Trump's big climate change splash - Axios
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Trump's big climate change splash

Rebecca Zisser / Axios

Today at the EPA President Trump is acting on a pledge to unravel several parts of the Obama-era climate change push. He'll sign an executive order that will:

  • Begin undoing the EPA Clean Power Plan than mandates cuts in carbon emissions from coal-fired power plants.
  • Undo several policies that wove climate change into federal decision-making, such as the Obama administration's tally of a metric called the social cost of carbon, and a White House directive that agencies factor climate change into a range of permitting decisions.
  • End an Interior Department policy that froze issuance of new coal leases on federal lands.
  • Reconsider EPA and Interior rules that govern oil-and-gas development.
  • Make several other policy changes, which we describe here.

Where all this matters and where it doesn't: Before today Trump had killed an Interior Department regulation on coal mining waste, approved the Keystone XL and Dakota Access pipelines, signaled he'll ease auto mileage rules, and called for faster infrastructure permitting overall. So two months into his presidency, how much impact is he having? Easing environmental protections can affect how industry operates, but not necessarily how much it operates. Fossil fuel production is pretty resilient to policy shifts unless they really mess with the underlying market fundamentals. So let's look at where Trump's actions to date will or won't move the needle . . .

  • Oil and gas production. These changes are unlikely to have an outsized effect, but could influence drilling and production decisions a little. Easing regulations matters much less than fundamentals. While lots of Washington is paying attention today, a date that matters way more is May 25, when OPEC meets to decide whether to extend production cuts that have helped prices rebound from the dumps of 2015 and 2016 and helped put the U.S. oil boom back in motion.
  • Infrastructure. This matters. Industry is more bullish here about a meaningful change from the Obama era — especially if the early moves on Keystone and Dakota Access are replicated more broadly. "Of all those things, the one that might matter the most, just because it might pull (oil) production forward a little quicker, is the whole permitting issue around infrastructure," veteran oil analyst Bobby Tudor said on a podcast released Monday from the Columbia University Center on Global Energy Policy.
  • Coal. Coal stocks could get a bump from the order, just like they did when Trump won in November. Trump may slightly alter the rate and trajectory of the industry's long-term projected decline in the U.S., where mining and power generation faces headwinds from inexpensive natural gas, earlier air pollution rules, renewables and other factors. But he probably can't really turn things around. Let's turn it over to the consulting firm ClearView Energy Partners: "[W]e see few policy levers available to either Congress or the Trump Administration sufficient to offset organic, power-sector coal displacement by modestly priced natural gas," they said in a recent research note.
  • Renewables: Killing the Clean Power Plan (which has already been frozen by the Supreme Court) doesn't help renewables, but probably doesn't hurt much either, at least not for a while, thanks to other forces like tax credits that were extended for five years in late 2015, state green energy mandates, and falling costs. "We expect there to be a relatively, strong continuing build of renewables over the next several years regardless of what happens with the CPP," Ethan Zindler, a senior analyst with Bloomberg New Energy Finance, tells Axios.

What's next: Bureaucracy, and lawsuits.

  • Some of the policies that the order targets, such as the White House guidance on factoring climate change into National Environmental Policy Act reviews, can be largely undone pretty fast.
  • But final regulations like the Clean Power Plan will take a long time, perhaps years, to formally unwind under the detailed requirements of administrative procedure. Look for environmental groups to battle the outcome in court.

What's outstanding: The executive order is the most aggressive move to date, but a lot remains undecided too.

  • Paris. The Trump administration still hasn't decided whether it will begin the process of abandoning the international Paris climate change pact, even as it takes steps that undercut U.S. carbon emissions pledges. Walking away would have an unknown effect on the global push toward low-carbon energy sources.
  • Federal R&D investments. The initial White House budget plan would cut Energy Department programs deeply, but it's unlikely Congress is willing to go as far.
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Trump gets personal with new attacks on Morning Joe hosts

AP

President Trump's Twitter attacks got personal Thursday morning when he went after Morning Joe hosts and engaged couple Joe Scarborough and Mika Brzezinski — his old friends:

"I heard poorly rated @Morning_Joespeaks badly of me (don't watch anymore). Then how come low I.Q. Crazy Mika, along with Psycho Joe, came... to Mar-a-Lago 3 nights in a row around New Year's Eve, and insisted on joining me. She was bleeding badly from a face-lift. I said no!"

Flashback: When Joe and Mika broke the news of their engagement in a Vanity Fair interview last month, they revealed that Trump — over lunch with the couple, as well as Ivanka and Jared Kushner — offered to officiate their wedding, and recommended they hold the ceremony at Mar-a-Lago or the White House. Mika told Vanity Fair, "If it weren't Trump, it might be something to think about."

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Reports: Trump routinely confuses Medicaid and Medicare

Evan Vucci / AP

A Republican Senator told the New York Times on Tuesday that President Trump gave the impression that he "did not have a grasp of some basic elements of the Senate plan" and that he was "especially confused" by the idea of opponents calling the bill "a massive tax break for the wealthy." More aides described Trump as uninterested in the particulars of health care.

"There would be times when he would describe what was clearly Medicare...but say Medicaid, and when we pointed that out, he would say, 'That's what I said, Medicare and Medicaid."
  • When asked if Trump had an understanding of the important aspects of the House and Senate health care bills, a close aide laughed and replied, "not to my knowledge."
  • "The president understands winning," a different official said.
  • Aides don't point out Trump's misunderstandings, not wanting to make him feel or look "dumb."
  • On Trump's campaign promises about repealing and replacing Obamacare, a former campaign aide said, "It wasn't really a policy oriented campaign—policy wasn't on our radar. The sense was, say what wins and figure out the details later."
  • Just as his intelligence briefings have been cut short compared to those of Obama, an official told the Daily Beast, "It is fair to say the president takes [a] similar approach to health care... [It's] 'less is more.'"
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Even Nike can't resist the Amazon revolution

Michael Noble Jr / AP

Sportswear giant Nike announced an agreement earlier this month to sell its products directly through Amazon.com, despite resisting the online retailer's entreaties for more than a decade.

The Wall Street Journal reports the decision was made after third-party sellers offering Nike products began to proliferate on the site, loosening the firm's control over pricing and distribution. Nike can't stop third-party sellers from reselling lawfully-purchased product, and following the liquidation of bankrupt Sports Authority's inventory last year, the market was flooded with Nike product that could be resold at deep discounts. Nike therefore decided to strike a deal to sell its products on Amazon in exchange for its help in stopping unauthorized third-party sales.

Why it matters: When consumers want to buy any type of product, be it electronics or apparel, an increasing share think of Amazon first.

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Ex-Binary Capital employee sues for alleged harassment

Binary Capital website

A female former employee at Binary Capital alleges that the VC firm tried to silence her after she quit, including alleged threats to withhold her share of the profits from successful investments (i.e., carried interest), according to a lawsuit filed in San Mateo Superior Court on Thursday.

The details: The former employee, Ann Lai, says that Binary Capital's culture was sexist, including commentary about sexual encounters, women's bodies, and inappropriate behavior toward female staff. After she resigned in May 2016, Binary Capital partner Justin Caldbeck allegedly threatened her ability to find work if she disclosed anything about her time at the firm. She quickly lost out on multiple jobs because of the firm's statements about her and her performance.

Piling on: Lai's complaint comes a week after a report from The Information revealed that Caldbeck had been sexually harassing some female startup founders. Since then, it's also been revealed that apparel startup Stitch Fix requested in 2013 that Calbeck, at the time working for Lightspeed Venture Partners, be removed from its board after he harassed the startup's founder, though she was forced to signed a non-disparagement agreement about the situation. Over the last few days, both Caldbeck and his partner, Jonathan Teo have effectively resigned, and Binary is expected to be wound down.

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Mining by machine: Automation hits coal industry

Anupam Nath / AP

If you want to work in coal, forget using a shovel. As Bloomberg's Tim Loh writes: "Coal…executives are starting to search for workers who can crunch gigabytes of data or use a joystick to maneuver mining vehicles hundreds of miles away."

The coal industry's workforce composition is increasingly going to be skilled workers, and overall hiring is likely to dip. As Heath Lovell, a spokesman for coal producer Alliance Resource Partners LP, puts it: "Whether coal comes back or not is not necessarily directly related to jobs," since as tech makes the industry more efficient it will be able to produce the same amount with fewer employees.

  • To get a sense of how successful the coal industry is going forward, look to production levels, not hiring. Remaining competitive, particularly with natural gas, likely means cutting labor.
  • The tech now: The machines that are likely to displace workers in the next 10 to 15 years include the longwall machine (which cuts coal in mile-long strips without many employees), joysticks to mine by remote control (with the help of videos, sensors, and positioning software), autonomous haul loaders, autonomous trucks, autonomous long-haul trains, semi-autonomous crushers and more. Read more, via the International Institute for Sustainable Development.
  • Likely Impacts: Accenture predicted in 2010 that employing autonomous tech in open pit mines would reduce employment by 75%. Miners, drivers, and maintainers will see more layoffs, per ComputerWorld. It is also likely that the introduction of automation will reduce fuel consumption and spending but also lost tax revenue, IISD claims.
Featured

The iPhone went on sale 10 years ago today

Sergey Ponomarev / AP

The Economist: "No product in recent history has changed people's lives more. Without the iPhone, ride-hailing, photo-sharing, instant messaging and other essentials of modern life would be less widespread. Shorn of cumulative sales of 1.2bn devices and revenues of $1trn, Apple would not hold the crown of the world's largest listed company. Thousands of software developers would be poorer, too: the apps they have written for the smartphone make them more than $20bn annually."

  • The next decade: "[T]he era of stand-alone electronic devices, however slick, is coming to an end. They will increasingly become a vehicle for — and be subsidized by — services based on machine learning and other artificial-intelligence techniques. The quality of these offerings will in turn largely depend on how much data developers have access to... Although Apple's Siri was one of the first digital assistants, Google's and Amazon's offerings are now much smarter."
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The story behind Trump's Medicaid tweet

On Wednesday afternoon, President Trump tweeted a graph from his personal account showing Medicaid spending under the Republican Senate health bill.

There's a story behind that tweet: In the Oval Office on Wednesday, Marc Short, the White House Legislative Affairs director, showed Trump a piece of paper with the graph of Medicaid spending pointing up. Trump wanted to tweet it, according to a source told about the meeting.

Why it matters: The graph doesn't show the other side of the Medicaid changes: the fact that spending would go down compared to current law, which is how Senate Republicans get $772 billion in savings. That's the whole point of the new spending limits.

This is all part of a broader White House strategy: They want to change the way it's presented in the media to help sway some of the Senate Republican holdouts.

  • For the longest time, Republicans in all branches of government failed to frame the argument over Medicaid in terms of the Medicaid dollars going up. Some in the administration had concluded it was an argument they couldn't win. But a number of officials saw they were getting killed every day in the press, with reports of the billions being cut out of Medicaid. Some officials wanted to aggressively reframe the argument as a growth in spending — and a slowing of the growth rate under Obamacare rather than a raw "cut."
  • Even at this late stage, the White House believes it's crucial to change the media narrative. A number of officials believe that some crucial senators are more heavily swayed by media coverage than they are by the substance of the cuts to the Medicaid spending under the Affordable Care Act.

HHS Secretary Tom Price has been making this argument, and tweeted a similar graph of Medicaid spending on Tuesday:

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Stop going to the White House press briefings

With all the legitimate gripes reporters have with this White House, perhaps the least worthy of your (or their) time and attention is the WWE-style smackdown over briefings. Every day, the White House hides or dodges. Every day, reporters protest and whine.

Here's an idea: Quit going.

  • Even if the spokespeople were fully looped in, appeared on camera, and shot straight, what would you miss by blowing it off? There are transcripts and this thing called Twitter, where the rare newsy nugget will quickly appear.
  • Truth is, with cable and the internet, the briefings were pretty useless, even pre-Trump. Government officials are paid to make little news, and spin the best take they can. It's low-grade propaganda at best, and full-blown B.S. at worst.
  • You're wasting time in your day you'll never get back. For a White House reporter who doesn't work in the building, it can take a good chunk of the workday to get to the briefing, sit through it, then complain about it afterward.
  • Work plugged-in sources instead. It's not as if this White House is a watertight ship: Aides are remarkably candid about the hour-by-hour intrigue, infighting and strategizing.
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No one came out of yesterday's Senate GOP meeting sounding hopeful

David J. Phillip / AP

Senate Republicans spent a whole lot of time talking about the health care bill yesterday, but not a whole lot of time reaching any deals. That makes it harder to see how they could get an agreement by Friday on a revised bill.

It didn't help when Sen. Ted Cruz said he wants to let insurers sell plans that don't have any protections for pre-existing conditions — as long as they also sell plans with that offer those protections and follow the Affordable Care Act's other insurance rules.

Reaction to Cruz's comment:

  • One Senate GOP aide told Caitlin Owens that many of the Republican senators were "surprised and pissed" because most Republican senators had already agreed not to touch the ACA's pre-existing condition protections.
  • Another aide summed up: "No matter how narrowly-proposed, wading into pre-ex is not just a 'No,' it's a 'Hell No' for the vast majority of the Senate GOP."
  • A Cruz spokesman, however, said the senator has been talking for weeks about the idea, which is part of a proposal to give consumers a choice between health plans that meet all of the ACA rules and plans that don't. He's been handing out a card that includes that pitch.

No one came out of yesterday's Senate GOP meeting sounding hopeful.

  • Sen. Susan Collins: "It's very difficult...I'm concerned about a number of aspects, such as coverage, Medicaid cuts, impact on premiums."
  • Sen. Shelley Moore Capito: "I'd like to see a [Medicaid] growth rate that matches the projected growth, or at least is close to projected growth." She also wants $45 billion in opioid treatment money over 10 years.
  • Sen. Rob Portman: "I'd rather see us stick to the [Medicaid] growth rates that were worked out by the House."
  • Sen. Rand Paul: Any tradeoff that gives more money to moderates and more deregulation to conservatives "sounds to me like a Washington deal...I'm not going to go for that."

Most of the optimism is coming from the White House. Here's how an administration source summed up the mood to Jonathan Swan last night: "I think we're going to pass this. I really think they'll bribe off the moderates with Opioid money and then actually move policy to shore up Mike Lee and Ted Cruz."

This is how it's going: Even Sen. John McCain, who hasn't been one of the most vocal holdouts, says he's not ready to vote for the bill. Since he's from Arizona, which expanded Medicaid, he wants to offer three Medicaid amendments that he's worked out with Gov. Doug Ducey.

"That has a lot to do with whether I support the bill or not," McCain told reporters as he stepped into an elevator. When asked what the amendments were, he motioned to the elevator operator to hit the button: "Basement!"

Featured

Staples being bought for $6.9 billion

Mark Lennihan / AP

Private equity firm Sycamore Partners has agreed to acquire office retailer Staples for $6.9 billion, or $10.25 per share. The move comes around one year after federal regulators prevented Staples from acquiring rival Office Depot, which soon was followed by Staples naming Shira Goodman as its new CEO. Goodman is expected to remain in place after the buyout is completed later this year.

Price talk: The $10.25 per share is higher than Staples has traded for most of the past two years, but well below its late 2014 high of $17.98 per share.

What to know: Staples is known for its bricks-and-mortar stores, but that's not necessarily where Sycamore's interest lies. Per Reuters: "Sycamore will be organizing Staples along three lines: its stronger delivery business, its weaker retail business and its business in Canada, two sources familiar with the deal said. This structure will give Sycamore the option to shed Staples' retail business in the future." Also don't be shocked if Sycamore at some point tries to revive the Staples-Office Depot merger concept, particularly now that a new Administration is in place.

Data: Money.net; Chart: Axios Visuals