Trump Signs Tax Overhaul, Stopgap Spending Bills In First Major Legislative Victory

Update: as previewed moments ago, President Trump on Friday morning signed into law legislation funding the government through Jan. 19 and more importantly, the $1.4 trillion Tax Cut and Jobs Act, i.e. the Tax Reform bill, overhauling the U.S. tax code. Trump is now set to depart for Florida.

The bill’s signing ends the president’s first year in office on a high note. As the Hill adds, the president has had some other successes as well, in areas such as rolling back regulations and getting a new Supreme Court Justice, Neil Gorsuch, confirmed. But Republicans were unable to repeal and replace ObamaCare, and the headlines over the past year have also at times been dominated by the Russia election meddling investigations and palace intrigue stories about disagreements among Trump"s staff.

Trump publicly made efforts to try to get Democrats to vote for the measure as well — particularly senators facing 2018 reelection bids in states the president carried in 2016. But while the president gave speeches on the tax plan in states with vulnerable Democratic senators such as Missouri, North Dakota, Indiana and Pennsylvania, no Democrat in either chamber of Congress ultimately backed the package.

Democrats have focused on the fact that some taxpayers would get tax increases and have argued that the largest benefits will go to wealthy people like the president. They think attacking Republicans on the plan will help them in the midterms since polls show the measure is unpopular with the public.

 

But Republicans are brushing off the polls, arguing that public opinion will change in February when people start to see higher take-home pay. They argue that the bill will be a winner because it will boost job creation, wages and the economy.

The irony will be if the tax bill - slammed by Democrats - actually ends up being popular and succeeds in reducing prevailing tax rates. Such an outcome would result in an even greater lock on Congress by the GOP after the 2018 midterm elections, forcing the Democrats to truly scramble what Russian collusion scandal they will trot out next. 

* * *

After days of speculation over whether Trump would sign his new tax reform bill this year or wait until January to avoid certain spending cuts (something we covered here), Trump has just announced that the tax bill, along with the missile defense bill, will be signed in the Oval Office later today before he heads off to Mar-A-Lago for Christmas. 

"Will be signing the biggest ever Tax Cut and Reform Bill in 30 minutes in Oval Office. Will also be signing a much needed 4 billion dollar missile defense bill."

Will be signing the biggest ever Tax Cut and Reform Bill in 30 minutes in Oval Office. Will also be signing a much needed 4 billion dollar missile defense bill.

— Donald J. Trump (@realDonaldTrump) December 22, 2017

Oddly, at least for Trump, the bill signing will be conducted in private rather than as part of a massive media event.

Per senior administration official @POTUS will sign #TaxCut bill before departing WH for Mar-a-Lago this morning. Am advised signing will be private. WH event to celebrate slated for Jan. 3

— Major Garrett (@MajorCBS) December 22, 2017

And just like that, the White House just delivered a $1,000 Christmas bonus to AT&T employees around the country...something that we"re almost certain will result in another Trump tweet at some point today.

Bob Corker Says Tillerson "Doesn"t Plan To Be Ousted"

Update: Bob Corker, chairman of the senate foreign relations committee, said Thursday that he spoke with Tillerson after the New York Times reported that he would soon be pushed out of the Trump administration, and the secretary of state has no plans to leave his post.

That"s contrary to the NYT"s claim that he"s judiciously waiting until year-end to resign so he can "leave with dignity". The NYT also noted that Tillerson"s departure was not yet a done deal because it hadn"t received the final approval from Trump.

One might assume that Trump would at least try and convince Tillerson to stay, if only for the fear that Tillerson might share details about his time at the state department that might embarass the president.

 

NEW: U.S. Senate Foreign Relations Chairman Corker aye he spoke to Secretary of State Tillerson earlier on Thursday and Tillerson is not planning on being ousted (@Reuters)

— Andrew Peng (@TheAPJournalist) November 30, 2017

 

* * *

Rumors have circulated for months that Rex Tillerson"s time at the helm of the State Department might soon be coming to the end. Tensions between the two men - who could forget "morongate"? - have apparently worsened since the spring, when reports first emerged that Tillerson and Trump had different views on important foreign policy issues like the Iran deal and North Korea. Trump was famously accused of "castrating" his secretary of state in the eyes of the global diplomatic community when he chided Tillerson not to bother pursuing diplomatic talks with the North Koreans.

Pompeo has long been rumored (as we pointed out in October) to be Tillerson"s obvious replacement, given his foreign policy expertise as head of the CIA and a reportedly close relationship with Trump - the two meet every day for Trump"s intelligence briefing. Pompeo"s reportedly become "a trusted policy adviser" to the president, according to the Times. Before the CIA, Pompeo was a Congressman from Vice President Mike Pence"s home state of Indiana.

And now, the New York Times is reporting that Tillerson could be out "within weeks." For the former ExxonMobile CEO, an end-of-year exit would make his time in office the shortest of any secretary of state whose tenure was not ended by a change in presidents in nearly 120 years. Tillerson has reportedly been holding out until year end to try to preserve some dignity.

Pompeo would then be replaced at the CIA by Senator Tom Cotton, a Republican from Arkansas who has been a key ally of the president on national security matters, according to the White House plan. Cotton has signaled that he would accept the job if offered, said the officials, who insisted on anonymity to discuss sensitive deliberations before decisions are announced.

The Times reporting comes with one important caveat: It"s still not immediately clear whether Trump has given final approval to the plan, but he has been said to have soured on Tillerson and in general is ready to make a change at the State Department.

White House chief of staff John Kelly developed the transition plan and has discussed it with other officials, who presumably shared it with the Times. Under his plan, the shake-up of the national security team would happen around the end of the year or shortly afterward.

As the Times points out, Tillerson"s tenure has been marred by "turbulent" relations with his boss:

The ouster of Mr. Tillerson would end a turbulent reign at the State Department for the former Exxon Mobile chief executive, who has been largely marginalized over the last year. Mr. Trump and Mr. Tillerson have been at odds over a host of major issues, including the Iran nuclear deal, the confrontation with North Korea and a clash between Arab allies. The secretary was reported to have privately called Mr. Trump a “moron” and the president publicly criticized Mr. Tillerson for “wasting his time” with a diplomatic outreach to North Korea.

Pompeo"s move is, of course, a setback for Nikki Haley, Trump"s ambassador to the UN, a position that"s typically seen as a stepping stone to leading the state department.

Cotton"s promotion wouldbe a reward for one of Trump"s most loyal supporters in the Senate on national security and immigration issues. However, Cotton"s ascension is not yet completely assured: There"s still some debate about whether he"d be more use to Trump in Langley, or in the senate.

If Cotton leaves, his seat will be up for grabs in 2018.

Tillerson would mark the latest in a string of more than a dozen high-profile departures from the Trump administration during its first year. He"s also probably the most high-profile figure to depart since Health and Human Services Secretary Tom Price resigned after being exposed for taking expensive chartered flights at taxpayer expense.

Sally Yates
Michael Flynn
Katie Walsh
Preet Bharara
James Comey
Michael Dubke
Walter Shaub
Mark Corralo
Sean Spicer
Micheal Short
Reince Priebus
Anthony Scaramucci
Steve Bannon
Sebastian Gorka
Tom Price

...and (maybe) Rex Tillerson?

Don"t Show President Trump These Two Charts

Mexico vehicle production hit a new record high in October - up 11% since President Trump"s election...

 

And Mexico vehicle exports are near record highs - up 13% since President Trump was elected...

 

Maybe Mexico can afford to "pay for the wall" after all...

Trump To Scrap Crucial Obamacare Insurer Subsidy

Just hours after signing an executive order that implicitly begins unwinding ObamaCare, Politco reports, citing two people familiar with the matter, that President Trump plans to cut off critical subsidy payments to insurers selling Obamacare coverage.

Earlier today, Trump signed an executive order expanding access to more loosely regulated insurance options with low premiums, a move that could undermine the ACA insurance markets.

“We’ve been hearing about the disaster of Obamacare for so long,” Trump said in signing the order at a White House ceremony. “For a long time, I’ve been hearing repeal, replace, repeal, replace.”

He then said that the order is "starting that process" to repeal ObamaCare.

It will be the "first steps to providing millions of Americans with ObamaCare relief."

And now, as Politico reports, the process appears to accelerating as Trump"s decision to end the payments, estimated at $7 billion this year, marks the president"s most aggressive move yet to dismantle Obamacare after months of failed GOP repeal efforts on Capitol Hill.

As Reuters notes, Trump has repeatedly threatened to stop the payments, which are made directly to insurance companies to help cover out-of-pocket medical expenses for low-income Americans enrolled in individual healthcare plans under Obamacare.

The move is likely to draw lawsuits and may put pressure on Congress to appropriate funding for the subsidies.

This latest move is likely to throw healthcare markets into chaos, and will infuriate Democrats - effectively closing the "Chuck and Nancy" channel of communications - leaving a deal to avert government shutdown on or after Dec 8th (when the currenct extension deal runs out) increasingly doubtful.

America's Slow-Motion Military Coup

Authored by Stephen Kinzer via The Boston Globe,

In a democracy, no one should be comforted to hear that generals have imposed discipline on an elected head of state. That was never supposed to happen in the United States. Now it has.

Among the most enduring political images of the 20th century was the military junta. It was a group of grim-faced officers — usually three — who rose to control a state. The junta would tolerate civilian institutions that agreed to remain subservient, but in the end enforced its own will. As recently as a few decades ago, military juntas ruled important countries including Chile, Argentina, Turkey, and Greece.

These days the junta system is making a comeback in, of all places, Washington. Ultimate power to shape American foreign and security policy has fallen into the hands of three military men: General James Mattis, the secretary of defense; General John Kelly, President Trump’s chief of staff; and General H.R. McMaster, the national security adviser. They do not put on their ribbons to review military parades or dispatch death squads to kill opponents, as members of old-style juntas did. Yet their emergence reflects a new stage in the erosion of our political norms and the militarization of our foreign policy. Another veil is dropping.

Given the president’s ignorance of world affairs, the emergence of a military junta in Washington may seem like welcome relief. After all, its three members are mature adults with global experience — unlike Trump and some of the wacky political operatives who surrounded him when he moved into the White House. Already they have exerted a stabilizing influence. Mattis refuses to join the rush to bomb North Korea, Kelly has imposed a measure of order on the White House staff, and McMaster pointedly distanced himself from Trump’s praise for white nationalists after the violence in Charlottesville.

Being ruled by generals seems preferable to the alternative. It isn’t.

Military officers, like all of us, are products of their background and environment. The three members of Trump’s junta have 119 years of uniformed service between them. They naturally see the world from a military perspective and conceive military solutions to its problems. That leads toward a distorted set of national priorities, with military “needs” always rated more important than domestic ones.

Trump has made clear that when he must make foreign policy choices, he will defer to “my generals.” Mattis, the new junta’s strongman, is the former head of Central Command, which directs American wars in the Middle East and Central Asia. Kelly is also an Iraq veteran. McMaster has commanded troops in Iraq and Afghanistan almost without interruption since he led a tank company in the 1991 Gulf War.

Military commanders are trained to fight wars, not to decide whether fighting makes strategic sense. They may be able to tell Trump how many troops are necessary to sustain our present mission in Afghanistan, for example, but they are not trained either to ask or answer the larger question of whether the mission serves America’s long-term interest. That is properly the job of diplomats. Unlike soldiers, whose job is to kill people and break things, diplomats are trained to negotiate, defuse conflicts, coolly assess national interest and design policies to advance it. Notwithstanding Mattis’s relative restraint on North Korea, all three members of Trump’s junta promote the confrontational approach that has brought protracted war in Afghanistan, Iraq and beyond, while fueling tension in Europe and East Asia.

Our new junta is different from classic ones like, for example, the “National Council for Peace and Order” that now rules Thailand. First, our junta’s interest is only international relations, not domestic policy. Second, it did not seize power in a coup, but derives its authority from the favor of an elected president. Third and most important, it main goal is not to impose a new order but to enforce an old one.

Last month, President Trump faced a crucial decision about the future of America’s war in Afghanistan. This was a potential turning point. Four years ago Trump tweeted, “Let’s get out of Afghanistan.” If he had followed that impulse and announced that he was bringing American troops home, the political and military elite in Washington would have been stunned. But junta members swung into action. They persuaded Trump to announce that instead of withdrawing, he would do the opposite: reject “rapid exit” from Afghanistan, increase troop strength, and continue “killing terrorists.”

It is no great surprise that Trump has been drawn into the foreign policy mainstream; the same happened to President Obama early in his presidency. More ominous is that Trump has turned much of his power over to generals. Worst of all, many Americans find this reassuring. They are so disgusted by the corruption and shortsightedness of our political class that they turn to soldiers as an alternative.

It is a dangerous temptation.

Powerful Republican Group, With 155 Members, Opposes Trump Debt Ceiling Deal

Having become best friends with top Congressional Democrats overnight, following yesterday"s stunning reversal in which President Trump unexpectedly struck a deal with Schumer and Pelosi in which he effectively handed control over the DACA process to Democrats in exchange for a 3 month extension on the debt ceiling as well as avoiding a government shutdown, Trump is now finding that it is Republicans who are engaged in open warfare with the president, and as Axios reports, the leadership of the powerful Republican Study Committee has come out against President Trump"s debt ceiling deal with Nancy Pelosi and Chuck Schumer.

For Trump, this is the harshest message of disagreement yet from the Republican Study Committee, which has 155 members, and one which "the Republican leadership - which strenuously opposed Trump"s surprise deal - fully anticipated."

In a letter to House Speaker Paul Ryan, RSC Chair Mark Walker outlines 19 ideas for spending cuts that would help secure more Republican votes on a debt limit hike. The highlights:

"While some have advocated for a "clean" debt limit increase, this would simply increase the borrowing authority of the government while irresponsibly ignoring the urgency of reforms. Worse yet is attaching the debt limit to legislation that continues the status quo or even worsens the trajectory on spending, such as the deal announced yesterday by the President and Congressional Leadership. The RSC Steering Committee opposes this proposal."

While opposition from hardline conservatives, and especially the Freedom Caucus,  to any debt ceiling deal without spending cuts was expected, today"s statement is "a strong message from the leadership of the largest caucus of House Republicans — and the conservative weight of the conference — that a debt ceiling deal which doesn"t chart a course for changing the country"s debt trajectory, is unacceptable."

As Axios notes, today brings the "strongest collective message we"ve seen from Republicans on Trump"s deal."

Still, the Trump-Schumer-Pelosi deal is likely to pass with more votes from Democrats than Republicans, and outcome which will hardly amuse Trump"s conservative base.

The Full document can be read below (link).

Tillerson Out? "Frustrated" Trump "Fed Up" With Secretary Of State: Axios

After North Korea launched three more short-range ballistic missiles into the East Sea early on Saturday morning, local time, political observers were eagerly looking forward to Trump"s response, especially since the president had managed to get boxed in by Kim Jong Un: on one hand, do nothing and be mocked and ridiculed not only by the North Korean press, but by the rest of the developed world, whose view of Trump"s diplomatic skills could hardly be any worse; or on the other hand, launch a military campaign, either surgical or broad, and risk a retaliation against South Korea and millions of US allies dying.

In the end the US appears to have chosen the former and on Sunday, Secretary of State Rex Tillerson said the firing of three ballistic missiles by North Korea this week was a provocative act but that the United States will continue to seek a peaceful resolution. The de-escalating tone took place just days after Tillerson credited the North with showing some restraint by not launching a missile since the ICBM test in July, and he had expressed hope that the easing of tension could lead to dialogue. That was not meant to be, although in it appears that what happened next is North Korea called the US bluff, and the US folded.

“We do view it as a provocative act against the United States and our allies,” Tillerson said in an interview on Fox News Sunday. “We’re going to continue our peaceful pressure campaign as I have described it, working with allies, working with China as well to see if we can bring the regime in Pyongyang to the negotiating table.”

As the NYT also reported, North Korea used multiple-rocket launchers off its east coast on Saturday to fire three short-range missiles that could strike United States military bases deep in South Korea, officials in Seoul said. The launches were the North’s first rocket tests since two intercontinental ballistic missile, or ICBM, were fired last month.

By resuming the tests, North Korea defied repeated urgings from the United States and South Korea to stop weapons trials and other provocations to pave the way for dialogue. The United States Pacific Command said that one of the three ballistic missiles had blown up immediately after blastoff, but that two others had traveled about 155 miles before splashing down. That would be far enough to reach major South Korean and American military bases, including those near the city of Pyeongtaek, about 60 miles south of Seoul. The range would also be sufficient to reach Seongju, a South Korean town where the United States has begun installing an advanced missile-defense system known as Thaad.

Kim Dong-yub, a defense analyst at the Institute for Far Eastern Studies at Kyungnam University in Seoul, said the tests on Saturday appeared to be aimed at expanding the strike range.

Nevertheless, the nature of the tests prompted some relief in the region.

The missiles flew to the northeast, not toward Guam, home to major United States Air Force and Navy bases. North Korea threatened to launch ballistic missiles in a “ring of fire” around Guam after President Trump threatened to hit the North with “fire and fury” if it persisted with its development of ICBMs.

Surprisingly, South Korea did not issue its usual condemnatory statement against the tests. In Tokyo, the chief cabinet secretary, Yoshihide Suga, said the missiles did not fall in Japanese waters or pose a threat to his nation’s safety. White House officials said that Mr. Trump had been briefed on the tests but did not immediately have any further comment.

And while North Korea was certainly on Tillerson"s agenda, what the media was focused on was Tillerson"s reported distancing from Trump’s remarks after the deadly Virginia protests, saying the president "speaks for himself.” Tillerson"s comment on “Fox News Sunday" follows Gary Cohn, the president’s chief economic adviser and the director of the National Economic Council, saying in a Financial Times interview published last week that the administration “can and must do better” in condemning hate groups.

In the exchange below, Chris Wallace asked Tillerson about Trump"s response to the racist carnage in Charlottesville. Tillerson replied: "I don"t believe anyone doubts the American people"s values or the commitment of the American government, or the government"s agencies to advancing those values and defending those values."

Wallace asked the obvious follow-up question: "And the president"s values?"

"The president speaks for himself," Tillerson said, leaving Wallace with a surprised look on his face.

Must-watch. Wallace asks Tillerson if Trump speaks for American values: "The President speaks for himself." (Note Wallace"s reaction.) pic.twitter.com/fHEk6qjwPd

— Kyle Griffin (@kylegriffin1) August 27, 2017

So, in response moments ago Axios reported that Tillerson appears to be the next top administration in Trump"s proverbial board room, who may soon here the trademarked Trump phrase: "You"re Fired!" According to Axios, "there"s a ticking problem with Rex Tillerson, and it"s growing louder by the day, citing officials inside and close to the White House."

President Trump has been growing increasingly frustrated with his Secretary of State. One time recently, after Trump had returned from a meeting on Afghanistan, a source recalled Trump saying, "Rex just doesn"t get it, he"s totally establishment in his thinking."

As Axios adds, "Trump is getting more and more fed up with Tillerson, who has still yet to staff his agency."

So is Tillerson the next top administration official to get kicked out by Trump? Unfortunately, the firings at the White House have been so fast and furious in recent weeks, the online political prediction marketplace PredictIt.com hasn"t had the time to put together a contract tracking the odds of Tillerson"s imminent survival, or lack thereof.

McConnell Doubts "Trump Can Save Presidency" As Relationship "Disintegrates"

According to a new bombshell report from the NYT, the relationship between President Trump and Senate Majority Leader Mitch McConnell has "disintegrated" in recent week "to the point that they have not spoken to each other in weeks", prompting the Kentucky senator to express doubts if Trump can succeed in office and "salvage the presidency" after a summer of controversies and crises.

The relationship between President Trump and Senator Mitch McConnell, the majority leader, has disintegrated to the point that they have not spoken to each other in weeks, and Mr. McConnell has privately expressed uncertainty that Mr. Trump will be able to salvage his administration after a series of summer crises.

What was once an uneasy governing alliance has curdled into a feud of mutual resentment and sometimes outright hostility, complicated by the position of Mr. McConnell’s wife, Elaine L. Chao, in Mr. Trump’s cabinet, according to more than a dozen people briefed on their imperiled partnership. Angry phone calls and private badmouthing have devolved into open conflict, with the president threatening to oppose Republican senators who cross him, and Mr. McConnell mobilizing to their defense.

In a phone call on Aug. 9, Trump blamed McConnell for the Senate"s troubled efforts to repeal and replace the Affordable Care Act. The Times said the call descended into shouting and profanity.

During the call, which Mr. Trump initiated on Aug. 9 from his New Jersey golf club, the president accused Mr. McConnell of bungling the health care issue. He was even more animated about what he intimated was the Senate leader’s refusal to protect him from investigations of Russian interference in the 2016 election, according to Republicans briefed on the conversation. Mr. McConnell has fumed over Mr. Trump’s regular threats against fellow Republicans and criticism of Senate rules, and questioned Mr. Trump’s understanding of the presidency in a public speech. Mr. McConnell has made sharper comments in private, describing Mr. Trump as entirely unwilling to learn the basics of governing.

While McConnell was reportedly troubled by Trump"s remarks that placed equal blame on hate groups and counterprotesters, that was just the tip of the iceberg of the pent up animosity between the two.  The Senator also signaled his unease with Trump’s comments to business leaders who quit their posts on presidential advisory councils in recent days, the NYT reports. But the straw that broke the camel"s back was last month"s failure by the Republican controlled Senate to pass Obamacare repeal, a humiliating defeat for Trump"s main campaign promise.

McConnell said in a speech earlier this month that Trump had "excessive expectations" about moving his legislative agenda through Congress. That led Trump to repeatedly lash out at McConnell on Twitter, questioning why McConnell has not been able to accomplish longtime GOP campaign promises.  Trump went so far as to suggest to reporters at his Bedminster, N.J. golf club that, if McConnell is unable to pass healthcare reform, tax reform and an infrastructure bill through the Senate, he should consider stepping aside from his leadership role.

for the two GOP heavyweights walking into a month of serious major political maelstroms with the debt ceiling, spending bill, tax reform, and a retry at healthcare looming–among other fights. Both Trump and McConnell themselves refused comment for the Times story, but McConnell spokesman Don Stewart said the president and majority leader had “shared goals” including “tax reform, infrastructure, funding the government, not defaulting on the debt, passing the defense authorization bill.”

But while the bad blood between the two is hardly news, the question is how will the allegedly tamer, and Bannon-free Trump react to the previously unreported news that McConnell has wondered whether Trump’s presidency will survive:

In offhand remarks, Mr. McConnell has expressed a sense of bewilderment about where Mr. Trump’s presidency may be headed, and has mused about whether Mr. Trump will be in a position to lead the Republican Party into next year’s elections and beyond, according to people who have spoken to him directly. While maintaining a pose of public reserve, Mr. McConnell expressed horror to advisers last week after Mr. Trump’s comments equating white supremacists in Charlottesville, Va., with protesters who rallied against them. Mr. Trump’s most explosive remarks came at a news conference in Manhattan, where he stood beside Ms. Chao.

As the NYT adds, McConnell will no longer be silent should Trump use the bully pulpit for future attacks. Instead, McConnell is now fully committed to firing back at Trump, and protecting his GOP senators.

In a show of solidarity, albeit one planned well before Mr. Trump took aim at Mr. Flake, Mr. McConnell will host a $1,000-per-person dinner on Friday in Kentucky for the Arizona senator, as well as for Senator Dean Heller of Nevada, who is also facing a Trump-inspired primary race next year, and Senator Deb Fischer of Nebraska. Mr. Flake is expected to attend the event.

It"s not just the Senate majority leader: McConnell allies like former Sen. Judd Gregg of New Hampshire and former Republican National Committee finance chair Al Hoffman are quoted as well, making ominous predictions about Trump.

“Failure to do things like keeping the government open and passing a tax bill is the functional equivalent of playing Russian roulette with all the chambers loaded,” Gregg said of Trump, blaming him for in the Times’ words “undermining” congressional leaders, adding that if Trump “can’t participate constructively” the House and Senate would take matters into their own hands.

“Ultimately, it’s been Mitch’s responsibility, and I don’t think he’s done much,” Hoffman said, slightly critical of McConnell before adding that he believes McConnell will outlast Trump in this stalemate. “I think he’s going to blow up, self-implode,” Hoffman said of the president, per the Times. “I wouldn’t be surprised if McConnell pulls back his support of Trump and tries to go it alone.”

Whatever Trump"s kneejerk reaction following the conclusion of tonight"s Phoenix rally, the biggest loser may be the market which today surged on a Politico report that Trump"s tax reform suddenly looks like it has a chance of passing. If the NYT report confirms one thing, it is that when it comes to Trump"s legislative agenda, any chance of success in the through the Senate is virtually nil.

Problems Too Big And Too Many To Fix: Trump Will Be The Fall Guy

Authored by Mike Shedlock via MishTalk.com,

The axe fell on Steve Bannon Friday.

Mid-day, mainstream media proclaimed stocks were up because of the firing. Stocks closed the day down. Apparently, stocks were both up and down due to Bannon.

Now Bannon is Back on the Outside, back at Breitbart, and happy to be there.

Stephen K. Bannon has always been more comfortable when he was trying to tear down institutions — not work inside them.

With his return to Breitbart News, Mr. Bannon will be free to lead the kind of ferocious assault on the political establishment that he relishes, even if sometimes that means turning his wrath on the White House itself.

Hours after his ouster from the West Wing, he was named to his former position of executive chairman at the hard-charging right-wing website and led its evening editorial meeting. And Mr. Bannon appeared eager to move onto his next fight.

“In many ways, I think I can be more effective fighting from the outside for the agenda President Trump ran on,” he said Friday. “And anyone who stands in our way, we will go to war with.”

Among those already in Mr. Bannon’s sights: Speaker Paul D. Ryan; Senator Mitch McConnell, the majority leader; the president’s daughter Ivanka Trump and son-in-law, Jared Kushner; and Gary D. Cohn, the former president of Goldman Sachs who now directs the White House’s National Economic Council.

Thanks But No Thanks

Trump thanked Bannon for his help during the campaign, but not for his tenure in the White House.

I want to thank Steve Bannon for his service. He came to the campaign during my run against Crooked Hillary Clinton - it was great! Thanks S

— Donald J. Trump (@realDonaldTrump) August 19, 2017

Trump explicitly thanks Bannon for his time on the campaign. Not his 7 months in the W.H. as chief strategist.

Nothing to see here. https://t.co/gqDRj5I2zJ

— Kyle Griffin (@kylegriffin1) August 19, 2017

New York Times Parting Shot

The New York Times editorial, Exit Steve Bannon, gave Banon a swift kick on his way out the door.

Mr. Bannon’s exit is, of course, a relief. As the well-financed Pied Piper of the alt-right Breitbart crowd, Mr. Bannon at the pinnacle of White House policy making was a nightmare come to life.

But Mr. Bannon, who promptly returned to Breitbart as its executive chairman on Friday, still poses a danger for our broader politics. Outside the White House, he is freer to rally his forces against anyone who doesn’t toe his nationalist-protectionist line. A Bannon-led right-wing backlash against Mr. Trump, who unleashed the worst impulses of nationalists in service to himself, would be a fitting comeuppance.

More Fun to Throw Mud

Clearly, it’s far more fun to throw mud than have it thrown at you.

Lost in the Bannon and Trump bashing is one key question: Who is really the bigger threat, Hillary, Trump, or Bannon?

Why We Are Where We Are

We are in this mess because Obamanomics, war-mongering, Fed policies, and social handouts created a budget mess but did not solve any problems. People revolted, and Trump got elected.

When it comes to trade and protectionism, Trump is wrong. So is Bannon.

Those who think Hillary would have been any better on trade policy are mistaken. If you believe differently, then please take Today’s Quiz: Donald Trump, Bernie Sanders, Hillary Clinton – Who Said It?

We would have a no-fly zone over Syria, had Hillary won. That would have risked a confrontation with Russia. Hillary wrecked Libya, and of course Obama and Bush had extremely misguided warmongering policies in the Mideast.

Obamacare was a failure, but no one on either side seems able or willing to fix it.

So here we are, with everything broken, and we still cannot get anything done. Republicans want more military spending and Democrats want more social spending. Warmongers on both sides want more war.

Art of Compromise

Compromise in Washington is more military spending and more social spending.

Repetitive “compromises” sent deficits soaring out of sight. On top of it all, the Fed blew massive bubbles in just about everything.

Problems Too Big and Too Many To Fix

One thing I expect Trump will get right, at least from a public union standpoint, regards appointments to the supreme court.

Overall, I hoped Trump would do better on many fronts. It was not to be. Trump could not drain the swamp. Partisan politics interfered, there was too much infighting, and there is nonsensical Russia bashing on both sides of the aisle.

The problems are too big and too many to fix. If you think Hillary would have fixed them you are delusional.

To the victor, goes the blame. Trump will be the fall guy when this mess blows up.https://t.co/99d7BrUfak

— Mike Mish Shedlock (@MishGEA) August 19, 2017

Bannon: "The Trump Presidency That We Fought For Is Over"

In his first interview shortly after the White House announced that it was parting ways with Trump"s chief strategist, Steve Bannon told the Weekly Standard on Friday afternoon that "the Trump presidency that we fought for, and won, is over." After confirming his departure Bannon said that “we still have a huge movement, and we will make something of this Trump presidency. But that presidency is over. It’ll be something else. And there’ll be all kinds of fights, and there’ll be good days and bad days, but that presidency is over.”

In his interview with the conservative publication, Bannon predicted that in the wake of his departure, Trump"s administration would "be much more conventional" as his absence from the White House would make it “much harder” for Trump to pave a way forward on issues like “economic nationalism and immigration.” He also predicted that republicans would "moderate" Trump:

“I think they’re going to try to moderate him,” he says. “I think he’ll sign a clean debt ceiling, I think you’ll see all this stuff. His natural tendency—and I think you saw it this week on Charlottesville—his actual default position is the position of his base, the position that got him elected. I think you’re going to see a lot of constraints on that. I think it’ll be much more conventional.”

In Bannon’s view, his departure is not a defeat for him personally but for the ideology he’d urged upon the president, as reflected in Trump’s provocative inaugural address in which he spoke of self-dealing Washington politicians, and their policies that led to the shuttered factories and broken lives of what he called “American carnage.” Bannon co-authored that speech (and privately complained that it had been toned down by West Wing moderates like Ivanka and Jared).

“Now, it’s gonna be Trump,” Bannon said. “The path forward on things like economic nationalism and immigration, and his ability to kind of move freely . . . I just think his ability to get anything done—particularly the bigger things, like the wall, the bigger, broader things that we fought for, it’s just gonna be that much harder.”

He also warned that things are about to get worse for Trump as even more people depart his side, warning of a "jailbreak" of moderate Republicans.

“There’s about to be a jailbreak of these moderate guys on the Hill”—a stream of Republican dissent, which could become a flood. Bannon also said that he once confidently believed in the prospect of success for that version of the Trump presidency he now says is over.

Asked what the turning point was, he says, “It’s the Republican establishment. The Republican establishment has no interest in Trump’s success on this. They’re not populists, they’re not nationalists, they had no interest in his program. Zero. It was a half-hearted attempt at Obamacare reform, it was no interest really on the infrastructure, they’ll do a very standard Republican version of taxes.

"What Trump ran on- border wall, where is the funding for the border wall, one of his central tenets, where have they been? Have they rallied around the Perdue-Cotton immigration bill? On what element of Trump"s program, besides tax cuts-which is going to be the standard marginal tax cut-where have they rallied to Trump"s cause? They haven"t."

As for what happens next, as reported late on Friday, Bannon said that he is eager to get back to Breitbart and lead the opposition from there.

"Now I’m free. I’ve got my hands back on my weapons," he said. "Someone said, ‘it’s Bannon the Barbarian.’ I am definitely going to crush the opposition. There’s no doubt. I built a f-cking machine at Breitbart. And now I’m about to go back, knowing what I know, and we’re about to rev that machine up. And rev it up we will do.”

Specifically, the target of his attacks will be the "globalists" and liberals he believes have taken over the White House. They include National Security Adviser H. R. McMaster, advisor Gary Cohn, Trump"s daughter Ivanka and son-in-law Jared Kushner.

* * *

With Bannon"s departure conceding control of Trump"s inner circle to the so-called "Goldman globalists", the question is how Trump"s message will evolve in the coming days with the "nationalist" element purged. With Trump having been granted the option of sounding like a more centrist President, will he continue with his usual rhetoric. Bloomberg is convinced that the answer is "more of the same" especially since Trump won"t risk losing his core base, although that may no longer be in his control, especially if Bannon is about to unleash a stinging attack on Trump"s inner circle.

For the clearest sign of what Trump"s post-Bannon posture - and administration - will look like, look no further than the coming debt ceiling negotiation (and/or crisis): on Friday, Goldman raised its odds of a government shutdown to 50%, a fact which also spooked the market sending the S&P to session lows at the close. If Trump is unable to build some political goodwill in the coming days on the back of the Bannon departure, those odds will steadily grow to 100% over the next few weeks.

Dunford: "Military Options" For North Korea Ready If Sanctions Fail

After President Donald Trump warned on Friday that the US military is “locked and loaded” and presumably prepared for an all-out nuclear showdown with North Korea, administration officials engaged in that most artful of Trump-era maneuvers: softening the president’s rhetoric without appearing to undercut him.

Now that financial markets are taking the threat of nuclear war between the US and North Korea seriously - or were until this morning - the administration is trying to walk a fine line between reassuring investors that nuclear war isn’t imminent, while stressing that all military options remain on the table. Echoing comments made by CIA Director Mike Pompeo on the Sunday talk shows, Joint Chiefs of Staff Chairman Joseph Dunford emphasized during a meeting with South Korea"s president that the US will only resort to military options once all "diplomatic and economic sanctions" have been exhausted, according to Reuters.

“U.S. Joint Chiefs of Staff Chairman Joseph Dunford said on Monday U.S. military options being prepared against North Korea would be for when diplomatic and economic sanctions failed, South Korea"s president"s office said on Monday.

Dunford made the comments to South Korean President Moon Jae-in in a 50-minute meeting to discuss recent issues including North Korean provocation, office spokesman Park Su-hyun told a media briefing.”

Gen Dunford met President Moon during his tour of the region

A report in the New York Times expanded on the chairman"s remarks, which were published by local media in Korean, but were translated by the US media.

“The United States military’s priority is to support our government’s efforts to achieve the denuclearization of the Korean Peninsula through diplomatic and economic pressure,” General Dunford was quote as saying in a Korean-language statement released by Mr. Moon’s office after the meeting. “We are preparing a military option in case such efforts fail.” 

Dunford added that he was supporting Secretary of State Rex Tillerson’s effort to push the North toward talks, and a possible peaceful resolution, though “as a military leader” Dunford said it’s still his duty to make sure the president has “viable military options.” Though he also stressed that the North"s nuclear program threatens "the entire global community," as the Hill reported.

"U.S. military spokesman Capt. Darryn James said Dunford "stressed that North Korea"s ballistic missile and nuclear weapons program threaten the entire global community."

"He conveyed America’s readiness to use the full range of military capabilities to defend our allies and the U.S. homeland," James said.”

Dunford also said that the US intends to honor its commitment to protect South Korea, and that the relationship between the two countries “has not changed,” according to Bloomberg.

“General Joseph Dunford, chairman of the U.S. Joint Chiefs of Staff, reaffirmed the U.S. commitment to protect South Korea after a meeting with President Moon Jae-in, spokesman Park Su-hyun told reporters in Seoul on Monday. He added that the military option would only be used if diplomatic and economic pressure fail, Park said.

‘Dunford said the U.S.’s security commitment for South Korea’s defense has not changed,’ Park told reporters after Moon’s meeting with the general. ‘Dunford told Moon everyone hopes to resolve the current situation without going to war.’”

During his trip in Asia, the general intends to emphasize that Washington is expected to complete the deployment of the Thaad missile system in South Korea, despite China"s repeated protests issue that bothers the Chinese. The visit to Beijing was planned long before the escalation in tensions with North Korea, according to the Times.

Stocks Catch A Bid On Report Trump's Threat Was Improvised

The S&P has caught a bid, and is now down just 0.1%, with the Nasdaq similarly wiping out most early losses, following a report that contrary to previous speculation that Trump"s bombastic "fire and fury" statement was a coordinated and pre-agreed upon indication of intent from the entire White House, it was in fact improvised. As the NYT writes, "President Trump delivered his “fire and fury” threat to North Korea on Tuesday with arms folded, jaw set and eyes flitting on what appeared to be a single page of talking points set before him on the conference table at his New Jersey golf resort. The piece of paper, as it turned out, was a fact sheet on the opioid crisis he had come to talk about, and his ominous warning to Pyongyang was entirely improvised."

The NYT also adds that "in discussions with advisers beforehand, he had not run the specific language by them", which has prompted a modest relief rally as it now appears that Trump"s widely reported statement was just another ad hoc outburst - in line with his daily Twitter rants - and one which will likely be moderated in future appearances after feedback from Trump"s advisors. 

To be sure, in the hours since, the president’s advisers have already sought to calm the situation, with Rex Tillerson assuring Americans that they “should sleep at night” without worrying about an imminent war, as we reported earlier.

As for the advisory split on how to handle North Korea, the NYT notes that that the president’s aides are "divided with national security veterans like Defense Secretary Jim Mattis and Lt. Gen. H.R. McMaster, the national security adviser, on one side and Stephen K. Bannon, the president’s chief strategist, and his allies on the other."

While General McMaster and others consider North Korea a pre-eminent threat that requires a tough response, Mr. Bannon and others in the nationalist wing argue that it is really just a subset of the administration’s conflict with China and that Mr. Trump should not give more prominence to an unstable rogue operator like Kim Jong-un, North Korea’s leader.

Mr. Bannon’s allies in the alt-right media and activist groups have been waging a ferocious public attack against General McMaster, characterizing him as soft on issues like Iran, Israel and terrorism and promoting a hashtag #FireMcMaster. They are angry that General McMaster has pushed out several hard-liners associated with Mr. Bannon from the National Security Council staff. Mr. Trump came to General McMaster’s defense last week with a statement expressing confidence in him.

Still, according to the report, the one voice pushing for a North Korean de-escalation is that of Steve Bannon who has been arguing against what his side considers the excessively militant approach of the “war party” of General McMaster. As a result, while Trump"s comment may have been indeed improvised, it merely reflect the will of both McMaster and Kelly, something we predicted two weeks ago when we commented on the appointment of Trump"s new Chief of Staff. Furthermore, while Bannon has his own channel to the president, he has been shut out of most formal discussions of North Korea by the national security team.

In any case, neither camp advocated language like “fire and fury,” according to the NYT sources. Among those taken by surprise, they said, was John F. Kelly, the retired four-star Marine general who has just taken over as White House chief of staff and has been with the president at his golf club in Bedminster, N.J., for his working vacation.

Whatever the politics behind the White House split on North Korea, stocks have taken the news in stride and as the VIX taking a hit, both the S&P and the Nasdaq have risen to session lows, even as the Dow continues to feel the pain from yesterday"s Disney breakup with Netflix.

Trump: "We'll handle North Korea. It Will Be Handled. We Handle Everything"

With Gen. John Kelly set to be sworn in as Trump"s new Chief of Staff, just days after the latest and most advanced North Korean ICBM test yet, one which can reportedly reach as much as half the major metro areas on the continental US, President Trump on Monday pledged to "handle" North Korea"s provocative belligerence, without specifying exactly how he would do so as he faces rising tensions and limited options.

"We"ll handle North Korea. We"re going to be able to handle North Korea. It will be handled. We handle everything," Trump told reporters at the start of Monday"s first Cabinet meeting with his new Chief of Staff, flanked by Secretary of State Rex Tillerson and Defense Secretary James Mattis.

Pres. Trump at Cabinet meeting: "We"ll handle North Korea...it will be handled. We handle everything." https://t.co/t3q481atrR pic.twitter.com/R5OjZDTBmi

— Evan McMurry (@evanmcmurry) July 31, 2017

The comments follow "guidance" from the US Ambassador to the UN, Nikki Haley, who on Sunday told CNN that the "time for talk" is over. As CNN noted, "it was a seemingly stark admission - the US ambassador to the UN suggesting the North Korean crisis couldn"t be solved through diplomatic channels in the Security Council."

On Firday, the Pentagon confirmed that North Korea fired an intercontinental ballistic missile capable of reaching the United States. The missile, fired from north central North Korea, traveled 600 miles before it fell into the Sea of Japan. Following the missile test, Trump said Saturday on Twitter that he was "very disappointed" in China for not doing more to curb North Korea"s missile program.

"I am very disappointed in China," Trump tweeted. "Our foolish past leaders have allowed them to make hundreds of billions of dollars a year in trade, yet they do NOTHING for us with North Korea, just talk."

Trump has repeatedly pressed China, North Korea"s only major ally, to put more economic pressure on Pyongyang, lamenting that he has few other options left to try to check North Korea. Trump did not hint at what actions he could take on Monday, but recent comments suggest he could take more steps to try to get China to act.

On Monday, Reuters reported that a "frustrated" China hit back over Trump"s weekend tweets, with the state-run nationalistic Chinese tabloid Global Times saying that "Pyongyang is determined to develop its nuclear and missile program and does not care about military threats from the U.S. and South Korea" adding "how could Chinese sanctions change the situation?"

China wants both balanced trade with the United States and lasting peace on the Korean peninsula, its official Xinhua news agency added in a commentary. "However, to realize these goals, Beijing needs a more cooperative partner in the White House, not one who piles blame on China for the United States" failures," it added.

Also over the weekend, the United States flew two supersonic B-1B bombers over the Korean peninsula in a show of "lethal, overwhelming force" on Sunday in response to the missile test and the July 3 launch of the "Hwasong-14" rocket, the Pentagon said. The bombers took off from a U.S. air base in Guam and were joined by Japanese and South Korean fighter jets during the exercise.

"North Korea remains the most urgent threat to regional stability," Pacific Air Forces commander General Terrence J. O"Shaughnessy said in a statement. "If called upon, we are ready to respond with rapid, lethal, and overwhelming force at a time and place of our choosing."

As reported earlier, South Korea"s Kospi stock index, oblivious of the constant threat of military action in its northern neighbor, closed 0.07% in the green, just shy of all time highs.

DHS Engineers Begin Work On Trump's "Physically Imposing" Yet "Aesthetically Pleasing" Border Wall

Having seemingly just been handed a stinging defeat on Obamacare, the Trump administration is desperate to deliver some "wins" for the people who voted him into office.  After all, he did promise voters "so much winning that you"ll get tired of winning."

As the New York Times points out today, one such win could come in the form of recent advances on the construction of that "physically imposing" yet "aesthetically pleasing" border wall that was a cornerstone of Trump"s campaign last year.

The United States Army Corps of Engineers has begun preliminary preparations for the construction of segments of a wall in several places along the border with Mexico, the Department of Homeland Security said on Tuesday.

Engineers are drilling and taking soil samples to determine what type of barriers would be most effective in the different types of geography along the border, said David Lapan, a spokesman for the Department of Homeland Security.

The drilling and soil testing are taking place in El Paso; Santa Teresa, N.M.; Calexico, Calif.; San Diego; and the Rio Grande Valley in South Texas. Mr. Lapan said the testing has been completed in El Paso and Calexico. The agency has identified the San Diego area and the Rio Grande Valley as priority regions for new border walls.

The drilling and testing come as Customs and Border Protection, the parent agency of the Border Patrol, continues to evaluate dozens of proposals that have been submitted by vendors for designs for a border wall.  We reviewed a couple of the design proposals back in April and here are a couple of our favorites:

This first design, dubbed “As Pretty as the Parthenon," seems to have prioritized "aesthetically pleasing" over "physically imposing."

 

And then there is the following design that takes a very practical approach to the border wall which would double as a nuclear waste facility.

 

Meanwhile, one lady in Pennsylvania submitted a plan to install organ pipes across the border with missing sections to allow free passage across the border...somehow we suspect this design won"t make it to the prototype stage. 

Last week Trump provided a couple of new insight on the wall while traveling to France on Air Force One:

“You don’t need 2,000 miles of wall because you have a lot of natural barriers,” Mr. Trump said in a conversation with reporters aboard Air Force One last week. “You have mountains. You have some rivers that are violent and vicious. You have some areas that are so far away that you don’t really have people crossing. So you don’t need that. But you’ll need anywhere from 700 to 900 miles.”

Mr. Trump also said the wall would be partially transparent and could have solar panels to help offset the cost.

And then there is the issue of how to pay for the wall.  Trump has maintained all along that Mexico will ultimately pay for the border wall but that American taxpayers will front the bill so as not to delay construction.  As such, on Tuesday the House Appropriations Committee approved a spending bill that included $1.6 billion for a wall. The bill would fund 74 miles of fencing along the southwest border.

In the interim, the Department of Homeland Security has moved $20 million from other programs to pay for the construction of several border wall prototypes. Construction of the prototypes for a border wall is set to begin this summer in the San Diego area.

Homeland Security officials said the prototypes would be added to the existing border walls in San Diego and would allow the agency to evaluate which barriers are most effective in giving Border Patrol agents time to respond to illegal drugs and human smuggling. Officials said they planned to build four to eight prototypes.

As for Mexico, at least one citizen remains adamant that his country will not pay for Trump"s wall.

Mnuchin Kills Idea Of Tax Hike For The Wealthy

Last week the Republican party was at arms after Axios reported that Steve Bannon was said to be pushing president Trump to raise taxes on the wealthiest Americans. According to the website, Trump’s chief strategist was urging to raise the top tax rate on individuals, with Axios saying the former Breitbart CEO looking for the top rate to have “a 4 in front of it” (currently, the highest income-tax bracket in the US is 39.6% for individuals earning more than $414,000 a year).

Well, they can now sleep easier after Treasury Secretary Steven Mnuchin on Sunday killed that particular idea, saying that the Trump administration is not considering a plan to raise taxes on the wealthiest Americans in order to pay for tax breaks for the middle class. Speaking on ABC"s "This Week," Mnuchin said the administration plans is “absolutely committed” to releasing its tax plan in early September, and getting it through Congress by the end of the year - and that plan won’t include a 40 percent tax rate for the richest Americans.

“Our plan is to have a full-blown release of the plan in the beginning of September, with being able to vote and getting this passed before the end of the year,” Mnuchin said on ABC’s “This Week” on Sunday.

The “objective” of the proposal is still that no one in the middle class will have a tax increase, Mnuchin said. “We’re finalizing the details of the plan, so there’s certain issues that are still on the table.”

.@stevenmnuchin1 denies report Steve Bannon is pushing tax hike for the wealthy. "I have never heard Steve mention that." #ThisWeek pic.twitter.com/Tu7q2PSUO4

— This Week (@ThisWeekABC) July 9, 2017

Referring to the Axios report that Bannon was advocating a proposal to raise the highest tax bracket to 40% or above, Mnuchin responded "I"ve never heard Steve mention that" and added that “it’s very clear, kind of, we have a proposal out there that the administration has put out, with a top rate of 35% where we reduce and eliminate almost every single deduction.”

Mnuchin said the administration’s plan would pay for itself, but that’s only if about $2 trillion in increased revenue resulting from projected faster economic growth is included. Yet congressional budget scorekeepers may not agree that tax cuts would produce such growth. Under congressional budget rules, tax cuts can be passed with a simple majority in the U.S. Senate, but only if they don’t increase the deficit after 10 years. That would allow Republicans, who have 52 Senate seats, to pass the bill without any Democratic votes.

The Treasury Secretary also said that the administration is aware of the concerns in high-tax states, where taxpayers could have no tax reductions as well as fewer deductions. “We’ve heard a lot of feedback from New York, California, New Jersey, Connecticut, Illinois, and I think we want to be sensitive to those states and those economies as we shape the plan,” Mnuchin said.

Separately, Mnuchin - who spoke after returning from the Group of 20 meeting in Hamburg - dodged a question about whether President Donald Trump had accepted President Vladimir Putin’s denial of Russian interference in the 2016 U.S. election.

“Why would President Trump broadcast exactly what he said in the meeting?” Mnuchin said, adding that Trump is focused on “strategically negotiating” with Putin.

.@stevenmnuchin1: "Why would President Trump broadcast exactly what he said" in Putin meeting? "Strategically that makes no sense." pic.twitter.com/VNIU2SEqHQ

— This Week (@ThisWeekABC) July 9, 2017

Watergate Reporter Hints At Coup, Warns "Non-Functioning" Trump Presidency Is "Malignant"

While Bob Woodward is more stoic in his public discussion of the predicament this nation finds itself in (lambasting the "fake news" media rather than directing his ire at the body politik), his partner in un-crime, legendary Watergate reporter Carl Bernstein, called the Trump administration a "malignant presidency" on Saturday, and suggested that the wrongdoings committed by the White House were unprecedented.

Journalism legend Carl Bernstein on President Trump: "We have never been in a malignant presidency like this before" https://t.co/847szAUDhk pic.twitter.com/OBPUajeqzf

— CNN Politics (@CNNPolitics) July 1, 2017

Speaking on CNN, The Hill reports that Bernstein warned that the Trump administration is "not functioning," and appears to hint at a "soft coup" amid the nation"s deep state...

"We are in the midst of a malignant presidency," Bernstein said. "That malignancy is known to the military leaders of the country, it"s known to the Republican leadership in Congress who recognize it, and it"s known to the intelligence community."

"The presidency of Donald Trump is not functioning," he continued. "It"s really not functioning because the character and capabilities of this president are called into grave question in a way that those that know him are raising serious concerns about."

While Bob Woodward warned the "smug" media against "hyperventilating" over Trump, Bernstein suggested Trump was the "greatest journalistic challenge of the modern era."

"To report on a malignant presidency, what it means, and where it"s going," he said. "This president is not in control of the presidency in a way that it is functioning."

"That has got our leaders worried, they are worried about his character, they are worried about his temperament," Bernstein said.

"We are in foreign territory. We have never been in a malignant presidency like this before."

As a reminder, Woodward previously warned that it’s not in the interest of either the Trump White House or the media to war with each other.

"I think everyone has accelerated this work. The other question to ask, is there any justification for Trump and people like — in his White House responding this way? And the only justification I can think of, which really isn’t a justification, but it accounts for emotional spasm of, my God, this is enemy of the people, I know that reporters have talked to people in the Trump house, — Trump White House about very sensitive intelligence operations, that we find out about in the press. And I think Trump is horrified that this is out there. And these are not necessarily things that are going to be published, but Trump is a newcomer saying, my God how do reporters know about these things? And so it’s — we’ve got to stop it.” 

“[I]t’s not in our interest, the media’s interest to have a war with the Trump White House. It’s not in Trump’s interest to have this war.”

Sadly, it appears it"s too late to get this toothpaste back in the tube (for both sides).

China Completes Construction Of New Missile Shelters On Disputed South China Sea Islands

Trump"s "up and down" relationship with China may be on the precipice of taking a sharp dive into the proverbial abyss.  After frequently threatening to label China a "currency manipulator" on the campaign trail last year, Trump"s relationship with China"s President Xi Jinping took a decided turn for the better after a meeting at Mar-a-Lago in which China vowed to help address the "menace of North Korea" .

I explained to the President of China that a trade deal with the U.S. will be far better for them if they solve the North Korean problem!

— Donald J. Trump (@realDonaldTrump) April 11, 2017

Had a very good call last night with the President of China concerning the menace of North Korea.

— Donald J. Trump (@realDonaldTrump) April 12, 2017

Why would I call China a currency manipulator when they are working with us on the North Korean problem? We will see what happens!

— Donald J. Trump (@realDonaldTrump) April 16, 2017

But apparently those efforts have officially failed:

While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out. At least I know China tried!

— Donald J. Trump (@realDonaldTrump) June 20, 2017

And, shortly after those efforts were declared dead, the Trump administration signed a $1.3 billion arms deal with Taiwan, a deal which China has "demanded" be cancelled immediately.

Meanwhile, as the Financial Times points out today, in the midst of all the international crises, China has made great strides building out and further militarizing their disputed islands in the South China Sea.

Over the past three months, China has built four new missile shelters on Fiery Cross, boosting the number of installations on the reef to 12, according to satellite images provided to the Financial Times by the Center for Strategic and International Studies.

China has also expanded radar facilities on Fiery Cross and two other disputed reefs — Subi and Mischief — in the Spratly Island chain, and started building underground structures that Greg Poling, director of CSIS’s Asia Maritime Transparency Initiative, assesses will be used to store munitions.

“We haven’t seen any slowdown in construction, including since the Mar-a-Lago summit,” said Mr Poling. “The islands are built and they are clearly militarised, which means they already got over the hard part. Now every time they put in a new radar or new missile shelter, it is harder for the world to get angry. They are building a gun, they are just not putting the bullets in yet.”

The advances underscore how much progress China has made towards militarizing the man-made islands in ways that significantly enhance its ability to both monitor activity in the South China Sea and to project power in the western Pacific where the US has been the dominant power in the seven decades since the second world war.

Euan Graham, an Asia expert at the Lowy Institute in Sydney, said it was “not quite game over in the South China Sea” but that China had fundamentally altered the status quo over the islands that would be hard to change barring war or natural disasters.

“They already exert a strategic effect by projecting China’s presence much further out,” said Mr Graham. “They will not prevent the US Navy from operating in their vicinity, but they will complicate the threat environment for US ships and aircraft — by extending the [Chinese navy’s] surveillance and targeting net, as well as the envelope of power projection.”

Of course, these latest provocations come despite a promise made to Obama in 2015 that "China would not militarize the man-made islands"...a promise which the Obama administration apparently took at face value and proceeded to bury their heads in the sand.

During a visit to Washington, Mr Xi told Barack Obama in 2015 that China would not militarise the man-made islands, but in the intervening 20 months Beijing has stepped up construction, and now has runways that can accommodate Chinese fighter jets.

China’s legal claim to the seas around the maritime features is legally controversial since many were dredged out of coral and sand and thus not entitled to status as islands. But Vasily Kashin, an expert on the Chinese military at the Higher School of Economics in Moscow, said the goal was never legal sovereignty but to give China forward bases from which it could patrol and exercise control in their vicinity.

“If you have this infrastructure in the Spratlys, it allows China to constantly monitor aircraft and ships in the South China Sea. The point is that no one will be able to do anything in the area without them seeing.”

Ely Ratner, an Asia expert who served in the Obama administration, said Washington had failed to craft a strategy to convince China to halt militarisation of the man-made islands. “Until China believes that there will be significant costs . . . I don’t think they have any reason to slow down,” said Mr Ratner. “They have been pushing on an open door and have been surprised at how little resistance they have faced.”

Critics say the Obama administration took too cautious an approach to avoid creating tensions that would hurt the ability for co-operation on other issues. Meanwhile, some experts say the Trump team has given China a relatively free pass to maximise the chances it will boost pressure on North Korea to give up its nuclear programme.

Somehow we suspect the Trump administration will end up being slightly less "accommodating" over the long term...

Illinois Democrat Introduces "COVFEFE Act"

The meaning of the term Covfefe has finally been revealed, at least as interpreted by Illinois Rep. Mike Quigley who moments ago introduced the "COVFEFE" Act, also known as the Communications Over Various Feeds Electronically for Engagement. The bill introduced by the Illinois Democrat seeks to amend the Presidential Records Act to include the term "social media" as a documentary material for preservation in the National Archives, "ensuring additional preservation of presidential communication and statements while promoting government accountability and transparency."

The bill takes it its name from the "gibberish term" which Trump tweeted late one night at the end of May, which stayed on his feed for nearly 6 hours before being deleted. Most people took the tweet to be a typo, although Press Secretary Sean Spicer told the media that the term was used intentionally.

"In order to maintain public trust in government, elected officials must answer for what they do and say; this includes 140-character tweets," said Rep. Quigley. "President Trump"s frequent, unfiltered use of his personal Twitter account as a means of official communication is unprecedented. If the President is going to take to social media to make sudden public policy proclamations, we must ensure that these statements are documented and preserved for future reference. Tweets are powerful, and the President must be held accountable for every post."

Quigley continued: "President Trump"s tweets frequently make national news and are a topic of everyday conversation, including deciphering the meaning behind his tweet using the previously unheard of term, "covfefe." While his personal account has become the de facto account for government business, it is unclear as to whether or not it would be archived in the same manner as the official @POTUS account under the Presidential Records Act. Another concern relates to President Trump"s frequent deletion of tweets. Including social media in the Presidential Records Act ensures that deleted tweets are documented for archival purposes, and makes deleting tweets a violation of the Presidential Records Act, subject to disciplinary action."

As the Hill adds, in January National Archives spokesperson Miriam Kleiman told the AP that Social Media posts would qualify as presidential records, but that statement is not explicitly spelled out in the law.

The White House, Trump surrogates and GOP congressmen have issued differing opinions on how seriously the president"s tweets should be taken. But the White House recently clarified that social media should be taken as official communication from the president

Last week, Spicer confirmed they should be taken as official presidential statements. 

"The president is president of the United States so they are considered official statements by the president of the United States,” he said

Incidentally, Quigley has a thing for acronyms: previously he introduced "The Making Access Records Available to Lead American Government Openness" aka MAR-A-LAGO Act, which would force the president to make his records public. At least we now know how House representatives spend their time when not doing anything... like the past 8 years for example.

Finally, here is a suggestion for Rep. Quigley: come up with a witty acronym for a Bill that authorizes the upcoming bailout of his home state, which in less than three weeks is about to be downgraded to junk by the rating agencies, a first in US history.

Full Quigley press release below:

Quigley Introduces the COVFEFE Act

Legislation Expands Presidential Records Act Preservation to Include Social Media

WASHINGTON — Today, U.S. Representative Mike Quigley (IL-05), co-founder and co-chair of the Congressional Transparency Caucus, introduced the Communications Over Various Feeds Electronically for Engagement or "COVFEFE" Act. This bill codifies vital guidance from the National Archives by amending the Presidential Records Act to include the term "social media" as a documentary material, ensuring additional preservation of presidential communication and statements while promoting government accountability and transparency.

"In order to maintain public trust in government, elected officials must answer for what they do and say; this includes 140-character tweets," said Rep. Quigley. "President Trump"s frequent, unfiltered use of his personal Twitter account as a means of official communication is unprecedented. If the President is going to take to social media to make sudden public policy proclamations, we must ensure that these statements are documented and preserved for future reference. Tweets are powerful, and the President must be held accountable for every post."

In 2014, the National Archives released guidance stating its belief that social media merits historical recording. President Trump"s unprecedented use of Twitter calls particular attention to this concern. When referencing the use of social media, White House Press Secretary Sean Spicer has said, "The president is president of the United States so they are considered official statements by the president of the United States."

President Trump"s tweets frequently make national news and are a topic of everyday conversation, including deciphering the meaning behind his tweet using the previously unheard of term, "covfefe." While his personal account has become the de facto account for government business, it is unclear as to whether or not it would be archived in the same manner as the official @POTUS account under the Presidential Records Act. Another concern relates to President Trump"s frequent deletion of tweets. Including social media in the Presidential Records Act ensures that deleted tweets are documented for archival purposes, and makes deleting tweets a violation of the Presidential Records Act, subject to disciplinary action.

In Congress, Rep. Quigley is working to combat the Trump Administration"s recent efforts to roll back transparency. In March, he introduced the Making Access Records Available to Lead American Government Openness (MAR-A-LAGO) Act, a bill that requires the publication of visitor logs to the White House or any other location where President Trump regularly conducts official business, including various Trump Organization properties frequented by the president. Last month, he questioned the Acting Administrator for the General Services Administration (GSA) about the Trump International Hotel lease and possible conflicts of interest.

Trump's Visit To Britain Said To Be "On Hold" Due To Worries Of "Large-Scale Protests"

Donald Trump"s controversial visit to the UK is on hold, according to the Guardian, which reports that the US president, leery of protests upon his arrival, spoke with Prime Minister Theresa May and told her "he didn’t want to proceed with a state visit to U.K. until he received more support for the trip." Trump reportedly told May that he did not want to come if there were "large-scale protests and his remarks in effect put the visit on hold for some time."

The call, which was leaked by a Downing Street adviser who was in the room, was made in recent weeks and according to the Guardian explains why there has been little public discussion about Trump"s visit. The Guardian also notes that Trump"s statement "surprised May."

As a reminder, May invited Trump to Britain seven days after his inauguration when she became the first foreign leader to visit him in the White House. She told a joint press conference she had extended an invitation from the Queen to Trump and his wife Melania to make a state visit later in the year and was “delighted that the president has accepted that invitation”. While many UK diplomats, including former national security advisor Lord Ricketts, said the invitation was premature, it was impossible to rescind once made.

Trump"s visit prompted further controversy recently after the US president went personally after the mayor of London in tweets following an attack there earlier this month. Last week, London Mayor Sadiq Khan called for the British government to cancel a state visit from Trump. “I don’t think we should roll out the red carpet to the president of the USA in the circumstances where his policies go against everything we stand for,” Khan said in an interview with Britain’s Channel 4 News.

“When you have a special relationship it is no different from when you have got a close mate. You stand with them in times of adversity but you call them out when they are wrong. There are many things about which Donald Trump is wrong”, Khan added.

The acting US ambassador to the UK, Lewis Lukens, clashed with Trump last week by praising the London mayor, for his strong leadership over the London Bridge and Borough Market terror attack.

As the Guardian adds, the UK’s traditional effort to act as a bridge between the US and Europe has become more complex since the vote last year to leave the European Union and Trump’s support for policies that have angered Euroean allies. In light of the latest political turbulence in the UK following the disastrous, for the Tories, general election last week, it was unclear if Trump plans to cancel his trip to the UK altogether.