Welcome to The Hill’s Morning Report. Happy Tuesday! Our newsletter gets you up to speed on the most important developments in politics and policy, plus trends to watch. Co-creators are Alexis Simendinger and Al Weaver (CLICK HERE to subscribe!). On Twitter, find us at @asimendinger and @alweaver22.







Just over a week after internal discord spilled into the open, tensions still simmer within the House Democratic Caucus over how to tackle the situation at the border including abysmal conditions for the detention of some migrants.

As Rafael Bernal and Juliegrace Brufke report, the battle over the $4.6 billion border bill supplemental funding that passed the House on June 27 left wounds within the conference. Progressives and moderates disagree within the party, as evidenced by a high-profile back-and-forth skirmish between Speaker Nancy Pelosi Nancy PelosiPelosi slams Trump executive order on pre-existing conditions: It 'isn't worth the paper it's signed on' On The Money: Anxious Democrats push for vote on COVID-19 aid | Pelosi, Mnuchin ready to restart talks | Weekly jobless claims increase | Senate treads close to shutdown deadline Trump signs largely symbolic pre-existing conditions order amid lawsuit MORE (D-Calif.) and Rep. Alexandria Ocasio-Cortez Alexandria Ocasio-CortezOn The Money: Anxious Democrats push for vote on COVID-19 aid | Pelosi, Mnuchin ready to restart talks | Weekly jobless claims increase | Senate treads close to shutdown deadline McCarthy says there will be a peaceful transition if Biden wins Anxious Democrats amp up pressure for vote on COVID-19 aid MORE (D-N.Y.).

The two Democratic heavyweights have clashed since the speaker made dismissive remarks about the influence of the freshman lawmaker in an interview with The New York Times, suggesting the firebrands are “four people” in the House Democratic caucus, adding that “they didn’t have any following” outside of Twitter.

The Progressive Change Campaign Committee, a top left-wing organization, blasted Pelosi for her remarks, saying Ocasio-Cortez is “more of a true leader” than the speaker.

Pelosi has since tried to turn the page and work toward addressing the situation for migrants at facilities such as the one in Clint, Texas, a focus of media attention after Ocasio-Cortez and 20 other House Democrats toured the facility early last week.

“Whether or not the President responds to our request to improve medical care standards for the health and safety of children, and while Senator McConnell still refuses to help the children suffering in these deplorable conditions, we must lead a Battle Cry across America to protect the children,” Pelosi wrote in a note to her colleagues.

While the two Democrats duke it out, a larger and potentially more consequential fight is playing out between members of the Congressional Progressive Caucus (CPC) and the Problem Solvers Caucus, a main vehicle for the party’s moderates. After the votes to approve supplemental funding for needs at the border, progressive members believe it will be tough to work with moderate colleagues, and some have threatened to retaliate by slowing committee momentum for select bills. CPC members chair many of the committees, including Judiciary, Rules, Oversight and Reform, Homeland Security, Small Business, and Natural Resources.

“I mean, it's just gonna be a lot harder for us to care enough to help deliver votes,” said Rep. Mark Pocan Mark William PocanOvernight Defense: Nearly 500 former national security officials formally back Biden | 40 groups call on House panel to investigate Pentagon's use of coronavirus funds 40 groups call on House panel to investigate Pentagon's use of coronavirus funds Overnight Defense: Pentagon redirects pandemic funding to defense contractors | US planning for full Afghanistan withdrawal by May | Anti-Trump GOP group puts ads in military papers MORE (D-Wis.), co-chairman of the CPC, who recently referred to the Problem Solvers Caucus as the “Child Abuse Caucus” over its support for the border supplemental.

The Washington Post: House to vote on new border bill amid outcry over conditions at migrant detention centers.

> As Democrats debate what to do next, the Department of Homeland Security is continuing its crackdown of the border and asked the Pentagon to authorize 1,000 additional Texas National Guard troops to the region "to provide supplemental holding and port of entry enforcement support.”

The increase would be in addition to the 1,900 National Guard members already at the border and 2,300 active-duty troops who are on border-related missions. The request was made on Wednesday (CNN).

Meanwhile, the House is back to work today after a 10-day July Fourth recess, set to resume negotiations on spending caps and a hike in the debt ceiling. Those congressional talks are in limbo with less than three months left before a fiscal deadline looms. Half of that time is expected to be spent away from Washington as House members return to their districts for a six-week August recess.

As CNN’s Phil Mattingly reports:

“The preferred method is to strike an all-encompassing two-year budget deal. At this point, after several meetings of top negotiators, things have moved further away from a deal. The internal dynamics of the Democratic caucus laid bare by the immigration funding fight two weeks ago have only served to exacerbate concerns about any path to a final resolution.”

Bloomberg: Debt limit, USMCA clocks ticking as Pelosi wrangles her party.

The Hill: White House repeatedly blocks ex-aide from answering Judiciary panel questions.







LEADING THE DAY





2020 CAMPAIGN & POLITICS: In a year when the popular move has been to run for president, Rep. Eric Swalwell Eric Michael SwalwellSwalwell calls for creation of presidential crimes commission to investigate Trump when he leaves office 'This already exists': Democrats seize on potential Trump executive order on preexisting conditions Swalwell: Barr has taken Michael Cohen's job as Trump's fixer MORE (D-Calif.) decided to go the other way and closed up shop on his 2020 bid, temporarily contracting the Democratic presidential field.

Swalwell announced that he was dropping out during a press conference in Dublin, Calif., on Monday afternoon following reports that he had discussed shutting the doors on his 2020 bid after he canceled two days of campaigning in New Hampshire during the July Fourth holiday.

"We have to be honest about our own candidacy's viability,” Swalwell told reporters, adding that he will run for reelection to the House instead. He did not endorse any of his former 2020 competitors (The Hill).

While one California Democrat ended his bid, another is expected to launch one of his own as Tom Steyer Tom SteyerTV ads favored Biden 2-1 in past month Inslee calls Biden climate plan 'perfect for the moment' OVERNIGHT ENERGY: Trump administration finalizes plan to open up Alaska wildlife refuge to drilling | California finalizes fuel efficiency deal with five automakers, undercutting Trump | Democrats use vulnerable GOP senators to get rare win on environment MORE, the billionaire investor who has loudly called for President Trump Donald John TrumpSteele Dossier sub-source was subject of FBI counterintelligence probe Pelosi slams Trump executive order on pre-existing conditions: It 'isn't worth the paper it's signed on' Trump 'no longer angry' at Romney because of Supreme Court stance MORE’s impeachment, reportedly plans to enter the race on Tuesday.

Steyer’s likely move comes despite his January announcement that he would not run in 2020, saying at the time that he planned to focus all of his time and energy in the push to impeach the president. However, according to reports, Steyer has had second thoughts in recent months and seemed uneasy about his January decision.

The potential announcement would bring the Democratic field back to 25 candidates.

The New York Times: Farewell, Swalwell: As one 2020 Democrat drops out, will others follow?

> Warren rises: Sen. Elizabeth Warren Elizabeth WarrenHillicon Valley: Subpoenas for Facebook, Google and Twitter on the cards | Wray rebuffs mail-in voting conspiracies | Reps. raise mass surveillance concerns On The Money: Anxious Democrats push for vote on COVID-19 aid | Pelosi, Mnuchin ready to restart talks | Weekly jobless claims increase | Senate treads close to shutdown deadline Democratic senators ask inspector general to investigate IRS use of location tracking service MORE (D-Mass.) announced Monday that she posted a $19.1 million haul in the second fundraising quarter, outraising two of her top rivals — Sen. Bernie Sanders Bernie SandersThe Hill's Campaign Report: Trump faces backlash after not committing to peaceful transition of power Bernie Sanders: 'This is an election between Donald Trump and democracy' The Hill's 12:30 Report: Trump stokes fears over November election outcome MORE (I-Vt.) and Sen. Kamala Harris Kamala HarrisHundreds of lawyers from nation's oldest African American sorority join effort to fight voter suppression Biden picks up endorsement from progressive climate group 350 Action 3 reasons why Biden is misreading the politics of court packing MORE (D-Calif.) — as she capped off a strong June (The Hill).

The total is third among Democratic candidates, behind only South Bend, Ind., Mayor Pete Buttigieg Pete ButtigiegBillionaire who donated to Trump in 2016 donates to Biden The Hill's Morning Report - Sponsored by Facebook - GOP closes ranks to fill SCOTUS vacancy by November Buttigieg stands in as Pence for Harris's debate practice MORE (D) and former Vice President Joe Biden Joe BidenPelosi slams Trump executive order on pre-existing conditions: It 'isn't worth the paper it's signed on' Hillicon Valley: Subpoenas for Facebook, Google and Twitter on the cards | Wray rebuffs mail-in voting conspiracies | Reps. raise mass surveillance concerns Fox News poll: Biden ahead of Trump in Nevada, Pennsylvania and Ohio MORE, as Warren continues to see her star grow in the 2020 race behind a nonstop string of policy proposals and progressive energy.

The latest figures put Warren in a strong spot as she looks to hold onto her spot in the top tier of candidates. On top of the fundraising figure, she also has $19.7 million in cash on hand and more than 300 staffers on the payroll. After fears that she could be in trouble due to a high burn rate of campaign funds, she has dramatically reduced that figure from 85 percent to 55 percent, putting her on more stable footing (Politico).

The Washington Post: “You are who?” The lonely presidential campaign of John Hickenlooper John HickenlooperThe Hill's Morning Report - Sponsored by Facebook - Trump previews SCOTUS nominee as 'totally brilliant' Cook Political Report shifts Colorado Senate race toward Democrat Willie Nelson playing at virtual fundraiser for Hickenlooper MORE.

The Wall Street Journal: Former Rep. Beto O’Rourke (D-Texas) struggles to break out of crowded Democratic field.

The Washington Post Magazine: The ignoring of Sen. Kirsten Gillibrand Kirsten GillibrandSunday shows preview: Justice Ginsburg dies, sparking partisan battle over vacancy before election Suburban moms are going to decide the 2020 election Jon Stewart urges Congress to help veterans exposed to burn pits MORE (D-N.Y.).

Mona Charen: How a Democrat can win over a never-Trumper.

> Cocaine Mitch: Democrats want to flip the script on Republicans by using Senate Majority Leader Mitch McConnell Addison (Mitch) Mitchell McConnellTrump 'no longer angry' at Romney because of Supreme Court stance On The Money: Anxious Democrats push for vote on COVID-19 aid | Pelosi, Mnuchin ready to restart talks | Weekly jobless claims increase | Senate treads close to shutdown deadline The Hill's Campaign Report: Trump faces backlash after not committing to peaceful transition of power MORE (R-Ky.) as the poster boy for next year’s congressional elections in the same way Republicans have repeatedly and successfully “posterized” Pelosi, former Senate Majority Leader Harry Reid Harry Mason ReidThe Supreme Court vacancy — yet another congressional food fight Trump seeks to turn around campaign with Supreme Court fight On The Trail: Battle over Ginsburg replacement threatens to break Senate MORE (D-Nev.) and Senate Minority Leader Charles Schumer Chuck SchumerPelosi slams Trump executive order on pre-existing conditions: It 'isn't worth the paper it's signed on' 3 reasons why Biden is misreading the politics of court packing Cruz blocks amended resolution honoring Ginsburg over language about her dying wish MORE (D-N.Y.) in past years.

McConnell often manages to fly under the radar by being so low-key but after he helped Trump fill two Supreme Court vacancies and with a pile-up of House-passed bills in the Senate, Democrats say using McConnell as a rallying banner can be effective (The Hill).

Paul Kane: North Carolina runoff a test of women’s standing in the Republican Party.

Elsewhere on the political scene … Kris Kobach, the former Kansas secretary of state, announced Monday that he will run for an open U.S. Senate seat in 2020, drawing the ire of national Republicans who are determined to not let him become the nominee. Kobach, a top Trump supporter who lost the gubernatorial contest last year, is running to replace retiring Sen. Pat Roberts Charles (Pat) Patrick RobertsThe Hill's Morning Report - Sponsored by Facebook - Washington on edge amid SCOTUS vacancy The Hill's Morning Report - Sponsored by National Industries for the Blind - Trump seeks to flip 'Rage' narrative; Dems block COVID-19 bill GOP senators say coronavirus deal dead until after election MORE (R-Kan.) ( The Hill) … CNN announced that they will hold a live draw to determine the debate lineups for the next Democratic presidential debates on July 30 and July 31 in Detroit (CNN).







IN FOCUS/SHARP TAKES





WHITE HOUSE & ADMINISTRATION: Trump delivered an East Room speech about “environmental leadership” on Monday that was long on praise for energy producers and the strong U.S. economy and silent about combating climate change, which most Americans say is a top concern as they ponder the Oval Office occupant in 2021 (The Hill).

The president opted to deliver the 45-minute address at the urging of his daughter, Ivanka Trump Ivana (Ivanka) Marie TrumpThe Hill's 12:30 Report: Trump stokes fears over November election outcome Special counsel investigating DeVos for potential Hatch Act violation: report Trump, Biden vie for Minnesota MORE, who wanted the president to defend his environmental record, according to Axios.

The New York Times reported that the idea came from the president’s campaign consultants, who believe that Trump’s environmental policies hurt him among millennials and suburban women, two blocs of voters his Democratic rivals are wooing.

Bottom line: The speech suggests the president’s advisers fear he is losing support he captured in 2016 and that courting his base of non-college-educated white men is not enough to win next year. The contents of Trump’s one-off energy speech, however, appeared unlikely to rebrand his environmental reputation.

Trump argues that his unwinding of Obama-era environmental regulations stayed true to his campaign promises, but his promotion of petroleum and coal and denial of the science behind calls to combat global warming remain unpopular with a majority of Americans, according to recent surveys.

> Iran: The International Atomic Energy Agency confirmed Monday that Iran resumed enriching uranium to higher levels than permitted under a 2015 accord with the United States and other world powers. Tehran cannot currently build a nuclear bomb, but it is steps closer to that potential. The New York Times outlined what occurred in the past and what’s likely to happen next.

> Department of Justice: From defending Trump’s ambitions for a citizenship question on the 2020 census to blasting House Democrats ahead of a hearing next week with star witness former special counsel Robert Mueller Robert (Bob) MuellerCNN's Toobin warns McCabe is in 'perilous condition' with emboldened Trump CNN anchor rips Trump over Stone while evoking Clinton-Lynch tarmac meeting The Hill's 12:30 Report: New Hampshire fallout MORE, Attorney General William Barr Bill BarrHillicon Valley: Subpoenas for Facebook, Google and Twitter on the cards | Wray rebuffs mail-in voting conspiracies | Reps. raise mass surveillance concerns Bipartisan representatives demand answers on expired surveillance programs YouTube to battle mail-in voting misinformation with info panel on videos MORE is busy.

The president’s battles over the census are noisily public (The Hill), while some experts believe Trump’s strategy is to create enough confusion to upend census participation among a sizable number of minorities, even if the administration loses its arguments in court (Reuters).

In an interview with The Associated Press on Monday, Barr said the administration will take action in the coming days that he believes will allow the government to add the controversial census question about citizenship. Barr would not detail the plans, although a senior official said Trump is expected to issue a memorandum to the Commerce Department instructing it to include the question in the 2020 census. Such a move is likely to be immediately challenged in court.

Pelosi said Monday that Trump wants to add the demand for citizenship information because he wants to “make America white again.”

> Labor Secretary Alexander Acosta Alex Alexander AcostaFederal litigator files complaint alleging Labor secretary abused his authority Appeals court to review legality of Epstein plea deal Appeals court finds prosecutors' secret plea agreement with Epstein didn't break law MORE: Federal charges filed Monday in New York against wealthy hedge fund manager Jeffrey Epstein put Acosta, a member of Trump’s cabinet, back in the spotlight because he’s the former U.S. Attorney in Miami who helped a sexual predator secure a lenient plea deal that shielded him from federal prosecution following sexual contact with dozens of underage girls 11 years ago (The Hill).

Republican senators declined to criticize Acosta following the new federal charges of sex trafficking against Epstein, 66 (The Hill). White House officials are concerned that House Democrats may call some of Epstein’s victims to testify on Capitol Hill about the plea deal Acosta negotiated in 2008, putting the Trump cabinet official in the klieg lights. Acosta declined to comment on Monday (The Washington Post).

The Justice Department is facing renewed criticism that it mishandled the Epstein case years ago, and Barr recused himself on Monday because his former law firm, Kirkland and Ellis, had represented Epstein (The New York Times).

Epstein pleaded not guilty to the New York charges. Under the Florida deal, he pleaded guilty to state prostitution-related charges and was allowed to go to his office during the day while he served his sentence a decade ago. He also registered as a sex offender and agreed to pay millions of dollars to dozens of his victims.

Fortune: Who is Epstein?

More administration news: Secretary of State Mike Pompeo Michael (Mike) Richard PompeoPutin nominated for Nobel Peace Prize The Hill's Morning Report - Sponsored by Facebook - Trump previews SCOTUS nominee as 'totally brilliant' Pompeo accused of stumping for Trump ahead of election MORE assembled a controversial advisory group on Monday to assess what is meant by “human rights” in U.S. foreign policy ( The Hill) … Trump said he will not work with Great Britain’s ambassador to the United States, who called the Trump administration “inept” in a private cable that was leaked (The Hill) … The Internal Revenue Service’s in-house watchdog, Nina Olson, is retiring at the end of the month (The Hill).







The Morning Report is created by journalists Alexis Simendinger and Al Weaver. We want to hear from you! Email: asimendinger@thehill.com and aweaver@thehill.com. We invite you to share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!







OPINION





Democrats 'shooting holes in their own boat' with single-payer plan, by Albert Hunt, opinion contributor, The Hill. https://bit.ly/32hwJX5

We need to know where Democratic candidates stand on nuclear weapons, by Lisbeth Gronlund and David Wright, opinion contributors, The Hill. https://bit.ly/2Lc9mbS







WHERE AND WHEN





Hill.TV’s “Rising” program features Rachel Bitecofer, assistant director at the Wason Center for Public Policy at Christopher Newport University, to discuss the negative partisanship model’s prediction that Trump will lose in 2020; Natalie Wynn, a noted YouTuber, to talk about YouTube radicalization; and Hany Farid, a digital forensics expert, who discusses manipulated media known as deepfakes at 9 a.m. ET at http://thehill.com/hilltv or on YouTube at 10 a.m. at Rising on YouTube.

The House convenes at 2 p.m. The House Intelligence Committee will hear closed-door testimony this morning from former Trump business associate Felix Sater (The Hill).

The Senate meets at 10 a.m.

The president welcomes the emir of Qatar, Sheikh Tamim bin Hamad al-Thani, to the White House for meetings and a working lunch this afternoon, joined by Treasury Secretary Steven Mnuchin Steven Terner MnuchinOn The Money: Anxious Democrats push for vote on COVID-19 aid | Pelosi, Mnuchin ready to restart talks | Weekly jobless claims increase | Senate treads close to shutdown deadline Vulnerable Democrats tell Pelosi COVID-19 compromise 'essential' Pelosi asks panels to draft new COVID-19 relief measure MORE. Trump will also participate in a commercial signing ceremonies event in the Roosevelt Room with the sheikh prior to the lunch.

Vice President Pence begins his day with a meeting with Latvian Prime Minister Arturs Krišjānis Kariņš. The vice president will join Trump for events with the emir of Qatar in the West Wing.

Federal Reserve Chairman Jerome Powell delivers prepared remarks about stress testing at financial institutions during the Federal Reserve Board Conference in Boston at 8:45 a.m.







ELSEWHERE





➔ Tech: Federal regulators and Congress want YouTube to take new steps to protect children from problematic content. Consumer groups are urging the Federal Trade Commission, which is finishing its probe into alleged violations of children's privacy laws, to hit the company with tough penalties. And the Senate Judiciary Committee today holds a hearing in which YouTube is in the spotlight (The Hill). … The leaders of the tech industry’s most prominent advocacy groups in Washington are increasingly female, a trend some hope to see spread Silicon Valley tech companies that are still male-dominated (The Hill).

➔ Minimum wage: The pending Raise the Wage Act sponsored by congressional Democrats would give 17 million people a raise and lift 1.3 million out of poverty, but also eliminate jobs for 1.3 million workers in the same period, according to the Congressional Budget Office. House Democrats expect to bring the bill, which would gradually increase the federal minimum wage from its current $7.25 to $15 by 2025, to a vote next week (The Hill).

➔ News of the weird: A Lithuanian couple defended their title in the World Wife-Carrying Championship, held in Finland on Saturday. It’s a contest that attracts couples from around the world, including from the United States. Men complete an obstacle course with their wives slung over their backs. The peculiar competition has been going on for 24 years, although the Morning Report was oblivious until Monday. The prize? The wife’s weight in beer (Reuters).







THE CLOSER





And finally … Monday’s flash flooding in the Washington metro area caught many by surprise as commuters encountered rivers instead of roadways, subway stops could have been mistaken for Niagara Falls and planes were temporarily grounded under a deluge of between three and five inches of rain in the span of two hours, depending on location.

It was biblical. Gutters and roofs failed, power outages spread, trees toppled and the White House press basement area looked like a retaining pond until special equipment arrived.

OK, not an earthquake, not a dangerous wildfire but definitely a swamp. The National Weather Service issued its first-ever flash flood warning for the District on Monday morning. In the midst of the seventh wettest July day recorded since 1871, Washington was knee-deep and all wet.





