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  • What the banking crisis means for mortgage rates | CNN Business

    What the banking crisis means for mortgage rates | CNN Business

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    Washington
    CNN
     — 

    Mortgage rates have taken would-be buyers on a ride this year — and it’s only March.

    Generally, home buyers can anticipate mortgage rates to move down through the rest of this year as the banking crisis drags on, which could cool down inflation.

    But there are bound to be some bumps along the way. Here’s why rates have been bouncing around and where they could end up.

    After steadily rising last year as a result of the Federal Reserve’s historic campaign to rein in inflation, the average rate for a 30-year fixed-rate mortgage topped out at 7.08% in November, according to Freddie Mac. Then, with economic data suggesting inflation was retreating, the average rate drifted down through January.

    But a raft of robust economic reports in February brought concerns that inflation was not cooling as quickly or as much as many had hoped. As a result, after falling to 6.09%, average mortgage rates climbed back up, rising half a percentage point over the month.

    Then in March banks began collapsing. That sent rates falling again.

    Neither the actions of the Federal Reserve nor the bank failures directly impact mortgage rates. But rates are indirectly impacted by actions that the Fed takes or is expected to take, as well as the health of the broader financial system and any uncertainty that may be percolating.

    On Wednesday, the Federal Reserve announced it would raise interest rates by a quarter point as it attempts to fight stubbornly high inflation while taking into account recent risks to financial stability.

    While the bank failures made the Fed’s work more complicated, analysts have said that, if contained, the banking meltdown may have actually done some work for the Fed, by bringing down prices without raising interest rates. To that point, the Fed suggested on Wednesday that it may be at the end of its rate hike cycle.

    Mortgage rates tend to track the yield on 10-year US Treasury bonds, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.

    Following the Fed’s announcement on Wednesday, bond yields — and the mortgage rates that usually follow them — fell.

    But the relationship between mortgage rates and Treasurys has weakened slightly in recent weeks, said Orphe Divounguy, senior economist at Zillow.

    “The secondary mortgage market may react to speculation that more financial entities may need to sell their long-term investments, like mortgage backed securities, to get more liquidity today,” he said.

    Even as Treasurys decline, he said, tighter credit conditions as a result of bank failures will likely limit any dramatic plunging of mortgage rates.

    “This could restrict mortgage lenders’ access to funding sources, resulting in higher rates than Treasuries would otherwise indicate,” Divounguy said. “For borrowers, lending standards were already quite strict, and tighter conditions may make it more difficult for some home shoppers to secure funding. In turn, for home sellers, the time it takes to sell could increase as buyers hesitate.”

    Inflation is still quite high, but it is slowing and analysts are anticipating a much slower economy over the next few quarters — which should further bring down inflation. This is good for mortgage borrowers, who can expect to see rates retreating through this year, said Mike Fratantoni, Mortgage Bankers Association senior vice president and chief economist.

    “Homebuyers in 2023 have shown themselves to be quite sensitive to any changes in mortgage rates,” Fratantoni said.

    The MBA forecasts that mortgage rates are likely to trend down over the course of this year, with the 30-year fixed rate falling to around 5.3% by the end of the year.

    “The housing market was the first sector to slow as the result of tighter monetary policy and should be the first to benefit as policymakers slow — and ultimately stop — hiking rates,” said Fratantoni.

    In second half of the year, the inflation picture is expected to improve, leading to mortgage rates that are more stable.

    “Expectations for slower economic growth or even a recession should bring inflation down and help mortgage rates decline,” said Divounguy.

    That’s good news for home buyers since it improves affordability, bringing down the cost to finance a home. It also benefits sellers, since it reduces the intensity of an interest-rate lock-in.

    Lower rates could also convince more homeowners to list their home for sale. With the inventory of homes for sale near historic lows, this would add badly needed inventory to an extremely limited pool.

    “Mortgage rates are steering both supply and demand in today’s costly environment,” said Divounguy. “Home sales picked up in January when rates were relatively low, then slacked off as they ramped back up.”

    But with cooling inflation comes a higher risk of job losses, which is typically bad for the housing market.

    “Of course, much uncertainty surrounding the state of inflation and this still-evolving banking turmoil remains,” said Divounguy.

    In his remarks on Wednesday, Fed Chair Jerome Powell said estimates of how much the recent banking developments could slow the economy amounted to “guesswork, almost, at this point.”

    But regardless of the tack the economy and banking concerns take, their impact will quickly be seen in mortgage rates.

    “Evidence — in either direction — of spillovers into the broader economy or accelerating inflation would likely cause another policy shift, which would materialize in mortgage rates,” said Divounguy.

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  • Is TikTok’s time up? CEO’s skewering before Congress raises questions about app’s future in the US | CNN Business

    Is TikTok’s time up? CEO’s skewering before Congress raises questions about app’s future in the US | CNN Business

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    CNN
     — 

    Is TikTok’s time up?

    That’s the question coursing through the halls of Congress, Wall Street, and the public writ large after the social media company’s chief executive, Shou Zi Chew, waffled for hours before US lawmakers on Thursday.

    “TikTok’s fate in the US is on shakier ground than ever following lawmakers’ grueling questioning of Chew,” Insider Intelligence principal analyst Jasmine Enberg said.

    The 40-year-old Harvard-educated Chew was never going to get a warm welcome from US lawmakers. That much had been telegraphed ahead of Thursday’s hearing in the clearest possible manner. And Chew was well aware he would likely be greeted with a cold reception, which is why he spent hours and hours preparing over the last week for his first sworn testimony before US lawmakers.

    But it was striking how the TikTok chief flailed under aggressive questioning from both Republicans and Democrats, uniting the parties in a way that is rarely ever seen in American politics anymore. “Mr. Chew, welcome to the most bipartisan committee in Congress,” Republican Rep. Buddy Carter said. Democratic Rep. Tony Cárdenas echoed, “You have been one of the few members to unite this committee.”

    A version of this article first appeared in the “Reliable Sources” newsletter. Sign up for the daily digest chronicling the evolving media landscape here.

    To be clear, quite a few members of Congress were simply not interested in the facts. They were never going to be moved by anything Chew said. They had their talking points and were going to deploy them during their allotted time as cameras were rolling. They couldn’t care less about technical talk related to routing server traffic through Oracle. It was never going to matter or impact how they behaved.

    “Shou came prepared to answer questions from Congress, but, unfortunately, the day was dominated by political grandstanding that failed to acknowledge the real solutions already underway through Project Texas or productively address industry-wide issues of youth safety,” a TikTok spokesperson said after the hearing.

    That said, Chew needed to provide clear, direct answers to questions posed by lawmakers, particularly those regarding fears of potential Chinese authority over the company. Instead, his murky answers on questions pertaining to the Communist Party of China led to added confusion at times.

    Even if everything TikTok claims about firewalling US data from Chinese actors via Oracle’s Texas-based servers is true, it was evident from Thursday’s hearing that lawmakers simply don’t buy it. And that poses a serious problem for the company as it faces mounting calls for it to be outright banned.

    As Kara Swisher told me, “While the politicians on both sides were posing for the cameras and should have been scrutinizing US social media sites for years and passing laws to protect US consumers, TikTok is going to get the brunt of it and will now have only two choices, a spin or a ban.”

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  • House fails to override Biden veto of resolution to overturn investment rule | CNN Politics

    House fails to override Biden veto of resolution to overturn investment rule | CNN Politics

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    CNN
     — 

    The House of Representatives on Thursday failed to override President Joe Biden’s veto of a measure to overturn a controversial investment rule in a victory for the White House.

    Biden issued the first veto of his presidency Monday on a resolution to overturn a retirement investment rule that allows managers of retirement funds to consider the impact of climate change and other environmental, social and governance factors when picking investments.

    A two-thirds majority vote would have been needed in both chambers of Congress to override the veto – a high threshold to meet. The final vote on the effort to override the veto was 219 to 200.

    Republican lawmakers led the effort to overturn the investment rule, arguing it pushes a liberal agenda on Americans and will hurt retirees’ bottom lines. Democrats argue it’s not about political ideology, it’s not a mandate and it will help investors.

    The resolution, which would rescind a Department of Labor rule, passed both chambers of Congress with Democratic Sens. Joe Manchin of West Virginia and Jon Tester of Montana voting with Republicans in the Senate.

    Biden argued the GOP-backed measure to overturn the rule would put retirement savings at risk.

    “This bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like,” Biden tweeted as he announced the veto.

    The veto from Biden reflects the reality of a changed political order in Washington with Republicans now in control of the House after they won back the chamber from Democrats in the 2022 midterm elections.

    Previously, Democrats controlled both the House and the Senate. Now, the president’s party only has a majority in the Senate.

    Most legislation passed by the current GOP-controlled House will not be able to pass the Democratic-controlled Senate. But the resolution to overturn the investment rule only needed a simple majority to pass in the Senate. Republican lawmakers advanced it under the Congressional Review Act, which allows Congress to roll back regulations from the executive branch without needing to clear the 60-vote threshold in the Senate that is necessary for most legislation.

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  • Supreme Court humors itself as it considers whether Jack Daniel’s can stop a dog toy company from parodying its brand | CNN Politics

    Supreme Court humors itself as it considers whether Jack Daniel’s can stop a dog toy company from parodying its brand | CNN Politics

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    Washington
    CNN
     — 

    The Supreme Court on Wednesday delved into the complexities of federal trademark law in a case concerning a poop-themed dog toy that resembles a Jack Daniel’s bottle, at times erupting into laughter as the justices explored how much protection should be given to parodists that rip off trademarks they don’t own.

    At the center of the case is a “Bad Spaniels Silly Squeaker” toy created by VIP Products that is strikingly similar to Jack Daniel’s bottles. The distiller sued the company over the toy – which is replete with scatological humor – claiming it violated federal trademark law, which usually centers around how likely a consumer is to confuse an alleged infringement with something produced by the true owner of the mark.

    But at oral arguments, at least one justice admitted she didn’t understand the joke being sold by VIP Products.

    “What is there to it? What is the parody here?” Justice Elena Kagan asked an attorney for the toy company, leading the courtroom to burst into laughter. “Because maybe I just have no sense of humor. But what’s the parody?”

    Kagan went on to list a number of different marks the company pokes fun at, drawing laughter from Justice Clarence Thomas: “Doggie Walker, Dos Perros, Smella Arpaw, Canine Cola, Mountain Drool. Are all of these companies taking themselves too seriously?”

    And a misunderstanding by Lisa Blatt, an attorney representing Jack Daniel’s, over a hypothetical posed by Justice Samuel Alito led to another round of giggles.

    Alito was trying to ask how likely it was that a reasonable person would believe Jack Daniel’s approved the toy at hand or a similar theoretical toy that joked it contained “dog urine.”

    “So a reasonable person would not believe Jack Daniel’s had approved this?” he asked Blatt.

    “I think if you’re selling urine you’re probably going to win on a motion to (dismiss), but you’re probably also violating some state law,” she replied.

    “Oh no, you’re not selling urine. It’s exactly this toy, which purportedly contains some sort of dog excrement or urine,” Alito said, humoring the courtroom as he attempted to clarify his hypothetical.

    “Well, just showing how confused I was suggests that I would be your perfect consumer,” Blatt said.

    Jokes – intentional or not – aside, some of the justices were skeptical of the distillery, whose attorneys want the court to toss out a heightened standard of review an appeals court used when it ruled in favor of the toy maker.

    “I have some hesitation doing away with the Rogers Test,” Justice Sonia Sotomayor said in part, referring to a court-created test used to determine whether a potential trademark infringement in non-commercial instances enjoys constitutional protection.

    Alito seemed to agree.

    “Well, I’m concerned about the First Amendment implications of your position and you began by saying, by stressing that Rogers is atextual, it was made up.”

    “You know, there is a text that says that Congress shall make no law infringing the freedom of speech. That’s a text that takes precedence over the Lanham Act and you said there are no constitutional issues,” he added, referring to the trademark law at the center of the dispute.

    Joining the dog pile, Justice Ketanji Brown Jackson said she was “concerned about impairing artists” if the court sided with Jack Daniel’s and issued a decision that effectively prevents the unauthorized use of marks in artistic works.

    The case pits the rights of a famous trademark holder against the First Amendment rights of a company that wants to use those marks to sell a humorous product.

    VIP’s “Bad Spaniels Silly Squeaker” toy has the same general shape of a Jack Daniel’s bottle. The plastic bottle, like its glass counterpart, has a similar font style and uses a black label.

    VIP borrows Jack Daniel’s “Old No. 7 Brand Tennessee Sour Mash Whiskey” to sell “The Old No. 2 On Your Tennessee Carpet,” a reference to dog excrement. And it changes the liquor bottle’s “40% ALC. BY VOL. (80 PROOF)” with “43% POO BY VOL.” and “100% SMELLY.”

    A tag affixed to the toy notes that it’s “not affiliated with Jack Daniel Distillery.”

    That, however, was not enough to keep Jack Daniel’s from suing the company to take the toy off the market. The distiller argues VIP violates federal trademark law and that the toy, especially the references to dog excrement, damage its reputation because it could confuse consumers into thinking the product belongs to the “oldest registered distillery in the United States.”

    “To be sure, everyone likes a good joke,” lawyers for Jack Daniel’s wrote in court papers. “But VIP’s profit-motivated ‘joke’ confuses consumers by taking advantage of Jack Daniel’s hard-earned goodwill.”

    Depending on how they rule, the justices could strip away some trademark protections by giving entities cover to legally use registered marks not belonging to them so long as they do so in a way that expresses humor.

    A district court ruled in favor of Jack Daniel’s, finding that the toy infringed on the distiller’s trademark. But an appeals court later sided with VIP Products, invoking the so-called Rogers Test.

    The court said VIP’s use of Jack Daniel’s trademark was non-commercial and that because it was done humorously for an “expressive work,” it’s protected by the First Amendment.

    The case “deals with a very common thing of pitting somebody who has trademark rights … against another who is saying, ‘I’m entitled to (use those marks) under the First Amendment because it is parody. And I need to take enough of the mark in order to make it funny. People have to get the joke,’” said Mark Sommers, a trademark attorney based in Washington, DC.

    Sommers added that the justices’ decision in the matter has the potential to be a landmark ruling if they “help define that line that exists between the First Amendment right of expression – be that parody, be that art, whatever you want to express – versus the important trademark issues that are here where brand owners who have invested a tremendous amount of goodwill don’t want their trademarks used in a manner which could result in potential confusion among the consuming public.”

    Attorneys for Jack Daniel’s told the justices in court papers that the appeals court ruling “gives copycats free license to prey on unsuspecting consumers and mark holders,” and warned that if it wasn’t reversed, companies could use trademarks they don’t own to flood the markets with allegedly unserious products.

    Santa Claus, the KKK, and other bizarre hypotheticals raised by Supreme Court in LGBTQ rights case

    “No one disputes that VIP is trying to be funny. But alcohol and toys don’t mix well, and the same is true for beverages and excrement,” they wrote. “The next case could involve more troubling combinations – food and poison, cartoon characters and pornography, children’s toys and illegal drugs, and so on.”

    VIP argues consumers can easily distinguish between the two products, with lawyers for the Arizona-based company writing in court papers that it “has never sold whiskey or other comestibles, nor has it used ‘Jack Daniel’s’ in any way (humorously or not). It merely mimicked enough of the iconic bottle that people would get the joke.”

    “This is a case about speech, and a popular brand’s attempts to control that speech by weaponizing the Lanham Act,” they wrote, referring to the federal trademark law at the center of the dispute.

    “It is ironic that America’s leading distiller of whiskey both lacks a sense of humor and does not recognize when it – and everyone else – has had enough,” the toy company told the court.

    The Biden administration had urged the justices to take the case, with the Justice Department siding with Jack Daniel’s in the dispute.

    “The First Amendment does not confer any right to use another person’s trademark, or a confusingly similar mark, as a source identifier for goods sold in commerce,” the department wrote in court papers. “Indeed, the absence of any such right is a basic animating premise of trademark-infringement law. If such a right existed, states and the federal government might lack authority to prohibit trademark infringement.”

    Several major companies also filed briefs to the court in support of Jack Daniel’s, including Nike and Levi Strauss & Co.

    “Though defendants will often have an incentive to label it as such, not every humorous use of another’s trademark is a parody,” Nike wrote in its brief. “Courts therefore should take a disciplined approach to this important classification in cases where ‘parody’ is claimed.”

    The Supreme Court is expected to rule later this term in another high-profile intellectual property law case, with the justices having heard arguments last year in a copyright infringement case concerning the late Andy Warhol and the late musician Prince. During those arguments, the justices attempted to determine when a new work based on a prior piece is substantially transformative, and when it simply amounts to a copycat version of an existing work subject to copyright rules.

    This story has been updated with additional developments.

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  • TikTok CEO testifies before Congress for the first time | CNN Business

    TikTok CEO testifies before Congress for the first time | CNN Business

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    CNN
     — 

    TikTok CEO Shou Chew made his first appearance before Congress on Thursday and was immediately hit by intense criticism from lawmakers, including calls for the app to be banned.

    Rep. Cathy McMorris Rodgers, the chair of the House Energy and Commerce Committee, opened Thursday’s hearing by tearing into TikTok, and telling Shou: “Your platform should be banned.”

    “I expect today you’ll say anything to avoid this outcome,” she continued. “We aren’t buying it. In fact, when you celebrate the 150 million American users on TikTok, it emphasizes the urgency for Congress to act. That is 150 million Americans that the [Chinese Communist Party] can collect sensitive information on.”

    In his opening remarks, Chew attempted to stress TikTok’s independence from China and played up its US ties. “TikTok itself is not available in mainland China, we’re headquarterd in Los Angeles and Singapore, and we have 7,000 employees in the U.S. today,” he said.

    “Still, we have heard important concerns about the potential for unwanted foreign access to US data and potential manipulation of the TikTok US ecosystem,” Chew said. “Our approach has never been to dismiss or trivialize any of these concerns. We have addressed them with real action.

    Chew’s moment in the hot seat comes as some lawmakers are renewing calls for the app to be banned in the United States due to perceived national security concerns because of its ties to China through its parent company, ByteDance. TikTok acknowledged to CNN last week that federal officials are demanding the app’s Chinese owners sell their stake in the social media platform, or risk facing a US ban of the app. A number of countries, including the US, have already instituted a ban of the app on government devices due to the security concerns.

    TikTok doesn’t operate in China. But since the Chinese government enjoys significant leverage over businesses under its jurisdiction, the theory goes that ByteDance, and thus indirectly, TikTok, could be forced to cooperate with a broad range of security activities, including possibly the transfer of TikTok data.

    With his appearance, Chew may hope to reassure Americans and temper the heated rhetoric in Washington about the app – but the first two hours of the hearing showed just how challenging a task that might be.

    Much of Chew’s attempts to stress that his company is not an arm of the Chinese government appeared to fall on deaf ears. Numerous members of Congress interrupted the chief executive’s testimony to say they simply don’t believe him.

    “To the American people watching today, hear this: TikTok is a weapon by the Chinese Communist Party to spy on you, manipulate what you see and exploit for future generations,” said Rep. McMorris Rodgers.

    In an exchange with Rep. Anna Eshoo, Chew talked up TikTok’s ongoing efforts to protect US user data and said he has “seen no evidence that the Chinese government has access to that data; they have never asked us, we have not provided it.”

    “I find that actually preposterous,” Eshoo fired back.

    “I have looked in — and I have seen no evidence of this happening,” Chew responded. “Our commitment is to move their data into the United States, to be stored on American soil by an American company, overseen by American personnel. So the risk would be similar to any government going to an American company, asking for data.”

    “I don’t believe that TikTok — that you have said or done anything to convince us,” Eshoo said.

    Perhaps no exchange sums up Thursday’s hearing like a moment following Rep. Kat Cammack’s lengthy critique of TikTok’s content moderation and links to China.

    “Can I respond, Chair?” Chew asked McMorris Rodgers after Cammack’s time was up.

    McMorris Rodgers considered Chew for a brief moment.

    “No. We’re going to move on,” she said.

    As lawmakers doubled down on their questions about TikTok’s data collection practices, Chew also emphasized that the data TikTok collects is data “that’s frequently collected by many other companies in our industry.”

    “We are committed to be very transparent with our users about what we collect,” Chew said. “I don’t believe what we collect is more than most players in the industry.”

    Independent researchers have backed Chew’s assertions. In 2020, The Washington Post worked with a privacy researcher to look under the hood at TikTok, concluding that the app does not appear to collect any more data than your typical mainstream social network. The following year, Pellaeon Lin, a Taiwan-based researcher at the University of Toronto’s Citizen Lab, performed another technical analysis that reached similar conclusions.

    Still, even if TikTok collects about the same amount of information as Facebook or Twitter, that’s still quite a lot of data, including information about the videos you watch, comments you write, private messages you send, and — if you agree to grant this level of access — your exact geolocation and contact lists.

    While national security was expected to be the primary focus of the hearing, multiple lawmakers also highlighted concerns about TikTok’s impact on children.

    Democratic ranking member of the committee Rep. Frank Pallone, for example, said Thursday: “Research has found that TikTok’s algorithms recommend videos to teens that create and exacerbate feelings of emotional distress, including videos promoting suicide, self-harm and eating disorders.”

    Rep. Bob Latta, a Republican from Ohio, accused TikTok of promoting a video on the so-called “blackout challenge” or choking challenge to the feed of a 10-year-old girl from Pennsylvania, who later died after trying to mimic the challenge in the video.

    Republican Rep. Gus Bilirakis of Florida also said there is a lack of adequate content moderation, which leaves room for kids to be exposed to content that promotes self harm.

    “Your technology is literally leading to death,” Bilirakis said to TikTok CEO Shou Chew.

    Citing examples of harmful content served to children, he said, “it is unacceptable, sir, that even after knowing all these dangers, you still claim that TikTok is something grand to behold.”

    TikTok, for its parts, has launched a number of features in recent months to provide additional safeguards for younger users, including setting a new 60-minute default for daily time limit for those under the age of 18. Even that feature, however, was criticized by lawmakers as being too easy for teens to bypass.

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  • FAA is laying out steps for air traffic controlers to avoid more close calls | CNN

    FAA is laying out steps for air traffic controlers to avoid more close calls | CNN

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    CNN
     — 

    The head of the nation’s air traffic controllers says there have been too many near collisions at airports and is laying out steps controllers should take to avoid more – including more supervisor oversight in control towers and extra controller training for “unusual circumstances.”

    “Even though we all know that multiple levels of safety are built into our system, there is no question that we are seeing too many close calls,” says Tim Arel, chief operating officer of the Federal Aviation Administration’s Air Traffic Organization.

    The five steps laid out Thursday by Arel in an agency-wide memo follow last week’s FAA safety summit focusing on the recent series of near collisions involving commercial airliners on or near the runways of US airports.

    “Our dedication to continuous improvement demands that we dig deep to identify the underlying factors and address them,” Arel said. “With the summer travel season just around the corner, airlines and the traveling public have high expectations.”

    On Wednesday, the FAA acknowledged a shortage in its air traffic control ranks and loosened rules around airlines’ takeoff and landing slots at airports in the New York and Washington, DC areas.

    This is a developing story and will be updated.

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  • FTC wants to make it easier for consumers to cancel free trials and subscriptions | CNN Business

    FTC wants to make it easier for consumers to cancel free trials and subscriptions | CNN Business

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    CNN
     — 

    New rules from the US government could soon let Americans more easily cancel free trials and subscriptions they no longer want, according to the Federal Trade Commission.

    The proposed rule change announced Thursday would apply to vast swaths of the US economy, covering both digital and physical subscriptions. Products subject to the new rule would include gym memberships, digital streaming and e-commerce, cable TV service, traditional print media and more.

    The FTC regulation could hit some of America’s biggest retailers and online platforms and a huge range of smaller businesses. It would affect millions of consumers in virtually every aspect of their lives, as subscription-based goods and services have become commonplace in industries as varied as music distribution, video gaming and pet care.

    Americans should not have to jump through hoops or be hounded by unwanted retention offers just to cancel their subscriptions, FTC Chair Lina Khan told reporters on a conference call Wednesday.

    “The idea here is pretty simple,” Khan said. “Companies should not be able to manipulate consumers into paying for subscriptions that they don’t want.”

    Broadly speaking, the rule change would prohibit companies from trying to retain customers through deceptive or burdensome tactics intended to stymie or delay them from quitting a subscription, such as by making customers mail in paperwork to cancel a subscription they initially signed up for online. For each violation of the rule, companies would be on the hook for potentially tens of thousands of dollars a day in fines — not to mention the consumer refunds the FTC could seek under the rule. While the FTC can currently pursue those types of remedies in specific sectors where cancellation rules exist, such as telemarketing, there is no such rule covering the economy as a whole, Khan said.

    The FTC voted 3-1 to introduce the proposal to amend the agency’s so-called Negative Option Rule, with the commission’s lone Republican, Christine Wilson, opposing the measure. The rules have not yet been finalized, the FTC said, and the public will have an opportunity to comment on the proposal. The agency also said it was not claiming any new legal authority, but that the rule would allow regulators to enforce against deceptive practices related to subscription cancellations without having to litigate each violation in a court.

    “We get countless complaints about this in our complaint database,” Khan said, “and we’re now putting an end to it.”

    Under the proposed change, companies would have to offer consumers the option to cancel a subscription using at least the same method they used to sign up; if a customer signed up for a service online or by phone, he or she would have to be able to cancel online or by phone.

    The proposed regulations include an array of other specific dos and don’ts. For example, companies would be required to first ask consumers who are requesting to cancel whether they would be open to retention offers, before the company could try to entice them back with discounts or deals. At the outset, all companies would be required to provide detailed information to consumers about a subscription’s terms before they could ask for billing details. Currently, the FTC said, there is no uniformity in how businesses present details such as how long a free trial period may last, the final date a customer can cancel a trial without charge, or the frequency of charges.

    The proposed FTC rule, which the agency calls “click to cancel,” comes as regulators have increasingly criticized the use of subtle techniques to steer consumers toward decisions that benefit a company’s bottom line.

    In the digital space, regulators have increasingly focused on so-called “dark patterns,” or the use of digital design interfaces that, for example, may use brightly colored buttons to encourage consumers to give up their personal information while simultaneously making opt-out buttons harder to see. More recently, Justice Department officials have argued that, depending on the context, the use of dark patterns could be considered an antitrust violation. On Wednesday, Khan adopted a similar view, telling reporters that the FTC’s consumer protection efforts — in this case, on deceptive cancellation practices — have antitrust implications because unchallenged deception tilts markets in favor of dishonest businesses that compete unfairly.

    The FTC in 2021 warned companies against deploying illegal dark patterns that trick or trap consumers into subscription services.

    The agency said at the time it was ramping up its enforcement in response to a rising number of complaints about deceptive sign-up tactics, including unauthorized charges or ongoing billing that is impossible to cancel. The FTC receives thousands of such complaints a year, it said.

    Since 2021, the FTC has been investigating Amazon

    (AMZN)     over allegations the company uses deceptive sign-up and cancelation practices in its Amazon

    (AMZN)     Prime product. The probe, whose sprawling scope now covers nearly a half-dozen Amazon

    (AMZN)     services, was publicly disclosed in an Amazon

    (AMZN)     filing accusing the FTC of harassing founder Jeff Bezos and CEO Andy Jassy; the FTC has said both men must personally testify in connection with the investigation.

    Thursday’s announcement underscores how the FTC’s scrutiny of user experience design extends to the enormous range of real-world commercial activity it oversees.

    The FTC has said it would pursue action against companies that did not provide easy and simple cancellations.

    Gyms, newspapers, phone companies and other businesses have faced lawsuits for imposing obstacles on consumers who try to cancel their services.

    In 2022, the FTC announced it reached a settlement with internet phone service provider Vonage over its cancellation policies. Vonage was required to pay $100 million in refunds to consumers harmed by the company’s actions, make its cancellation process simple and transparent, and stop charging consumers without their consent.

    Online children’s education company ABCmouse agreed in 2020 to pay $10 million to settle FTC allegations that it failed to disclose membership terms that led to consumers being charged without their consent.

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  • Most Asian shares reverse early losses after US Fed raises rates by a quarter point | CNN Business

    Most Asian shares reverse early losses after US Fed raises rates by a quarter point | CNN Business

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    Hong Kong
    CNN
     — 

    Most Asia Pacific shares pared early losses on Thursday, after the US Federal Reserve reaffirmed its dedication to bring down inflation.

    In Hong Kong, the benchmark Hang Seng

    (HSI)     index traded 1.5% higher, leading gainers in the region. One of the top gainers was internet giant Tencent, which was more than 7% higher after posting a strong rise in its online advertising business in the December quarter on Wednesday.

    In Japan, the Nikkei 225

    (N225)     was flat after opening lower. The broader Topix index was 0.3% lower, reversing some of its early morning losses.

    South Korea’s Kospi was 0.2% higher, while Australia’s S&P ASX 200 advanced by half a percentage point.

    Asian shares had opened broadly lower, tracking losses on Wall Street. In the US, the Dow closed 1.6% lower, while the S&P 500

    (DVS)     slipped about 1.7%. The Nasdaq Composite declined 1.6%.

    “Looking ahead, while we see fundamental value in Asia-ex Japan stocks … we remain concerned about a possible pullback in US stocks assuming US data deteriorates in the months ahead,” Nomura analysts wrote in a Thursday research note.

    US markets had been fickle on Wednesday before settling in the red as investors digested the Federal Reserve’s quarter-point rate hike and looked for clues about the state of the banking sector meltdown.

    The Fed raised rates by a quarter point at the conclusion of its two-day meeting, even though its historic rate hiking campaign was a contributing factor in the banking crisis.

    Investors were heartened by the central bank’s strong hints that its aggressive pace of interest rate hikes would come to an end soon. Still, the central bank also warned that rate cuts aren’t coming this year.

    – CNN’s Krystal Hur and Laura He contributed reporting

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  • Your Trump questions answered. Yes, he can still run for president if indicted | CNN Politics

    Your Trump questions answered. Yes, he can still run for president if indicted | CNN Politics

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    A version of this story appeared in CNN’s What Matters newsletter. To get it in your inbox, sign up for free here.



    CNN
     — 

    Could he still run for president? Why would the adult-film star case move before any of the ones about protecting democracy? How could you possibly find an impartial jury?

    What’s below are answers to some of the questions we’ve been getting – versions of these were emailed in by subscribers of the What Matters newsletter – about the possible indictment of former President Donald Trump.

    He’s involved in four different criminal investigations by three different levels of government – the Manhattan district attorney; the Fulton County, Georgia, district attorney; and the Department of Justice.

    These questions are mostly concerned with Manhattan DA Alvin Bragg’s potential indictment of Trump over a hush-money payment scheme, but many could apply to each investigation.

    The most-asked question is also the easiest to answer.

    Yes, absolutely.

    “Nothing stops Trump from running while indicted, or even convicted,” the University of California, Los Angeles law professor Richard Hasen told me in an email.

    The Constitution requires only three things of candidates. They must be:

    • A natural born citizen.
    • At least 35 years old.
    • A resident of the US for at least 14 years.

    As a political matter, it’s maybe more difficult for an indicted candidate, who could become a convicted criminal, to win votes. Trials don’t let candidates put their best foot forward. But it is not forbidden for them to run or be elected.

    There are a few asterisks both in the Constitution and the 14th and 22nd Amendments, none of which currently apply to Trump in the cases thought to be closest to formal indictment.

    Term limits. The 22nd Amendment forbids anyone who has twice been president (meaning twice been elected or served part of someone else’s term and then won his or her own) from running again. That doesn’t apply to Trump since he lost the 2020 election.

    Impeachment. If a person is impeached by the House and convicted by the Senate of high crimes and misdemeanors, he or she is removed from office and disqualified from serving again. Trump, although twice impeached by the House during his presidency, was also twice acquitted by the Senate.

    Disqualification. The 14th Amendment includes a “disqualification clause,” written specifically with an eye toward former Confederate soldiers.

    It reads:

    No person shall be a Senator or Representative in Congress, or elector of President and Vice-President, or hold any office, civil or military, under the United States, or under any state, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof.

    Potential charges in New York City with regard to the hush-money payment to an adult-film star have nothing to do with rebellion or insurrection. Nor do potential federal charges with regard to classified documents.

    Potential charges in Fulton County, Georgia, with regard to 2020 election meddling or at the federal level with regard to the January 6, 2021, insurrection could perhaps be construed by some as a form of insurrection. But that is an open question that would have to work its way through the courts. The 2024 election is fast approaching.

    If he was convicted of a felony – reminder, he has not yet even been charged – in New York, Trump would be barred from voting in his adoptive home state of Florida, at least until he had served out a potential sentence.

    First off, there’s no suggestion of any coordination between the Manhattan DA, the Department of Justice and the Fulton County DA.

    These are all separate investigations on separate issues moving at their own pace.

    The payment to the adult-film actress Stormy Daniels occurred years ago in 2016. Trump has argued the statute of limitations has run out. Lawyers could argue the clock stopped when Trump left New York to become president in 2017.

    It’s also not clear how exactly a state crime (falsifying business records) can be paired with a federal election crime to create a state felony. There are some very deep legal dives into this, like this one from Just Security. We will have to see what, if anything, Bragg adds if he does bring an indictment.

    Of the four known criminal investigations into Trump, falsifying business records with regard to the hush-money payment to an adult-film actress seems like the smallest of potatoes, especially since federal prosecutors decided not to charge him when he left office.

    His finances, subject of a long-running investigation, seem like a bigger deal. But the Manhattan DA decided not to criminally charge Trump with regard to tax crimes. Trump has been sued by the New York attorney general in civil court based on some of that evidence.

    Investigations in Georgia with regard to election meddling and by the Justice Department with regard to January 6 and his treatment of classified data also seem more consequential.

    But these cases are being pursued by different entities at different paces in different governments – New York City; Fulton County, Georgia; and the federal government.

    “I do think that the charges are much more serious against Trump related to the election,” Hasen said in his email. “But falsifying business records can also be a crime. (I’m more skeptical about combining that in a state court with a federal campaign finance violation.)”

    One federal law enforcement source told CNN’s John Miller over the weekend that Trump’s Secret Service detail is actively engaged with authorities in New York City about how this arrest process would work if Trump is ultimately indicted.

    It’s usually a routine process of fingerprinting, a mug shot and an arraignment. It would not likely be a public event and clearly his protective detail would move through the building with Trump.

    New York does not release most mug shots after a 2019 law intended to cut down on online extortion.

    As Trump is among the most divisive and now well-known Americans in history, it’s hard to believe there’s a big, impartial jury pool out there.

    The Sixth Amendment guarantees “the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed.”

    Finding such a jury “won’t be easy given the intense passions on both sides that he engenders,” Hasen said.

    A Quinnipiac University poll conducted in March asked for registered voters’ opinion of Trump. Just 2% said they hadn’t heard enough about him to say.

    The New York State Unified Court System’s trial juror’s handbook explains the “voir dire” process by which jurors are selected. Those accepted by both the prosecution and defense as being free of “bias or personal knowledge that could hinder his or her ability to judge a case impartially” must take an oath to act fairly and impartially.

    We’re getting way ahead of ourselves. He hasn’t been indicted, much less tried or convicted. Any indictment, even for a Class E felony in New York, would be for the kind of nonviolent offense that would not lead to jail time for any defendant.

    “I don’t expect Trump to be put in jail if he is indicted for any of these charges,” Hasen said. “Jail time would only come if he were convicted and sentenced to jail time.”

    The idea that Trump would ever see the inside of a jail cell still seems completely far-fetched. Hasen said the Secret Service would have to arrange for his protection in jail. The logistics of that are mind-boggling. Would agents be placed into cells on either side of him? Would they dress as inmates or guards?

    Top officials accused of wrongdoing have historically found a way out of jail. Former President Richard Nixon got a preemptive pardon from his successor, Gerald Ford. Nixon’s previous vice president, Spiro Agnew, resigned after he was caught up in a corruption scandal. Agnew made a plea deal and avoided jail time. Aaron Burr, also a former vice president, narrowly escaped a treason conviction. But then he left the country.

    That remains to be seen. Jonathan Wackrow, a former Secret Service agent and current global head of security for Teneo, said on CNN on Monday that agents are taking a back seat – to the New York Police Department and New York State court officers who are in charge of maintaining order and safety, and to the FBI, which looks for potential acts of violence by extremists.

    The Secret Service, far from coordinating the event as they might normally, are “in a protective mode,” Wackrow said.

    “They are viewing this as really an administrative movement where they have to protect Donald Trump from point A to point B, let him do his business before the court, and leave. They are not playing that active role that we typically see them in.”

    The New York Times published a report based on anonymous sources close to Trump on Tuesday that suggested he is, either out of bravado or genuine delight, relishing the idea of having to endure a “perp walk” in New York City. The “perp walk,” by the way, is the public march of a perpetrator into a police office for processing.

    “He has repeatedly tried to show that he is not experiencing shame or hiding in any way, and I think you’re going to see that,” the Times reporter and CNN political analyst Maggie Haberman said on the network on Tuesday night.

    “I do think there’s a part of him that does view this as a political asset,” said Marc Short, the former chief of staff to former Vice President Mike Pence, during an appearance on CNN on Wednesday. “Because he can use it to paint the other, more serious legal jeopardy he faces either in Georgia or the Department of Justice, as they’re politically motivated.”

    But Short argued voters will tire of the baggage Trump is carrying, particularly if he faces additional potential indictments in the federal and Georgia investigations.

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  • Ramen noodles and drained savings: FEC weighs allowing candidates to use political cash to pay themselves bigger salaries | CNN Politics

    Ramen noodles and drained savings: FEC weighs allowing candidates to use political cash to pay themselves bigger salaries | CNN Politics

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    CNN
     — 

    When Nabilah Islam began running for Congress in the 2020 cycle, she said she quickly discovered the high price of her decision.

    “It was impossible for me to have a full-time job and wage a competitive campaign,” the Georgia Democrat recalled. So, she gave up her work as a campaign consultant, paused paying her student loans and went without health insurance – in the middle of a pandemic – because she could no longer afford to pay the premiums. She drained her savings to pay living expenses.

    “I was eating ramen and turkey sandwiches every day,” said Islam, who lost her bid for a House seat and now serves in the Georgia state Senate. “It was one of the hardest things I had ever done in my life.”

    Now, the Federal Election Commission is taking up a request that Islam lodged in 2021 to change some of the federal rules governing the use of political cash. At a hearing Wednesday, the regulators weighed boosting the amount of campaign money candidates can use to pay themselves while running for office. They also are considering whether to allow federal candidates to use donors’ money to underwrite health insurance premiums and other benefits.

    Although the FEC now allows candidates to use campaign funds to pay themselves a salary, the agency set strict limits. That salary is capped at the annual salary for the office they are seeking or their earnings in the year before they became a candidate, whichever is the lower amount.

    The limits are aimed at preventing candidates from enriching themselves at donors’ expense, but they also bar candidates who were unemployed or at home caring for children in the prior year from using contributors’ money to draw a candidate salary.

    Supporters of the change say it would make it easier for a broader spectrum of Americans to run for federal office, including full-time caregivers, students and people from working-class backgrounds. But critics question whether it would encourage grift.

    “The reality is that giving up your salary for a year or two to run for Congress is unsustainable for most working people,” said Liuba Grechen Shirley, a former House candidate and founder and CEO of the Vote Mama Foundation, which aims to overcome the obstacles mothers face in running for office. She supports the rule change.

    “We have to make it the norm that candidates pay themselves a livable wage, so that they can run for office because that’s how we start to change the system,” she told CNN in an interview this week.

    Running for Congress is a time-consuming and expensive enterprise. The average successful House winner in the 2022 midterms spent nearly $2.8 million in campaign funds, according to OpenSecrets, a nonpartisan organization that tracks political money.

    And members of Congress, as a group, are far wealthier than the general US population. An OpenSecrets analysis of congressional financial disclosures reports in 2020 found that more than half the people in Congress that year were millionaires.

    Although a record number of women serve in Congress, they still make up just over a quarter of total representation, according to the Center for American Woman and Politics (CAWP) at Rutgers University.

    Only about 28% of all candidates for the House in 2022 were women, said Kelly Dittmar, CAWP’s director of research, underscoring that the gender disparities start long before Election Day.

    “If you could tell a potential candidate that they would have greater financial security if they decided to wage a campaign for office, then it might increase the pool of candidates, including women,” Dittmar said.

    The limits don’t just affect women.

    Maxwell Frost rides an elevator on his way to be interviewed on a podcast in Orlando, Florida, on August 30, 2022.

    Florida Rep. Maxwell Frost, who last year became the first Gen Z candidate to win a congressional seat, told the commissioners he “put himself in a bad financial place” by seeking a House seat.

    The 26-year-old Democrat said he left his job at a gun-violence prevention organization to run for office but quickly realized that he couldn’t sustain campaigning and driving part-time for Uber as he had planned.

    Frost drew headlines late last year after a landlord denied his application to rent an apartment in Washington, DC, because of his low credit score.

    “I did overcome the odds,” he testified Wednesday. “But there are often consequences when you participate in a system that’s not set up for you.”

    The FEC, which is not likely to make a decision in the coming weeks, is considering a range of options.

    Among them: Allowing candidates to earn, on a pro-rated basis, up to 50% – or as much as 100% – of the federal office they are seeking, regardless of what they earned in the year before they launched their campaigns. Rank-and-file members of Congress earn $174,000 a year, with those in top leadership positions collecting more.

    Other options include allowing candidates to receive a salary that’s tied to a $15-an-hour rate or to the minimum wage set by federal or state law.

    So far, a range of individuals and organizations – including the campaign arms for House Democrats and Republicans – have expressed general support for a change, although they diverge on the specific remedies.

    Some Republicans on the panel, including Commissioner James “Trey” Trainor, questioned whether the agency is overstepping its bounds by weighing a rule change and should instead ask Congress to change the federal law that bars candidates from converting campaign contributions to personal use.

    Bradley Smith, a former Republican FEC commissioner, testified that the agency should be wary of going too far with “feel-good rule-making.”

    “Why not allow candidates to pay for haircuts, better clothes, better food to keep a candidate’s energy up and fundraising or recharging time at the country club, all of which could be helpful to a campaign?” he asked.

    The commission also is considering whether to allow candidates to begin drawing a donor-funded salary as soon as they file a statement of candidacy rather than waiting, as is currently required, for primary ballot deadlines, which vary widely by state.

    Frost, the freshman congressman from Florida, also urged the commission to allow candidates to continue drawing a campaign salary after the election as they wait for their salaries as officeholders to kick in.

    Although the FEC often deadlocks along partisan lines, the commission has signaled an openness to easing some rules for candidates in the past.

    In 2018, the agency opened the door to candidates using campaign contributions to pay for child care benefits, following a request from Grechen Shirley. She said she did so after trying for months to juggle care for her small children while running for a House seat in Long Island. “I would literally be nursing my son, while my daughter put hairclips in my hair, and I’d have my headphones on and would be dialing for dollars,” she said.

    To date, 59 federal candidates have used campaign dollars for child care, according to Vote Mama. The group now is pressing states around the country to extend the policy to state and local candidates.

    This year, 19 bills to do so have been introduced in 13 states, Grechen Shirley said.

    Last year, Islam, 33, made history by becoming the youngest woman and the first Muslim woman elected to the Georgia state Senate. Although she is not currently planning another run for Congress, she said she is determined to see federal policy change.

    “I’m very persistent,” she said. “No one should have to go through all that in order to run for office.”

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  • US State Department ends assignment restrictions that were perceived as discriminatory | CNN Politics

    US State Department ends assignment restrictions that were perceived as discriminatory | CNN Politics

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    Washington
    CNN
     — 

    The US State Department will no longer issue assignment restrictions as a condition of granting security clearance, Secretary of State Antony Blinken announced to the department’s workforce on Wednesday in a memo obtained by CNN.

    The change comes after an intensive review of the practice, which was perceived as discriminatory by diplomats and Democratic lawmakers, particularly because the limits appeared to fall disproportionately on employees with Asian American and Pacific Islander backgrounds.

    The assignment restrictions were applied by the Bureau of Diplomatic Security, sometimes to employees who otherwise hold top-secret clearances, to prevent them from serving in particular countries or even, while they’re in Washington, from working on issues related to those countries.

    In 2021, CNN reported that diplomats felt frustrated that they felt untrusted by their own government. Lawmakers also highlighted the issue that there was no independent appeals process to challenge decisions. Democratic lawmakers introduced legislation in 2021 to address the long-standing complaints.

    Politico was first to report the changes to the assignment restrictions.

    Blinken said the change came after he had lifted more than half of the restrictions during his first year as secretary of state, which opened “new possible assignments” for hundreds of US diplomats.

    “Today, I’m pleased to share that after a rigorous review, I have decided that, moving forward, the Department will end its practice of issuing new assignment restrictions as a condition placed on a security clearance,” he wrote to the workforce.

    There will be a review and appeal process rolled out for those who are subject to the assignment restrictions currently, he said. But some restrictions will remain in place, such as those that relate to a situation “in which a foreign country may consider an employee to be one of their own nationals” or when there are “assignments to posts rated critical for human intelligence threats,” Blinken explained.

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  • Senate committee delays vote to consider Biden’s pick to lead the FAA | CNN Politics

    Senate committee delays vote to consider Biden’s pick to lead the FAA | CNN Politics

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    CNN
     — 

    A Senate committee has abruptly delayed its vote scheduled for Wednesday to consider President Joe Biden’s pick to lead the Federal Aviation Administration, further holding up the long-awaited nomination.

    It’s not yet clear why the Senate Committee on Commerce, Science, and Transportation’s vote to consider Phil Washington’s nomination on Wednesday has been delayed. His pick was first announced by Biden eight months ago and has since faced continued resistance from Republican members of Congress over a number of issues, including his slim aviation-related credentials and his potential legal entanglements.

    Washington Democratic Sen. Maria Cantwell, the chairwoman of the committee, announced that the vote is “moving to a future date pending information that members have been seeking.” She also underscored that the committee “will have this debate in the future,” contending that Washington is qualified for the job.

    Texas Sen. Ted Cruz, the leading Republican on the Senate Commerce committee, said during the panel’s executive session Wednesday, “I am glad to hear that the committee is considering delaying consideration of the nomination of Phil Washington. Phil Washington has been before this committee for some time now. And I think every member of this committee knows that Mr. Washington is not qualified for the position for which he is nominated.”

    The White House is continuing to stand behind Washington following the vote delay.

    “The FAA needs a confirmed Administrator, and the president’s nominee, Phil Washington, has the right qualifications and experience for this role,” a White House official said in a statement to CNN. “He has led the Denver International Airport, one of the busiest airports in the world, managed large transportation safety organizations, and served as a command sergeant major in the military. This is a role with a key safety mandate and Mr. Washington’s nomination has been pending for months. We continue to urge the Senate to move swiftly on his confirmation.”

    Ahead of Wednesday’s scrapped vote, a steady stream of groups lined up for and against Washington.

    Aviation worker unions, former transportation secretaries on both sides of the aisle, Denver-based Frontier Airlines and the family members of crash victims who died on Ethiopian Air Flight 302 all endorsed Washington.

    Former Department of Transportation officials who served at the agency during the Trump administration signed onto a letter to the president expressing their opposition to Washington’s confirmation.

    Cruz and Missouri Rep. Sam Graves, the chairman of the House Committee on Transportation and Infrastructure, have both expressed their opposition to Washington’s nomination.

    The FAA has been operating without a permanent administrator for a year.

    In that time, the agency has contended with several problems that have plagued travelers and the airline industry, such as recent near-collisions involving airliners, crucial staffing shortages and malfunctions of aging technology that have cause major air travel disruption.

    While Democrats largely seemed supportive during Washington’s confirmation hearing earlier this month, he was grilled by Republican senators on issues that have emerged since he was named as a prospective administrator last summer.

    Washington, the current CEO of the Denver International Airport, has held leadership roles at municipal transit organizations, including in Denver and Los Angeles, focused on bus and rail lines. He also led the Biden-Harris transition team for the Department of Transportation. Prior to his work in transportation, Washington served in the military for 24 years.

    While Washington has worked in transportation-related positions since 2000, he had no experience in the aviation industry prior to joining the Denver airport in 2021 – a major concern among committee members.

    Since being nominated, Washington has also faced questions about being named in a search warrant issued as part of a political corruption investigation in Los Angeles, along with other potential legal entanglements. Republicans have also questioned whether Washington, an Army veteran who left the military in 2000 after more than 20 years of service, would be statutorily considered a civilian – a requirement in order to serve as the FAA chief.

    If he’s not considered a civilian, he would need a waiver from Congress permitting him to lead the agency. And Republicans in both the House and the Senate do not support granting Washington a waiver.

    This story and headline have been updated with additional developments.

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  • Justice Department convinces federal judge Trump used his attorney in furtherance of a crime in classified docs probe | CNN Politics

    Justice Department convinces federal judge Trump used his attorney in furtherance of a crime in classified docs probe | CNN Politics

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    CNN
     — 

    The Justice Department has convinced a federal judge that former President Donald Trump used one of his defense attorneys in furtherance of a crime or fraud related to the existence of classified documents at Mar-a-Lago, sources familiar with the matter told CNN.

    The finding – part of a major ruling Friday from Judge Beryl Howell of the DC District Court – makes clear for the first time that the Justice Department is arguing it has evidence that Trump may have committed a crime. And Howell ruled that prosecutors met the burden to overcome Trump’s right to shield discussions with his lawyers normally protected under attorney-client privilege.

    The evidence would likely be significant in the obstruction probe being pursued by special counsel Jack Smith’s team. It also underscores how critical the testimony of Trump’s defense lawyers would be in the federal grand jury investigation.

    ABC News first reported the development.

    The revelation comes as the former president continues to face a number of notable investigations and lawsuits, including a separate yearslong investigation into his alleged role in a scheme to pay hush money to an adult film star. There are signs that case is nearing an end and Trump and his advisers are awaiting a potential indictment.

    Trump has not been charged in the documents case, but is still under investigation by the grand jury in Washington. Prosecutors had relied on surveillance videos in arguing their case to Howell, one source said.

    A spokesman for the special counsel’s office did not immediately respond to CNN’s request for comment.

    The Justice Department is still seeking testimony from Trump defense attorney Evan Corcoran, after he cited attorney-client privilege, as well as from another Trump lawyer, Jennifer Little, CNN has learned.

    CNN has reached out to Corcoran and Little for comment.

    Corcoran’s critical testimony in the Mar-a-Lago classified documents investigation is now in the hands of the US DC Circuit Court of Appeals.

    CNN was first to report the action at the DC Circuit Court of Appeals on Tuesday referred to in anonymized court records and confirmed by CNN, following Trump’s loss on Friday before Howell.

    A three-judge panel – Judges Nina Pillard, Michelle Childs and Florence Pan – at the appeals court now is positioned to decide whether to put on hold a lower-court ruling that Corcoran must provide additional testimony to the grand jury about his conversations with Trump. Trump’s team has argued those conversations are covered by attorney-client privilege and should be shielded in the investigation.

    Howell, in her sealed ruling, determined prosecutors were able to show Corcoran’s legal services were used in furtherance of a crime, so attorney-client privilege didn’t apply, sources told CNN.

    What happens next is crucial because the Justice Department has successfully argued that Corcoran’s conversations with Trump would reveal Trump was trying to advance a crime – but the grand jury hasn’t yet heard from Corcoran directly about those conversations.

    If the appeals court sides with the Justice Department, Corcoran could be forced to testify again to a federal grand jury within days, ushering the investigation into the handling of classified documents and obstruction of justice toward a conclusion.

    The extremely tight deadlines – a turnaround essentially unheard of in this court – indicates the seriousness of the matter.

    The DC Circuit judges also mentioned documents involved in the dispute, asking that Trump’s side “specify” them. The court order doesn’t explain any further what’s happened with documents. But Corcoran also was ordered to hand over a number of documents, including handwritten notes and notes transcribed of a verbal conversation.

    Trump sent a statement to his supporters Tuesday night criticizing ABC and calling the details “illegally leaked false allegations.”

    When Corcoran first testified to the grand jury in January, he was asked about what happened in the lead up to the August search of Trump’s Mar-a-Lago residence.

    Corcoran had drafted a statement in June 2022 that attested Trump’s team had done a “diligent search” of boxes moved from the White House to Florida and that all classified documents had been returned. Christina Bobb, the attorney who signed the letter, added the caveat, “to the best of my knowledge.”

    After that, the FBI searched Mar-a-Lago and found hundreds of government records, including classified material, raising questions about the lawyer’s attestation.

    This headline and story have been updated with additional reporting.

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  • Biden White House closely watching Federal Reserve following bank failures | CNN Politics

    Biden White House closely watching Federal Reserve following bank failures | CNN Politics

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    CNN
     — 

    All eyes are trained on the Federal Reserve as it prepares to announce another potential interest rate hike Wednesday afternoon – exactly 10 days after the Biden administration stepped in with dramatic emergency actions to contain the fallout from two bank failures.

    Biden White House officials will be closely watching the highly anticipated rate decision – and monitoring every word of Fed Chairman Jerome Powell’s public comments – for any telling clues on how the central bank is processing what has emerged one of the most urgent economic crises of Joe Biden’s presidency.

    The moment creates a complex, if carefully observed, dynamic for the administration’s top economic officials who have spent much of the last two weeks engaged in regular discussions and consultations with Powell and Fed officials as they’ve navigated rapid and acute risks to the banking system.

    The Fed’s central role in not only supervising US banks and the stability of the financial system, but also in serving as a liquidity backstop in moments of systemic risk, has once again thrust the central bank back to center stage in the government’s effort to stabilize rattled markets.

    But Biden has made the central bank’s independence on monetary policy an unequivocal commitment – and has repeatedly underscored that he has confidence in the Fed’s central role in navigating inflation that has weighed on the US economy for more than a year and remained stubbornly persistent.

    Even as some congressional Democrats have directed fire at Powell for the rapid increase in interest rates and the risks the effort poses to a robust post-pandemic economic recovery, White House officials have taken pains not to shed light on their views publicly.

    Officials stress nothing in the last week has changed that mandate from Biden – and note that the widespread uncertainty about what action the Fed will take on rates only serves to underscore that reality.

    It’s a reality that comes at a uniquely inopportune time for a banking system that has shown clear signs of stabilizing in the last several days, but is still facing a level of anxiety among market participants and depositors about the durability of that shift.

    “I do believe we have a very strong and resilient banking system and all of us need to shore up the confidence of depositors that that’s the case,” Treasury Secretary Janet Yellen said during remarks Tuesday in Washington.

    Yellen said a new emergency lending facility launched by the Fed, along with its existing discount window, are “working as intended to provide liquidity to the banking system.”

    But prior to the closures of Silicon Valley Bank and Signature Bank, analysts had widely predicted that the Fed would unveil a half-point rate hike. But after the sudden collapse of the two banks that sent shockwaves across the global economy, there has been a growing belief among Wall Street analysts that the central bank will pull back, and only raise rates by a quarter-point – in part to try to alleviate concerns that the Fed’s historically aggressive rate hikes over the past year were precisely to blame for this month’s financial turmoil.

    But there are also concerns that a dramatic pullback, like choosing to forgo any rate increases altogether until a later meeting, would bring its own risks of signaling to the market that there are deeper systemic problems.

    It’s a conundrum top Fed officials started grappling with in the first of their two-day Federal Open Market Committee meeting on Tuesday. How they choose to navigate the path ahead will remain behind closed doors until their policy statement is released Wednesday afternoon.

    Powell is scheduled to speak to reporters shortly after.

    For officials inside the Biden White House, Wednesday is poised to offer critical insight into how the central bank is grappling with its urgent priority of bringing down inflation, while at the same time, minimizing the risk of additional dominoes falling in the US banking sector.

    Those two imperatives – bringing prices down and maintaining stability across the US financial sector – are urgent priorities for the Biden White House, particularly as the president moves closer to a widely expected reelection announcement and the health of the economy remains the top issue for voters.

    Yet the Fed’s decision will come at a moment of accelerating political pressure on the Fed itself – and Powell specifically.

    Massachusetts Democratic Sen. Elizabeth Warren, a member of the Senate Banking Committee, slammed Powell, saying he has failed at two of his main jobs, citing raising interest rates and his support of bank deregulation.

    “I opposed Chair Powell for his initial nomination, but his re-nomination. I opposed him because of his views on regulation and what he was doing to weaken regulation, but I think he’s failing in both jobs, both as oversight manager of these big banks which is his job and also what he’s doing with inflation,” Warren said on NBC’s “Meet the Press.”

    White House officials have made clear – with no hesitation – that Biden’s long-stated confidence in Powell is unchanged. Powell, who was confirmed for his second four-year term as Fed chair last year, announced last week that the Fed would launch a review into the failure of Silicon Valley Bank.

    Treasury and Fed officials, along with counterparts at other federal regulators and their international counterparts, have continued regular discussions this week as they’ve monitored the system in the wake of the weekend collapse, and eventual sale, of European banking giant Credit Suisse.

    US officials viewed the Credit Suisse collapse as unrelated to the crisis that took down the US banks a weekend prior, although they acknowledged it posed broader risks tied to confidence, or the potential lack thereof, in the system.

    In recent days, White House officials have begun to cautiously suggest that they see signs of the US economy stabilizing, following the turbulent aftermath of the closures of Silicon Valley Bank and Signature Bank. Biden, for his part, has credited the sweeping steps his administration announced – namely, the backstopping of all depositors’ funds held at the two institutions and the creation of an emergency lending program by the Federal Reserve – as having prevented a broader financial meltdown.

    He has also called on US regulators and lawmakers to strengthen financial regulations, though it is not yet clear what specific actions the president may ultimately throw his weight behind.

    Press secretary Karine Jean-Pierre declined to comment Tuesday afternoon at the White House press briefing on how she and other officials were watching the Fed’s upcoming decision.

    “The Fed is indeed independent. We want to give them the space to make those monetary decisions and I don’t want to get ahead of that,” Jean-Pierre said. “I don’t even want to give any thoughts to what Jerome Powell might say tomorrow.”

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  • Lawmakers say TikTok is a national security threat, but evidence remains unclear | CNN Business

    Lawmakers say TikTok is a national security threat, but evidence remains unclear | CNN Business

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    CNN
     — 

    As TikTok CEO Shou Zi Chew prepares for his first congressional grilling on Thursday, much of the focus will undoubtedly be on the short-form video app’s potential national security risks.

    Concerns about TikTok’s connections to China have led governments worldwide to ban the app on official devices, and those fears have factored into the increasingly tense US-China relationship. The Biden administration has threatened TikTok with a nationwide ban unless its Chinese owners sell their stakes in the company.

    But more than two years after the Trump administration first issued a similar threat to TikTok, security experts say the government’s fears, while serious, currently appear to reflect only the potential for TikTok to be used for foreign intelligence, not that it has been. There is still no public evidence the Chinese government has actually spied on people through TikTok.

    TikTok doesn’t operate in China. But since the Chinese government enjoys significant leverage over businesses under its jurisdiction, the theory goes that ByteDance, and thus indirectly, TikTok, could be forced to cooperate with a broad range of security activities, including possibly the transfer of TikTok data.

    “It’s not that we know TikTok has done something, it’s that distrust of China and awareness of Chinese espionage has increased,” said James Lewis, an information security expert at the Center for Strategic and International Studies. “The context for TikTok is much worse as trust in China vanishes.”

    When Rob Joyce, the National Security Agency’s director of cybersecurity, was asked by reporters in December to articulate his security concerns about TikTok, he offered a general warning rather than a specific allegation.

    “People are always looking for the smoking gun in these technologies,” Joyce said. “I characterize it much more as a loaded gun.”

    Technical experts also draw a distinction between the TikTok app — which appears to operate very similarly to American social media in the amount of user tracking and data collection it performs — and TikTok’s approach to governance and ownership. It’s the latter that’s been the biggest source of concern, not the former.

    The US government has said it’s worried China could use its national security laws to access the significant amount of personal information that TikTok, like most social media applications, collects from its US users.

    The laws in question are extraordinarily broad, according to western legal experts, requiring “any organization or citizen” in China to “support, assist and cooperate with state intelligence work,” without defining what “intelligence work” means.

    Should Beijing gain access to TikTok’s user data, one concern is that the information could be used to identify intelligence opportunities — for example, by helping China uncover the vices, predilections or pressure points of a potential spy recruit or blackmail target, or by building a holistic profile of foreign visitors to the country by cross-referencing that data against other databases it holds. Even if many of TikTok’s users are young teens with seemingly nothing to hide, it’s possible some of those Americans may grow up to be government or industry officials whose social media history could prove useful to a foreign adversary.

    Another concern is that if China has a view into TikTok’s algorithm or business operations, it could try to exert pressure on the company to shape what users see on the platform — either by removing content through censorship or by pushing preferred content and propaganda to users. This could have enormous repercussions for US elections, policymaking and other democratic discourse.

    Security experts say these scenarios are a possibility based on what’s publicly known about China’s laws and TikTok’s ownership structure, but stress that they are hypothetical at best. To date, there is no public evidence that Beijing has actually harvested TikTok’s commercial data for intelligence or other purposes.

    Chew, the TikTok CEO, has publicly said that the Chinese government has never asked TikTok for its data, and that the company would refuse any such request.

    If there’s a risk, it’s primarily concentrated in the relationship between TikTok’s Chinese parent, ByteDance, and Beijing. The main issue is that the public has few ways of verifying whether or how that relationship, if it exists, might have been exploited.

    TikTok has been erecting technical and organizational barriers that it says will keep US user data safe from unauthorized access. Under the plan, known as Project Texas, the US government and third-party companies such as Oracle would also have some degree of oversight of TikTok’s data practices. TikTok is working on a similar plan for the European Union known as Project Clover.

    But that hasn’t assuaged the doubts of US officials, likely because no matter what TikTok does internally, China would still theoretically have leverage over TikTok’s Chinese owners. Exactly what that implies is ambiguous, and because it is ambiguous, it is unsettling.

    In congressional testimony, TikTok has sought to assure US lawmakers it is free from Chinese government influence, but it has not spoken to the degree that ByteDance may be susceptible. TikTok has also acknowledged that some China-based employees have accessed US user data, though it’s unclear for what purpose, and it has disclosed to European users that China-based employees may access their data as part of doing their jobs.

    Multiple privacy and security researchers who’ve examined TikTok’s app say there aren’t any glaring flaws suggesting the app itself is currently spying on people or leaking their information.

    In 2020, The Washington Post worked with a privacy researcher to look under the hood at TikTok, concluding that the app does not appear to collect any more data than your typical mainstream social network. The following year, Pellaeon Lin, a Taiwan-based researcher at the University of Toronto’s Citizen Lab, performed another technical analysis that reached similar conclusions.

    But even if TikTok collects about the same amount of information as Facebook or Twitter, that’s still quite a lot of data, including information about the videos you watch, comments you write, private messages you send, and — if you agree to grant this level of access — your exact geolocation and contact lists. TikTok’s privacy policy also says the company collects your email address, phone number, age, search and browsing history, information about what’s in the photos and videos you upload, and if you consent, the contents of your device’s clipboard so that you can copy and paste information into the app.

    TikTok’s source code closely resembles that of its China-based analogue, Douyin, said Lin in an interview. That implies both apps are developed on the same code base and customized for their respective markets, he said. Theoretically, TikTok could have “privacy-violating hidden features” that can be turned on and off with a tweak to its server code and that the public might not know about, but the limitations of trying to reverse-engineer an app made it impossible for Lin to find out whether those configurations or features exist.

    If TikTok used unencrypted communications protocols, or if it tried to access contact lists or precise geolocation data without permission, or if it moved to circumvent system-level privacy safeguards built into iOS or Android, then that would be evidence of a problem, Lin said. But he found none of those things.

    “We did not find any overt vulnerabilities regarding their communication protocols, nor did we find any overt security problems within the app,” Lin said. “Regarding privacy, we also did not see the TikTok app exhibiting any behaviors similar to malware.”

    TikTok has faced claims that its in-app browser tracks its users’ keyboard entries, and that this type of conduct, known as keylogging, could be a security risk. The privacy researcher who performed the analysis last year, Felix Krause, said that keylogging is not an inherently malicious activity, but it theoretically means TikTok could collect passwords, credit card information or other sensitive data that users may submit to websites when they visit them through TikTok’s in-app browser.

    There is no public evidence TikTok has actually done that, however. TikTok has said the keylogging function is used for “debugging, troubleshooting, and performance monitoring,” as well as to detect bots and spam. Other research has shown that the use of keyloggers is extremely widespread in the technology industry. That does not necessarily excuse TikTok or its peers for using a keylogger in the first place, but neither is it proof positive that TikTok’s product, by itself, is any more of a national security threat than other websites.

    There have also been a number of studies that report TikTok is tracking users around the internet even when they are not using the app. By embedding tracking pixels on third-party websites, TikTok can collect information about a website’s visitors, the studies have found. TikTok has said it uses the data to bolster its advertising business. And in this respect, TikTok is not unique: the same tool is used by US tech giants including Facebook-parent Meta and Google on a far larger scale, according to Malwarebytes, a leading cybersecurity firm.

    As with the keylogging tech, the fact TikTok uses tracking pixels does not on its own transform the company into a national security threat; the risk is that the Chinese government could compel or influence TikTok, through ByteDance, to abuse its data collection capabilities.

    Separately, a report last year found TikTok was spying on journalists, snooping on their user data and IP addresses to find out when or if certain reporters were sharing the same location as company employees. TikTok later confirmed the incident and ByteDance fired several employees who had improperly accessed the TikTok data of two journalists.

    The circumstances surrounding the incident suggest it was not the type of wide-scale, government-directed intelligence effort that US national security officials primarily fear. Instead, it appeared to be part of a specific internal effort by some ByteDance employees to hunt down leaks to the press, which may be deplorable but hardly uncommon for an organization under public scrutiny. (Nevertheless, the US government is reportedly investigating the incident.)

    Joyce, the NSA’s top cyber official, told reporters in December that what he really worries about is “large-scale influence” campaigns leveraging TikTok’s data, not “individualized targeting through [TikTok] to do malicious things.”

    To date, however, there’s no public evidence of that taking place.

    TikTok may collect an extensive amount of data, much of it quietly, but as far as researchers can tell, it isn’t any more invasive or illegal than what other US tech companies do.

    According to security experts, that’s more a reflection of the broad leeway we’ve given to tech companies in general to handle our data, not an issue that’s unique or specific to TikTok.

    “We have to trust that those companies are doing the right thing with the information and access we’ve provided them,” said Peiter “Mudge” Zatko, a longtime ethical hacker and Twitter’s former head of security who turned whistleblower. “We probably shouldn’t. And this comes down to a concern about the ultimate governance of these companies.”

    Lin told CNN that TikTok and other social media companies’ appetite for data highlights policy failures to pass strong privacy laws that regulate the tech industry writ large.

    “TikTok is only a product of the entire surveillance capitalism economy,” Lin said. “And governments around the world are ignoring their duty to protect citizens’ private information, allowing big tech companies to exploit user information for gain. Governments should try to better protect user information, instead of focusing on one particular app without good evidence.”

    Asked how he would advise policymakers to look at TikTok instead, Lin said: “What I would call for is more evidence-based policy.”

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  • FCC cracks down on spammy text messages | CNN Business

    FCC cracks down on spammy text messages | CNN Business

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    Washington
    CNN
     — 

    The Federal Communications Commission is cracking down on spammy text messages with new rules for telecom companies, citing a surge of consumer complaints in recent years tied to unwanted robotexts.

    The new rules require phone providers to block text messages from suspicious sources including phone numbers that appear to be “invalid, unallocated, or unused.” Carriers will also have to block text messages coming from phone numbers that claim not to ever send text messages, or that the government has identified as numbers not used for texting, the FCC said.

    The move mirrors a similar US government effort to shut down illegal robocalls, which has led to at least one phone provider being cut off entirely from the US telephone network. Robocall monitoring services say the effort has largely been successful at reducing the volume of robocalls. But in recent years, an explosion of spam and scam text messages appears to have taken their place, leading to more than 18,000 consumer complaints at the FCC last year.

    The FCC is mulling additional regulations that could, among other things, apply Do Not Call registry protections to text messages for the first time. The FCC said it is also considering making it harder for marketers to use a single consumer consent to flood that user with calls and text messages from multiple sources and numbers.

    Unwanted or scam robotexts can be an even greater risk to consumers than unwanted robocalls, the FCC said, because unlike phone calls, text messages may contain malicious links that can infect a smart device with dangerous software.

    “Scam artists have found that sending us messages about a package you never ordered or a payment that never went through along with a link to a shady website is a quick and easy way to get us to engage on our devices and fall prey to fraud,” said FCC Chairwoman Jessica Rosenworcel in a statement.

    The FCC voted to adopt the new rules in a unanimous 4-0 decision.

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  • Supreme Court urged by DOJ and other parties to sidestep independent state legislature dispute | CNN Politics

    Supreme Court urged by DOJ and other parties to sidestep independent state legislature dispute | CNN Politics

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    CNN
     — 

    As the Supreme Court deliberates behind closed doors over a case that many believe could be one of the most consequential voting rights disputes ever to reach the high court, the Justice Department and some other parties involved are suggesting the case be dismissed due to major developments since oral arguments.

    If the justices were to ultimately remove the case from the docket it would sidestep a major dispute over the so-called the Independent State Legislature theory pushed by conservatives and supporters of former President Donald Trump after the 2020 election for now.

    The case has captured the nation’s attention, because Republican lawmakers in North Carolina are asking the justices to adopt a long dormant legal theory and rule that state courts and other state entities have a limited role in reviewing election rules established by state legislatures when it comes to federal elections.

    Critics say the Independent State Legislature theory could revolutionize electoral politics going forward if fully adopted and could lead to state legislatures having absolute authority in the area without the necessary judicial oversight.

    The actual case before the justices presents a redistricting dispute out of North Carolina, involving a North Carolina Supreme Court decision from February 2002 that invalided the state’s congressional map. The state Supreme Court struck the map as an illegal partisan gerrymander and replaced it with a temporary court-drawn map more favorable to Democrats.

    The Supreme Court heard oral arguments in the GOP’s appeal of that decision in December. At arguments, a lawyer for the lawmakers asked the justices to adopt the Independent State Legislature theory, and some of the justices appeared to express some support for a version of the doctrine.

    But after the case was argued, and before the justices have rendered an opinion, new developments occurred on the ground in North Carolina.

    That’s because after the last election, the North Carolina Supreme Court flipped its majority to Republican. In February, the newly composed state Supreme Court announced it had voted to take the unusual step and rehear a dispute concerning the maps.

    That development prompted the US Supreme Court to ask the parties on both sides to explain whether the justices still had the authority to hear the case or whether it should be dismissed. Central to the question is whether the state court has issued a “final judgment” in the case clearing the way for US Supreme Court review.

    Solicitor General Elizbeth Prelogar told the justices in a letter Monday that the NC decision grant of rehearing “makes it difficult to conclude that the state court has entered a final judgement.”

    At the same time, Prelogar acknowledged the maneuvering had created a “novel” predicament and the justices “could reasonably reach a different conclusion.”

    An attorney for the state of North Carolina, which is also opposed to the Republican lawmakers’ stance in the case, agreed the case should be dismissed. Sarah G. Boyce of the North Carolina Department of Justice stressed that the US Supreme Court cannot step in now because, “further proceedings remain”.

    But Common Cause, a group that opposes the GOP lawmakers, disagreed with the position taken by its own side and urged the justices to decide the case.

    Neal Katyal, a lawyer for the group, stressed that the court should use the North Carolina case to decide the Independent State Legislature doctrine issue rather than wait until it arises again on an emergency basis “during the 2024 election cycle.”

    And his opponent, David Thompson, a lawyer for the North Carolina Republican lawmakers, agreed on that point.

    He argued in his letter that the justices still have jurisdiction because the North Carolina Supreme Court decision was final, and the re-hearing order is directed at subsequent decisions made by the state high court.

    “This court is therefore fully possessed of jurisdiction to decide” the case, Thompson wrote.

    If the US Supreme Court ultimately decides to dismiss the case out of North Carolina, it will likely be asked in short order to take up the same kind of dispute brought by a different party. Ohio’s attorney general, for instance has a pending request with the court to take up a similar dispute.

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  • Capitol Police see no current threat to US Capitol after Trump calls for supporters to protest potential indictment | CNN Politics

    Capitol Police see no current threat to US Capitol after Trump calls for supporters to protest potential indictment | CNN Politics

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    Washington
    CNN
     — 

    The US Capitol Police force “is not currently tracking any direct or credible threats to the US Capitol” ahead of a possible indictment of former President Donald Trump, according to a department intelligence assessment obtained by CNN.

    “Although (Intelligence and Interagency Coordination Division) has identified reactionary responses that include calls for protests, mass civil disobedience, violence and targeting of law enforcement involved in any such arrest of the former president, IICD is not currently tracking any direct or credible threats to the US Capitol,” the assessment said.

    “While the calls for protests and violence are worrisome and some commentators may be inclined (to) engage in potentially violent unlawful actions, IICD has not yet seen any indication of large-scale organized protests and/or violence, as IICD did leading up to January 6, 2021,” the assessment said.

    A USCP spokesman declined CNN’s request for comment on the assessment, saying that “for safety reasons we don’t discuss any potential security plans.”

    A Manhattan grand jury is investigating Trump’s alleged role in a hush money payment scheme, but no indictment has been issued. Trump on Saturday called on his supporters to protest in response to a potential arrest, echoing the calls he made for protests in Washington, DC, in response to his 2020 election loss – protests that later turned violent when scores of his supporters stormed the Capitol.

    After the January 6, 2021, Capitol riot, USCP came under fire for security lapses despite online chatter about protests and potential violence that day.

    Some social media users have interpreted Trump’s post over the weekend as a “call to action,” the Capitol Police assessment says, including discussions on tactics for their demonstrations, like forming large gatherings to block roads and access to buildings and a trucker transportation protest.

    The assessment noted that while some social media users “have issued calls for demonstrations” in Washington, DC, the department “has not identified any confirmed plans for demonstrations in the city or on US Capitol grounds.”

    “Any protests or possible violence are likely to be directed at the Department of Justice, the FBI, and the Manhattan District Attorney’s Office,” the assessment said.

    Protests supportive of an indictment are also expected, according to the assessment, which cautions that the “organizing of protests supporting opposing views increased the likelihood of protestor/counter-protestor confrontation.”

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  • Trump shadow looms large over House GOP policy retreat | CNN Politics

    Trump shadow looms large over House GOP policy retreat | CNN Politics

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    Orlando, Florida
    CNN
     — 

    House Republicans had hoped to use their annual retreat to get on the same page about upcoming policy battles and devise a strategy to preserve their fragile majority.

    Instead, they find themselves playing defense for former President Donald Trump.

    While most Republicans had hoped to steer clear of any presidential politics – despite being in Florida, home to two major potential GOP rivals in 2024 – Trump’s announcement over the weekend that he expects to be imminently arrested has put him back in the center of the conversation and forced Republicans to publicly rally to his side. Even some GOP lawmakers who have called for the party to move on from Trump have lined up to offer their full-throated defense of the ex-president, attacking the Manhattan District Attorney’s office that is investigating Trump as a political witch hunt.

    Speaker Kevin McCarthy, echoing calls from inside his conference, has instructed GOP-led committees to investigate whether the Manhattan DA used federal funds to probe a payment made by Trump’s then-personal attorney Michael Cohen to adult film star Stormy Daniels days before the 2016 presidential election.

    McCarthy said Sunday that he already talked to House Judiciary Committee Chairman Jim Jordan, a Republican from Ohio, about an investigation into the matter, and hinted that there could be more developments on that front soon.

    “Remember, we also have a select committee on the weaponization of government, this applies directly to that. I think you’ll see actions from them,” McCarthy told reporters at a news conference kicking off their three-day policy retreat.

    But Republicans weren’t in complete lockstep with Trump. McCarthy carefully broke with Trump’s calls to protest and “take our nation back” if he is arrested, which has sparked concerns of political violence reminiscent of the January 6 attack on the Capitol.

    “I don’t think people should protest this, no,” McCarthy said. But he added: “You may misinterpret when President Trump talks … he is not talking in a harmful way, and nobody should. Nobody should harm one another … We want calmness.”

    Firebrand Rep. Marjorie Taylor Greene of Georgia, however, offered a different take.

    “I don’t think there’s anything wrong with calling for protests,” she told reporters after the news conference on Sunday. “Americans have the right to assemble and the right to protest. And that’s an important constitutional right. And he doesn’t have to say ‘peaceful’ for it to mean peaceful. Of course he means peaceful.”

    The latest Trump drama is once again threatening to divide the GOP and overshadow their carefully-laid messaging plans – a familiar predicament for Republicans who served in Congress while Trump was in office and spent years being forced to answer for his regular controversies. Republican leaders who had hoped to focus on their legislative agenda during the first news conference of their policy retreat instead fielded numerous questions from reporters about Trump and the Manhattan DA’s investigation.

    Asked whether he thinks it would be appropriate for Trump to run for president if he is ultimately convicted, McCarthy said: “He has a constitutional right to run.”

    Multiple Republican lawmakers – including House GOP Conference Chair Elise Stefanik – have endorsed Trump, while at least two of his staunch supporters have thrown their weight behind other candidates in the race: South Carolina Rep. Ralph Norman is backing former South Carolina Gov. Nikki Haley, and Rep. Chip Roy of Texas is supporting Florida Gov. Ron DeSantis.

    Most GOP lawmakers, however, have been reluctant to pick sides just yet, waiting to see how the field develops. Even McCarthy, who credited his speakership to Trump, has yet to make his preference known.

    “I could endorse in the primary, but I haven’t endorsed,” he told reporters on Friday. When pressed on if he will do so, he again repeated: “I could endorse but I haven’t.”

    Aside from a potentially bruising GOP primary contest, House Republicans have other major internal battles on the horizon. They are about to dive into some of the most complicated and divisive policy fights of their razor-thin majority, including lifting the nation’s borrowing limit, funding the government, reauthorizing federal food stamp programs and deciding whether to continue aid for Ukraine.

    Part of their goal during their annual retreat is to just get the conference in sync ahead of these looming debates.

    “The value of something like this is, can we keep the era of good feelings going within the Republican conference?” said Rep. Dusty Johnson of South Dakota, who chairs the centrist-leaning Main Street Caucus. “This is gonna be a nice opportunity for us to just get in the same room, have a couple hundred of us breathe the same air, and remind ourselves that we have more in common than we have apart.”

    While the GOP has notched a handful of victories since taking over the House, including a resolution to overturn a DC crime bill, most of their bills have been messaging endeavors thus far. And even measures that were thought to be low-hanging fruit, like a border security plan, have proved more challenging than expected in their slim majority.

    House Republicans know their biggest challenges lie ahead.

    “The question is really going to be as we get into phase two,” GOP Rep. Brian Fitzpatrick of Pennsylvania, who co-leads a bipartisan caucus with Democrats, told CNN. “The real test is going to be the must-pass pieces of legislation.”

    The GOP’s investigations on a wide array of subjects, including Hunter Biden’s business deals and the treatment of January 6 defendants, have caused some consternation among the party’s moderates. And some were also skeptical about the need for a congressional response to a potential Trump indictment.

    “I’m going to wait until I hear more facts and read the indictment itself,” Rep. Don Bacon, a Nebraska Republican who represents a district President Joe Biden won, told CNN. “I have faith in our legal system. If these charges are political bogus stuff, and they may be, it will become clear enough soon.”

    GOP leaders are nonetheless expressing confidence in their ability to stay united.

    “House Republicans are working as a team,” House GOP Whip Tom Emmer of Minnesota said at the Orlando news conference. “Because that’s what the American people elected us to do.”

    Bacon framed the stakes of the legislative fights with Biden and Senate Majority Leader Chuck Schumer to come by saying, “We need to be the governing party that voters trust. This will determine 2024 results. This means we can’t cave to Biden’s and Schumer’s demands, but we can’t refuse to find consensus and make agreements on must pass legislation.”

    GOP Rep. Tim Burchett of Tennessee, who told CNN he is willing to shut down the government if conservatives do not get what they are calling for pertaining to the debt ceiling, reflected on how House Republicans could learn from their Democratic counterparts in presenting a unified front.

    “They’re better than us at the carrot and the stick. If they get in line, they get the carrot. If they don’t, they get the stick. They all tout the unity thing. Maybe that’s one of our weaknesses,” he told CNN.

    The must-pass pieces of legislation expose not only the fault lines of a slim majority, but also underscore the hurdles House Republicans face in cementing their transition from a nay-saying minority to a governing majority.

    “Campaigning is for dividing. Governing is for uniting,” GOP Rep. Tony Gonzales of Texas told CNN, adding that sentiment must extend beyond House Republicans to Biden and Senate Democrats.

    “I’d say in general, not everybody comes up here to be serious legislators. A lot of people come up here for fame and fortune. I spent 20 years in the military. I’m focused on being a serious legislator,” he added.

    Fitzpatrick told CNN, “It’s definitely an adjustment,” when describing the House Republicans’ transition from minority to majority, particularly for those members who have not served in the majority before. But Fitzpatrick pointed to the fact that the messaging bills that Republicans have brought to the floor so far have passed almost unanimously.

    Some of the House GOP’s biggest hurdles will come in trying to write a budget blueprint, which they hope will kick off negotiations over the raising debt ceiling, where Republicans are demanding steep spending cuts.

    Further complicating the GOP’s goal to balance the budget and claw back federal spending, Republican leaders – egged on by Trump – have vowed not to touch Social Security and Medicare.

    Norman acknowledged how difficult it is going to be to coalesce around a framework that the entire conference can agree on. Before leaving Washington, the far-right House Freedom Caucus laid out their own hardline spending demands in the debt ceiling fight.

    “I don’t expect to get 218 on the first blush. What we present, there’s gonna be some gnashing of teeth,” he told CNN. “Every dollar up here has an advocate.”

    Burchett told CNN he stands behind the proposals being pushed by the Freedom Caucus.

    “It seems like every time the conservatives are the only ones that compromise. And we are just going to have to say no compromise,” he told CNN, adding he is willing to shut down the government on this issue. “I did it under Trump, and I’ll sure as heck do it under Biden.”

    McCarthy said he thought it was “productive” for his members to outline “ideas” for the budget, and dismissed the idea that anyone was drawing red lines.

    Asked about Biden’s insistence that House Republicans show them their budget before negotiations can continue, McCarthy replied, “Why do we have to have a budget out to talk about the debt ceiling? We’re not passing the budget, we’re doing a debt ceiling.”

    He added that he has told the president, “We’re not going to raise taxes, and we’re not going to pass a clean debt ceiling, but everything else is up for negotiation.”

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  • Mike Pence calls potential Trump indictment ‘not what the American people want to see’ | CNN Politics

    Mike Pence calls potential Trump indictment ‘not what the American people want to see’ | CNN Politics

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    Washington
    CNN
     — 

    Former Vice President Mike Pence balked at the idea of a potential indictment of Donald Trump, categorizing any possible prosecutorial actions as “politically charged” and “not what the American people want to see.”

    Speaking with ABC’s Jon Karl during a taped interview Saturday, Pence defended any peaceful protests that may break out at Trump’s behest, after the former president called for his supporters to “take our nation back,” while still condemning the egregious violence that the country witnessed at the US Capitol on January 6, 2021.

    “The American people have a constitutional right to peacefully assemble,” Pence said, adding, “The frustration the American people feel about what they sense is a two-tiered justice system in this country, I think is well founded. But I believe that people understand that if they give voice to this – if this occurs on Tuesday, that they need to do so peaceful and in a lawful manner.”

    Pence’s comments underscore his attempts to walk a fine line in issuing criticism and support for his former boss amid mounting expectations that he will vie for the Republican presidential nomination. Just last week, at the annual Gridiron Club dinner in Washington, DC, the former vice president issued his most blistering comments yet about Trump’s role in the attack on the Capitol.

    “President Trump was wrong. I had no right to overturn the election, and his reckless words endangered my family and everyone at the Capitol that day, and I know that history will hold Donald Trump accountable,” Pence said at the dinner.

    Trump has repeatedly pushed back on that assertion and argued Pence was at fault because he didn’t attempt to overturn the 2020 election results.

    “The president’s wrong,” Pence told ABC. “He was wrong that day, and I had actually hoped that he would come around in time, Jon, that he would see that the cadre of legal advisers that he surrounded himself with had led him astray. But he hasn’t done so and it’s … I think it’s one of the reasons why the country just wants a fresh start.”

    Pence said the former president let him and the country down on January 6 and Trump’s continued discourse on the events is one of the reasons why the former duo has gone their “separate ways.”

    Still, Pence maintained he is “taken aback at the idea of indicting a former president of the United States.”

    Trump said Saturday that he expects to be arrested in connection with the yearslong investigation into a hush money scheme involving adult film actress Stormy Daniels and he called on his supporters to protest any such move.

    In a social media post, Trump, referring to himself, said the “leading Republican candidate and former president of the United States will be arrested on Tuesday of next week” – though he did not say why he expects to be arrested. His team said after Trump’s post that it had not received any notifications from prosecutors.

    Law enforcement has discussed how to navigate the potential indictment on a criminal charge by a New York county grand jury and the choreography around the possibility of an unprecedented arrest of a former president.

    Should he be indicted, Trump is expected to surrender and be processed and arraigned at a New York courthouse, which includes fingerprinting and mug shots, a source familiar with the matter told CNN.

    “At a time when there’s a crime wave in New York City, the fact that the Manhattan DA thinks that indicting president Trump is his top priority just tells you everything you need to know about the radical left in this country,” Pence said Saturday.

    Turning to the subpoena he received from the special counsel investigating Trump’s post-2020 election activities, Pence said he is not challenging all the elements of the subpoena and that he and his lawyers aren’t asserting executive privilege. Trump, though, has already cited executive privilege in a motion to prevent Pence from testifying before a grand jury.

    As for 2024, Pence said he is “giving serious consideration” to a White House bid, and, speaking to reporters in Des Moines, Iowa, on Saturday, he said, “No one is above the law, and I’m confident President Trump can take care of himself. My focus is going to continue to be on the issues that are affecting the American people.”

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