Axios Sneak Peek

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February 26, 2017

Welcome to Sneak Peek, our weekly lookahead for both ends of Pennsylvania Avenue, plus all you need from the Sunday shows. I'd love your tips and feedback: [email protected].

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1 big thing: budget wars

We hear the White House tomorrow will send Cabinet officials their first draft budget numbers.

One budget we'll be watching especially closely: the Environmental Protection Agency. The EPA is the leading edge of the first wave of Trump's planned "deconstruction of the administrative state." Expect massive, transformational cuts, particularly to climate-change programs, top officials tell us.

Trump has made clear he wants the EPA to get back to its core missions of clean air and clean water. He views many of the global-warming programs as superfluous additions made by an out-of-control Obama EPA.

But, but, but ... Don't expect the topline budget numbers to change dramatically. Money saved from cuts to EPA and other agencies will be used to bolster the military — which is exactly what Trump promised on the campaign trail.

2. Enemies: domestic and foreign

Two issues dominated the shows:

  1. FBI investigation into contacts between the Trump campaign and Russia — and, specifically, whether Attorney General Jeff Sessions must recuse himself from overseeing such an investigation.
  2. GOP concerns about the replace part of Obamacare plans — especially from Republican governors who will be hit hardest by the human and financial fallout.

Comments that will echo into the week:

  • Deputy press secretary Sarah Sanders — the only White House rep on the shows — said the FBI described the Trump-Russia reports as "B.S." and that everyone should "move on." But, as ABC's George Stephanopoulos pointed out, the FBI hasn't commented publicly on the investigation, which is ongoing. In other words: The White House can't wish this one away.
  • New Jersey Gov. Chris Christie told CNN's "State of the Union" that White House Chief of Staff Reince Priebus was wrong to have any conversations with the FBI about the investigation. "I don't think the chief of staff will ever have that kind of conversation with the FBI, with an FBI personnel again," Christie warned. "Nor should he."
  • Ohio Gov. John Kasich — who met the President on Friday and HHS Secretary Tom Price on Saturday — fires an Obamacare warning shot on CBS' "Face the Nation": "There's going to be a problem in the House of getting anything out of there that still provides coverage to people … At the end of the day, I'm going to stand up for the people that wouldn't have the coverage if they don't get this thing right."

3. The speech

Trump consumes 99 percent of Capitol Hill's oxygen this week, with Republicans eagerly anticipating his address a joint session of Congress on Tuesday night.

What you won't hear: Trump endorsing, in specific terms, the two most contentious House Republican plans: the $1 trillion border adjustment tax and the House GOP's Obamacare repeal and replace plan.

What you will hear: A big picture speech — we're told it'll be "optimistic and uplifting" ... we'll see — that'll focus on "safety, sovereignty, and economic opportunity."

Reality: House leaders know exactly where they are with Trump on Obamacare. It's helping a huge amount that Trump's point man is HHS Secretary Tom Price, who is close to Ryan and helped develop the House's plan. Tax reform is a different story. The future of border adjustment remains very much in doubt.

Three things the White House is doing to prepare the echo chamber:

  • Briefing allies: Trump's communication staffers Jessica Ditto and Raj Shah held a conference call Saturday with the RNC, NRCC and congressional leadership offices. They didn't give them specifics about the speech, but assured them there'll be fact sheets and talking points galore.
  • Outreach to regional media: Tomorrow night, the President and Press Secretary Sean Spicer will dine with regional TV and radio affiliates. It's part of a macro strategy to get the message ringing around the 2018 battleground states and beyond.
  • will redirect to a "joint address" page so people can watch the live stream and follow all the social media posts.

4. Revealing Trumponomics

We told you in last week's Sneak Peek that a growing number in the Trump orbit are seduced by the idea of major tax cuts without paying for them with new revenue (like Paul Ryan's $1 trillion border adjustment tax.)

Now we're seeing that thinking play out ...

Key points from Treasury Secretary Steve Mnuchin's interview that aired today on Fox's "Sunday Morning Futures":

  • Still won't commit to border adjustment: "There are certain aspects that the president likes about the concept of a border-adjusted tax; there are certain aspects that he's very concerned about."
  • Total commitment to supply-side economics: "With our growth projections, we'll get more revenues on that alone … although there may be an absolute lower [tax] rate, that doesn't necessarily mean it's a corresponding drop in revenues."
  • No entitlement reform: "We are not touching those now," Mnuchin said when asked whether the Trump administration would address entitlement spending. "So don't expect to see that as part of this budget, OK."

Why this matters: Every fiscal conservative knows — and none more so than Trump's new Budget Director Mick Mulvaney — that tax cuts alone won't touch the sides of America's $20 trillion debt. Everyone from Ryan to influential Freedom Caucus member Jim Jordan wishes the President would get serious about reforming massive entitlement programs like Social Security and Medicare. But the President ain't budging.

The big question: After spending the entire Obama presidency railing against reckless spending, will Republicans vote for a budget that increases the debt?

1 fun thing: what a world

If someone told you a year ago ... that Donald Trump would be president, that the U.K. would leave the European Union, and that Dog the Bounty Hunter would be partying with people who work at the White House, you'd have laughed hysterically.

But that's what happened on a docked three-level boat outside of CPAC Friday night, where a top aide to a top aide mingled with Breitbart's editorial team, a burnt-out reality TV star, and Nigel Farage, the Brexit man himself.

On the lower deck, Hawaiian dancers did the hula and reporters, wearing Hawaiian leis around their necks, ate chunks of pork from a roasted suckling pig. Perhaps the least weird part was the attendance of a Democratic staffer from Joe Manchin's office.