Axios

The GOP is scrambling to respond to a new CBO report on the House health care plan which, as Democrats have been anxious to point out, estimates that 23 million fewer Americans would have health insurance over 10 years, that some older Americans would pay far more, and that those with pre-existing conditions may have difficulty getting on plans. The GOP messaging:

1. The CBO report affirms our goals: Per Paul Ryan, "This CBO report...achieves our mission: lowering premiums and lowering the deficit."
2. The CBO report is wrong: HHS Secretary Tom Price said, "The CBO was wrong when they analyzed Obamacare's effect...and they are wrong again."
3. We're starting fresh anyways: HELP Committee Chair Lamar Alexander said, "It's informative to know the estimated impact of the House health care bill — but the Senate is writing its own bill..."

It's day five of President Trump's first foreign trip. He started his day at the Vatican, where he and Melania met with Pope Francis and exchanged gifts from their respective countries. Trump later returned to Rome to meet with the President and Prime Minister of Italy before traveling to Brussels, where he met with the King and Queen of Belgium, as well as the Prime Minister. Live updates, per White House pool reports.

The latest: President Trump arrived at the U.S. ambassador to Belgium's residence around 6:30pm local time, where he is staying for the evening. He later tweeted at the Belgian Royal Palace. "Thank you for the warm welcome to Brussels, Belgium this afternoon!"

The Trump Organization hasn't been tracking all potential foreign payments, according to an NBC News report.

Don't forget: Trump promised to donate all profits from foreign governments to the U.S. Treasury to sidestep violating the Constitutional safeguards against POTUS receiving foreign emoluments.

Quick take: You can't donate all profits coming from foreign governments if you don't know how much you've received.

Why it matters: This gap in tracking means foreign donations in violation of the Constitution could go unnoticed, for example, from adversaries trying to curry favor with the President.

The problem: The organization is not attempting "to identify individual travelers who have not specifically identified themselves as being a representative of a foreign government entity."

Budget Director Mick Mulvaney told the House Budget Committee Wednesday that the budget can't be balanced next year without reforming Social Security and Medicare.

"I don't believe it's possible, in fact I know it's not possible to balance the budget solely using the discretionary portion of the budget…[This year is] probably the last time we could [not touch Social Security retirement and Medicare]."

Go deeper: Trump has promised to "not touch Social Security, to leave it the way it is" and to "save Medicare, Medicaid and Social Security without cuts" — and Mulvaney said the reason the current budget proposal doesn't touch those is because Trump told him, he "made a promise" he wouldn't.

What it means: If Trump's going to keep those promises to the American people, he's going to have to break another promise and leave the budget unbalanced.

Aboard Air Force One from Rome to Brussels, Secretary of State Rex Tillerson held a gaggle with reporters that covered Trump's trip so far and told them what to expect when POTUS sits down with other world leaders at the upcoming NATO and G7 summits.

One big thing: Tillerson confirmed that the Vatican pushed Trump on climate change, but he's still deciding whether or not the United States should remain a participant in the Paris Agreement. "I think they were encouraging continued participation in the Paris Accords…The president indicated we're still thinking about that, that he hasn't made a final decision," he said.

Budget Director Mick Mulvaney testified before the House Budget Committee Wednesday, and defended Trump's FY18 budget, which he calls the "Taxpayer First" budget. Mulvaney repeatedly insisted that the government has a "moral obligation" to balance the budget since the U.S. is $20 trillion in debt. "Everybody around this table owes the government $60,000," he lamented.

Pool report from President Trump at the Vatican today, by the Wall Street Journal's Carol Lee: "When pool entered the room, ... POTUS had already introduced Ivanka Trump, who ... wore a black lace dress and veil, and Jared Kushner. ... Other members of the delegation were still in the back of the room near pool."

President Trump has retained Marc Kasowitz, his long-time attorney, in the Russia probe, Axios has confirmed.

This comes at a pivotal moment for Trump, with special prosecutor Robert Mueller now leading the federal investigation into ties between his associates and Russia. A White House source says Trump feels comfortable with Kasowitz, who will be lead attorney, and that other names could be added to his legal team.

Key points about Kasowitz:

• He has represented Trump in various instances over the past 15 years relating to everything from Trump's divorces to a threat to sue the New York Times.
• The Russia connection: One of his clients is Russia's largest state-run bank, OJSC Sberbank of Russia.
• The O'Reilly connection: Kasowitz was Bill O'Reilly's lead attorney during the former Fox host's sexual harassment scandal.

It's day four of President Trump's first foreign trip. He kicked it off with a short trip to Bethlehem, where he met with Palestinian Authority President Mahmoud Abbas to discuss the Israeli-Palestinian peace process, a key foreign policy objective of his administration. He then returned to Jerusalem, and will end his day in Rome, where he's set to visit the Vatican and meet with Pope Francis tomorrow.

The latest: Donald Trump touched down in Rome 6:25pm GMT+2 with no further events on his public schedule for the evening.

Office of Management and Budget Director Mick Mulvaney is briefing reporters on the latest details of the Trump Administration's FY18 budget. The title on the hard copy of budget reads, "New Foundation for American Greatness," but Mulvaney said it should really be called the "Taxpayer First Budget" because the administration looked at it "through the eyes of the people who were actually paying the bills." Live updates:

Former CIA Director John Brennan told the House Intel Committee Tuesday he believes he was the first U.S. official to engage with Russia on the issue of interfering in the U.S. elections when he warned his Russian counterpart on August 4, 2016 that if Russia interfered in the U.S. elections it would "undermine constructive engagement even on matters of mutual interest" for Russia and the U.S. Brennan reported that his counterpart denied any interference and said he would relay Brennan's warning to Putin.

Asked about the "widely optimistic" outlook for economic growth in the Trump administration's budget, House speaker Paul Ryan seemed uncertain of the specifics, but said he has confidence in the Office of Management and Budget:

"I haven't seen the details yet, I don't want to get ahead of [Mick] Mulvaney... but I would say this ... we never hit 3% growth in the last presidency at all... the problem for us as Americans is that we have embraced slow growth strategies for the last eight years and now we have an administration and Congress committed to pro-growth strategies.

"Whether or not we hit those numbers, I don't know the answer yet because I haven't seen all of those numbers, but I would expect that OMB will put their projections of what the economy will reach in their budget."

Rep. Devin Nunes (R-CA) stepped aside from running the House Intelligence Committee's investigation into Russian interference in the 2016 elections in early April. Background here.

Since then, Democrats have warmed to his replacement, Rep. Mike Conway (R-TX). Quotables from House Dems to Texas Tribune's Abby Livingston:

• Rep. Adam Schiff (D-CA), the top Dem on the committee: "I appreciate his devotion to the task and the constructive way he is helping to lead the investigation..."
• Rep. Terry Sewell (D-AL): "He has always shown himself to be fair-minded."
• Rep. Jackie Speier (D-CA): "All signs are good, but the rubber hasn't met the road yet."

Axios' Jim Vandehei and NBC "Meet the Press" host Chuck Todd sat down with Senator Jim Inhofe (R-OK) and Atlanta Mayor Kasim Reed at Axios' Infrastructure in 2017 event. Inhofe (R-OK), a pilot and "infrastructure junkie", said he doesn't think that the drama with Russia will deter the Trump Administration from passing a successful infrastructure bill:

"A lot of people out there hate Trump, and a lot of you guys in the media keep fanning the flames, you're gonna keep doing it," said Inhofe. "But we're going to get it done... let the media have their heyday."

Day 124... White House officials tell me they're gearing up for months, and likely years, of Russia defense. Trump and his inner circle are belatedly scrambling to install war-room-like mechanisms designed to prevent the drama and threat from consuming the entire West Wing, and derailing everything else.

Trump aides have studied precedents, including the Reagan White House's handling of Iran-Contra and President Clinton's scandal machinery.

The West Wing appears to be absorbing key lessons from its predecessors, although even Trump allies tell me he's just beginning to take steps to wall off the controversy that should have begun on Day 1:

President Trump has commented on the terror attack on Manchester, which left at least 22 dead and around 50 injured. From his remarks at a pool spray in Bethlehem, where he's meeting and speaking with Palestinian Authority President Mahmoud Abbas:

Data: White House; Note: Doesn't include reprioritized discretionary spending; Chart: Andrew Witherspoon / Axios

Office of Management and Budget director Mick Mulvaney briefed White House reporters today on President Trump's 2018 budget proposal, to be released tomorrow morning. Here's what you need to know:

• $3.6 trillion in total spending reductions over 10 years
• Includes $1.7 trillion in savings from "mandatory" spending
• Biggest savings: More than $800 billion from health care
• Balances the budget in 10 years

Our thought bubble: Presidential budgets are aspirational political documents. None of these cuts (or increases) will happen without Congress. Democrats will go along with none of this and Republicans are already wary. Congress is going to write its own budget, but realistically, they're not going to start completely from scratch either. They have to take the administration's priorities into account.

Branding / philosophical underpinning:

• The official title of the budget: "A new foundation for American jobs."
• Mulvaney calls it the "taxpayer-first" budget. What he means by that: Mulvaney says the administration is thinking about the budget in a fundamentally different way than previous administrations did. Mulvaney says they're now thinking more about the people who are paying the taxes — and trying to justify asking hardworking people to cough up money — rather than focusing on the people who are receiving the benefits.
• The Trump administration wants to redefine what "compassion" means. Mulvaney says it should no longer be measured based on how many programs are in effect or how many people are receiving the benefit. He wants "compassion" to be broadened to include whether the government is ripping off taxpayers by using their money for ineffective programs.

The budget balances in 10 years, but relies on some very sketchy assumptions:

• It assumes passage of the American Health Care Act — the Affordable Care Act repeal and replacement bill that passed the House but will soon face strong moderating forces in the Senate.
• It assumes Trump can sign into law tax reform that is revenue neutral. That's quite an assumption given that most people have already written the obituary for the main policy House Republicans plan to use to pay for big tax cuts — the "border adjustment tax."
• It assumes that Trump can increase the economic growth rate to 3 percent from the currently projected 1.9 percent. To get there, they're assuming Trump can make historic tax cuts (corporate rate to 15%!!!) and slash regulations.

Safety net programs are cut significantly:

• As Axios scooped on Sunday evening, Trump's budget proposal will cut spending on "mandatory" (mostly social welfare) programs by about $1.7 trillion over ten years.
• Medicaid would be cut by $610 billion over 10 years — but when added to the rest of ACA repeal, total health care savings would be $866 billion.
• Tightens eligibility for SNAP (food stamps), cutting $193 billion from the budget over 10 years.
• Requires people to have Social Security numbers if they want to receive the Earned Income Tax Credit and the Child Tax Credit. Mulvaney said it's not fair to expect taxpayers to pay for illegal immigrant families to receive these benefits. Saves $40 billion over ten years.
• Cuts $5.8 billion from the Children's Health Insurance Program.
• Cuts $21 billion from the Temporary Assistance for Needy Families (TANF) program.

No Social Security (retirement payments) or Medicare cuts: Mulvaney, a fiscal hardliner, argued strongly to Trump that he should reform Social Security (retirement payments) and Medicare benefits, but Mulvaney says Trump refused to cut these programs because he promised not to on the campaign trail.

Yes, but: Trump's budget would cut programs that fall into the safety net category and one in particular, the Social Security Disability Insurance program (SSDI), that many will argue breaks his promise not to cut Social Security.

Massive cuts to non-defense discretionary spending:

• Unsurprisingly, Trump is proposing slashing many government agency budgets that don't fit with his priorities. He's asking Congress to cut around $1.5 trillion out of non-defense discretionary spending over 10 years.
• Agencies hardest hit: EPA (slashes 31.4% off budget in first year), State Department (-29.1%), Agriculture (-20.5%), Labor (-19.8%) and Health and Human Services (-16.2%)

Where Trump is boosting spending:

• Military: Trump is proposing to increase the previously-projected defense budget by 4.6%, or $25.4 billion in 2018.
• Border security: Plussing up the previously-projected Homeland Security budget by 6.8%, or $2.8 billion in 2018.
• Vets: Boosting the previously-projected Veterans Affairs budget by 5.8% or $4.3 billion in 2018.
• Paid parental leave: Includes $19 billion over 10 years to help states provide up to six weeks of paid leave for new mothers and fathers. Mulvaney says the proposal would encourage them to go back into the workforce, which would boost economic growth.