Dec 31, 2017

Trump confronts 2018's harsh political reality

Photo: Mark Makela / Getty Images

Over the past few weeks — especially since Roy Moore's defeat — sources close to Trump say he's finally recognizing a harsh reality: If Republicans lose the House in 2018, it will pose an existential threat to his presidency, with endless investigations, legislative obstruction and a likely move toward impeachment.

"Oh, he gets it," a source who's recently spoke to Trump told me.

  • Some of Trump's trusted advisers are stressing the crisis-level stakes of the 2018 midterms. Many believe that the White House's political shop, run by Bill Stepien, has proven useless. And they say the Trump-endorsed outside support group, America First, is equally ineffectual. One top administration official described it to me as "not necessarily inept, but certainly inert."
  • Brian O. Walsh, a top official at America First, responded to the criticism by saying: "In just a few months, we've taken America First from inception to an operation that's raised over $30 million and spent more money championing the accomplishments and supporting President Trump than any other organization. In 2018, we will be even more aggressive, and are optimistic that we will get the support needed to do so."

At a recent lunch with Trump, former chief of staff Reince Priebus said 2018 is as serious as a heart attack— and that Republicans will only keep control of the House if everything goes perfectly.

  • Sources who've spoken to Priebus say he's pessimistic about next year and is concerned that the White House doesn't have a single ringleader who can galvanize Republican leaders around the country.
  • To emphasize the potential calamity, Priebus, the former RNC chair, has been telling GOP leadership that the party needs to own the entire data and ground operation for every single congressional district, and to "spend whatever needs to be spent as if 2020 relies on it."

Senior White House adviser Kellyanne Conway said she thinks the GOP can keep the Congress in Republican hands, but that a to-be-determined liability is if more and more House Republicans retire. She noted that most presidents — including Clinton and Obama — face midterm massacres but then win re-elections.

  • "However, in the age of Trump," she added, "history tends to be made, not repeated."

Conway said she remains optimistic because she believes Democrats "have nothing positive or concrete to run on and wasted the year talking about Russia instead of America, and holding up a stop sign screaming 'resist and obstruct'."

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Scoop: Top NSC official reassigned to Energy Department amid "Anonymous" fallout

Photo: Mark Wilson/Getty Images

Deputy national security adviser Victoria Coates will be reassigned as a senior adviser to Energy Secretary Dan Brouillette, the National Security Council said Thursday — and a senior White House official said that the administration "rejects" the rumors that she is "Anonymous."

Why it matters: Coates has battled claims that she is the still-unknown Trump administration official that penned a New York Times op-ed and book critical of President Trump.

The Fed may be setting the table for 2020 rate cuts

Illustration: Sarah Grillo/Axios

The Fed looks to be laying the groundwork to lower U.S. interest rates this year, just as they did in April 2019 before cutting rates in July, September and October.

Why it matters: A Fed rate cut makes taking on debt more attractive for U.S. consumers and businesses, helping to juice the economy, but also puts the central bank in a weaker position to fight off a potential recession.

Morgan Stanley to buy E*Trade in a $13 billion deal

Photo: Rafael Henrique/SOPA Images/LightRocket via Getty Images

Morgan Stanley is planning to buy E*Trade Financial Corp. in a $13 billion all-stock deal, the Wall Street Journal reports, with plans to acquire the company known for helping everyday Americans manage their money.

Why it matters: The deal, which would be the largest by a major American bank since the financial crisis, signals Morgan Stanley‘s desire to bulk up in wealth management.