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Axios Sneak Peek

Happy Father's Day, and welcome to Sneak Peek, our weekly lookahead for both ends of Pennsylvania Avenue. I'd love your tips and feedback: jonathan@axios.com. And please urge your friends and colleagues to join the conversation by signing up for Sneak Peek. See you all week in the Axios STREAM.

1 big thing: debt ceiling, behind the scenes

President Trump is likely to play a much smaller role than previous presidents in the coming debt-ceiling fight.

Marc Short, director of the White House's Office of Legislative Affairs, has told associates his recommendation is that the House and Senate initiate the debt-limit negotiations within their own conferences rather than leaning on Trump to do the heavy lifting. (During the previous debt ceiling crises, Obama aggressively lobbyied Congress both publicly and privately.)

  • The White House theory: Congressional spending habits got America into this mess and the President has enough on his plate and would gain nothing from spending his political capital on this fight.
  • The upshot: Trump will ultimately have to play some role in the debt ceiling debate, but the White House won't have him out there providing cover for congressional leadership to negotiate an unpopular bill.
  • Current status: Nobody agrees on anything. Budget Director Mick Mulvaney wants to use the debt limit bill to cut spending. Treasury Secretary Steven Mnuchin just wants the debt ceiling raised without fuss — to avoid a last-minute standoff in September that could crash markets.

Why this matters: Presidents have traditionally used the weight of the presidency to push Congress to raise the ceiling. Some in Republican leadership circles are frustrated that the White House appears willing to make GOP leadership do the thankless work.

  • Between the lines: Some in the White House believe Republican leadership has already given up on the Freedom Caucus / Mulvaney approach, and concluded the only workable path is to collaborate with Democrats and moderate Republicans. Leadership says it's not close to making such decisions.
  • Click here for three options being kicked around.

2. "Tapes"?

We told you in last Sunday's Sneak Peek you should expect to see a lot more of Jay Sekulow — the man Trump has chosen as his TV lawyer for the Russia probe. Today Sekulow repped POTUS on nearly every Sunday show — Fox, NBC, CBS and CNN.

  • Tantalizing: Sekulow told John Dickerson of CBS's "Face the Nation" he expected Trump to address "in the week ahead" whether he secretly taped his private conversations with former FBI director James Comey.

Several of Sekulow's interviews got testy, especially his exchange with "Fox News Sunday" host Chris Wallace. The two talked over each other, with Sekulow accusing the host of manipulating his words.

Wallace's response:

"Don't tell me what I'm trying to do because you don't know what I'm trying to do. Actually, what I'm trying to get is a straight answer out of you."

The bone of contention: Whether Special Counsel Bob Mueller is investigating Trump. Trump seemed to confirm the investigation when he tweeted: "I am being investigated for firing the FBI Director." But Sekulow said nobody had told Trump he was under investigation, and the President was only responding to the Washington Post story.

Money quote: "The President is not under investigation by the Special counsel," Sekulow told NBC's "Meet the Press" moderator Chuck Todd. "He's not afraid of the investigation. There is no investigation."

3. Huge week for healthcare

Sources close to Mitch McConnell tell me the Majority Leader is dead serious about forcing a Senate vote on the Obamacare repeal-and-replace bill before the July 4 holiday.

Some senators want to delay the vote but McConnell views that as delaying the inevitable. There are no mysteries about what the toughest disagreements are over — Medicaid funding and insurance market regulations.

  • This week is crucial: the Senate won't vote without a CBO score, which means they need to finalize negotiations this week.
  • Behind-the-scenes: McConnell and Senate leaders have been at this for all of May and now first couple weeks of June, turning their weekly lunches into working sessions on various aspects of the healthcare legislation. They've whittled down the stack of items that people don't agree on. I've spoken to a number of people who know McConnell well who speculate that he'll force a vote regardless of whether he knows he has 50 votes. They say he's desperate to move on to tax reform and can't have healthcare hanging around like a bad smell through the summer.

On the House side:

  • Following the White House's "Workforce Development Week," House GOP leadership will vote on two workforce bills. The big one: a bipartisan bill to reauthorize the "Perkins Act" for six years — providing more than $1 billion per year in federal support for career and technical education programs.
  • Wednesday's conference meeting is expected to be more policy-focused than usual. (They had to cancel Friday's meeting due to the fallout from last week's shooting.) A senior House aide tells me the Wednesday conference will focus on the budget caps and appropriations.
  • Paul Ryan and Kevin McCarthy will both address the National Association of Manufacturers. Ryan pushing tax reform and McCarthy on reg reform and workforce development.

4. What Tim Cook will tell Trump

Apple CEO Tim Cook will be at the White House tomorrow for tech meetings organized by Jared Kushner's Office of American Innovation. It's the first of two heavy-hitter meetings in what the White House is calling "Technology Week."

A source tells me Cook, who doesn't belong to any of the President's councils, plans to proactively raise four issues:

  1. Immigration: Cook will participate in the session titled "H-1B/immigration." He's got a long history of arguing for the importance of immigration to the American economy and doesn't agree with the Trump-Bannon-Sessions view that unchecked immigration has been driving down wages and stealing jobs from Americans.
  2. Encryption: Cook will "fly the flag" for strong encryption. This has been a controversial issue within the administration and it remains unsettled. Shortly after the San Bernardino shootings, Trump called for a boycott of Apple products because Cook refused to cooperate with the FBI after it requested that Apple create a special version of its operating software that would have given the government a backdoor into the iPhone used by the terrorists. Cook took a lot of incoming after saying it'd compromise customers' privacy and security. Some argue Cook has been vindicated given subsequent leaks from federal agencies.
  3. Veterans' affairs: How to better serve vets both in the provision of medical care and in hiring policies.
  4. How the administration talks about human rights: Ensuring it remains a priority for the U.S., both domestically and internationally.

Other points on Tech Week:

  • I'm told the White House won't be rolling out any new policies or signing any executive orders related to technology.
  • Tomorrow: Attendees are expected to include Alphabet Chairman Eric Schmidt, Amazon's Jeff Bezos, Microsoft's Satya Nadella, IBM's Ginni Rometty, Oracle's Safra Catz, and venture capitalist John Doerr, among others. Cabinet secretaries will attend and the President will drop by, too.
  • Wednesday: Per a White House official: "We're taking the tech conversation to rural America ... [W]e'll be in Iowa talking about agriculture and technology and showcasing the latest technology that is changing the way farmers produce, harvest, and market food." The event will double as a send-off for Iowa Gov. Terry Branstad, who's heading to China to be the U.S. ambassador.
  • Thursday: Breakout sessions focusing on 5G and the Internet of Things, the commercial use of drones, and what the administration can do to spur innovation. The attendees are expected to come together after their more specialized sessions for a meeting with Trump. C-suite level executives and general partners from venture capital firms have been invited. Commerce Secretary Wilbur Ross will play a key role.

What's next: "Energy Week." (These branded weeks are part of the White House's framing of June as "Jobs Month" — focused on public-private partnerships.)

5. 1 $$ thing: Kellyanne's cost

A source from a Fortune 100 company tells me his business was ready to pay an eye-popping price to have Kellyanne Conway speak to them shortly after the election. Her going rate in December: $75,000 for a "local" speech and $100,000 for outside the New York area. That's not far from Clinton money.

The conversation got me wondering exactly how much cash would've been available to a top official from a winning presidential campaign. (Kellyanne and the others who joined the White House gave up that immediate earning capacity.)

A well-known book agent tells me Kellyanne and other top officials could expect "high seven figures" if they publish the first "insider" book on life inside the Trump campaign or White House. The agent told me he's heard from a number of officials currently inside the White House who want to know how much money they could expect to make from writing books when they leave.

(N.B.: Corey Lewandowski is reportedly one step ahead of them. CNN's Oliver Darcy reports that the sacked campaign manager is shopping a book through his agent. I'm told he can expect more than $1 million if he goes through with it.)

Final thought: what POTUS could be talking about

The father of Otto Warmbier — the American college student just freed from prison in North Korea — held a deeply moving press conference on Thursday. Wearing the blazer his son wore during the show trial where North Koreans sentenced him to 15 years of hard labor, Fred Warmbier ripped into the Obama administration and praised Trump.

  • His son was arrested during Obama's presidency, and the Obama administration told the family to stay quiet about his imprisonment in hopes of negotiating a deal to free him. It didn't work. Then Trump's State Department got Otto free.

Our thought bubble: It isn't the first time diplomatic efforts under Trump have succeeded where Obama's fell short. In April, Trump's team convinced the Egyptians to free an American aid worker. But instead of sharing this deeply moving moment and praising his Secretary of State's leadership, the President tweeted about Bob Mueller's "WITCH HUNT."

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Trump gets personal with new attacks on Morning Joe hosts

AP

President Trump's Twitter attacks got personal Thursday morning when he went after Morning Joe hosts and engaged couple Joe Scarborough and Mika Brzezinski — his old friends:

"I heard poorly rated @Morning_Joespeaks badly of me (don't watch anymore). Then how come low I.Q. Crazy Mika, along with Psycho Joe, came... to Mar-a-Lago 3 nights in a row around New Year's Eve, and insisted on joining me. She was bleeding badly from a face-lift. I said no!"

Flashback: When Joe and Mika broke the news of their engagement in a Vanity Fair interview last month, they revealed that Trump — over lunch with the couple, as well as Ivanka and Jared Kushner — offered to officiate their wedding, and recommended they hold the ceremony at Mar-a-Lago or the White House. Mika told Vanity Fair, "If it weren't Trump, it might be something to think about."

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Reports: Trump routinely confuses Medicaid and Medicare

Evan Vucci / AP

A Republican Senator told the New York Times on Tuesday that President Trump gave the impression that he "did not have a grasp of some basic elements of the Senate plan" and that he was "especially confused" by the idea of opponents calling the bill "a massive tax break for the wealthy." More aides described Trump as uninterested in the particulars of health care.

"There would be times when he would describe what was clearly Medicare...but say Medicaid, and when we pointed that out, he would say, 'That's what I said, Medicare and Medicaid."
  • When asked if Trump had an understanding of the important aspects of the House and Senate health care bills, a close aide laughed and replied, "not to my knowledge."
  • "The president understands winning," a different official said.
  • Aides don't point out Trump's misunderstandings, not wanting to make him feel or look "dumb."
  • On Trump's campaign promises about repealing and replacing Obamacare, a former campaign aide said, "It wasn't really a policy oriented campaign—policy wasn't on our radar. The sense was, say what wins and figure out the details later."
  • Just as his intelligence briefings have been cut short compared to those of Obama, an official told the Daily Beast, "It is fair to say the president takes [a] similar approach to health care... [It's] 'less is more.'"
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Even Nike can't resist the Amazon revolution

Michael Noble Jr / AP

Sportswear giant Nike announced an agreement earlier this month to sell its products directly through Amazon.com, despite resisting the online retailer's entreaties for more than a decade.

The Wall Street Journal reports the decision was made after third-party sellers offering Nike products began to proliferate on the site, loosening the firm's control over pricing and distribution. Nike can't stop third-party sellers from reselling lawfully-purchased product, and following the liquidation of bankrupt Sports Authority's inventory last year, the market was flooded with Nike product that could be resold at deep discounts. Nike therefore decided to strike a deal to sell its products on Amazon in exchange for its help in stopping unauthorized third-party sales.

Why it matters: When consumers want to buy any type of product, be it electronics or apparel, an increasing share think of Amazon first.

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Ex-Binary Capital employee sues for alleged harassment

Binary Capital website

A female former employee at Binary Capital alleges that the VC firm tried to silence her after she quit, including alleged threats to withhold her share of the profits from successful investments (i.e., carried interest), according to a lawsuit filed in San Mateo Superior Court on Thursday.

The details: The former employee, Ann Lai, says that Binary Capital's culture was sexist, including commentary about sexual encounters, women's bodies, and inappropriate behavior toward female staff. After she resigned in May 2016, Binary Capital partner Justin Caldbeck allegedly threatened her ability to find work if she disclosed anything about her time at the firm. She quickly lost out on multiple jobs because of the firm's statements about her and her performance.

Piling on: Lai's complaint comes a week after a report from The Information revealed that Caldbeck had been sexually harassing some female startup founders. Since then, it's also been revealed that apparel startup Stitch Fix requested in 2013 that Calbeck, at the time working for Lightspeed Venture Partners, be removed from its board after he harassed the startup's founder, though she was forced to signed a non-disparagement agreement about the situation. Over the last few days, both Caldbeck and his partner, Jonathan Teo have effectively resigned, and Binary is expected to be wound down.

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Mining by machine: Automation hits coal industry

Anupam Nath / AP

If you want to work in coal, forget using a shovel. As Bloomberg's Tim Loh writes: "Coal…executives are starting to search for workers who can crunch gigabytes of data or use a joystick to maneuver mining vehicles hundreds of miles away."

The coal industry's workforce composition is increasingly going to be skilled workers, and overall hiring is likely to dip. As Heath Lovell, a spokesman for coal producer Alliance Resource Partners LP, puts it: "Whether coal comes back or not is not necessarily directly related to jobs," since as tech makes the industry more efficient it will be able to produce the same amount with fewer employees.

  • To get a sense of how successful the coal industry is going forward, look to production levels, not hiring. Remaining competitive, particularly with natural gas, likely means cutting labor.
  • The tech now: The machines that are likely to displace workers in the next 10 to 15 years include the longwall machine (which cuts coal in mile-long strips without many employees), joysticks to mine by remote control (with the help of videos, sensors, and positioning software), autonomous haul loaders, autonomous trucks, autonomous long-haul trains, semi-autonomous crushers and more. Read more, via the International Institute for Sustainable Development.
  • Likely Impacts: Accenture predicted in 2010 that employing autonomous tech in open pit mines would reduce employment by 75%. Miners, drivers, and maintainers will see more layoffs, per ComputerWorld. It is also likely that the introduction of automation will reduce fuel consumption and spending but also lost tax revenue, IISD claims.
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The iPhone went on sale 10 years ago today

Sergey Ponomarev / AP

The Economist: "No product in recent history has changed people's lives more. Without the iPhone, ride-hailing, photo-sharing, instant messaging and other essentials of modern life would be less widespread. Shorn of cumulative sales of 1.2bn devices and revenues of $1trn, Apple would not hold the crown of the world's largest listed company. Thousands of software developers would be poorer, too: the apps they have written for the smartphone make them more than $20bn annually."

  • The next decade: "[T]he era of stand-alone electronic devices, however slick, is coming to an end. They will increasingly become a vehicle for — and be subsidized by — services based on machine learning and other artificial-intelligence techniques. The quality of these offerings will in turn largely depend on how much data developers have access to... Although Apple's Siri was one of the first digital assistants, Google's and Amazon's offerings are now much smarter."
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The story behind Trump's Medicaid tweet

On Wednesday afternoon, President Trump tweeted a graph from his personal account showing Medicaid spending under the Republican Senate health bill.

There's a story behind that tweet: In the Oval Office on Wednesday, Marc Short, the White House Legislative Affairs director, showed Trump a piece of paper with the graph of Medicaid spending pointing up. Trump wanted to tweet it, according to a source told about the meeting.

Why it matters: The graph doesn't show the other side of the Medicaid changes: the fact that spending would go down compared to current law, which is how Senate Republicans get $772 billion in savings. That's the whole point of the new spending limits.

This is all part of a broader White House strategy: They want to change the way it's presented in the media to help sway some of the Senate Republican holdouts.

  • For the longest time, Republicans in all branches of government failed to frame the argument over Medicaid in terms of the Medicaid dollars going up. Some in the administration had concluded it was an argument they couldn't win. But a number of officials saw they were getting killed every day in the press, with reports of the billions being cut out of Medicaid. Some officials wanted to aggressively reframe the argument as a growth in spending — and a slowing of the growth rate under Obamacare rather than a raw "cut."
  • Even at this late stage, the White House believes it's crucial to change the media narrative. A number of officials believe that some crucial senators are more heavily swayed by media coverage than they are by the substance of the cuts to the Medicaid spending under the Affordable Care Act.

HHS Secretary Tom Price has been making this argument, and tweeted a similar graph of Medicaid spending on Tuesday:

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Stop going to the White House press briefings

With all the legitimate gripes reporters have with this White House, perhaps the least worthy of your (or their) time and attention is the WWE-style smackdown over briefings. Every day, the White House hides or dodges. Every day, reporters protest and whine.

Here's an idea: Quit going.

  • Even if the spokespeople were fully looped in, appeared on camera, and shot straight, what would you miss by blowing it off? There are transcripts and this thing called Twitter, where the rare newsy nugget will quickly appear.
  • Truth is, with cable and the internet, the briefings were pretty useless, even pre-Trump. Government officials are paid to make little news, and spin the best take they can. It's low-grade propaganda at best, and full-blown B.S. at worst.
  • You're wasting time in your day you'll never get back. For a White House reporter who doesn't work in the building, it can take a good chunk of the workday to get to the briefing, sit through it, then complain about it afterward.
  • Work plugged-in sources instead. It's not as if this White House is a watertight ship: Aides are remarkably candid about the hour-by-hour intrigue, infighting and strategizing.
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No one came out of yesterday's Senate GOP meeting sounding hopeful

David J. Phillip / AP

Senate Republicans spent a whole lot of time talking about the health care bill yesterday, but not a whole lot of time reaching any deals. That makes it harder to see how they could get an agreement by Friday on a revised bill.

It didn't help when Sen. Ted Cruz said he wants to let insurers sell plans that don't have any protections for pre-existing conditions — as long as they also sell plans with that offer those protections and follow the Affordable Care Act's other insurance rules.

Reaction to Cruz's comment:

  • One Senate GOP aide told Caitlin Owens that many of the Republican senators were "surprised and pissed" because most Republican senators had already agreed not to touch the ACA's pre-existing condition protections.
  • Another aide summed up: "No matter how narrowly-proposed, wading into pre-ex is not just a 'No,' it's a 'Hell No' for the vast majority of the Senate GOP."
  • A Cruz spokesman, however, said the senator has been talking for weeks about the idea, which is part of a proposal to give consumers a choice between health plans that meet all of the ACA rules and plans that don't. He's been handing out a card that includes that pitch.

No one came out of yesterday's Senate GOP meeting sounding hopeful.

  • Sen. Susan Collins: "It's very difficult...I'm concerned about a number of aspects, such as coverage, Medicaid cuts, impact on premiums."
  • Sen. Shelley Moore Capito: "I'd like to see a [Medicaid] growth rate that matches the projected growth, or at least is close to projected growth." She also wants $45 billion in opioid treatment money over 10 years.
  • Sen. Rob Portman: "I'd rather see us stick to the [Medicaid] growth rates that were worked out by the House."
  • Sen. Rand Paul: Any tradeoff that gives more money to moderates and more deregulation to conservatives "sounds to me like a Washington deal...I'm not going to go for that."

Most of the optimism is coming from the White House. Here's how an administration source summed up the mood to Jonathan Swan last night: "I think we're going to pass this. I really think they'll bribe off the moderates with Opioid money and then actually move policy to shore up Mike Lee and Ted Cruz."

This is how it's going: Even Sen. John McCain, who hasn't been one of the most vocal holdouts, says he's not ready to vote for the bill. Since he's from Arizona, which expanded Medicaid, he wants to offer three Medicaid amendments that he's worked out with Gov. Doug Ducey.

"That has a lot to do with whether I support the bill or not," McCain told reporters as he stepped into an elevator. When asked what the amendments were, he motioned to the elevator operator to hit the button: "Basement!"

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Staples being bought for $6.9 billion

Mark Lennihan / AP

Private equity firm Sycamore Partners has agreed to acquire office retailer Staples for $6.9 billion, or $10.25 per share. The move comes around one year after federal regulators prevented Staples from acquiring rival Office Depot, which soon was followed by Staples naming Shira Goodman as its new CEO. Goodman is expected to remain in place after the buyout is completed later this year.

Price talk: The $10.25 per share is higher than Staples has traded for most of the past two years, but well below its late 2014 high of $17.98 per share.

What to know: Staples is known for its bricks-and-mortar stores, but that's not necessarily where Sycamore's interest lies. Per Reuters: "Sycamore will be organizing Staples along three lines: its stronger delivery business, its weaker retail business and its business in Canada, two sources familiar with the deal said. This structure will give Sycamore the option to shed Staples' retail business in the future." Also don't be shocked if Sycamore at some point tries to revive the Staples-Office Depot merger concept, particularly now that a new Administration is in place.

Data: Money.net; Chart: Axios Visuals