The Chuck and Nancy Show

Head Games:  Wednesday morning Trump invited House and Senate leadership, including Democrats Nancy Pelosi and Chuck Schumer, to a meeting in the Oval Office to discuss the best way to proceed with September’s hefty legislative agenda.  After spending well over an hour listening to everyone’s recommendations on how best to raise the debt ceiling and provide funding to FEMA for hurricane repairs, Trump looked around the room, smiled, ignored the recommendations of Republican leaders McConnell and Ryan, VP Pence and Treasury Secretary Mnuchin and announced that he liked Chuck and Nancy’s approach best.  Instead of going with the eighteen month increase in the debt ceiling promoted by the Republicans, Trump stunned them by choosing to go with Nancy and Chuck’s plan to combine Harvey funding with a three month debt ceiling extension and a short term budget resolution.  Before the Republican team could talk him out of his decision, dutiful daughter Ivanka appeared on cue, ending further discussion.  Trump appears to have given up on Republican leadership’s ability to deliver enough votes to pass legislation and has more confidence in his “good friends” seasoned legislators Nancy and Chuck’s ability to deliver their far more disciplined Democratic contingent.  He should be concerned that he’s handed Chuck and Nancy the power to hold him hostage in December when he will again need their help raising the debt ceiling but he’s decided to trade clout for a big check mark on his otherwise empty legislative scoreboard.  Shortly before the Oval Office meeting, Ryan, who desperately wanted to raise the debt ceiling by an amount sufficient to insure government funding through next year’s mid-term elections, said that raising the debt limit by a small amount would be “ridiculous and disgraceful.” He is now eating his words.  A dour faced McConnell left the meeting and said “That’s what I will be offering, based on the president’s decision..... And we’ll try to get 60 votes and move forward.” Though budget hawks and Freedom Caucus types are likely to squawk and vote against the package, the bigger risk to passage is that press reports that he was punked by Nancy and Chuck will cause Trump to change his mind.  For their part, Nancy and Chuck are likely to push for Dreamer legislation in December.  Trump will demand wall funding, they’ll say no but concede to a few border drones embellished with Trump logos and maybe the Dreamers will get their lives back.  Trump isn’t playing footsie with all Democrats.  Yesterday the Wall Street Journal reported that Trump has taken economic advisor Gary Cohn, the globalist “closet” Democrat, off the list of possible replacements for Fed Chief Janet Yellen as punishment for going public with his criticism of his Charlottesville remarks. It turns out that calling Trump out for appeasing Nazis was a step too far.  

Smoke and Mirrors:  After his morning meeting Trump flew off to North Dakota  to pitch his tax reform plan, the one that still doesn't exist.  CNBC's Andrew Ross Sorkin says the plan is in “bizarro” land and despite months of promises is no more advanced than the one pager that Treasury Secretary Steve Mnuchin and Gary Cohn composed over afternoon drinks last Spring when Trump promised he had a plan and needed one to rollout the next day.  Trump is still promising to lower the corporate tax rate to 15%, a myth that none of his advisors believe is feasible. They'd be happy to get it down to 20% and even that is a push since no one has yet figured out how to pay for it. In any case, Sorkin reports that the betting line in corporate boardrooms is that there will be no tax reform this year. Trump is starting to realize that when and if he ever has a plan his only chance of getting it passed will require some Democratic buy-in so he invited North Dakota's very vulnerable Democratic Senator Heidi Heitkamp, who is up for reelection in 2018 in the heavily pro Trump state, to join him on Air Force One and upon arrival introduced her to his crowd as a “good woman.” Then he launched into his usual speech the one where he says that US tax rates are the highest in the world even though they’re not.  He also brought his valuable advisor Ivanka up to the stage after telling his audience that he brought her along for the trip because she so nicely asked "Daddy, please can I go to North Dakota." Ivanka dutifully flashed her megawatt smile to the adoring crowd.  Isn't nepotism grand?               

Hot Seats and Trolls:  Don Jr is set to testify in front of a closed meeting of the House Judiciary Committee today about his infamous Russian lawyer meeting, the one about Russian adoptions that was really about getting dirt on Hillary Clinton.  Every time that Donny Jr has had something to say about that meeting he's changed his story.  Wonder which version he'll tell today, his choices are fairly limited as lying under oath even when your father is the pardoner in chief is risky.  Either he goes with the truth or he pleads the fifth, either way it should be very interesting, we will have to wait for a few “leaks” to find out which route he takes.  Donny's testimony is particularly timely.  Yesterday, Facebook disclosed that an internal investigation revealed that, despite their earlier denials, they sold $100,000 of ads promoting “divisive messages” to questionable Russian entities during the election.  Some of the accounts were linked to a troll farm in St Petersburg likely financed by Putin's intelligence officers.  Though the ads didn’t reference Hillary Clinton, they targeted specific audiences and focused on hot button issues such as LGBT rights, race issues, immigration and gun control, the things that energized Trump’s base.  Facebook has turned all their pertinent records over to Special Counsel Mueller.  Among other things, he’s probably trying to figure out who helped the Russians fine tune their targeting.              

Putin’s Influence Grows:  Putin is exercising his diplomatic skills which involves meetings and calls as opposed to Trump style diplo-tweets.  He’s spoken with China’s Xi and met with South Korea’s Moon at the Eastern Economic Forum in Vladivostok Russia, and is promoting a plan to persuade North Korea to ramp down its nuclear tests in exchange for a cutback in US and South Korea military exercises and a possible withdrawal of the THAAD missile defense system that China and North Korea find so threatening.  In a dig at Trump he’s dissed the value of sanctions and economic pressure and Trump style histrionics with the comment  “Do not push North Korea into a corner. Now more than ever everyone needs to be calm and avoid steps that lead to an escalation of tension.”  He went on to call for diplomatic tools.  Putin is most certainly acting in his own interests, seeking to diminish US influence in the region by putting a wedge in US-China relations and in the US- South Korea alliance, an alliance already weakened by Trump’s trade threats.  Yesterday, in classified meetings to both houses of Congress, Trump’s national security advisors detailed the US strategy for dealing with North Korea, providing a “sober assessment of the diplomatic and military approach to the threat.” Though they didn’t suggest following Putin’s recommendations regarding military exercises or missile defense,  they did advocate measured diplomacy over tension escalating tweets and bluster.