Good morning, Power people. And safe travels to environmental activist Greta Thunberg who set sail yesterday for New York from the English coast to attend the U.N. climate summits. Reach out, sign up, forward this email to your friends. Thanks for waking up with us.
🚨TENSIONS WITH IRAN CONTINUE: "The United States has applied to seize the Iranian oil tanker being held at Gibraltar, the government of the British territory revealed on Thursday, just as the authorities there were considering whether to release the ship they detained more than a month ago," the New York Times's Richard Pérez-Peña and Megan Specia report.
"The American action is the latest in a series of back-and-forth jabs that the United States and Iran have traded recently, raising fears of escalation into an all-out conflict in the Persian Gulf."
🚨HICKENLOOPER IS EXPECTED TO DROP OUT: "Former Colorado governor John Hickenlooper is preparing to withdraw from the contest for the Democratic presidential nomination and could announce a decision as early as Thursday, according to three knowledgeable Democrats," our colleague Dan Balz reports.
- And drop in?: "Hickenlooper reportedly has not made a final decision about the Senate, according to two knowledgeable people," Dan writes. "A third Democrat following the movements in Colorado said he believed that Hickenlooper will join the Senate race soon, although did not predict the exact timing."
- The Associated Press's Nicholas Riccardi was the first to report the news.
IS THIS TIME DIFFERENT?: As the debate over gun control plays out for the umpteenth time, there's cautiously optimistic chatter in Washington that the Dayton and El Paso aftermath might actually end with more than just thoughts and prayers.
- “The president's leaned in, he's having his administration lean in, and we're working hard to see if there is a path forward,” Eric Ueland, President Trump's director of legislative affairs, told Power Up last night of the White House efforts.
- Trump's legislative affairs team is working to gather an array of options and information to present to the president, along with a better sense from members of Congress about what legislation they could realistically get behind.
The biggest factor: What Trump would actually sign on gun control. The president has reached out to a handful of Democratic and Republican senators to discuss possible ways forward, but has yet to back a specific piece of legislation.
- Yin: The president has repeatedly said he supports expanded background checks and “red flag” laws to deny guns to someone who is deemed dangerous to themselves or others.
- Yang: Trump has also said views of the NRA, which donated $30 million to his 2016 campaign, would be “fully represented and respected.”
The White House and Hill staffers also confirmed that Ivanka Trump has contacted various senators on both sides of the aisle in an effort to facilitate discussions between the Hill and her father.
“She has trusted relationships on both sides of the aisle and she is working in concert with the White House policy and legislative teams,” a spokeswoman told us.
He 'alone can fix it'?: Senate Majority Leader Mitch McConnell (R-Ky.) has come under fire from Democrats for rebuffing their calls to bring senators back from recess to vote on two House bills requiring comprehensive background checks that Trump has previously said he would veto. Sources on Capitol Hill — both Republicans and Democrats — who are involved in gun control negotiations say the ball is squarely in Trump's court to line up GOP support.
- “It’s sort of one of those issues that only Trump could give Republicans the cover that they need to make this politically viable,” a Republican Senate aide working on the issue told us. Any successful measure would need 60 votes in the Senate and significant GOP support.
- “The only Republican worth negotiating with is Donald Trump because he's the only one that matters and the only one that can get this done,” a Democratic Senate aide who is also working on legislative efforts told Power Up. “The only way that this happens is if Trump endorses a bill.”
- “What I see that's different here is that you have a Democratic House — you were never going to get anything through a Republican House of Representatives. There would have been a mutiny. And you have a president potentially willing to take on more of a leadership role,” the Republican aide added.
Sen. Susan Collins (R-Maine) told Politico's Burgess Everett and Marianne Levine that she's increasingly optimistic about passing new gun regulations following the latest mass shootings, largely due to the unique leverage Trump wields over her fellow Republicans. But Collins is a moderate who has previously supported an assault weapons ban, a proposal that's politically toxic to many of her GOP colleagues. She's also expected to face a stiff reelection challenge in 2020. She isn't the Republican to watch:
- “The president is key on this,” Collins told Everett and Levine “He does seem to be calling for some sort of background check tightening and also some sort of red flag bill. Now obviously the details matter a great deal but if he advocates those two positions that will help us with members of the Republican Caucus.”
- “This is the moment. When you have two incidents like that in the same weekend, I think conservatives and Republicans lose in the long run if we don’t do something to change the dynamic. And I’m about as hard a Second Amendment guy as there is,” Sen. Mike Braun (R-Ind.) told Politico.
That being said: Trump has previously capitulated to NRA pressure after the Parkland, Fla., shooting, abandoning his call for tougher gun laws. There are those who remain privately pessimistic that Trump will follow through on endorsing extensive background checks.
- “I was here when we watched 20 babies get shot to death and we did nothing,” a Democratic Senate aide told Power Up, referring to the shooting at Sandy Hook Elementary.
The past two mass shootings come as the NRA has been roiled by scandal and internal upheaval and as the public has overwhelmingly come around to supporting background checks. From a Fox News poll released yesterday that was conducted a week after El Paso and Dayton:
- “On specific measures to reduce gun violence, there’s broad support for requiring criminal background checks on all gun buyers (90 percent) and passing 'red flag' laws that allow police to take guns from people shown to be a danger to themselves or others (81 percent)," per Fox News's Dana Blanton.
- “Forty-seven percent have an unfavorable opinion [of the NRA]. This is the first time the organization has had a net negative rating.”
- “Approval of Trump’s response to the shootings stands at 37 percent, and 46 percent think the administration has made the country less safe from mass shootings.”
- David Chipman, a senior policy analyst for the advocacy group Giffords, told my colleagues Amy Wang, Tom Hamburger, Josh Dawsey and Marissa Lang that the turmoil at the NRA has “created room for 'responsible' gun owners to make progress on gun safety issues. The organization has organized gun owners in states known as NRA strongholds to advocate for new restrictions.”
Philadelphia Mayor Jim Kenney (D) to reporters after six police officers were shot by a suspect in a north Philly neighborhood late Wednesday:
“Our officers need help. They need help. They need help with gun control," said Philadelphia's Mayor during an hourslong standoff in the city that left 6 officers shot. https://t.co/vxtzmRYIIE pic.twitter.com/UZIpMtK3zY— CBS News (@CBSNews) August 15, 2019
ISRAEL SET TO DENY OMAR, TLAIB ENTRY: "Democrats in Congress are quietly bracing for a new public fight with Israeli Prime Minister Benjamin Netanyahu after his government informed congressional leaders on Wednesday that it would formally announce that Representatives Ilhan Omar of Minnesota and Rashida Tlaib of Michigan would be denied entry into Israel because of their support of a boycott movement against Israel, said several congressional aides familiar with the discussions," our colleague John Hudson scoops.
- But it's possible there will be a last minute change of heart: "... It is now unclear if Netanyahu will follow through on that decision following a private backlash from the Democratic leadership and some U.S.-based pro-Israel groups, who warned against barring sitting members of congress from entering Israel because of their political beliefs, said the aides, who spoke on condition of anonymity to describe sensitive discussions," John writes.
- The plan as it stands: "The Israeli government did not make an announcement on Wednesday as planned but informed lawmakers they would make an announcement on the issue on Thursday."
- Why this is happening: "The question about their entry status arose because of Omar and Tlaib’s upcoming visit to Israel and the West Bank slated for Friday and a recently passed Israeli law that denies entry visas to foreign nationals who publicly back or call for any kind of boycott — economic, cultural or academic — against Israel or its West Bank settlements."
WALL STREET’S WORST DAY OF THE YEAR: “The U.S. stock market tumbled to its worst day of the year on Wednesday, after a reliable predictor of looming recessions flashed for the first time since the run-up to the 2008 financial crisis. The Dow Jones industrial average fell 800 points, or about 3 percent, and has lost close to 7 percent over the past three weeks,” our colleagues Damian Paletta, Thomas Heath and Taylor Telford report.
One wonky development worried investors a lot: The inverted yield curve.
- What is it?: The inverted yield curve “occurs when the interest rates on short-term bonds are higher than the interest rates paid by long-term bonds,” our colleague Jonnelle Marte writes in a helpful explainer.
- Slow down I haven't had my coffee yet: “What it means is that people are so worried about the near-term future that they are piling into safer long-term investments,” Jonnelle continues. “In a healthy economy, bondholders typically demand to be paid more — or receive a higher 'yield' — on longer-term bonds than they do for short-term bonds … In contrast, bonds that require investors to make shorter time commitments, say for three months, don’t require as much sacrifice and usually pay less.”
- Why you should care about it: “The yield curve has inverted before every U.S. recession since 1955, although it sometimes happens months or years before the recession starts. Because of that link, substantial and long-lasting inversions of the yield curve are largely viewed as a strong predictor that a downturn is on the way.”
It's not just in the United States:
- “Two of the world’s largest economies, Germany and the United Kingdom, appear to be contracting even as the latter forges ahead with plans to leave the European Union. Growth also has slowed in China, which is in a bitter trade feud with the United States,” Damian, Thomas and Taylor write. “Meanwhile, Argentina’s stock market fell nearly 50 percent earlier this week after its incumbent president was defeated by a left-wing opponent.”
Counterpoint: Former Federal Reserve chair Janet Yellen told Fox Business she doesn't see a recession as the most likely outcome of the inverted yield curve.
- "Historically, it’s been a pretty good signal of recession and I think that’s why the markets pay attention to it but I would really urge that on this occasion it may be a less good signal," Yellen said. "And the reason for that is there are a number of factors other than market expectations about the future path of interest rates that are pushing down long term yields."
What is an inverted yield curve? It marks a point on a chart where short-term investments in U.S. Treasury bonds pay more than long-term ones. Here's why it's widely regarded as a bad sign for the economy. https://t.co/VCBISqhGR3 pic.twitter.com/sH1whoYLNb— CNBC (@CNBC) August 14, 2019
Why this is bad news for Trump: “An inversion in this corner of the bond market has occurred before every recession since the 1950s, raising the potential for the 2020 election to look more like 2008 when a cratering economy dominated the political debate,” Politico's Ben White reports. “That could derail Trump’s plans to make 2020 more like 1984 when Ronald Reagan ran a “Morning in America” campaign based on faster growth.”
- The White House does not see a recession on the horizon: “Trump administration officials strongly reject the notion that the U.S. is heading for a recession. They say that continued strong jobs and wage growth will overcome any slowdown caused by uncertainty over trade,” White writes. “And they continue to maintain that Trump is working hard to overcome long-standing cheating by China on trade.”
If a recession occurs, history will not be Trump's friend, per our colleague Aaron Blake:
- Since the Civil War, only one president has won reelection with a recession occurring in the final two calendar years of his first term: William McKinley in 1900.
- Since then, all four presidents running for reelection in the midst of a recession lost: William Taft, Herbert Hoover, Jimmy Carter and George H.W. Bush.
- As Aaron points out, a recession could be even worse for Trump: “His approval rating already languishes in the low to mid-40s, even with a strong economy and an unemployment rate at 3.7 percent. Some polls have shown a majority of Americans approve of his job performance on the economy, but he seldom cracks 50 percent on any other issue.”
EPSTEIN'S AUTOPSY RAISES MORE QUESTIONS: “An autopsy found that financier Jeffrey Epstein sustained multiple breaks in his neck bones, according to two people familiar with the findings, deepening the mystery about the circumstances around his death,” our colleagues Carol D. Leonnig and Aaron C. Davis scoop in the first details to be reported from Epstein's autopsy.
- The problem: “Among the bones broken in Epstein’s neck was the hyoid bone, which in men is near the Adam’s apple. Such breaks can occur in those who hang themselves, particularly if they are older, according to forensics experts and studies on the subject. But they are more common in victims of homicide by strangulation, the experts said.
- More info.: “That investigation can include analysis of the location of the noose, how narrow the noose is, and if the body experienced any substantial drop in the course of the hanging,” Carol and Aaron write. “A handful of studies conducted over the past decade have produced conflicting results about the likelihood of a hyoid break in a suicide."
- No official cause of death: “People familiar with the autopsy, who spoke on the condition of anonymity due to the sensitive stage of the investigation, said [New York chief medical examiner's] office is seeking additional information on Epstein’s condition in the hours before his death,” Carol and Aaron write.
IN OTHER NEWS:
- Read all of this incredible story on the history of slavery in America: "The 1619 Project." Edited by Nikole Hannah-Jones.
- Days since a controversial Steve King comment? Zero. "Steve King: 2020 Democratic presidential candidates, Republicans condemn 'rape and incest' remarks." By the Des Moines Register's Linh Ta and Nick Coltrain.
- Singularly focused on trade: Trump resists aides’ pressure to back Hong Kong protesters. By Politico’s Eliana Johnson, Nahal Toosi, and Ben White.
- The trade war continues: China threatens retaliation if US tariff hikes go ahead. By The Associated Press.
- All Songs Rewind: The Songs That Got You Through School. By NPR’s Robin Hilton and Bob Boilen.
- Some good news: Russian plane hits birds on takeoff, lands in cornfield. Everyone survives. By The Post’s Will Englund.
- Always read Marianne: Marianne Williamson shares her thoughts on memes, Goop, and Mar-A-Lago. By Interview Magazine’s Ben Barna.