Axios AM - Axios
Featured

Axios AM

1 big thing: Trump's retaliation

Comey is greeted by Senate Intelligence Committee Chairman Richard Burr (R-N.C.) at the beginning of yesterday's hearing (AP's Andrew Harnik)

President Trump's advisers feared Jim Comey had held back some devastating cards, and would unfurl new facts that could speed Trump's legal or political troubles. Instead, they considered yesterday's mesmerizing testimony a damaging but not cataclysmic public spectacle.
  • "The threat level to the presidency is less than it was," a White House adviser said.

Mainly, they were relieved that POTUS didn't tweet yesterday.

  • Trump tweeted this morning: "Despite so many false statements and lies, total and complete vindication...and WOW, Comey is a leaker!"

Look for Trump and his allies to scream four things:

  • Comey's a liar: After the hearing, Marc Kasowitz, Trump's personal lawyer, escalated the combat: "The president ... never told Mr. Comey, quote, 'I need loyalty, I expect loyalty.'"
  • Comey's a leaker: Kasowitz also said: "Comey admitted that he unilaterally and surreptitiously made unauthorized disclosures to the press of privileged communications with the president."
  • Clinton did it, too: Republicans instantly jumped on Comey's charge that Loretta Lynch, Obama's attorney general, had encouraged him to echo Clinton campaign lingo in discussing the email probe.
  • Comey agrees: Fake news! If Trump enjoyed any moment of the hearing, it was surely when Comey said a memorable New York Times story was untrue.

But don't lose sight: There is no way to spin away that this was a very dark and damning day for Trump. The head of the FBI testified he so distrusted his own president and White House that he took detailed notes of his conversations to prove he felt pressure to drop an investigation of collusion with the Russians. He then felt so strongly he leaked those notes to the press to force a special prosecutor. Imagine Act 2!

  • Be smart: This wasn't the end but the beginning of a long, agonizing process for the Trump White House. What they fear most is the probes into central figures around Trump, and what happens when investigators dig into the context for so many meetings with the Russians.
  • Up next: Attorney General Jeff Sessions' testimony before a Senate appropriations subcommittee becomes high drama. And the Senate Intelligence Committee expects Jared Kushner to meet with committee staffers.

Top Comey quote: "[T]here should be no fuzz on this whatsoever. The Russians interfered in our election during the 2016 cycle. They did it with purpose. They did it with sophistication. They did it with overwhelming technical efforts. And it was an active-measures campaign driven from the top of that government. There is no fuzz on that."

N.Y. Times Quote of the Day ... Comey: "The president surely knows if there are tapes. If there are, my feelings aren't hurt. Release the tapes."

  • The buzz: Is the flat denial by Trump's lawyer that he said something Comey attributed to him during the Green Room dinner ("I need loyalty") a clue that there aren't tapes?

2. New threats to Trump

Marc Kasowitz, Trump personal attorney, makes a post-Comey statement at the National Press Club (AP's Manuel Balce Ceneta)

Many of Trump's mounting perils are self-inflicted:

  • From a New York Times front-pager by Peter Baker, "For Trump, a Looming 'Cloud' Just Grew That Much Darker": "Comey ... revealed that he had turned over memos of his conversations with Mr. Trump to that newly appointed special counsel, Robert S. Mueller III, suggesting that investigators may now be looking into whether Mr. Trump obstructed justice by dismissing the F.B.I. director."
  • Comey testified that he arranged the leak of his private conversations with Trump after the president tweeted a threat at Comey.
  • CNN: "Comey told senators in a closed hearing [after his public testimony] that Attorney General Jeff Sessions may have had a third interaction with Russia's ambassador to the US."

Sound smart: Imagine how much the public would never have known if Trump hadn't canned Comey.

3. Media hit, too

Comey declared that a New York Times front pager from Feb. 14 — "Trump Aides Had Contact With Russian Intelligence" — was "in the main ... not true. ... [W]e don't call the press to say, 'Hey, you got that thing wrong about this sensitive topic.' We just have to leave it there."

  • The article's lead: "Phone records and intercepted calls show that members of Donald J. Trump's 2016 presidential campaign and other Trump associates had repeated contacts with senior Russian intelligence officials in the year before the election, according to four current and former American officials."

In today's paper, the same three authors write: "Comey did not say exactly what he believed was incorrect about the article ... The original sources could not immediately be reached after Mr. Comey's remarks, but in the months since the article was published, they have indicated that they believed the account was solid."

  • On the other hand, Comey said another Times scoop — reporting that Comey had written an in-the-moment memo saying Trump had asked him to shut down the investigation of former national security adviser Michael Flynn — had been spoon-fed to the paper through a friend.

CNN had to backtrack from an article originally headlined "Comey expected to refute Trump," with this correction: "The article and headline have been corrected to reflect that Comey does not directly dispute that Trump was told multiple times he was not under investigation in his prepared testimony released after this story was published."

  • Be smart: CNN's lapse, and the charge against The New York Times, provide ammunition for Trump partisans to shout "Fake news!" in an effort to discredit other reporting that is perfectly valid.

4. "Gut feel ... it's ... important ... that I make records"

Comey is sworn in (Reuters' Jim Bourg)

Two of the most memorable exchanges ... Sen. Dianne Feinstein (D-Calif.): "You're big. You're strong. I know the Oval Office, and I know what happens to people when they walk in. There is a certain amount of intimidation. But why didn't you stop and say, 'Mr. President, this is wrong. I cannot discuss this with you'?"

Comey: "Maybe if I were stronger, I would have. I was so stunned by the conversation that I just ... took it in. ... [L]ook, ... I've seen the tweet about tapes. Lordy, I hope there are tapes." ...

"I remember saying, 'I agree [Flynn is] a good guy,' as a way of saying, 'I'm not agreeing with what you just asked me to do.' Again, maybe other people would be stronger in that circumstance ... I hope I'll never have another opportunity. Maybe if I did it again, I would do it better." ...

Sen. Joe Manchin (D-W.Va.): "Do you believe there were any tapes or recordings of your conversations with the president?"

Comey: "It never occurred to me until the president's tweet. ... I'm not being facetious, I hope there are, and I'll consent to the release of them."

5. Britons break the anti-elite fever

Breaking ...

Get smart fast ... Axios' Steve LeVine: "The U.K.'s repudiation of Theresa May marks a definitive break in the wave of anti-establishment politics that for more than a year have roiled Brazil to the Philippines, and the U.S. to Austria. European elections have now spurned the trend in three straight elections in the Netherlands, France and the U.K."

  • What's next: "Elections are scheduled in the fall in Germany and Austria, and Italy may hold one, too. But while extremist and anti-establishment politics are not dead, they no longer seem to threaten the major institutions created in the aftermath of World War II."
  • The takeaway: "Europeans remain restless — 'unhappy with the status quo and seeking change, but they don't know what that change should be.'"

"Softer Brexit" possibleReuters: With Brexit talks with Brussels set to begin June 19, the result increases chances of "a softer deal on Britain's planned departure from the European Union than the 'hard Brexit' that markets have worried May would deliver."

  • "[I]f we get more of a softer Brexit or more of a globalist stance from the UK ... it's good for Europe, the UK and U.S. assets."
  • Malcolm Barr, economist at JPMorgan, in a research note: "Perhaps the most obvious conclusion is that the likelihood of the UK needing to request a delay in the Brexit process has risen substantially, given the chance that political developments in the UK disturb what is already a time-compressed process," said Malcolm Barr, economist at JPMorgan, in a research note." (Via Reuters)

6. Expert voices: Death of bricks and mortar

Rebecca Zisser / Axios

With sales plunging, more than 8,000 U.S. brick-and-mortar stores could close this year — twice the number as 2016, per Axios' Steve LeVine.

  • Why it matters: Among the chief victims are retail workers. Amazon says it's adding 100,000 employees, but a multiple of that number have lost their jobs in recent years. One in 9 Americans work in bricks-and-mortar retail, almost 16 million people in all.
  • Five experts weigh in.

7. A debate that'll get louder

Economist cover leader (editorial) ... "Terror and the internet: Tech firms could do more to help stop the jihadists":

[T]he firms can act when they want to. Before Edward Snowden exposed them in a huge leak in 2013, they quietly helped American and British intelligence monitor jihadists. Whenever advertisers withdraw business after their brands ended up alongside pornographic, violent or extremist material, they respond remarkably quickly. ...

In the past, internet firms have tended to "build it first, figure out the rules later". However, the arguments about terrorism and extremist content are a stark reminder that the lawless, freewheeling era of the early internet is over. Technology firms may find that difficult to accept. But accept it they must, as part of the responsibility that comes with their new-found power and as part of the price of their success.

8. The talk of tech

Sheryl Sandberg speaks in Paris in January (Reuters' Philippe Wojazer)

"Facebook Is Determined to Build Ties With Automakers," by Bloomberg's Jamie Butters and Sarah Frier:

  • COO Sheryl Sandberg, in Detroit yesterday for an annual Facebook Automotive Summit, "shared a stage with [GM CEO] Mary Barra at a women's-only event ... before the two toured a factory and spoke with about 200 GM employees."
  • Sandberg: "Our industries are converging. Detroit's writing software and Silicon Valley is building hardware."
  • "Mark Zuckerberg visited Ford ... headquarters and an F-150 truck plant in April to rub elbows with Executive Chairman Bill Ford."
  • The plot: "Facebook is focused on boosting sales for video advertising, ... which should help take a cut of the $70 billion television ad market."
  • Key stat: "The U.S. automotive industry is the second-largest spender on digital advertising behind retail."
  • Why it matters: "Autos and real estate are among the last categories that aren't transacting online, and it's taken longer for Facebook to break into categories with expensive purchases like travel and cars."

9. Warming to Gore

Al Gore interview in Interview magazine, by editor-in-chief Nick Haramis, ahead of the July 28 nationwide release of the documentary "An Inconvenient Sequel: Truth to Power":

On not getting stale while traveling the world leading seminars for climate activists:

I update my slide show almost every day. I have a personal staff of ten in Nashville that helps me scour the internet and other media around the world for the latest scientific peer-reviewed findings, the latest examples of climate-related extreme weather events, and the latest examples of progress.

On maintaining a positive outlook:

I had the privilege of working with the late economist Rudi Dornbusch, who once said, "Things take longer to happen than you think they will, and then they happen faster than you thought they could." Where solar energy is concerned — and wind energy and battery storage and electric vehicles and efficiency technologies — that is what we are now seeing.

On parallels between climate deniers and gay-rights opponents:

I think they're more similar than different. The gay rights movement of recent years has been an inspiring victory for humanity and it is in the tradition of the civil rights movement ...

God intends for us to take responsibility for how we treat God's creation, and if we choose to use the thin shell of atmosphere surrounding our planet as an open sewer for 110-million tons of global-warming pollution every day, the consequences are attributable to us.

10. 1 fun thing

"Trevor Noah strikes a nerve — and ratings gold — as he steers 'The Daily Show' into the Trump era," by L.A. Times' Greg Braxton: "[A]lmost two years after his debut [as Jon Stewart successor], Noah ... notched his most-watched week ever in May, with more than 1 million viewers."

Is there any potential danger of "Trump fatigue"?

I definitely think so. But I believe people aren't often good with separating Trump from what is happening within the the world he inhabits. Donald Trump is the president of the United States. That is something that some people still refuse to acknowledge, nor do they wish to accept as a reality. That's the first mistake people make, in my opinion. And this president in particular has an impressive ability to create and sustain scandal and news like no one before.

I don't think of Donald Trump as the story. I see this as America's story, and Donald Trump is the antagonist. America is dealing with Donald Trump, not the other way around. That character offers up the opportunity to have conversations about things that people may not have otherwise been interested in. On the griddle of "The Daily Show's" barbecue, we cook different foods every day. But the fuel we use to cook that food is Donald Trump.

What are you reading these days?

  • "The Hip Hop Wars" by Tricia Rose.
  • I'm re-reading "The Autobiography of Malcolm X."
  • "The New Jim Crow" by Michelle Alexander.

Featured

How Medicaid funding would change under the Senate health bill

The Senate health care bill would substantially reduce federal funding for all Medicaid beneficiary groups over the next two decades compared to current law, according to an analysis by Avalere, a health care consulting firm.

Why this matters: The funding cuts could encourage states to cut benefits for enrollees, payments to providers or eligibility for the program. It also saves the federal government $772 billion over 10 years, and likely much more over 20 years.


Data: Avalere Health analysis; Note: Adult age cutoff defined by state, ranging from 19-21. Seniors are 65+; Chart: Andrew Witherspoon / Axios

What the bill does:

  • Phases out enhanced federal funding for the Affordable Care Act's Medicaid expansion.
  • Caps the amount of federal funding per Medicaid enrollee. This cap grows with medical inflation beginning in 2020, but in 2025 the growth rate slows to inflation, which is tighter and causes most of the steep reductions.
Featured

Axios Review: New Eero delivers even better Wi-Fi, albeit at a price

Eero

When it debuted a couple years ago, Eero was the first company to aggressively promote the concept of placing multiple networking boxes around the home for better Wi-Fi. Now, as Eero's second-generation product hits the market, the company is far from alone, facing competition from other startups as well as traditional networking companies like Belkin and Netgear.

Who it's good for: Anyone that has pockets of slow wi-fi in their home and doesn't already have a multi-unit system

Who it's not good for: Those whose homes are reasonably well covered, those who already have a mesh network or are particularly cost conscious, since others offer a more affordable alternative.

Our take: I eagerly bought the first Eero system due to poor in-home Wi-Fi coverage in an old San Francisco building. While it improved a bad situation, the Wi-Fi in the back of the house (where our bedroom is located) still left much to be desired. Eero's original system consisted of three identical units, while the new standard $399 system is one main system and two smaller "Eero Beacon" devices.

In testing the second-generation system, I initially tried a mix of three new devices and one older Eero and it actually made things slower. But when I went with just the new Eero-and-two-beacon system I found it delivered a significant speed bump, as measured by the Speedtest app, on the order of about 25% faster downloads.

Featured

Waymo: Uber knew about the stolen files

Jeff Chiu / AP

Waymo is pushing back on Uber's defense, arguing in new court documents that the ride-hailing company not only knew that a former Waymo employee had downloaded proprietary files, but that it also set up legal mechanisms to cover that up.

Cover up: Waymo argues that Uber struck a deal with Anthony Levandowski, a former Waymo employee whose startup it was acquiring, that he submit to a due diligence investigation in exchange for indemnification. Uber either knew or suspected that he had stolen files in his possession and set up a legal agreement to protect both parties, says Waymo.

More: Waymo also points to other suspicious events, such as Levandowski's downloading of proprietary files onto a personal device on two occasions, and both on days that he was meeting with Uber executives. It also says it can't find text messages from Uber CEO Travis Kalanick to Levandowski, suggesting they may have been deleted. Uber has not produced all text messages between Levandowski and every witness yet.

Read here Uber's legal defense, also filed on Wednesday.

Featured

Senior official contradicts Trump's South Korea stance

Evan Vucci / AP

On the eve of South Korean President Moon Jae-in's meeting with President Trump, a senior White House official told reporters in a background briefing that South Korea is not, in fact, a "laggard" on military burden sharing:

"South Korea in many respects is the model ally because they are spending somewhere in the order of 2.7% of their GDP on their defense. Burden sharing is always going to be part of the conversation with our allies. President Trump has made that clear, but we shouldn't view South Korea as somehow laggard on that front."

Why this matters: The senior White House official is directly contradicting Trump's long-running public statements — where he has frequently condemned South Korea for being a freeloader. This could preface a strategic shift for the administration. During the presidential campaign, Trump told CNN's Wolf Blitzer: "South Korea is a money machine but they pay us peanuts...South Korea should pay us very substantially for protecting them."

  • During Wednesday's briefing — a prelude to Moon's visit to the White House on Thursday, where he'll have cocktails and dinner with Trump — the senior White House official praised South Korea for paying an "enormous amount of money to help host U.S. troops in their country including through things like...the new base, south of Seoul, which 92% of that cost was shouldered by South Korea."

Since taking office, Trump has used far more bellicose rhetoric than his senior advisors — with the prominent exception of Steve Bannon — when it comes to South Korea:

  • Trump upset the South Koreans when he told Reuters in April he expected them to pay for the "billion dollar system," THAAD, to defend against North Korean missiles. Trump's national security adviser, H.R. McMaster, had to clean-up Trump's statement, assuring the South Koreans that "until any re-negotiation that the deal is in place, we will adhere to our word" to pay for the missile defense system.
  • Trump also told Reuters the Korean trade agreement was "a horrible deal, and we are going to renegotiate that deal or terminate it." In Wednesday's briefing the senior White House official used more diplomatic language — saying "I think they will have a friendly and frank discussion about the trade relationship."
  • The official did, however, specify the areas of tension on trade: "He will be, I think, forthright in terms of talking about things like U.S. autos and the fact that there are still some barriers to U.S. auto sales in Korea, certainly the enormous amount of steel that sometimes ends up surplus, Chinese steel that comes to the United States via South Korea."
Featured

Mattis, Haley claim White House warning to Syria prevented attack

Jacquelyn Martin and Andrew Harnik / AP

Both Defense Secretary Mattis and U.N. Ambassador Nikki Haley are claiming President Trump's warning to Syria over chemical weapons prevented an attack.

Mattis, while on his way to a NATO meeting in Brussels Wednesday told reporters: "It appears that they took the warning seriously." When asked repeatedly how he knows Syria heeded the warning he said simply, "they didn't do it," three times.

Haley on Capitol Hill Wednesday, via The Guardian: "Due to the president's actions, we did not see an incident…I would like to think that the president saved many innocent men, women and children."

Our thought bubble: Reports on what prompted the White House statement Monday night that Syria was preparing for a possible chemical attack have been vague and at times conflicting. With so little known about the would-be attack, it's hard to assess whether the warning changed the regime's calculus.

Featured

The story behind Trump's Medicaid argument

President Trump's rallying behind the Senate GOP's health care bill continued this afternoon as he tweeted that the bill actually increases Medicaid spending rather than cutting it:

Our thought bubble: The Senate bill would cut Medicaid spending by $772 billion over a decade from its levels under the Affordable Care Act. Some Republicans argue, as the the New York Times summed up yesterday, that health care spending under the ACA is dangerously out of control, so the Senate bill doesn't include "cuts," it simply increases Medicaid funding at a more reasonable rate.

Featured

McMaster lays out North Korea strategy

Susan Walsh / AP

Trump's National Security Advisor H.R. McMaster laid out the way the U.S. is thinking about the North Korea problem Wednesday in three main points:

  1. "The North Korea problem is not a problem between North Korea and the United States. It's a problem between North Korea and China — and the world."
  2. A positive gain in the last few months has been "Chinese leadership's recognition that China does have a great deal of control over that situation mainly through the powers of the economic…relationship" with North Korea. This seems to diverge from Trump's stance that China has tried to exert influence but fallen short.
  3. "Denuclearization of the peninsula is the only appropriate and acceptable" solution.

Read more from Axios' Expert Voices on what the U.S. can do about North Korea, here.

On NATO: McMaster affirmed Trump is "absolutely committed to" the mutual defense protocol, known as Article Five.

On Afghanistan: McMaster said the Taliban is taking advantage of the disconnect between military action and political action in Afghanistan. He noted the previous approach of saying "let's talk to you about a political solution…but we're leaving" made little sense to him. "How does that work?"

On Russia: McMaster said the U.S. needs more tools to confront Russia's destabilizing behavior towards the U.S., including in cyberspace.

On budget: McMaster dodged a question about USAID and State Department budget cuts.

Featured

New laptop inspections coming for U.S.-bound flights

Ted S. Warren / AP

Additional screening will soon be required before personal electronic devices (PEDs) larger than cell phones can be carried on to U.S.-bound flights, senior Department of Homeland Security officials announced Wednesday. The TSA and the State Department will also be involved in implementation.

The need for more security comes from the fact that terrorists continue to look at attacking commercial airlines as the "crown jewel," and are exploring new ways to conceal devices, DHS Secretary John Kelly said at the CNAS conference.

Why it matters: This move could have major commercial implications, but Kelly is pressing ahead because he places aviation in general, and the ability of terrorists to turn laptops into explosive devices in particular, at the top of his list of security concerns.

What to expect: As one senior DHS official put it, "if the PEDs [larger than a cellphone] are screened, they can fly. If they are not screened, they cannot fly." The officials would not discuss what the enhanced screenings will look like exactly, but added that DHS is calling for the use of next generation screening methods as well as K-9 assets. DHS is encouraging more airports to become pre-screening locations, which allows passengers to go through Customs and border security before boarding flights to the U.S., Kelly said.

If airline carriers choose to not implement these changes, the U.S. could suspend their flights to the U.S. and could not allow PEDs larger than cell phones on board at all. One DHS official said he believes every airport in the world would be able to implement these changes, however. The changes will affect 238 airports, 105 countries, and, on average, 2,000 flights per day.

Timeline: The DHS officials briefing reporters were vague about the implementation due to security reasons, noting the changes "could roll out this summer, absolutely." They ultimately claimed it was up to the airline carriers to get the changes implemented and that TSA and DHS officials stand ready to inspect the changes to approve the airlines' protocols.

The existing ban: The 10 airports in the Middle East that are already subject to a laptop ban can have those restrictions lifted if they comply with these new security measures. One DHS official clarified, "we're not rolling back those measures," but this gives those airports the opportunity to increase their security. (Those airports affected: Amman, Kuwait City, Cairo, Istanbul, Jeddah, Riyadh, Casablanca, Doha, Dubai, and Abu Dhabi.)

Featured

Trump's latest social media salvo against "fake news"

Alex Brandon / AP

President Trump has shared videos on his official Instagram account from Project Veritas, the controversial right-wing outlet known for its deceptively-edited videos, that purport to show CNN figures — including contributor Van Jones — dismissing the federal government's Russia investigation. Trump captioned the videos, "CNN is fake news."

Sarah Huckabee Sanders yesterday: "There's a video out there circulating right now — whether it's accurate or not, I don't know — but I would encourage everybody in this room, and frankly, everybody across the country to take a look at it."

Note of caution: Per the Washington Post, Project Veritas is known for utilizing practices considered unethical in mainstream journalism, including using false identities and deceptive editing. For example, one video features a CNN producer saying there is "no smoking gun" in the Russia investigation but fails to note that he produces health and medical stories for the network — and is based in Atlanta, away from the epicenters of CNN's politics coverage in Washington and New York.

Featured

Senate Intel cuts a deal for the Comey memos

Andrew Harnik / AP

The Senate Intelligence Committee has reached an agreement to obtain the memos James Comey wrote after interactions with President Trump, chairman Richard Burr said Wednesday. Per Politico:

  • "I've got a commitment," Burr said when asked whether his panel would get access to the documents. Asked who gave him that commitment, the senator responded: "I'm not going to tell you."
  • Burr said he expected to obtain the memos sooner rather than later, saying, "it does us no good later."
  • Flashback: Comey testified before the committee about the contents of the memos, one of which details Trump's alleged pressure over the investigation into Michael Flynn, which House investigators have also sought without success.