Axios Sneak Peek - Axios
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Axios Sneak Peek

Welcome to Sneak Peek, our weekly lookahead for both ends of Pennsylvania Avenue, plus the cream of the Sunday shows. I'd love your tips and feedback: jonathan@axios.com.

Please urge your friends and colleagues to join the conversation by signing up for Sneak Peek and the other Axios newsletters. See you all week in the Axios STREAM, and next Sunday evening in Sneak Peek.

1 big thing: Trump’s wall

Chuck Schumer has concluded that denying President Trump his wall is perhaps the surest major defeat Democrats can hand the President in his first year.

Trump needs 60 Senate votes to fund construction of his "great wall" along the Southern border. Unlike healthcare or tax reform, Republicans can't use the budget process to ram the wall funding through Congress using only Republican votes.

  • Schumer's thinking: There's nothing the Republicans would be willing to offer that could get Trump the eight Democratic Senators he needs to fund the wall. Mitch McConnell's only other option would be to invoke the nuclear option and bypass the filibuster. But Democratic appropriators are betting the Republican leader won't be willing to undermine such a fundamental Senate tradition just to pay for Trump's wall.
  • The evolving plan, being discussed by Schumer's office and Senate appropriators: If Republicans put money for the wall into a bill, Democrats block it. It doesn't matter what else is in the bill — Schumer will make it about the wall. The way Democrats see it, if they can block the wall, they'd crush a central feature of Trump's political identity. And as the face of the strategy, Schumer would thrill the Democratic base (though less so the red-state Democratic senators up in 2018).
  • What happens next: Team Trump knows it's not going to be easy to fund the wall. A source familiar with the administration's plans says the preferred strategy would be to attach the wall funding to the bill that funds the military. That way, Republicans could tell the public that Schumer and the Democrats are blocking money not only for border security but for our troops. They'll run relentless attack ads against Senate Democrats up for re-election in 2018 in states that Trump won.
  • What happens if Schumer wins: A second source familiar with the administration's thinking said that even if Democrats block funding, the administration will find ways to get by in the short term. "We have enough money to get a decent amount of the wall done in first year," the source said. "We can reprioritize some funding within [the Department of Homeland Security]. ... It's not like work would come to a complete halt."

2. The clean-up

The Sunday shows were supposed to focus on Obamacare — the policy issue that's supposed to be consuming Washington right now — but instead they were dominated by President Trump's explosive and unsubstantiated claim that Obama ordered the wiretapping of Trump Tower.

On ABC's "This Week," host Martha Raddatz became exasperated with the White House's representative — deputy press secretary Sarah Sanders. Sanders told Raddatz that "if this happened, if this is accurate, this is the biggest overreach and the biggest scandal."

"If, if, if, if," Raddatz replied, pointing out that Trump didn't hedge in his tweet. He categorically asserted that Obama committed what would be a crime of Watergate proportions.

Republicans are distressed and irritated, and nobody in the White House or on Capitol Hill has offered evidence to support Trump's allegation:

  • Republican Susan Collins, who sits on the Senate intelligence committee, said she has "seen no evidence" of what Trump alleged. "It would be more helpful if he turned over to the intelligence committee any evidence that he has," she told John Dickerson on CBS's "Face the Nation." "What we need to deal with is evidence, not just statements."
  • Marco Rubio told Chuck Todd on NBC's "Meet the Press": "The president put that out there, and now the White House will have to answer as to exactly what he was referring to."
  • Former Director of National Intelligence James Clapper told Chuck: "For the part of the national security apparatus that I oversaw as DNI, there was no such wiretap activity mounted against the president-elect at the time, or as a candidate, or against his campaign."

3. Window into Trump's mind

Trump's aides desperately want to move on from the wiretap flap. Press Secretary Sean Spicer issued a statement this morning saying the President requests that the congressional committees look into the allegations as part of their investigation into Russia's interference in the 2016 election. "Neither the White House nor the President will comment further until such oversight is conducted," he said.

But, but, but ... As is so often the case in Trumpland, the President has his own ideas. Trump's friend Christopher Ruddy gives us a window into the president's current state of mind. Ruddy, the CEO of conservative media outlet Newsmax, writes this morning:

"I spoke with the President twice yesterday about the wiretap story. I haven't seen him this pissed off in a long time. When I mentioned Obama 'denials' about the wiretaps, he shot back: 'This will be investigated, it will all come out. I will be proven right.'"

What many in Congress will say: Given Trump made the claim, the onus is on him, not us, to produce the evidence. The president has access to any piece of classified intelligence in the country. It's well within his power to find out whether Obama ordered the tapping of Trump Tower.

4. Obamacare's big week

The Hill will be consumed by Obamacare for the foreseeable future but this week is a big one, with House committees expected to mark up the first legislative text.

Committees responsible for the health-care bill — led by Ways and Means chair Kevin Brady and Energy and Commerce chair Greg Walden — worked over the weekend with the White House "to tie up loose ends and incorporate technical guidance from the administration," a senior GOP aide tells me.

There was a weekend call with the big players crafting the policy: Speaker Ryan, Walden, Budget Director Mick Mulvaney, HHS Secretary Tom Price, White House senior policy hand Andrew Bremberg, and others.

Outstanding issues, still being worked through by the committees:

  • Design of the tax credits: We're told that Republicans are going to put an income cap on the tax credits. This helps bring down costs — a top GOP priority — and will ensure that the super-rich aren't getting financial assistance they don't need.
  • Tweaking coverage: We're told that the early estimates about how many people would be covered by the healthcare plan were pretty bad. Republicans have been tweaking the plan to ensure that the coverage gets better.

1 fun thing: The Onion's prediction

Many laughed in 2012 when a news anchor on the satirical website The Onion reported that "due to Facebook ... every potential candidate for the 2040 presidential race, no matter how smart or accomplished, is now completely unelectable."

Turns out The Onion had a solid grip on the future, with a new political attack ad comprised entirely of unflattering footage found on social media.

NPR reports: "Jon Ossoff, 30, is running as a Democrat in a special election in Georgia ... The Congressional Leadership Fund, a super-PAC aligned with GOP leadership, launched an attack ad Wednesday [which] includes a clip of him dressed as Han Solo in a Star Wars parody of the school's alcohol policy."

"The ad marks a new era in politics," writes NPR's Jessica Taylor. "In years past, opposition researchers would have to dig deep to hope for leaked videos or testimony from former friends, rivals and roommates. Now, they don't have to go much farther than Google or the photos section of Facebook pages."

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Top quotes from Bloomberg Global Business Forum

From left: Mike Bloomberg, Bill Clinton, Tim Cook, and Justin Trudeau. Photos: Bloomberg Global Business Forum and AP

Top world leaders and CEOs from the most influential global corporations gathered at the Plaza Hotel in NYC Wednesday for the first-ever Bloomberg Global Business Forum, intentionally hosted the same week as the UN General Assembly, to address some of the most pressing issues impacting cross-border societies today.

Mike Bloomberg kicked off the event, explaining how "Too often governments and businesses don't talk to each other. This forum aims to fix that, and it's especially important when isolationism is rearing its head... including here in the U.S."

  • Former President Bill Clinton: "I want you to look to the future, but I believe underneath all these debates that are going on today lingers one simple question... whether you believe social strength, economic reform and political reform flow from division or multiplication."
  • French President Emmanuel Macron's main priority for France and Europe: To be the leader of climate change, new finance, artificial intelligence and transformation of the new industrial world.
  • Founder and CEO of Alibaba, Jack Ma: "[I]n the past 30 years we made people like machines. In the next 30 years we'll make the machines like people." But people shouldn't worry, because although machines will be faster and stronger than humans, "human beings have the heart, soul, beliefs, and value."
  • Apple CEO Tim Cook: "I think [deciding what to do with Dreamers] is the biggest issue of our time because this goes to our values of being American... If I were a leader of a country... I'd want every smart person coming into my country...[because] smart people create jobs... I'd have a very aggressive plan not to just let a few people in. I would be recruiting."
  • Canadian Prime Minister Justin Trudeau: "[T]rade leads to growth... and we made a deal with citizens that we would pursue pro-growth policies and that everyone would benefit... So we've seen growth, but it hasn't necessarily reached everyone... and that's where we fall into the politics of fear and envy... so now we need to make a turn into a new progressive trade agenda."
  • World Bank President Dr. Jim Kim: Announced a new initiative, along with Mike Bloomberg and Patricia Espinosa, titled "Invest for climate," which will be a continuation of the Paris Agreement. His bottom line: "There needs to be much more cooperation between the multilateral system, corporations, and governments" in combatting climate change.
  • Turkish President Recep Tayyip Erdogan on whether he considers Russia an ally: He thinks leaders should "increase the number of your adversaries and increase the number of allies."
  • Bill Gates: "I had an early career in the digital revolution, and that's still the fastest moving thing... but today my focus is more on the latest health breakthroughs... [that's what] I'm most excited about."
  • CEO of Softbank, Masayoshi Son (while sitting next to Gates): "For three days I became richer than Bill Gates. Twelve months later, I became almost broke."
  • CEO of Pepsi, Indra Nooyi: "Every aspect of our lives is changing, but the single best thing I feel good about is gender inclusion... 20 or 30 years ago when I first started working, there weren't many women."

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Graham-Cassidy could delay tax reform rollout

Sen. Lindsey Graham speaks at the Capitol last week. Photo: Andrew Harnik / AP

Administration officials have been debating whether to delay the tax rollout until the first week of October to clear space for the Graham-Cassidy health care bill. Sources with direct knowledge tell me no final decisions have been made as of Wednesday afternoon, but Trump has been impatient for tax reform to begin so he may not tolerate any more delays.

Why it matters: Sources involved say the plan is still to roll out tax reform next week, but some officials are wringing their hands about the health care bill — the Senate could vote as early as Wednesday — ruining tax reform's launch week by sucking all of the attention away from tax.

Why it's happening: Trump wants tax reform on schedule, but the Senate is running out of days to use reconciliation to change elements of the Affordable Care Act. Meanwhile, there is concern of potential leaks from the upcoming House Ways and Means Committee retreat, and the "Big Six" that's negotiating the plan has yet to decide what to put in the document that will guide tax reform.

  • An administration official told me the White House invited Big Six communications and coalitions teams to the Roosevelt Room on Wednesday afternoon to discuss what a rollout of tax reform would look like.
  • The group is still operating under the assumption that the rollout will happen next week as originally planned.
The "Big Six": House Ways and Means Committee chairman Kevin Brady, House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Senate Finance Committee chairman Orrin Hatch, Treasury secretary Steven Mnuchin and White House economic adviser Gary Cohn.
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Mueller's probe shifts to Trump's presidency

Robert Mueller testifies on Capitol Hill in 2013. Photo: J. Scott Applewhite / AP

Special Counsel Robert Mueller has sent the White House a request for documents pertaining to some of President Trump's most controversial moves in office, per a report from The New York Times. The news suggests that at least part of the Russia probe is focused directly on Trump's time as president.

What Mueller wants: Trump's meeting with high-ranking Russian officials in the Oval Office the day after Comey's firing; the events leading to the firing of Michael Flynn; and the White House's response to questions from NYT about Donald Trump Jr.'s Trump Tower meeting with Russian officials.

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Artificial intelligence pioneer calls for the breakup of Big Tech

Illustration: Lazaro Gamio / Axios

Yoshua Bengio, the artificial intelligence pioneer, says the centralization of wealth, power and capability in Big Tech is "dangerous for democracy" and that the companies should be broken up.

Why it matters: Bengio is a professor at the University of Montreal and a member of the three-man "Canadian Mafia" that pioneered machine learning, the leading method used in AI. His remarks are notable because of his influence in the AI community and because he or his peers all either directly lead or consult for Big Tech's AI programs. Says Bengio: "Concentration of wealth leads to concentration of power. That's one reason why monopoly is dangerous. It's dangerous for democracy."

The AI pioneers: Bengio consults for IBM and his colleagues Geoffrey Hinton consults for Google and Yann LeCun for Facebook. Ruslan Salakhutdinov, a protege of Hinton's, runs Apple's AI research effort.

Benigo said the concentration of resources, talent and knowledge among giant tech companies is only increasing and governments must act. "We need to create a more level playing field for people and companies," Bengio told Axios at an AI conference in Toronto last week.

In recent years, Apple, Facebook, Google and Microsoft have amassed a towering lead in AI research. But now, they are subject to growing scrutiny because of their outsized influence on society, politics and the economy. I asked Bengio if the companies should be broken up. He harrumphed and responded that anti-trust laws should be enforced. "Governments have become so meek in front of companies," he said.

"AI is a technology that naturally lends itself to a winner take all," Bengio said. "The country and company that dominates the technology will gain more power with time. More data and a larger customer base gives you an advantage that is hard to dislodge. Scientists want to go to the best places. The company with the best research labs will attract the best talent. It becomes a concentration of wealth and power."

When some of the young people gathered around him looked a bit dejected, Bengio responded, "Don't despair — fight."

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After summer of historic lows, Trump's popularity improves

Photo: Carolyn Kaster / AP

After several months of reaching record-lows in approval, new polls are showing President Trump's ratings beginning to climb upwards, according to Politico.

  • POLITICO/Morning Consult: 39% last month vs. 43% this week
  • Gallup: 35% last month vs. 38% last week
  • RealClearPolitics average: 37.4% August 14 vs. 39.9% September 20

How it happened: Politico reports Trump's responses to hurricanes Irma and Harvey helped his approval, after his ratings taking a over Charlottesville. Also, while his decision to end DACA was unpopular, he gained momentum from his negotiation with Sen. Schumer and Rep. Pelosi. But, his "popularity still remains historically low for a first-year president."

Other findings: Trump's upward trend over the past month is bigger with independents (+5%) than Republicans or Democrats (both +2%).

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Howard Schultz: Companies need to balance profit and conscience

AP

Howard Schultz, who rose from the projects in Brooklyn to create Starbucks, is making it a personal mission to find jobs for some of the least-advantaged and, in his view, most deserving in the United States: veterans and their families, refugees, and, with a job fair today, young people who are neither going to school nor working.

Why it matters: Schultz and his partners are attempting to pull a much-overlooked segment of U.S. society into the work force at a time that public hostility is driven in large part by low and stagnant salaries, and deep pockets of joblessness in inner cities and rust belts.

We caught up with Schultz at the Convention Center in downtown Washington, DC, where Starbucks and about a dozen other companies were conducting interviews with some 1,800 job-seekers aged 16 to 24 years old, seeking to hire as many as possible on the spot, and others over the coming months.

The background: The official national unemployment rate is just 4.4%, but we all know that statistic camouflages a world of misery: Among it is an 11.7% jobless rate for people 16 to 24 — those trying to just get started — and worse for black youths (14.6%) and Latinos (11.9%). Between the lines are young people who have dropped out of school, are jobless, have a criminal record, or are a parent.

Schultz's organization is attempting to attack the whole crippling system. Downstairs from where we spoke, there was a place for job applicants to leave their child while they were interviewed; a place to type up a quick resume; a place to put on a tie and jacket; and one for makeup. For those hired on the spot, there was advice for finding a place to stay, for public transportation, and child care. Companies, Schultz said, need to find "a balance between profit and conscience."

A need for "truthfulness": Regardless of what I asked in our quick, 15-minute chat, Schultz kept returning to what he said the country sorely needs — civility and respect toward one another. "There is a need for more truth and more transparency, not only because of Donald Trump becoming president," he said. "We've needed that for some time. There is a great need for servant leadership and truthfulness."

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Fed to begin reversing its huge stimulus program

Federal Reserve Chair Janet Yellen testifies before Congress. Photo: Pablo Martinez / AP

The Federal Reserve will begin selling off the government debt and mortgage bonds it amassed to help drive down interest rates and stabilize the housing market in the aftermath of the financial crisis, a move that signals the central bank's growing confidence in the U.S. economy.

Steady as she goes: The Fed will shrink the value of its portfolio of bonds by just $10 billion per month, a fraction of its $4.5 trillion stockpile. The modest nature of the move reflects the Fed's recognition that despite historically low unemployment rates, wage growth has been tame and inflation remains below the bank's 2% annual target.

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Obama: ACA is the reason "people are alive today"

Barack Obama delivers his speech during the 4th Congress of Indonesian Diaspora Network in Jakarta, Indonesia this July. Achmad Ibrahim / AP

While speaking at an event sponsored by the Bill and Melinda Gates Foundation today, former President Barack Obama said "people are alive today because of" the Affordable Care Act, "and when I see people trying to undo that hard-won progress…it is aggravating."

Obama ripped into the Graham-Cassidy bill, which proposes block grant funding to be distributed among the states. Obama said it would "raise costs, reduce coverage and roll back protections for older Americans, and people with pre-existing conditions." Based on current projections from consulting firm Avalere Health, health care cuts could top $4 trillion under this bill.

Other key quotes:

  • "Nationalist thought, xenophobic sentiment ... a politics that threatens to turn good people away from the kind of collective action that has always driven human progress."
  • On climate change: It's the "threat that may define the contours of this century more than any other."
  • On the future of the internet: "I don't think we can count on conventional media to spread the word [of progress]. This is where the power of the internet has not been harnessed the way it needs to be, particularly when you think of young people and young audiences.
Watch Obama speak:

Obama is speaking across town from Trump's UN appearance.

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Trump tells leaders his friends are going to Africa "to get rich"

President Trump addressed African leaders at a UN luncheon, and discussed the "tremendous potential" of Africa, particularly economically. He also said he was disturbed by violence in South Sudan and the Congo, and planned to send UN Ambassador Nikki Haley to Africa.

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Amazon reportedly talking to pharmacy benefit managers

Amazon may be trying to start building pharmacy contracts. Photo: Richard Drew / AP

Amazon may be talking with some middle-market pharmacy benefit managers "in an effort to get into various contract arrangements," according to analysts at investment bank Leerink Partners who spoke with pharmacy executives. Amazon may pursue a mail-order pharmacy that initially targets uninsured customers or people who have high deductibles and pay cash for most of their prescription drugs.

Reality check: The country is still a long way from Amazon handling people's prescriptions, if that time even comes. But conservations with prescription drug middlemen make it appear "that this is the direction Amazon is moving in," Leerink said in a report. Pharmacy executives who spoke with Leerink said it would take at least 18 to 24 months for Amazon to get proper drug licenses in 50 states. Amazon didn't immediately respond.