(cache) Breitbart leaks tape to divide Trump from Ryan - Axios
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Breitbart leaks tape to divide Trump from Ryan

Breitbart News has published a leaked tape of Paul Ryan telling Republican House members he wouldn't defend Donald Trump over the "Access Hollywood" tape.

I am not going to defend Donald Trump—not now, not in the future.

Ryan continues in the tape: "As you probably heard, I disinvited him from my first congressional district GOP event this weekend—a thing I do every year. And I'm not going to be campaigning with him over the next 30 days."

Why this matters: The timing of the leak. Breitbart is echoing a strategy that we foreshadowed over the weekend: conservatives who want to kill the House Obamacare replacement plan are trying to sow divisions between Ryan and Trump. This tape dredges up painful old memories from the campaign trail of when Ryan abandoned Trump.

These conservatives know the President prizes personal loyalty over all else. Trump often talks about who was with him and who wasn't. In that frame — it's one thing for Trump to read about Ryan's words in the papers. It's quite another for him to hear the audio.

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Trump-Ryan face a pair of tests

J. Scott Applewhite, Pablo Martinez Monsivais / AP

When the nonpartisan Congressional Budget Office released its worst-than-expected estimate just after 4 p.m. that 24 million people would lose coverage under Trumpcare in 10 years (14 million next year), Axios' David Nather accompanied his flash post with a GIF of a mushroom cloud.

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Breitbart had a bomb of its own that Paul Ryan opponents had been husbanding for months, waiting to detonate at a time of maximum vulnerability: audio of the Speaker on Oct. 10, a few days after the release of the Billy Bush tape, saying on a conference call with House Republicans: "I am not going to defend Donald Trump — not now, not in the future." His remarks had been reported at the time, but now the tape was out there.

For Republicans on both ends of Pennsylvania Avenue, it was the coup de grâce on a downer day. House GOP leadership soldiered on, saying that members are "by and large in a good place" despite the "coverage gap": "[T]he score was better than expected on premiums [down 10% over 10 years], deficit reduction, tax relief." Ryan said he was "encouraged"!

Aides said leadership plans to send the "well-crafted plan" — mostly as-is — to the floor for final passage by the end of next week. That theoretically would allow the Senate to hit the target of passing it before Easter break, along with the confirmation of Judge Neil Gorsuch to the Supreme Court.

But the CBO's headline number added huge uncertainty, and mammoth new risk for Republicans. The N.Y. Times' David Leonhardt called it "jaw-dropping." A Democrat who knows the Hill well emailed us: "Paul Ryan can kiss his AHCA [American Health Care Act] good-bye."

Nather writes this morning in "Trumpcare and the CBO freakout" that his bottom line summed up in this tweet from former Senate Republican aide Rodney Whitlock: "Critical, soul searching moment for GOP. Ignore #CBOscore and plow ahead or admit that some ideas might just be problematic."

A theory from one Republican lobbyist: "Trump throws Ryan under the bus. Negotiates a deal and they pass it." Another counters: "More likely Trump gets Ryan to make changes but has to campaign to help get the votes in the House."

Either way, the House R optimism is based on policy, and now we're in the realm of politics. Our experts expect some transition tweak to soften the blow.

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Peloton CEO John Foley on bikes, revenue and recessions

John Foley is a veteran technology executive and entrepreneur, having previously held senior positions at companies like Citysearch, Evite and Barnes & Noble (where he led e-commerce). Now he runs Peloton, a so-called Netflix for bikes that effectively offers professional spin classes in a user's home. If that sounds familiar, it may be because you saw the company's store in your local shopping mall, or one of its recent spate of television commercials.

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The New York-based company also reportedly is raising up to $120 million in new VC funding at around a $1.2 billion valuation. Axios spoke with Foley via phone about Peloton, its finances, its competition and its future. The quick read:

  • Peloton is best known for hardware, but it's more a software and media company.
  • The company generated $170 million in revenue last year.
  • Last month it streamed one million rides. Monthly subscriber churn is just 0.3%.
  • Peloton discussed bringing rivals Soul Cycle and Flywheel onto its platform.
  • It pays its instructors 3-4 times the market rate, plus bonuses.

Is Peloton a hardware or software company?

For sure we're a software company. The entire leadership team comes from consumer Internet… We decided to get into hardware because we didn't think there was any existing hardware that was good enough. So we went out and decided to make a bike and make a big tablet for it. But what differentiates us is the software, which includes the streaming and the gamification and the network. We're also a media company on top of that, because we're streaming 12 hours of live TV content each day and have another 4,000 classes on-demand. It's kind of like how Apple was before all the services went to the cloud and the handsets basically become dumb terminals, plus CPUs and smart-chips.

Will you also have to open up your walled garden for third-party content?

We've played with it, and even talked to Soul Cycle and Flywheel, asking if they wanted to have a channel. We were open to the idea, but they were not. A couple of years ago we also leaked out on Reddit how to unlock the device and download Netflix, but there haven't been a lot of people asking for it. Overall, I do assume that content in this area is going to massively heat up in the next year or two, including among all the traditional stationary bike manufacturers who have realized that people don't want to stare at a wall and motivate themselves. That's why we're capitalizing to be very aggressive.

Speaking of capitalization, will you comment on the Bloomberg fundraising report?

I'm not going to discuss that, but we tripled the size of the company last year and plan to do so again this year.

Tripled in terms of what?

We went from 20,000 bikes to 60,000 bikes and $50 million in revenue to around $170 million. We also have 99.7% monthly retention on our subscriptions... We're also doing more and more of our own logistics. We currently have three Peloton/Mercedes Sprinter vans in three cities and rolling out another seven this year. That means people will get bikes delivered by our people, who will set them up, put cleats on their shoes, hook up the WiFi and even answer questions about different instructors. It's UPS meets Apple's Genius Bar. We currently have a 93 net promoter score and, I know it sounds crazy, but I want us to get to 100.

Peloton has lived its entire life in an economic recovery. How do you sell more $2,000 bikes and $39 monthly subscriptions if things turn south?

First we're going to take some sticker shock off the table by launching a three-year financing plan on the bike. We're also going to market how Peloton is an investment that scales inside your household. A couple can both pay for Soul Cycle classes or monthly gym memberships, or they can share a bike and pay $39 per month for unlimited classes. We think it's actually the perfect product for a recession, because it's cheaper in the long-term than the alternative.

Another alternative would be riding outside. Are most of your sales in cold weather states.

That's what I originally thought would happen, but Dallas is actually our best store right now. When Soul Cycle filed its S-1, they came under some criticism because 97% of their revenue was in three markets. For us, only 27% of our bike sales are to New York City and California. It really speaks to how much demand there is across the nation.

If you're a media company, in part, then your instructors are the talent. How do you recruit and compensate them?

We streamed one million rides in the last 30 days. If you're a spin instructor reaching 50 people in a sweaty basement, you want a chance to reach that kind of audience. We also pay three to four times more than market rate, plus a performance bonus where the top ones get a little bit more. We also care a lot about our culture, so retention hasn't been a problem. In five years from now, if other platforms like ours emerge, we'll have to continue to maintain that culture and make it even more attractive. One big way to do that is continue to improve the software, which makes the experience better for both users and instructors.

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How Trump's data operation helped him win

Greg Ruben / Axios

According to conversations with over two dozen staffers and advertising experts involved with the data and advertising operations of both presidential campaigns, the Democratic party's data machine that worked so well in 2008 and 2012 may have ended up working against Hillary Clinton in 2016. Here's what the campaigns did:

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  • Like Clinton, the Democratic campaign's digital strategy was disciplined and precise. They were methodical, using data to acutely target voters that were pegged as most likely to vote or most likely to be swayed.
  • Like Trump, the Republican campaign's strategy was unpredictable and opportunistic. They were experimental, especially on Facebook, using data to identify wider sets of potential voters, and to target broader audiences that weren't necessarily pegged as definitive or persuadable voters.

Why it matters: The Clinton campaign's data-driven media and communication tactics may have been too precise amid an unusual media climate against a non-traditional candidate. Conversely, the Trump campaign's reliance on intuition over data drove their message to people and places they would've never otherwise reached, like white, male voters in Wisconsin and Michigan — the voters that delivered his victory.

Campaign structure:

Per a former Clinton party official:

The Clinton campaign was run like a management consulting firm. The Trump campaign was run like a family business.
  • The Trump campaign's main data source came from the RNC, which worked with a third-party firm called Data Trust. The relationship between the RNC and an independent group, not a campaign, is what many from the Trump campaign credit for their electoral success. After their 2008 loss, Data Trust and the RNC began to create an infrastructure that could support any future nominee. "Our theory is Democrats created a machine designed to market one product — Obama. If we can design a system that can market any candidate, not one specific candidate, we think we can leapfrog the competition," Data Trust advisor (and former Reince Priebus chief of staff) Mike Shields said about their strategy.
  • The Clinton campaign's main data hub was split between the DNC and the campaign itself, not a third-party that could cultivate data across cycles. Groups like Catalist, Civis, Organizing for Action and the DNC all housed different pieces of the data at different times that Obama used to target voters in 2012. Sources say the Clinton campaign worked with the DNC to cultivate and model a data pool that had been fragmented after Obama's 2012 win, making it harder for the Clinton campaign to compete with the GOP's long-term strategy.

Targeting strategy: One of the biggest differences between 2012 and 2016 was the increased domination of Facebook and Google, which made micro-targeting through paid advertising on both platforms a significant part of each campaign's strategy.

  • The Clinton campaign used micro-targeting to focus on a specific group of persuadable voters, while the Trump campaign identified persuadable voters and advertised to broader, related groups.
One of biggest lessons of this campaign is you can't get by with small, targeted audiences.
— Google's Head of Industry - Elections, Lee Dunn

Mass-message testing:

  • Trump: Gary Coby, who led the Trump Campaign's advertising team alongside Brad Parscale, said that each day, the campaign tested 40,000-50,000 automated ad combinations on Facebook for $200,000-$300,000. From there, they found which messaging attracted audiences whose voter files weren't pegged as being likely to vote for Trump. Experimenting that quickly allowed them to build up enough historical data to very quickly identify trends of which ads worked and which didn't. Coby told Axios that campaign staff got so good at predicting effectiveness of certain messaging, that they could see what worked after only spending $20-$50 on a particular ad.
  • The Clinton campaign took a more strategic approach, focusing on fewer, more targeted messages, that were more likely to appeal to certain voters and refining them through surveys on video ads across the web. The campaign used technology that was able to measure specifically how messages resonated within different voter files, and drill into subgroups to identify areas for future message optimization. The technology even included ways to measure how external events affected responder bias.
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The coming message battle over auto regs

Gene J. Puskar / AP

Powerful automakers about to score a big lobbying win face the tricky task of defining it as something a little more nuanced. President Trump intends to use a visit with the auto industry in the Detroit area Wednesday to announce that EPA will revisit an 11th-hour Obama administration decision to lock in strict greenhouse gas and efficiency rules for the 2022-2025 model years.

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That's welcome news for the industry, which has pressed EPA to reexamine the January 13 decision and says maintaining the targets will be expensive and out-of-step with consumer preferences amid cheap gas and modest electric car sales.

Green groups will loudly condemn the decision as a major rollback of a signature Obama climate initiative.

But the industry will probably respond with more of a golf clap. Why? While it's clear that Trump plans to scale-back the standards, the industry is wary of claiming victory on a regulatory rollback. They'll spin this as good government and an analytical process while knowing it's likely to yield a better outcome than they got under Obama

"Until this review is done, nobody knows what that number should be," Gloria Bergquist of the Alliance of Automobile Manufacturers told Axios. She said the group is merely seeking a "data-driven" review, one conducted "without pre-judging the outcome, checking assumptions against market realities."
A different message: White House spokesman Sean Spicer framed Trump's visit in starker terms at the White House yesterday. "He will meet with auto executives and workers and manufacturing suppliers highlighting the need to eliminate burdensome regulations that needlessly hinder meaningful job growth," he said.
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Tillerson faces his own email controversy

Susan Walsh / AP

Back when he was Exxon's CEO, secretary of State Rex Tillerson apparently used an alias ("Wayne Tracker") in emails discussing climate change, according to Bloomberg, which cites a court filing from New York Attorney General Eric Schneiderman, who is probing whether Exxon misled investors and the public about the effects of climate change on its business.

Why it matters: Basically anything involving a secretary of State and emails (think Hillary Clinton) is bound to attract interest. And if this story founds familiar ... years ago conservatives pilloried Obama's first EPA chief, Lisa Jackson, over her use of a secondary email account under the name "Richard Windsor."

Exxon fights back: In a late Monday statement, the company said Tillerson's main corporate address got tons of messages. The wayne.tracker@exxonmobil.com address was used for "secure and expedited" communications on a "broad range" of business topics, not just climate change.

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What if politicians worked in restaurants?

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Trumpcare and the CBO freakout

Giphy

The next few days will tell us whether Republican leaders prepared adequately for the disastrous Congressional Budget Office estimates of the House Obamacare replacement bill. It's one thing to say, "we're not going to compete with a law that forces everyone to buy coverage." It's another thing to fight headlines about 24 million Americans losing coverage.

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Quick recap:

  • Coverage losses: 14 million people in 2018, 24 million over 10 years
  • Savings: $337 billion over 10 years
  • Medicaid cuts: $880 billion over 10 years
  • Premiums: 15 to 20 percent higher in 2018-19, 10 percent lower in 10 years
Top Republican responses:
  • House Speaker Paul Ryan told reporters he was "encouraged" by the report — because of the savings and long-term lower premiums — and it "exceeded my expectations."
  • Health and Human Services secretary Tom Price said CBO didn't look at everything Republicans are planning: "It didn't look at the regulatory reforms that we're going to put into place. It didn't look at the state innovation grants. It didn't look at the flexibility that we're going to allow the states."
  • Office of Management and Budget director Mick Mulvaney, on Medicaid coverage losses: "The CBO is saying it happens on day one, which is just absurd."
But here are the Republicans to watch:
  • Top conservative critics of the bill — including House Freedom Caucus chairman Mark Meadows, Freedom Caucus member Jim Jordan, and Sens. Rand Paul and Ted Cruz — were laying low.
  • But Caitlin Owens reports that Sen. Mike Lee — another conservative critic — said his concerns about the bill "have not been eliminated by the CBO report."
  • Sen. Susan Collins, one of the GOP moderates who's skeptical about the bill: "The topline numbers are alarming on the loss of coverage."
  • Sen. Lindsey Graham: "Let's say the CBO is half right—that should be cause for concern," per the Wall Street Journal.
  • (As one Senate Democratic aide noted: "We heard three different messages from the House, Senate, and White House. Clearly zero attempt at message coordination.")
The bottom line: It's summed up in this tweet from former Senate Republican aide Rodney Whitlock: "Critical, soul searching moment for GOP. Ignore #CBOscore and plow ahead or admit that some ideas might just be problematic.
FWIW: Politico reports that the White House's internal projections were even worse: 26 million would lose coverage over the next 10 years.
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Britain one step closer to Brexit

Ben Stansall / Pool Photo via AP

The UK Parliament gave Prime Minister Theresa May the go-ahead to leave the European Union in a long-awaited approval, per the AP. Both the amendments that were pending approval were rejected, one of which would have allowed EU residents to remain in Britain. The proposal now awaits royal approval, and then May can trigger Article 50 to exit the union.

Compare that to... Scotland, which is calling for a referendum to leave the UK since it doesn't want to leave the EU and says it has been "taken down a path that we do not want to go down without a choice." That could take place between the fall of 2018 and the spring of 2019.

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Trump is letting the CIA launch drone strikes

Ismail Coskun, IHA via AP

Trump has granted drone-striking power to the CIA, breaking from an Obama-era policy that separated the CIA's capabilities from the Pentagon's, according to the WSJ. Previously, the CIA would run the operation to locate terrorists, and the DOD would launch strikes.

The CIA has authority to operate in Syria now, lining up with Trump's desire to stomp out ISIS, but the striking region will expand, U.S. officials said. The CIA has been using this strike capability already, killing a senior al-Quaida leader in Syria, Abu al-Khayr al-Masri.

Why it matters: The CIA doesn't have to report the number of terrorists or civilians it kills during a drone strike. The Pentagon had to report that publicly. Now the numbers of strikes might increase without public disclosures.

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DOJ needs more time on wiretapping evidence

Pablo Martinez Monsivais / AP

The Department of Justice faced a deadline today to show evidence to the House Intelligence Committee on Trump's unproven claim that Obama wiretapped Trump Tower during the campaign. The department wants an extension, per an AP report.

DOJ spokeswoman Sarah Isgur Flores said it wants more time to "review the request in compliance with the governing legal authorities and to determine what if any responsive documents may exist." Evidence it could turn over would include any applications, orders, or warrants about alleged wiretaps.

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Senators not thrilled with the CBO score of the House bill

J. Scott Applewhite / AP

It's not every day that Senators Susan Collins and Mike Lee have the same opinion on policy, but the Congressional Budget Office estimate on the impact of the House Obamacare repeal and replacement bill made them feel the same way: Concerned.

It's not just them. Most GOP senators asked about the estimate that 24 million people will lose their coverage told reporters they're not finished reading the CBO report. But some had things to say, none of them good.

  • Lee: "I have some concerns with the bill. They have not been eliminated by the CBO report."
  • Collins: "The topline numbers are alarming on the loss of coverage."
  • Sen. Steve Daines: "Better is possible."
  • Sen. Ron Johnson: "Interesting, wasn't it?"

What to watch: What happens to the bill in the House. Unless leadership has some magic solution up their sleeves, this bill is very, very unlikely to pass in the Senate, despite the current plan to take the House-passed bill directly to the Senate floor (if and when the bill passes the House). It's even unclear how it will fare with moderates in the House, who don't come back into town until later this week.

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Senate confirms Seema Verma to head CMS

AP file photo

Seema Verma is on her way to become the next chief of the Centers for Medicare and Medicaid Services. The Senate confirmed her tonight on a 54-43 vote, putting her in line to help Health and Human Services secretary Tom Price with the next phases of Obamacare repeal.

Her agency will be in charge of relaxing and rewriting the law's regulations while Congress works on the biggest changes. She'll also run the Medicare and Medicaid programs, although her main expertise is in Medicaid — she helped design Indiana's overhaul of the program under then-Gov. Mike Pence.

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