Jan 7, 2019

Axios PM

By Mike Allen
Mike Allen

Good afternoon.

Situational awareness: The big story so far at CES 2019 is just how much the Big Tech companies are partnering with one another, Axios' Ina Fried reports.

1 big thing: The fear of a painful shutdown

Illustration: Sarah Grillo/Axios

It appears that the IRS has supplanted federal worker paychecks as the first true pain point in the Trump administration's partial government shutdown.

  • IRS refunds will now be paid during the shutdown, a reversal from previous statements, the White House's Office of Management and Budget told reporters today.
  • "Final decisions were still being worked out, including how many people would be brought back to work at the IRS and when the tax filing season will begin," according to the Washington Post.
  • Acting OMB director Russell Vought said the administration wants the shutdown to be as "painless as possible consistent with the law."
  • VP Mike Pence: "We’re going to continue to take steps like that to mitigate the impact."

Behind the scenes: Until recently, Trump had been saying privately that he doesn’t think the American people care about shutdowns and that a shutdown wouldn't hurt him politically, a source familiar with the situation told Axios' Jonathan Swan.

  • But Trump's opinion can soon change with harmful effects kicking in imminently — with paychecks, federal housing and food for poor people all potentially threatened. 
  • Swan asked Pence about these private comments today. Pence said he’d never heard Trump say anything like that, and he said that Trump was alert to the needs of the roughly 800,000 federal workers affected by the shutdown. 
  • A White House official told Swan earlier today that they are most worried about food stamps being cut off and believe the next 72 hours are crucial to put political pressure on Democrats, given real effects of the shutdown are looming.

Between the lines: "The IRS plans for this shutdown and for one that could have occurred during last year’s tax-filing season both listed 'issuing refunds' among the activities that can’t be performed during a shutdown," the WSJ's Richard Rubin and Peter Nicholas report.

  • "Administration lawyers may have been using a different theory—that the power to issue refunds was implied by the permanent appropriations for the refunds themselves. That is the exception the government uses to pay Social Security benefits."
  • "It is hard to see the legal justification for reversing past practice and paying refunds," said Sam Berger, a former senior OMB official under President Barack Obama.

P.S. Trump will address the nation tomorrow at 9 pm ET regarding the ongoing partial government shutdown. Some networks haven't decided whether to air the speech. They declined to air an Obama immigration speech in 2014. Go deeper.

Bonus: Pic du jour

An aerial view shows ice sculptures during the annual Harbin International Ice and Snow Sculpture Festival in Harbin, in China's northeast Heilongjiang province.

Photo: Fred Dufour/AFP/Getty Images
2. What you missed
  1. World Bank president Jim Yong Kim will step down on Feb. 1 — well before the slated end of his term in 2022 — to take a job at an investment firm. Go deeper.
  2. The Supreme Court has rejected ExxonMobil's bid to review the Massachusetts attorney general's demand for internal documents about what the company knew about climate change over the course of decades. Go deeper.
  3. 2018 was Earth's 4th-warmest year on record — with the past four years serving as the hottest years the planet has seen since instrument records began in 1880 (and likely well before that). Go deeper.
  4. Pharma giant Eli Lilly is acquiring Loxo Oncology for $8 billion in cash, the companies said today.
3. 1 fun thing

Mastercard, the legendary credit card provider, is taking its own name out of its branding, the company said today.

Mike Allen