Overnight Defense: US, South Korea to delay military drills during Olympics | Senators fight over defense spending in budget talks | Trump suspends security aid to Pakistan

View in your browser     THE TOPLINE: The United States and South Korea have agreed to delay an annual joint military exercise that was scheduled to take place during the Winter Olympics in Pyeongchang. President Trump and South Korean President Moon Jae-in spoke Thursday and agreed "to de-conflict the Olympics and our military exercises so that United States and Republic of Korea forces can focus on ensuring the security of the Games," a White House statement said. "I believe it would greatly help ensure the success of the Pyeongchang Winter Olympic Games if you could express an intention to delay joint South Korea-U.S. military exercises during the Olympics in case the North does not make any more provocations," Moon told Trump during the phone conversation, according to sources quoted by South Korea's Yonhap news agency.  South Korea looked to delay the drill, known as Foal Eagle, so as not to increase tensions with North Korea when athletes from around the world converge on the peninsula to compete in the Winter Olympics next month. The Hill's Rebecca Kheel has the rest here.   Defense Secretary James Mattis also weighed in on the announcement, and said the joint military exercises with South Korea will begin again toward the end of March. "Exercises are not just done on military bases in defense of [South Korea]," Mattis told reporters at the Pentagon. "So we worked with [the South Koreans] on it and [the exercises] will start sometime ... after the Paralympics." The Games take place Feb. 9 to 25 in Pyeongchang - which is 50 miles south of the demilitarized zone - followed by the Paralympic Games, which run March 8 to 18. Read about that here.   SENATORS BATTLE OVER DEFENSE SPENDING IN BUDGET TALKS: A fight over defense funding is emerging as a key hurdle to getting a budget deal and avoiding across-the-board spending cuts. Senators on Thursday battled over a Democratic push to equally increase defense and nondefense spending as Congress faces an upcoming deadline to lock down an agreement. Senate Majority Leader Mitch McConnell (R-Ky.) said following a closed-door meeting between congressional leadership and the White House that he was "optimistic" a two-year agreement could be reached, but Democrats must set aside their demand. "Any agreement must provide our armed forces with the resources they need to fulfill their missions. That means setting aside the misguided notion that new defense spending needs to be matched dollar for dollar by new nondefense spending," he said. McConnell argued that the military had taken more of a hit under the Budget Control Act and the ongoing negotiations provided a "golden opportunity to put aside political calculations." Congress faces a mid-January deadline to both avoid a government shutdown and automatic across-the-board spending cuts under sequestration. Negotiators have been meeting for weeks to try to lock down top-line spending numbers, but so far a deal has yet to crystallize. Read more from The Hill's Jordain Carney here.    LATEST ON IRAN PROTESTS: The State Department issued a stern warning to the Iranian government on Thursday, asserting that the U.S. has the power to hold individuals who censor or harm protesters accountable. "We have ample authorities to hold accountable those who commit violence against protesters, contribute to censorship, or steal from the people of Iran," State Department spokeswoman Heather Nauert said. "To the regime's victims, we say: You will not be forgotten." Foggy Bottom's statement comes amid reports that demonstrations have waned in recent days. The Associated Press noted Thursday that it is unclear whether the decrease is due to Iranian officials successfully blocking social media platforms or a true decline in the numbers of protests. Demonstrations began last week reportedly over economic concerns but later shifted toward anti-government protests focused on Iran's clerical rulers. Read more here.   Vice President Pence lamented that many European leaders and the United Nations have "failed to forcefully speak up" in support of civilian protesters in Iran. "The president and I call on leaders of freedom-loving nations across the world to condemn Iran's unelected dictators and defend the Iranian people's unalienable right to chart their own future and determine their own destiny," Pence wrote in an opinion piece for The Washington Post. Read that here.   TRUMP SUSPENDS SECURITY ASSISTANCE TO PAKISTAN: The Trump administration is suspending security assistance to Pakistan amid frustration with Islamabad's failure to combat terrorist networks operating in the country, the State Department announced Thursday. Heather Nauert, a spokeswoman for the department, said at a press briefing that the U.S. would freeze military equipment deliveries and transfers of security-related funds to Pakistan. She said the administration is still working out the dollar amounts of the cuts. The U.S. will also freeze reimbursements to the Pakistani government for money spent on conducting counterterrorism operations. "Until the Pakistani government takes decisive action against groups, including the Afghan Taliban and the Haqqani Network, we consider them to be destabilizing the region and also targeting personnel," Nauert said. Nauert said that there "may be some exceptions that are made on a case-by-case basis if determined to be critical to national security interests." The announcement came two days after Trump railed against Pakistan, saying that Washington gives the country "billions of dollars" and gets "nothing" in return. The U.S. is also withholding $255 million in aid from Pakistan amid frustration over its failure to fight terrorist groups. Read more from The Hill's Max Greenwood here.   US ADDS PAKISTAN TO 'SPECIAL WATCH LIST' FOR RELIGIOUS FREEDOM VIOLATIONS: The State Department on Thursday announced Pakistan had been added to a "special watch list" due to its treatment of religious minorities within the country's borders.  Pakistan was added to the list under the International Religious Freedom Act of 1998 last month, with the announcement citing the country's "severe violations of religious freedom."  The department also announced that Secretary of State Rex Tillerson moved to redesignate Myanmar, China, Eritrea, Iran, North Korea, Sudan, Saudi Arabia, Tajikistan, Turkmenistan and Uzbekistan as countries of "particular concern." The law was passed during the Clinton administration as part of an effort to make religious freedom a key objective of U.S. foreign policy. Pakistan, which is an Islamic republic, has been under scrutiny for its treatment of religious minorities in the country. Read more on that here.   ON TAP FOR TOMORROW: The Foundation for Defense of Democracies will hold a breakfast conversation with Iran experts on the ongoing Iran protests at 9 a.m. at the foundation's headquarters, 1800 M St. NW.    ICYMI: -- The Hill: Trump takes credit for talks between two Koreas -- The Hill: Justice Dept to offer House key documents in Russia probe -- The Hill: Blair rejects claim he said UK intelligence spied on Trump campaign -- The Hill: Opinion: Dear America: Don't fall for Pyongyang's predictable, poisonous ploy -- The Hill: Opinion: Legislators should focus on complementary roles of defense and global health     Please send tips and comments to Rebecca Kheel, rkheel@thehill.com, and Ellen Mitchell, emitchell@thehill.com. Follow us on Twitter: @thehill, @Rebecca_H_K, @EllenMitchell23         Did a friend forward you this email? 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