Nov 10, 2017

Axios AM

1 big thing: GOP woes fuel tax cuts

With the release of the Senate's plan yesterday, tax cuts are off to a stronger start than health reform's fraught debut earlier this year.

  • The bottom line: You've got high top rates on wealthy people, a concession to the left — yet tons of loopholes and crony tax breaks.

Even Republicans who have been skeptical all year about tax reform's prospects are telling Jonathan Swan and me that they see glints of momentum. The reasons:

Sheer political panic: This may be Republicans' only chance to hold onto the House. GOP leaders, especially Speaker Ryan, are under no illusions — particularly not after the results in Virginia.Donor pressure: As members and senators have admitted out loud, donors won't be returning phone calls if united GOP government can't deliver tax reform.The Roy Moore factor: Senators were already nervous about this unpredictable, anti-establishment figure entering the Senate in the new year. His election is on Dec. 12. Now, with yesterday's molestation accusations (see item #3), Republicans can foresee a scenario in which he loses to a Democrat in Alabama!The upshot: The GOP must pass tax reform before "the Roy Moore line," says a source close to leadership.Republicans understand and care far more about cutting taxes than they ever did — despite seven years of sloganeering — about overhauling Obama's Affordable Care Act.Be smart: Despite the "so far, so good" start, expensive concessions will still have to be added to bring around resistant business interests. Expect more stuffing in this bird.

2. The deets: House v. Senate
3. New GOP panic

"Republicans in Washington seemed near panic ... in the light of a news report in which four women said Roy S. Moore, the Republican nominee for a United States Senate seat in Alabama and an evangelical Christian, had made sexual or romantic overtures to them when they were teenagers and he was in his 30s," the N.Y. Times writes on A1.

  • "Senator Mitch McConnell of Kentucky, the Republican majority leader, said Mr. Moore should step aside ahead of the Dec. 12 special election if the allegations were true."
  • "If true"?! ... Dan Eggen, WashPost White House editor: "All 4 women on record, corroborating witnesses, 30 sources total - what would it take to overcome 'if true' caveat?" (h/t Brian Stelter)
  • The story, atop WashPost front page ... "Moore accused of touching teen girl," by Stephanie McCrummen, Beth Reinhard and Alice Crites: Four women "interviewed by The Washington Post in recent weeks say Moore pursued them when they were between the ages of 16 and 18 and he was in his early 30s, episodes they say they found flattering at the time, but troubling as they got older."

The dominoes: N.Y. Times Quote of the Day ... Julia Wolov, who accused a fellow comedian, Louis C.K., of sexual harassment in front-page story, "Detailing Lewd Acts, 5 Women Accuse a Comic of Misconduct": "I think the line gets crossed when you take all your clothes off and start masturbating."

  • "Louis C.K.'s publicist, Lewis Kay, said the comedian would not respond. 'Louis is not going to answer any questions,' Mr. Kay wrote in an email."
Bonus: Pic du jour

The sun sets behind the ancient Acropolis hill and the ruins of the fifth century B.C. Parthenon temple in Athens yesterday.

4. China guru Bill Bishop makes Axios debut

In a few hours, we'll debut Axios China, our new, weekly newsletter from Bill Bishop of Sinocism, who is consulted by CEOs around the world for his Beijing insights, intel and connections. Sign up free here.

Sneak peek ... "Trump in Beijing: Smiles mask growing tensions":

  • Be smart: "Pomp and flattery aside, it is not so clear that Xi played Trump. The administration has a good team of China people."
  • What's next: "Trump may return to the U.S. and, barring a real breakthrough over the North Korea issue, begin rolling out a tougher policy towards China, especially on trade."
  • "Trump has been consistent for decades in his criticism of China and its trade practices, so the last 10 months of relative calm in the U.S.-China relationship seem more an anomaly than the status quo."
  • Bottom line: "There was no announced progress on North Korea. ... Xi is also not stupid and while he prefers a constructive relationship with the U.S., the Chinese are prepared for and in fact are expecting more friction with the U.S."
  • Get Axios China free.
5. How they see us

The Economist cover ... "Endangered: America's global influence has dwindled under Donald Trump — A presidential tour of Asia cannot hide the fact that America has turned inward, hurting itself and the world":

  • Shot: "So far, Mr. Trump's foreign policy has been less awful than he promised."
  • Chaser: "Reagan, he ain't."
  • Why it matters: "For all its flaws, America has long been the greatest force for good in the world, upholding the liberal order and offering an example of how democracy works. All that is imperiled by a president who believes that strong nations look out only for themselves. By putting 'America First,' he makes it weaker, and the world worse off."

P.S. L.A. Times front page, "Trump's Asia trip shows U.S. at risk of being sidelined: Leaders have not pursued negotiations or given concessions," by Don Lee: "From Tokyo to Seoul to Beijing, the American president has been feted with maximum ceremonial honors ... Nowhere in Trump's tour, however, have any of those leaders entered into serious negotiations or made significant concessions."

6. Bannon's new holiday

Steve Bannon, in an interview with the N.Y. Times' Jeremy Peters on Wednesday, a year since Election Day:

We celebrated today in the Trump movement as MAGA Day [Make America Great Again]. Right? A high holy day. ... It's MAGA Day. And we'll celebrate it like Bastille Day going forward.

7. Russia dossier drip, drip

"After a business meeting before the Miss Universe Pageant in 2013, a Russian participant offered to 'send five women' to Donald Trump's hotel room in Moscow, his longtime bodyguard [Keith Schiller] told Congress this week," NBC News reports.

  • "Schiller [said he] viewed the offer as a joke, and immediately responded, 'We don't do that type of stuff.'"
  • CNN: "On their way up to Trump's hotel room that night, Schiller told the billionaire businessman about the offer and Trump laughed it off, Schiller told the House intelligence committee ... After several minutes outside of Trump's door, which was Schiller's practice as Trump's security chief, he said he left."
  • CNN's Manu Raju said on-air that Schiller "couldn't account for what happened the rest of the night."
8. How Snap hype led to disappointment

Wall Street Journal front page ... "Snap's Splashy IPO Stifled Its Doubters: Deal participants had concerns about revenue, competition — issues now gutting the stock price":

  • "At a company all-hands meeting in January [ahead of the Feb. 2 SEC filing and March 2 trading debut], a Snap employee said the company would reach a saturation point in the U.S., according to a person present at the gathering in an airplane hangar in Santa Monica, Calif. The employee wanted to know about the company's growth strategy overseas, since Facebook was imitating many of Snap's features and signing up droves of users in Asia and India, the person said."
  • "Mr. Spiegel's response: People feel more free to express themselves on networks of close friends."
  • The takeaway: "The CEO has dismissed ideas that rely heavily on data, according to people who have worked with him. He prefers to study the experience of users for cues on revisions and new features."

Be smart: Snap's Q3 report this week — revenue of $207.9 million, with 178 million daily active users — was less than analysts expected, but still reflects a business of stunning size that remains addictive to young users. If Snap had stayed private, the hype and heat would have persisted.

9. Zuck hits the heartland

"Zuckerberg nears end of US tour, wants to boost small biz," by AP Tech Writer Barbara Ortutay:

  • Key stat: "Facebook says more than 70 million small businesses use its service. Only 6 million of them advertise."
  • What's next: After a pilot in Detroit, "Zuckerberg [announced] a program to boost small businesses and bolster individual technical skills both on and off Facebook. ... Community Boost ... will 'visit' 30 U.S. cities next year and offer ... free training on a range of digital skills ... coding, building websites and ... using Facebook for their business."
  • Zuck's year: The 33-year-old CEO has spent the past year visiting states he hadn't been to yet to learn more from regular people and local communities — stopping by an opioid treatment center, an oil rig and a seafood processing plant along the way. He has two more states left, Kansas and Missouri."

Go deeper ... "Silicon Valley's guilty conscience," by Stef Kight.

Bonus: Out and about

Kellyanne Conway joined "Meet the Press" moderator Chuck Todd at the Newseum last night to celebrate the 70th anniversary of the longest running show on TV.

  • Novelty ... Guests took pics on a replica "Meet the Press" set.
  • Party favor ... A Mason jar, stuffed with Bloody Mary mix and emblazoned: "If it's Sunday."
10. 1 joe thing

Starbucks holiday cups from 1997 to 2017 (top row to bottom, left to right) are displayed in New York yesterday.

  • This year's edition has splashes of red and green but is mostly white, for customers to color in themselves.