The Hill's Morning Report — Sponsored by PhRMA — Spy drama grips Washington | Pompeo’s ‘Plan B’ for Iran | What next for Ryan and the House GOP? | North Korea summit uncertainty | Defense bill moves in Senate in McCain’s absence | Roger Stone says he’s prepared for possible indictment | Melania returns to White House from hospital | Treasury says US-China trade frictions ‘on hold’

Sponsored by PhRMA     © Getty Images     Welcome to The Hill's Morning Report, and happy Monday! This daily email, a successor to The Hill’s Tipsheet, is reported by Jonathan Easley and Alexis Simendinger to get you up to speed on the most important developments in politics and policy, plus trends to watch. (CLICK HERE to subscribe!)   Emotions are running hot in Washington on multiple fronts ahead of a pivotal week for Speaker Paul Ryan (R-Wis.), the Russia investigation, the debate over guns and the future of the nuclear programs in Iran and North Korea.   Among the “known unknowns” that are coming to a head...   Mike Pompeo will give his first major policy address as secretary of State today at the Heritage Foundation. The speech is about “the road ahead” on Iran now that the U.S. has pulled out of the Obama- era nuclear deal. It comes amid increasingly delicate negotiations between President Trump and North Korean leader Kim Jong Un over North Korea’s nuclear weapons. The House reconvenes today after Friday’s debacle, in which conservatives helped vote down a farm bill that came as a major blow to Ryan and GOP leadership. The farm bill’s failure could fuel a GOP revolt in the House among members trying to force a vote on immigration against Ryan’s wishes. What is the way forward for immigration, and for Ryan, the lame-duck Speaker who appears to be losing control of his caucus? President Trump says that today he will officially “demand” the Justice Department (DOJ) investigate an FBI informant who had contact with three of his advisers during the 2016 campaign. Deputy Attorney General Rod Rosenstein — a frequent target of Trump’s ire — announced shortly after that the DOJ’s inspector general would investigate whether politics played a role in the investigation. The president is also ramping up his attacks against special counsel Robert Mueller, going on a Sunday Twitter tirade to demand the investigation be brought to an end. Trump’s attorney Rudy Giuliani says he has been told the special counsel will conclude its investigation into obstruction before Sept. 1 to ensure that it doesn’t interfere with the 2018 midterm elections...if the president sits for an interview with Mueller. That’s unlikely to happen. Another tragic school shooting, this time at Santa Fe High School outside of Houston, claimed the lives of 10 people on Friday. The shooting has reignited the national debate over gun control only three months after the mass shooting at a Parkland, Fla., high school.     LEADING THE DAY INVESTIGATIONS: Spy drama grips Washington…   The president is demanding an investigation into an FBI informant who made contact with several of his campaign advisers in 2016.   © Twitter     Rosenstein is looking to defuse the situation, announcing the expansion of an ongoing inspector general investigation into whether politics played a role in the FBI’s surveillance of the campaign.   It is unclear what kind of response Trump seeks from the DOJ, since investigations are kept secret and designed to be insulated from political influence and White House meddling.   Background…   The likely identity of the alleged informant came into focus over the weekend.   The Washington Post reported on a “retired American professor” who has acted as an FBI and CIA informant “for years.” The New York Times described the informant as “an American academic who teaches in Britain” and is “well known in Washington circles, having served in previous Republican administrations and as a source of information for the C.I.A.”   The outlets declined to name the informant, but both detailed the extensive contacts the man had at meeting spots around the world with three former Trump campaign advisers — Carter Page, George Papadopoulos and Sam Clovis.    What now?   Democrats are accusing House Intelligence Committee Chairman Devin Nunes (R-Calif.), who has been pressing law enforcement for details on the informant, of trying to out the informant. But they say there was enough evidence of wrongdoing within the Trump campaign to justify the use of an informant.   Republicans are accusing law enforcement of sensationalizing the impact of revealing the informant’s identity and of illicitly spying on Trump advisers in an effort to frame the president.   Some Trump allies in Congress are urging the president and the legislative branch to take new action to probe what they perceive as intelligence agency excesses.   Roger Simon: The mainstream media are covering for the intelligence agencies. David Von Drehle: The new Trump strategy: Claim there was a setup.   Elsewhere on the Russia front…   The New York Times: Donald Trump Jr. and other aides met with Gulf emissary offering help to win election. NBC News: Roger Stone ‘prepared’ for possible Mueller indictment. The Hill: Will Mueller play hardball with Trump?   Donna Brazile: Congress must act to restore the integrity of our elections. Mark Penn: Stopping Mueller to protect us all.   INTERNATIONAL: From “what next” with Iran and North Korea nuclear postures, to the uncertainties of reckoning with China on trade, this is a Washington week filled with complex next steps and questions.   Iran: CNN — Pompeo this morning will expand on a “Plan B” with Iran now that the United States has exited the 2015 nuclear agreement in a speech titled “After the Deal: A New Iran Strategy.” The ambition, administration officials say, is to assemble a global coalition to pressure Iran into negotiations on "a new security architecture" that goes beyond its nuclear program.   North Korea: The Washington Post — Trump spoke late Saturday to South Korean President Moon Jae-in amid increasing concerns in the White House that North Korea is not serious about striking a deal on denuclearization, which has complicated planning for a June 12 Singapore summit between Trump and Kim. Trump and Moon will meet at the White House on Tuesday.   The president is grappling with risks of political embarrassment if he proceeds with pursuing a North Korea meeting, and is conferring with advisers and President Moon, The New York Times’ David Sanger reports. The stated U.S. goal with North Korea through any detailed negotiation is “complete, verifiable, irreversible denuclearization.” Some foreign policy experts believe Kim’s unstated goal is “the future of geopolitics in northeast Asia.”   The Hill: North Korea’s young leader has surprised some Asia-watchers with savvy power plays.   State Department/South Korea: Bloomberg: Trump moved to fill a key gap in his foreign policy team by picking Adm. Harry Harris, head of the U.S. Pacific Command, to be his nominee for ambassador to South Korea.   China trade: Reuters — In an agreement to de-escalate threats of a trade war between the world’s two largest economies, the U.S. and China are continuing to work on arriving at some specific commitments that could achieve a narrowing of the trade gap, senior Trump administration officials said over the weekend. Treasury Secretary Steven Mnuchin described the current state of play as putting trade frictions “on hold” (The Hill).   The Hill: Trump’s national economic adviser Larry Kudlow said the president and his trade team never anticipated they would conclude a pact with China after two rounds of talks between the two countries. “There’s no agreement for a deal,” Kudlow told ABC News Sunday, adding that the direction of talks is encouraging.   Reuters: China said this morning it did not back down with U.S. officials and a win-win opening exists for business cooperation.   The Hill: Mnuchin defended Trump’s willingness to take another look at the administration’s trade punishments aimed at Chinese telecom giant ZTE Corp. “The president wants us to be very tough on ZTE,” he said Sunday.   SPONSORED CONTENT Sponsored by PhRMA   New analysis from IHS Markit shows providing access to discounted medicine prices at the pharmacy could save seniors with diabetes more than $350 annually. Sharing negotiated rebates could also save Medicare nearly $1,000 annually for every senior taking diabetes medication, reducing total health care spending by approximately $20B over the next 10 years. Seniors share the cost. They should share the savings.   IN FOCUS/SHARP TAKES ➔ CONGRESS: A period of intraparty revolt enters week two with House Republicans searching to heal a divide over an immigration fix for “Dreamers” that stalled momentum for an unrelated and controversial farm bill.   Analysis from The Hill’s editor-in-chief, Bob Cusack:       ❝This is a pivotal week for House Republican leaders. 2017 ended with a big win for the GOP when the tax cut bill passed. But 2018 has been a disaster for House GOP leaders with the year marked by party infighting and awkward jockeying for Paul Ryan’s job. The issue of immigration is dividing the GOP conference and uniting Democrats. The key to any compromise is trust. The bottom line: GOP leaders don’t trust the Freedom Caucus and the Freedom Caucus doesn’t trust leadership.❞   The Hill: Rundown of what’s on tap for Congress this week. The Hill: GOP revolts pile up under the leadership of retiring Speaker Ryan. The Hill: Farm bill frictions could fuel an immigration push for young “Dreamers.” The Hill: The House upended a farm bill as conservatives took aim to block centrists’ immigration ambitions. Now what?   Technology: The Hill – In the wake of the Facebook testimony from Mark Zuckerberg, tech company CEOs are under pressure to appear before Congress.   Trump & Congressional Republicans: The Hill – GOP lawmakers with eyes nervously glued to the November elections told Trump last week they wish he could focus on GOP achievements and mute his carping and advice-giving to Republican lawmakers. They even gave him a card.   Defense: The Hill – National Defense Authorization Act markups begin this week in the Senate as lawmakers say they miss the influence of ailing Sen. John McCain (R-Ariz.), chairman of the Armed Services Committee. Schedules here.   Spending: The Hill – Trump’s proposal to cancel $15 billion out of $1.3 trillion in spending already approved by Congress may go nowhere.   August Recess:  The Hill opinion by Jenny Beth Martin – Congress needs to forgo its summer recess in order to get more done for Americans.   ➔ WHITE HOUSE & ADMINISTRATION:  First Lady: The Hill – Melania Trump returned to the White House over the weekend after a week in the hospital for treatment of an unspecified, benign kidney ailment. Her husband misspelled her name in a tweet welcoming her back to the White House on Saturday, but quickly corrected himself. On Friday, the first lady tweeted a message to students and teachers in Texas, following the school shooting there that killed 10 people and wounded 10 others.   © Twitter     School Shootings: NBC News — At the Department of Education, school shootings remain under study. In Texas and in other parts of the nation, there is less shock, continued uncertainty about gun controls and mental health, and more expressions of resignation that school massacres may be the “new normal.”   Drug Prices: The Hill — Trump's health chief is struggling to show that the administration is serious about taking on drug companies after the government’s recent proposals aimed at lowering prices were criticized as less-than-tough on manufacturers.   Veterans Affairs: The Washington Post — Trump’s new nominee to head the Veterans Affairs Department, acting secretary Robert Wilkie, is receiving a cautiously enthusiastic reception from lawmakers.     ➔ CAMPAIGNS:  Business groups that backed the GOP’s tax bill are working hard to make sure that the overhaul helps vulnerable Republicans in the November midterm elections, The Hill’s Naomi Jagoda reports.   It is taking longer for the public to warm to the tax bill than Republicans would like. But there are some good data points for the GOP in a new CBS News poll, which found that almost two-thirds of Americans give Trump credit for the strong economy.   The Atlantic: Guns, illegal immigration steal the show at Georgia Republican gubernatorial debate. The Hill: Pair of Kentucky Dems in primary competition Tuesday in a deep-red district (political scientist calls it “a grand experiment”). Politico: Democrats put new muscle behind black candidates. Politico: Democrats target Nunes for his investigatory zeal. Ronna McDaniel: Republicans are set to defy history.   OPINION Trump has destroyed Obama’s legacy, by Andrew Sullivan, New York magazine. https://nym.ag/2k6olol   What does the Democratic Party stand for? by Elaine Godfrey, The Atlantic. https://theatln.tc/2IwxeWV   WHERE AND WHEN The House is in session at noon. The Rules Committee will hold a hearing at 5 p.m. on pending legislation.   The Senate convenes at 3 p.m. and resumes consideration of the nomination of Dana Baiocco to be a commissioner of the Consumer Product Safety Commission.   Trump will participate in the swearing-in of Gina Haspel as CIA director at the agency in Langley, Va. At the White House, the president will sign Senate Joint Resolution 57, which effectively rescinds 2013 Consumer Financial Protection Bureau auto lending guidance promoting non-discrimination. Later, Trump will host NASCAR Cup Series champion Martin Truex Jr. and the NASCAR team. The president is having dinner with invited governors to discuss border security and safe communities.   The Supreme Court, with six weeks remaining before its term ends, will release orders beginning at 9:30 a.m.; there’s a possibility of opinions at 10 a.m. (SCOTUSBlog’s live coverage is here.)   The Hill: Washington has whipped itself into a frenzy over rumors that Justice Anthony Kennedy, 81, will retire from the Supreme Court.   ELSEWHERE > The Ebola superhighway: Why the new Congo outbreak terrifies public health authorities, by Reid Wilson, The Hill.   > Illinois lawmakers vote to let kids take medical marijuana in school, by Robert McCoppin, The Chicago Tribune.   > As insurer Anthem resists paying for ‘avoidable’ E.R. visits, patients and doctors push back, by Reed Abelson, Margot Sanger-Katz and Julie Creswell, The New York Times.   > Sports’ Newest Battlefront: Mental Health, by Jason Gay, The Wall Street Journal.   > California poised to become first state in the nation to offer full health coverage to undocumented migrant adults, an expensive undertaking, by Victoria Colliver, Politico.   THE CLOSER And finally … George H.W. Bush, who weathered a turbulent spring with the death of former first lady Barbara Bush and his own hospitalization for sepsis, arrived in Maine Sunday for what he, his children and grandchildren hope will be a summer of relaxation at his beloved home in Kennebunkport.   © Twitter     The Morning Report is created by journalists Jonathan Easley jeasley@thehill.com & Alexis Simendinger asimendinger@thehill.com. Suggestions? Tips? We want to hear from you! Share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!   To view past editions of The Hill's Morning Report CLICK HERE To receive The Hill's Morning Report in your inbox SIGN UP HERE Morning Report Sign Up FORWARD Morning Report Privacy Policy  |  Manage Subscriptions  |  Unsubscribe Email to a friend  |  Sign Up for Other Newsletters The Hill 1625 K Street, NW 9th Floor, Washington DC 20006 ©2018 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.