| | |  | BY DANIEL LIPPMAN | | With help from Renuka Rayasam
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Journalist Bob Woodward sits at the head table during the White House Correspondents' Dinner in Washington in 2017. | AP Photo/Cliff Owen | THIS WEEKEND’S HAPPY HOUR TALKERS — The new Bob Woodward-Robert Costa book has made international headlines for its revelations about Joint Chiefs Chair Gen. Mark Milley’s phone calls with his Chinese counterpart and how he ensured that he would be in the chain of command if any nuclear weapons were to be launched. But “Peril,” which goes on sale next Tuesday and was obtained by POLITICO, also includes lesser revelations that may be catnip for political junkies. Among those nuggets: — Medal of Freedom for Pence? In the days after Jan. 6, Keith Kellogg, a retired lieutenant general who was a fierce Trump loyalist but served as Vice President Mike Pence’s national security adviser, told Ivanka Trump and Jared Kushner that her father should give Pence the Presidential Medal of Freedom to repair the two’s relationship. Woodward and Costa write: “Their response: Nice idea, but we need to let some time go by. Let’s see what happens.” (Bill Belichick, the legendary New England Patriots coach, had declined the medal after Jan. 6.) — Barr: They think you’re an a-hole: Then-Attorney General Bill Barr had a “come to Jesus” meeting with former President Donald Trump in April 2020 in which Barr dished out political advice to him because he was worried Trump was slated to lose the election. He told him the election was about the suburbs, where he had to do a “charm offensive,” and that he had to do “some repair work” among Republicans and independent voters who liked his policies, but not his personality. “They just think you’re a f----- asshole,” Barr told Trump. Trump didn’t take his advice and repeatedly told Barr in the meeting that his base wanted him to “fight” for them. In early December, after Barr told the Associated Press that there wasn’t widespread fraud in the election, Trump ripped at him and said: “You must have said that because you hate Trump, you must really hate Trump.” — Was Biden too mean to Mayor Pete? Joe Biden regretted attacking Pete Buttigieg in a cutting personal ad during the primary that made fun of his future Transportation secretary, contrasting Biden’s national work to help save the economy during the early years of the Obama administration and negotiate the Iran nuclear deal with Buttigieg’s tenure as mayor of South Bend, Ind. “Under the threat of disappearing pets, Pete Buttigieg negotiated lighter licensing regulations on pet chip scanners,” the ad’s narrator intoned. Only a few hours after the ad had been released, Biden called senior adviser Mike Donilon urging him to pull the ad, about which Biden had previously expressed reservations, saying he hated it. “Take it off,” Biden told Donilon, who’s known in Biden world as “Mr. Silent” for being quiet on phone calls. “Take it back. I don’t want it airing any longer. Take it down!” But the ad was already getting circulated in the media so it was too late to retract it. — Biden’s friendship breakup with Graham: Sen. Lindsey Graham (R-S.C.), a close Trump ally, angered Biden during a phone call soon after the election. Graham, a longtime friend of Biden’s from the Senate, told him that if Pence’s son or someone closely connected to Trump had had the business entanglements that Hunter Biden had, they would have easily lost. “I’ve got no problem with you. But Joe, if Mike Pence’s son or a Trump person did what Hunter did, it’d be game, set, match.” The authors write that Graham “who had no children, had crossed a red line” and that Biden would likely never talk again to him if he could avoid it. — SecDef excluded from some national security calls: Chris Miller, who was Trump’s last Defense secretary and stepped into the role in an acting capacity on Nov. 9, was intentionally excluded from an 8 a.m. secure phone call that Milley, Secretary of State Mike Pompeo and White House chief of staff Mark Meadows held most days in November to check in on the global national security situation. The call was intended to keep stability during a time when nations were questioning what was happening in the U.S. “We’ve got to land this plane. We’ve got to make sure there’s a peaceful transfer of power,” Milley told his colleagues during one of the calls. — Kelly calls Paul Ryan post-Charlottesville: After white supremacists marched in Charlottesville, then-White House chief of staff John Kelly praised then-Speaker Paul Ryan for speaking out after Trump blamed “both sides” for Charlottesville. Kelly told Ryan in a phone call: “Yeah, you need to hit him for that. Don’t worry about it.” Welcome to POLITICO Nightly. Reach out with news, tips and ideas for us at nightly@politico.com. Or contact tonight’s authors at dlippman@politico.com and on Twitter at @dlippman.
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| | A message from the American Investment Council: Private equity is fueling the American recovery. The majority of private equity investment – 86% – went to small businesses last year to keep doors open and Americans employed during uncertain times. Private equity is supporting jobs in every state across the country, directly employing more than 11 million workers. This is why Congress should oppose a 98% tax increase on private investment. Learn more. | | | | | — Jan. 6 committee vows strong Pentagon oversight after Milley-Trump revelations: The House committee probing the Jan. 6 Capitol attack is vowing to home in on senior Pentagon officials’ response to the assault following reports that Milley assured China that Trump would not authorize a strike against the country. “The facts surrounding steps taken at the Pentagon to protect our security both before and after January 6th are a crucial area of focus for the Select Committee,” Chair Bennie Thompson (D-Miss.) and Vice Chair Liz Cheney (R-Wyo.) said today in a joint statement. — Judge raises concerns about speed of Oath Keepers trial related to Capitol riot: The judge overseeing the sprawling case of the Oath Keepers who stormed the Capitol on Jan. 6 raised concerns today about the pace of the government’s effort to bring the matter to trial, particularly as three of the defendants sit in D.C. jail. Washington D.C. federal district court Judge Amit Mehta warned prosecutors today that their scheduled Jan. 31 trial date for a subset of the Oath Keepers might not be sustainable, as evidence related to the Capitol breach continues to pour in faster than the government can process it. — Powell opens review into Fed ethics rules after backlash over trading: Federal Reserve Chair Jerome Powell ordered the central bank’s staff to examine internal ethics rules around what types of assets Fed officials are allowed to hold , following revelations of financial trades made by two policymakers during the pandemic. Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren last week came under fire after reports that they had bought and sold stocks and real estate-linked assets in 2020 as the central bank was engaged in an extensive rescue of financial markets. Later that week, both said they would sell the assets to avoid any suggestion of impropriety, though their actions were allowed under Fed ethics rules. — Biden blocked from expelling migrant families using Title 42: A federal judge today blocked the Biden administration from continuing to use a Trump-era public health order to expel migrant families arriving at the U.S. southern border . In a 58-page ruling, U.S. District Court Judge Emmet Sullivan found that the Title 42 policy does not authorize the expulsion of migrants — and, in turn, does not allow for those removed to be denied the opportunity to seek asylum in the U.S. The judge’s order will go into effect in 14 days. — Special prosecutor John Durham charges ex-attorney for Clinton campaign with lying to FBI: The special prosecutor probing the origins of the federal investigation into ties between the Trump campaign and Russia, John Durham, has charged Washington lawyer Michael Sussmann with lying to the FBI during the early stages of the inquiry. Sussmann, who worked as an attorney for the Hillary Clinton campaign, is accused in a grand jury indictment returned today of a single felony count of making a false statement during a September 2016 meeting with FBI General Counsel James Baker.
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| | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today. | | | | | | | | 
Alexandria Ocasio-Cortez and Aurora James attend The 2021 Met Gala Celebrating In America: A Lexicon Of Fashion at Metropolitan Museum of Art in New York City. | Dimitrios Kambouris/Getty Images for The Met Museum/Vogue | READ MY LIPS — Setting aside the optics of AOC’s “Tax the Rich” Met Gala dress , the politics around raising taxes has rapidly shifted with Democrats looking for a way to pay for their $3.5 trillion spending plan. This week House Democrats are debating more than 40 separate tax increases worth about $2 trillion. Nightly’s Renuka Rayasam chatted with senior tax reporter Brian Faler over Slack today about Biden’s tax hikes hitting the realities of Congress. This conversation has been edited. Who are the Joe Manchins in the House? Unfortunately for Pelosi, there is a rotating cast of Joe Manchins in the House. There is a contingent of Democrats from high tax states like New York and New Jersey taking a hardline on repealing the SALT cap. There is a group of moderates who’ve mostly kept their heads down but have balked at Democratic leaders’ plans to dramatically increase taxes on big companies’ overseas profits — with some success. The House plan doesn’t go nearly as far in hitting multinationals as many in the Senate or the administration want. Another problem is that some Democrats like Rep. Stephanie Murphy (D-Fla.), who voted against Democrats’ plans Wednesday in committee, are nervous about voting for tax increases that may not ultimately make it into law — they don’t want to get BTU’d on this stuff (politician slang for getting screwed). They’ve been pushing Pelosi to work out differences with the Senate ahead of time, but there’s going to be places where the two sides just disagree. And Pelosi here can only afford to lose three votes. The U.S. has historically relied on income and not wealth taxes. Is that set to change? There’s no doubt that wealth taxes are part of the debate like they haven’t been in a very long time. But a wealth tax proposal like what Sen. Elizabeth Warren is proposing is not in the cards. Some Democrats think it would likely run afoul of constitutional restrictions on so-called direct taxes, and any such tax, were Congress to create one, would be immediately challenged in court. That said, House Democrats do want to toughen up the estate tax, which is a type of wealth tax and it’s not hard seeing Senate Democrats agreeing to that as well. Senate Finance Chair Ron Wyden has some proposals he’s hoping to get into their reconciliation plan that could be seen as cousins to a wealth tax, such as a proposal to annually tax billionaires’ unrealized stock gains. Raising taxes used to be a classic third rail of American politics — just a total nonstarter. What has changed? With all of the attention to income inequality, and reports of rich people not paying taxes, they think that much of the public is now with them and tax increases aren’t the political killer they once were. Not everyone believes that of course — especially folks from areas where Trump did well. This reconciliation plan will be a real test of Democrats’ willingness to raise taxes.
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| | | | | THE AUSSIE-FRENCH BREAKUP — “A stab in the back” is how French Foreign Minister Jean-Yves Le Drian described Australia’s move to tear up a submarine deal worth more than €50 billion to instead acquire nuclear-powered subs from the United States. France could have seen it coming, Zoya Sheftalovich writes. Canberra signaled in June it was looking for a way out of the contract, signed in 2016 with French company DCNS (now known as Naval Group) to build 12 Barracuda submarines. Questioned by a Senate committee about issues with the project, Australia’s Defense Secretary Greg Moriarty said: “It became clear to me we were having challenges ... over the last 15 to 12 months.” He said his government had been considering its options, including what it could do if it was “unable to proceed” with the French deal. Moriarty’s admission came after his government in April refused to sign a contract for the next phase of the French submarine project, giving Naval Group until this month to comply with its demands. There were reports dating back to the beginning of this year that Canberra was seeking to walk away.
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Canadian Prime Minister and Liberal leader Justin Trudeau greets a constituent during a campaign stop in Port Coquitlam, Canada. | Jeff Vinnick/Getty Images | THANKS, OBAMA — Former President Barack Obama has tweeted his endorsement for Justin Trudeau in the closing days of Canada’s tight election campaign, Zi-Ann Lum writes. “Wishing my friend @JustinTrudeau the best in Canada’s upcoming election,” Obama shared this afternoon. “Justin has been an effective leader and strong voice for democratic values, and I’m proud of the work we did together.” Trudeau responded by thanking his friend and added, “Progress is on the ballot — and we’re going to keep fighting for it.” The former president’s tweet was immediately met with charges of election interference — a rebuke Obama also faced when he endorsed Trudeau in the final stretch of the 2019 federal election campaign. Canada’s chief electoral officer at the time said the endorsement was not considered foreign interference under current law “so long as it was not paid for or the person making it did not receive any form of payment.” Trudeau is campaigning for a third term after calling an election last month in hopes of turning his minority government into a majority.
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| | A message from the American Investment Council: Private equity is investing in America and fueling our recovery. The industry is supporting jobs in every state across the country, directly employing more than 11 million workers. Last year, private equity provided hundreds of billions of dollars to struggling companies to save jobs and help businesses make it through the pandemic. The majority of private equity investment – 86% – went to small businesses, and roughly a third went to businesses with just 10 workers or less.
Private equity is strengthening our country by pouring capital into infrastructure, renewable energy projects, and healthcare. According to the Wall Street Journal, “private-equity portfolio companies have been involved in nearly every step” of getting people vaccinated against COVID-19. And, because of these strong investments, PE is the highest returning asset class for public pensions for teachers, first-responders, and other public servants. Tell Congress to oppose a 98% tax increase on private investment. Learn more. | | | Did someone forward this email to you? Sign up here. | |
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