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What to Know in Washington: Democrats Seek Trump’s Tax Returns

Posted April 4, 2019

House Democrats yesterday formally demanded that the IRS turn over six years of personal and business tax returns for President Donald Trump, setting the stage for a clash with the White House and in the courts.

Ways and Means Chairman Richard Neal (D-Mass.) sent a letter to Internal Revenue Service Commissioner Charles Rettig, citing Congress’s oversight responsibility to review the president’s business activities before and during his first term.

He said he wanted the returns by next Wednesday, but that deadline was expected to be negotiable. Trump told reporters he would refuse the request. The decision, however, is up to the Treasury Department.

Neal cast his letter as a legislative oversight duty to ensure the IRS was doing its routine function of auditing every sitting president and vice president’s return, and not as part of Democrats’ broad investigations of Trump’s personal and business finances.

“We must obtain President Trump’s tax returns and review whether the IRS is carrying out its responsibilities,” Neal’s letter said. “The committee has a duty to examine whether congressional action may be needed to require such audits, and to oversee that they are conducted properly.”

Trump said at the White House that his returns are under audit and that he doesn’t intend to turn anything over until that is finished. “Until such time as I’m not under audit I would not be inclined to do it,” he told reporters. No law prevents a taxpayer from releasing returns that are under audit. Read more from Anna Edgerton and Laura Davison.

Meet the Investigators: As House Democrats ramp up oversight of the administration, they’ve brought in a cadre of legal advisers and investigators to dig into the actions of the executive branch. Hires include Douglas N. Letter, who spent four decades defending presidential power and secrecy at the Justice Department, as well as veterans of congressional investigations of steroid use in major league baseball and of Apple stashing $102 billion of assets offshore to avoid U.S. taxes. Read more on the staffers behind the probes from James Rowley.

Photographer: Andrew Harrer/Bloomberg
Neal at a press conference in March.

Happening on the Hill

Democrats’ Budget Plans: The House Budget Committee yesterday advanced a measure that would raise spending caps for defense and domestic funds in fiscal 2020 and 2021, setting it up for a full floor vote over grumbling from progressive Democrats about the military boost. The panel voted 19-17 to advance a bill by Chairman John Yarmuth (D-Ky.) that would raise the base defense and non-defense caps under the Budget Control Act each by equal amounts in fiscal 2020. Compared to current levels, non-defense spending would get twice the increase as military funds. Congressional Progressive Caucus members Ro Khanna (D-Calif.), Pramila Jayapal (D-Wash.) and Ilhan Omar (D-Minn.) joined the Republicans on the panel in opposing the measure.

House Democrats plan to hold a floor vote next Tuesday or Wednesday, Yarmuth said after the markup. That could be a close vote, with some Democratic amendments offered, as progressives complained that defense spending is still greater than the domestic level. Read more from Jack Fitzpatrick.

McConnell Goes Nuclear: Senate Majority Leader Mitch McConnell (R-Ky.) deployed the so-called “nuclear option” yesterday by changing the Republican-controlled chamber’s rules to speed approval of Trump’s nominees who have been slow-walked by Democrats. “It is time for this sorry chapter to end,” he said, noting the new rules will apply to future nominees by the president. “It’s time to return this body to a more normal and reasonable process for fulfilling its constitutional responsibilities, no matter which party controls the White House.” Read more from Steven T. Dennis.

McConnell’s effort is unlikely to fully clear the confirmation logjam aggravated by longtime vacancies and the turnover of high-level political appointees. With a backlog of nominations to process and a large number of vacancies, “it will still take a long time to fully staff the administration,” said Lauren Bell, professor of political science at Randolph-Macon College in Virginia. Read more from Nancy Ognanovich.

Roy Altman became the first in a likely wave of district court appointees to be considered under the accelerated timetable. The chamber voted 66 to 33 to invoke cloture, or end debate on Altman’s nomination to the U.S. District Court for the Southern District of Florida, and set the stage for a likely confirmation vote this morning, Patrick L. Gregory reports.

Venezuela Aid: A bipartisan group of senators introduced legislation that seeks to speed the transition of power in Venezuela and ease the humanitarian crisis that has escalated amid a power struggle between President Nicolas Maduro and an emboldened opposition. The legislation introduced yesterday by Sen. Bob Menendez (D-N.J.) would provide diplomatic support for Juan Guaido as the interim president of Venezuela, along with $400 million in humanitarian aid. Read more from Daniel Flatley.

The measure comes as a new report says the worsening humanitarian crisis in Venezuela requires a full-scale United Nations response to address increasing levels of food insecurity and shortages of medicine. The study, published today, describes the spread of vaccine-preventable diseases, such as measles and diphtheria, rising infant mortality and sharp increases in the transmission of infectious diseases including malaria and tuberculosis. Child malnutrition is widespread, according to the repor t by researchers at Human Rights Watch and the Johns Hopkins Bloomberg School of Public Health. Read more from David Wainer.

Bipartisan Drug Bills Advance: In a moment of bipartisanship, House lawmakers on the House Energy and Commerce Committee sent a handful of bipartisan bills meant to bolster drug competition to the full House floor for a vote. The bill bundle includes two pieces of legislation that were extensively debated earlier — one that addresses drug sample access and one covering pay-for-delay tactics. The committee votes are a positive sign for bipartisanship for future bills meant to bring down drug prices. It’s a bipartisan goal but difficult to achieve when lawmakers can’t agree on what avenue to take. Read more from Jacquie Lee.

Senator Slams Pace of Facebook Probe: Sen. Richard Blumenthal (D-Conn.) slammed the pace of the Federal Trade Commission’s privacy investigation into Facebook, saying it is “inexplicable” that the probe has stretched for more than a year without a fine against the company. He said in an interview he’s “flabbergasted and frustrated” that the commission had not resolved the case. The inquiry, which started in March 2018, should have been done in “one-tenth” of the time, he said. Read more from Daniel Stoller and David McLaughlin.

Elections & Lobbying

More Democrats Set for 2020 Bids: At least five more Democrats are considering jumping into the 2020 presidential race — and that’s not even counting Joe Biden. The former vice president is the most prominent name among the undeclared Democrats interested in challenging Trump next year and joining a historically large primary field.

The list of lesser-known potential candidates who have tested the waters in early primary states includes Montana Governor Steve Bullock, as well as those who say they’re inclined to run, including Sen. Michael Bennet (D-Colo.). There are also others who haven’t ruled out a run, such as Rep. Tim Ryan (D-Ohio).

These would-be candidates aren’t daunted by Biden or by the big names among the 15 declared Democratic contenders already. While some potential entrants may be waiting to see whether Biden jumps in, others won’t be dissuaded because someone wouldn’t need to win a big percentage of the vote in early balloting to break out, said strategist Joe Trippi, a veteran of Democratic presidential campaigns. Read more from Mark Niquette.

Bennet Announces Cancer Diagnosis: Meanwhile, Sen. Bennet said he has prostate cancer and will undergo surgery when the Senate recesses later this month. “Late last month, I was diagnosed with prostate cancer. While hearing news like this is never easy, I am fortunate it was detected early, and as a result, my prognosis is good,” he said in a statement last night. “During the upcoming Senate recess, I will have surgery in Colorado and return to work following a brief recovery.” Read more from Chelsea Mes.

Gerrymandering in Court: The Supreme Court’s newest justices, Neil Gorsuch and Brett Kavanaugh, highlighted independent redistricting commissions as a solution to state legislatures maximizing seats for the party in power while drawing voting districts. But legal experts say these commissions can’t solve the problem alone. The justices’ comments came during arguments last week in a pair of partisan gerrymandering challenges out of Maryland and North Carolina, which allege politicians drew voting districts to disadvantage the other political party. In North Carolina, Democrats say the state’s congressional districts were drawn to benefit Republicans. In Maryland, it’s Republican voters who are complaining that the districts have been rigged.

The Supreme Court has struggled for decades to come up with a neutral way to police partisan gerrymandering, but hasn’t been able to settle on one. The chances for the high court to resolve the problem may have dropped last year with the retirement of Justice Anthony Kennedy, who was a swing vote on this ideologically divided issue. Read more from Kimberly Strawbridge Robinson.

Uber Lobbying: A relative newcomer to Washington, Uber has revved up its Washington influence machine as the ride-sharing company expands into new business areas and seeks to shed its image as a dysfunctional startup before going public. Uber set its fifth federal lobbying spending record last year, focusing on issues central to its growth strategy: winning approvals for innovations such as self-driving cars and flying cars and fighting to ensure its drivers maintain their status as independent contractors.

Even though Uber’s lobbying expenditure is still dwarfed by those of Facebook, Amazon and Google, it lobbied on 15 different policy concerns in 2018 — the same number as Facebook — and courted almost as many agencies as Facebook did, according to an annual analysis of data from nine technology companies compiled by Bloomberg from federal lobbying reports filed with the Senate. Read more from Naomi Nix, Ben Brody and Lauren Leatherby.

What Else to Know Today

U.S.-China Talks: Trump will meet Chinese Vice Premier Liu He at the White House today as speculation grows that negotiations over a trade deal between the world’s biggest economies is entering the final stages. Talks are continuing in Washington where Liu held meetings with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin yesterday. The goal over the next few days is to strike an agreement on the core issues so Trump and Chinese leader Xi Jinping can hold a ceremony to sign a deal.

Drafts of an agreement to end a nearly year-long trade war would give Beijing until 2025 to meet commitments on commodity purchases and allow American companies to wholly own enterprises in the Asian nation, according to three people familiar with the talks. Read more.

Mar-a-Lago Security Scrutinized: Congressional Democrats demanded fresh scrutiny of security risks at Trump’s Mar-a-Lago club after the arrest of a Chinese woman who managed to pass Secret Service screening, highlighting concerns about the president’s use of his Florida resort.

The suspect, Yujing Zhang, was initially allowed onto the Palm Beach property by the Secret Service. She was later detained after entering a restricted area with four mobile phones, a laptop computer, an external hard drive and a thumb drive found to contain malware, according to an affidavit the service filed in support of the charges against her. The Miami Herald reported yesterday that federal authorities have been investigating whether a Chinese intelligence operation is targeting Trump and Mar-a-Lago, citing unidentified sources. China said only that it reached out to Yang after being notified of her arrest via the country’s diplomatic mission in Houston.

House Oversight Committee Chairman Elijah Cummings (D-Md.) said he and the senior Republican on the panel, Jim Jordan (R-Ohio), would be briefed on security procedures at Mar-a-Lago today. Read more from Jennifer Epstein.

NATO Chief Makes Case: NATO’s chief delivered a subtle rebuke of Trump’s “America First” foreign policy in a speech to the U.S. Congress, as the alliance’s 70th anniversary was marked more by tensions roiling the military bloc than by signs of unity. Secretary-General Jens Stoltenberg, appearing at the invitation of congressional leaders yesterday, argued that the U.S. has benefited as much from the 29-member alliance as have European nations. He cited how NATO partners came to the aid of America after the Sept. 11 terrorist attacks, continue to fight alongside U.S. troops in Afghanistan and are members of the coalition to defeat Islamic State. Read more from Nick Wadhams.

North Korea: South Korea disclosed a probe into a local ship suspected of illegal high-seas cargo transfers with North Korean vessels, affirming support for U.S.-backed sanctions ahead of a summit with Trump. Authorities impounded the South Korean-flagged oil products tanker P Pioneer in the southern port of Busan in October, a government official said Thursday, confirming an earlier report in the Chosun Ilbo newspaper. The ship — the first local vessel seized by South Korean authorities — is among four detained for potential violations of United Nations curbs on fuel shipments to North Korea, Chosun said. Read more from Jon Herskovitz and Youkyung Lee.

Some Mueller Staff See Report More Damaging: Some of Special Counsel Robert Mueller’s staff tell associates that Attorney General William Barr didn’t adequately convey their inquiry findings and that they were more concerning for Trump than Barr suggested in his summary, The New York Times reports. Mueller’s investigators had written multiple summaries of the report and some team members think Barr should have included more of their material in the four-page summary he wrote on March 24, the Times reports.

To contact the reporters on this story: Brandon Lee in Washington at blee@bgov.com; Zachary Sherwood in Washington at zsherwood@bgov.com

To contact the editors responsible for this story: Loren Duggan at lduggan@bgov.com; Giuseppe Macri at gmacri@bgov.com