Read more from Laura Davison.

Bloomberg QuickTake: How Trump’s (Private) Tax Returns Could Become Public

Border Separation Policy: House lawmakers are preparing to probe shortcomings in the tracking system for families separated at the border under the Trump administration’s “zero tolerance” immigration policy in a series of hearings.

At the first planned hearing on the issue today, members of the House Energy and Commerce Committee’s Oversight Subcommittee will ask whether the Department of Health and Human Services still has migrant children separated from their parents in its custody, members said. They’ll also ask officials why the agency didn’t have better systems to track them and if they’re still struggling with the issue, C.J. Young, a committee spokesperson, told Bloomberg Law. Michaela Ross and Shira Stein preview the hearing.

Lawmakers Unveil ‘Green New Deal’

Rep. Alexandria Ocasio-Cortez (D-N.Y.) released a sweeping package of environmental measures today that has pitted progressives in the House Democratic caucus against moderates over how far to go in pursuit of resetting the climate change debate.

The proposals, which have come to be known as the Green New Deal, were crafted in conjunction with Sen. Ed Markey (D-Mass.). Their plan envisions shifting away from fossil fuels and other sources of global warming causing emissions within 10 years.

It has already prompted strong opposition from Republicans and industry leaders who say it’s technologically impossible and will costs tens of trillions of dollars.

Advocacy of stronger environmental laws have been an important part of the agenda of Ocasio-Cortez and other progressives in the new Congress. The legislation has been the subject of intense speculation and interest for weeks even as it has no chance of gaining support in the Republican-controlled Senate, let along being sighed into law by Trump.

Still, the next steps remain important, as the reception among moderate Democrats and House leaders could act as a bellwether for its future in the 2020 elections, and beyond.

The plan, in the form of a non-binding resolution, weaves together what had been a hodgepodge of progressive proposals and aspirations into a single initiative. It sets a goal of shifting the nation to 100 percent “clean, renewable, and zero-emission energy sources,” within 10 years. Missing from earlier drafts, however, is a pledge to eliminate fossil fuels altogether — an idea that had put off some moderates.  Read more from Ari Natter.

Also Happening on the Hill

Border Wall Talks: Acting White House Chief of Staff Mick Mulvaney said if Congress doesn’t agree to Trump’s request for $5.7 billion for a wall on the U.S.-Mexico border “we’ll figure out a way to do it with executive authority.” Mulvaney, in an interview with Fox News’ Sean Hannity yesterday, said officials are looking at multiple options and that the approach may be to “find the money that we can spend with the lowest threat of litigation and then move from that pot of money to the next pot that maybe brings a little bit more threat of litigation and then go through the budget like that.” He did not say how the executive authority would be used.

The dispute between Trump and congressional Democrats over money for the wall led to a 35-day standoff that shut down part of the government. Rep.  Nita Lowey (D-N.Y.), the top Democrat working on a border-security deal to avoid another government shutdown before a Feb. 15 deadline, said yesterday lawmakers should be able to reach a bipartisan agreement by the end of this week. Read more from Margaret Talev.

Infrastructure Action: Infrastructure tops the bill of the first Transportation and Infrastructure Committee hearing under Chairman  Peter DeFazio (D-Ore.) today. DeFazio wants to move an infrastructure package this year in addition to working on a new surface transportation bill to replace the FAST Act that expires at the end of 2020. Shaun Courtney previews the hearing.

Drug Pricing: Senate Republicans say they want to support Trump’s effort to stop a practice that benefits drug-industry middlemen, but need evidence that doing so would reduce prices for consumers. The administration recently rolled out a plan that would end a system of rebates to middlemen in the prescription drug portion of Medicare and Medicaid that critics say helps keep list prices high. The president asked Congress to pass legislation to support his idea during his State of the Union address Tuesday.

Republican members of the Senate Finance Committee, which will tackle rising drug prices this year, said they agree the rebate system needs revamping, but are worried the proposal may raise Medicare premiums and the cost of health care generally for seniors.  Read more from Alex Ruoff.

Financial Trade Tax Proposal: Wall Street would bear the brunt of the latest tax proposal as Democrats jockey for the most progressive tax ideas with the approach of the 2020 elections. Sen.  Brian Schatz (D-Hawaii) is working on a plan that would tax financial trades, according to his spokesman, Michael Inacay, who declined to provide details on how, exactly, it would be structured.

Financial transaction taxes typically place a levy of a fraction of a percent on the price of a securities trade. The idea has gained popularity within the Democratic Party as a way to curb high-frequency trading as well as raise revenue for progressive policies such as free college tuition.  Read more from Laura Davison.

Beer Tax Cut: One of the loudest critics of Trump’s tax law has found something to like about it: lower taxes on beer and wine. Sen.  Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, introduced legislation yesterday that would make permanent the excise-tax reductions on beer, wine and spirits producers included in the Republican tax law of 2017. Read more from Laura Davison.

Wireless Carrier Throttling: Sens. Markey, Wyden and Richard Blumenthal  (D-Conn.) asked the Federal Communications Commission to investigate whether U.S. wireless carriers are throttling popular applications without telling customers. The request came after Bloomberg News reported that the largest U.S. telecom companies are slowing internet traffic to and from apps such as YouTube and Netflix, citing research from Northeastern University and the University of Massachusetts, Amherst. The researchers used a smartphone app called Wehe, downloaded by more than 100,000 consumers, to monitor which mobile services were being throttled and by whom.  Read more from Olga Kharif.

Lawmakers Target T-Mobile: Democrats are seeking answers about a report that T-Mobile executives regularly stayed at Trump’s hotel in Washington while they were pursuing regulatory approval for a $26.5 billion Sprint merger. Sen.Elizabeth Warren (D-Mass.) and Rep.  Pramila Jayapal (D-Wash.) sent letters this week seeking information from the Trump Organization and T-Mobile CEO John Legere. A central question: Did T-Mobile executives patronize Trump properties as part of a bid to get clearance for their Sprint deal? Read more from Nick Turner, Kim Chipman and Scott Moritz.

Meanwhile, the House Judiciary Committee will hold a hearing next week to examine “the potential impact” of the proposed merger of Sprint and T-Mobile on consumers, workers, and the Internet. Legere and Sprint Executive Chairman Marcelo Claure have both agreed to testify at the hearing.

What Else to Know Today

Prayer Breakfast: Trump begins his day this morning at the annual National Prayer Breakfast in Washington, where he will deliver remarks at 8 a.m.

Schultz Bid Could Help Trump: Howard Schultz is unlikely to land in the White House if he makes an independent bid for the presidency, but he would probably pull enough votes away from a Democratic candidate to strengthen Trump’s prospects for re-election. That’s the conclusion of a survey examining the former Starbucks Corp. CEO’s political ambitions conducted by Optimus, a data-science firm that’s studying the effects of independent candidates on the 2020 race. Read more from Joshua Green.

Economic Outlook: Federal Reserve Chairman Jerome Powell gave a brief but positive assessment of the economy at an event organized for educators. “The U.S. economy is now in a good place,” Powell said last night in response to audience questions during a meeting with teachers at the central bank’s headquarters in Washington. “At the moment, unemployment is low, prices are near two percent inflation, so we’re in a good place now.”

The Fed has pivoted in recent weeks to a decidedly more dovish stance, signaling it will be patient before deciding how next to adjust interest rates. That contrasts sharply with the central bank’s stance in December when officials penciled in two hikes for 2019. The policy U-turn after the Fed raised rates in December reflected concern that slower global growth, tighter financial conditions and uncertainty over U.S.-China trade talks and Brexit posed risks to the central bank’s positive U.S. economic outlook. Read more from Christopher Condon, Chibuike Oguh and Matthew Boesler.

DOJ to Probe Labor Secretary’s Role in Plea Deal: The Justice Department is launching an investigation into a decade-old plea deal in which critics say Labor Secretary Alexander Acosta as a federal prosecutor allowed hedge fund manager Jeffrey Epstein, who was facing sex abuse and trafficking allegations, to avoid harsh punishment.

The DOJ Office of Professional Responsibility “has now opened an investigation into allegations that department attorneys may have committed professional misconduct in the manner in which the Epstein criminal matter was resolved,” Assistant Attorney General Stephen Boyd said in a letter yesterday to Sen.  Ben Sasse (R-Neb.). Read more from Chris Opfer and Jaclyn Diaz.

Islamic State: Trump said the U.S. military and its allies will probably control all territory once held by Islamic State by next week. “It should be formally announced sometime probably next week that we will have 100 percent of the caliphate,” Trump said yesterday at a meeting of the Global Coalition to Defeat ISIS in Washington. “You can’t do better than we’ve done militarily.”

Trump and Secretary of State Michael Pompeo have sought to reassure allies that the promised U.S. troop withdrawal from Syria doesn’t mean they are being left behind in the fight against Islamic State. Even though the U.S. and allies have won nearly all the territory Islamic State had controlled, thousands of fighters remain dispersed in the region, intelligence officials have said. “We will work together for many years to come,” Trump added. Read more from Nick Wadhams and Margaret Talev.

U.S.-German Spat: The Trump administration escalated its dispute with Germany over the transfer of a terror suspect sought by the U.S., with American officials berating their German counterparts in a private meeting and Acting AG Whitaker issuing an unusual rebuke of an ally for sending the man to Turkey. Senior U.S. and German officials had a heated argument over the fate of Adem Yilmaz, a Turkish man convicted of belonging to a terrorist cell, after he was deported to Turkey despite a U.S. extradition request. The dispute is the latest sign of mounting strain between the two allies under Donald Trump’s presidency.Read more from Nick Wadhams.

Immigration: Trump said in his State of the Union address Tuesday that immigration enriches the country and “I want people to come into our country, in the largest numbers ever, but they have to come in legally,” he said. Trump yesterday reiterated that he meant what he said. “Yes, because we need people in our country because our unemployment numbers are so low,” he said in an interview with regional news organizations after he was asked whether he favors a change in policy to expand legal immigration, according to a reporter for The Advocate of Louisiana.

Immigration opponents are a mainstay of Trump’s political base, and the president’s State of the Union aside caught their attention.  Read more from Sahil Kapur.

Meanwhile, Congress is taking another go at legislation to reduce green card wait times for skilled Indian immigrants as the deadline nears to reach a broader immigration deal and avoid another government shutdown. Reps. Zoe Lofgren (D-Calif.) and Ken Buck (R-Colo.) plan to reintroduce legislation Feb. 7 that would eliminate per-country caps on employment-based green cards. A similar bill in the last Congress was supported by tech giants such as Microsoft, Amazon and IBM, which have sponsored such workers for green cards. Read more from Laura D, Francis.

Movers & Shakeups

Job Training Office Vacancies: The federal office tasked with carrying out the Trump administration’s expansion of job training and apprenticeship programs is struggling in the face of staff and leadership vacancies, sources familiar with Labor Department operations told Bloomberg Law. The Employment and Training Administration, a DOL subagency with a budget of more than $9 billion, has been without a confirmed director for two years. Trump’s pick to lead it, John Pallasch, is still awaiting confirmation in front of the Senate after first being nominated in April 2018.

The ETA is responsible for monitoring nationwide apprenticeship programs and for issuing various work visa programs—both major policy targets for Trump and Secretary Acosta. The absence of steady hands to guide policy and staff on a daily basis, however, may be putting these efforts at risk, sources said. It’s not just Pallasch’s vacancy that’s causing concern. Staffers across the ETA are getting moved around causing at the very least confusion on who is in charge of what, and at the most a loss of experienced staff.

Trump Resubmits Tax Court Picks: Trump formally renominated Travis Greaves, Mark Van Dyke Holmes, Courtney Dunbar Jones, and Emin Toro to serve as judges on the U.S. Tax Court, the White House announced yesterday. Each of the candidates was previously nominated last year for a 15-year term on the court, but the Senate didn’t confirm their appointments before the end of last Congress. That required the White House to start over and resubmit the nominations. Read more from Robert Lee.

To contact the reporter on this story: Zachary Sherwood in Washington at zsherwood@bgov.com

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