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



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The State of the Union address is back on but little else is settled as Washington faces a Feb. 15 deadline to fund the government.

Speaker Nancy Pelosi Nancy PelosiSunday shows preview: Justice Ginsburg dies, sparking partisan battle over vacancy before election Trump is betting big on the suburbs, but his strategy is failing 'bigly' Trump orders flags at half-staff to honor 'trailblazer' Ginsburg MORE (D-Calif.) invited President Trump Donald John TrumpUS reimposes UN sanctions on Iran amid increasing tensions Jeff Flake: Republicans 'should hold the same position' on SCOTUS vacancy as 2016 Trump supporters chant 'Fill that seat' at North Carolina rally MORE to address the nation from the House chamber on Feb. 5. Trump accepted the offer, bringing an end to a stunning battle of wills over the annual presidential address.

Now, Trump and Pelosi will have to find common ground on border security or face another shutdown, just as the government recovers from the longest one on record.

The White House says it’s unfazed by the last shutdown fight and appears as dug-in as ever. Press secretary Sarah Huckabee Sanders refused on Monday to take another shutdown off the table and reiterated that Trump could still declare a national emergency to circumvent Congress if he doesn’t get enough wall money.

“If they don’t come back with a deal, that means Democrats get virtually nothing, that will make the president — and force him to have to take executive action.” — Sanders

Bipartisan lawmakers in both chambers will meet on Wednesday to begin negotiations. Trump has already said he doesn’t expect to receive a bill that contains sufficient funds for a border wall.

The Hill : Divisions linger in Trump World over “emergency” gambit.

There is one noteworthy difference as round two of negotiations get underway: Trump and Republicans are not unified this time around.

Republicans are enormously frustrated by what they view as a politically damaging and pointless 35-day shutdown. They’re in no mood for it to happen again, and many are opposed to Trump’s threat of declaring a national emergency if he doesn’t get additional money for a border wall.

Monmouth University : Public opposes the use of emergency powers by a 2-to-1 margin.

Democrats, on the other hand, are flying after what they view as a government shutdown victory. Pelosi touted the party’s unity in a Monday letter to lawmakers.

“Now, as we proceed with the negotiations on the best way to protect our borders and our values, we do so without holding federal employees hostage and we do so with House and Senate Democratic unity. Many thanks to our House Democratic Caucus for remaining strong and unified. As I have said, our diversity is our strength and our unity is our power!” — Pelosi

The Hill : Dem duo poses test for Trump.

The Hill : Lawmakers push to end shutdowns — for good.

As lawmakers work to avoid another shutdown, the fallout from the recent closure is coming into focus.

The partial government shutdown cost the economy $11 billion in total, $3 billion of which is permanently gone, according to the Congressional Budget Office ( The Hill ).

It also delayed the ambitions of House Democrats, who have been eager to flex their newfound powers in the majority.

That begins today, with a slew of hearings on matters such as election security, troop deployment and drug pricing.



LEADING THE DAY





INVESTIGATIONS: Acting Attorney General Matthew Whitaker made waves on Monday, saying that 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’s probe is nearing the end.

“I have been fully briefed on the investigation and I look forward to Director Mueller delivering the final report. I am comfortable that the decisions that were made are going to be reviewed. ...Right now, the investigation is close to being completed.” — Whitaker

Those comments mark the first time the Justice Department has given any indication about the timeframe for the special counsel probe, which is now in its 20th month.

The remarks will be welcome at the White House. While the Mueller probe has resulted in criminal charges against 34 people, including several members of Trump’s inner circle, there have not to date been any charges of conspiracy for colluding with Russia to influence the 2016 election.

“[Whitaker] may just be predicting it wrongly, as many others have done before." — Rep. Jerrold Nadler (D-N.Y.), chairman of the House Judiciary Committee.

> Trump’s former adviser Roger Stone Roger Jason StoneOur Constitution is under attack by Attorney General William Barr Justice IG investigating Stone sentencing: report Romney says Trump's protest tweets 'clearly intended to further inflame racial tensions' MORE will appear in federal court in Washington, D.C., to be arraigned today. Stone is charged with lying to Congress and tampering with a witness. He insists that he’s innocent and says he will not cut a deal with Mueller’s team for a lighter sentence ( The Hill ).

ABC13 : “It’s unconscionable”: Stone speaks before court appearance.

> Trump’s former personal attorney Michael Cohen has a date with Congress before reporting to prison. Cohen will testify before the House Intelligence Committee behind closed doors on Feb. 8. The plan had been for Cohen to testify publicly, but he pulled out, saying that the president was whipping up a frenzy against him and that he feared for his safety ( The Hill ). Cohen shook up his legal team on Monday, adding two new criminal defense attorneys ( Bloomberg ).

More from the investigations front … Lawmakers are seizing on new momentum to crack down on unregistered foreign lobbying ( The Hill ) … William Barr, Trump’s nominee for attorney general, told lawmakers that he did not discuss the special counsel probe with the president ( Reuters ) … Senators introduce bill to require special counsel findings be made public ( The Hill ) ... A judge has delayed a sentencing hearing for Trump’s former campaign chairman Paul Manafort Paul John ManafortOur Constitution is under attack by Attorney General William Barr Bannon trial date set in alleged border wall scam Conspicuous by their absence from the Republican Convention MORE ( The Washington Post ).

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CAMPAIGNS & POLITICS: If generating buzz is the goal for a presidential launch announcement, former Starbucks CEO Howard Schultz’s “60 Minutes” interview on Sunday was a resounding success.

Schultz is moving closer to launching a presidential bid as an independent, a development that has sent Democrats into a panic.

Democrats are agitated that Schultz will draw from left-leaning independents and help Trump get reelected.

Michelle Goldberg : Howard Schultz, please don’t run.

Former New York City Mayor Michael Bloomberg, who is mulling his own bid for the Democratic presidential nomination, is urging Schultz not to run as an independent.

“In 2020, the great likelihood is that an independent would just split the anti-Trump vote and end up re-electing the President. That's a risk I refused to run in 2016 and we can't afford to run it now. We must remain united, and we must not allow any candidate to divide or fracture us. The stakes couldn’t be higher.” — Bloomberg

CNN : Schultz’s 2020 bid gives Democrats a double shot of unease.

The Associated Press : Dems fear Trump reelection if Schultz runs.

The president also weighed in on Schultz’s potential 2020 bid.

Schultz on Monday made a splashy hire, adding Bill Burton, a former Obama aide, to his campaign team.

Looking at the rest of the 2020 presidential field…

> Conservative writer Erick Erickson says “several” unnamed people considering a primary challenge to Trump in 2020 have asked for his advice about running ( The Resurgent ).

“One of them is thinking of mounting an independent challenge from the right and is presently working with lawyers on ballot access issues. He could mount a challenge with his own money.” — Erickson

Washington Post-ABC News poll : Danger mounts for Trump ahead of 2020

Poll : Trump is not meeting public’s modest expectations.

> Advisers close to Hillary Clinton Hillary Diane Rodham ClintonJeff Flake: Republicans 'should hold the same position' on SCOTUS vacancy as 2016 Momentum growing among Republicans for Supreme Court vote before Election Day Warning signs flash for Lindsey Graham in South Carolina MORE are disputing a report that said she might be considering running for president again in 2020 ( NBC News ).

> Sen. Elizabeth Warren Elizabeth WarrenBiden's fiscal program: What is the likely market impact? Warren, Schumer introduce plan for next president to cancel ,000 in student debt The Hill's 12:30 Report - Presented by Facebook - Don't expect a government check anytime soon MORE (D-Mass.) is focusing her presidential run on income inequality and her proposal to tax the ultra-wealthy.

> Lawmakers are already taking sides in the Democratic primary. Rep. Ted Lieu Ted W. LieuThe spin on Woodward's tapes reveals the hypocrisy of Democrats Larry Kudlow defends response to coronavirus: Trump 'led wisely' Lieu on Trump 'playing it down' on coronavirus: 'This is reckless homicide' MORE (D-Calif.) will support his home state senator, Kamala Harris Kamala HarrisHarris honors Ginsburg, visits Supreme Court The Hill's Campaign Report: Trump and Biden vie for Minnesota | Early voting begins in four states | Blue state GOP governors back Susan Collins Kamala Harris: Black Americans have been 'disproportionately harmed' by Trump MORE.

Looking at campaigns in Congress…

> Freshman Rep. Alexandria Ocasio-Cortez Alexandria Ocasio-CortezLawmakers fear voter backlash over failure to reach COVID-19 relief deal Why Democrats must confront extreme left wing incitement to violence The Hill Interview: Jerry Brown on climate disasters, COVID-19 and Biden's 'Rooseveltian moment' MORE (D-N.Y.) has angered some of her colleagues by aligning with a progressive group that has threatened a primary challenge to Democrats they view as insufficiently liberal.

Now, some Democrats in the House are talking about drafting a primary challenger for her ( The Hill ).

Ocasio-Cortez has become an internet sensation in her short time on Capitol Hill, with her viral social media posts and eagerness to spar with her detractors turning the 29 year-old into a star.

The New York Democrat can't run for president until 2024 because she won't turn 35 until the fall of that year. But a slew of AOC-related presidential domain names have already been snatched up, including aoc2024.com , aoc2028.com , aoc2032.com , ocasio-cortez2024.com , ocasio-cortez 2028.com and others. Some have been bought privately while a few were snatched days after her stunning primary victory over former Rep. Joseph Crowley (D-N.Y.) in June.

A recent Axios/Survey monkey poll found that 74 percent of Democrats and people who lean toward the party said they would consider voting for Ocasio-Cortez if she were able to run in 2020. The Constitution stipulates that presidential candidates must at least be 35 years old by the time he or she is inaugurated.

More from the campaign trail … Democrats are targeting 33 GOP-held districts in 2020 as they seek to grow their House majority ( The Hill ) … The House Judiciary Committee will hold a hearing at 10 a.m. today on H.R. 1, “ensuring election access, restoring voting rights, protecting the integrity of our elections, reforming our ethics laws and campaign finance reform” ( Judiciary Democrats ) … Democratic presidential hopefuls are making an early play for Puerto Rican voters ( The Hill) .

IN FOCUS/SHARP TAKES





WHITE HOUSE & ADMINISTRATION: Venezuela: The United States on Monday announced new sanctions against Venezuela's state-owned oil company, ramping up pressure on Nicolás Maduro to forfeit his powers as president. The Trump administration is targeting $7 billion in assets held by Petroleos de Venezuela, S.A., which could result in $11 billion in lost sales over the next year ( The Hill ).

U.S. – China trade: A new round of senior-level trade talks with China begins Wednesday in the Eisenhower Executive Office Building adjacent to the White House, facing a March 1 deadline ( The Hill ).

Trump – China meeting: Trump will meet with Chinese Vice Premier Liu He on Thursday ( Reuters ).

U.S. prosecution of Huawei: U.S. prosecutors on Monday filed criminal charges against China’s largest tech firm, Huawei Technologies Co., alleging it stole trade secrets from a U.S. rival and committed bank fraud by violating sanctions and doing business with Iran ( Bloomberg ). China objected ( The Associated Press ), while the U.S. charges are perceived as complicating trade discussions ( The Associated Press ).

“It has been clear for some time that Huawei poses a threat to our national security, and I applaud the Trump administration for taking steps to finally hold the company accountable.” – Sen. Mark Warner Mark Robert WarnerIntelligence chief says Congress will get some in-person election security briefings Overnight Defense: Trump hosts Israel, UAE, Bahrain for historic signing l Air Force reveals it secretly built and flew new fighter jet l Coronavirus creates delay in Pentagon research for alternative to 'forever chemicals' House approves bill to secure internet-connected federal devices against cyber threats MORE (D-Va.)

Treasury - debt: To finance mounting federal debt, the Treasury Department announced it will borrow $1 trillion for a second straight year ( Bloomberg ).

White House – deficits: The Trump administration disputed a projection by the nonpartisan Congressional Budget Office (CBO) on Monday that said annual deficits exceeding $1.1 trillion will become the norm after 2022. By 2029 the CBO estimated that the deficit will be 93 percent of gross domestic product, which is considered unsustainable by economists.

White House economic adviser Larry Kudlow said the CBO underestimates the economic growth that can result from Trump’s tax cuts and deregulation policies. He said the president will send Congress a budget for fiscal 2020 that again calls for an across-the-board 5 percent reduction in non-defense spending. He sidestepped acknowledging the slim odds that House Democrats would embrace the president’s proposed deep spending cuts heading into an election year.

Pentagon: House Democrats today will grill the Defense Department about the recent Trump-ordered troop deployment to the U.S.-Mexico border. The discussion in the Armed Services Committee relates to the debate that Trump could within weeks declare a national security emergency in order to secure funding to construct an additional 200 miles of wall at the southern border ( The Hill ).

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STATE WATCH: There are plenty of newsy trends emerging outside Washington this week.

Criminal justice: Since 1998, the Vermont Department of Corrections has sent a portion of its prisoners out of state to 13 detention facilities. In a Mississippi prison, there are now 234 Vermont inmates who are 1,366 miles from home ( VTDigger.com ).

Elections: State legislators across the country are making a big push using at least 230 proposed bills to make elections and voting easier ( Stateline/Pew ).

Partisan divides: Minnesota is the only remaining state in the nation where control of a legislature is divided along party lines ( The New York Times ).





The Morning Report is created by journalists Jonathan Easley & Alexis Simendinger. We want to hear from you! @ jeasley@thehill.com and @ asimendinger@thehill.com . We invite you to share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE !





OPINION





Stone indictment shows there was no Trump-Russia collusion, by Andrew McCarthy, opinion contributor, The Hill. http://bit.ly/2MCBvHc

A solution to climate change that even Republicans can get behind, by Mark Reynolds, opinion contributor, The Hill. http://bit.ly/2sVHQEl





WHERE AND WHEN





Hill.TV’s “Rising” program, starting at 8 a.m., features ret. Col. Doug MacGregor, on U.S. and Taliban peace talks; the Heritage Foundation’s Ana Quintana discussing new U.S. sanctions on Venezuelan oil; and College to Congress founder and CEO Audrey Henson, who shares thoughts about compensating interns. http://thehill.com/hilltv

The House convenes at 10 a.m. The House Armed Services Committee holds a hearing at 10 a.m. to examine the Pentagon’s recent deployment of troops to the U.S. southern border. The House Oversight and Reform Committee holds a hearing at 11 a.m. to probe the role of drug companies in prescription drug prices .

The Senate convenes at 10 a.m. The Senate Judiciary Committee is scheduled to take up the nomination of former attorney general Barr to again fill that job, along with the nominations of 45 other appointees at 10 a.m. The Senate Intelligence Committee will discuss global threats during an open hearing at 9:30 a.m. with Christopher Wray, director of the FBI; Gina Haspel, director of the CIA; Dan Coats Daniel (Dan) Ray CoatsFBI chief says Russia is trying to interfere in election to undermine Biden The Hill's Morning Report - Sponsored by The Air Line Pilots Association - Trump, Biden renew push for Latino support Former Intel chief had 'deep suspicions' that Putin 'had something on Trump': book MORE, director of the Office of National Intelligence; National Security Agency Director General Paul Nakasone; Defense Intelligence Agency Director General Robert Ashley; and Director of the National Geospatial-Intelligence Agency Robert Cardillo.

The president has no public events scheduled.

Vice President Pence will join a White House meeting at 3:45 p.m. with Carlos Alfredo Vecchio, chargé d’affaires of Venezuela.

Impeachment advocate Tom Steyer and Rep. Al Green Alexander (Al) N. GreenThe Memo: Trump's race tactics fall flat Trump administration ending support for 7 Texas testing sites as coronavirus cases spike The Hill's Coronavirus Report: Miami mayor worries about suicide and domestic violence rise; Trump-governor debate intensifies MORE (D-Texas) will hold a press conference at 9:30 a.m. to discuss draft articles of impeachment against Trump to be delivered by Steyer’s group, “Need to Impeach,” to members of Congress. Location: 101 Constitution Ave. NW, 3rd floor rotunda.





ELSEWHERE





> Tech: Facebook and Google are in the crosshairs after the latest news media layoffs drew more attention to the two tech giants' stranglehold on the digital advertising market. Lawmakers and press advocates accuse the two companies of making it nearly impossible for digital publishers to survive under existing business models ( The Hill) . Facebook on Monday unveiled new plans to combat “fake news” ahead of the 2020 presidential election ( Facebook ).

> Media: Meanwhile, let’s mull some psychological reasons why journalists should be allergic to predictions (now that the 2020 presidential contest is upon us). “You’re driving forward looking into the rearview mirror” ( The New York Times ).

> Football: NFL Commissioner Roger Goodell is expected to break his silence this week about a controversial no-call that ended the New Orleans Saints' season last week. It drew the ire of fans and grabbed the attention of state and federal lawmakers. League officials have remained publicly silent, but as the New England Patriots and Los Angeles Rams prepare to meet in Atlanta for the Super Bowl on Sunday, Louisiana lawmakers are vocal about a major dispute in sports ( The Hill ).

THE CLOSER





And finally … It’s winter and thus cold in many states, so what does everyone talk about? The weather. Extreme weather. Weather that closed state offices in Georgia today, and could mess with football and zoos .

These headlines gave us the shivers this morning.

❆ 75 percent of the US population will suffer below-freezing temps this week ( CNN ).

❆ A polar vortex is descending on the Midwest ( AccuWeather ).

❆ In Chicago, the coldest day of the year is expected midweek ( The Chicago Tribune ).

❆ Wisconsin Gov. Tony Evers declares a state of emergency ahead of the record cold ( Fox9 ).

Leave it to the Weather Channel to keep things in perspective.





