Tax reform shocker: the White House actually has a plan - Axios
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Tax reform shocker: the White House actually has a plan

Carolyn Kaster / AP

Here's a shocker that shouldn't be a shocker: The White House actually seems to have its act together on tax reform. Activists and business leaders who've been meeting with Gary Cohn, Steven Mnuchin, Marc Short & Paul Teller from legislative affairs, and Sean Spicer (who's leading the comms strategy), all tell us the same thing: They're surprised about how much planning and organizing the White House has already done, given its ham-handed approach to the health care rollout.

The administration will start pitching the tax reform effort in mid-August, according to sources involved. They're hoping to get the bill itself finalized for mark-ups after Labor Day (count us as skeptical on that.) But while that happens, expect to see CEOs, White House surrogates, and high-profile conservative activists start talking up the plan.

Sources close to the effort say the White House is looking to avoid the mistakes of the health care debacle, when they failed miserably to build nationwide support.

Here's what to expect:

  • President Trump wants to pitch tax reform aggressively. Our sources expect him to make the case for the plan by barnstorming the Midwest states he won in November. Reince Priebus is in charge of his schedule, so this will be a major test of his organizational skills.
  • The White House is engaging CEOs across the country, looking for them to hold town halls, do media appearances, and write letters to their employees explaining the benefits of tax reform. They want members to return to their districts in August and hear from business leaders and other influential constituents about why tax reform needs to get done.
  • They're talking to local mayors and county commissioners, too. And they're pressing outside groups to spend big on advertising support.
  • A wide range of groups — from movement conservatives to downtown lobbying shops — are fired up. This includes Heritage Action, Americans for Tax Reform, the Business Roundtable, and the Koch brothers' network, which is already rolling out a multi-million dollar ad and grassroots organizing campaign to support comprehensive tax reform.
  • We expect the White House to float a few tax policy trial balloons in August.
  • The aim is to get as many administration officials involved as possible, regardless of their day jobs. UN Ambassador Nikki Haley, for example, has nothing to do with tax reform. But White House officials think she could be an asset because she's a great communicator and a former small business leader.

On the substance:

  • The "Big Six" leading the tax code rewrite — Speaker Paul Ryan and Rep. Kevin Brady, Sens. Mitch McConnell and Orrin Hatch, Treasury Secretary Steven Mnuchin, and National Economic Council Director Gary Cohn — are currently working through their disagreements.
  • One of the toughest remaining disputes is whether to start letting businesses immediately write off the cost of equipment (known as "full expensing"). This would be hugely expensive, so some conservatives oppose it. But House Leadership argues it would juice short-term economic growth.
  • Another major unsolved problem is how (or if) to pay for all these tax cuts. Some in the White House would happily just blow out the deficit, but Leadership suspects most Republicans wouldn't be on board with that.

Be smart: There's a reason it's been more than 30 years since Congress passed real tax reform: It's damn hard.

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CMS reaches EpiPen Medicaid agreement

(Andrew Harnik / AP)

The Centers for Medicare and Medicaid Services announced today that it has struck a deal with Mylan to reclassify the EpiPen, which will save the Medicaid program hundreds of millions of dollars.

Context: Part of last year's controversy over the price of EpiPens included the device's classification under the Medicaid program. It was classified as a generic rather than a brand name drug, meaning it paid less in rebates to the program.

The agreement: Mylan will reclassify the EpiPen as a brand name drug, which will recalculate the amount it pays to the program in rebates starting retroactively in April 2017.

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Facebook updates video ad-buying options

Noah Berger / AP

Facebook will now let advertisers buy in-stream video ads separate from the News Feed, meaning they can buy in-stream video ads (mid-roll and pre-roll) on Facebook's Audience Network or on Facebook without having to buy News Feed ads. Facebook's Audience Network is a collection of third party apps and sites, like Vice and LittleThings, that have partnered with Facebook to run ads from Facebook advertisers on their properties.

Why it matters: It gives advertisers a lot more flexibility and control on where they can buy video ads, which makes ad campaigns easier to customize to reach certain marketing objectives. This essentially allows advertisers to tell more complex, customizable messages through video.

A good thing to know: Facebook only lets mid-roll ads (ads that show up in the middle of a video) on the Facebook News Feed — not pre-roll, because Facebook is built for video discovery, and people are less likely to engage/discover new videos if there's a pre-roll ad (an ad before the video starts). But off-platform, where people are committed to longer videos and would be wiling to watch an ad to get to their content, pre-roll ads make sense. (You can buy pre-roll or mid-roll ads off of Facebook with this new update.)

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Facebook cracks down on spammy videos

Facebook is cracking down on spammy and misleading videos by down-ranking videos with fake play buttons or ones with static images in the News Feed. The crackdown will officially roll out in the next few weeks.

Why it matters: Those tactics are annoying and misleading for consumers, (you think you're watching a real video but you're not), and they're typically used by scammers trying to game the system by driving traffic to a low-quality, spammy web pages. Facebook product manager Greg Mara says that good publishers won't see any major change, but they may see a small bump as a result of Facebook weeding out spammy content.

How it works:

  • When Facebook catches a video link with fake play buttons or a long static image instead of an actual video, they'll be pulling them further down in the feed using a technique called "motion scoring."
  • Facebook built a proprietary system using machine learning to identify what these fake/misleading videos look like so they can automatically down-rank them in the feed.
  • According Mara, Facebook won't notify spammy publishers when they're being targeted, so as to avoid giving them information to be able to game the system even further.

Why don't they just remove these posts? The reason Facebook would remove posts is if they violate community standards. These posts don't necessarily violate standards, but they distrust the consumer experience. "We see category of publishers on Facebook not interested in building a category of readers and will do whatever tactic get them to a low-quality web experience," says Mara. Facebook's hoping the new motion scoring technique will solve for that.

Expert Voices Featured

What we still don't know about the Sun

Rebecca Zisser / Axios

When the Moon dims the Sun for a few minutes next week, scientists will get a rare view of our star. Studying an eclipse seems almost quaint — we have telescopes that continuously observe the Sun and NASA is sending a probe to it next year. What further knowledge can we gain?

We asked four researchers what we still don't know about the Sun and what might be learned from next week's solar eclipse:

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With strong earnings, Walmart continues its battle with Amazon

Walmart reported earnings and sales that beat expectations for the second quarter this year, with same-store sales growing for U.S. stores 60%, CNBC reports. Revenue was at $123.36 billion compared to an estimated $122.84 billion. Earnings were at $1.08 a share.

Why it matters: Walmart is largely avoiding the struggles hitting the rest of the industry — its size and scale enable it to compete on price with Amazon.

Data: Money.net; Chart: Andrew Witherspoon / Axios

Context: E-commerce sales were up 63%, compared to 29% growth the previous quarter following Walmart's acquisition of internet retailer Jet. Plus, as CNBC's Lauren Thomas writes, "These days, Walmart and Amazon.com are neck and neck on pricing."

What to watch: Walmart's retail rival, Target, had a report recently that topped expectations in digital sales growth.

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Trump publicly defends “beautiful” Confederate statues

In a series of three tweets over 14 minutes this morning, President Trump doubled down on his controversial rhetoric from his Tuesday press conference, calling the removal of Confederate statues a contributing factor to "the history and culture of our great country being ripped apart."

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Lindsey Graham to Trump on white nationalist support: "fix this"

In a string of tweets, Sen. Lindsey Graham told President Trump that he needs to "fix this" because "history is watching us all" after Trump accused him this morning of putting forth a "disgusting lie" regarding Trump's response to the violence in Charlottesville.

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Most Americans think Trump wasn't strong enough on Charlottesville

Pablo Martinez Monsivais / AP

A majority of Americans (52%) believe that President Trump's response to last weekend's violence in Charlottesville following a white nationalist rally was not strong enough, per an NPR/PBS NewsHour/Marist poll.

  • The timing: 80% of the poll was completed after Tuesday's explosive press conference where Trump doubled down on his earlier assertion that "both sides" were responsible for the violence in Charlottesville.
  • Bipartisan consensus: While most questions in the poll predictably broke down along partisan lines, a majority of Democrats and Republicans — even those who identify specifically as Trump voters — branded the car attack that resulted in the death of Heather Heyer an act of domestic terrorism.
  • Another stat: A majority of Americans believe that Confederate statues should remain as a historical symbol, an opinion supported by an overwhelming majority of Republicans (86%-6%) and even a significant minority of Democrats (44%-47%).
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Trump attacks 2 GOP senators in early-morning tweets

Trump called out two GOP senators this morning on Twitter — first Lindsey Graham for being "Publicity seeking," then Jeff Flake for being "WEAK."

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Putin more trusted than Trump worldwide

Alexei Nikolsky / Sputnik, Kremlin Pool Photo via AP

The Pew Research Center conducted a poll that shows citizens trust Russian President Vladimir Putin more than Trump to do the right thing for the world. That's a huge international rap on Trump.

Stack it up: Japan, South Korea, Venezuela, Mexico, Germany, France, Greece, and Turkey all have more confidence in Putin.

Keep it in perspective: Putin only got a global median of 26% confidence. And it's not all bad for Trump — Israel, Britain, Canada, Australia, Philippines, and Poland all favored Trump over Putin.