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Good morning ... The Senate is back in Washington this week after a weeklong recess, with a new goal of trying to pass a health care bill before the next recess in August.

McConnell's search for 50 votes

What to expect this week: Everything in this process in constant flux, but for now, our colleague Caitlin Owens' sources aren't expecting to see an updated bill — or CBO score — this week. The Congressional Budget Office is still working through some of the policy options Majority Leader Mitch McConnell sent over before the break, and the two can exchange more information privately this week as long as the bill is still private, too.

The latest: CBO is taking a look at a handful of possible amendments, including Sen. Ted Cruz's proposal to let insurers sell policies that don't comply with the Affordable Care Act — he's calling them "freedom plans" — as long as they also sell plans that do comply with the law's coverage requirements.

  • Many experts (and some moderate Republicans) are concerned that setup would cause premiums to skyrocket for policies that do cover pre-existing conditions. Cruz says the bill's $100 billion stabilization fund would take care of that.
  • Treasury secretary Steven Mnuchin seemed to endorse the Cruz plan over the weekend. "I'm very hopeful that his plan and his changes will get supported," he said on "Fox News Sunday."

The outlook: It certainly didn't get any sunnier over the recess.

  • "My view is it's probably going to be dead," Sen. John McCain said of the bill on CBS' Face the Nation.

This is what Washington has been fighting about

Data: Kaiser Family Foundation; Graphic: Lazaro Gamio / Axios

Every time you hear the Trump administration or Congress fight about rising ACA premiums, or what will happen to people with pre-existing conditions, just remember — we're talking about issues that affect 7% of the population. That's how many people are in the individual health insurance market, or the "non-group" market.

The graph above, put together by Axios' Lazaro Gamio with data from the Kaiser Family Foundation, shows what the rest of the population looks like — including the much larger employer health insurance marketplace, Medicare, and Medicaid.

Why it matters: This shows how much time we're spending on a relatively small portion of the market. The ACA was supposed to fix the problems of the individual market, which was dysfunctional for anyone with the slightest health problem. In doing so, it created other problems, including rising premiums. But when you hear about those sky-high rate hikes because of "Obamacare," chances are, they're not your sky-high rate hikes — unless you happen to be in that market.

Yes, but: The spending limits that have been proposed for Medicaid really do matter, and they affect a larger group — 20% of the population. So every minute Washington spends on the smaller group is time that could have been spent talking about Medicaid changes that will affect more people.

The easy conservative win Cruz could get

There's another piece of Cruz's proposed change to the Senate health care bill that may be accepted more easily than his ideas on insurance deregulation. He wants to let people use health savings accounts to pay for their health insurance premiums. Conservatives have been pushing to expand HSAs, which allows people to set aside tax-free money to spend on certain health expenses.

  • Cruz's argument: It would help make health insurance more affordable by letting people pay for them with pre-tax dollars.
  • "This is going to be big, especially for people who don't get tax subsidies." — Brandon Arnold, executive vice president, National Taxpayers Union
  • "That potentially makes HSAs a more potent tool...and a more legitimate option for employers and families." — Alexander Hendrie, director of tax policy, Americans for Tax Reform

Yes, but: Not all conservative health care wonks are impressed. Tom Miller of the American Enterprise Institute calls it a "symbolic move," and not the best way to achieve the conservative goal of equalizing the tax treatment between the individual market and employer-sponsored insurance. But Arnold said it would be more powerful in combination with other changes already in the bill, like increasing the annual contribution limits for HSAs.

Upcoding: health care's widespread overbilling problem

Bob Herman has a deep look this morning at "upcoding" — the practice where doctors and hospitals bill for more expensive services than they actually provide. The payment system gives them lots of incentives to do that, and numerous settlements between health care companies and the Department of Justice indicate it's a widespread problem.

Why it matters: Upcoding affects everyone — it saps money from the taxpayer-funded Medicare and Medicaid programs and could lead to higher premiums for people with commercial insurance. But there's no evidence the health care system is fighting upcoding effectively, or that the problem will go away. More here.

Fun fact: No one forced Bob to include the name of one coding webinar: "Keeping up with the Code-ashians." He did that on his own. Send your complaints to him.

While you were weekending...

  • Jonathan Swan reports that the pro-ACA group Save My Care will launch a seven-figure TV ad campaign today reminding four Republican senators that they promised not to support a health bill that hurts their constituents.
  • Rita Rubin reports in Forbes that Dr. Brenda Fitzgerald, the new head of the Centers for Disease Control and Prevention, used to promote "anti-aging medicine" — a field that mainstream experts consider "snake oil."
  • Sen. Bill Cassidy, making another pitch for the partial state opt-out plan he wrote with Sen. Susan Collins, said on "Fox News Sunday" that if the bill fails, repealing the ACA without replacing it would be "a nonstarter" for him.
  • Former Democratic Rep. Donna Edwards reveals in the Washington Post that she has multiple sclerosis, and asks her former colleagues not to undermine coverage of pre-existing conditions.
  • Peter Suderman says in the New York Times that Republicans "don't know what they want" and need to start over.
  • James Capretta writes in National Review that the Ted Cruz-Mike Lee amendment would "shift costs from healthy consumers to less-healthy consumers and households with lower incomes."

Cerner CEO dies

Cerner, one of the nation's leading providers of electronic health records, lost its CEO to cancer yesterday. The company announced that Neal Patterson, who co-founded the company, died from complications from a recurrence of the disease (the Kansas City Star identified it as a soft-tissue cancer). Cliff Illig, vice chairman of the board and another co-founder of the company, has been named chairman and interim CEO.

What we're watching this week: Are we really going to have to start hitting "refresh" on the CBO website again? Also, House Energy and Commerce health subcommittee hearing on medical product manufacturer communications, Wednesday; Employee Benefit Research Institute health policy forum, focusing on health savings accounts, Wednesday.

What else are you watching? Let us know: david@axios.com, baker@axios.com.

Featured

Fox renewed O'Reilly's contract after a sixth harrassment settlement

Photo: Andy Kropa / AP

Bill O'Reilly's contract with 21st Century Fox was renewed — with an approximate $7 million pay raise — after O'Reilly made a $32 million agreement to settle sexual harassment allegations, the New York Times reports.

What happened: Lis Wiehl, an analyst at Fox News, notified O'Reilly of her sexual harassment lawsuit in early January. Five days later, the two reached a settlement, per the Times, and Wiehl agreed "not to sue Mr. O'Reilly, Fox News, or 21st Century Fox," as well as destroying texts, photos, and other communications between them. The four-year contract extension with the network was granted in February, the Times reports.

Why it matters: This was the largest settlement made by O'Reilly and 21st Century Fox; it was also the sixth one of its kind.

Featured

The failed U.S. attempt at a Kirkuk compromise

Iraqi soldiers remove a Kurdish flag from a checkpoint in Bashiqa, Iraq. Photo: Khalid Mohammed / AP

The U.S. tried to form a compromise between Iraqi Prime Minister Haider al-Abadi and the Kurdistan Regional Government over the weekend, but ultimately failed, leading to the Iraqi forces overthrowing the Kurds in Kirkuk, according to Bloomberg's Eli Lake.

Why it matters: The compromise would have taken Kurdish control of the K-1 air base outside the city, and suggested a joint administration of the Kurds and Iraqis with a U.S. general. It would've allowed Abadi to "save face...while avoiding the trauma of Iraqi forces taking over" the city. But, Abadi was not convinced, and ultimately ordered troops into Kirkuk.

As Lake writes, "the Kurds have lost their Jerusalem, as Iraqi forces approach what Kurds voted last month should eventually be their independent state's national borders."

Featured

Scoop: Trump pledges to personally pay some legal bills of WH staff and associates

President Trump has promised to spend at least $430,000 of his own money to defray legal costs incurred by campaign associates and White House staff due to the Russia investigations, a White House official tells Axios.

What we know: The Republican National Committee has paid roughly $430,000 to lawyers representing the president and his eldest son, Don Jr. A White House official told me Trump will not be reimbursing the RNC for these costs. However, the White House official says he has pledged to spend the same amount, from his personal finances, "to defray the costs of legal fees for his associates, including former and current White House aides."

To understand the details of the RNC's payments for Trump and his son's lawyers, read this WashPost report — the substance of which the RNC confirmed to Axios.

What we don't know: The president and his legal team haven't announced the mechanism to make these payments. The arrangement raises a number of questions, none of which the White House official answered:

  • Is the plan to put this money into a general legal defense fund that all of the president's associates could request access to, or will the money be disbursed directly to attorneys?
  • $430,000 is a relatively small amount, given the ballooning legal fees of Trump's associates who are under the most intense investigation. Will Trump's legal fund pay the bills of associates with the most expensive legal fees, including Michael Flynn and Paul Manafort?
  • Who decides which of the president's associates get the money and when they get it?
  • What are the president's intentions regarding future legal bills for the first family? Will the RNC keep paying them?
  • Why isn't the president reimbursing the RNC in addition to partially defraying his associates' costs?

Bottom line: TBD on everything. The official said: "We're working on appropriate legal and ethical approval" — and said the president hasn't ruled out spending more of his own money on these legal fees. It's also unclear what the president will do in the future as he and the first family continue to rack up legal bills.

Update: I'm told there's no chance Trump will pay Flynn's legal bills. A source close to Flynn told me that the former National Security Adviser will not accept contributions to his legal defense fund from President Trump or the Trump campaign. Nor will he accept funds from the RNC.

Featured

Trump: Syrian victory in Raqqa is a “critical breakthrough”

Photo: Gabriel Chaim / AP

The image above from drone video shows damaged buildings in Raqqa, Syria, two days after Syrian Democratic Forces said that military operations to oust the Islamic State have ended, and that their fighters have taken full control of the ancient city on the Euphrates River.

  • The devastation was "caused by weeks of fighting between Kurdish-led forces and the Islamic State group, and thousands of bombs dropped by the U.S.-led coalition," AP writes.
  • Why it matters: "Entire neighborhoods are seen turned to rubble, with little sign of civilian life. ... The U.N. and aid organizations estimate about 80 percent of the city is destroyed or uninhabitable."
  • Now, a humanitarian crisis is escalating.
President Trump issued a statement on the Syrian victory, saying it "represents a critical breakthrough in our worldwide campaign to defeat ISIS."
"Today, we reaffirm that ISIS leaders, and anyone who supports them, must and will face justice."

Go deeper: Axios' Shannon Vavra and Steve LeVine explain how ISIS is scattered, but not gone.

Featured

Blueberry-picking robots' threat to human beings

"Tech Support," by R. Kikuo Johnson

"Welcoming Our New Robot Overlords: Once, robots assisted human workers. Now it's the other way around," by The New Yorker's Sheelah Kolhatkar:

The frontier: "An industrial robot will pick up the same object, in the same location, over and over. The challenge, and the multibillion-dollar business opportunity, [is] to teach a robot to function in an environment that [is] constantly changing."

Why it matters: "Harvesting fruit and other produce ... is the kind of job that Americans are increasingly reluctant to do ... Yet the implications extend beyond agriculture. A robot that could efficiently pick blueberries could probably do a lot of things that are currently the exclusive province of human beings."

Featured

300 people have been killed in U.S. disasters this year

Home destroyed from fires in the Coffey Park neighborhood in Santa Rosa, California. Photo: Jeff Chiu / AP

Damage from California wildfires is now estimated to exceed $1 billion, giving the U.S. 16 separate billion-dollar disasters so far this year, tying 2011 for the most in one year, per the Weather Channel.

Why it matters: The disasters, combined, have killed over 300 people, the Weather Channel reports. There have been 218 climate disasters since 1980, which has cost the U.S. over $1.2 trillion, not including the hurricanes last month or the wildfires in California.

Featured

A new North Korea problem

Kim Jong-un speaks to the central committee of the Workers' Party of Korea in Pyongyang on Oct. 7. (Korean Central News Agency/Korea News Service via AP)

"[A]nalysts ... see signs that Mount Mantap, the 7,200-foot-high peak under which North Korea detonates its nuclear bombs, is suffering from 'tired mountain syndrome,'" the WashPost reports on A1:

Why it matters: "Chinese scientists ... have warned that further nuclear tests [by North Korea] could cause the mountain to collapse and release the radiation from the blast."

P.S. CIA Director Mike Pompeo said Thursday a Foundation for Defense of Democracies forum that North Korea is months away from perfecting its nuclear weapons capabilities, AP reports:

  • Pompeo: "They are close enough now in their capabilities that from a U.S. policy perspective we ought to behave as if we are on the cusp of them achieving" their objective of being able to strike the United States.
  • John Brennan, Pompeo's predecessor as CIA director, said at Fordham University in New York on Wednesday that the prospects of a military conflict on the Korean Peninsula "are greater than they have been in several decades": "I don't think it's likely or probable, but if it's a 1-in-4 or 1-in-5 chance, that's too high."
Featured

Trump: Rep. Wilson is "killing" the Democratic Party

Photo: Evan Vucci / AP

President Trump sent a series of tweets Saturday morning regarding Congresswoman Frederica Wilson, the new budget passed in Congress on Thursday, and more.

Go deeper: Chief of Staff John Kelly misrepresented a story about Rep. Wilson earlier this week, which further intensified a feud between Trump and the Florida Congresswoman, evidenced by his tweet this morning. Yesterday Wilson raised the issue of race, suggesting that the animosity from Kelly is racially charged and called him a liar. "The White House itself is full of white supremacists," she said.

Featured

Big Tech's new Wall Street problem

Photo courtesy of Barron's

Just as Big Tech has begun to seriously worry about Washington, now Wall Street is waking up to possible government threats to the market dominance of the Silicon Valley giants.

While the "biggest companies don't face an immediate threat of being broken up ... just the possibility creates a risk factor in the stocks," Barron'sreports in its new cover story:

  • "More than antitrust issues are in play. The huge amounts of personal data that Google, Facebook, and Amazon are amassing is just as troubling to some."
  • Why it matters: "Taken together, these challenges threaten the stock valuations of the group. To get an idea of the worst-case scenario, take a look at two of tech's dominant players from previous eras: IBM [1969] and Microsoft [1998]."
  • "If these giants get sideswiped, it could be because of the fatal flaw in large tech companies that's often drawn social ire and regulation — the will to exploit their dominance."

Possible hits to the platforms' business models are blossoming in Europe, and the contagion could spread across the Atlantic. An AP takeoutfrom London points out that the giants "are increasingly facing an uncomfortable truth":

  • "[I]t is Europe's culture of tougher oversight of companies, not America's laissez-faire attitude, which could soon rule their industry as governments seek to combat fake news and prevent extremists from using the internet to fan the flames of hatred."

Be smart: My conversations with tech execs show they're skeptical that Congress will figure out the mechanics of inhibiting the platforms in a way that would do serious damage to the bottom line.

  • It's true that potential D.C. action is in the early stage. And there are huge impediments to doing anything radical. But the companies are now such tempting targets, this is a rising passion in both parties.
Featured

Those "puppy eyes" are all for you

Photo: Alan Diaz / AP

"Puppy dog eyes" — the pleading look a dog gives by lifting its inner brow and widening its eyes — has become synonymous with a sad pup hoping for a scrap of food off its owner's plate. However a new study published Thursday in Scientific Reports suggests "puppy dog eyes" may not be meant to be manipulative, but are simply a reaction to human expression.

Key findings: The study, conducted by researchers in Britain who closely monitored dogs' facial expressions, found that dogs were much more expressive when a person was paying attention to them as opposed to when they were turned away. The presence of food didn't make a difference in the dogs' reactions.

Why it matters: "This study is the first to show evidence that dogs adjust their facial expressions when humans are looking at them," Angie Johnston, a graduate student at Yale university working in the Psychology Department's Canine Cognition Center, told Axios. "This suggests that the methods dogs use to communicate with us may be more nuanced than we previously thought."

Details of the study and other findings:

  • Juliane Kaminski, a psychologist at the Dog Cognition Centre at the University of Portsmouth, U.K. and her colleagues studied 24 pet dogs of various breeds from ages 1-12 years.
  • The researchers filmed the dogs' facial expressions while a woman was a) facing the dog and displaying food in her hands; b) facing it and not displaying food; c) facing away and displaying food; and d) facing away and not displaying food.
  • The dogs were found to be much more expressive when the woman was facing them, and stuck out their tongues and barked more when they got attention.
  • Meanwhile, the presence of food didn't seem to make a difference. "This kind of 'dinner table effect' that dogs try and look super cute when they want something is something we did in fact not find," wrote Kaminski, "meaning, there was no effect of food being visible or not."
  • Take note: Kaminiski underscored that the team doesn't know dogs' intentions for making certain faces. "We cannot in any way speculate what dogs might 'mean' with whatever facial movement they produce," she wrote.

What they're saying:

  • "That the dogs raised their eyebrows and flicked their tongues more when people are looking at them... suggests that dogs might be using the actions communicatively, just as people do with facial expressions," Alexandra Horowitz from Barnard University's Dog Cognition Lab told Axios.
  • Looking forward: "This study represents a promising new frontier in canine science... I was surprised that dogs made 'puppy dog eyes' at the person regardless of whether she had food in her hands or not. This makes me wonder exactly what it is that dogs are trying to communicate," says Johnston. "More work is going to be needed to pin down exactly what dogs are trying to tell us, if anything, when they make these facial expressions."

Go deeper: