Tom Price's unprecedented predicament - Axios
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Tom Price's unprecedented predicament

Lazaro Gamio / Axios

It's hard to think of another Cabinet secretary in recent memory who's been as hostile to part of his duties as Health and Human Services secretary Tom Price is to overseeing the Affordable Care Act.

  • Most new administration come in with some reservations about their predecessors' policy decisions and aims to nudge things in a new direction — but that's hardly the same thing as producing P.R. materials attacking a law you're supposed to be implementing, and reportedly using money set aside to promote that program.
  • "If you believe in the rule of law, then those reservations notwithstanding, the executive branch has a duty to execute the laws," said William Galston, who served in the early days of the Clinton administration and now chairs the governance studies program at the Brookings Institution.

Price has been one of the administration's loudest critics of the ACA, and HHS has disparaged the law even in updates about its progress. But it's still up to HHS and the IRS to carry out the ACA's most significant provisions.

For context:

  • Democrats never loved Medicare Advantage, the partially privatized program created under the George W. Bush administration, and didn't love the structure of Medicare's prescription-drug benefit, either.
  • But when President Obama came into office, his administration carried out those programs relatively normally. It tried to cut Medicare Advantage payments a few times, but it didn't run ads or put top officials on TV trying to discourage enrollment. The parts of the drug benefit it didn't like were changed in the ACA.
  • The closest parallel, Galston said, would be the tug-of-war between administrations at the Environmental Protection Agency, which has been sued in the past for refusing to carry out responsibilities it had been tasked with. If Price goes that far, he also could face the threat of legal action.

Yes, but: "This is an unusual case," said Mark McClellan, who oversaw Medicare, Medicaid and the FDA during the Bush administration, citing the problems the ACA has experienced on the ground — even with the Obama administration's aggressive effort to make it work as well as possible.

"This has been a little bit more fragile," he said. "To me what seems likely is markets continuing to limp along in some states unless administration decides to do something much more active" to disrupt those markets.


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China's first space lab will fall to Earth in next six months

A man looks at a display model of a Shenzhou 8 spacecraft docked with Tiangong 1. Photo: Alexander F. Yuan / AP

Tiangong 1, China's first space lab, will make an uncontrolled descent to Earth sometime before April after the country lost control of the craft due to its rapidly decaying orbit, per The Guardian. The reentry into Earth's atmosphere should burn up most of the craft, but 220-pound pieces of debris could reach Earth's surface. China has told the United Nations the chances of the lab wreaking any havoc on the ground are "very low," but that it would closely monitor the craft's reentry.

Think back: It's not the first uncontrolled reentry of a large spacecraft, as Skylab broke up over Australia in 1979. And no word if Taco Bell will set up a target for Tiangong 1 to offer free tacos to every American — like it did with Mir's descent in 2001.

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Cryptocurrency investing gets more formal

Illustration: Rebecca Zisser / Axios

Serial tech entrepreneur and investor Rick Marini has launched the first-ever fund-of-funds for cryptocurrencies, called Protocol Ventures.

Why it matters: An increasing number of investors are interested in cryptocurrencies as values skyrocket, but they aren't yet comfortable parsing through white papers or picking from the dozens of nascent crypto hedge funds. This is where Marini says his fund-of-funds can help.

The fund: Starting with $1 million of his own money, Marini hopes to eventually grow the fund to at least $100 million.

  • He expects his fund's investors to be a mix of high net worth individuals, family offices, a few institutions, and potentially venture capital funds.
  • Marini plans to invest in about ten cryptocurrency hedge funds with diverse profiles, strategies, and sizes.
  • He already plans to to invest from Protocol Ventures into two funds he's personally backed—MetaStable Capital and Neural Capital. The former was co-founded by AngelList co-founder Naval Ravikant, who introduced Marini to cryptocurrencies three years ago.

Pros and cons: "Family offices, institutions, and [high net worth] individuals want exposure to this space, but are unsure of how to pick the right fund managers to back," Neural Capital managing partner Christopher Keshian told Axios. MetaStable Capital's Josh Seims, on the other hand, is more cautious and says that it's too early to have an opinion on funds like Protocol Ventures. "In general, we prefer direct relationships with principals, but fund of funds allow better scaling," he adds.

On ICOs: "Probably 97% of them are garbage and that's a problem the industry needs to clean up," said Marini, adding that regulations should help.

Go deeper: Finance pros want in on the crypto boom

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Young people flock to Snap, flee Facebook

Teens overwhelming prefer Snapchat to any other social media platform, according to Piper Jaffray's 34th semi-annual Teens research survey. 47% of teens indicated that Snapchat is their favorite social platform, while only 24% of teens indicated Instagram was their favorite platform.

Data: Piper Jaffray, The Taking Stock With Teens survey. Note: Survey of 6,100 teens with an average age of 16 years. Chart: Andrew Witherspoon / Axios

Why it matters: Investors were initially bearish on Snapchat after Instagram launched a rival "Stories" feature, which put a dent in Snap's user growth. But now Snapchat is proving that its focus on engagement over scale can lead to more opportunities for advertisers. A recent analysis by MarketingLand shows that advertisers have more opportunities to reach 13- to 17-year-olds with ads on Snapchat than they do on rival properties, like Facebook or Instagram.

One philosophical thing: Snapchat executives tells Axios they are focused on connecting people with their closest personal contacts. Facebook COO Sheryl Sandberg told Axios' Mike Allen last week that their strategy is the exact opposite. Facebook connects people to their "weak ties," or people they aren't close to, Sandberg said.

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Game change: Half of America subscribes to Netflix

A person displays Netflix on a tablet in North Andover, Mass. Photo: Elise Amendola / AP

Netflix blew past user growth expectations, reporting Monday that it added 5.3 million new subscribers last quarter, upwards of 1 million more than expected.

  • In total, it added 850,000 new U.S. subscribers and 4.45 million new international subscribers.
  • Netflix predicts that it will add 6.3 million new subscribers next quarter, which would bring its total to 111.2 million paid subscribers globally.
  • The company also continued to beat expectations on revenue, although profit came in slightly lower than anticipated.

Investors are thrilled: Netflix stock reached an all-time high in after-hours trading Monday after the network proved it could continue strong user growth internationally. Its U.S. subscription growth has been slowing, but that's because its user base is pretty saturated in North America.

Why it matters: Hitting revenue estimates is a big win for Netflix, given that it poured a ton of money into programming investments (more below), as opposed to focusing on profit. It's also another reminder for Pay-TV providers and TV networks that the traditional cable bundle can't compete with the power of on-demand.

  • "It's increasingly clear that the price/value of the legacy video bundle is unsustainable," says BTIG media analyst Rich Greenfield. "Netflix is growing subscriptions at higher prices, driving more money to spend on content — a virtuous circle."

What's next? Netflix's chief content officer Ted Sarandos on Monday'searnings said the tech giant is inching closer towards producing dailynew, original content and will invest a lot more in original films: "We plan on (releasing) about 80 (original films) coming up next year and they range anywhere from the million-dollar Sundance hit, all the way up to something on a much larger scale."

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Ryan predicts House will pass tax plan by next month

Paul Ryan listens to Del. Jenniffer Gonzalez, D-Puerto Rico, at the Emergency Operations Center in San Juan. Photo: Carlos Giusti / AP

House Speaker Paul Ryan predicted to a Milwaukee radio station yesterday that the House will pass a tax rewrite by next month, and the Senate will approve it and send it to Trump's desk by December, The Hill reports.

Reality check: Republicans haven't introduced an actual bill yet, and Congress has a fairly full plate right now, from immigration to Iran to government funding for the rest of the year. There are 28 legislative days left in 2017.

The Senate hurdle ahead: Although Ryan said the House "pre-agreed" on a tax overhaul, when asked at a Monday event what the biggest roadblock to passing a change to the tax code is, Ryan responded: "You ever heard of the United States Senate before?" Senate Majority Leader Mitch McConnell can only afford to lose two Republicans in the tax battle ahead.

Trump's not blaming himself: "I'm not going to blame myself, I'll be honest. They are not getting the job done," Trump said Monday.

  • But Americans' approval of the way Trump works with Congress is 32%, which is even lower than his 37% approval rating right now, per a CNN and SSRS poll.

This week on the Hill: The Senate is expected to vote on the budget this week after the House passed its version last week. Both will need a conference to work out a final version. The House is out this week.

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Report: U.S.-backed forces recapture Raqqa from ISIS

A U.S.-backed Syrian Democratic Forces fighter runs in front of a damaged building as he crosses a street on the front line in Raqqa in July. Photo: Hussein Malla / AP

U.S.-backed militias said Tuesday that they have recaptured the northern Syrian city of Raqqa from ISIS, pushing the militant group's last stronghold out of what long had been considered their de facto capital, per Reuters.

Yes, but: Although the fighting is over, officers with the Syrian Democratic Forces (SDF), an American-backed militia group made up of Syrian Kurds and Arabs, said a formal declaration of victory wouldn't be made until they have finished clearing the area of mines and remaining militants. The U.S. military has also stopped short of declaring defeat, with a spokesman telling Fox News' Bret Baier that some fighting still remains.

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Axios Review: Google's unassuming Pixel 2 impresses

The Pixel 2 and Pixel 2 XL. Photo: Google

From the leaked images and rumored specifications, I fully expected Google's Pixel 2 to underwhelm. To be sure, it doesn't have the sexy curves or edge-to-edge screen of the Samsung Galaxy S8, LG V30 or Apple's iPhone X.

But in using the phone, I found it to be one of the most comfortable, powerful and no-hassle Android phones I've used.

Our Take: Google's second Pixel improves on the strengths of the first model by replacing a great camera with an even better one, making the device waterproof and adding several improvements on the software side. It offers a comfortable, if not dazzling design at a price that won't break the bank.

Aimed at switchers: Google has also made it an incredibly easy move for iPhone switchers. An included dongle lets one easily move a range of data from the iPhone, including iMessages. Plus, Google will automatically match as many of your apps as it can and install those.

The camera: Google puts a ton of emphasis on the camera and it shows. The camera on the original Pixel performed well and the new one scored best-ever ratings on a leading industry benchmark. What's more, Google manages to get a pleasant portrait effect with just a single rear camera. (see below for a comparison with Apple's iPhone 8 Plus)

The software: Some of the Pixel 2's key advances aren't visible until you turn it on, including the Google Lens smart camera software and the ability to squeeze the phone's exterior to summon the Google Assistant. The Pixel 2 will also support Pixel Buds, a $159 pair of wireless headphones that can do real-time language translation. As with other Pixel devices, it also guarantees prompt access to the latest Android updates.

Who it's good for: Most people looking for a solid, powerful Android phone.

Who it's not: If you are on a budget or want the flashiest hardware, the Pixel may not be for you.

The practicalities: The Pixel 2 starts at $649, while the XL version starts at $849. Verizon is the only carrier selling it directly, but it is available unlocked from Google and works with all the major carriers.

Since the camera is a key selling point, here is a comparison image of the portrait mode on the Pixel 2 and Apple's iPhone 8 Plus.

Pixel 2:

Ina Fried / Axios

iPhone 8 Plus:

Ina Fried / Axios

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Trump: Marino is out of the running to become drug czar

President Trump announced via Twitter this morning that Rep. Tom Marino removed his name from consideration to head the Office of National Drug Control Policy. This follows reports emerged that Marino steered a bill through Congress that significantly weakened the government's ability to crack down against the opioid epidemic.

Go deeper: The Washington Post/60 Minutes report that started it all.

Think back: Trump touched on the topic of Marino's nomination during his impromptu press conference in the White House Rose Garden with Mitch McConnell yesterday afternoon:

  • "We are going to look into the report... We are going to be looking into Tom... We are going to take it very seriously."
  • Trump also said he'll declare the opioid crisis a national emergency "next week"
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Verizon Fios pulls signal from Univision

Elise Amendola / AP

Univision announced last night that Verizon pulled its signal from its FiOS and mobile platforms "entirely without warning," leaving mostly East Coast consumers without access to programming. Univision says it's "deeply concerned," especially "in light of recent natural disasters and current events impacting the Hispanic community." Verizon says Univision is charging too much for its waning viewership.

Why it matters: It's the latest example of what happens when a Pay-TV provider and a cable network can't agree on a new contract. With new competitors in tech, the big Pay-TV distributors are incentivized to drop cable networks that are underperforming or too expensive, possibly to create their own skinny bundles. (We saw these dynamics play out two weeks ago when Altice threatened to drop Disney and Sunday when Charter struck a last-minute deal with Viacom.)

Go deeper: TV networks have been charging cable and satellite providers fees to carry their content for years, spurring more and more carriage fights. But pay TV providers are continuing to boycott the fees being demanded of them, causing TV blackouts all over the country. With more consumers cutting the cord, the atmosphere has gotten tense. By 2022, SNL Kagan predicts that retransmission fees being charged by TV networks will increase by roughly 50%, reaching $11.6 billion.

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Trump approval steady but fewer Americans think things going well: poll

Trump arrives on Air Force One at Greenville Spartanburg International Airport. Photo: Carolyn Kaster / AP

The portion of Americans who think things are going well in the U.S. dropped from 53% in August to 46% in mid-October, according to a CNN poll conducted by SSRS between October 12-15.

Trump's approval rating is 37% now, the same as it was in late September (Gallup reports it was 37% between September 25-October 1). His disapproval rating is 57% now. 32% approve of the way Trump is dealing with Republicans in Congress.