What to Know in Washington: Democrats Up Trump Legal Threats

The confrontation between House Democrats and the Trump administration intensified Thursday, with two congressional committees and the White House accusing each other of ignoring the Constitution and legal precedent.

Intelligence Committee Chairman Adam Schiff (D-Calif.) said the Justice Department defied a subpoena for “counterintelligence and foreign intelligence” material uncovered in Special Counsel Robert Mueller’s investigation. Schiff set a new May 22 deadline for the Trump administration to reconsider its refusal to cooperate with investigations that involve President Donald Trump.

Separately, House Judiciary Chairman Jerrold Nadler (D-N.Y.) yesterday accused the Trump administration of defiance that is “unprecedented and unsupported by law, history and practice.” Nadler was responding to White House Counsel Pat Cipollone’s assertion that the committee had no right to documents related to the Mueller inquiry.

“As a threshold matter, your failure to comprehend the gravity of the special counsel’s findings is astounding and dangerous,” Nadler said of Cipollone’s argument that the committee should end its investigation into obstruction of justice, public corruption and abuses of power.

There was no immediate response from the White House to Nadler’s letter.

These dramatic exchanges bring the executive and legislative branches into a conflict that Nadler previously warned could be approaching a “constitutional crisis.” While some Democrats say further investigations are needed, others say the president has already committed offenses that merit articles of impeachment.

Earlier yesterday, Speaker Nancy Pelosi (D-Calif.) approached the question of impeachment with caution, saying she trusts her committee chairmen to exercise their constitutional responsibility for oversight.

She laid out investigative approaches that included both negotiated agreements for material, or “friendly subpoenas,” and “not-so-friendly subpoenas” that carry consequences for noncompliance. She said Trump’s refusal to cooperate “gives reasons every day for impeachment.”

“I don’t want to impeach,” Pelosi said at a Georgetown Law School event. “But you see the point: you’re on a path, oversight, investigation” that could lead to Democrats citing impeachment as a justification in court to obtain the documents they seek. Read more from Billy House.

Photographer: Chip Somodevilla/Getty Images
Nadler (D-NY) takes a turn reading all 448 pages of the Mueller Report on Thursday.

Trump’s Taxes: Meanwhile, Treasury Secretary Steven Mnuchin faces a deadline today of 5 p.m. to comply with a subpoena to hand over Trump’s tax returns. But, the pressure is really on House Ways and Means Chairman Richard Neal (D-Mass.), who has to decide how ferociously to respond to the Treasury secretary’s all-but-certain refusal.

Neal, along with other House leaders, is determining how best to investigate a White House that is blocking them at every turn. The power struggle has also forced Neal to try to forge a path between his legal argument and the overheated politics that go with inquiries involving Trump. Neal has asked Mnuchin and IRS Commissioner Charles Rettig several times to hand over six years of tax returns for Trump and his business entities. Neal cited a 1924 law that allows the chairmen of the congressiona l tax committees to review the returns of any taxpayer.

Mnuchin has repeatedly argued that Neal didn’t have a legitimate legislative purpose for seeing Trump’s private documents and accused Democrats of “weaponizing the tax code.” But for the first two requests, he didn’t flat out refuse, saying only he needed to consult with the Department of Justice. Read more from Laura Davison.

Oversight Panel to Probe Trump ‘Secret’ Waivers: House Oversight Chairman Elijah Cummings (D-Md.) asked the White House and federal agencies for information about the administration’s use of waivers “to allow political appointees to continue working on matters they worked on before entering government.” The Office of Government Ethics issued a directive in 2017 requiring all agencies, including the White House, to provide documents about ethics waivers given to political appointees, the committee said in a news release. Read more from Kim Chipman.

Flynn-Influence Voicemail to be Disclosed: A U.S. judge ordered the release of a transcript of a voicemail from someone who tried to dissuade former National Security Adviser Michael T. Flynn from fully cooperating with Special Counsel Robert Mueller’s investigation of Russian meddling in the 2016 election. While the identity of the caller wasn’t disclosed, Flynn told Mueller’s team he was contacted by individuals linked to the Trump administration and Congress before and after he pleaded guilty to lying to prosecutors, court records sho w. Read more from Andrew Harris.

Also On Lawmakers’ Radars

Retooling Retirement Bundle Ahead of Vote: House leaders are stripping out language from a bipartisan retirement tax bill that would have benefited home schoolers in anticipation of finally bringing the measure to the floor next week. The Ways and Means-passed bill had been hung up the past few weeks over allowing education savings account holders to use tax-free funds to offset home schooling costs and other elementary and secondary school expenses.

Ways and Means Chairman Richard Neal is scheduled to present an amendment to the House Rules Committee on Monday that cuts those controversial provisions—but not the tax breaks for apprenticeships or educational loans—and provides additional relief to underage beneficiaries of assorted payouts. Read more from Warren Rojas.

Wyden Open to Dropping Free File Provision: Removing a controversial provision from a stalled tax administration bill may be a good path forward, Senate Finance Committee ranking member Ron Wyden (D-Ore.) said. A provision in the House-passed bill (H.R. 1957) codifying the IRS Free File program has brought the bill’s progress to a halt in the chamber. Democrats are concerned the provision could keep the IRS from ever offering its own free-filing service, a concern that deepened as ProPublica released a series of stories revealing how tax preparation companies shield free options from consumers. Read more from Robert Lee.

House Passes ACA, Drug Package: A package of bills to bolster Obamacare and reduce drug prices passed the House over objections from Republicans. The vote late yesterday was 234 to 183 and mostly along party lines. House Democratic leaders packaged together (H.R. 987) several measures with bipartisan support that look to spur the creation of more low-cost generic drugs with those only supported by Democrats that counter Trump administration changes to the Affordable Care Act’s individual health insurance marketplaces. Read more from Alex Ruoff.

Senate Panel Takes Steps to Address Election Threats: Bipartisan proposals written in response to Special Counsel Robert Mueller’s warnings of foreign hacking of U.S. elections were easily approved by the Senate Judiciary Committee yesterday, though there’s no guarantee they’ll get to the Senate floor. The two-prong strategy approved by the panel calls for changes to eject foreign agents found interfering in elections and establish a federal criminal penalty to help prosecutions of hacking into state voting systems. The bills advanced on voice vote s.

Chairman Lindsey Graham (R-S.C.) called the bills “a step in the right direction but by no means a comprehensive solution to the problems we face with hacking and attacking our election system.” Graham said the systematic Russian efforts outlined by Mueller could easily be repeated and also copied by other adversary nations. His views were echoed by Democrats, who said the bills do nothing to address foreign influence via dark money channels or ads on Facebook, for instance. Read more from Nancy Ognanovich.

Trump at Limits of Foreign Policy Pressure

In two years as president, Trump built a foreign policy strategy on applying as much pressure as possible on enemies — and even some allies — to make them bend to America’s will.

Venezuela, North Korea and Iran have all been targets of the administration’s “maximum pressure” approach. Under Trump, U.S. sanctions were deployed to notable effect: Venezuela’s battered economy is more isolated than ever, Iran has seen oil sales plummet and North Korea has struggled as fuel and electricity shortages crimp output and food shortages loom.

Yet no adversary has buckled. So, short of war, what does the U.S. do now? Nick Wadhams and Glen Carey try to answer that question.

2020 Impact: Trump is wary of drawing the U.S. into a war with Iran, in part out of concern that an armed conflict with the Islamic Republic would imperil his chances at winning a second term, according to people familiar with the matter. There is division within the administration over the approach to Iran, some of the people said. Meanwhile, the president is cognizant that he was elected in part on promises to withdraw the U.S. from Mideast wars — not start new ones, they said. Read more from Jennifer Jacobs and Margaret Talev.

Congress’s Role: Pelosi warned the Trump administration against taking military action in Iran without authorization from Congress. “The responsibility in the Constitution is for Congress to declare war,” Pelosi said yesterday. “So I hope that the president’s advisers recognize that they have no authorization to go forward in any way.” Pelosi said that the 2001 Authorization for the Use of Military Force — or AUMF — enacted by Congress after the Sept. 11 terrorist attacks would not cover actions taken against Iran. Read more from Daniel Flatley

Politics & Elections

Democrats Shift to Seize on Supreme Court: Democrats are attempting to turn the Supreme Court into a campaign issue as they confront Trump’s success at reshaping the federal judiciary with young, conservative judges and the prospect that abortion rights are close to being eliminated. It’s a shift after decades of GOP candidates rallying their voters with promises to reshape the courts in a backlash to Warren Court rulings of the 1960s, and Roe v. Wade in 1973, the landmark abortion-rights ruling. That dynamic lasted through the 2016 election, when Trump won over skeptical evangelicals by vowing to pick conservative justices who would allow states to outlaw abortion.

The 2020 Democratic presidential contenders are increasingly bringing up the the courts when addressing voters. They’re egged on by activists still furious about Senate Majority Leader Mitch McConnell’s (R-Ky.) refusal to let President Barack Obama fill an open Supreme Court seat in 2016 after the death of Justice Antonin Scalia. That enabled Trump to solidify a 5-4 conservative majority. Read more from Sahil Kapur.

Buttigieg Says Party Must Offer New Leadership: Democratic presidential candidate Pete Buttigieg said the U.S. is going through a period of “tectonic change” and needs a new generation of leadership to counter the cynicism and resentment that’s currently driving much of the political debate. The 37-year-old mayor of South Bend, Indiana, said Trump’s victory was a symptom of unease among Americans, and that Democrats must offer more than a restoration of the pre-2016 status quo.

“A promise to return to normal ignores that normal hasn’t been working for a lot of people,” Buttigieg said in an address yesterday to the City Club in Chicago. It was a pointed, if indirect, contrast to the message of 76-year-old former Vice President Joe Biden, the current frontrunner in the race. Read more from Emma Kinery.

Movers and Shakeups

Labor Staff: Two Labor Department aides are considered the leading candidates to replace departing Chief of Staff Nicholas Geale as the secretary’s top adviser, a source close to the secretary told Bloomberg Law. DOL Deputy Chief of Staff Molly Conway and Alison Kilmartin, the chief of staff at the department’s policy office, are the two favorites for the influential post, said the source, speaking on condition of anonymity to discuss internal deliberations. Other sources familiar with the situation also id entified Conway and Kilmartin as the top contenders for the promotion, along with acting assistant secretary for policy Jonathan Berry. Read more from Ben Penn.

Trump’s Deregulation Architect Leaving: A top aide to Treasury Secretary Steven Mnuchin who led the Trump administration’s push to cut regulations for Wall Street is quitting, according to people familiar with the matter. Craig Phillips will leave the agency next month, said the people, who asked not to be named because his departure hasn’t been announced publicly. As a counselor to Mnuchin, he took the lead on several domestic financial policy initiatives, including the rule rollback and developing plans for freeing mortgage giants Fannie Mae and Freddie Mac from federal control. Read more from Robert Schmidt and Saleha Mohsin.

Trump Pick Takes Reins at Pension Protection Agency: Former businessman Gordon Hartogensis is now officially in charge of the Pension Benefit Guaranty Corp. A press release from the federal pension insurer yesterday describes the brother-in-law of Senate Majority Leader Mitch McConnell (R-KY.) as “an entrepreneur, investor, and technology sector leader with experience in finance, asset management and software development.” He most recently ran a family trust. Read more from Warren Rojas.

Iraq Ambassador Confirmed: The Senate confirmed by voice vote the nomination of Matthew Tueller to be the U.S. ambassador to Iraq, Ben Livesey reports.

What Else to Know Today

Trump’s Export Blacklist: The Trump administration said restrictions on Huawei announced this week will take effect today, placing China’s largest technology company and scores of its affiliates around the world on a blacklist that curtails its access to critical U.S. suppliers. In a Federal Register notice released yesterday, the Commerce Department said the curbs apply to Huawei and 67 of its affiliates scattered across 26 countries from Germany to Madagascar. They were mainly private subsidiaries that the networking giant owns and uses to trade or conduct business in different cities or countries, and hence prime targets should the White House decide to pursue export restrictions. Read more from Shawn Donnan.

Farmer’s Fears: Trump’s escalation of the trade war with China without a concrete plan to aid farmers could worsen the rising stockpiles of U.S. crops such as soybeans and depress commodity prices even after the current dispute is resolved. The Trump administration is signaling that the aid package it’s assembling would make payments to farmers based on their current crop production, raising concern among analysts and some lawmakers. The administration’s signals on trade aid has sowed confusion and the sense that a $15 billion or even $20 billion program with major ramifications for agriculture and commodity markets is being improvised on the fly. Read more from Mike Dorning.

California Threatens Cars: A top California environmental regulator is threatening to enact tough, new pollution rules — including an unprecedented ban on cars burning petroleum-based fuels — in response to a Trump administration plan to relax vehicle emission standards. California Air Resources Board Chairman Mary Nichols said the state would be forced to pursue “extreme” requirements to offset the uptick in pollution that would be unleashed if federal vehicle emission and fuel economy standards are weakened. Read more from Jennifer A. Dlouhy.

Trump Kills $929 Million for California Train: The Trump administration officially canceled $929 million in federal grants earmarked for California’s ambitious high-speed rail project, escalating tensions between the federal government and the most-populous U.S. state. Federal Railroad Administrator Ronald Batory said in a letter yesterday to Brian Kelly, the CEO of the state agency running the project, that California has failed to show progress and meet requirements under the agreements for the funds. Romy Varghese has more.

Trump’s Business Earnings Decline: Trump appears to have earned less from his vast financial empire last year as licensing royalties, rents and golf revenues fell at some properties, his financial disclosure shows. Trump’s income was at least $421.3 million, according to the document posted yesterday by the Office of Government Ethics, down from $452.6 million he reported the year before. The disclosures, which provide incomes and the value of assets in broad ranges but aren’t definitive figures, are the latest glimpse of the president’s personal finances. Read more from Shahien Nasiripour and Bill Allison.

Trump Pipeline Push No Help for N.Y. Project: Trump may need more than an executive order to speed up approval of natural gas pipelines like the $1 billion Williams Cos. project that was denied a key New York permit yesterday. Trump last month signed an order aimed at short-circuiting state regulators who have held up gas lines by refusing necessary permits. The move came as the White House spars with Democratic states over the conduits, which have increasingly been targeted by environmentalists concerned about fossil fuels’ contribution to climate change. But it’s unlikely the new White House directive will have much impact on the type of review that snagged Williams’ Northeast Supply Enhancement project, analysts say. Rachel Adams-Heard has more.

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