August 20, 2019

President Trump's next round of tariffs on Chinese imports will raise the average trade war cost for U.S. households to $1,000 per year, from $600, because the new duties will largely hit finished consumer goods, JP Morgan Chase researchers said Monday. The tariffs would largely negate any extra money consumers got from Trump's $1.5 trillion tax cut, and unlike with tax-subsidized farmers, "there is no simple way to compensate consumer," Dubravko Lakos-Bujas, JP Morgan's head of U.S. equity strategy, wrote to investors.

Consumer spending is the brightest spot in the U.S. economy right now, and facing slowdowns in manufacturing and business spending, and other warnings signs of a possible recession, the White House is now exploring a payroll tax cut to encourage Americans to keep their wallets open, The Washington Post and The New York Times report, citing several people familiar with the discussions. White House economic adviser Larry Kudlow is also reportedly advocating a capital gains tax cut, which would mostly benefit wealthy investors but, unlike the payroll cut, wouldn't require approval by Congress.

Payroll tax cuts, typically popular among Democrats because they benefit middle class workers, either drain money from Social Security and Medicare accounts or add to the ballooning deficit, already up 27 percent from last year. The White House said Monday that "cutting payroll taxes is not something under consideration at this time," despite Monday's White House discussions and an internal white paper exploring the idea.

Publicly, Trump administration officials have been dismissing the idea of a recession, but "Trump has sent mixed messages," the Post notes. He tweeted that the economy is "very strong," then specifically urged the Federal Reserve to cut already-low interest rates by 100 basis points and pump more money into the economy through "quantitative easing." Cutting benchmark interest rates to 1.25 percent would give the Fed "little additional wiggle room to maneuver if a full-fledged recession began," the Post reports, and quantitative easing is "an extreme step that central bankers take when they are trying to urgently address a slumping economy." Peter Weber

10:43 a.m.

The ousted former ambassador to Ukraine told Congress Friday she was "shocked and devastated" to learn that President Trump had trashed her to a foreign leader.

Marie Yovanovitch, who was dismissed from her position in May 2019 after what she described Friday as a smear campaign against her, spoke about learning in September that Trump in his July call with Ukraine's president called her "bad news" and said she was going to "go through some things." Yovanovitch explained she was not aware of these comments until the rough transcript of the call was publicly released.

"I was shocked and devastated that I would feature in a phone call between two heads of state in such a manner," she said. "... It was a terrible moment. A person who saw me actually reading the transcript said that the color drained from my face. I think I even had a physical reaction. Even now, words fail me."

Yovanovitch also said she was concerned about Trump's "go through some things" comment in particular, as it "sounded like a threat." During this very same hearing, Trump was trashing Yovanovitch on Twitter, which she called "very intimidating." Brendan Morrow

10:23 a.m.

If Republicans had one goal going into the House Intelligence Committee's hearing with former U.S. Ambassador to Ukraine Marie Yovanovitch, it was do not be on the attack. Democrats' strategy on Friday hinged on painting Yovanovitch as a "sympathetic victim of bullying by [Rudy] Giuliani and the president, whose decision to pull her from Ukraine helped set the stage for the campaign to pressure that country's president," The New York Times reports. Republicans, naturally, did not want to give their opponents more ammo.

And then Trump tweeted:

Trump's tweet completely undermined the Republican strategy. For one thing, the tweet made clear that he did in fact single Yovanovitch out — which is exactly what the Democrats' line of question was intended to prove. Additionally, "Republicans did not want to attack Yovanovitch personally, just to portray her as a distraction from the main events," noted The New York Times' Nicholas Fandos. What's more, the Democrats' lawyer specifically undercut Trump's line of attack by asking Yovanovitch if anyone in the State Department "ever expressed concern about your job performance," to which the former ambassador answered "no."

Trump's tweets also directly contradicted the White House, which had claimed earlier in the day that "the president will be watching [Republican Rep. Devin] Nunes' opening statement, but the rest of the day he will be working hard for the American people." Jeva Lange

10:05 a.m.

Ousted ambassador Marie Yovanovitch told Congress Friday that U.S. policy toward Ukraine was "thrown into disarray" and that corrupt foreign interests were able to "manipulate our government" by having her removed.

Yovanovitch spoke on the second day of public hearings in the impeachment inquiry into Trump, which centers around whether Trump improperly pressured Ukraine to conduct investigations that might help him in the 2020 election, including into former Vice President Joe Biden.

In her opening statement, Yovanovitch told Congress that she was pushed out as ambassador in May 2019 following a "smear campaign" against her, with false claims being pushed by Trump lawyer Rudy Giuliani and Ukrainians who "apparently felt stymied by our efforts to promote stated U.S. policy against corruption."

"How could our system fail like this?" she asked. "How is it that foreign corrupt interests could manipulate our government?"

Now, Yovanovitch told Congress, "shady interests the world over have learned how little it takes to remove an American ambassador who does not give them what they want." Without mentioning Secretary of State Mike Pompeo, she also slammed the State Department's leadership for not "[pushing] back as foreign and corrupt interests apparently hijacked our Ukraine policy," adding, "I remain disappointed that the Department's leadership and others have declined to acknowledge that the attacks against me and others are dangerously wrong." Brendan Morrow

10:05 a.m.

The White House has released a very uneventful transcript as a very eventful event begins.

Pretty much exactly as the House Intelligence Committee began its second public impeachment hearing, this one with former U.S. Ambassador to Ukraine Marie Yovanovitch, the White House debuted a rough transcript of an April call between President Trump and Ukrainian President Volodymyr Zelensky. There's not much substance in the congratulatory call, making it appear more like an attempt to distract from one of the most consequential impeachment testimonies yet.

Trump has spent the past week claiming he'd release a memo of a second call with Zelensky that actually took place before his apparently "perfect" July call — the one in which he implied there'd be consequences if Zelensky didn't issue an investigation into the Bidens. And when he did that on Friday, it became even more unclear what Trump was trying to prove. The call is a simple congratulations from Trump to Zelensky in which they discuss possible visits to each others' countries — and in which Trump, contrary to what he previously claimed, does not offer to help Zelensky root out corruption.

Intelligence Committee Ranking Member Devin Nunes (R-Calif.) unexplainably read off that pizzazzless call as his opening statement before Yovanovitch spoke, somehow not tripping up when Trump mentioned Ukraine's "representation" at his Miss Universe pageants and failing to recognize Yovanovitch was even there. Kathryn Krawczyk

9:54 a.m.

Rep. Adam B. Schiff (D-Calif.), the chairman of the House Intelligence Committee, and Rep. Devin Nunes (R-Calif.), its top Republican, painted opposing pictures of the purpose of the hearing of former Ukrainian ambassador, Marie Yovanovitch, in their opening statements Friday. Yovanovitch appeared before the committee in the second public hearing in the impeachment process to date; she had previously spoken to the lawmakers behind closed doors.

The ousting of Yovanovitch by President Trump and his personal lawyer, Rudy Giuliani, "helped set the stage for an irregular channel" that allowed the president to pursue "the 2016 conspiracy theory and most important, an investigation into the 2020 political opponent he apparently feared most, Joe Biden," Schiff said. "And the president's scheme might have worked but for the fact that the man who would succeed Ambassador Yovanovitch, whom we heard from on Wednesday, Acting Ambassador [William] Taylor, would eventually discover the effort to press Ukraine into conducting these investigations, and would push back. But for the fact, also, that someone blew the whistle."

Nunes, by contrast, set the stage for Republicans to tiptoe around Yovanovitch; rather than reference her directly, he painted Friday's hearing as another of the Democrats' "Watergate fantasies" and "daylong TV spectacles, instead of solving the problems we were all sent to Washington to address." In fact, the only mention of Yovanovitch in Nunes' opening statement at all was in the title, Bloomberg's Steven Dennis noted.

Instead, Nunes pivoted attention to what he described as an effort to "topple a duly elected president," and muddied the waters with "three crucial questions" that re-framed conspiratorial conservative talking points concerning Hunter Biden, Ukrainian election meddling, and Democrats' alleged coordination with the whistleblower, despite such claims having been repeatedly disproved. Jeva Lange

9:10 a.m.

President Trump lashed out at House Intelligence Committee Chair Adam Schiff (D-Calif.) and complained that the impeachment inquiry has been hard on his family at a wild Louisiana rally Thursday night.

Trump spoke after the first two witnesses spoke publicly in the impeachment inquiry on Wednesday, decrying the "deranged impeachment witch hunt" and telling supporters that impeachment has been "very hard on my family."

"Impeachment to me is a dirty word," he added. "It's been very unfair, very hard on my family. My whole life is crazy."

Trump dismissed Wednesday's witnesses as "Never Trumpers," a charge they specifically denied. He also targeted Schiff, the committee's top Democrat, with fresh personal insults, mocking his "little 10-inch neck" and doing an impression of Schiff buying a shirt. “What size shirts do you need, Adam,” Trump asked to himself. “I wear a size nine," he responded as Schiff. "Nine! He will not make the LSU football team, that I can tell you."

At another point in the rally, Trump re-upped his call for Schiff to be prosecuted while providing no examples of anything illegal he's done, centering his complaint around the Democrat's paraphrase of his Ukraine call. The impeachment inquiry, meanwhile, on Friday is continuing with its second day of public hearings. Brendan Morrow

8:16 a.m.

The second day of public impeachment hearings into President Trump is about to begin.

Wednesday's hearing featuring testimony from William Taylor, the U.S. charge d'affaires in Ukraine, and Deputy Assistant Secretary of State George Kent. On Friday, ousted former Ukraine ambassador Marie Yovanovitch is set to provide public testimony.

David Holmes, the official whom Taylor said overheard Trump talking with U.S. Ambassador to the European Union Gordon Sondland about "the investigations" over the phone, will also speak before Congress, but his testimony will be behind closed doors.

Yovanovitch previously provided closed-door testimony before Congress, telling lawmakers Trump removed her from her position earlier this year based on "false claims" pushed by people with "questionable motives." She also told Congress she felt threatened and "very concerned" after Trump told Ukrainian President Volodymyr Zelensky she was "bad news" and "going to go through some things."

Yovanovitch's hearing will begin at 9 a.m. Eastern, and it can be streamed live on YouTube via CSPAN. Brendan Morrow

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