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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 "ultimate deal"

Every American president fantasizes about being the Middle East peacemaker. It's the great unattainable — a sure-fire Nobel Peace Prize, and your own page in the history books.

Influential figures in the conservative pro-Israel community have concluded that President Trump and his son-in-law Jared Kushner have convinced themselves that their dealmaking talents can clinch this "ultimate deal" between Israel and the Palestinians.

Trump the dealmaker has begun inching to the left on Israel:

  • The Trump administration alienated some allies in conservative pro-Israel circles by allowing the State Department to hire Michael Ratney, who was a senior U.S. diplomat in Jerusalem under John Kerry. In recent days, a number of influential conservatives have reached out to White House officials, urging them to fire Ratney.
  • On the campaign trail, Trump promised to "move the American embassy to the eternal capital of the Jewish people, Jerusalem." As president, Trump is keeping the embassy in Tel Aviv as a bargaining chip to extract future concessions from Israeli Prime Minister Bibi Netanyahu.
  • Trump infuriated Palestinians by breaking with U.S. policy and saying he could potentially support a one-state solution. But during the same recent visit with Netanyahu, Trump threw a bone to the left by gently chiding the Israelis on settlement building.
  • On Friday, Trump spoke by phone to President Mahmoud Abbas of the Palestinian Authority. According to the White House, they "discussed a comprehensive agreement that would end the Israeli-Palestinian conflict." Trump invited Abbas to visit the White House in the near future.
So what comes next?
The hardbitten view: A conservative pro-Israel leader tells me Trump's aspirations "will run up against the reality of dealing with the Palestinians."
The most hopeful words: In a recent interview on David Axelrod's podcast, The Atlantic's editor Jeffrey Goldberg repeated a joke that Jared Kushner's principal qualification to be Trump's Middle East peacemaker was that he'd been to Jewish summer camp. But Goldberg wisely noted that the "great geniuses of American diplomacy" have all failed to achieve a deal:
"There's almost like a Jewish comic novel in this ... And then a boy named Jared Kushner emerged from Trump Tower and brought peace to the tribes of Abraham. I mean ... who knows?"

2. The highest bar

The White House and Republican Hill leaders are setting a dauntingly high bar for their plan to replace Obamacare:

  • Trump's top economic adviser, Gary Cohn, told Chris Wallace on "Fox News Sunday" that the administration will do "whatever it takes" to get the bill passed.
  • When NBC's Chuck Todd asked on "Meet the Press" what success would look like, HHS Secretary Tom Price said it means "more people covered than are covered right now, and at an average cost that is less" (which contradicts the administration's line that coverage is the wrong focus).
  • Price also told Chuck that "nobody will be worse off financially."
  • Speaker Ryan told John Dickerson on CBS's "Face the Nation" that he agrees with President Trump that the 2018 elections would be a "bloodbath" for Republicans if they fail to pass his Obamacare replacement.

Echoing into the week ... On ABC's "This Week," Arkansas Sen. Tom Cotton had this warning for Republican House members: "Do not walk the plank and vote for a bill that cannot pass the Senate and then have to face the consequences of that vote."

3. Undercutting Speaker Ryan

Inside the Oval Office last week, there was a telling exchange between conservative activist Jenny Beth Martin and the president.

During Trump's Wednesday meeting with conservative leaders over the healthcare plan, Tea Party Patriots leader Martin subtly reminded Trump that her super-PAC stood by him "through thick and thin" during the campaign, unlike a certain politician from Wisconsin.

According to two sources in the room, Martin didn't mention Paul Ryan's name. But everyone knew who she was talking about. She reminded Trump that in October — when the crude "Access Hollywood" tape leaked and Ryan disinvited Trump from a Wisconsin event — Tea Party Patriots Citizens Fund volunteers were working the phones on Trump's behalf.

Trump smiled and glanced over at his chief of staff Reince Priebus. Trump said that, yes, he had been disinvited. And he thanked Martin for standing by him. (Of course, Martin wasn't always a Trump loyalist. She gave a blisteringly anti-Trump speech at CPAC in 2016, but has since changed her tune.)

  • Why this matters: Some conservatives who oppose the House GOP Obamacare replacement plan believe it's strategically smart to divide the president from the speaker. They think the president is more open than Ryan to negotiating, and they believe that branding the bill as "Paul Ryan's plan" and emphasizing Ryan's disloyalty during the campaign could make Trump less attached to the specifics of the current bill.
  • However: So far, the White House and Ryan are publicly sticking close together even on the controversial stuff. The controversial Medicaid timeline that's in the bill "is what the president supports," White House press secretary Sean Spicer said Friday, adding: "it's not a question of negotiation."

4. Lowering sights on tax

It didn't get much media attention, but Trump's chief economic adviser Gary Cohn said something very important in a Friday interview with CNBC:

"We're going to have to be deficit neutral over a 10-year period."

Why this matters: Sources familiar with the administration's tax planning say there's nothing close to agreement on how — or if — the administration will "pay for" the cuts it has planned to corporate and individual rates. Given Trump's oft-professed love for debt, many sources had been assuming the administration would give up on revenue neutrality, instead suffering short-term deficit hikes in hopes of long-term growth.

Cohn's comments change that calculus, since they sure look like an official White House endorsement of the House's commitment to revenue neutrality.

I checked in with Stephen Moore, one of Trump's top economic advisors during the campaign. He worries that Cohn & Co. are preparing for a less ambitious rate cut.

  • Here's the rub: If the administration doesn't get behind new taxes to pay for the cuts — like the House Republicans' trillion-dollar border adjustment tax — then taxes won't be cut as much as Trump originally promised.

1 fun thing: celebrities struggling with Trump

The celebrity community is still having trouble adjusting to Trump's America, as was on display this week in two big ways:

  • First, Madonna — never one to err on the side of understatement — released a short video announcing that we have entered a "New Age of Tyranny."
  • Even more dramatic, if that's possible, was the escalating feud between Shia LaBeouf and members of the troll-infested Internet message board 4chan. According to Page Six, LaBeouf livestreamed a flag that read "He Will Not Divide Us," billowing in the wind over an undisclosed location. 4chan members reportedly found the flag, pulled it down, and replaced it with a "Make America Great Again" hat.

Not your daddy's culture war, but here we are.

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House and Trump administration to delay insurer subsidy case

(Atef Safadi / EPA Pool via AP)

The House and the Trump administration will seek an additional 90 days to resolve a pending court case over the legality of Affordable Care Act insurer subsidies, the Washington Examiner and CNBC report.

While the subsidies may continue to flow to plans operating on exchanges, the failure to reach a decision doesn't give insurers the certainty they're looking for. Plans must decide whether to participate in federal exchanges by June 21. If they don't get a guarantee that they'll keep receiving the subsidies, plans will likely drastically raise premiums or pull out of exchanges.

The Examiner reports the House and the White House are working on a plan to ensure the subsidies continue going to insurers, who pass them on to low-income enrollees.

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Supreme Court strikes down North Carolina redistricting

Jon Elswick / AP

The Supreme Court ruled Monday that North Carolina Republicans placed too many African-Americans in two congressional voting districts it re-mapped after the 2010 Census, according to the Associated Press.

Why it matters: The 5-3 ruling upholds a federal district court decision that argued North Carolina lawmakers packed more African American residents into the districts than was necessary, which was challenged by the state. But even with the new lines, Republicans continue to hold 10 of the state's 13 districts.

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Pittsburgh sours on Uber's driverless car experiment

Gene J. Puskar / AP

Nine months after Uber rolled out its self-driving car trials in Pittsburgh, the relationship is deteriorating, the New York Times reports.

Why it matters: Self-driving car companies are forming partnerships with cities that will allow them to test their vehicles on their streets. It's a high-risk, high-reward proposition for city leaders.

Pittsburgh Mayor Bill Peduto told The Washington Post this fall, "Is there going to be an accident in a robot car? Yes there is. But the greater goal is to make our streets safer in the long term. We have to start at some point and we can't wait for regulation to catch up with innovation."

The city's complaints: Uber began charging for rides that were expected to be free; it withdrew support from Pittsburgh's application for a major federal grant to overhaul transportation; and it hasn't hired local workers as it promised.

Uber's response: "Uber is proud to have put Pittsburgh on the self-driving map, an effort that included creating hundreds of tech jobs and investing hundreds of millions of dollars," Uber told the Times in a statement. "We hope to continue to have a positive presence in Pittsburgh by supporting the local economy and community."

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Another U.S. chemicals giant strikes global merger

Huntsman Corp. of Texas and Switzerland's Clariant have agreed to an all-stock merger that would create a specialty chemicals giant valued at around $20 billion (including debt). Clariant shareholders would hold around a 52% stake in the combined company, which is expected to generate $13.2 billion in annual sales and $2.3 billion of EBITDA.

Why it's a big deal: This tie-up is part of a trend of cross-border consolidation in the mega-chemicals space, following the pending deal between Praxair (Connecticut) and Linde (Germany) and PPG Industries (Pittsburgh) attempting to purchase Dutch rival Akzo Nobel. It's also notable for private equity buffs (yes, such people exist), as Huntsman was at the center of what arguably was the most contentious M&A failure failure of the financial crisis era.

Fun fact: "Huntsman... is best known for inventing the clam-shell styrofoam box for McDonald's Big Mac burgers." ― Reuters

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Report: Michael Flynn will plead 5th, decline subpoena

Saul Loeb / Pool Photo via AP

The Associated Press is reporting that Michael Flynn, the former general fired from his National Security Advisor role by President Trump for lying about his contacts with Russians, will decline a subpoena from the Senate Intelligence Committee.

  • The sourcing: "[A] person with direct knowledge of the matter... spoke on condition of anonymity to discuss the private interactions between Flynn and the committee."
  • Why this was coming: "Legal experts have said Flynn was unlikely to turn over the personal documents without immunity because he would be waiving some of his constitutional protections by doing so. Flynn has previously sought immunity from "unfair prosecution" to cooperate with the committee."

Background on the subpoena, here.

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First-class travel, hotel suites: WHO spending under scrutiny

Raphael Satter / AP

The World Health Organization nearly spent more on travel for its 7,000 staffers in 2016 — $201 million — than its combined programs for AIDS, hepatitis, malaria, tuberculosis, mental health, and substance abuse, which total $213.5 million, per the AP.

  • How it happened: Lax rules surrounding first-class travel and hotel bookings allowed WHO employees to ignore official travel policy. For example, the agency's Ebola head spent nearly $400,000 in West Africa during the crisis, often opting for helicopter travel.
  • Comparisons: Doctors Without Borders spent $43 million on travel for its 37,000 aid workers; UNICEF spent $140 million for its 13,000 staffers.
  • Worth noting: The agency's polio expenditures hit $450 million last year.
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Zuckerberg: I'm not using this trip to run for office

Jeff Chiu / AP

Facebook CEO Mark Zuckerberg announced in a Facebook post Sunday:

"Some of you have asked if this challenge means I'm running for public office. I'm not. I'm doing it to get a broader perspective to make sure we're best serving our community of almost 2 billion people at Facebook and doing the best work to promote equal opportunity at the Chan Zuckerberg Initiative."

His learned insight: Zuckerberg said he sees an opportunity for Facebook to connect users beyond people they already know, and is hoping to soon introduce a system that recommends "people you should know," like mentors and people outside of your social circle who can provide "a source of support and inspiration."

Read next: Inside Zuck's real political strategy

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Ford replaces CEO Mark Fields with autonomous driving exec

Carlos Osorio / AP

Ford will announce Monday morning that it is replacing CEO Mark Fields with Jim Hackett, who ran Steelcase furniture for 20 years before joining the car company, reports The New York Times. Hackett most recently headed Ford's autonomous vehicle subsidy, known as Ford Smart Mobility.

Under Fields, who served as CEO for three years, Ford shares dropped 40 percent. He also was criticized by investors and the board for failing to make Ford a competitive player in the development of high-tech vehicles for the future.

Between the lines: The shake-up shows that Ford is shifting its focus to accelerate its self-driving technology. As the NYT points out, Ford has lagged behind other large automakers like General Motors and tech companies like Google, both of which have already begun testing their own autonomous vehicles. Ford is promising it will have a fully operating driverless car on the road by 2021.

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Striking AT&T workers head back to bargaining table

CWA

Over the weekend, AT&T stores were closed in a number of cities — from San Francisco to Boston to D.C. — when 40,000 workers walked off the job on Friday after the company failed to reach an agreement with the Communications Workers of America union. (AT&T told Fortune the majority of stores stayed open.)

In Oregon, Sen. Jeff. Merkley joined the picket line with workers. In New York City, Mayor Bill DeBlasio signaled support on Twitter.

Why it matters: It's the first labor strike AT&T has faced since 2012. AT&T is the largest U.S. telecom company, and the only one with a major union presence in its wireless business — the fastest growing part of the company. As a result, AT&T is having to contend with the pressures of competing with nonunion rivals in the increasingly competitive wireless sector, a company spokesman told the NYT.

At issue: CWA says AT&T has cut 12,000 U.S. call center jobs while moving jobs overseas, and has shifted jobs from company-owned retail stories to third-party reseller chains. Workers are also frustrated about rising healthcare costs and changes to commission rates. AT&T, for its part, says it's offering fair wage and pension increases and healthcare benefits. "Our employees are returning to work, and we remain committed to reaching fair agreements in these contracts," a spokesperson said.

What's next: In an email to members Sunday evening, CWA rep Dennis Trainor said the union will be back at the bargaining table Monday: "We stood up not only for ourselves and for our families, but for all working Americans who are sick and tired of being taken advantage of by greedy corporations. This fight is even bigger than AT&T. Let's congratulate ourselves for a job well done and walk into work tomorrow very proud."

Updated to include AT&T statement.

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Tech adoption skyrockets among older adults

Over 40% of American adults ages 65+ own a smartphone, more than double the amount since 2013, according to the latest survey from Pew Research Center. At the same time, more than two-thirds of seniors use the internet — a 55% increase from 2000. And for the first time, half of seniors have broadband at home.

Reproduced from 'Tech Adoption Climbs Among Older Adults' Pew Report

Why it matters: Despite these milestones, seniors still report feeling disconnected from the internet and digital culture. The study also found that roughly one-third of older internet users say they have little to no confidence in their ability to use electronic devices to perform online tasks, and roughly half of seniors say they usually need someone else to set up a new electronic device for them or show them how to use it. As more aspects of daily life become dependent on technology, particularly health care, senior adoption of new technologies will become increasingly important.

Other takeaways: The study also found that broadband access was dependent on household income and education levels. It's important to note that tech adoption among seniors is happening as the average population of seniors is on the rise in the U.S. Today, people ages 65+ account for 15% of the overall U.S. population and that number is expected to jump to 22% by 2050, according to U.S. Census Bureau projections.