Jan 13, 2017

Axios AM

Mike Allen

Good Friday morning: A week from today, it'll be inauguration morning. Enjoy the last weekend of the Obama era. Thanks for making this a great beta week for Axios AM: Keep your leaks and suggestions coming. And make sure your friends and colleagues join the breakfast conversation: Get them to sign up at this one-click link.

​The 1 thing: The coming Republican clash

Look for lots of Trump v. Republican action in the weeks ahead. Three things you should know:

  • Trump's run-and-gun strategy: He wants fast action on Obamacare repeal, infrastructure spending, corporate tax reform (with VAT-tax-like border adjustment included), funding for a partial wall on Mexican border and a Supreme Court nominee, transition sources tell me. So much, so fast could catch critics and media napping. BUT, it also runs danger of clogging a slow-motion Congress.
  • Inside the room: Lawmakers have been trying to instill the facts of life (and calibrate expectations) during meetings with eager-beaver Trumpers. A top Hill leadership aide told us: "We work on a calendar, and definitely have roadblocks that are institutional or constitutional, and slow us down."
  • Just the facts: Democrats paint the Trump team as radicals, but there are actually a lot of insiders who are spoiling for fights with conservatives. Jared Kushner and Steve Bannon both want an infrastructure bill that could make fiscal conservatives choke; most of the inner circle agrees with picking fights with specific companies and fighting for tariffs that free-market conservatives hate.
  • And the Russian menace won't go away. McCain, Graham & Co. are very suspicious of Trump's ties to Putin — and unlikely to back off.
  • The inside take: Trump insiders are much more worried about Mitch McConnell than Paul Ryan being an obstacle. While Ryan was a campaign critic (way more so than McConnell), many transition officials have been pleasantly surprised by the Speaker's flexibility on topics like border adjustments. Color me crazy, but does McConnell strike you as a Trump kind of guy?
​2. Inside Trump Tower

Don't believe what you read elsewhere. I'm told that Rex Tillerson, the former Exxon CEO chosen as Trump's Secretary of State, was absolutely reflecting the boss views when he made confrontational remarks about Beijing's behavior in the South China Sea at Wednesday's hearing: "You're going to have to send China a clear signal that first the island building stops, and second your access to those islands is also not going to be allowed."

  • Chinese state media scolded Tillerson: "Unless Washington plans to wage a large-scale war in the South China Sea, any other approaches to prevent China access to the islands will be foolish."
  • A top Trump source emails: "Most important part of the testimony."
3. Trump v. Cabinet

Some reporter nerds who have been following the confirmation hearings too closely for our own health were trading examples of this at Martin's in Georgetown last night. You snooze, you lose: During that very dinner, the N.Y. Times, WashPost and Wall Street Journal were all posting front-pagers pulling together nominees who have been taking positions that are slightly or notably different than Trump's.

  • In "Latest to Disagree With Trump: His Nominees: His Nominees," the NYT's Jennifer Steinhauser points out that retired Marine Gen. John F. Kelly, Trump's choice for Homeland Security, said when asked about a border wall that "a physical barrier in and of itself will not do the job … it has to be really a layered defense."
  • Retired Marine Gen. James Mattis, who'll head the Pentagon, opposes torture and would support the Iran nuclear agreement — the opposite of Trump. (Trump said after Mattis' audition interview that he was surprised but impressed by his position on waterboarding — suggesting Trump might rethink his view.) Kelly also opposed waterboarding at his hearing.
  • Sean Spicer, the incoming White House press secretary, said when asked about the differences Thursday morning on a daily transition conference call for reporters: "[T]hey're being asked their personal views here and there. They're giving them. … [T]hat's why he chose them, is to share their views with him, to help shape his opinions and ideas and thoughts."
  • The inside take: Trump is plenty willing to change positions to suit the moment. (Remember the president-elect on "Lock her up," at a rally in December: "That plays great before the election -- now we don't care, right?") So he's fine with his nominees taking slightly different positions: A bit of ambiguity on the team strengthens him as the last word on any given issue at any given moment, and gives him some running room on issues where he otherwise might look boxed in.
  • Headline of the day, on an overnight AP story: "Week 1: Dems find Trump's picks more reasonable than Trump."
​4. An intriguing phone call

David Ignatius broke some news last night in his WashPost column, "Four burning questions on Russia": "According to a senior U.S. government official, [retired Army Lt. Gen. Michael Flynn, who'll be Trump's national security adviser] phoned Russian Ambassador Sergey Kislyak several times on Dec. 29, the day the Obama administration announced the expulsion of 35 Russian officials as well as other measures in retaliation for the hacking."

  • "What did Flynn say, and did it undercut the U.S. sanctions? The Logan Act (though never enforced) bars U.S. citizens from correspondence intending to influence a foreign government about 'disputes' with the United States. Was its spirit violated? The Trump campaign didn't immediately respond to a request for comment."
​5. The conversation

Jim Rutenberg argues in his NYT "Mediator" column ("Outgunned, Outmaneuvered and in Need of a Game Plan") that reporters need more of a "united front" against kneecappings by the president-elect: "Trump … used his first news briefing since July to expertly delegitimize the news media and make it the story … The news media remains an unwitting accomplice in its own diminishment as it fails to get a handle on how to cover this new and wholly unprecedented president."

  • On the night of Trump's presser, CNN's Brian Stelter began his Reliable Sources newsletter: "An email from a reliable newsletter reader: 'Why doesn't the media join together to combat it when he singles out reporters?' Another reader email: 'If you all don't stand together for the First Amendment, he will pick you off individually.'"
​6. Millennials lag boomers

New research is out this a.m. that helps explain why voters under 30 leaned less to the left in this election than they did in 2012. (Exit polls show they went 55-37 Clinton-Trump, compared with the 60% who voted to reelect Obama.)

  • AP: "With a median household income of $40,581, millennials earn 20 percent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles."
  • "[T]he median college-educated millennial with student debt is only earning slightly more than a baby boomer without a degree did in 1989."
​7. Nervous Davos Man

In a priceless metaphor, next week's Davos gathering of global elites will be counter-programming the American inauguration, leading to split-screen images of Donald Trump as the triumphant new president, versus China President Xi Jinping, the first Chinese head of state to attend the World Economic Forum, as the face of globalism.

  • Bloomberg Businessweek last night posted, "Davos Wonders If It's Part of the Problem: Did the global elite's devotion to borderless capitalism sow the seeds of a populist backlash?" Ngaire Woods, dean of the Blavatnik School of Government at Oxford University and a frequent Davos visitor, is quoted as saying "The last time that we had a convergence of fear of globalization, fear of economic stagnation and poverty, fear of the international, it was after the 1929 crash … We really have to learn the lessons of the 1930s."
​8. Trending in tech
  • Two huge headlines today for the Everything Store: "Amazon Touts Job-Creation Plans, Patching Up Rift With Trump" (100,000 full-time jobs in U.S. in next 18 months) … WashPost Style front, "Bezos buys the biggest house in Washington" ($23 million in cash for the 27,000-square-foot former Textile Museum, to be converted to a single-family home).
  • The Verge's Casey Newton channels Twitter HQ in San Francisco, where employees are angsty about their role as an engine for Trump: "[T]heir efforts have bolstered a politician that some of them find odious … And yet thanks largely to his victory, Twitter has never been such a vital source of news and conversation."
​9. Tops in business
  • Under the wire: With a week left in the administration, the EPA accuses Fiat Chrysler of using secret software to violate emissions regulations on 100,000 diesel vehicle — echoing the successful case against VW.
  • A good laugh for Rs: George Soros lost nearly $1 billion in the post-election Trump rally, per a WSJ front-pager. "But Stanley Druckenmiller, Mr. Soros's former deputy who helped Mr. Soros score $1 billion of profits betting against the British pound in 1992, anticipated the market's recent climb and racked up sizable gains."
  • Make America gamble again: In the latest sign of a healing U.S. economy, Nevada state regulators said that for the first time since 2008, the Nevada gaming industry was profitable again amid a resurgence of tourism to Las Vegas. Axios' Christopher Matthews says this jibes with a lot of other economic data that shows rising wages, falling unemployment and increased consumer confidence.
​10. 1 fun thing

JetBlue becomes the first airline to offer free wifi in every seat. The Fly-Fi service includes streaming video curated by Amazon and 36 channels of DIRECTV. Also free wifi at its terminals at DCA, JFK, LAX and many other airports.

WHAT'D I MISS? Send me your tips, clicks and rants.

Mike Allen