Dec 14, 2018

Axios AM

By Mike Allen
Mike Allen

☕️ Happy Friday!

1 big thing ... Trump v. Pelosi: Showdown will define 2019, 2020

Illustration: Aïda Amer/Axios

Neither of them has any real competitor for influence on their side. Each sees themselves as a master dealmaker. Both run in coastal-elite circles.

And now the chilly relationship between Speaker-designate Nancy Pelosi and President Trump is the most consequential in American public life:

  • She is the most powerful and recognizable Democrat.
  • She has an iron grip over most her party.
  • She is hated on the right as much as Trump is on the left.
  • She will decide impeachment and every Trump target to hit.
  • She is trash-talking him with glee.
  • She can block any bill.
  • He is the most powerful and recognizable Republican.
  • He has an iron grip on elected Republicans.
  • He is loathed by Democrats.
  • He tried mansplaining to her in the White House this week, and got a biting response.
  • He soon will be subject to the subpoenas and gavels of her committee chairs.

Both sides are relishing the combat to come:

  • Rep. Hakeem Jeffries (D-N.Y.), the incoming Democratic Caucus chair, told me that after two years of essentially running a monarchy, Trump this week got a taste of Pelosi's strength: "Everything changes on January 3rd. ... She's just getting started. There will be much more of that to come."
  • David Urban, a Trump adviser who hosted the president at last weekend's Army-Navy game, told me Trump is treating Pelosi as "the new Hillary" until he has a 2020 opponent. "He's already branding her: 'I’m for you. She’s for them,'" Urban said.

Be smart ... Erik Smith — founder of Blue Engine Message & Media, and a former senior House Democratic adviser — said:

  • "Speaker Pelosi's sole job in 2019 will be to serve Trump to the 2020 nominee on a platter ... She won't be bullied or outmaneuvered."
2. Scoop: Trump meets Christie to discuss job
White House chief of staff John Kelly listens as President Trump speaks with newly elected governors in the Cabinet Room yesterday. (Evan Vucci/AP)

President Trump met with Chris Christie last evening and considers him a top contender to replace John Kelly as chief of staff, a source familiar with the president’s thinking tells Jonathan Swan.

  • Christie is "tough; he’s an attorney; he’s politically-savvy, and one of Trump’s early supporters,” the source said.

Behind the scenes: Trump has met with a couple of others, but the way he’s discussed Christie to confidants makes them think he’s serious. The former New Jersey governor's legal background may also come in handy next year.

  • Between the lines: Christie is used to being a principal, and it’s unclear how he would handle playing second fiddle. Also, he is not a friend of the Kushners. (As U.S. attorney for New Jersey, Christie sent Jared’s father to prison.)

Also spotted at the White House yesterday ... another contender for chief of staff: David Bossie, Trump's 2016 deputy campaign manager.

P.S. "President Trump's hunt for a new chief of staff has taken on the feel of a reality TV show," the AP reports.

  • Author Chris Whipple, an expert on chiefs of staff, called the search process "sad to watch."
3. Mueller wrapping up?
Michael Cohen leaves his apartment building on New York's Park Avenue last week. (Richard Drew/AP)

The sentencing (before public testimony) of Robert Mueller's cooperating witnesses suggests the end of the Russia investigation may be near, the Washington Post's well-wired Devlin Barrett reports:

  • One explanation for Mueller's unusual approach is that "the accounts of those cooperating witnesses will appear in a written report, not in court."
  • Robert Ray, a former independent counsel on the Whitewater investigation, "said he expects Mueller to deliver a report on his findings in the first three months of 2019."

Multiplying fronts in Trump probes:

  • NBC News: "Trump was the third person in the room in August 2015 when his lawyer Michael Cohen and National Enquirer publisher David Pecker discussed ways Pecker could help counter negative stories about Trump's relationships with women." Why it matters: Daniel Goldman, an NBC News analyst and former assistant U.S. attorney, said that would "squarely place Trump in the middle of a conspiracy to commit campaign finance fraud."
  • WashPost: "Trump tried to place blame entirely on his lawyer for felonies that his advisers and allies are increasingly concerned could imperil the president."
  • Wall Street Journal: "Federal prosecutors in Manhattan are investigating whether President Trump’s 2017 inaugural committee misspent some of the record $107 million it raised."
  • N.Y. Times: Federal prosecutors are examining "whether people from Middle Eastern nations — including Qatar, Saudi Arabia and the United Arab Emirates — used straw donors to disguise their donations" to Trump’s inaugural committee and a pro-Trump super PAC.
4. Pic du jour
Win McNamee/Getty Images

Sen. Jeff Flake (R-Ariz.) hugs his wife, Cheryl, after delivering his farewell speech on the Senate floor yesterday.

  • Flake said: "Let us recognize from this place here today that the shadow of tyranny is once again enveloping parts of the globe. And let us recognize as authoritarianism reasserts itself in country after country that we are by no means immune."
5. 7-year-old girl died in Border Patrol custody

"A 7-year-old girl from Guatemala died of dehydration and shock after she was taken into Border Patrol custody last week," the Washington Post's Nick Miroff and Robert Moore report:

  • She was "crossing from Mexico into the United States illegally with her father and a large group of migrants along a remote span of New Mexico desert, U.S. Customs and Border Protection said."
  • "The child’s death is likely to intensify scrutiny of detention conditions at Border Patrol stations and CBP facilities that are increasingly overwhelmed by large numbers of families seeking asylum in the United States."

"[T]he girl and her father were taken into custody ... as part of a group of 163 people who approached U.S. agents to turn themselves in."

  • "More than eight hours later, the child began having seizures ... Emergency responders ... measured her body temperature at 105.7 degrees, and according to a statement from CBP, she 'reportedly had not eaten or consumed water for several days.'"
  • "Food and water are typically provided to migrants in Border Patrol custody, and it wasn’t immediately clear ... if the girl received provisions and a medical exam before the onset of seizures."

CBP spokesman Andrew Meehan: "Our sincerest condolences go out to the family of the child."

6. Why ACA season has been the worst
Expand chart
Data: Centers for Medicare & Medicaid Services. Chart: Andrew Witherspoon/Axios

The Affordable Care Act is limping toward the end of what will likely be the worst enrollment season in its history. That's partly because of the Trump administration's policies, but there are also other reasons, and they may matter just as much, Axios health care editor Sam Baker reports:

  • The window to purchase ACA coverage for 2019 closes tomorrow.
  • So far, the number of people signing up through, the main enrollment portal, is down about 12% from the same time last year — and last year was down slightly from the year before that.

The timing of this enrollment drop has caught some experts by surprise. Yes, the Trump administration has chipped away at the ACA, but a lot of that was baked into the system a year ago, when premiums skyrocketed.

  • Premiums are actually lower, on average, this year, and many people have more plans to choose from.

Here’s why it’s happening:

  • Coverage is still really expensive. Yes, premiums went down this year for many plans. But they’ve been going up, sometimes by double digits, every year before that.
  • Unemployment is low. The ACA’s markets are mostly designed to serve people who don’t get insurance through their jobs — and that pool shrinks when more people are working.

Trump certainly hasn’t helped, though some of the administration’s changes may not pack as much punch as you might think:

  • The Department of Health and Human Services has slashed the budget for advertising and enrollment outreach.
  • It has also expanded cheap, bare-bones “short-term” plans, which don’t have to cover pre-existing conditions. That may be siphoning some healthy people out of the ACA’s exchanges.
  • Nullifying the individual mandate once seemed like a death blow. But there’s a growing consensus among policy wonks that the mandate just wasn’t very effective.
7. CBS paid actress $9.5 million settlement
Photo: Brent N. Clarke/Invision/AP

Eliza Dushku, known for her work on "Buffy the Vampire Slayer," won a confidential settlement of $9.5 million from CBS after confronting the star of "Bull," Michael Weatherly, about inappropriate comments he made to her on-set.

  • She was then written out of the show, the N.Y. Times' Rachel Abrams and John Koblin scoop, based on a report about sexual misconduct being prepared for the CBS Corp. board in connection with the Les Moonves investigation.

The big picture: The report says "the company’s handling of Ms. Dushku’s complaints was not only misguided, but emblematic of larger problems at CBS."

  • "When faced with instances of wrongdoing, the company had a tendency to protect itself, at the expense of victims, the investigators wrote."
8. Facebook looks for new income

Illustration: Lazaro Gamio/Axios

Three recent moves by Facebook suggest the company is looking to aggressively expand its business beyond selling mostly display ads, Axios' Sara Fischer reports:

  • Why it matters: Executives have been warning investors for months that these ads are nearing a growth ceiling.
  • And analysts say engagement on Facebook's main app (where it sells most of these ads) is declining, which puts even more pressure on the tech giant to quickly find new sources of revenue.

What's new: Facebook has invested heavily in finding ways to increase display ad revenue on its other apps, primarily Instagram. But the latest reports suggest Facebook is dabbling in a bunch of new revenue streams, including new types of advertising.

  1. Video ads: Facebook announced yesterday that its video platform "Watch" has 75 million daily visitors.
  2. Search ads: Facebook is testing ads in its search results and Marketplace (its Craigslist-like community sales tab), in an effort to compete with Google for search ad revenue, per TechCrunch's Josh Constine.
  3. Commerce: Facebook is hoping to cut deals with premium cable channels, like HBO and Showtime, that would allow users to watch content from those channels on Facebook's apps and potentially even buy subscriptions through Facebook, with the platform getting a cut, Recode's Peter Kafka reports. This would be one of Facebook's first real attempts to sell products directly on its app.

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9. The rise of the family office
Courtesy The Economist

"The family offices through which the world’s wealthiest 0.001% invest are a new force in global finance that few have heard of," The Economist writes in its lead editorial:

  • "Global finance is being transformed as billionaires get richer and cut out the middlemen by creating their own 'family offices,' personal investment firms that roam global markets looking for opportunities."
  • "Largely unnoticed, family offices have become a force in investing, with up to $4trn of assets — more than hedge funds and equivalent to 6% of the value of the world’s stock markets."
  • Why it matters: "As they grow even bigger in an era of populism, family offices are destined to face uncomfortable questions about how they concentrate power and feed inequality."

"The concept is hardly new; John D. Rockefeller set up his family office in 1882."

  • "But the number has exploded this century. Somewhere between 5,000 and 10,000 are based in America and Europe and in Asian hubs such as Singapore and Hong Kong."
10. 1 🎵 thing

The debate over the 74-year-old "Baby, It’s Cold Outside" makes the front page of today's N.Y. Times, as the "annual holiday culture wars and the reckoning over #MeToo have swirled together into a potent mix."

  • "Several radio stations have pulled 'Baby' from the air," Jacey Fortin writes. "To some modern ears, the lyrics sound like a prelude to date rape. ... But some believe this to be a case of political correctness run amok."

"The composer Frank Loesser, known for 'Guys and Dolls' and other Broadway hits, wrote it in 1944 for himself and his wife Lynn Loesser to perform for friends in their living rooms."

  • "'I’ve got to get home,' the woman sings in the duet. 'But baby, it’s cold outside,' the man replies. 'The answer is no,' she protests later. By the end they’re singing the chorus together."
  • "The woman keeps protesting. 'I ought to say no, no, no, sir,' she sings, and he asks to move in closer. 'My sister will be suspicious,' she sings. 'Gosh, your lips look delicious,' he answers."

But it's popularity is rising: "[A]ccording to Billboard’s sales chart for holiday-themed digital songs, 'Baby, It’s Cold Outside' is rising in the rankings. Three cover versions appear in the Top 50, more than any other title."

Mike Allen