Apr 28, 2019

Axios Sneak Peek

By Jonathan Swan
Jonathan Swan

Welcome to Sneak Peek, our weekly lookahead for both ends of Pennsylvania Avenue, plus my best scoops. Please encourage your friends and colleagues to sign up.

  • New tips: Reply to this email with tips and story ideas. Or if you have more sensitive information, email me securely at jonathanvswan@protonmail.com to get my Signal number.
1 big thing: Scoop — Trump's $2 trillion spending dream

Illustration: Lazaro Gamio/Axios

At last month's St. Patrick's Day lunch in the Capitol, President Trump told Richard Neal, the powerful Democratic chairman of the House's tax-writing Ways and Means Committee, that he wants to spend close to $2 trillion on infrastructure, according to two sources to whom Neal recounted his conversation.

  • Trump's 2020 Budget calls for just $200 billion in additional infrastructure spending. A spokesperson for Neal did not comment on this reporting.
  • A former senior White House official told me that on infrastructure, Trump's instincts are much closer to Elizabeth Warren's than they are to his tight-fisted acting chief of staff Mick Mulvaney.

Why this matters: Trump meets on Tuesday with Democratic leaders Chuck Schumer and Nancy Pelosi to discuss infrastructure. These meetings usually amount to nothing besides a media circus. But Democrats still take these meetings — in fact, Pelosi requested this one — because they know that, left to his own devices, Trump would happily spend a ton of federal money on infrastructure. (It's his own party that won't let him.)

  • The dirty secret — which multiple senior White House officials have confirmed to me — is that Trump hates the infrastructure plan his own White House released last year. In private, he has referred to it dismissively as "Gary's plan," a shot at his former top economic adviser Gary Cohn.
  • The heart of "Gary's plan" was to build infrastructure through "public-private partnerships" — leveraging a modest amount of government spending to stimulate private investment in projects around the country.
  • Democratic leaders have no interest in public-private partnerships. Neither does Trump. Even though he himself has benefited richly from public-private partnerships (as with the Trump International Hotel in D.C.), he has told aides he thinks they don't work and that they need to spend real federal money instead.

Behind the scenes: Trump came into office imagining a presidency in which new projects — "built by the Trump administration" — would be erected all over the country, sources close to him tell me.

  • "There was a genuine naivety about the prospect of Democrats and Republicans coming together to do something on a grand scale with infrastructure," a former White House official told me. "It was one of those things where Trump said it was gonna be easy. He really thought so."
  • In an early 2017 infrastructure meeting at the White House with his friend, New York real estate billionaire Richard LeFrak, Trump laid out his grand Trumpian vision. "They say Eisenhower was the greatest infrastructure president. They named the highway system after him," Trump said, per a source who was in the room. "But we're going to do double, triple, quadruple, what Eisenhower did."

What's next? Nobody will come into the Tuesday meeting with an infrastructure plan, according to White House, administration and Democratic leadership sources who’ve discussed the meeting plans with me. And there are no plans to present even a top-line figure or a list of ways to offset new spending.

  • "The whole thing comes under the heading of an ongoing discussion," a senior administration official with direct knowledge of the plans for Tuesday's meeting told me. "Nobody wants to lay down specific markers. Nobody wants to rule in; nobody wants to rule out."
  • The White House team working on the issue — led by Larry Kudlow — seems much less excited than Democrats are about new, large-scale federal spending on infrastructure. Instead, they are focused on cutting permitting regulations, making it easier to spur energy development, and signing a longer-term transportation funding bill.
2. Inside the Pelosi-Schumer Trump prep

Meeting in the Oval Office, Tuesday, Dec. 11, 2018. Photo: Jabin Botsford/The Washington Post via Getty Images

Trump wings it at his "Chuck 'n Nancy" meetings. But Schumer and Pelosi spend a lot of time choreographing these meetings, according to sources familiar with their planning. They list off things they won't budge on and game out how to respond to Trump’s inevitable curve balls (such as calling in the TV cameras to watch them spar).

Here's what Democrats will demand in Tuesday's infrastructure discussion, per a source familiar:

  1. Any infrastructure bill "must be real money." Translation: Major federal spending, not through public-private partnerships or deregulation.
  2. They need to know where the money is coming from. Translation: Trump must be willing to discuss tax hikes to pay for new spending if he wants their support. (Senate Democrats put out a plan last year that proposed raising the corporate tax rate from 21% to 25% — still much lower than it was before Trump's tax cuts.)
  3. The bill must include strong labor protections and must require that materials used be American-made.
  4. The bill must address climate change, with major investments in renewable energy. (Chuck Schumer gave insight into this in his December op-ed and letter to the president.)
3. How 2020 Dems plan to take on Trump

Illustration: Lazaro Gamio/Axios

Vice President Joe Biden's 2020 announcement sounded like he was ready to skip the primary. He dove right in, directly attacking his hoped-for competitor: President Donald Trump. Axios' Alayna Treene reached out to every Democratic presidential campaign over the past few days to preview their general election strategy.

Alayna's intel:

  • Sen. Kamala Harris' campaign said they'll focus on "Harris the prosecutor." "If you were to canvas the Democratic electorate, a significant portion of it thinks Donald Trump is a criminal, and who best to take that on than a prosecutor?" a campaign aide said.
  • Sen. Cory Booker will play up that Trump came in on a promise to drain the swamp, "but we've seen the exact opposite — he's enriching his pals across the country," a Booker campaign aide said. The aide said Booker is running on the idea that America needs to restore justice and fairness in a time when the Trump administration has chipped away at it.
  • Sen. Amy Klobuchar's campaign said she'll focus on Trump's empty promises, specifically on health care and prescription drugs, and she'll point to how her record in office shows "she's getting things done as a senator and he isn't as president."
  • Julián Castro's message will be: "I'm the antithesis to Donald Trump. I’m a young Latino man who grew up in a family with modest means. I know what it looks like to achieve the American dream," per a Castro spokesperson.
  • Sen. Elizabeth Warren's spokesperson pointed Axios to her Feb. 9 announcement speech where she stated that Trump "is not the cause of what’s broken, he’s just the latest, and most extreme, symptom of what’s gone wrong in America." She'll prioritize how she would fight for big, structural change.
  • John Delaney's spokesperson said they're "going to make a really good case for the fact that we actually need a boring president. We need the guy who can get the job done and won’t make a bunch of waves."
  • Rep. Eric Swalwell will note that he's the product of a working family, first in his family to go to college, and still paying down his student loan debt. "He sees and hears what working Americans need because he always has been in the same boat as them,” his campaign said.
  • Gov. Jay Inslee's team says he will contrast Trump's pessimism with his optimism, specifically how the president "acts as though Americans can’t solve the impacts of climate change, while the governor is optimistic we can take on this existential threat," an Inslee spokesperson said.
  • Rep. Tim Ryan will argue that he can unite Americans, while Trump just divides them, a Ryan campaign aide said.

What we're hearing: Some Democratic operatives told Alayna they worry about Trump dominating this election cycle the way he did in 2016 — something that could easily happen with Biden making Trump's character the focus of his campaign.

4. Trump's Japan deal spin

President Trump and first lady Melania Trump welcome Japanese Prime Minister Shinzo Abe and his wife Akie Abe to the White House, April 26. Photo: Win McNamee/Getty Images

President Trump says he thinks he could strike a bilateral trade deal with Japan by the time he visits Tokyo in May. (Trump made this prediction during a Friday meeting at the White House with Japanese Prime Minister Shinzo Abe.)

Reality check: Multiple sources close to the U.S.-Japanese trade talks tell me this is ridiculous spin. Trump's big demand — that the Japanese drop their massive tariffs on U.S. agricultural products — isn't going to happen anytime soon. They say the two sides haven't even agreed on the scope of these trade talks, let alone crafted serious plans for the timing of a possible deal.

  • "Japan is hoping the USMCA and China will continue to preoccupy USTR [the U.S. trade representative] and the White House," said a source close to the Japanese negotiating team. (Translation: They have little interest in a bilateral deal; rather, Abe is indulging Trump and playing for time.)

Between the lines: Abe has no political wiggle room to give Trump what he wants on agriculture without getting significant U.S. concessions in return. Japan's farming lobby is far more powerful than America's — it’s virtually untouchable.

  • Abe already stretched himself to make agricultural concessions for the Trans-Pacific Partnership (TPP) trade deal. Trump withdrew the U.S. from the deal, and those benefits have been reallocated to the other TPP countries. He doesn’t have much political capital left.
  • Abe would need to appeal to Japan's legislature to get more farming concessions. Japanese elections are in July, and there's no way he will do anything before then. Even after then, the politics are still very tough.
5. Trump plans to give up on part of the ACA

Illustration: Sarah Grillo/Axios

The Trump administration is about to formally give up on a part of the Affordable Care Act that had largely died on its own.

Driving the news: The Office of Personnel Management intends to stop administering the ACA’s multi-state insurance plans. Axios’ Sam Baker reviewed a draft of the notification letter OPM is planning to send to congressional leaders.

How it works: The ACA initially envisioned creating 2 multi-state plans — private insurance policies that would be available through the ACA’s insurance exchanges in every state. The goal was to provide guaranteed competition in states that lacked it.

  • But the policy never got off the ground. By 2017, there was just 1 plan operating in just 1 state: a Blue Cross Blue Shield plan in Arkansas.
  • OPM will tell Arkansas Blue Cross Blue Shield thanks for its cooperation, but then shutter the multi-state effort, according to the draft letter.

Between the lines: An administration official framed the death of the multi-state plans as a bad omen for “Medicare for All,” arguing that it was “a pilot program for the public option, and it’s been a dismal failure with even the most liberal states balking on it.”

  • It’s true that this policy was designed to do some of the same things a public option would have done, and that it failed.
  • But it failed, in part, because its insurers never were very enthusiastic about setting up networks of doctors and hospitals across multiple states — which is also a bad omen for the conservative priority of selling insurance across state lines.

The bottom line: “I've always sort of felt like it was well-intentioned but not reflective of the right reality of what's limiting competition," Georgetown University health policy professor Sabrina Corlette told Axios back in 2017.

6. Sneak Peek diary

Photo: Glowimages/Getty Images

The House has the Climate Action Now Act as its main legislation this week, per a senior Democratic aide. The House Rules Committee will have a "Medicare for All" hearing on Tuesday.

The Senate will speed through the following nominees under the new rule of only two hours of debate time, per a GOP leadership aide:

  • William Cooper as general counsel of Energy Department
  • R. Clarke Cooper as an assistant secretary of state (political-military affairs)
  • Gordon Hartogensis as director of the Pension Benefit Guaranty Corporation
  • J. Campbell Barker as judge for the Eastern District of Texas
  • Andrew Lynn Brasher as judge for the Middle District of Alabama
  • Rodolfo Armando Ruiz II as judge for the Southern District of Florida
  • Raul Arias-Marxuach as judge for the District of Puerto Rico
  • Joshua Wolson as judge for the Eastern District of Pennsylvania

"The Senate will also process the president’s veto message on the Yemen resolution by the end of the week," per the aide.

President Trump's schedule, per a White House official:

  • Monday: The president has lunch with Vice President Mike Pence. He will also host the 2019 NCAA Division I Women’s Basketball National Champions, The Baylor Lady Bears, at the White House.
  • Tuesday: Trump will meet with congressional Democrats on infrastructure. He'll later welcome the 2018 NASCAR Cup Champion Joey Logano to the White House.
  • Wednesday: The president and the first lady will participate in the National Day of Prayer dinner.
  • Thursday: Trump and the first lady will participate in the National Day of Prayer service.
  • Friday: Trump has lunch with Secretary of State Mike Pompeo. He will also meet with the prime minister of the Slovak Republic.
Jonathan Swan