Cleveland Fed president says 'downside' economic risks rising, calls for more aid

Loretta Mester, president of the Federal Reserve Bank of Cleveland, asked for more assistance from Congress on Wednesday as negotiators seek to complete a deal on a new coronavirus relief package.

Lawmakers are trying to reach a deal on adding to state unemployment benefits and renewing a federal moratorium on certain evictions that expired last month.

“The actions we take can help control the virus and thereby change the impact of the virus on the economy,” Mester said at the Liberal Arts Macroeconomic Conference, CNBC reported. “It will take continued fiscal and monetary policy support to limit lasting damage to the economy and achieve a sustainable recovery.”

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She added, “It is also clear that more fiscal support is needed to provide a bridge for households, small businesses, and state and local municipalities that have borne the brunt of the economic shutdown until the recovery is sustainably in place.”

Democrats in the House approved a $3.4 trillion measure, but Republicans want a package more in the range of $1 trillion. Lawmakers are looking at distributing another round of $1,200 stimulus checks as part of the package.  

Congress in March approved a $600 increase in unemployment benefits, and lawmakers disagree over whether to renew those benefits, which expired at the end of July.

The Fed has made several policy moves during the pandemic in an effort to help the American economy, such as lowering interest rates to zero percent. Mester, however, noted that the recent surge of cases across the country had “raised the downside risks” to the economic outlook, but that the Fed has stayed “committed to using all of its policy tools” during the rough financial times.

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Twitter showing interest in TikTok purchase: reports

Representatives from Twitter have approached the Chinese firm that owns TikTok to express interest in acquiring the U.S. operations of the popular short-form video app, according to multiple reports. 

It remains unclear whether Twitter would move forward with a potential deal, people familiar with the matter told Reuters. It is also said to be uncertain whether the San Francisco-based company has the means to finalize a deal by the time President TrumpDonald John TrumpTrump suggests some states may ‘pay nothing’ as part of unemployment plan Trump denies White House asked about adding him to Mount Rushmore Trump, US face pivotal UN vote on Iran MORE’s executive order restricting the use of TikTok in the U.S. goes into effect.

Microsoft, a company far bigger in size and market capitalization than Twitter, said earlier this month that it would pursue an acquisition of TikTok’s U.S. operations. It is considered the favorite to score a deal, The Wall Street Journal reported. 

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Twitter declined to comment. TikTok did not immediately return a request for comment from The Hill.

Trump last Thursday signed executive orders imposing broad sanctions on ByteDance, the Chinese parent company of TikTok, and the Chinese owners of the messaging app WeChat. The move, which marked the latest escalation in the increasingly fractious relationship between the U.S. and China, set a deadline of Sept. 15 for an American company to acquire TikTok before a ban goes into effect. 

The executive order stated that TikTok posed a national security risk, given its relationship with a Chinese firm and local laws in the country that allow for the seizure of user data. TikTok has strongly pushed back against suggestions that China can gain access to Americans’ data through the app. 

The company, which boasts more than 100 million U.S. users, has said that Americans’ user data is stored in servers in the U.S. with strict controls on employee access. 

Trump has indicated that he supports a company such as Microsoft acquiring TikTok to avoid an outright ban of the app. Several Republican lawmakers have also come out in support of such a scenario. However, Trump said last week that a portion of any sale of TikTok should be directed to the U.S. Treasury, considering the role he’d play in the deal. 

Microsoft said in a statement ahead of the executive order that Chief Executive Satya Nadella spoke with Trump about pursuing an acquisition of the app’s operations in the U.S. The tech giant pledged to work to finalize a deal by Sept. 15 but cautioned that its talks with ByteDance were preliminary and that there could be “no assurance that a transaction which involves Microsoft will proceed.”

Overnight Defense: Most VA workers find racism 'moderate to serious problem' at facilities l Trump advisers were wary of talking military options over fears he'd accidentally start war

Happy Friday and welcome to Overnight Defense. I’m Ellen Mitchell, and here’s your nightly guide to the latest developments at the Pentagon, on Capitol Hill and beyond. CLICK HERE to subscribe to the newsletter.

 

THE TOPLINE: A new union survey found that nearly 80 percent of Department of Veterans Affairs (VA) employees thought racism was a problem at the VA, with more than half reporting that they have seen racial discrimination against veterans while working there.

In a nationwide survey released Friday, 78 percent of workers reported that racism is a moderate to serious problem at the VA, according to data collected by the American Federation of Government Employees (AFGE), a federal union that represents hundreds of thousands of VA employees.

The data, taken from about 1,500 VA staff members, also found that 76 percent of those surveyed said they had experienced racially-charged actions while working at the U.S. government’s second-largest organization. Another 55 percent said they had witnessed racial discrimination against veterans while on the job.

“It’s shocking that in 2020, not only are we still having to contend with racism at an agency of the federal government, but that it’s getting worse” AFGE National President Everett Kelley told reporters on Friday. “These survey results are shocking and unacceptable and must be addressed.”

The VA’s response: The VA on Friday pushed back on the survey, calling AFGE “one of the least credible authorities in this country regarding harassment, abuse and unfair treatment,” and the survey a “desperate attempt” by the union to deflect attention from a lawsuit against it and its former president J. David Cox. Cox, who was accused of sexually harassing and assaulting employees at AFGE, resigned in February but has denied the allegations.

“VA does not tolerate harassment or discrimination in any form,” VA spokesperson Christina Noel said in a statement to The Hill.

Noel added that the VA over the last two years “has boosted its rating from 17th to 6th among large federal agencies” in a “best places to work” survey.

Context: The review comes in the wake of the death of George Floyd, an unarmed Black man who died while in Minneapolis police custody, which incited ongoing nationwide protests over racial injustice.

Employee accounts: VA employees, meanwhile, detailed racism at department facilities that they say have occurred for years.

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At the Kansas City VA Medical Center, for example, Navy veteran Charmayne Brown said she endured racial slurs and sexually suggestive language from superiors and was repeatedly passed up for promotions, facing backlash when she spoke out.

Brown has filed 18 complaints against the facility and is one of 50 employees – joined by the local American Civil Liberties Union and NAACP – who are demanding high-level VA officials intervene and Congress hold a hearing to look into the matter.

 

TRUMP ADVISORS WERE WARY OF TALKING MILITARY OPTIONS OVER FEAR OF STARTING WAR: President Trump’s advisers were wary to talk to him about military options over fears he’d accidentally start a war, CNN’s Jim Sciutto reported Thursday.

Sciutto, CNN’s chief national security correspondent, said multiple former administration officials told him that as tensions rose with North Korea and Iran, Trump’s advisers told foreign officials that they did not know what the president would choose to do next. 

These interviews are highlighted in his book “The Madman Theory: Trump Takes on the World,” which is set to be published Aug. 11.

The North Korea concern: Senior members of the administration were concerned after Trump called North Korean leader Kim Jong Un “little rocket man” in 2017 and Kim responded by calling Trump a “dotard.” They had feared the name-calling would evolve into the president ordering military action against North Korea, CNN reported. 

Joseph Yun, who served as Trump’s special representative for North Korea policy until 2018, said military advisers were reluctant to give the president all of the options out of fear he would order an attack. He said the White House was frustrated with the limited options, but the Department of Defense under former Secretary James Mattis stood its ground.

“We used to only think of Kim Jong UnKim Jong UnOvernight Defense: Most VA workers find racism ‘moderate to serious problem’ at facilities l Trump advisers were wary of talking military options over fears he’d accidentally start war Trump advisers were wary of talking military options over fears he’d accidentally start war: report Hiroshima, Nagasaki, and the new nuclear danger MORE as unpredictable. Now we had Trump as unpredictable,” Yun told Sciutto. “And I would communicate that.”

The White House’s response: A senior White House official told CNN that with North Korea, “it was the President who at every turn has encouraged diplomacy over escalation. He took the historic step of meeting with [Kim Jong Un] in person to encourage de-escalation.”

The Iran concern: In 2019, senior Pentagon officials told U.S. partners and Iranian leaders that they didn’t know how Trump would respond when the White House was considering action against Iran for attacks in the Persian Gulf.

“It was possible he could make a decision that would lead to an escalation of the conflict, and that escalation could lead to war, so they needed to relay that to Iran so they realized not even his staff knew what would happen if they attacked another oil facility, for instance,” Mick Mulroy, the deputy assistant secretary of Defense for the Middle East until 2019, told CNN.

Before that, in September 2019, Pentagon officials told Sciutto they were surprised when Trump requested retaliation through a National Security Council (NSC) official when some mortar shells hit the U.S. Embassy in Baghdad without causing damage or casualties. 

A former U.S. official told CNN that the NSC official called them on a Sunday requesting military options that day.

Gen. Paul Selva, the vice chairman of the Joint Chiefs of Staff, reportedly muted the line during a call with the White House and asked, “Is this a joke?”

“‘He said, ‘Is this a joke? They really want us to propose direct military action into Iran, against Iran, based on this?'” the former official told the network. “And I said, ‘No, we’ve been dealing with this all morning. Have they spent any time in Iraq?’ This is a constant thing.”

The order that did go through: The president did instruct a military attack that killed top Iranian Gen. Qassem Soleimani earlier this year, which Tehran responded to by launching a strike against a U.S. base in Iraq, injuring several. 

Senior officials were worried if the U.S. attacked within Iran, war would break out.

 

ICYMI

– The Hill: US sent texts to Russians, Iranians offering reward for info on election interference
 
– Military Times: White House agrees to cover all costs for Guard coronavirus missions for three more states
 
– The Washington Post: Senators question Pentagon nominee about whether firm trained Saudi journalist’s killers
 
– CNBC: SpaceX and ULA win billions in Pentagon rocket contracts, beating out Blue Origin, Northrop Grumman

Mnuchin defends Trump's move on executive actions

Treasury Secretary Steven MnuchinSteven Terner MnuchinWhite House officials, Democrats spar over legality, substance of executive orders Sunday shows – Trump coronavirus executive orders reverberate Pelosi: ‘Of course there’s room for compromise’ on 0-per-week unemployment benefit MORE on Monday defended President TrumpDonald John TrumpTrump suggests some states may ‘pay nothing’ as part of unemployment plan Trump denies White House asked about adding him to Mount Rushmore Trump, US face pivotal UN vote on Iran MORE‘s decision to sign a series of executive orders after talks with Congress on a coronavirus relief package collapsed, arguing that the president had to move forward.

“If we can get a fair deal, we’ll do it this week, but the president needed to take action,” Mnuchin said in an interview on CNBC. “He’s not going to sit around.”

Mnuchin said that the signing of the controversial orders came after he and White House chief of staff Mark MeadowsMark Randall MeadowsMeadows says he wants Trump nomination speech ‘miles and miles away’ from White House Pelosi: ‘Of course there’s room for compromise’ on 0-per-week unemployment benefit Pelosi, Schumer slam Trump executive orders, call for GOP to come back to negotiating table MORE reported to Trump on Friday that talks with Democrats were at an impasse.

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“We left the meeting on Friday. Mark Meadows and I reported back to him that we were nowhere, and that’s why he moved forward,” Mnuchin said.

Trump on Saturday signed memoranda aimed at providing enhanced unemployment benefits, deferring payroll tax payments, and providing student loan and federal eviction relief. Democrats have criticized the orders, arguing that they’re insufficient and are unlikely to be effective. A number of Republicans have backed the president’s actions, though some GOP lawmakers have questioned whether the president had the legal authority to do what he did.

Top congressional Democrats and administration officials met several times last week to discuss coronavirus relief legislation, but they remain far apart on a number of issues, including aid to state and local governments.

House Democrats passed a bill in May that would provide almost $1 trillion to state, local, territorial and tribal governments. But Mnuchin said that number is “absurd,” arguing that there is still money remaining for states under previous legislation and that some states had financial problems before the pandemic.

The Treasury secretary also said that Trump would sign a bill that focuses specifically on helping schools.

“The president will be more than happy to sign a stand-alone education bill,” Mnuchin aid. “Let’s get that done. Let’s not hold up our kids, and let’s not hold up our small businesses that need to get back to work. This is not about partisan politics. Let’s focus on the kids and the jobs.”

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Blumenthal calls for declassification of materials detailing Russian threat to US elections

Sen. Richard Blumenthal (D-Conn.) said intelligence detailing Russian efforts to influence the 2020 elections should be declassified and made available to the public before ballots are cast.

In an op-ed in The Washington Post, Blumenthal wrote that he reviewed classified information on the Capitol this week and concluded that the November elections are “under attack.” He went on to say he was “shocked” by what he learned and “appalled” that the information has not been made available to voters. 

“The facts are chilling. I believe the American public needs and deserves to know them. The information should be declassified immediately,” Blumenthal wrote. 

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The Connecticut Democrat said he still believes in proper classification of information that can protect sources and methods but accused the Trump administration of politicizing intelligence by overclassifying information. He claimed that overprotecting this kind of information keeps voters in the dark about attempts by foreign powers to interfere in the elections. 

“Unnecessary classification politicizes the national security apparatus and, in this case, keeps the American people in the dark about efforts by foreign adversaries to destroy the bedrock of the nation’s democracy: free and fair elections,” he said.

“The Trump administration’s refusal to share with the American public any information about the Russian threat to the November election is simply unacceptable,” he added. 

Blumenthal also went after Republicans on Capitol Hill, saying they’ve already politicized intelligence with probes into former Vice President Joe BidenJoe BidenBiden says Trump executive order is ‘a reckless war on Social Security’ Trump got into testy exchange with top GOP donor Adelson: report Blumenthal calls for declassification of materials detailing Russian threat to US elections MORE and accusing them of spreading a Russian disinformation campaign.

“Instead, by keeping the facts cloaked in secrecy, the Trump administration and its Republican allies on Capitol Hill invite disinformation and give deception a toehold in the American electorate. And it now appears that such disinformation and deception are gaining a toehold in Congress as well,” he wrote.

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Blumenthal even name-checked Sen. Ron JohnsonRonald (Ron) Harold JohnsonBlumenthal calls for declassification of materials detailing Russian threat to US elections Democrats try to force Trump to boost medical supplies production GOP chairmen hit back at accusation they are spreading disinformation with Biden probe MORE (R-Wis.), the chairman of the Senate Homeland Security and Governmental Affairs Committee, noting his probe into Biden and accusing him of receiving documents from the son of a former KGB officer.

Johnson, who has become a close ally of the White House and has received flak from Democrats who say his investigation is meant to hurt Biden in an election year, fired back Saturday on Twitter, accusing his Democratic colleague of “twisting” classified briefings. 

“It is a flat-out lie that I received the documents from Ukrainians that Democrats keep claiming. And they know it. It is unconscionable that Democrats and the press continue to report it,” he said in a lengthy Twitter thread. 

“The only ones responsible for furthering Russian disinformation to interfere in our election are the Democrats in Congress and the Biden campaign, and the media that is willingly amplifying their lies. They should all be ashamed,” he added.

The back-and-forth between Blumenthal and Johnson comes after months of Democrats voicing concerns that the government is not doing enough to address the threats of foreign election meddling. Many of the lawmakers are racked with memories over Russia’s complex campaign in 2016 against Hillary ClintonHillary Diane Rodham ClintonBlumenthal calls for declassification of materials detailing Russian threat to US elections Hillary Clinton roasts NYT’s Maureen Dowd over column Hillary Clinton touts student suspended over crowded hallway photo: ‘John Lewis would be proud’ MORE.

Those concerns were only elevated after William Evanina, the director of the National Counterintelligence and Security Center, identified China, Russia and Iran as the three top foreign threats to the U.S. presidential race, warning that they are trying to “sway voters’ preferences and perspectives,” create conflict and “undermine the American people’s confidence in our democratic process.”

Evanina said intelligence had concluded that China does not want Trump to win reelection because it considers him “unpredictable,” and Iran is trying to “undermine” U.S. democratic institutions and the president.

He also said that officials had determined that Russia is trying to “denigrate” Biden, noting the Obama administration’s policies on Ukraine and its support for opponents to Russian President Vladimir PutinVladimir Vladimirovich PutinBlumenthal calls for declassification of materials detailing Russian threat to US elections Not a pretty picture: Money laundering and America’s art market Trump brushes off view that Russia denigrating Biden: ‘Nobody’s been tougher on Russia than I have’ MORE.

Trump refuted the intelligence Friday that Russia is seeking to help him, saying he’s “the last person Russia wants to see in office.”

“I don’t care what anybody says,” he shot back when pressed by a reporter.

Bray Wyatt Injury Confirmed, More on Paige and Jimmy Uso

As noted, Bray Wyatt rolled his ankle during Tuesday’s WWE SmackDown main event but finished the match. After the injury, the referee threw up the dreaded “X” symbol but Wyatt clearly didn’t want to stop and didn’t want help from trainers.

Dave Meltzer confirmed on wrestling Observer Radio that Wyatt sprained his ankle. Wyatt was still planning on working weekend WWE live events as of Wednesday morning. If he does miss this weekend’s matches, that could indicate that the injury is serious as he was intent on wrestling this weekend. Meltzer also confirmed that WWE wanted Wyatt to stop the match on Tuesday night but he refused.

Regarding Paige’s injury that has her off the upcoming tour of Australia and New Zealand, word is that she’s dealing with back and shoulder injuries. She’s expected to be out of action for at least two more weeks, possibly longer. Meltzer also noted that her injuries aren’t believed to be too serious.

We also noted before that Jimmy Uso was out of action with an unknown injury. He was expected to be back in action this past Tuesday night but that did not happen. No word yet on when he will be back.

Big WWE Title News Revealed, Must See New Diva Bikini Galleries, Dana Brooke – Triple H Report, Bad News for Reigns’ Push?, HHH Low-Balling WWE Stars on Money?, Big News on a WWE Team Splitting Up, WWE Star Speaking Out Against the Company Soon?, WHY Roman Reigns Failed a WWE Wellness Test, Big Backstage WWE Draft Updates, New Members of The Club, WWE Star Gets Heat for Sloppy Work, , Interesting Dean Ambrose News, Possible AJ Styles Title Plans, Major Tag Team Division Changes Coming?, WWE Ribbing Top Stars on TV, Must See New Lana & AJ Lee & Maryse, Lots of New GIFs & Exclusives, More

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