Apr 21, 2019

Axios Sneak Peek

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.

  • ‏חג כשר ושמח
  • And Happy Easter to those who don't read right to left.
1 big thing: Scoop — Pompeo says admin opposes Iran military intervention

Illustration: Lazaro Gamio/Axios

In a closed-door meeting with Iranian-American community leaders last Monday, Secretary of State Mike Pompeo said the Trump administration is "not going to do a military exercise inside Iran" to expedite a regime change, according to three sources who were in the room, including one who took detailed contemporaneous notes and shared them with me.

  • Pompeo also sought to distance the Trump administration from a controversial Iranian resistance group that has welcomed John Bolton and Rudy Giuliani as speakers in a private capacity.

Behind the scenes: Pompeo met with around 15 Iranian-American community leaders on Monday morning in a conference room at the Renaissance Dallas Hotel. The secretary gave brief opening remarks and then spent most of the session listening and answering questions.

  • The most provocative question he fielded, according to the sources, was: "If regime change does not occur internally what is the endgame?"
  • Pompeo replied, "We're careful not to use the language of regime change." He then told the group that the administration would not intervene militarily in Iran.
  • Another participant asked, "Has the idea of a coup been considered?" Pompeo joked that "Even if we did, would I be telling you guys about it?" and the room broke out in laughter.

Pompeo used euphemisms and diplo-speak to describe the administration's position on Iran.

  • "Our mission set is to give them the opportunity ... capacity to create opportunity, create that and provide transitional support," he said, per the notes.
  • "Our best interest is a non-revolutionary set of leaders leading Iran," he added, according to the notes.

Between the lines: Pompeo said the Trump administration would have handled the 2009 Green Movement uprising against the regime very differently than the Obama administration did. But he did not say how.

  • Pompeo also said there is "no such thing as a moderate inside the Iranian regime anywhere today."
  • And when asked how he could guarantee that the Trump administration's tough new sanctions wouldn't hurt the people of Iran, he replied: "There are no guarantees."

Pompeo also distanced the administration from the People's Mujahedin of Iran, or MEK (Mujahedin-e Khalq), an anti-regime group that the U.S. once designated as a foreign terrorist organization.

  • Several people in the room told Pompeo they worried about what message it sent for close Trump allies — National Security Adviser John Bolton and Trump's personal lawyer Rudy Giuliani among them — to appear friendly with the MEK, whom some in the room described as worse than the current regime.
  • "Let's not beat around the bush," Pompeo replied, according to one source's notes. "Ambassador Bolton spoke at an MEK rally. President Trump and I have not."
  • "He acknowledged that John Bolton and Rudy Giuliani had connections or ties, whatever you want to call it ... with the MEK, but he did say that he and the president did not," confirmed another person in the room, Texas attorney Michael Payma.

Why this matters: With Trump as president, Bolton as national security adviser and Pompeo as secretary of state — the American people have never had a government so hostile to the Islamic Republic of Iran.

  • Even though Pompeo made his comments in a relatively private setting — and therefore they cannot be set into stone — it's significant for the secretary of state to tell members of the Iranian diaspora that the Trump administration won't be intervening militarily to overthrow the regime in Tehran.
  • It's also significant for Pompeo to distance the Trump administration from the MEK organization — given the group's public association with high-profile Trumpworld figures like Giuliani and Bolton.
  • (The State Department did not respond to requests for comment when we gave them visibility of this reporting.)
2. Washington's major push to lower drug prices

Illustration: Aïda Amer/Axios

The White House and top lawmakers from both parties think a bill to lower drug prices has a better chance of becoming law before the 2020 election than any other controversial legislation, according to numerous sources who spoke with Axios' Caitlin Owens and me.

Between the lines: Republican politics on drug prices have changed rapidly. The White House has told Democrats it has no red lines on the substance of drug pricing — which should make the pharmaceutical industry nervous.

What they're saying: "I think if we get a bipartisan deal on anything, it's going to be this," a senior administration official told Axios, of the thinking at the top level of the White House.

  • The official said that in the White House's conversations with House Speaker Nancy Pelosi's office, "the only red line that we have communicated" is that a drug pricing deal shouldn't be combined with any changes to the Affordable Care Act.
  • When asked specifically about letting Medicare negotiate directly over how much it will pay for the drugs it covers — a top priority for Democrats — the official reiterated that "we're not drawing any red lines on anything in the drug space right now."
  • "We're having conversations with the White House, but they are not negotiations," said Henry Connelly, a Pelosi spokesperson. "We're looking at every option to maximize the leverage needed to drive down prescription drug prices."

Top lawmakers and lobbyists have told Axios over the last several months that real momentum has been building behind the issue — making them cautiously hopeful in a year when most everything else is dead on arrival on Capitol Hill.

  • "It's created interesting alliances and probably is the number one topic for legislatively addressing an issue for the remainder of this year," the Republican House Freedom Caucus Chairman Mark Meadows said.
  • "In this unusual three-sided political world, dealing with prescription drug prices seems to have the best chances of a legislative accomplishment," said Democratic House Budget Committee Chairman John Yarmuth, adding that he was referring to the Democratic House, the Republican Senate and the "unaffiliated White House."

The other side: The drug industry says that government intervention on prices will result in less innovation, and Trump has shown an intense interest in new treatments, perhaps leaving him open to industry persuasion.

What we're watching: Bipartisan bills have already started moving through the House, and Senate Republicans have recently put forward a slate of new bills, some of which could have been written by liberal Democrats.

Go deeper: For details on the bills we're tracking, read our full item.

  • For more on the White House's perspective, sign up for Caitlin's daily health care newsletter Vitals, which will publish more policy detail tomorrow.
3. Supreme Court to tackle Trump admin's census controversy

Eastern fascade of Supreme Court building. Photo: John Greim/LightRocket via Getty Images

The 2020 Census will redraw the electoral map and guide billions of dollars in federal spending for the next decade. And critics say the Trump administration is skewing those results by adding a question about citizenship to the census, Axios' Sam Baker writes.

The big picture: The Supreme Court will hear oral arguments Tuesday over the citizenship question — about whether it's unconstitutional, if it violates other federal laws, and whether this dispute even belongs in court.

Why it matters: The basic point of the census is to figure out how many people live in the U.S., and where. Countless decisions flow from that, including how many seats each state gets in the House. The survey also includes basic demographic questions, including age and sex.

  • But, Commerce Secretary Wilbur Ross touched off a firestorm last year by announcing the addition of a new question — asking people whether they're U.S. citizens.

Between the lines: The Census Bureau itself told Ross that adding the question would make the census less accurate, because some non-citizens will lie or refuse to fill out the survey. It would probably end up undercounting about 6.5 million people, the bureau said.

  • Minority communities "stand to lose funding for their schools, housing, infrastructure, and healthcare, among other critical needs, for the next decade if the citizenship question is allowed to go forward," the Brennan Center for Justice said in a brief to the Supreme Court.

Critics believe that's the whole point, and sued.

  • They said the process by which this happened doesn't support Ross' stated reasons for doing it, citing internal communications as well as the fact that he passed up other alternatives the Census Bureau said would be more accurate.
  • A federal judge in New York sided with Ross' critics earlier this year, saying he didn't follow the processes laid out in federal law and calling his reasoning a mere pretext.

The other side: The Justice Department argues, first and foremost, that this isn't the courts' business, as the Commerce secretary has considerable authority over the census.

  • On the merits, the administration says this question is no big deal — it's been asked before (though usually of smaller samples) — and that the risk of under-counting is mere speculation.
  • The lower court "strained to read every statement and action of the Secretary in the worst possible light," DOJ argues.

What's next: A ruling is expected by June.

4. Trump's 2020 tax dilemma

A number of Republican Party officials and Trump advisers are studying a trend that has received scant national media coverage but could pose a jarring dilemma for the president: Will Trump have to choose between releasing his tax returns and having his name on the ballot in some blue states for the 2020 election?

  • Illinois' state senate recently passed a bill that would require people running for president or vice president to disclose their tax returns from the past five years.

The big picture: Illinois is not alone. Per the National Conference of State Legislatures...

"As of February 20, 2017 legislators in 18 states (Arizona, California, Connecticut, Hawaii, Illinois, Iowa, Kansas, Maryland, Minnesota, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont and Virginia) have introduced bills" to require "future presidential candidates to disclose income tax returns in order to be placed on the general election ballot."

The bottom line: None of these bills have been signed into law (yet). But it seems possible — even likely — that at least one blue state might put it in place. And that potential scenario is giving Trump allies pause.

Our thought bubble: Given Trump's determination so far to keep his taxes hidden, it's not crazy to imagine that he'd rather not be on the ballot in a state he's certain to lose than turn over his taxes.

  • Keep your eye on this — as Republican Party officials will surely do.
5. Sneak Peek diary

President Trump with First Lady Melania Trump at the 2018 White House Easter Egg Roll. Photo: Jabin Botsford/The Washington Post via Getty Images

The House and Senate are still on their Easter break.

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

  • Monday: The president and the first lady will partake in the White House Easter Egg Roll.
  • Tuesday: Trump will have lunch with Vice President Mike Pence and join a photo op with the White House News Photographers Association's photo contest winners.
  • Wednesday: The president and the first lady will speak at the "Rx Drug Abuse and Heroin Summit" in Atlanta, Georgia.
  • Thursday: Trump has lunch with Pompeo.
  • Friday: Trump will meet with Japanese Prime Minister Shinzō Abe. Trump will also give a speech at the National Rifle Association's annual meeting in Indianapolis.
  • Saturday: Trump has a campaign rally in Green Bay, Wisconsin.
6. 1 fun thing: Behind Trump's Holt interview

Unending gold is buried in the Mueller report. As the Washington Post's book critic Carlos Lozada writes, "the Mueller report is the best book by far on the workings of the Trump presidency ... special counsel Robert Mueller has it all under oath, on the record, along with interviews and contemporaneous notes backing it up."

Here's one remarkable tidbit, from page 285 of the report:

"The next day, on May 11, 2017, the President participated in an interview with Lester Holt. The President told White House Counsel's Office attorneys in advance of the interview that the communications team could not get the story right, so he was going on Lester Holt to say what really happened."

Flashback: The Lester Holt interview became infamous because Trump told the NBC anchor that when he fired FBI Director James Comey, "I said to myself — I said, you know, this Russia thing with Trump and Russia is a made-up story."

  • Far from helping himself, the interview gave prosecutors another reason to think he had sought to obstruct justice.

Behind the scenes: This scene in the Mueller report brought back memories for one of my sources who was in the Oval Office with Trump shortly before the Holt interview.

  • "He was full of righteous indignation," the source said of Trump. "He said something like, 'Never forget, no one speaks for me but me. These people [Trump's communications team] don't know what they're talking about. But I do, believe me.'"
Jonathan Swan