Welcome to The Hill’s Morning Report. Happy Thursday in a brand-new year! Our newsletter gets you up to speed on the most important developments in politics and policy, plus trends to watch. Alexis Simendinger and Al Weaver are the daily co-creators, so find us @asimendinger and @alweaver22 on Twitter and recommend the Morning Report to your friends. CLICK HERE to subscribe!







*** It’s 2020! … The Senate’s impeachment trial date remains unknown … 32 days until the Iowa caucuses ... 33 days until President Trump Donald John TrumpBarr criticizes DOJ in speech declaring all agency power 'is invested in the attorney general' Military leaders asked about using heat ray on protesters outside White House: report Powell warns failure to reach COVID-19 deal could 'scar and damage' economy MORE’s State of the Union address … 40 days until the New Hampshire primary ***







The Democratic primary field is hitting the homestretch of the pre-voting period as presidential candidates make final plans for first-in-the-nation primary contests in Iowa and New Hampshire. This week, candidates leading in recent polls are also trying to project dominance in the money chase as they announce fundraising totals after 2019 came to a close.

With roughly a month until the Iowa caucuses, the primary debate swirls around four candidates who lead in current voter surveys and war chests: former Vice President Joe Biden Joe BidenThe Memo: Warning signs flash for Trump on debates Senate Republicans signal openness to working with Biden National postal mail handlers union endorses Biden MORE, Sen. Bernie Sanders Bernie SandersSenate Republicans signal openness to working with Biden Hillicon Valley: DOJ indicts Chinese, Malaysian hackers accused of targeting over 100 organizations | GOP senators raise concerns over Oracle-TikTok deal | QAnon awareness jumps in new poll Schumer, Sanders call for Senate panel to address election security MORE (I-Vt.), Sen. Elizabeth Warren Elizabeth WarrenNo new taxes for the ultra rich — fix bad tax policy instead Democrats back away from quick reversal of Trump tax cuts It's time for newspapers to stop endorsing presidential candidates MORE (D-Mass.) and former South Bend, Ind., Mayor Pete Buttigieg Pete ButtigiegBogeymen of the far left deserve a place in any Biden administration Overnight Defense: Woodward book causes new firestorm | Book says Trump lashed out at generals, told Woodward about secret weapons system | US withdrawing thousands of troops from Iraq A socially and environmentally just way to fight climate change MORE.

According to Niall Stanage’s latest candidate rankings, Biden, despite sitting as a relatively weak frontrunner, remains in contention to accept his party’s nomination in Milwaukee six months from now. Despite multiple strikes against him, including trailing in the first two early primary states in recent polls, the former vice president continues to lead in national polling and, importantly, leads the president in head-to-head polling at a time when other Democratic contenders do not.

Behind Biden is Sanders, a fellow septuagenarian, who has turned in a strong stretch of campaigning. Buoyed by Warren’s downturn since late October, the Vermont Independent who tops polls in New Hampshire and is a tick behind Buttigieg in Iowa has the most financial might of anyone in the top tier.

Sanders announced this morning that he raised a whopping $34.5 million in the last three months of 2019, the highest fundraising number of the 2020 cycle on the Democratic side. According to the campaign, he has raised $96 million since launching his bid in February thanks to more than 5 million donations, with the average contribution at $18. In December alone, Sanders raised $18 million from 900,000 donors.

“Bernie Sanders is closing the year with the most donations of any candidate in history at this point in a presidential campaign,” Faiz Shakir, Sanders’s campaign manager, said in a statement. “He is proving each and every day that working class Americans are ready and willing to fully fund a campaign that stands up for them and takes on the biggest corporations and the wealthy. You build a grassroots movement to beat Donald Trump and create a political revolution one $18 donation at a time, and that’s exactly why Bernie is going to win.”

Sanders’s campaign is looking to do something in Iowa it failed to do in 2016: win. He lost the Hawkeye State narrowly to Hillary Clinton Hillary Diane Rodham ClintonBarr criticizes DOJ in speech declaring all agency power 'is invested in the attorney general' Virginia Democrat blasts Trump's 'appalling' remark about COVID-19 deaths in 'blue states' The Hill's Campaign Report: Biden asks if public can trust vaccine from Trump ahead of Election Day | Oklahoma health officials raised red flags before Trump rally MORE four years ago before taking home New Hampshire a week later.

The Associated Press: Sanders, 78, released details of his medical records this week indicating “modest heart muscle damage” as a result of his heart attack in 2019.

As for Warren, who sits third in the Stanage rankings, it is far too early to count her out despite a rough couple of months, headlined by the constant attacks she faced over her “Medicare for All” plan. She continues to poll well in the two early states, but how she fares against Sanders will be the thing to watch moving forward. The candidate who emerges more intact after Iowa and New Hampshire will be well positioned to become the preferred choice of the left and the possible nominee.

Meanwhile, Buttigieg sits fourth in Stanage’s candidate rankings, with his hopes pinned squarely on Iowa. While the outgoing mayor leads there, his challenges elsewhere remain, including his continued struggles with African American voters.

The New York Times: Elizabeth Warren isn’t talking much about “Medicare for All” anymore.

Jonathan Allen: Democrats' 2020 split risks handing Trump a big advantage.

With the turn of the new year, candidates have another opportunity to show off their readiness for coming months in the form of their bank accounts as they release their fourth quarter fundraising figures.

Buttigieg was first out of the gate on Wednesday, announcing that he raised nearly $25 million in the last three months of 2020. With figures in from him and Sanders, the wait is on for those from Biden and Warren.

Andrew Yang Andrew YangDoctor who allegedly assaulted Evelyn Yang arrested on federal charges The Hill's Campaign Report: Biden weighs in on police shootings | Who's moderating the debates | Trump trails in post-convention polls Buttigieg launches his own podcast MORE also revealed early Thursday that he raised $16.5 million in the fourth quarter, a big jump for his campaign after raising $10 million in the previous fundraising period (The New York Times).

Politico: Looking for an edge, Sen. Amy Klobuchar Amy KlobucharEPA delivers win for ethanol industry angered by waivers to refiners It's time for newspapers to stop endorsing presidential candidates Biden marks anniversary of the Violence Against Women Act, knocks Trump and McConnell MORE (D-Minn.) chases Trump voters.

The Washington Post: Michael Bloomberg Michael BloombergThe Hill's 12:30 Report - Presented by Facebook - Latest with the COVID-19 relief bill negotiations The Memo: 2020 is all about winning Florida The Hill's Morning Report - Sponsored by The Air Line Pilots Association - Trump, Biden renew push for Latino support MORE’s business in China has grown. That could create unprecedented entanglements if he is elected president.

On the other side of the aisle, the president remains in a strong position to win a second term in office, having set up a behemoth of an operation as he continues to battle over impeachment and a number of other issues that could have an effect on his chances. Pulling double duty, Stanage took a look at questions the president faces in his quest to retain the White House until 2024.

Chief among the questions is impeachment’s impact. It remains highly unlikely that the Senate will convict the president — no matter when the trial takes place — meaning that he will become the first president to be impeached and run for reelection in the aftermath. Despite impeachment being the top issue in the news since September, Trump’s approval numbers have remained static and have hardly budged, exhibiting the polarization of the electorate that remains hunkered down one way or another.

Two other key issues for Trump center around the economy and the Democrats’ nominee this summer. Positive U.S. growth and a favorable employment picture will continue to boost Trump’s chances in November, while the Democrats’ eventual political standard bearer helps determine whether voters give the president a second term.

Trump is scheduled to return to Washington from Florida this weekend, days before his first reelection campaign rally of the new year, in Toledo, Ohio. He also plans to rally supporters in Milwaukee on Jan. 14 at the same time that Democratic presidential contenders gather in Des Moines for the first in a series of televised debates in 2020.

Reuters: Trump re-election campaign raises $46 million in fourth quarter.







LEADING THE DAY





INTERNATIONAL: In Iraq, militia fighters believed to be organized and backed by Iran, retreated across the Tigris River on Wednesday after days of clashes with U.S. and Iraqi security forces guarding the U.S. Embassy and personnel in Baghdad. No injuries were reported after protesters forced their way into a reception area at the U.S. compound and set fire to property while vandalizing some structures.

“After achieving the intended aim, we pulled out from this place triumphantly,” said Fadhil al-Gezzi, a militia supporter. “We rubbed America’s nose in the dirt” (The Associated Press).

American airstrikes on Sunday killed 25 fighters of an Iran-backed militia in Iraq, Kataib Hezbollah. The Trump administration said those U.S. strikes were in retaliation for last week’s killing of an American contractor and the wounding of American and Iraqi troops in a rocket attack on an Iraqi military base that the U.S. blamed on the militia. The U.S. strikes angered the Iraqi government, which called them an unjustified violation of its sovereignty.

With tensions high, Trump threatened a “big price” for this week’s violence, which he blamed on Iran. He ordered about 750 U.S. soldiers to be deployed to the Middle East as about 3,000 more prepared for possible deployment within days (The Associated Press).

Secretary of State Mike Pompeo Michael (Mike) Richard PompeoThe Hill's Morning Report - Sponsored by The Air Line Pilots Association - Pence lauds Harris as 'experienced debater'; Trump, Biden diverge over debate prep Trump's foreign policy successes confound his detractors It's time for a Jackson-Vanik Amendment for China MORE, who was scheduled to visit Ukraine later today along with four other countries this week, on Wednesday postponed his travel to remain in Washington to monitor the situation in Iraq (PBS). The president is not scheduled to return to Washington from his estate in Florida until Sunday.

> North Korea: The timing of new challenges in Iraq and North Korea is critical, writes David Sanger of The New York Times. “Both the Iranians and the North Koreans seem to sense the vulnerability of a president under impeachment and facing reelection, even if they are often clumsy as they try to play those events to their advantage,” he reported.

“ Kim Jong Un Kim Jong UnSouth Korea warns of underwater missile test launch by North Korea Trump says he didn't share classified information following Woodward book The Hill's Morning Report - Sponsored by National Industries for the Blind - Woodward book revelations rock Washington MORE ’s declaration on Wednesday that the world would ‘witness a new strategic weapon’ seemed to be the end of an 18-month experiment in which Mr. Trump believed his force of personality — and vague promises of economic development — would wipe away a problem that plagued the last 12 of his predecessors.”

Trump on Tuesday said he was still optimistic about diplomatic efforts with Kim, even as the North Korean leader warned the president that denuclearization of the Korean Peninsula will never happen (CNN). Trump and Kim last met in June.

The president’s former national security adviser John Bolton John BoltonThe Hill's Morning Report - Sponsored by The Air Line Pilots Association - Pence lauds Harris as 'experienced debater'; Trump, Biden diverge over debate prep DOJ launches probe into Bolton book for possible classified information disclosures Gary Cohn: 'I haven't made up my mind' on vote for president in November MORE, who has been sharply critical of Trump’s stance on North Korea, tweeted on Wednesday that the United States should resume military exercises with South Korea and hold hearings to determine U.S. troop readiness on the Korean Peninsula in the wake of Kim’s assertion that he can violate a ban on testing nuclear weapons (The New York Post).

Meanwhile, United Nations Secretary-General Antonio Guterres, through a spokesman, is said to be “deeply concerned” about North Korea’s threats to resume weapons tests (Reuters).

Reuters: Faster rockets, more warheads: What North Korea could gain from new weapons development.







IN FOCUS/SHARP TAKES





CONGRESS & ADMINISTRATION: Lawmakers will be facing a lengthy to-do list in the coming days as they return to Capitol Hill to kick off the second half of the 116th Congress, fresh off of voting on impeachment in the House and as the process is set to move to the Senate.

Jordain Carney took a look at five high-profile fights to keep an eye on, headlined by impeachment, which is expected to be taken up by the Senate. However, the timing remains in flux as Speaker Nancy Pelosi Nancy PelosiPowell warns failure to reach COVID-19 deal could 'scar and damage' economy Overnight Defense: House to vote on military justice bill spurred by Vanessa Guillén death | Biden courts veterans after Trump's military controversies Intelligence chief says Congress will get some in-person election security briefings MORE (D-Calif.) withholds sending the two articles of impeachment to Senate Majority Leader Mitch McConnell Addison (Mitch) Mitchell McConnellSenate Republicans signal openness to working with Biden Hillicon Valley: DOJ indicts Chinese, Malaysian hackers accused of targeting over 100 organizations | GOP senators raise concerns over Oracle-TikTok deal | QAnon awareness jumps in new poll The Hill's Campaign Report: Biden asks if public can trust vaccine from Trump ahead of Election Day | Oklahoma health officials raised red flags before Trump rally MORE (R-Ky.), who is expected to hold negotiations in the near future over the parameters of a Senate trial.

Democrats continue to push for key witnesses to be included in a Senate trial, which is expected to consume much of the January floor schedule, boxing out all other items from coming to the upper chamber during that time, including judicial nominations and the United States-Mexico-Canada Agreement (USMCA), which passed the House just before the holidays.

Bloomberg News: Pelosi and McConnell begin 2020 in standoff over Trump impeachment trial.

The Hill: Ten senators to watch on Trump impeachment trial.

Carl Hulse, The New York Times: McConnell, master of the blockade, plots impeachment strategy.

NPR: Trump impeachment trial turns spotlight on White House lawyer Pat Cipollone.

Once impeachment wraps, the USMCA is expected to be the next item on the agenda, as it has already garnered bipartisan support in the House, where it was overwhelmingly passed.

The Senate Finance Committee is scheduled to mark up the trade deal on Tuesday, and Senate GOP leaders expect they’ll ultimately be able to pass the USMCA early this year. Passage of the landmark trade deal will require only a simple majority instead of the 60 votes normally needed for advancing legislation, and likely hand the president a key victory in an election year.

Among the other items to watch are drug pricing, surveillance reform and government spending, even though a funding package was signed into law before Christmas break. However, the process will take only a short break before they start work on fiscal 2021, which could be a fraught topic as the presidential race heats up.

Administration policy to watch continues to be vaping. The president told reporters at his New Year’s Eve celebration at his Mar-a-Lago resort in Palm Beach, Fla., that the federal government will announce new rules to combat underage use of e-cigarettes.

Trump said the federal plan seeks to protect families, children and the industry, adding the government will likely take “certain flavors” of e-cigarettes off the market “for a period of time" (NBC News). While returning to his Florida estate on Wednesday, Trump’s motorcade was greeted with protesters dressed in T-shirts that said, “We vape, We vote.” They waved signs that said, “Don’t ban my vape,” and “Freedom to Vape.”

The Hill: Trump signs law to cut down on robocalls.

The Wall Street Journal: Surging Amtrak seeks green light from Congress.

The Hill: Trump signs bill to eliminate rape kit testing backlog.







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





In 2020, will Democrats embrace vanilla? by George F. Will, opinion columnist, The Washington Post. https://wapo.st/36eZS6E

Already had plenty of Trump 2020? He’s a bad show, but it’s not low-flow, by Gail Collins, opinion columnist, The New York Times. https://nyti.ms/2sD52Lf







WHERE AND WHEN





Hill.TV’s “Rising” program features Jermaine Johnson, campaign chairman in South Carolina for Yang’s presidential bid; The Hill’s Senate reporter Jordain Carney, who discusses the latest on the pending impeachment trial; and Jamie Kilstein, host of the “Jamie Kilstein Podcast,” who unpacks the political news of the day. The TV coverage starts at 9 a.m. ET at http://thehill.com/hilltv or on YouTube at 10 a.m. at Rising on YouTube.

The House holds a pro forma session at 10 a.m. and convenes next Tuesday, when the second session of the 116th Congress meets.

The Senate holds a pro forma session that begins at 6:30 p.m. and returns to work at noon on Friday. The next votes in the chamber are scheduled on Monday.

The president continues his holiday break in Palm Beach, Fla.







ELSEWHERE





➔ Supreme Court: In his annual year-end report, Chief Justice John Roberts touted the independence of the judiciary and the role of U.S. judges in promoting civic education. “In our age, when social media can instantly spread rumor and false information on a grand scale, the public’s need to understand our government and the protections it provides is ever more vital,″ he wrote. Roberts will serve this year as the presiding judge at the president’s Senate impeachment trial (The Associated Press). … And here’s all you need to know about seven significant Supreme Court cases to watch in 2020 (The Hill).

➔ Drug prices: Pharmaceutical companies are hiking the costs of hundreds of drugs as the new year begins. More than 250 medications are more expensive today than earlier this week, according to data analyzed by health care research firm 3 Axis Advisors. Reuters published its list on Tuesday. Soaring U.S. prescription drug prices will continue to be a central issue in this year’s presidential campaign (Reuters).

➔ Boeing: Airbus, which is headquartered in France, surpassed Boeing to beat its own goal with 863 jet deliveries in 2019, Reuters reported. For the first time since 2011, Airbus is the world’s largest planemaker, seizing the crown from embattled U.S. rival Boeing.

➔ Vatican: Pope Francis apologized on Wednesday for becoming visibly frustrated and swatting away the hand of a fellow admirer of the nativity scene in St. Peter’s Square. Francis’s remarks came during his homily at New Year’s Day mass, saying that he lost “patience” on Tuesday with a woman who pulled him (The Associated Press). In the homily, Francis spoke out against violence toward women, likening it to profaning God and saying that they should be more involved in decision making at high levels (The Associated Press).







THE CLOSER





And finally … Analysts are divided about whether the GOP tax overhaul of 2017 — which eliminated many tax deductions for middle-income Americans and doubled standard deductions — is depressing charitable giving. United Way believes the law effectively discourages donations and wants Congress to restore deductibility for all filers.

Smaller, local charities are concerned about what they see as a giving gap, even with a healthy economy and robust stock market. Wealthy donors give, but those earners with modest means may have less of a financial or tax incentive to contribute a percentage of their income to various charities (CNBC).

Rising income inequality, tax changes and the pace of the U.S. economy are being studied for their impacts on charitable giving, and some experts worry that donations could become “increasingly dominated by a small number of very wealthy individuals and foundations,” according to the “Gilded Giving 2018” report by the Washington, D.C.-based Institute for Policy Studies (The Deseret News, Utah).





