What to Know in Washington: GOP Talks Budget, Debt Ceiling Deal

Senate Republicans are urging the White House toward a government spending and debt limit deal that House Democrats can accept, as lawmakers cast an increasingly nervous eye toward looming fiscal deadlines.

Senate Majority Leader Mitch McConnell (R-Ky.) yesterday convened a high-stakes meeting with Treasury Secretary Steven Mnuchin, Senate Appropriations Chairman Richard Shelby (R-Ala.), acting White House Chief of Staff Mick Mulvaney, and other Republicans to create a deal that would avert another government shutdown and appease market uncertainties about a debt ceiling standoff. This unified plan would be their opening offer in talks with congressional Democrats.

“We are making progress on where the Senate wants to go and the White House wants to go,” Shelby said as he left the meeting. He said Mnuchin offered ideas that Republicans will take to Democratic leaders.

Mnuchin said the White House “preference’’ is to include the debt ceiling in the deal Congress must strike to fund the government.

Lawmakers were optimistic about a budget deal despite the challenges. But any agreement may still be scuttled by President Donald Trump, even though he has the most to lose from the economic fallout of a debt default or shutdown heading into the 2020 election. With just over three months until the Sept. 30 end of the current fiscal year, the annual budget process has once again gotten off to a slow start. Read more from Erik Wasson.

Photographer: Andrew Harrer/Bloomberg
Senate Majority Leader Mitch McConnell

Late Night on Capitol Hill: The House worked until just after 4 a.m. this morning, voting on amendments to its four-bill spending package. The chamber made it through a chunk of the amendments, though most made relatively small changes in funding levels. The House will resume consideration of many more amendments today and will continue considering the measure after the last votes for the week this afternoon. Read more on those amendments:

Meanwhile, the House Armed Services Committee worked through the night on its fiscal 2020 defense authorization legislation, and finally adopted the measure shortly before 7 a.m.

Debate over military policy for the year starting Oct.1 has been punctuated by some controversial issues such as the fate of the Guantanamo Bay prison, the Pentagon’s role in border assistance and building barriers at the Southwestern border and the U.S. nuclear arsenal. Roxana Tiron and Travis J. Tritten have the latest.

Probing the White House

Panel Votes to Hold Barr, Ross in Contempt: A House panel voted yesterday to hold Attorney General William Barr and Commerce Secretary Wilbur Ross in contempt of Congress for withholding documents on plans to add a citizenship question to the 2020 census. Trump yesterday claimed executive privilege over the material.

The Oversight House and Reform Committee’s 24-15 vote for the civil contempt resolution offers Chairman Elijah Cummings (D-Md.) the option to file a lawsuit to enforce the panel’s subpoenas for the records. Rep. Mark Meadows (R-N.C.) warned colleagues that their vote was “a significant moment in history” in holding two Cabinet-level officials in contempt. Cummings said he didn’t disagree. “We must protect the integrity of the census,” he said.

Congressional Democrats are pursuing what they call evidence that the Trump administration’s bid to include the citizenship query was designed to suppress response rates of immigrants and non-citizens. That could reduce some states’ number of congressional seats, Electoral College clout and federal funds. Chris Strohm and Billy House have more.

Hicks Agrees to Closed-Door Interview: Hope Hicks, the former White House communications director, has agreed to be interviewed by the House Judiciary Committee in its investigation of Trump, Chairman Jerrold Nadler (D-N.Y.) said. Hicks, who also worked on the Trump campaign, agreed on a closed-door appearance on June 19, with a transcript of the proceeding to be released later, Nadler said in a statement. Read more from Billy House.

Also Happening on the Hill

Blue Water Benefits Bill Heads to Trump: The Senate yesterday cleared a bill that would expand a presumption of benefits to Blue Water Navy veterans who served on deep water ships off the coast of southeast Asia. The move came after a recent Justice Department decision to not appeal a court ruling to extend disability compensation benefits to Vietnam-era Navy veterans for illnesses that are linked to Agent Orange exposure. The House passed the measure in May on a 410-0 vote.

Veterans who had “boots on the ground” already receive these benefits, but the Veterans Affairs Department has opposed attempts to expand such coverage to members who served on ships miles off the coast, Megan Howard reports.

Tax Extenders: If liberal and conservative advocacy groups can agree on anything, it’s that the suite of more than three dozen or so corporate tax breaks that have expired over the past two years should stay dead. Even so, there’s a bipartisan push among some lawmakers to renew them—even if that push will likely fail.

Congress has re-upped the temporary tax breaks in the past without much commotion, and many of the breaks still have wide support in both parties. But this time, fallout from the 2017 tax overhaul, reluctance in the House at more temporary breaks and a dwindling calendar of working days in Congress could lessen the enthusiasm for another renewal. Joe Light takes a closer look at the effort on tax extenders.

Panel Advances 9/11 Victims, Responders Bill: Victims and first responders of the Sept. 11 terror attacks could continue receiving compensation through fiscal 2090 under a bill approved yesterday by the House Judiciary Committee. The bill, approved on a voice vote, extends the September 11th Victim Compensation Fund and allows people to file claims through October 2089. The bill would also require that anyone whose claim was reduced due to insufficient funding be paid for the full amount. The measure, which was sponsored by Rep. Carolyn Maloney (D-N.Y.) and has over 300 cosponsors, now moves to the full House. Read more from Elizabeth Elkin.

Third Black Trump Judge Confirmed: The Senate confirmed five more of Trump’s judicial nominees yesterday, including one of his few black appointees. Fulfilling his campaign vow to reshape the federal judiciary, Trump has now put 119 judges in lifetime seats. The newly confirmed judges include Rodney Smith to the U.S. District Court for the Southern District of Florida. Smith is the third of Trump’s black judicial appointees. The second, Eastern District of Virginia Judge Rossie Alston, was confirmed Monday. Read more from Patrick L. Gregory.

Flood Insurance Bill Clears Panel Unanimously: A bill to revamp the National Flood Insurance Program cleared a House panel yesterday. The House Financial Services Committee voted 59-0 on approving H.R. 3167 to reauthorize the federal insurance program for five years. Chairwoman Maxine Waters (D-Calif.) said getting this many lawmakers on board with the bill required her to make some sacrifices, such as removing a provision to cancel the program’s $20 billion in debt. Read more from David Schultz.

Conservation Funding Wins GOP Backing: A plan to effectively double funding for the Land and Water Conservation and remove it from the uncertainties of an annual appropriations process cycle is gaining some House Republican support, but the measure, which is strongly backed by environmental groups, will have to overcome resistance from powerful appropriators who’ve wielded control of the purse strings for the fund, which is authorized at $900 million a year and funded from offshore oil and gas revenues. Read more from Dean Scott.

Juul Scrutinized in Teen Vaping Investigation: A House Oversight and Reform Subcommittee is seeking records from Juul Labs as part of an investigation into e-cigarette use by teenagers, according to a letter from the subpanel’s chairman to the company’s chief executive. Rep. Raja Krishnamoorthi (D-Ill.) in a letter to CEO Kevin Burns, asked for documents of the firm’s marketing strategy and advertising campaigns, as well as internal communication on the impact on minors. Krishnamoorthi said Juul is a “primary cause” of the youth vaping issue. A Juul spokesman said the company will cooperate with the investigation. Read more from Ellen Huet.

Hearings Set for FEMA, Other DHS Picks: Trump’s nominee to lead FEMA, as well as two other top jobs at the Homeland Security Department, are slated to be considered by the Senate Homeland Security and Governmental Affairs panel next Wednesday after completing their nomination hearings yesterday. Sen. Gary Peters (D-Mich.) said Democratic members still had some questions for the nominees, but that the committee was trying to move to fill the widening number of vacancies at the department following a White House shakeup in April.

The committee will consider Jeffrey Byard to be the administrator of FEMA, Chad Wolf to be DHS’ under secretary for strategy, policy and plans, and Troy Edgar to be the department’s chief financial officer. In yesterday’s hearing, Byard said his top priority would be ensuring the well being of FEMA’s workforce and reducing the complexity of applying for aid. Wolf said he’d be focused on border security, domestic terrorism and cybersecurity, Michaela Ross reports.

Elections and Politics

Trump Says He’d Accept Foreign Help in 2020: Trump said he would want to hear damaging information about a political opponent in the 2020 presidential election, even if it were offered by a foreigner—a scenario that evokes some of the controversial behavior at the center of the Mueller investigation. “I think I’d take it,” Trump told ABC News’s George Stephanopoulos in an taping yesterday. Asked whether he would accept information from foreigners or provide it to the FBI, Trump said: “Maybe you do both.”

“I think you might want to listen, there isn’t anything wrong with listening,” said Trump, adding that if someone from a country like Norway offered information on his opponent, he would “want to hear it.”

Trump’s remarks come despite the years-long federal investigation into whether his campaign colluded with Russia to coordinate the release of damaging emails hacked from the Democratic National Committee. Mueller uncovered numerous Russian attempts to interfere in the 2016 election, but ultimately concluded that there was not enough evidence to establish Trump or his campaign conspired in those efforts. Read more from Justin Sink.

Democrats’ 2020 Odds Clouded by Party Finances: The Democratic National Committee has a money problem. And that could hurt its nominee’s chances of beating Trump in 2020. In the first four months of 2019, the party spent more than it raised and added $3 million in new debt. In the same period, its Republican counterpart was stockpiling cash.

Democratic donors overall have been generous, pouring three times as much into their party’s presidential and congressional campaigns in the first quarter of the year than Republicans gave to their national office-seekers. But the DNC isn’t benefiting from the same donor enthusiasm, putting at risk its ability to help the nominee take on Trump, donors said. Read more from Bill Allison.

Young Republicans Care About Climate: Nearly three-quarters of Republican voters think that the GOP is hurting itself with younger voters over its stance on climate change, a memo circulating the Hill says. Over half of Republican voters under 40 are more concerned about the climate now than they were a year ago, according to recent polling from Luntz Global Partners, a firm led by Republican strategist Frank Luntz. The memo quoting the figures was sent to all Republican offices on Capitol Hill yesterday. Read more from Tiffany Stecker on the survey.

What Else to Know

Trump to Host Trudeau Next Week: Trump is set to host Canadian Prime Minister Justin Trudeau next week as the American president’s tariff threats continue to cloud the outlook for the countries’ trade deal with Mexico. Trudeau will visit Washington on June 20 and is tentatively scheduled to meet Trump that day, according to a Canadian official who spoke on condition of anonymity because the visit hasn’t been announced. The White House didn’t immediately respond to a request for comment. Trade and China will dominate the agenda , the official said. Read more from Josh Wingrove and Justin Sink.

Tankers Damaged Near Hormuz: The U.S. Fifth Fleet said two oil tankers were damaged in an incident near the Strait of Hormuz that one of the ships’ operators described as a suspected attack. Oil prices surged. The development will inflame already-rising political tensions in the region weeks after four vessels, including two Saudi oil tankers, were sabotaged in what the U.S. said was an Iranian attack using naval mines. Tehran denied the charge.

The Bahrain-based Fifth Fleet said it received two separate distress signals at 6:12 a.m. and about 7:00 a.m. local time. “U.S. Navy ships are in the area and are rendering assistance,” Commander Josh Frey, a spokesman, said. He couldn’t confirm reports that one of the attacks was caused by a torpedo. Iran said it has rescued 44 sailors. Read more from Verity Ratcliffe, Anthony DiPaola and Bruce Stanley.

Turkey Urges U.S. to Take Weapons From Kurds: Turkey is pushing the U.S. to collect heavy weapons it supplied to Kurdish militants in Syria, a sticking point in a joint effort to create a “safe zone” across a section of northern Syria, according to a senior security official in Turkey. Relations between the two NATO members remain strained over Turkey’s decision to buy a Russian missile-defense system, but they are trying to keep the issue of a safe zone—which would be off limits to U.S.-backed Kurdish troops—walled-off from the tensions to sustain the alliance between Washington and Ankara. Read more from Selcan Hacaoglu.

Trump‘s Deregulatory Effort: Phase 1 of Trump’s environmental deregulation agenda lasted two largely unsuccessful years. One by one, his climate proposals were crushed by legal challengers who convinced judges that the administration had failed to abide by established policy making procedures.

Trump has so far attempted to deregulate by cutting corners: postponing compliance dates on Obama-era norms or suspending rules “pending reconsideration.” A new wave of finalized deregulatory measures is set to roll out beginning later this month, including guidelines for vehicle emission standards, clean water policies, and raised caps for greenhouse gas emissions from power plants. This time around, the president and his team seem to have discovered a secret weapon that may threaten the pristine record earned by their environmental opponents: playing by the rules. Read more from Kartikay Mehrotra.

Trump Offers to Negotiate for VA: Trump offered to help the Department of Veterans Affairs negotiate the acquisition of a new Johnson & Johnson drug to treat depression, a treatment he believes could result in an “incredible” drop in veteran suicide. “I think they’ll be very generous with you,” Trump told Veterans Affairs Secretary Robert Wilkie during a meeting yesterday on opioid abuse at the White House. “And if you like, I’ll help you to negotiate.” Read more from Justin Sink.

Trump Wishes ‘Good Luck’ to Former Adviser Flynn and New Lawyer: Trump offered well wishes to his former national security adviser Michael Flynn, who has brought on conservative firebrand Sidney Powell as his lawyer ahead of his sentencing for lying to investigators in the Russia probe.

“General Michael Flynn, the 33 year war hero who has served with distinction, has not retained a good lawyer, he has retained a GREAT LAWYER, Sidney Powell. Best Wishes and Good Luck to them both!” Trump said on Twitter. The comments mark Trump’s latest broadside against the FBI and federal investigators who’ve brought charges against Flynn and other Trump associates as part of Special Counsel Robert Mueller’s investigation. Read more from Terrence Dopp.

State Enforcers Advance Tech Platforms Inquiry: States are advancing a broad inquiry into whether the biggest U.S. technology platforms are violating antitrust and consumer protection statutes, adding to the scrutiny of the firms by federal enforcers and lawmakers. A group of state attorneys general said at a workshop hosted by the FTC in Omaha yesterday that they are examining a wide range of practices, such as data collection, digital advertising, and innovation. Read more from Ben Brody.

Huawei Urges FCC to Stay Out of Fight: Huawei Technologies, already under siege by the White House, urged the Federal Communications Commission not to join the fight yesterday. The FCC last year gave its preliminary approval for a proposal from Chairman Ajit Pai to prohibit mobile service providers from spending federal subsidies on equipment made by companies deemed a national security threat. The FCC hasn’t scheduled a final vote on the measure, but Huawei said it would file a 10-page response urging the agency to abandon the idea. Read more from Todd Shields and Edvard Pettersson.

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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