What to Know in Washington: Mnuchin’s Role in Trump Taxes Fight

Steven Mnuchin’s job as Treasury secretary is to protect the value of the dollar. Now, he’s also protecting the most sought-after documents in America: President Donald Trump’s tax returns.

Mnuchin today is expected to hold off on House Democrats’ request to release Trump’s returns. It’s the first time a Treasury chief has had to juggle concerns about releasing a president’s personal information with other parts of the job: overseeing the $16 trillion Treasuries market, maintaining economic pressure on global threats, such as North Korea, and leading economic diplomacy with international counterparts.

Today’s response will be Mnuchin’s third attempt to stave off House Ways and Means Chairman Richard Neal’s (D-Mass.) request for six years of Trump’s personal returns, as well as those of the Trump Organization. This time, he’ll be backed with a Justice Department legal review of the request. At two congressional hearings in April that were supposed to be focused on the budget, Democrats focused on the tax-return fight.

Mnuchin’s more substantive economic plans risk being consumed by the partisan fight over the tax returns. Mnuchin and Congress need each other if they hope to achieve their goals on housing finance reform and an upgrade to U.S. infrastructure.

“This is probably one of the most important decisions I will make,” Mnuchin told reporters last week. “It’s not just about a congressional investigation into the president’s tax returns — it’s about my responsibility to follow the law.” Read more from Saleha Mohsin.

Photographer: Alex Wroblewski/Bloomberg

Trump Warns as Mueller Testimony Tentatively Set

Trump over the weekend looked to forestall perhaps the most keenly-awaited event in Washington in decades — a congressional hearing with Special Counsel Robert Mueller — saying: “Bob Mueller should not testify. No redos for the Dems!”

The president’s comment, in a pair of tweets yesterday, came hours after a Democratic member of the House Judiciary Committee said that a “tentative date” of May 15 had been set for testimony by the former FBI director to discuss his investigation into the 2016 election.

“We hope the special counsel will appear,” Rep. David Cicilline (D-R.I.), said on “Fox News Sunday.”

“We think the American people have a right to hear directly from him.”

Democrats have been eager for Mueller to testify since last month, when his report on Russian election interference and Trump’s subsequent actions to stall the investigation became public. An appearance by Mueller, whose public utterances during the two-year investigation consisted of court filings, would promise to be a dramatic day in the nation’s capital, with Democrats pushing him to expand on his inability to exonerate Trump on obstruction of justice and his differences with Attorney Genera l William Barr over the presentation of his findings.

Cicilline said a Mueller representative has agreed to the appearance, “but obviously until the date comes, we never have an absolute guarantee.” In a later tweet, the lawmaker clarified that the committee had proposed the date “but nothing has been agreed to yet.” Read more from Ben Brody.

Cohen Begins Prison Term: Trump’s longtime fixer Michael Cohen is set to report today to the federal prison in Otisville, New York — marking a steep fall for a man who a year ago seemed capable of bringing down his former boss. Cohen, once a combative New York lawyer who bullied Trump’s enemies and paid money to silence a porn star, was an intimate witness to Trump’s business dealings and his internal campaign decisions. He’d snapped photos of confidential documents with his mobile phone and recorded their private conve rsations. Read more from Shahien Nasiripour and Bob Van Voris.

Also Happening on the Hill

Drug Price, Obamacare Plans: Democrats, planning to put a series of health-care bills onto the House floor in coming weeks, aim to pressure Republicans by bundling some drug-pricing measures that conservatives support with moves to shore up Obamacare.

That would force some Republicans into the tough decision of opposing measures to reduce prescription drug prices, which both parties have promised to do, to avoid supporting a bill bolstering Obamacare’s individual health insurance markets, according to a senior Democratic aide. It’s also partly a practical move as the drug-pricing legislation would be used to offset the expense of the Obamacare-related bills, the aide said. Alex Ruoff previews the coming floor action.

Climate Issues Possible in Tax Extenders, Highway Bill: Senate Democrats promised in March that they would try to inject climate change across any and all legislation they could that needs 60 votes. They are likely to score their biggest victories in two must-pass bills in the 116th Congress: a tax “extenders” package, in which they hope to broaden credits to offshore wind and battery storage, and the next highway bill, where Democrats will push low-emissions transportation technologies and ways to make the nation’s transportation network more resil ient to climate change. Dean Scott has more on the effort.

Waters’ Plan for Wall Street: Rep. Maxine Waters (D-Calif.) hauled seven Wall Street bank chiefs to a hearing that had all the elements of a show trial: contrite executives, lecturing lawmakers and TV cameras to magnify every exchange. Yet the theatrics were secondary to changes the House Financial Services Committee chairwoman won even before the hearing began — Bank of America raised its minimum wage, Goldman Sachs set minority hiring goals and JPMorgan Chase vowed to stop financing private prisons. The policy wins show how Waters plans to wield power in a divided Congress as she oversees the banking industry and joins other Democrats in probing Trump’s finances.

Waters is planning to put even more CEOs in the hot seat. The committee is preparing a hearing with executives from U.S. regional lenders, she says. Another with executives from foreign banks is also on the table, she said. Read Austin Weinstein for more on Waters agenda.

Politics & Elections

Democrats Wonder Who Can Beat Trump: Joe Biden has vaulted to the front of the Democratic 2020 field by touting his electability. Now his rivals for the nomination want the party’s voters to know that they, too, have the chops to beat Trump. The other 21 Democrats in the field have been moving to adjust their strategy since Biden’s entry into the race on April 25 and are making the case directly to voters that they can take on the Republican president. Read more from Sahil Kapur.

Biden Courts Black Voters in South Carolina: Biden warned about threats to voting rights during his first campaign stop in South Carolina, where he’s counting on his long relationships with black leaders and his link to Barack Obama to carry him in the state’s crucial early 2020 Democratic presidential primary. “We’ve got Jim Crow sneaking back in,” the former vice president said Saturday at a rally in Columbia, comparing new restrictions on voting to the racial segregation laws of the past.

Biden capped his first week as an official candidate for the Democratic presidential nomination with a weekend trip to the Palmetto State. He pivoted from appeals to the working class in the Rust Belt to courting black voters, who typically comprise a little more that half of the Democratic electorate in South Carolina. Both groups will be key to Democrats’ chances of defeating Trump in 2020. Biden also spent part of Sunday morning at Brookland Baptist Church in West Columbia. Read more from Jennifer Epstein and Sahil Kapur.

Sanders Pitches to Iowa: Sen. Bernie Sanders (I-Vt.) proposed a broad overhaul of policies affecting small-town family farmers and the agriculture industry that would include a moratorium on new agribusiness mergers. Speaking to supporters in tiny Osage, Iowa — a farming community with about 4,000 residents — Sanders also promised to steer more farm subsidies away from bigger companies and to strengthen antitrust laws governing the industry. Read more from Laura Litvan.

North Carolina House Primary: Republican voters in the North Carolina district where the 2018 election was rescinded will soon pare a field of 10 candidates seeking to oppose the well-funded Democrat who ran last time. The primary is testing the clout of the National Association of Realtors, which has spent more to aid its preferred candidate than all 10 candidates have together raised in campaign funds.

Leigh Brown, who owns a real estate brokerage and helped run the group’s political operation, is the beneficiary of the $1.3 million independent spending campaign ahead of the May 14 election in the 9th District, Federal Election Commission reports show. With so many Republicans running, there’s a good chance no one will win the 30 percent needed to avoid a Sept. 10 runoff between the top two finishers. The special general election would then be held on Nov. 5. If no runoff is needed, the special general election would be held on Sept. 10. Read more from Greg Giroux and Andrew Ballard.

Enzi Won’t Run Again: Sen. Mike Enzi (R-Wyo.), chairman of the Senate Budget Committee, will not run for re-election in 2020, giving Wyoming an open Senate seat for the first time in more than a decade. Enzi, first elected in 1996, announced on Saturday in his hometown of Gillette that he’ll not run for a fifth term. In a series of Twitter posts, the senator said he wants to focus on policy priorities for the remainder of his term and also spend time with his grandchildren, not run another campaign.

Enzi’s seat is likely to remain in Republican hands in a deep-red state won by Trump by almost 46 percentage points. Potential replacements for Enzi could include Rep. Liz Cheney (R-Wyo.), who ran against him in the 2014 primary. Read more from Polina Noskova and Naomi Nix.

Movers & Shakeups

Trump Taps ICE Chief: Trump plans to nominate Mark Morgan, who led the Border Patrol during the final months of the Obama administration, as the next head of U.S. Immigration and Customs Enforcement. “I am pleased to inform all of those that believe in a strong, fair and sound Immigration Policy that Mark Morgan will be joining the Trump Administration as the head of our hard working men and women of ICE,” Trump tweeted yesterday. Morgan’s nomination comes as Trump looks to reshape his administration’s immigration te am amid a surge of migrant apprehensions at the southern border.

Pending Morgan’s confirmation, Matt Albence will serve as acting director, Trump said in a later tweet. “Matt is tough and dedicated and has my full support to deploy ICE to the maximum extent of the law!” Trump said. Read more from Justin Sink and Jennifer Jacobs.

Gauging Fed Interest: The White House asked former domestic policy adviser Paul Winfree if he was interested in joining the Federal Reserve Board of Governors, according to one person familiar with the matter. Winfree, who was deputy director of Trump’s domestic policy council until January 2018, has expressed interest in the job, the person said, requesting anonymity to discuss the matter. The White House reached out to Winfree a few weeks ago, the person said, before businessman Herman Cain and economist Stephen Mo ore withdrew from consideration for the two open seats on the Fed board. Read more from Saleha Mohsin.

Judicial Pick: Trump nominated newly minted federal district Judge Peter Phipps to a slot on the U.S. Court of Appeals for the Third Circuit in his latest round of judicial nominations. Phipps served for 14 years at the Department of Justice, most recently as senior trial counsel in the Federal Programs Branch of the Department of Justice’s Civil Division. Earlier in his career he had a three-year stint as an associate at the global law firm Jones Day. With his judicial appointments, Trump has flipped the Thir d Circuit from mostly Democratic-appointed judges to mostly Republican-appointed judges. Read more from Jessie Kokrda Kamens.

What Else to Know Today

U.S.-China Trade: Talks between the U.S. and China to resolve their year-long trade standoff appeared to be on life-support today, with Beijing struggling to respond to a pair of tweets by Trump that threaten an escalation of tariffs by the end of the week. China’s foreign ministry said that officials were still planning to travel to the U.S. for the next round of talks — but was unable to confirm when amid signs that a delay is now being considered. Meanwhile, a media blackout on Trump’s threat left investors baffled as stocks and the yuan tumbled on rumors that the trade war is now back on. Read more from Jenny Leonard, Steven Yang and Lucille Liu.

U.S. Deploys Carriers to Middle East: The U.S. said it’s sending an aircraft carrier strike group and bomber force to the Middle East to send an “unmistakable message” to the Iranian regime, citing “a number of troubling and escalatory indications and warnings” it suggested were linked to Tehran. “The United States is not seeking war with the Iranian regime, but we are fully prepared to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces,” National Security Adviser John Bolton said in a statement last night. Read more from Melissa Cheok.

North Korea: Kim Jong Un oversaw a live-fire military exercise Saturday that potentially included North Korea’s first ballistic missile launch since 2017, challenging Trump’s bottom line in nuclear talks. Kim watched as “large-caliber, long-range multiple-rocket launchers and tactical guided weapons” were fired off North Korea’s eastern coast Saturday, according to the official Korean Central News Agency. The state media’s report on Sunday was accompanied by a photo of what non-proliferation analysts said a ppeared to be the launch of a short-range ballistic missile. Read more from Jihye Lee.

Pompeo Says All Venezuela Options Open: Secretary of State Michael Pompeo said the U.S. has a full range of options available to help oust Venezuelan President Nicolas Maduro and didn’t rule out “ultimately” using military action on top of diplomatic, political and other pressure points. “We’re preparing those for him so that when the situation arises, we’re not flat-footed,’’ Pompeo said on ABC’s “This Week,” one of three scheduled appearances on Sunday morning political shows. Pompeo said yesterday that he can’t predict when Maduro will be forced out of office — whether days, weeks or months. But Maduro can’t feel good about his situation because while he might be ruling for the moment, he can’t govern, Pompeo said. Read more from Mark Niquette, Laura Litvan and Ben Brody.

U.S. Condemns Rocket Attacks on Israel: “The United States strongly condemns the ongoing barrage of rocket attacks by Hamas and Palestinian Islamic Jihad from Gaza upon innocent civilians and their communities across Israel,” a State Department spokesperson said in an emailed statement. “We support Israel 100% in its defense of its citizens,” Trump tweeted yesterday. “To the Gazan people — these terrorist acts against Israel will bring you nothing but more misery. END the violence and work towards peace – it can happen!” he wrote in a subsequent tweet.

Israel and Gaza Strip militants have now reached a truce after the most intense round of fighting since their 2014 war, and life on both sides of the border returned to normal. The violence, which claimed the lives of 25 Palestinians and four Israelis, had threatened to undo months of Egyptian-brokered efforts to reach a long-term truce. Read the latest from Ivan Levingston and Saud Abu Ramadan.

Trump Attacks Social Media: Trump retweeted several messages, including two by a well-known right-wing personality, and continued to assail what he says is bad treatment of “conservative thinkers” by companies such as Facebook. He later linked the social media giants with the Democratic Party. The president on Saturday also called for the “Radical Left Wing Media” to apologize for what he called “Russian Collusion Delusion.”

Facebook on Thursday said it was banning a number of contentious far-right personalities, including Infowars founder Alex Jones, Milo Yiannopoulos, a former editor of Breitbart News, and far-right activist Laura Loomer, for violating the social-media company’s policies on hate speech and promoting violence. Trump in March accused Facebook, Google and Twitter of favoring content from Democrats and blocking material from some Republicans. Read more from Ros Krasny.

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

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