Happy Thursday 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: President Biden on Thursday announced an end to U.S. support for offensive operations in the Saudi Arabia-led war in Yemen.

“This war has to end,” Biden said during an address at the State Department. “And to underscore our commitment, we are ending all American support for offensive operations in the war in Yemen, including relevant arm sales.”

Biden also confirmed he has appointed veteran diplomat Timothy Lenderking as his special envoy to Yemen, saying Lenderking will work with the United Nations and “all parties to the conflict to push for a diplomatic resolution.”

What won’t change: Biden’s announcement will not affect U.S. military operations against Yemen’s al Qaeda affiliate because those are “actions that we undertake in service of protecting the homeland and protecting American interests in the region and our allies and partners,” national security adviser Jake SullivanJake SullivanOvernight Defense: Biden announces end to US support for offensive operations in Yemen | Pentagon orders mask-wearing indoors and out | Military COVID deaths mounting Biden: US taking ‘urgent’ steps to improve cybersecurity Biden condemns jailing of Navalny in Russia MORE said ahead of Biden’s speech.

In choosing to end support for offensive operations in Yemen, Biden has taken a step toward fulfilling a campaign promise to review the U.S. relationship with Saudi Arabia, which he at one point described as a “pariah” state.

But he also stressed Thursday the United States would continue defending Saudi Arabia against attacks.

“Saudi Arabia faces missile attacks, [drone] strikes and other threats from Iranian supplied forces in multiple countries,” Biden said. “We’re going to continue to support and help Saudi Arabia defend its sovereignty and territorial integrity and its people.”

What US has been doing: The United States has been providing logistics and military support to a Saudi Arabia-led military coalition in Yemen’s civil war, as well as billions of dollars in weapons sales. Last week, the State Department announced it was pausing and reviewing arms sales to the Saudis, as well as to the United Arab Emirates (UAE).

Officials in Saudi Arabia and the UAE, which is also part of the Yemen coalition, have been notified of Biden’s decision to end support of offensive operations, Sullivan said.

The background: Support for the Saudi coalition began during the Obama administration as the administration sought to mend ties after Saudi opposition to the Iran nuclear deal. The coalition is fighting Houthi rebels that U.S. officials say receive weapons and other support from Iran.

But opposition to U.S. support for the war mounted as thousands of civilians were killed in Saudi bombing raids. The United Nations has also warned Yemen is on the verge of widespread catastrophic famine.

U.S. lawmakers in both parties have also been increasingly opposed to support for the Saudis after their killing of U.S.-based journalist Jamal Khashoggi in 2018.

The Trump administration ended the U.S. military’s aerial refueling of Saudi jets in the war amid the mounting opposition but in other ways ramped up support for the Saudis, which it saw as critical to its so-called “maximum pressure” campaign against Iran.

Former President TrumpDonald TrumpGOP senator warns his party must decide between ‘conservatism and madness’ Pompeo rebukes Biden’s new foreign policy Here are the 11 Republicans who voted to remove Greene from House committees MORE pushed through an $8.1 billion arms sale to the Saudis in 2019 over congressional opposition by invoking “emergency” authorities, citing alleged threats by Iran.

Support for decision: Longtime opponents of the war in Yemen hailed Biden’s decision Thursday to end support for offensive operations but stressed it should be just a first step.

“Today marks the beginning of a new era in our foreign policy — one that prioritizes human rights and diplomatic solutions,” Rep. Ro KhannaRohit (Ro) KhannaOvernight Defense: Biden announces end to US support for offensive operations in Yemen | Pentagon orders mask-wearing indoors and out | Military COVID deaths mounting Biden announces end to US support for offensive operations in Yemen Democrats offer bill to provide tax relief to unemployment recipients MORE (D-Calif.) said in a statement. 

PENTAGON ORDERS MASKS WORN INSIDE AND OUTSIDE: Defense Secretary Lloyd AustinLloyd AustinOvernight Defense: Biden announces end to US support for offensive operations in Yemen | Pentagon orders mask-wearing indoors and out | Military COVID deaths mounting Pentagon mandates masks for all personnel working indoors and outdoors Colorado presses Biden to reverse Trump Space Command move MORE on Thursday ordered all military personnel to wear masks while on Defense Department property or while working anywhere outside their homes for the department, a move intended to combat the COVID-19 pandemic.

“Effective immediately, all individuals on military installations … and all individuals performing official duties on behalf of the Department from any location other than the individual’s home, including outdoor shared spaces, will wear masks in accordance with the most current CDC guidelines,” Austin wrote in a memo to the force.

“COVID-19 is one of the deadliest threats our Nation has ever faced. As we have done throughout our history, the military will rise to this challenge. It is imperative that we do all we can to ensure the health and safety of our force, our families, and our communities so we can prevail in this fight.”

Earlier: The new directive follows President Biden’s recent executive order, signed on his first day in office, that mandates face coverings while on federal property.

The new guidelines: The Pentagon memo lays out the guidelines of the new order, which stipulates that individuals must wear masks continuously while on military property except when they are alone in an enclosed office with the door closed; for brief periods of time when eating and drinking; for identification purposes; and to “reasonably accommodate an individual with a disability.”

The new rules update those that have been in place since last year but allowed for more exceptions, including not requiring a mask in shared office spaces as long as individuals were socially distanced.

MILITARY COVID-19 DEATHS MOUNTING: Three service members have died of COVID-19 in the past seven days.

In the most recent case, a sailor assigned to the USS Tennessee battleship died Thursday in Florida from complications related to the illness, bringing the official number of service members killed by the coronavirus to 20.

The sailor was admitted to the Naval Air Station Jacksonville Hospital on Saturday and on Sunday was transferred to the nearby University of Florida Hospital Shands Intensive Care Unit (ICU) where they tested positive for COVID-19. The sailor was in the ICU at the time of death, according to a Navy statement.

No details were given as to whether additional sailors assigned to the Tennessee were infected or would quarantine. 

Closely following: The sailor’s death follows closely behind those of two other service members, an Air National Guard member from Alabama and an Army National Guard member from California.

Sgt. Goran Dimovski, 40, of the California Guard died Sunday, while Master Sgt. Darryl Lovell, 58, of the Alabama National Guard, died Jan. 28.

In total, eight guardsmen, eight reservists and four active-duty service members have died from the virus.

The numbers now: The Pentagon has also reported 225,753 coronavirus cases as of Wednesday, according to an online chart the Defense Department maintains.

The total cases include 143,272 in the military, 45,106 among civilians, 23,034 among dependents and 14,341 among contractors.

There have also been 164 civilian deaths, nine dependent deaths and 60 contractor deaths, according to the Pentagon data.

ON TAP FOR TOMORROW

The Wilson Center Middle East Program will hold a conversation with Amb. James Jeffrey, former ambassador to Iraq and Turkey and Special Envoy to the Global Coalition To Defeat ISIS, to discuss the Biden Administration’s Middle East policy, at 9 a.m. 

Former Defense Undersecretary Michele Flournoy, co-founder and managing partner of WestExec Advisers will speak at the Carnegie Endowment for International Peace webinar on “Nuclear Policy and Posture in the Biden Administration,” at 9:30 a.m. 

The Hudson Institute will hold a webinar on “The Afghan Peace Process: Progress or Peril?” with Afghanistan Ambassador to the United Arab Emirates Javid Ahmad; and former Pakistani Ambassador to the United States Husain Haqqani at 10 a.m. 

ICYMI

— The Hill: Biden to freeze Germany drawdown
 
— The Hill: Colorado presses Biden to reverse Trump Space Command move
 
— The Hill: Lawmakers mull domestic terrorism statute in wake of Jan. 6 attack
 
— The Hill: Biden: US taking ‘urgent’ steps to improve cybersecurity
 
— The Hill: Iranian diplomat convicted in bombing plot
 
— The Hill: Opinion: China’s unconventional weapons are winning the Middle East
 
— The Hill: Opinion: The US should negotiate a ban on basing weapons in space
 
— Military Times: Lawmakers expect quick response from Pentagon on issue of military extremist ties
 
— San Diego Union-Tribune: Black sailor finds noose on San Diego-based warship, sparking investigation
 
— The New York Times: Inside the shadowy militias luring unsuspecting Afghans to fight, or die

President Biden said Thursday that his administration is launching an “urgent initiative” to improve the nation’s cybersecurity, pointing to concerns around malign efforts by Russia and China.

“We’ve elevated the status of cyber issues within our government,” Biden said as part of a national security speech at the State Department. “We are launching an urgent initiative to improve our capability, readiness and resilience in cyberspace.”

Biden pointed to advances made by his administration including the creation of the new position of deputy national security adviser for cyber and emerging technology. Anne Neuberger, the former director of the National Security Agency’s Cybersecurity Directorate, was appointed to fill the position last month.

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The president did not elaborate on other steps his administration is specifically taking and the White House did not respond to The Hill’s request for comment for further details.

Biden has previously underscored his commitment to defending the nation against cyberattacks, in particular through his comments around the recently discovered Russian breach of IT group SolarWinds, which compromised much of the federal government for over a year.

He described the hack during a speech in December as constituting a “grave threat to national security,” and later in the month separately pushed for modernization of the nation’s defenses to address new and evolving risks.

Biden also included more than $10 billion in cybersecurity and information technology funds as part of his $1.9 trillion COVID-19 recovery proposal, with the proposal describing the nation’s cybersecurity as a “crisis.”

The president during his speech Thursday afternoon also cited specific international cybersecurity concerns, including challenges from Russia and China.

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Biden zeroed in on Russia in particular, saying he had emphasized to Russian President Vladimir PutinVladimir Vladimirovich PutinBiden: US taking ‘urgent’ steps to improve cybersecurity Biden condemns jailing of Navalny in Russia Overnight Defense: New START extended for five years | Austin orders ‘stand down’ to tackle extremism | Panel recommends Biden delay Afghanistan withdrawal MORE during his first call in office that his administration would push back against various interference efforts.

“I made it clear to President Putin, in a manner very different from my predecessor, that the days of the United States rolling over in the face of aggressive actions, interfering with our elections, cyberattacks, poisoning its citizens, are over,” Biden said. “We will not hesitate to raise the cost on Russia and defend our vital interests and our people.”

Biden also noted that while he hoped his administration could work with both the Russian and Chinese governments, he would also hold China accountable, a nation he described as “our most serious competitor.” 

“We’ll confront China’s economic abuses, counter its aggressive, coercive action to push back on China’s attack on human rights, intellectual property, and global governance, but we are ready to work with Beijing when it’s in America’s interest to do so,” Biden said. 

Biden’s comments on Russia echoed those made earlier in the day by national security adviser Jake SullivanJake SullivanOvernight Defense: Biden announces end to US support for offensive operations in Yemen | Pentagon orders mask-wearing indoors and out | Military COVID deaths mounting Biden: US taking ‘urgent’ steps to improve cybersecurity Biden condemns jailing of Navalny in Russia MORE, who told reporters at the White House that the administration would be “taking steps to hold Russia accountable for the range of malign activities undertaken,” including election interference and major hacks like the SolarWinds incident. 

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“We will do that at a time and a manner of our choosing, and we believe that imposing those costs and consequences will have an effect on Russia’s behavior going forward,” Sullivan said. “Now, is it going to stop Vladimir Putin from doing everything we don’t like? Of course not, but do we believe we will be able to take a firmer, more effective line when it comes to Russian aggression and bad behavior? Yes we do.”

Russia is also under the microscope from the U.S. intelligence community, with Biden last month ordering assessments of Russian malign efforts on issues including election interference and the impact of the SolarWinds hack. 

A group of former secretaries of the Department of Homeland Security (DHS) on Thursday urged Biden to take a strong stance against Russia, underlining the country’s continued threat in cyberspace.

“One of the big issues for the incoming administration, is going to be to send a very clear message … that we will not suffer violence, and we will respond forcefully to efforts to subvert our unity or our system, and I think this is going to be an ongoing challenge,” former DHS Secretary Michael Chertoff, who served under President George W. Bush, said in reference to Russia during a virtual event hosted by the University of California, Berkeley.

Obama-era DHS Secretary Jeh Johnson noted that while the U.S. had been fixated on protecting elections over the past year, Russian hackers had hit the federal government in other ways through the SolarWinds hack, underlining the need to focus on a range of ways that foreign adversaries could interfere. 

“My general attitude, which I conveyed to people at DHS when in office, was don’t plan for the last attack, plan for the next one, anticipate for the next move of the adversary,” he said.

Sen. Tina SmithTina Flint SmithOvernight Energy: Biden administration delays Trump rollback of migratory bird protections | Democrats seek to block further Arctic drilling | Democratic senator pushes for clean electricity standard Democratic senator pushes for clean electricity standard What the shift in Senate control means for marijuana policy reform MORE (D-Minn.) on Thursday pushed for the adoption of a clean electricity standard, and for potentially using budget rules that sidestep the filibuster to get it done.

“We have to understand that this transition will happen and we can either choose to lead in this clean energy transition, or we can follow,” Smith told reporters Thursday. 

“The clean electricity standard is a powerful tool for realizing this positive transition,” she added. 

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Smith praised a report that would have all U.S. electricity standards come from clean sources by 2035, calling it “excellent.”

She made the remarks during a press conference on the release of a report from the group Evergreen and the progressive pollster Data for Progress. 

President Biden also pledged to make the country’s power sector carbon-free by 2035 while he was campaigning. 

The report argues that budget reconciliation rules could be used to adopt the standard.

Under those rules, a package of proposals can be moved through the Senate and can not be filibustered, as long as it meets certain requirements.

Democrats are now planning to use the rules to move a COVID-19 relief package through the Senate without needing GOP votes.

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The report argued that it could meet the budget reconciliation requirements for a change in revenues or budget overlays by creating a market for zero-emission electricity credits that electric providers can earn by generating power from clean sources. These credits could then be bought from or sold to other providers. 

It notes that these sources would include renewables, nuclear and hydropower. 

“I am open to all of the tools that we might have available to us to get a clean electricity standard passed as part of a significant infrastructure bill,” Smith said when asked about reconciliation. 

It’s possible the standard wouldn’t win support from every Democrat in the Senate, however.

In an interview with the Washington Examiner last month, Sen. Joe ManchinJoseph (Joe) ManchinSanders defuses late-night fight over minimum wage House will have to vote on budget second time as GOP notches wins On The Money: White House reviewing if Biden can cancel student loan debt | Senate signals broad support for more targeted relief checks | Romney proposes monthly payments for families with children MORE (D-W.Va.) expressed skepticism about the idea of imposing a clean electricity standard. 

“The market will take you there,” he said. “We have moved the date farther ahead than we ever thought we would have, and we have done it without total mandates.”

Smith, in 2019, introduced a bill pushing for a clean electricity standard that aimed to reduce emissions from the sector by almost 80 percent by 2035 and have it almost reach near carbon neutrality by the 2050s.

In 2018, the electricity sector accounted for 27 percent of the country’s greenhouse gas emissions. 

A compensation fund for victims of sexual abuse at the hands of the late Jeffrey Epstein will be temporarily frozen while an issue with its liquidity is resolved, an administrator for the fund said Thursday.

When the fund was established, the late financier and registered sex offender’s estate said it had the money and liquidity to pay out all claims, according to Bloomberg. The terms require the estate to replenish funds whenever they fall below a certain level. However, administrator Jordana Feldman said Thursday that the fund had informed her it lacked the liquidity for the next replenishment.

On Wednesday, “the Estate has advised the Program that it is working to secure additional liquidity to continue to fund the Program and that it is committed to paying all eligible claims in accordance with the Protocol,” Feldman said, according to Bloomberg. She said the suspension is effective immediately and will last through March 25.

The fund has so far paid out more than $50 million and received more than 150 claims. Feldman said anyone seeking to come forward as a victim has until Feb. 8 to register to receive a payout, according to Bloomberg.

Epstein was arrested on charges of sex trafficking in 2019 and died in federal custody months later. British socialite Ghislaine Maxwell, who has been accused of recruiting young girls as his victims and participating in their sexual abuse, was arrested in New Hampshire last July. A court has denied her bail, saying her British and French passports make her a flight risk. Maxwell’s trial is set for July.  

The Supreme Court on Wednesday agreed to take up a challenge from a pipeline project seeking to use eminent domain to build a natural gas pipeline between Pennsylvania and New Jersey.

The PennEast Pipeline Co. LLC is seeking to overturn a decision from the 3rd U.S. Circuit Court of Appeals that blocks it from seizing New Jersey state land to build its 116-mile project.

The state of New Jersey has opposed the project, as have environmental groups, but under the Trump administration, the White House sided with the pipeline company.

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It is the federal government who has the “primary authority to determine whether additional pipelines and related facilities are needed and, if so, where they should be located and whom they should serve,” the solicitor general’s office wrote in a December brief.

Those opposed to the pipeline argue states should have a say.

“The law is clear, and the Eleventh Amendment protects New Jersey from seizures by private companies using eminent domain. The Supreme Court should uphold the Third Circuit ruling and protect states from federal overreach,” Maya van Rossum, leader of the Delaware Riverkeeper Network, which opposes the project, said in a statement.

Tony Cox, chair of the board of managers of the PennEast Pipeline, said the Supreme Court’s decision to grant a review is “a major step forward in upholding Congress’ clear charge to the Federal Energy Regulatory Commission (FERC) to ensure the availability of affordable domestic energy,” adding that “federally approved pipeline projects undergo an extensive review process.”

Last summer, 20 states sued the Trump administration in a separate suit, challenging an Environmental Protection Agency rule that weakens states’ ability to block pipelines and other controversial projects that cross their waterways.

Updated at 3:30 p.m.

Happy Thursday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

Write us with tips, suggestions and news: slane@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @NJagoda and @NivElis.

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THE BIG DEAL—White House reviewing whether Biden can take action to cancel student loan debt: The White House is mulling whether President Biden can take unilateral action to cancel federal student loan debt, press secretary Jen PsakiJen PsakiJudge blocks Texas effort to remove Planned Parenthood from Medicaid Cruz blocks vote on Biden Commerce secretary nominee over Huawei concerns On The Money: White House reviewing if Biden can cancel student loan debt | Senate signals broad support for more targeted relief checks | Romney proposes monthly payments for families with children MORE said Thursday, as progressives push the administration to provide relief amid the coronavirus pandemic.

“The President continues to support the cancelling of student debt to bring relief to students and families,” Psaki tweeted. “Our team is reviewing whether there are any steps he can take through executive action and he would welcome the opportunity to sign a bill sent to him by Congress.”

Why it matters: Psaki’s statement is the first indication that Biden may be willing to forgive student loan debt through executive action, something he’s declined to support before and doubted he would be able to do legally.

Biden had previously called for $10,000 of student debt forgiveness per borrower through an act of Congress, not executive action, and Psaki reiterated the president’s position hours before her tweet opening the door to unilateral forgiveness.

The progressive push for forgiveness: The White House comment came hours after a group of Democratic lawmakers led by Senate Majority Leader Charles SchumerChuck SchumerSanders, Ocasio-Cortez, Blumenauer aim to require Biden to declare climate emergency  Biden needs to follow his own advice: Compromise Senate names first Black secretary of the Senate MORE (N.Y.) and Sen. Elizabeth WarrenElizabeth WarrenOn The Money: White House reviewing if Biden can cancel student loan debt | Senate signals broad support for more targeted relief checks | Romney proposes monthly payments for families with children West Virginia newspaper sues Facebook, Google for manipulating digital-advertising market Warren rushes to Capitol to continue hearing questions after Zoom failure MORE (Mass.) reintroduced a measure calling on Biden to forgive up to $50,000 in federally held student debt per borrower.

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• The resolution from Schumer, Warren and Democratic Reps. Ayanna PressleyAyanna PressleyOn The Money: White House reviewing if Biden can cancel student loan debt | Senate signals broad support for more targeted relief checks | Romney proposes monthly payments for families with children Schumer, Warren introduce bill calling on Biden to wipe out student loan debt House Democrats press Biden over vaccine distribution for people of color MORE (Mass.), Ilhan OmarIlhan OmarHere are the 11 Republicans who voted to remove Greene from House committees On The Money: White House reviewing if Biden can cancel student loan debt | Senate signals broad support for more targeted relief checks | Romney proposes monthly payments for families with children House votes to kick Greene off committees over embrace of conspiracy theories MORE (Minn.), Alma AdamsAlma Shealey AdamsOn The Money: White House reviewing if Biden can cancel student loan debt | Senate signals broad support for more targeted relief checks | Romney proposes monthly payments for families with children Schumer, Warren introduce bill calling on Biden to wipe out student loan debt Record number of Black women elected to Congress in 2020 MORE (N.C.) and Mondaire Jones (N.Y.) is not legally binding, but would serve as a formal congressional endorsement of a popular but polarizing progressive proposal.
• The resolution calls on Biden to instruct the Education secretary to use provisions of the Higher Education Act and forgive up to $50,000 in debt per borrower. It also asks Biden to order the IRS to waive taxes on the canceled loans, since forgiven debt is typically treated as taxable income in the U.S.

“We are not going to let up until we accomplish it, until $50,000 of debt is forgiven for every student in the country,” Schumer said during a Thursday press conference. “Let’s get it done.”

I’ve got more here.

LEADING THE DAY

Senate signals broad support for more targeted coronavirus relief checks: The Senate signaled broad bipartisan support on Thursday for the next round of coronavirus stimulus checks to be more targeted.

The chamber voted 99-1 on an amendment from Sens. Joe ManchinJoseph (Joe) ManchinSanders defuses late-night fight over minimum wage House will have to vote on budget second time as GOP notches wins On The Money: White House reviewing if Biden can cancel student loan debt | Senate signals broad support for more targeted relief checks | Romney proposes monthly payments for families with children MORE (D-W.Va.) and Susan CollinsSusan Margaret CollinsHouse will have to vote on budget second time as GOP notches wins On The Money: White House reviewing if Biden can cancel student loan debt | Senate signals broad support for more targeted relief checks | Romney proposes monthly payments for families with children Senate signals broad support for more targeted coronavirus relief checks MORE (R-Maine) related to “targeting” the checks and making sure that “upper-income taxpayers are not eligible.”

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• The vote is non-binding and the budget resolution to which senators attached the proposal doesn’t get signed into law. 
• But the margin signals overwhelming support in the Senate for tightening the phase-out structure of the next round of checks as Congress crafts the COVID-19 relief bill that Democrats want to pass by mid-March.

The Hill’s Jordain Carney breaks it down here.

Romney proposes monthly payments for families with children: Sen. Mitt RomneyWillard (Mitt) Mitt RomneyOn The Money: White House reviewing if Biden can cancel student loan debt | Senate signals broad support for more targeted relief checks | Romney proposes monthly payments for families with children Senate signals broad support for more targeted coronavirus relief checks Bipartisan group of senators calls for more targeted relief checks MORE (R-Utah) on Thursday unveiled a proposal to provide monthly payments to families with children.

The proposal comes as many Democrats have similarly expressed interest in providing payments to families with children on a monthly basis.

Breaking down the plan: Under Romney’s proposal, the existing child tax credit would be replaced with monthly payments of $350 for children ages 5 and under and $250 for children ages 6 to 17. Families would be capped at monthly payments of $1,250.

• All children with Social Security numbers would be eligible for the payments, and parents would also be eligible to apply to start getting the benefit four months before a child’s due date.
• The payment amounts phase out for single tax filers with income above $200,000 and married couples with income above $400,000 — the same income phaseout thresholds for the current child tax credit. 
• The Social Security Administration would administer the monthly payments, and people would reconcile any overpayments or underpayments with the IRS when they filed their tax returns.

The Hill’s Naomi Jagoda walks us through the plan here.

GOOD TO KNOW

• President Biden on Thursday formally withdrew Judy Shelton’s nomination to the Federal Reserve Board, closing the book on her quest to join the central bank.
• The S&P 500 closed at a record high of 3,872 on Thursday, up 42 points, or 1.1 percent, as markets seized on positive economic data.
• Initial jobless claims in the last full week of January fell to a seasonally adjusted 779,000, a drop of 33,000 from the previous week, but still a historically high level demonstrating persistent troubles in the job market.
• One in three Americans who relocated during the coronavirus pandemic said they did so due to related financial issues, according to polling from Pew Research Center released Thursday.

ODDS AND ENDS

• Hershey Co. will be raising the price of its chocolate in 2021 during the holiday season, the company’s CEO said Thursday. 
• Former President TrumpDonald TrumpGOP senator warns his party must decide between ‘conservatism and madness’ Pompeo rebukes Biden’s new foreign policy Here are the 11 Republicans who voted to remove Greene from House committees MORE’s banker at Deutsche Bank lost her job in December after an internal probe revealed that she did not properly disclose business that she did with a client.

The U.S. is “disappointed” by the International Court of Justice’s (ICJ) ruling on Wednesday rejecting the American argument that a case brought forth by Iran is outside the jurisdiction of the court, said State Department spokesperson Ned Price.

The ruling by the ICJ, the top court for the United Nations, will allow a case brought by the Islamic Republic of Iran against the U.S. to proceed. The case alleges the U.S. sanctions policy against Iran violates a 1955 treaty between the two countries.

“We have great respect for the International Court of Justice. At the same time, we are disappointed that the court did not accept our well-founded legal arguments, that the case Iran brought is outside the court’s jurisdiction, and the court should not hear it,” Price said during a briefing with reporters at the State Department.

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The ICJ in a statement Wednesday said the majority of the court panel rejected the arguments made by the U.S. to dismiss Iran’s claims as outside the court’s jurisdiction.

The court further rejected the U.S. request to dismiss Iran’s claims made on the basis of the 1955 Treaty of Amity, Economic Relations, and Consular Rights.

Washington severed relations with Tehran following the Islamic Revolution of 1979, but the U.S. remained a party to the treaty.

Iran used it as a basis to file a case with the International Court of Justice in 2018 in response to former President TrumpDonald Trump Pelosi pushing Newsom to pick Schiff for next California AG: report Palm Beach town attorney says Trump should be able to live at Mar-a-Lago Trump helipad at Mar-a-Lago to soon be demolished MORE’s decision to withdraw from the international nuclear deal, called the Joint Comprehensive Plan of Action, and reimpose sanctions on Iran.

Former Secretary of State Mike PompeoMike PompeoUS ‘disappointed’ by UN court decision on Iran case: State Department Ben Carson launches conservative think tank Belarus police arrest 160 protestors calling for president’s ouster MORE withdrew from the treaty months after Iran filed its case with the ICJ.

Iran argues the U.S. sanction regime on the country violates the terms of the 1955 treaty.

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The court on Wednesday said the terms of the treaty provided a basis for the case to proceed in the international body.

Iranian Foreign Minister Javad Zarif celebrated the decision as “another legal victory for Iran.”

Price warned against characterizing the court’s decision as in favor of Iran, and that the U.S. is preparing to prove that Iran’s claims “have no merits.”

“While Iran may seek to frame this decision as somehow supporting its view on the merits, the ICJ’s rules and case law make plain that a decision on preliminary objections does not prejudge the merits. In the next phase of this case we’ll explain why Iran’s claim has no merits,” he said.

Two trade groups representing grocery stores in the Pacific Northwest sued the city of Seattle on Wednesday for requiring stores to increase workers’ hazard pay by $4 an hour amid the coronavirus pandemic.

Under the city ordinance, all large grocery stores with locations bigger than 10,000 square feet and more than 500 employees worldwide must provide the pay increase to all workers through the end of the city’s civil emergency.

“Unfortunately, the council’s unprecedented ordinance, its unilateral action, and unwillingness to work with the grocery industry has left us with no other option than to file a lawsuit against the city,” Tammie Hetrick, president and CEO of the Washington Food Industry Association, said in a statement, according to The Seattle Times.

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In the lawsuit, the group accuses the city of attempting to override federal laws on collective bargaining between unions and management. It further alleges the city singles out large grocers “without providing any reasonable justification for the exclusion of other employers or frontline retail workers.”

The lawsuit also accuses the lawmakers who passed the ordinance of doing so at the behest of United Food and Commercial Workers (UFCW), the nation’s largest grocery worker union.

“We see this kind of employer pushback every time we pass workers-rights laws, but it’s especially unfortunate in the middle of a pandemic that these grocery employers are going to such great lengths to avoid paying workers,” Anna Minard, a spokesperson for UFCW Local 21, told the newspaper.

“We will absolutely defend the City’s right to see essential grocery workers receive the hazard pay they so rightly deserve,” said Dan Nolte, a spokesperson for Seattle City Attorney Pete Holmes.

Kroger has already closed two California locations after similar legislation passed in the state, while Trader Joe’s has raised pay for all workers but canceled a smaller raise set for mid-2021, the paper notes.

Executives at the trading app Robinhood are scrambling to respond to congressional backlash over their decision last week to block users from buying shares of GameStop and other quickly rising stocks.

Lawmakers in both parties have blasted the company’s actions amid the frenzy sparked by a Reddit subform that drove shares of GameStop and other poor-performing companies to staggering heights.

Robinhood’s lobbying skills and Washington knowledge will now be put to the test as the company faces two bruising hearings and the potential for regulatory changes that could upend its business model.

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“This brings in so many populist issues from anti-Wall Street, anti-Big Tech. Those worlds seem to be colliding a little bit with this story,” said Dave Oxner, managing director at Cogent Strategies and a former GOP aide on the House Financial Services Committee.

Robinhood CEO Vlad Tenev is expected to testify before the House Financial Services Committee at a Feb. 18 hearing that will focus on the GameStop rally, Robinhood’s response and the overall state of the stock market. A separate Senate Banking Committee hearing is in the works.

Rep. Maxine WatersMaxine Moore WatersRobinhood CEO, regulators to testify at House hearing on GameStop frenzy Lawmakers remember actress Cicely Tyson Lawmakers rip Robinhood’s decision on GameStop MORE (D-Calif.), chairwoman of the Financial Services panel, said Wednesday that she wanted Tenev to testify, along with GameStop and Reddit representatives and Keith Gill, a prominent Reddit trader behind the recent rallies. She said not all invited witnesses have responded yet.

Lawmakers on both sides of the aisle have criticized Robinhood’s decision to stop users from buying shares of GameStop and other skyrocketing companies targeted by a Reddit forum. Hedge funds and other investors, meanwhile, continued to buy the stocks.

The anger even bridged some political divides, with Rep. Alexandria Ocasio-CortezAlexandria Ocasio-CortezOmar slams GOP ‘whitewashing,’ false equivalency with Greene Progressives target Manchin, Sinema with new PAC Chip Roy ‘saddened’ by Ocasio-Cortez’s experience of sexual assault, but remains firm on calling for her apology MORE (D-N.Y.) and Sen. Ted CruzRafael (Ted) Edward CruzHillicon Valley: Federal cyber agency reevaluating role in countering election disinformation | Senate panel advances Biden’s Commerce secretary pick | House Armed Services panel establishes new cybersecurity panel Senate panel advances Biden’s Commerce secretary pick in 21-3 vote The Hill’s Morning Report – Presented by Facebook – Democrats chart path to pass Biden’s COVID-19 relief plan MORE (R-Texas.) finding themselves on the same page.

At the hearings, Robinhood will need to lay out its case before skeptical lawmakers. The company, which was founded in 2013, has argued that its decision to curtail trading of GameStop stock was done in the best interest of its customers at a time when it’s struggling to keep up with rapid growth.

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“Robinhood appears to have a credible, objectively verifiable explanation for why it did what it did,” said David Slovick, a partner at Barnes & Thornburg and who was senior enforcement attorney at SEC from 2000-2004.

Tenev’s performance at the hearing, and Robinhood’s fight to quell the backlash, will pose the biggest challenge yet for its recently expanded D.C. team.

The company has been bulking up its Washington office with former Securities and Exchange Commission (SEC) officials.

In May, Robinhood hired former Republican commissioner Dan Gallagher, who served from 2011-2015, as its chief legal officer. The company also brought on Lucas Moskowitz, former chief of staff to ex-SEC Chairman Jay Clayton from 2017-2019, as deputy general counsel.

Robinhood spent $275,000 on lobbying in 2020 and had eight lobbyists on retainer, many of whom have backgrounds at the SEC and on Capitol Hill.

Justin Daly of Daly Consulting Group was commissioner’s counsel from 2007-2010, and Blue Ridge Law & Policy’s Benjamin Brown served as counsel at the agency from 2014-2015.

On the banking and congressional side, Williams Group’s Michael Williams is a former managing director at Credit Suisse, and Blue Ridge Law & Policy’s William Liles served as senior counsel to Republicans on the House Financial Services Committee from 2011-2012.

Just recently, Robinhood put out the call for an in-house lobbyist. The job posting said the federal affairs manager would need to prioritize working on federal government relations, primarily focusing on Congress.

On the PR front, Robinhood isn’t retreating from the GameStop controversy.

Speaking on Tesla CEO Elon MuskElon Reeve MuskFAA taking charge of SpaceX rocket explosion investigation On The Money: Biden calls Dems, urges big COVID bill | Biden’s SEC pick sidelined as GameStop drama unfolds | Bezos stepping down as Amazon CEO Warren presses Robinhood chief on decision to halt GameStop purchases MORE’s podcast this week, Tenev defended the decision to halt trading. The company is also running a Super Bowl ad on Sunday, highlighting how the app is opening the financial system to everyone.

Slovick said the out-front approach is a smart one.

“Burying your head in the sand is typically the route chosen by people who don’t have a plausible explanation for their conduct,” he said.

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Robinhood has hired communications specialists in recent weeks.

Josh Drobnyk, who worked in communications at the Financial Industry Regulatory Authority (FINRA), came on as vice president of corporate communications just days before the GameStop frenzy.

Another recent DC hire was Jacqueline Ortiz Ramsay, former vice president of media relations at the National Association of Federally-Insured Credit Unions, as head of public policy communications.

Anthony Cavallaro, who worked in the financial crimes detection program at FINRA, was hired as head of regulatory services and fraud oversight and is expected to start this month.

While Robinhood may be preparing for enforcement actions, industry experts are doubtful that the hearings will lead to substantive reforms.

“I doubt very much that this saga will result in any changes to the securities laws or the SEC’s rules. Even if Robinhood did what Sen. Warren says it did and improperly restricted individuals’ ability to trade certain stocks, the securities laws already contain the provisions necessary to charge the company,” Slovick said.

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Democrats want the SEC to increase capital requirements for brokerages, nail down what it considers to be market manipulation and increase disclosure requirements for hedge funds, particularly when they take large short positions on stocks.

Tenev has also called for changes, saying regulators and the financial system need to create a means to finalize securities transactions immediately, instead of the two-day process that he blamed for some of the companies woes.

Some experts say Robinhood just needs to weather a storm that is likely to blow over with time.

“I’d be surprised if we were talking about the health of our equity markets a year from now,” Oxner said.

Slovick agreed, saying Wall Street critics might not find the kind of smoking gun they’re looking for.

“It’s got the right populist elements: small investor good, big hedge fund bad. But for anyone who wants to dig a little deeper, I think they’ll discover a dry well, not a perfect storm,” he said.

The National Counterintelligence and Security Center (NCSC) on Monday warned that efforts by the Chinese government to obtain U.S. health data, particularly DNA, through hacking and other means had been stepped up during the COVID-19 pandemic. 

“For years, the People’s Republic of China (PRC) has collected large healthcare data sets from the U.S. and nations around the globe, through both legal and illegal means, for purposes only it can control,” the NCSC wrote in a fact sheet. “The PRC’s collection of healthcare data from America poses equally serious risks, not only to the privacy of Americans, but also to the economic and national security of the U.S.”

The agency noted that these efforts had increased during the COVID-19 pandemic, with Chinese biotech group BGI offering COVID-19 testing kits to the majority of countries and establishing 18 testing labs over the past six months alone, allegedly as part of an effort to obtain health data. 

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The NCSC wrote that U.S. health data was an attractive target for the Chinese government due to the diversity of the population and because of the nation’s comparably lax safeguards for personal data. 

“The PRC understands the collection and analysis of large genomic data sets from diverse populations helps foster new medical discoveries and cures that can have substantial commercial value and advance its Artificial Intelligence and precision medicine industries,” the agency wrote. 

The NCSC underlined its concerns that the Chinese government has already used health data, including DNA, to suppress and control its own citizens, noting that many residents of the Xinjiang province, home to the Uighur population, had been forced to provide fingerprints, blood types and other personal data.

The report was released the day after former NCSC Director William Evanina warned of the risks China posed to U.S. health care data during an appearance on CBS News’s “60 Minutes,” noting that there was a likelihood of “110 percent” that China has obtained an average American’s personal data.

“We have probably five or six health care companies in the last five years who have been, I would say, penetrated, exfiltrated, hacked by China,” Evanina said. “Current estimates are that 80 percent of American adults have had all their personally identifiable information stolen by the Communist Party of China.”

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The NCSC warned Monday that the Chinese government was using the health data to outpace the U.S. biotech industry, which posed the threat of the U.S. being “left more dependent on Chinese innovation and drug development for its cures” and hurting the U.S. job market. 

Evanina highlighted this concern during his appearance on “60 Minutes,” warning that without action the U.S. could face the threat of China trying to “systematically eliminate our health care services.”

“Are we OK with that as a nation? If we are as a nation, then so be it, but that’s what’s happening,” Evanina said. 

Much of this data has been accessed through hacking, with Evanina saying that China is “number one in the world at any kind of hacking capability,” describing it as “brazen” in its online efforts. 

The NCSC also cited concerns Monday around Chinese hackers targeting U.S. health data and research.

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“China’s access to U.S. healthcare and genomic data poses serious privacy and national security risks to the U.S.,” the agency wrote. “Through its cyber intrusions in recent years, the PRC has already obtained the Personal Identifying Information (PII) of much of the U.S. population.”

Chinese hackers have stepped up efforts to target both U.S. researchers and the overall COVID-19 vaccine supply chain over the past year. Evanina said at an event earlier this month prior to stepping down from his position that he was heavily concerned about efforts by both China and Russia to target the vaccination process. 

FBI Director Christopher Wray testified last year of these threats, telling a Senate committee that the FBI was seeing “very aggressive activity by the Chinese, and in some cases by others, to target our COVID-related research, whether it’s vaccines, treatments, testing technology, etc.”