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Capital Journal
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Good morning from the WSJ Washington Bureau.
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Trump's Day: The president is back in Washington after a swing through California that ended with a tour of a newly constructed border wall segment at the San Diego County community of Otay Mesa.
Markets: Global stocks rose as investors assessed the Federal Reserve’s outlook on future rate cuts. The Fed on Wednesday cut rates by a quarter point, and officials were split over the outlook for further reductions.
Afghanistan: A Taliban car bomb killed and wounded dozens of people in southern Afghanistan. Insurgents are keeping up military pressure after the collapse of negotiations with the U.S. and ahead of national elections.
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The White House is pushing to build an international coalition to exert pressure on Iran through the United Nations as its chief response to the attack on Saudi oil facilities, an approach consistent with President Trump’s aversion to military intervention, but also reflecting limits on his retaliatory options, Michael C. Bender, Jessica Donati and Lindsay Wise report.
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From reporter Ian Talley:
Global markets should gird for more shocks ahead. Oil prices cooled after initially spiking in the wake of the drone-and-missile attack on the world's largest crude processing facility in Saudi Arabia. But some energy and security experts say the relative calm belies the high risk of more strikes by suspected perpetrator Iran against vulnerable energy infrastructure critical to the global economy, particularly with ill-prepared defense systems and as Washington responds with more sanctions.
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Robert C. O'Brien, left, and President Trump board Air Force One in Los Angeles on Wednesday. PHOTO: EVAN VUCCI/ASSOCIATED PRESS
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President Trump named Robert O’Brien, a top hostage-affairs official with the State Department, as national security adviser. Mr. O'Brien said his focus would be on keeping Americans safe and rebuilding the military. He said he'd advise Mr. Trump privately on the situation in Saudi Arabia, reports Vivian Salama.
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Attorney General William Barr is gauging support among lawmakers for a plan to expand gun background checks, signaling that the administration hasn’t dismissed a significant tightening of gun rules, though President Trump hasn’t indicated what he will endorse, Sadie Gurman, Natalie Andrews and Catherine Lucey report.
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Speaking to reporters on Air Force One Wednesday night, Mr. Trump said the White House was “looking at many different things.”
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The president said he's taking away California’s power to set its own vehicle tailpipe emission standards, a move that would curb California’s influence over the car industry, report Katy Stech Ferek and Alejandro Lazo. State officials said vowed to challenge the action in court.
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The Trump administration plans to deliver a notice of environmental violation to San Francisco over its homelessness problem. Mr. Trump said the notice would come from the Environmental Protection Agency. He said waste in storm sewers, specifically used needles, were contributing to ocean pollution, Rebecca Ballhaus reports.
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“We can’t have our cities going to hell.”
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— President Trump
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Asylum seekers are processed in a tent courtroom facility set up in Laredo, Texas, on Sept. 17. PHOTO: ERIC GAY/ASSOCIATED PRESS
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The backlogged deportation docket pending in U.S. immigration courts surpassed one million cases in August, despite the Trump administration’s varied attempts to cut back on asylum claims, Michelle Hackman reports.
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Lawmakers are exploring an option to mitigate the border-wall funding controversy: putting it off until next year. Officials on Capitol Hill crafting spending legislation are considering extending current funding for the Department of Homeland Security—which oversees construction of the wall—for another year, Andrew Duehren reports.
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Lawmakers of both parties showed a willingness to end the National Security Agency's phone-surveillance program, as the spy agency sought to defend the suspended program during a congressional hearing while acknowledging its compliance issues, reports Dustin Volz.
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The acting director of national intelligence, Joseph Maguire, will testify next week before the House Intelligence Committee. The move follows a spat over the handling of a whistleblower complaint, Siobhan Hughes reports.
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A bipartisan bill introduced in the Senate Wednesday would hit China's DJI, the world's largest maker of consumer drones, reports Katy Stech. The U.S. has allowed Chinese technology “into some of the most critical operations of the U.S. Government,” said Sen. Rick Scott (R., Fla.).
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Facebook Chief Mark Zuckerberg will travel to Capitol Hill today to pitch his vision for moderate internet regulation. Mr. Zuckerberg will seek to placate lawmakers who are weighing tougher moves, John D. McKinnon reports.
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PHOTO: ELIJAH NOUVELAGE/BLOOMBERG NEWS
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Bernie Sanders’s perch among the most immigration-friendly candidates differs sharply from his situation in 2016. While his rhetoric has hewed closer to the pro-immigration wing of his party, his views appear unchanged, report Eliza Collins and Joshua Jamerson.
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Mr. Sanders wants to pause deportations, but he also has argued that too much immigration could hurt American workers.
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Elizabeth Warren Leads Democratic Field in Voter Enthusiasm
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A WSJ/NBC News poll shows former Vice President Joe Biden leading the 2020 candidate field. But when it comes to voter enthusiasm, Sen. Elizabeth Warren is on top. That difference illustrates the big question for the Democratic race.
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Cory Booker's Tax Plan Draws Contrast With Trump Overhaul
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New Jersey senator and Democratic presidential candidate Cory Booker has endorsed a rethinking of capital-gains taxation, backing a proposal that would treat increases in investments as taxable income, even if the assets aren't sold.
The move comes as Democratic candidates are proposing larger and more structural tax increases than the party's standard-bearers have in years past. Whoever wins will present a contrast with President Trump in the general election. Mr. Trump's 2017 tax overhaul lowered taxes on corporations, individuals and estates.
Under current law, taxpayers can defer capital gains until they sell assets and avoid income taxes on those gains if they hold appreciate assets until death. Mr. Booker would change both of those principles and tax capital gains at the same 40.8% top rate he would apply to other income.
"Making sure that the wealthy - and not just workers - are paying their fair share is an essential component to restoring economic justice to our tax code," Mr. Booker's campaign said Wednesday as part of a broader plan for workers.
Beyond tax increases, Mr. Booker would reduce taxes on low-income households, make it easier for unions to organize and introduce paid family leave.
Mr. Booker joins fellow presidential candidate Julian Castro, a former secretary of House and Urban Development, and Sen. Ron Wyden (D., Ore.) in endorsing what's known as mark-to-market taxation for capital gains. Mr. Booker would exempt the first $2 million in lifetime gains from the new system and set special rules for illiquid assets such as private businesses that would not require annual payments.
Mr. Booker would also raise taxes on private equity managers' carried interest income and prohibit real-estate investors from deferring taxes when they exchange properties, a change that would reshape the commercial real-estate industry that relies on such like-kind exchanges.
Write to Richard Rubin at richard.rubin@wsj.com
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Rep. Joe Kennedy III will challenge Ed Markey for his Massachusetts Senate seat. (Full story)
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Which candidate has caught your attention in recent weeks? (Weigh in)
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Who's still in the 2020 race? (Graphic)
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Democratic presidential candidate Kamala Harris has a new "Iowa-or-bust" strategy as polls show her falling behind in the race. (Politico)
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Some progressive voters who previously supported Bernie Sanders are now backing Elizabeth Warren because “she’s everything Bernie is—but a bit more electable.” (The Atlantic)
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Tom Barrack, a friend of the president who came under scrutiny by federal prosecutors investigating possible foreign influence in the 2016 campaign, attended two of Mr. Trump's fundraisers this week. (NYT)
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This newsletter is a production of the WSJ Washington bureau. Our newsletter editors are Tim Hanrahan, Kate Milani, Troy McCullough and Daniel Nasaw. Send feedback to capitaljournal@wsj.com. You can follow politics coverage on our Politics page and at @wsjpolitics on Twitter.
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