What to Know in Washington: Talks Ahead on Immigration, Spending

Congress left Washington yesterday for a two-week break, but there’s plenty of dealmaking to do behind the scenes as lawmakers look to lay the groundwork for a busy spring agenda when they return.

Senate Majority Leader Mitch McConnell (R-Ky.) said yesterday he hopes to reach what so far have been elusive bipartisan breakthroughs on immigration, infrastructure and budget caps.

“It’s time to act” on immigration, he told reporters. “It’s long past due for us to sit down in a bipartisan basis and try to fix as much of this problem as we can.”

The situation on the U.S.-Mexico border “can’t be solved without legislation because the current asylum laws aren’t working out well, given the vast number of people who are coming here and seeking asylum,” McConnell added. He didn’t rule out including Democratic priorities like language addressing young undocumented immigrants who came to the U.S. as children and are known as dreamers.

“That’s what a negotiation produces, some kind of an understanding about how many of these different issues you can get enough agreement to solve,” he said.

McConnell said separately that talks have begun among his staff, Speaker Nancy Pelosi’s (D-Calif.) staff and the White House on a two-year deal on budget caps to clear a path for appropriations. Congress also must increase the debt limit later this year. McConnell said he’s still working to pass disaster relief, which has been mired in a dispute over how much to spend on Puerto Rico. Read more from Steven T. Dennis and Laura Litvan.

Photographer:Mark Wilson/Getty Images
Senate Majority Leader Mitch McConnell

White House Detainee Plan: Meanwhile, the Washington Post reported last night that White House officials proposed moving immigrant detainees to districts of President Donald Trump’s political opponents. The report said administration officials proposed moving detained immigrants to “sanctuary cities” in November and again in February amid the government shutdown. Pelosi’s district was among those officials wanted to target, according to the report.

The legal department at U.S. Immigration and Customs Enforcement rebuffed the idea as inappropriate, and a White House official and DHS spokesman told the Washington Post in a statement that the proposal is no longer under consideration.

Coming Up in Congress

ACA, Drug Bills on Radar for May: Bills to tackle rising drug prices and shore up Obamacare are headed for House votes in early May, Democrats said yesterday, as they seek to show they’re making progress on key priorities for voters. The slate of legislation coming to the House floor after the two-week spring recess have wide support among Democrats, and the drug-pricing bills also have backing from House Republicans.

However, the next steps on tackling prescription drug prices and health-care costs may prove tougher to find agreement on. “We have been very successful at extending coverage and the politics of that were tough,” Rep. Donna Shalala (D-Fla.) said. “The politics of containing costs is tougher, and it’s different politics because there are winners and losers when you’re talking cost containment.” Read more from Alex Ruoff.

Infrastructure Effort Could Reach $2 Trillion: Congressional Democrats are laying the groundwork for a broad infrastructure package that could reach $2 trillion in new investment, and they are hoping to make it a bipartisan push with a House vote by June or July, several members said during a retreat in Leesburg, Va.

House and Senate Democratic leaders will meet with Trump in the coming weeks, Pelosi and Senate Minority Leader Chuck Schumer (D-N.Y.) said at news conferences yesterday. However, Schumer wouldn’t engage in discussing potential pay-fors, like whether he’d support raising the gas tax. Read more from Shaun Courtney.

Disaster Aid: Trump yesterday encouraged Senate Republicans to negotiate a deal with House Democrats on disaster aid, aiming to end a standoff over money for Puerto Rico and bring a bill to the Senate floor soon after the two-week recess ends, Senate Appropriations Chairman Richard Shelby (R-Ala.) said.

Several senators met with the president yesterday and discussed “trying to make some overtures to the Democrats to settle this disaster package,” Shelby told reporters afterward. Trump made suggestions, instructed the White House and Senate Appropriations staff to coordinate, and encouraged Republicans to make an offer to Democrats, Shelby said.

Saudi Alliance Makes Khashoggi Issue ‘Tough’: The U.S. alliance with Saudi Arabia has made it difficult for Congress to find the right way to respond to the murder six months ago of columnist and government critic Jamal Khashoggi, McConnell said yesterday. “What clearly happened is outrageous and unacceptable. On the other hand, Saudi Arabia is an important ally against the Iranians, so it is a difficult problem to figure out exactly the most appropriate response.” Read more from Steven T. Dennis.

Trump’s Fed Policy in Spotlight

Cain’s Nomination: Trump has said privately that he knows Herman Cain will have trouble getting confirmed to the Federal Reserve Board, people familiar with the matter said yesterday. Some of Trump’s closest advisers want the FBI to finish its background check before he makes his decision on whether to formally nominate Cain, but others said they are aware of the misgivings of GOP senators and that they wouldn’t be surprised if Cain withdraws. The people spoke hours after Sen. Kevin Cramer (R-N.D.) said he wouldn’t back Cain if Trump nominated him to the Fed, and hopes the president will make another choice. Read more from Jennifer Jacobs and Laura Litvan.

Powell Talks to Democrats: Federal Reserve Chairman Jerome Powell asserted the central bank’s independence in remarks to Democratic lawmakers, telling them the Fed doesn’t consider political pressure in any way, according to two people in the room for the closed-door event. Powell’s appearance last night at the Democratic retreat in Leesburg came as many of the lawmakers gathered there have raised alarms about the Fed’s independence in the face of Trump’s frequent criticisms of the central bank.

Powell declined to discuss the president, according to the people, a comment that was greeted by applause. The chairman told the lawmakers that interest rates are at about the right level given current economic conditions and that the benefits of U.S. economic growth haven’t been as widely spread as the Fed would like. When asked about the potential nominations of Cain and conservative activist Stephen Moore to the Federal Reserve Board, Powell said he doesn’t discuss Fed nominations. Read more from Erik Wasson and Billy House.

Bloomberg QuickTake: What Trump Can (And Can’t) Do to Steer Fed Policy

Politics & Elections

Sanders Prepares Taxes: Sen. Bernie Sanders (I-Vt.), the Democratic socialist who’s built a career promoting policies to raise taxes on millionaires and billionaires, said he plans to make public his federal tax returns by Monday, the annual filing deadline. Sanders has said he’ll release 10 years of returns, and disclosed this week that his literary fame of recent years has catapulted him into the ranks of top earners he’s derided for decades. “I wrote a best-selling book,” Sanders told the New York Times this week. “If you write a best -selling book, you can be a millionaire, too.”

The senator refused to release his full tax returns when he vied for the Democratic presidential nomination in 2016. He’s contending again in 2020 as one of the front-runners, and is attempting to manage the disconnect between decades of rhetoric about the “top 1 percent” and his own position within that group. Read more from Laura Davison.

Cybersecurity Election Aid: The Federal Election Commission delayed a vote on a plan to provide free cybersecurity assistance for campaigns, with the panel’s chairwoman voicing concerns it could the open the door to corporate money in campaigns. Ellen Weintraub said she supported the goal of cybersecurity but questioned whether the proposal could grant broad leeway for providing aid to campaigns outside the limits and restrictions of campaign finance law, including a longstanding ban on corporate contributions to candidates.

“We do not want to inadvertently blow a hole in the corporate contribution ban,” the Democratic chairwoman said at a commission meeting yesterday. Read more from Kenneth P. Doyle.

AOC Says Conservatives Inciting Violence: Rep. Alexandria Ocasio-Cortez (D-N.Y.) accused conservative activists and a newspaper of inciting violence against a fellow progressive House member, Rep. Ilhan Omar (D-Mich.). Ocasio-Cortez said at the Democratic retreat that The New York Post endangered Omar with a front page yesterday that criticized her comments about the Sept. 11 terrorist attacks. Read more on the controversy by Erik Wasson.

In the Courts

High Court Tested on Trademark Rights: A clothing line with a vulgar-sounding name is about to test the U.S. Supreme Court’s commitment to free speech. The justices will hear arguments Monday from a lawyer for Erik Brunetti, who was rejected when he sought federal protection for his “FUCT” trademark. Brunetti is asking the court to strike down a century-old provision that bars the inclusion of “scandalous” and “immoral” trademarks on a U.S. government registry.

Recent history suggests the justices will be skeptical about the prohibition. Two years ago, the court unanimously threw out a similar ban on disparaging trademarks, saying that provision violated the First Amendment. Read more from Greg Stohr.

Private Tender Offer Suits: Two computer hardware firms who accidentally left a chart out of their tender offer will try to convince the U.S. Supreme Court not to hold them responsible on Monday. The companies will argue that negligently omitting material information from a tender offer isn’t enough to make them liable to investors — if investors even have the right to sue over the alleged omissions at all. Read more from Jennifer Bennett.

Judge Misconduct Loophole: Maryanne Trump Barry’s quiet retirement earlier this year from a federal appeals court short-circuited a judicial ethics investigation, allowing the president’s older sister to dodge potentially serious consequences such as loss of full retirement benefits. The former Third Circuit judge faced the civil probe that was triggered by a New York Times report last year about whether she and her siblings, including her brother Donald, benefited from alleged tax schemes linked to her late father. Four complaints of judicial misconduct were filed in October of 2018. At the time, Barry, now 82, was semi-retired and not hearing cases. The Judicial Council of the Second Circuit terminated its inquiry because it can’t investigate retired judges.

The treatment of her case is not without recent precedent, and raises questions about a loophole in the conduct code for federal judges that allows them to avoid scrutiny by stepping down. A proposed ethics bill is making its way through Congress to address the issue. Read more from Melissa Heelan Stanzione and Patrick L. Gregory.

What Else to Know

North Korea Deal: Trump rejected calls for confidence-building economic projects with North Korea, in a blow to South Korean leader Moon Jae-in’s efforts to restart nuclear talks with Kim Jong Un. The U.S. president, speaking yesterday during a White House meeting with Moon, said “this isn’t the right time” for inter-Korean projects including reopening a joint industrial park kept shuttered by sanctions. Still, he held out the possibility for other incremental steps that could keep negotiations alive. Read more from Youkyung Lee, Justin Sink and Jennifer Jacobs.

Trade Wars: Japan is finally stepping into the ring for a fight it had managed to dodge for more than two years: Bilateral trade talks with Trump. The world’s third-biggest economy has a lot at stake in the talks, which are expected to start next week in Washington just as the U.S.’s negotiations with China appear to be winding down. Prime Minister Shinzo Abe is desperate to avoid tariffs or quotas on lucrative auto exports, while Trump wants to crack open Japan’s agricultural market and reduce a $60 billio n trade deficit. Read more from Isabel Reynolds.

Regulatory Oversight: Agencies will have to start regularly submitting economic data about all of their rules to the White House regulatory affairs office to avoid potential violations of the Congressional Review Act, under a new memorandum released yesterday. Until now, agencies were only required to send regulations they deemed “significant” for review by the Office of Information and Regulatory Affairs. The problem, according to the new memo, is that OIRA does not consistently receive from agencies the informatio n necessary to determine whether a rule is major and therefore subject to the requirements of the Congressional Review Act. Read more from Cheryl Bolen.

FCC to Auction 5G Airwaves: The U.S. Federal Communications Commission plans to auction the broadest set of airwaves yet to speed the nation’s adoption of super-fast 5G wireless communications, as well as devoting more than $20 billion to improving mobile connections in rural areas. The actions represent the latest steps by the FCC to hasten the arrival of 5G, which will allow such things as driverless cars and remote surgery, while smart machines in homes and factories communicate via the so-called internet of things. Read more from Todd Shields.

Transgender Ban Goes Into Effect: The Pentagon’s new transgender service policy is going into effect today, despite four ongoing federal lawsuits by active-duty troops and opposition from medical professionals. The American Medical Association underscored its view yesterday the military misinterpreted the scientific data on gender dysphoria to craft the exclusionary policy, Travis J. Tritten reports.

New Farmers Are Growing Share of Industry: Beginning farmers make up a growing share of all U.S. farmers, the Agriculture Department said. Farmers with 10 years or less of experience made up 27 percent of U.S. producers, according the USDA’s 2017 Census of Agriculture released Thursday. The census is conducted every five years by USDA’s National Agricultural Statistics Service with information gathered directly from farmers and ranchers. Read more from Teaganne Finn.

Lawyer’s Indictment Puts Pressure on Foreign Lobbyists: The indictment of Gregory Craig, a politically connected lawyer accused of concealing his firm’s work for Ukraine, delivered a warning shot to those who’ve made a business of representing foreign governments and companies. The increasing crackdown on people who fail to register their activities on behalf of foreign clients is prompting some professionals to turn down opportunities and spurring more to formally disclose their work. The Foreign Agents Registration Act, a measure that was previously lightly enforced, is in the spotlight following Special Counsel Robert Mueller’s investigation into Russian interference in the 2016 election. Read more from Bill Allison and Ben Brody.

Rosenstein Defends Barr on Mueller Report: Attorney General William Barr is “being as forthcoming as he can, and so this notion that he’s trying to mislead people, I think is just completely bizarre,” outgoing Deputy Attorney General Rod Rosenstein told The Wall Street Journal in an interview. Responding to Democrats’ criticism over the release of the report, Rosenstein said “it would be one thing if you put out a letter and said, ‘I’m not going to give you the report.’ What he said is, ‘Look, it’s going to take a while to process the report. In the meantime, people really want to know what’s in it. I’m going to give you the top-line conclusions.’ That’s all he was trying to do,” Rosenstein said.

Assange Extradition: Julian Assange spent seven years in the Ecuadorian embassy in London trying to avoid facing what he believed were imminent American charges. Now, after he finally overstayed his welcome, he will try to buy more time in the U.K. courts. Lawyers for the WikiLeaks founder said he will fight extradition to the U.S., where he faces charges that he took part in a hacking conspiracy with ex-Army analyst Chelsea Manning to disclose classified government material.

While Assange’s attorneys argued that the charges are an illegal attempt to punish a journalist for publishing information, extradition lawyers said that the best he will be able to do is delay his arrival to the U.S. through a process that will likely stretch into 2020. Read more from Thomas Beardsworth and William Mathis.

To contact the reporters on this story: Brandon Lee in Washington at blee@bgov.com; 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

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