Overnight Defense: New allegations emerge against VA nominee | Pompeo vote set for Thursday | Work begins on defense policy bill | Measures push space corps, pay bump for troops

View in your browser     Happy Wednesday and welcome to Overnight Defense. I'm Rebecca Kheel, and here's your nightly guide to the latest developments at the Pentagon, on Capitol Hill and beyond.   THE TOPLINE: Ronny Jackson's nomination to be Veterans Affairs secretary appears to be in even worse shape than yesterday as allegations of wrongdoing pile up. On Wednesday afternoon, Senate Veterans Affairs Committee Democrats released a compilation of the allegation against Jackson. The revelations in the document include that he has been accused of providing a "large supply" of Percocet to a White House Military Office staffer. The missing medication had sent the White House Medical Unit "into a panic," according to the report. Jackson was also accused of getting drunk and wrecking a government vehicle at a Secret Service going away party, the report says. Jackson's defense: Jackson denied the allegations he drunkenly wrecked a car and said his embattled nomination is "moving ahead." "I never wrecked a car," Jackson told reporters at the White House, adding that he has "no idea where that is coming from." Jackson said the charge would be easy to disprove and insisted "we're still moving ahead as planned." White House digs in: The White House showed no signs Wednesday of abandoning Jackson. White House press secretary Sarah Huckabee Sanders offered a vehement defense of President Trump's embattled pick to the lead the Department of Veterans Affairs, saying Jackson's record is "impeccable" and that the choice was aggressively vetted. "He has received more vetting than most nominees," she told reporters at a daily briefing dominated by questions about Jackson, whose nomination appeared to be on life support after the allegations of misconduct. Sanders said Jackson had been scrutinized in a "pretty thorough vetting process done by the FBI, as well as three independent investigations." Takeaway: It's hard to see how Jackson survives the growing firestorm around his nomination. Senators were already skeptical of Jackson's lack of experience managing a bureaucracy as large as the VA. And veterans service organizations, which have considerable sway on veterans issues in Congress, are getting increasingly frustrated at the dysfunction over VA leadership.     POMPEO CONFIRMATION SET FOR THURSDAY: After securing enough votes to be confirmed and getting past committee drama, Mike Pompeo is scheduled to get a vote on his confirmation to be secretary of State on Thursday. Senators locked in an initial vote for Pompeo on Thursday at noon, followed immediately by a final vote on his nomination. The agreement speeds up the timeline for Pompeo's nomination, though opponents could have delayed a final vote until Friday. In addition to support from every Republican senator, four Democrats have said they will support him. Democratic Sens. Doug Jones (Ala.), Heidi Heitkamp (N.D.), Joe Manchin (W.Va.) and Joe Donnelly (Ind.) have said they will back Pompeo. Sen. Angus King (I-Maine), who caucuses with Democrats, also came out as a "yes" vote on Wednesday. What is means: Pompeo will be in place ahead of a number of thorny foreign policy debates, including Trump's May 12 deadline to decide whether to withdraw from the Iran deal and the upcoming summit with North Korean leader Kim Jong Un that Trump has said will take place in May or June.   NDAA GETS GOING: National Defense Authorization Act (NDAA) season officially kicked off Wednesday, as subcommittees release their portions of the bill and committee staffers briefed reporters. The most juicy details won't be known until the so-called "chairman's mark" is released in the coming weeks, but the subcommittees offered a few interesting tidbits. Here's a rundown of what we learned Wednesday: Space: Lawmakers on a House panel are moving forward with a push to build up a space war fighting unit, though they are stopping short of trying to create a separate military branch as floated by President Trump. The House Armed Services Strategic Forces Subcommittee is working to use its portion of the annual defense policy bill to create a new numbered unit within the Air Force as well as a subunified command that would report to Strategic Command. "I don't think that the members are backing off on this," a committee staffer said of the so-called space corps suggested by some Republicans in recent months. "President Trump has come out and said that he has endorsed an independent space force. I think our members are still focused on that. I think our members also realize that nothing happens overnight," the staffer said. Oxygen issues: A subcommittee of the House Armed Services Committee is taking steps in its portion of the annual defense policy bill to address physiological episodes that have been hitting military pilots midflight, committee staffers said Wednesday.  "This mark reflects the continued emphasis on keeping this issue in the spotlight at senior department-level leadership so we can continue to work this," a staffer told reporters at a background briefing. Navy and Air Force pilots on various aircraft have been reporting unexplained incidents of hypoxia, which is when the body is deprived of oxygen at the tissue level. There have also been unexplained incidents of disorientation, and hypocapnia and hypercapnia, which is when there is abnormally low and high levels, respectively, of carbon dioxide in the blood. Navy ships: House lawmakers are proposing giving the Navy three more ships than it asked for in fiscal 2019 -- one aircraft carrier and two littoral combat ships. A House Armed Services Committee's subpanel would give the Navy a total of 13 ships in its portion of the National Defense Authorization Act (NDAA). "As Russia and China grow their naval presence it is absolutely critical that we continue to invest in and rebuild our Navy," subcommittee Chairman Rep. Rob Wittman (R-Va.) said in a statement. "The mark released today would put our Navy on the path to make our way to a 355-ship fleet." Pay, troop bump: The House Armed Services Committee is supporting a White House push for a 2.6 percent pay raise for troops in fiscal year 2019, according to a draft defense policy bill released Wednesday. The committee's military personnel subpanel – in its mark for the FY-19 National Defense Authorization Act – wants "full funding of the by-law pay raise for the troops, the highest in 9 years," a notice of the mark states. Unlike last year, the pay increase is in line with what the White House asked for in President Trump's budget proposal released in February.  Trump wanted 2.1 percent pay increase for troops in FY-18, but Congress instead approved a 2.4 percent jump. The subcommittee's draft bill, which sets military policy for the coming year, also includes the extension of several special pay and bonus provisions. In addition, the mark has an increase in troops across the Army, Navy, Air Force and Marine Corps, also in line with White House increases.    ON TAP FOR TOMORROW Defense Secretary James Mattis, Joint Chief Chairman Gen. Joseph Dunford and Pentagon comptroller David Norquist will testify before the Senate Armed Services Committee at 9:30 a.m. at the Hart Senate Office Building, room 216. https://bit.ly/2I4koue The Senate Appropriations defense subcommittee will hold a hearing on the fiscal 2019 budget request for the Defense Health Agency at 10 a.m. at Dirksen 192. https://bit.ly/2Fhjdpv House Armed Services subcommittees will mark up their portions of the NDAA: -- Readiness at 9 a.m. at the Rayburn House Office Building, room 2212 -- Emerging Threats and Capabilities at 10 a.m. at Rayburn 2118. -- Military Personnel at 11 a.m. at Rayburn 2212 -- Tactical Air and Land Forces at 12:30 p.m. at Rayburn 2118 -- Seapower and Projection Forces at 1:30 p.m. Rayburn 2212 -- Strategic Forces at 3 p.m. at Rayburn 2118. https://bit.ly/2qWGk4A   ICYMI: -- The Hill: Lawmakers planning hearings over deadly Niger attack -- The Hill: Sex assault reports in military up 10 percent: report -- The Hill: Opinion: Kim's concessions seem too good to be true; they may be just that -- The Hill: Opinion: Summits and denuclearizing North Korea: Good start, but don't hold your breath -- The Hill: Opinion: US must act decisively to weaken Russia and Iran as guarantors of Assad's survival     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? Sign up for Defense Newsletters     Forward Defense Newsletters       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 ©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.

Overnight Energy: Pruitt faces grilling before House | Park Police forbidden from using body cameras | Macron thinks US will return to Paris agreement

View in your browser     A BIG DAY FOR PRUITT: Environmental Protection Agency (EPA) chief Scott Pruitt is heading to the House Thursday for a pair of hotly anticipated hearings. In the morning, Pruitt will be at the Energy and Commerce Committee's environment subcommittee. After lunch, he'll go to the Appropriations Committee's subpanel that oversees the EPA's budget. Both hearings are supposed to be to examine Pruitt's budget request for 2019, but expect that to be a very minor focus. It's the first time Pruitt will sit in front of either committee since the recent controversies involving him broke, such as his rental of a house from a lobbyist last year for $50 for each night he slept there, his lavish spending in areas like security and travel and raises he gave to two aides despite the White House refusing to approve them. Democrats have been chomping at the bit to question Pruitt in a formal setting. "I think we need to get the answers to a lot of these questions. There's enough concerns out there of misconduct, so I'm sure everyone is going to have their area that they want to review," said Rep. Paul Tonko (N.Y.), the top Democrat on the Energy and Commerce subpanel. But some Republicans are also hoping to get answers on the controversies. The GOP initially saw them as distractions, but as they've grown, lawmakers have started to complain that they could get in the way of Pruitt policies that they support. "So I think you'll see a lot of members talk policy issues, but I also think you'll see members, even Republican members, talk about, obviously, the laundry list of stories," said Rep. John Shimkus (R-Ill.), the same subcommittee's chairman. What Pruitt will say: The Energy and Commerce committee Wednesday released Pruitt's prepared remarks, and they don't mention the controversies at all. Instead, the remarks center around the actual topic of the hearing: Pruitt's budget request. "Over the past year as administrator, I've witnessed firsthand the tremendous advances this agency, and our partners, have made to address the nation's environmental challenges and fulfill our mission. The proposed budget continues this progress by supporting EPA's highest priorities with federal funding for core work in air and water quality, contaminated land cleanups, ensuring the safety of chemicals in the marketplace, and compliance with the law," the remarks say. But The New York Times obtained talking points for "hot topics," with responses for questions the EPA is expecting Pruitt to get on matters like the condo rental, raises and first-class travel. It's worth a read. Why it matters: It may only be five minutes of questioning at a time for each lawmaker, but the Thursday hearings are likely to be among the toughest events of Pruitt's time so far at the EPA. It could make or break Pruitt's future in Trump's Cabinet, particularly if he or others in the White House think Pruitt didn't handle it well. Live blog: Your hosts will be live blogging both hearings, so tune in for highlights and major takeaways.     PARK POLICE OFFICERS WERE FORBIDDEN FROM WEARING CAMERAS: U.S. Park Police officers were forbidden from wearing body cameras while on the job, according to an internal memo obtained by The Hill through a Freedom of Information Act (FOIA) request. The March 2015 memo that U.S. Park Police Chief Robert MacLean wrote to the entire force expressly told officers not to use any audio or video recorders "while on duty." He cited the lack of a department-wide policy for body cameras as the reason why officers could not record their time on the job. "While we recognize the potentially positive benefits associated with body worn cameras, the Force does not currently have a program or policy in place. As such, and until such time that the force authorizes implementation, employees are not authorized to utilize such a device (whether Force or personally owned) to record video or audio while on duty," the memo read. The only exception to the rule, MacLean wrote, would be if a division commander authorized the wearing of a recording device for a "special investigation." The U.S. Park Police did not respond to a request for comment. The Park Police has been under scrutiny since a November police chase on the George Washington Memorial Parkway in Washington, D.C. The chase ended with officers firing nine shots into a Jeep Grand Cherokee, killing 25-year-old Bijan Ghaisar. Family members say Ghaisar was unarmed. Why it matters: Currently, the Interior Department, which oversees U.S. Park Police, still lacks an official policy on the use of body cameras by officers. A February investigation by the Interior Department's Office of the Inspector General (IG) found that the department only has a draft policy on body camera usage, and at this point, it is voluntary. Read more.   MACRON EXPECTS U.S. TO RETURN TO PARIS AGREEMENT: French President Emmanuel Macron on Wednesday predicted that the United States will come back to the Paris climate change agreement. Speaking to a joint session of Congress, Macron said climate change is a long-term problem that won't go away, and that gives him confidence the United States will either stay in the agreement or come back if it does leave. "I'm sure, one day, the United States will come back and join the Paris agreement. And I'm sure we can work together to fulfill with you the ambitions of the global compact on the environment," Macron told the House and Senate, eliciting some cheers from within the House chamber. President Trump announced in June 2017 that he would pull the United States out of the pact, but it cannot take effect until 2020 at the earliest, and a future president could quickly rejoin. Macron spoke extensively about climate change and the environment in his speech. But he did not seek to consternate Trump or the United States and instead chose to highlight the urgency of the issue. Read more.   FROM THE HILL'S OPINION SECTION: -Policy makers should rethink traditional assumptions of how gas prices impact households, says Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University.   ON TAP THURSDAY: Pruitt hearings: Pruitt will testify at two House hearings on the EPA's 2019 budget request: one in the Energy and Commerce Committee's environment subcommittee and one in the Appropriations Committee's Interior/EPA subcommittee. Offshore revenue sharing: The House Natural Resources Committee's subcommittee on energy and mineral resources will hold a hearing on revenue sharing for offshore oil and natural gas drilling.   OUTSIDE THE BELTWAY: Wednesday marked four years since the event that started the Flint water crisis, and WJBK looks back on what's happened since. A new study found that thousands of tropical islands could become uninhabitable in the coming decades due to climate change, The Washington Post reports. North Carolina Attorney General Josh Stein (D) is suing Duke Energy over its decision to charge ratepayers for the costs of cleaning up coal ash disposal facilities, the Associated Press reports.   IN CASE YOU MISSED IT: Check out Wednesday's stories ... -Park Police officers were forbidden from wearing body cameras: memo -GOP lawmaker wants 'contrition' from Pruitt -Pruitt talking points show he plans to shift blame at hearings: report -White House: We expect Pruitt to provide answers on ethics controversies -Macron: The US will come back to the Paris climate pact -EPA security chief worked for tabloid owner linked to Trump: report     Please send tips and comments to Timothy Cama, tcama@thehill.com; and Devin Henry, dhenry@thehill.com. Follow us on Twitter: @Timothy_Cama, @dhenry, @thehill         Did a friend forward you this email? Sign up for Energy Newsletters     Forward Energy Newsletters       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 ©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.

Overnight Finance: Mulvaney remark on lobbyists stuns Washington | Macron takes swipe at Trump tariffs | Conservatives eye tax cut on capital gains | Gillibrand unveils post office banking bill | GOP chairman pushes banks on gun policies

View in your browser     Happy Wednesday and welcome back to Overnight Finance, your primary source of dragon energy. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line. See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.   THE BIG DEAL: Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau (CFPB), on Tuesday told bankers that direct engagement with their representatives would bolster their efforts to curtail the bureau's power and loosen financial regulations. Mulvaney, the White House budget director, told a Washington conference of more than 1,000 bankers that their input on the extensive powers of the CFPB could help rein in the agency long loathed by the financial sector. "What you do here matters," said Mulvaney, a former GOP congressman, at an American Bankers Association (ABA) conference on Tuesday. "People coming from back home to tell people in Congress what issues are important to them is one of the fundamental underpinnings of representative democracy, and you have to continue to do it."   Ok, here's the controversial part: Mulvaney said he "had a hierarchy in my office in Congress" in which he valued the opinions of his South Carolina constituents over lobbyists who donated to his campaigns. "If you were a lobbyist who never gave us money, I didn't talk to you. If you were a lobbyist who gave us money, I might talk to you. If you came from back home and sat in my lobby, I would talk to you without exception, regardless of the financial contributions," Mulvaney said.   I've got more on his stunning comments here. Critics pounced on the remarks, saying that Mulvaney was suggesting he gave more favorable treatment to lobbyists who had donated to him. And even some Republicans called on him to clarify his comments.   Reactions "Mr. Mulvaney should resign, and The White House should quickly nominate a permanent CFPB Director with bipartisan support and a moral compass." -- Sen. Sherrod Brown (D-Ohio), top Democrat on the Senate Banking Committee. "If you have someone who comes in the door and it's based on how much money they've given, that's a problem." -- Rep. Mark Meadows (R-N.C.), chairman of the House Freedom Caucus. "I don't believe in that. It's a mistake." -- Rep. Tom Cole (R-Okla.). "It's a total admission of the role of money in decision-making around here, and he should be ashamed of himself." -- Rep. Jan Schakowsky (D-Ill.).   Mulvaney's response "He was making the point that hearing from people back home is vital to our democratic process and the most important thing our representatives can do. It's more important than lobbyists and it's more important than money." -- Mulvaney spokesman John Czwartacki.     ON TAP TOMORROW House Appropriations Committee: Hearing on the SEC's fiscal 2019 budget request with Chairman Jay Clayton, 9:30 a.m. House Education and the Workforce Committee: Hearing entitled "Worker-Management Relations: Examining the Need to Modernize Federal Labor Law," 9:30 a.m. House Financial Services Committee: Hearing entitled "Oversight of the SEC's Division of Corporation Finance," 10 a.m. House Energy and Commerce Committee: Hearing entitled "Perspectives on Reform of the CFIUS Review Process," 10:15 a.m.   LEADING THE DAY Macron takes swipe at Trump tariffs plan: French President Emmanuel Macron took a swipe during an address to Congress on Wednesday at President Trump's plan to levy a variety of tariffs on U.S. allies and China. Macron insisted that, instead of imposing tariffs, the best way forward is a consensus on trade and using the World Trade Organization to fight against abuses.  "We need a free and fair trade for sure," he said. Trump and Macron have met several times at the White House over the past several days. Macron's visit has included a dinner at George Washington's Mount Vernon estate and a state dinner on Tuesday night.  The leaders have shown warmth toward each other during their public appearances.  During his speech to Congress, however, Macron said that facing challenges in a growing global economy "requires the opposite of massive deregulation and extreme nationalism." "A commercial war is not consistent with our mission, with our history with our current commitments for global security," Macron told lawmakers on Capitol Hill. The Hill's Vicki Needham explains here.   Conservatives eye new tax cut for capital gains: Conservatives are making a push to cut taxes on capital gains as a follow-up to the tax-cut measure President Trump signed into law last year. Republican lawmakers and prominent conservative leaders such as Grover Norquist say they want capital gains to be indexed to inflation, saying it would give the economy a boost. They are pursuing both legislation and regulatory action in an effort to achieve that goal. It's unclear when or if it will happen, but conservatives are bullish about the possibility of a unilateral move by the Trump administration. They feel the odds have been bolstered by Larry Kudlow's entry into the administration as National Economic Council director. "It would be phenomenal for the economy," Norquist said. The Hill's Naomi Jagoda breaks down the battle here.   Gillibrand unveils bill to offer banking services at post offices: Sen. Kirsten Gillibrand (D-N.Y.) is offering a bill to establish retail banking services at every U.S. post office. Gillibrand's bill would make the U.S. Postal Service (USPS) offer checking and savings accounts, small-dollar loans, debit cards, cash withdrawals and money transfer services in each of its roughly 30,000 offices. The proposal has been popular among liberals for several years, but has earned recent mainstream support from prominent progressive politicians. Supporters of postal banking say it could give millions of Americans in areas without banks access to essential financial tools. U.S. post offices offered banking services in the early 20th century, and supporters of bringing back the practice say it would help undercut predatory lenders and short-term, high-interest "payday" loans. "For millions of families who have no access or limited access to a traditional bank, the simple act of cashing a paycheck or taking out a small loan to fix a car or pay the gas bill can end up costing thousands of dollars in interest and fees that are nearly impossible to pay off," said Gillibrand, who is seen as a possible 2020 presidential candidate. Republicans, though, aren't on board. They are skeptical about whether the post office can effectively offer those services. I dive deeper into the issue here.   MARKET CHECK: Stocks ticked higher Wednesday as strong earnings reports snapped the market back after yesterday's steep losses. The Dow Jones Industrial Average rose 0.25 percent, snapping a five-day losing streak. The S&P 500 inched up by 0.18 percent, but the Nasdaq dropped 0.05 percent.   GOOD TO KNOW:  The chairman of the Senate Banking Committee is pressing Bank of America and Citigroup for details on their plan to implement new policies restricting business with firearms manufacturers. Moves to ease post-crisis financial rules are spurring lending and risk-taking even as the industry is lowering its own standards, according to The Wall Street Journal. Comptroller of the Currency Joseph Otting bought financial stocks until he took office in November, according to Reuters. Apple CEO Tim Cook visited the White House on Wednesday to meet with President Trump amid escalating trade tensions between the administration and China that involve the tech industry. Two often-warring trade groups--the Independent Community Bankers of America and the Credit Union National Association--teamed up on an effort to push the House to pass the Senate's bipartisan Dodd-Frank rollback. The National Association of Federally Insured Credit Unions is pushing back against efforts kill the industry's tax-exemption. Housing and Urban Development (HUD) Secretary Ben Carson on Wednesday unveiled a plan that would triple the rent for Americans on housing assistance, as well as impose work requirements for the program.   ODDS AND ENDS The House voted unanimously Wednesday in favor of a bill to update music licensing laws, a move widely backed by the music industry and lobbying groups representing streaming platforms such as Spotify, Pandora, Amazon Music and Google Play. Facebook's leaders told investors Wednesday that they're sticking by their advertising-based business model despite scrutiny of the company's practices and a new European law that will give users more control over their data.     Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com, njagoda@thehill.com, and nelis@thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill, @NJagoda, and @NivElis.         Did a friend forward you this email? Sign up for Finance Newsletters     Forward Finance Newsletters       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 ©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.