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By Ben Kamisar
WASHINGTON — Maine independent Sen. Angus King, cautioned Democrats in Congress Sunday that there’s not enough public evidence at this point to impeach President Donald Trump without the issue devolving into partisan warfare.
“I don’t think that there’s evidence yet available to the public where there would be more or less a consensus that this is an appropriate path,” King said in an appearance on “Meet the Press.”
“My concern is that if impeachment is moved forward on the evidence that we have now, at least a third of the country would think it was just political revenge and a coup against the president,” said the senator, who caucuses with Democrats. “That wouldn’t serve us well at all. The best way to solve a problem like this, to me, is elections.”
King added that, as a member of the Senate Intelligence Committee, he’s privy to additional information about special counsel Robert Mueller’s investigation that’s not available to the public. And he said that Congress needs to be careful that it doesn’t set a strictly partisan standard on an issue as important as impeachment.
“I’m a conservative when it comes to impeachment. I think it’s a last resort and only when the evidence is clear of a really substantial legal violation,” he said.
“We may get there, but we are not there now.”
King’s comments come after a rough week for Trump, particularly as it relates to Mueller’s investigation into possible collusion between the president’s campaign and Russia during the 2016 election.
Last week, federal prosecutors accused Trump of directing his former lawyer, Michael Cohen to commit campaign finance felonies regarding hush-money payments to two adult film entertainers who claim they had affairs with Trump years ago.
Cohen also admitted that he lied to Congress about his discussions with Trump and his family members about a plan to build a Trump Tower in Moscow.
In a possible preview of GOP opposition to any impeachment effort, Kentucky Republican Sen. Rand Paul argued that the special counsel’s investigation has been overly broad to begin with.
He said that prosecutors have “over-criminalized” possible campaign finance violations related to Cohen’s hush-money payments.
Paul argued that Mueller’s agreements with Cohen and former National Security Adviser Michael Flynn could be proof of “prosecutorial abuse” that has pressured Trump allies into finding something to provide to the special counsel in exchange for a lighter sentence.
And he downplayed the idea that Trump seeking to build a Trump Tower in Russia while running for president was a problem.
“If you were asking and saying ‘I will give you something in exchange for letting us build a hotel, that would be wrong. But i haven’t heard any evidence of that,” the Kentucky senator said.
“Just trying to build a hotel somewhere, I can’t imagine how that would be criminal or why you’d lie about it.”
Is Trump right to blame the Fed for market plunge?
It takes a lot to kill an economic expansion, typically requiring a major shock to bring growth to a halt and trigger a U.S. recession.
This week investors signaled that moment may have arrived, and one big question is whether that shock has come from President Donald Trump’s trade war or a mistake by policymakers at the Federal Reserve.
As bond markets flashed concern about recession on Wednesday and major stock indices cratered, Trump put the blame squarely on the Fed for continuing to raise rates through the end of last year. Even Trump foe and New York Times economics columnist Paul Krugman dinged the Fed for “a clear mistake.”
In raising interest rates four times last year “the Federal Reserve acted far too quickly, and now is very, very late,” in reversing itself and cutting borrowing costs only modestly so far, Trump tweeted. “Too bad, so much to gain on the upside!”
Earlier on Wednesday, White House trade adviser Peter Navarro told Fox Business Network the central bank should cut rates by half a percentage point “as soon as possible,” an action he claimed would lead “to 30,000 on the Dow.”
A cut of that magnitude would typically be associated with serious economic risk, not an economy with record low unemployment and ongoing growth.
The three major indices slumped by around 3 percent each by Wednesday’s close, with the blue chip Dow Jones Industrial Average suffering its largest percentage loss of the year. Bond investors pushed the yield on the 30-year Treasury bond to a record low.
Causing even more concern: The yield on the 2-year Treasury note briefly went above the yield on the 10-year Treasury note, the sort of “inversion” that, when it proves durable, has preceded prior U.S. recessions.
Trump himself took note of the development, blasting the Fed chair he appointed as “clueless” in a tweet citing the “CRAZY INVERTED YIELD CURVE.”
It was perhaps the most dramatic bit of evidence yet of just how the landscape for the Fed has changed over the past few months, from one that Chairman Jerome Powell deemed “remarkably positive” as of last October, to one of rising risks for the United States’ record-setting, decade-long expansion.
As of last fall, the Fed thought the economy, fueled by the Trump administration’s massive $1.5 trillion tax cut package and spending plans, would grow strongly enough to justify steadily higher rates.
At that point the threat of a recession seemed distant unless some sort of outside event intervened to throw the economy off course — something similar to the collapse of the dot-com stock market bubble ahead of the brief 2001 recession, or the implosion of the housing and credit markets ahead of the more serious 2007-2009 Great Recession.
Yet, as Trump’s trade rhetoric and his imposition of tariffs on trading partners ratcheted up this year, investors have acted as if a breaking point had been reached.
Global trade flows have dropped. Economic growth in Germany, a bellwether economy of sorts given its reliance on exports, contracted in the second quarter. Data also showed industrial output in China fell to more than a 17-year-low in July. Indices of uncertainty also have spiked.
If Fed policy suddenly seemed out of step, it was perhaps inevitable given the difficulty of keeping up with Trump’s whipsaw approach to trade policy, and the growing sense that the fallout may be deeper and longer lasting than expected.
“The challenge is that Trump’s trade policy has proven so erratic that you cannot relieve the sense of uncertainty,” as firms adjust to what may be a years-long rearrangement of global supply chains and cost structures, said Tim Duy, an economics professor at the University of Oregon. “So the question becomes is policy going to be easing enough … or remain so tight that the economy remains vulnerable?”
Investors in federal funds futures contracts are currently pricing in a quarter-point rate cut at each of the Fed’s remaining three policy meetings in 2019. That would take the benchmark fed funds rate to a range of between 1.25 percent and 1.50 percent.
Along with the rate cut at the last Fed meeting in July, it would also mean the central bank will have used up almost half the rate-cut “ammunition” assembled during a slow-moving, and ultimately truncated, series of rate increases begun in 2015.
For Trump, who is hoping to make the economy a central part of his case for his 2020 re-election campaign, further rate cuts could not come fast enough. He has been berating the Fed for its rate increases for more than a year — since even before his trade rift with China morphed from being considered an economic annoyance to a larger and potentially durable risk.
Compared to the prior two recessions, the Fed may actually be ahead of the curve.
In both the 2001 and 2007 downturns, the Fed raised rates even after the yield curve inverted and did not cut until just a few months before the start of recession about a year later.
In the current case, it signaled a policy shift in January, when it removed the expectation of further rate hikes from the table, and then cut rates two weeks before Wednesday’s yield curve inversion.
Whether that proves adequate is another matter.
Choppy economic waters complicate 2020 picture for Trump
WASHINGTON — We stand by what we wrote on Wednesday — that an incumbent president’s greatest advantage is time (because you get four years to focus on the general election, versus just months for your eventual opponent).
But that advantage disappears if the economy goes south.
And that might be the biggest news over the last 24 hours: The state of the U.S. economy feels a lot more fragile than the traditional indicators suggest (like the 3.7 percent unemployment rate).
“Shares on Wall Street were off sharply. … The S&P 500 was down 2.9 percent. And bond markets offered an ominous warning on American growth prospects, with yields falling to levels not seen in years,” the New York Times writes.
Additionally, “The financial jitters, which continued Thursday as markets in Asia were down in early trading, came after new data showed the German economy hurtling toward a recession and factory output in China growing at its slowest pace in 17 years.”
And this morning’s developments aren’t any brighter.
“Global stocks fell after China vowed to take ‘necessary counter-measures’ over U.S. plans for a new tariff on Chinese imports, compounding investors’ concerns about weakness in the global economy,” the Wall Street Journal says.
Bottom line: Trump’s political standing is already in dangerous territory, despite a historically low unemployment rate and a growing economy.
What happens if that positive economic news goes away?
But there’s also a challenge for Democrats, especially when it comes to tariffs and trade.
Can you promise to get tough on China and oppose free-trade agreements when it appears that those strategies have backfired? (And how do you out-Trump Trump on trade?)
Or do you take a more pro-free trade approach, which is contrary to where the left and organized labor are on the issue?
There isn’t an easy answer here for Democrats.
Tweet of the day
Trump heads to New Hampshire
The negative economic news is the backdrop to tonight’s Trump rally in Manchester, N.H. at 7:00 pm ET.
“The state, which he lost by about 2,700 votes in 2016, is doing well economically, at least when using broad measures,” per the AP.
“But beneath the top-line data are clear signs that the prosperity is being unevenly shared, and when the tumult of the Trump presidency is added to the mix, the state’s flinty voters may not be receptive to his appeals.”
By the way, Trump has been blaming the Federal Reserve for the economic jitters – because it raised interest rates and then didn’t lower them enough.
But we remember when Trump was against low interest rates during Obama’s presidency.
“The Fed’s reckless policies of low interest and flooding the market with dollars needs to be stopped or we will face record inflation,” he tweeted back in 2011.
Beto O’Rourke this morning will deliver a speech from El Paso, marking his return to the 2020 presidential campaign after the deadly shooting last week that killed 22 people in his hometown.
“O’Rourke will recommit to holding President Trump accountable for the state of the country — and focus on the stakes of removing a president from office whom he has explicitly linked to the deaths of fellow El Pasoans, according to a senior campaign official,” NBC’s Garrett Haake writes.
“He’ll focus heavily on three key issues: racism, white supremacy and guns — and plans to propose what the campaign calls ‘new, bold solutions.’”
The good news for Beto: His campaign has a new sense of urgency and it’s getting newfound attention after his handling of the El Paso tragedy.
The bad news: This is, by our count, Beto’s second relaunch/reset (his first being when he junked his local campaigning strategy for a more national one).
And successful campaigns usually don’t get two relaunches/resets.
2020 Vision: Hickenlooper exits the race
We told you August would be a month when the 2020 Democratic field would winnow due to the heightened requirements to make next month’s debate stage.
And it seems we have the first casualty of August.
“Former Colorado Gov. John Hickenlooper is expected to drop out of the Democratic presidential race on Thursday, a source close to Hickenlooper told NBC News on Wednesday night,” Stephanie Ruhle and Alex Johnson report.
It’s still unclear if Hickenlooper would make a run for Colorado’s Senate race, or if he’s getting out of politics altogether.
On the campaign trail today
Pete Buttigieg and John Delaney stump in Iowa… Andrew Yang is in South Carolina… And Amy Klobuchar headlines a dinner in Arkansas.
Dispatches from NBC’s embeds
Elizabeth Warren brought out a comedic side to her campaign during a house party in New Hampshire, NBC’s Benjamin Pu reports: “As for the funny moments – why do I bring up the funny side of Warren’s campaigning style? I’ve had several voters tell me that Warren has better energy and charisma over Sen. Bernie Sanders, her policy contemporary. These two incidents I flagged above really killed with the crowd, and they were, as far as I can tell, unscripted. The crowd always leaves energized and hopeful and cheerful, by their own admission.”
Amid yet another shooting gaining national attention, Pete Buttigieg spoke about the limits of the 2nd Amendment during a house party in Iowa. NBC’s Maura Barrett relays Buttigieg’s comments: “When one of your friends gets that look in their eyes and says, ‘Look, you can’t do anything because that’s unconstitutional ’cause that would be infringing.’ And the word ‘infringe’ is in there. One thing you can do is remind them that the word ‘well-regulated’ is in there too.”
Data Download: The number of the day is … 5
That’s the number of times — before yesterday — that there has been an inversion of the yields on the 2-year and 10-year Treasury notes since 1978.
From our colleagues at CNBC: “There have been five inversions of the 2-year and 10-year yields since 1978 and all were precursors to a recession, but there is a significant lag, according to data from Credit Suisse. A recession occurred, on average, 22 months after the inversion, Credit Suisse shows. And the S&P 500 actually enjoyed average returns of 15 percent 18 months after an inversion before it eventually turns.”
The Lid: “While I breathe, I hope”
Don’t miss the pod from yesterday, when we reported on the latest polling out of South Carolina.
ICYMI: New clips you shouldn’t miss
NBC’s Jonathan Allen: “The GOP would like Steve King to kindly shut up.”
Trump is talking to lawmakers of both parties about gun control.
The president isn’t exactly going out on a limb as tensions simmer in Hong Kong.
Another day, another Biden-family/Ukraine story.
And broken bones in Jeffrey Epstein’s neck are raising more questions about his death.
Trump Agenda: On edge
Here’s the latest on how the recent combination of hate and violence has minority communities on edge.
The New York Times tells the story of an heiress whose riches still fund some of the country’s biggest anti-immigration organizations.
2020: “Trumpgret” in New Hampshire
Some voters in New Hampshire are feeling “Trumpgret.”
Harry Reid says he wishes Al Franken would run again.
Not everyone in New Hampshire is happy about Corey Lewandowski’s Senate ambitions there.
Kamala Harris has unveiled a plan for online gun sale background checks.
Trump snubs John McCain during bill signing intended to honor him
WASHINGTON — Congress wanted to honor the ailing Sen. John McCain, R-Ariz. President Donald Trump did not.
In extended remarks during a visit to Fort Drum in upstate New York to sign the John S. McCain National Defense Authorization Act for Fiscal Year 2019 — this year’s version of an annual bill that sets defense policy — Trump chose not to mention the former prisoner of war and Senate Armed Services Committee chairman who is battling brain cancer. He even omitted McCain’s name when citing the title of the bill.
The two men have long been fierce critics of each other, with McCain calling Trump’s supporters “crazies” in 2015 and Trump retaliating by questioning whether McCain, who was subjected to torture in a Vietnamese prison camp, is really a “war hero” because “he was captured.”
The snub at Fort Drum, home to the combat aviation brigade of the Army’s 10th Mountain Division, did not escape the notice of McCain’s allies.
“For those asking did I expect Trump to be an a—— today. No more than I expected it to be Monday,” Mark Salter, McCain’s longtime aide, wrote on Twitter.
McCain’s condition — dire enough that a recent HBO documentary on him was titled “John McCain: For Whom the Bell Tolls” — has not stopped Trump from deriding the Arizona senator at political rallies. Though Trump does not use his name, he tells crowds that he would have been able to repeal Obamacare if not for a thumbs-down sign from one senator — McCain.
The senator’s own statement included Trump’s name in the headline and in a preamble written by staff. But the words attributed to McCain did not.
“I’m very proud that the National Defense Authorization Act for Fiscal Year 2019 has been signed into law,” he said.
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