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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 meets with Romanian President Klaus Iohannis at the White House this afternoon.
North Korea: Despite scaled-down military exercises, North Korea has accused Washington and Seoul of saber rattling. Understanding Pyongyang’s emotions could be critical to restarting disarmament talks.
Hong Kong: A British consular staff member in Hong Kong was detained in mainland China. Separately, Twitter and Facebook took down accounts they say were trying to undermine antigovernment protests in Hong Kong.
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President Trump with Fed Chairman Jerome Powell at the White House in 2017. PHOTO: NICHOLAS KAMM/AGENCE FRANCE-PRESSE/GETTY IMAGES
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President Trump called for the Federal Reserve to cut its benchmark interest rate by "at least 100 basis points," and criticized Chairman Jerome Powell for "horrendous lack of vision," Rebecca Ballhaus reports. Such a rate move would typically be considered only when the economy is on the brink of a recession.
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White House aides said they are examining proposals to bolster the economy. Among the ideas is a cut in the payroll tax, but two people familiar with the matter said they didn’t expect such a proposal to be pursued.
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The Trump administration extended a license that has enabled Huawei to work with U.S. customers for another 90 days, despite national-security concerns that prompted officials to add the Chinese telecom company to an export blacklist earlier this year, report Katy Stech Ferek and Drew FitzGerald. It wasn’t immediately clear what impact the Commerce decision would have on U.S.-China trade talks.
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Monday’s action will most directly affect about 40 U.S. cellphone carriers and cable operators, most of which operate in rural areas.
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Planned Parenthood is withdrawing from the federal family planning program, marking the administration’s most successful effort thus far to “defund” the organization and reshape family planning services, reports Michelle Hackman. The organization receives $60 million a year in federal funds.
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Attorney General William Barr removed Hugh Hurwitz as acting head of the U.S. prisons bureau, reports Sadie Gurman. The move follows the death of financier Jeffrey Epstein, who was awaiting trial on new sex-trafficking charges in a New York jail. Kathleen Hawk Sawyer will again serve as director.
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Sen. Elizabeth Warren would impose a new tax on corporate profits and a wealth tax on the richest American households, and use the proceeds to pay for education, health care and climate-change programs PHOTO: SEAN RAYFORD/GETTY IMAGES
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Which Democratic candidate would benefit more from a recession? Primary and general-election voters may disagree, writes Jerry Seib. And history suggests perhaps a slight advantage to the moderate, safer candidate in a time of economic distress, but not a clear one.
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Which 2020 Democratic candidate would best handle a recession in the U.S. if he/she were president? Join the conversation.
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Sen. Elizabeth Warren apologized to a largely Native American audience for “harm I have caused” after years of occasionally identifying herself as Native American, as well as for releasing a DNA test last year that she said supported her ancestry claims, reports Joshua Jamerson.
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Campaign Wire: Former Vice President Joe Biden released his first television ad of his 2020 presidential campaign. It shows images of Mr. Trump and white nationalists involved in the deadly 2017 confrontations in Charlottesville, Va.
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Trump's Attack on Foreign Aid Funding Threatens to Upend Spending Talks, Risks Shutdown
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By Andrew Duehren
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The Trump administration's effort to freeze more than $4 billion in foreign aid funding is threatening to confound the already-delicate process to avoid a government shutdown this fall.
The administration is expected to submit a package to Capitol Hill in the coming days or weeks that would temporarily stop the State Department and U.S. Agency for International Development from spending money on foreign aid programs that Congress has already funded.
While Congress must eventually sign off on such proposals before they are permanent, the administration’s submission would automatically suspend the money for 45 days. Because the end of the federal fiscal year arrives on Sept. 30, the administration’s package could hold the money until after it expires—a maneuver that would effectively cancel the money. Some lawmakers charge that freezing the money until the end of the fiscal year would be illegal.
The move could end the detente on spending between Capitol Hill and the administration that enabled the passage earlier this summer of a deal setting new spending levels and suspending the debt ceiling. House Speaker Nancy Pelosi (D., Calif.) sent a letter to Treasury Secretary Steven Mnuchin, who led negotiations with Mrs. Pelosi on the last spending deal, writing the action “violates the good faith of our budget negotiations.”
Mrs. Pelosi was not alone in her criticism. Sen. Lindsey Graham (R., S.C.), a close ally of President Trump, joined Rep. Hal Rogers (R., Ky.), who formerly led the House Appropriations Committee, to oppose the planned spending freeze. The pair warned that the proposed package “could complicate the ability of the Administration and Congress to work constructively on future appropriations deals.”
Though Congress and the administration have agreed to new spending levels, they must still reach a series of deals on funding levels for individual agencies and programs—including contentious propositions like funding for a wall along the U.S.-Mexico border—before Oct. 1. A clash between the legislative and executive branches on a comparatively small amount of foreign aid funding could delay and distract from that task, increasing the possibility of a government shutdown.
Still, deficit hawks frustrated by the funding increases in the deal reached earlier this summer see this new battle as worthwhile to try and rein in spending wherever possible.
Write to Andrew Duehren at Andrew.Duehren@wsj.com
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Support for Free Trade Grows Despite Trump Criticisms
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As President Trump's campaign to revamp free-trade agreements negotiated in the past has intensified, a growing number of Americans polled say they support free trade.
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A group of states is preparing to move forward with a joint antitrust investigation of big technology companies, adding another layer of scrutiny to an industry already under a federal spotlight, report John D. McKinnon and Brent Kendall.
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There's growing consensus that the Community Reinvestment Act rules should be updated, reports Lalita Clozel, now that many banking services are provided online. Joseph Otting, comptroller of the currency, is seeking to judge banks’ CRA performance by giving them dollar targets based on the number of deposits they hold in different areas.
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The Department of Housing and Urban Development is moving to roll back an Obama-era policy aimed at rooting out racial bias in housing, the latest move by the Trump administration to weaken a legal tool combating unintentional discrimination, reports Lalita Clozel.
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The number of Russian nuclear monitoring stations that have gone silent has doubled to four, an international arms control official said Monday, fueling concerns among observers that Russia is trying to hide evidence from an explosion at a missile test site, reports Michael R. Gordon.
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The U.S. has warned Greece against hosting the Iranian tanker released by Gibraltar last week, saying those who help the vessel, which is carrying oil deemed illicit, would face immigration and potential criminal consequences, reports Benoit Faucon.
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Secretary of State Mike Pompeo has moved from harsh 2016 critic of President Trump to rank "among the most sycophantic" of his aides. (New Yorker)
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President Trump has cut off a onetime close friend and adviser, Tom Barrack, over unhappiness with his leadership of the president's inaugural committee. (Politico)
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The question of who is most electable hangs over the Democratic primary field. (ABC News)
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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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