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Amazon’s operating income nearly hit $2 billion in Q1 — almost double what Wall Street expected

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Investors cheered the results. In recent after-hours trading, the company’s stock was up $97.54, or 6.4%, to $1,615.50.

The company recorded $1.9 billion in operating income in the quarter. That was much better than analysts were expecting. In February, the company forecast that its operating income for the first quarter would likely range from $300 million to $1 billion, influencing analysts’ profit predictions.

Several factors played into the better-than-expected results, Brian Olsavsky, Amazon’s chief financial officer, said in a conference call with analysts. The company’s revenue came in higher than Amazon expected. Because much of the company’s costs — such as those related to running its fulfilment centers and data centers — are fixed, a good portion of the extra revenue trickled down to Amazon’s bottom line, he said.

Additionally, at the end of the fourth quarter, the company had relatively high inventory levels and was worried that it would incur significant costs shifting products around among its warehouses to ensure each one had optimal levels, Olsavsky said. But the better-than-expected sales in the period meant the company didn’t have to do that rebalancing of inventory, he said.

What’s more, Amazon benefitted from surging advertising sales, he said.

“Advertising continues to be a strong contributor to profitability,” Olsavsky said.

Amazon is hiking the price for Prime

In the quarter, Amazon saw strong gains from its North American retail segment, thanks in part due to Whole Foods, which it acquired in the second half of last year. Sales from that segment rose 46% year-over-year to $30.7 billion in the quarter. The segment posted an operating profit of $1.1 billion, which was nearly double the $596 million operating profit it recorded last year.

“The Man in the High Castle” is one of the most high-profile shows available through Amazon’s Prime service.

Amazon

It was also much bigger than Wall Street was expecting. On average, analysts were forecasting that the North American retail business would have an operating income of $660 million in the quarter, according to Colin Sebastian, an analyst who covers the company for Robert W. Baird.

The North American segment could see a surge in coming quarters from another piece of Amazon’s business — its Prime subscription service. The company announced Thursday that it plans to hike the annual price for Prime to $119 in May from the current $99 a year rate.

Amazon Web Services is actually picking up steam

Amazon’s results were also helped by its cloud business — Amazon Web Services — which saw sales grow 49% to $5.4 billion. Yet again AWS contributed the lion’s share of Amazon’s profit. The cloud business had operating income of $1.4 billion in the quarter, up from $890 million a year earlier.

Although AWS’s sales have grown at rates of 40% or better for at least the last six quarter, its pace in the just-completed period was the fastest over that time span.

“AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down,” Amazon CEO Jeff Bezos said in a statement. “As a result, the AWS services are by far the most evolved and most functionality-rich … That’s why you’re seeing this remarkable acceleration in AWS growth.”

Advertising boosted Amazon’s bottom line

Amazon’s results were also augmented by its burgeoning advertising business. The company’s “other” revenue, which includes ad sales, was up a massive 139% in the quarter from the same period last year to $2 billion.

Consumers who are shopping for particular products are increasingly starting at Amazon’s site. The company has seen growing interest from marketers eager to advertise to those shoppers.

Meanwhile, the company was able to keep something of a lid on the losses in its international retail business. That segment’s sales jumped 34% to $14.9 billion from the same period a year earlier. While the segment’s operating loss grew to $622 million, that figure rose 29% — a pace slower than its sales.

It also was much lower than analysts expected. Wall Street had forecast that the international retail business would post an operating loss of $950 million in the quarter, Sebastian said.

However, favorable foreign exchange rates helped improve the international segment’s top and bottom lines. Without that boost, Amazon’s international retail sales would have risen by 21%, and its operating loss would have swelled 44%.

The company’s overall retail business — North American and international — was also helped by Whole Foods and Amazon’s other physical stores as well as the money Amazon makes from third party merchants who offer goods through its sites. Amazon’s brick-and-mortar outlets accounted for $4.3 billion in sales in the quarter. Its revenue from third-party merchants was $9.3 billion, up 44% year-over-year.

By contrast, Amazon’s traditional online retail business, where it sells products directly to customers, posted $26.9 billion in sales in the quarter, up just 18% from the same period a year earlier.

Amazon’s results came on a busy day for tech earnings reports. Among the other notable results:

Intel topped Wall Street’s revenue expectations, which sent its own stock soaring.

And Microsoft reported better-than-expected financials, thanks in part to its cloud business.

We’ll be continuing to cover the results, so hit refresh or click here for the latest.

As Trump threatens to get more involved at Justice Department, its alums push back

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As President Trump threatens to reshape the Justice Department’s leadership and demolish its tradition of independence from politics, department alums are fighting back with increasing vigor — signing petitions, holding public events and taking direct aim at a man they fear will do lasting damage.

On Thursday, Trump suggested in a television interview he might increase his involvement with the Justice Department, which is exploring the conduct of his personal lawyer and overseeing the special counsel investigation into whether his election campaign coordinated with Russia.

[Trump says he might get more involved in managing the Justice Department]

Justice Department alums and legal observers already had been critical of the president for allegedly trying to exert influence over the agency in inappropriate ways, including by asking the FBI to let go of an investigation into his former national security adviser, Michael Flynn. The president, though, has ignored their pleas to back off, asserting repeatedly that federal law enforcement leaders are out to get him.

“You look at the corruption at the top of the FBI; it’s a disgrace, and our Justice Department — which I try to stay away from, but at some point, I won’t — our Justice Department should be looking at that kind of stuff, not the nonsense of collusion with Russia,” Trump told Fox Friends.

Justice Department alums fear the president is laying groundwork to fire the attorney general, deputy attorney general or special counsel Robert S. Mueller III in an effort to end investigations that might affect him personally. Trump says he’s the subject of a “witch hunt.”

But his attacks also might have significant consequences, undermining public faith in the Justice Department, the FBI and the force of the law, said John Bellinger, a former Justice Department official who more recently worked as a legal adviser to the State Department and National Security Council in the George W. Bush administration.

“My real concern is that this will do long-term damage to the perception of independence of the Department of Justice and of the FBI, with at least some group of people, and that that might not ever be retained,” Bellinger said.

Trump’s latest complaints were familiar and wide ranging. In the Fox Friends interview, he raged about the number of Democrats on Mueller’s team, and the political donations a Hillary Clinton-ally made to the wife of former FBI deputy director Andrew McCabe. He accused former FBI director James B. Comey of lying and leaking classified information in memos he provided to his lawyers detailing interactions with Trump.

Comey, who as FBI director had the authority to classify information, has said none of the memos were classified when he created them, though the FBI later deemed some of the information was.

Trump’s raging has generated little public pushback from those leading the Justice Department now. On Thursday, Attorney General Jeff Sessions said at a congressional hearing that he shared some of the president’s frustrations, and noted that FBI leadership has changed since Trump took office.

[‘This thing needs to conclude’: Sessions says he understands frustrations with Mueller]

Pressed on why he had so far refused to appoint a second special counsel to investigate a host of GOP concerns, many of them having to do with Hillary Clinton, Sessions responded, “I do not think we need to willy nilly appoint special counsels, and as we can see, it can really take on a life of its own” — taking what seemed to be a swipe at Mueller.

Sessions said he sympathized with Trump’s frustration about matters that have distracted from his agenda and suggested Mueller’s probe “needs to conclude.”

“Look, I think the American people are concerned, and the president is concerned,” Sessions said. “He’s dealing with France and North Korea and Syria and taxes and regulations and border and crime, every day, and I wish — this thing needs to conclude.”

It was unclear from the exchange what “thing” he was referring to, though a Justice Department spokeswoman said later, “I’d imagine he was saying that it’s in the public interest to have the special counsel’s investigation concluded as soon as possible.”

Outside the Justice Department, the concern has been more palpable. At Georgetown Law School on Thursday, a group of former Justice officials from both political parties held an event called “Democracy in the Balance,” where they warned of how Trump is violating long-held norms.

Former deputy attorney general Sally Yates, who emceed the event, said it was a way of “planting a flag and making it clear that these institutions are important and that what’s happening now is not normal.” Trump famously fired Yates, an Obama appointee, as acting attorney general after she refused to defend the first version of his travel ban.

“That’s one of the risks, I think, that we face in all of this, is that with a daily onslaught, after a while people stop feeling outraged by it, and it starts becoming more and more normal,” Yates said in an interview.

As of Thursday, more than 900 former Justice employees had signed an open letter calling on Congress to “swiftly and forcefully respond to protect the founding principles of our Republic and the rule of law” if Trump were to move on Mueller or other Justice Department officials. Trump has long raged about Sessions recusing himself from the investigation that Mueller now leads. Those inside the Justice Department have been on edge since the FBI earlier this month raided the home, office and hotel room of Trump’s personal lawyer, Michael Cohen.

[Senate Judiciary Committee backs bill to protect special counsel Robert S. Mueller III from being fired by President Trump]

Former Justice officials often speak out about issues important to them, but the volume and forcefulness with which many are criticizing Trump is notable.

Comey, who is in the midst of a media tour to promote a new book, has repeatedly compared Trump to a crime boss and his presidency to a forest fire. Yates said in an interview this week that the president’s attacks on the Justice Department are “beyond unprecedented,” and that voters should take them into account in deciding whether he should be reelected in 2020.

The Justice Department is part of the executive branch, and it is not inappropriate for the president to work with his attorney general on promoting broad policy goals. Jack Goldsmith, who led the Justice Department’s Office of Legal Counsel in the Bush administration, said at the Georgetown event that Trump has “extraordinary theoretical powers to control prosecutions,” though since Watergate, presidents have by tradition steered clear of putting their thumb on the scale in such matters.

Trump, Goldsmith said, seemed to be “indifferent to those norms” — though his efforts so far had been largely ineffective.

Of particular concern to some is that Trump has suggested his foes, such as Comey and top Hillary Clinton aide Huma Abedin, should not just be investigated, but jailed.

“That is not okay,” Comey said on CNN Wednesday. “This is the United States of America.”

[Trump grants pardon to former Bush official; some say he is using the law as a political tool]

Former Justice Department officials critical of Trump have stopped short of calling for the president to be removed from office by impeachment. So far, their pleas have mostly been that voters and legislators take notice. Bellinger said he hoped that more Republicans who held senior Justice Department positions, in particular, would join the chorus of voices defending the agency.

Trump campaigned on a promise of shaking up Washington, and he reiterated that on Thursday.

“I’m fighting a battle against a horrible group of deep-seated people — drain the swamp — that are coming up with all sorts of phony charges against me, and they’re not bringing up real charges against the other side,” he said.

Yates said that while voters might have rightly expected Trump to bring significant policy changes, “I think what you don’t expect and what’s a lot more dangerous to us as a country is this all-out assault on institutions and norms that are really essential to our democracy.”

Scott Pruitt, on Capitol Hill, Deflects Blame for Ethical Lapses

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While Democrats, who have called for his resignation, sought to force Mr. Pruitt to accept culpability for a variety of ethical missteps, he denied knowledge of or responsibility for the actions in question. Republicans, after briefly chastising Mr. Pruitt in their opening remarks, asked friendly questions that appeared calculated to allow him to talk about his policy proposals.

As reports about Mr. Pruitt have continued to increase, some White House staff members have urged Mr. Trump to fire the E.P.A. chief. Some Republican leaders have called for his resignation, and many in Mr. Pruitt’s own party have called for investigations into his actions. But analysts who watched his performance on Thursday said he did well.

Representative Ken Calvert, Republican of California and chairman of the appropriations subcommittee where Mr. Pruitt testified in the afternoon, called the administrator’s appearance “very professional.”

Asked if Mr. Pruitt should resign he said, “No.”

Ultimately, of course, the only opinion about Mr. Pruitt’s fate that matters is the president’s.

“I think his effort will be well received by the president,” Mr. Maisano said. He has more explaining to do, but it was a good effort to mend fences. There were no lethal blows.”

Mr. Pruitt is now the subject of 10 federal investigations, including questions about his office’s illegal purchase of a secure phone booth, his condominium rental agreement with the wife of an energy lobbyist, and accusations that he demoted or sidelined E.P.A. employees who questioned his actions.

Committee Democrats queried him sharply about the reports of his ethical lapses and pressed Mr. Pruitt on his rollbacks of environmental rules, in particular, a new policy, proposed this week, that would limit the E.P.A.’s use of scientific research in crafting new health and environmental rules. Scientists have deplored the proposed rule, saying that it would significantly limit the agency’s use of rigorous science.

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“Administrator Pruitt has brought secrecy, conflicts of interest and scandal to the E.P.A.,” said Representative Frank Pallone Jr. of New Jersey, the ranking Democrat on the House Energy and Commerce Committee, where Mr. Pruitt testified Thursday morning. “You are unfit to hold public office and undeserving of the public trust,” he said. “Every indication we have is you really should resign.”

Mr. Pruitt at the House Appropriations subcommittee on the Interior and E.P.A., his second appearance before House members on Thursday.


Pete Marovich for The New York Times

Greg Walden, Republican of Oregon and the chairman of the House Energy committee, offered light criticism before moving on to praising Mr. Pruitt for his efforts to roll back environmental regulations. “I am concerned that the good progress being made on the policy front is being undercut by allegations of your management of the agency and use of its resources,” he said. “These issues are too persistent to ignore.”

Conservative lawmakers from fossil-fuel producing states, who have long pushed for the rollback of E.P.A. regulations, bypassed even slight criticism of Mr. Pruitt, attributing the scrutiny on his actions to a political witch hunt.

Representative David B. McKinley, Republican of West Virginia, told Mr. Pruitt sympathetically that the attacks on him “have an echo of McCarthyism.”

In many ways, the past 14 months of Mr. Pruitt’s tenure has been building to this moment.

As Oklahoma’s attorney general, he made a name for himself aggressively battling the agency he now leads. Mr. Pruitt’s confirmation was fiercely opposed by Democrats, environmentalists and even E.P.A. employees. Since taking the helm of the agency, Mr. Pruitt has worked to strip the E.P.A. of funding, reduce its staff and curb its ability to develop new regulations on fossil fuel pollution.

No E.P.A. director in history has achieved Mr. Pruitt’s level of notoriety. Since the agency was formed, its administrators have been second-tier Washington figures. But Mr. Pruitt’s antagonism toward climate science has made him a nationally-prominent and divisive figure.

Critics said that more than the ethical and spending issues, the real damage to the E.P.A. has been Mr. Pruitt’s systematic weakening of the agency’s ability to protect the environment and public health. While Mr. Pruitt’s performance in Thursday’s hearings may make or break his future within the Trump administration, many said his legacy was already set.

“It’s just been a flagrant, shameless series of calculated decisions to dismantle the country’s most successful domestic enterprise,” William K. Reilly, who led the E.P.A. under the first President George Bush, said of Mr. Pruitt’s leadership. “It’s really a national tragedy,” he said.

Graphic

The Behavior That Put Scott Pruitt at the Center of Federal Inquiries

The head of the Environmental Protection Agency faces nearly a dozen federal inquiries into his practices. We break down the accusations by category.


At Thursday morning’s hearing, Representative Joe Barton of Texas, who has long denied the overwhelming evidence of human effects on climate change, offered sympathy. “Mr. Pruitt, you’re not the first victim of Washington politics,” he said.

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Democrats unsuccessfully sought to pin down Mr. Pruitt on questions about his expenditures, and to force him to accept culpability for some the actions now under investigation.

Representative Tony Cárdenas, a California Democrat, asked about Mr. Pruitt’s soundproof booth, installed in his E.P.A. office at a cost of $43,000. The Government Accountability Office has ruled that the expenditure broke the law.

“I was not aware of the approval of the $43,000,” Mr. Pruitt told him, “and if I had known about it, congressman, I would not have approved it.”

Mr. Cárdenas responded that “if someone was spending $43,000 in my office, I would know about it.”

Representative Diana DeGette, a Colorado Democrat, launched into questions about Mr. Pruitt’s involvement in real estate deals in Oklahoma that have been reported in The New York Times, referring to the purchaser of his home as a “shell company.”

“It’s not a shell company,” he said quickly, and added that such financial structures were commonly used to purchase real estate in Oklahoma.

Protesters interrupted Mr. Pruitt’s testimony during the morning hearing.


Pete Marovich for The New York Times

She then asked Mr. Pruitt whether he had paid taxes on rent he received. He said the issue had been handed over to an accountant.

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“I’m not doing this to hassle you. I’m doing this as an elected official,” Ms. DeGette said as she ended her questions. “Everything we do has to be to the highest ethical standards.”

Representative Paul Tonko, the ranking Democrat on the House Energy’s subcommittee on the Environment, pressed Mr. Pruitt on his claims that he was unaware that the E.P.A. had used an obscure legal provision to grant hefty raises to political appointees, bypassing approval by the White House. Mr. Pruitt has said the decision was taken by his chief of staff, Ryan Jackson.

“Did you authorize Mr. Jackson to sign those documents for you?” Mr. Tonko asked.

“I was not aware of the amount and I was not aware of the bypassing that was going on,” Mr. Pruitt replied.

Even some Republicans criticized Mr. Pruitt for repeatedly blaming his staff.

“If you say give me a phone booth, and your staff does it, you should say, I’m at fault,” said Representative John Shimkus, Republican of Illinois, the chairman of the House Energy subcommittee, speaking to reporters after the morning hearing. “It’s never good to blame your staff. Or at least do it behind closed doors.”

And Representative Anna G. Eshoo, a California Democrat, used her turn at questioning to try to get Mr. Pruitt to accept culpability. “You have a solid record of violating ethics rules from the state level to the federal government,” she told Mr. Pruitt. “I think it’s an embarrassment.” And then she asked, “Do you have any remorse? Yes or no?”

Mr. Pruitt responded: “I think there are changes I’ve made already. I’ve made a change from first class to coach travel.” Ms. Eshoo returned to her call for a yes-or-no answer, and asked Mr. Pruitt whether he would reimburse the government. He launched into a long response, but she cut him off.

“With all due respect, I may be elected, but I’m not a fool,” she said. “This is not ‘dodge-question’ day.”

Correction: April 26, 2018

An earlier version of this story gave the incorrect home state for Representative John Shimkus. He represents Illinois, not Pennsylvania.


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Cliff Huxtable Was Bill Cosby’s Sickest Joke

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“Just like us” was the dream of the show, right? “Best behavior” blackness. That’s one way to think about it, the cynical, uncharitable, myopic way, the way you’d think about it if you wanted to psychologize Bill Cosby as Cliff Huxtable.

I couldn’t have known how vertiginous the entire Huxtable project was. I was, like, 10, 13, 15 years old when the show was a thing. But eventually, I could see that Cliff became a play for respectability. This is how you comport yourself among white people, young black child. Take a little bit of Howard with you on your way to Harvard. But then, in 2004, at an NAACP ceremony commemorating 50 years since the Brown v. Board of Education decision, he gave the notorious “Pound Cake” speech, where prodding for a particular kind of self-betterment turned tsk-y. He compared incarcerated black men to jailed civil rights activists, the apples and oranges of the black criminal-justice crisis. He ruminated on names that didn’t seem, to him, like Bill.

Mr. Cosby in 1966, the year he won an Emmy for “I Spy.”


Max B. Miller/Archive Photos, via Getty Images

“We are not Africans,” he said. “Those people are not Africans, they don’t know a damned thing about Africa. With names like Shaniqua, Shaligua, Mohammed, and all that crap and all of them are in jail.” Maybe this was Cliff unplugged — and unhinged. Mohammed? But it was a dare to flirt with distance, to reconsider all those applications I filed, to see Bill Cosby as someone who, despite hours of comedy like “Bill Cosby Is Not Himself These Days” and “Bill Cosby: Himself,” might not be willing or able to see who “himself” actually is. I called this a speech, but he performed it like another standup special.

This is the heavy thing about this verdict. The sorting of the ironies has been left to us. Mr. Cosby made blackness palatable to a country historically conditioned to think the worst of black people. And to pull that off, he had to find a morally impeccable presentation of himself and his race. This is what Sidney Poitier, his friend and movie partner, was always up against: inhabiting the superhumanly unimpeachable. But Mr. Cosby might have managed to pull a fast one, using his power and wealth to become the predator that white America mythologized in a campaign to terrorize, torture and kill black people for centuries. Mr. Cosby told lots of jokes. This was his sickest one.

Mr. Cosby’s guilty verdict happens to fall during a week in which Kanye West brought a lot of people a lot more grief, not with new music but with a blizzard of tweets that included an expressed affinity for President Trump, right down to wearing a Make America Great Again cap of his own. Mr. West began his career as a kind of black-sheep Huxtable. (His first album was “The College Dropout.”) But he eventually gathered a sense of politics — racialized, pro-black politics. And then he married into the Kardashian family and things got as vivid and incoherent as one of Cliff’s Van Den Akker sweaters. This is how you get a blistering indictment of racial closed-mindedness like 2013’s “Black Skinhead” but also an embrace of people who’ve been reluctant to shame white supremacists.

This seems like a reasonable moment to wonder whether the Huxtable mold is one that needs breaking — or at least expansion. Mr. West presents a new vexation that’s the opposite of Mr. Cosby’s stringent black conservatism. He can be offensive and rude and self-aggrandizing. But that mind-set also feels like a way to move beyond America’s Dad. Disrespectability politics.

We’re in a moment of cleaving terrible people from their great work. It’s a luxury conundrum, one that feels like a mockery of tremendous human suffering. With Mr. Cosby, though, these are questions worth seriously considering. How do I, at least, cleave this man from the man he seduced me into becoming?


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Trump After Dark: I’m Sorry Mr. Jackson edition

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Early this morning, Rear Adm. Ronny Jackson did what many felt sure he would do eventually: He withdrew his nomination to lead the Department of Veterans Affairs.

In doing so, Jackson overshadowed a victory for President Donald Trump — the swift confirmation of Secretary of State Mike Pompeo, along with the release of a photo of Pompeo meeting with Kim Jong Un. Jackson was also an unwitting spark to a new presidential feud, POLITICO’s Burgess Everett reports.

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Vulnerable Sen. Jon Tester, a Montana Democrat up for reelection, led the charge with a slew of anonymous allegations against Jackson. And Trump is livid.

“The president is enraged over Tester’s work documenting allegations of malfeasance by Rear Adm. Ronny Jackson, which quickly unraveled Jackson’s nomination to be VA secretary and marks a turning point in the relationship between the moderate Democrat and Trump. As Tester’s reelection campaign kicks into high gear, Trump is more motivated than ever to campaign against him in the ruby-red state — accusing the senator of irresponsibly leaking the damaging information to undermine the president’s nominee.”

As for Jackson, he announced his decision to withdraw earlier this morning amid a wave of damaging allegations, though he insisted the allegations were false even in pulling himself out of the process to lead the VA.

“The allegations against me are completely false and fabricated,” he said. “If they had any merit, I would not have been selected, promoted and entrusted to serve in such a sensitive and important role as physician to three presidents over the past 12 years.”

PROGRAMMING NOTE: Your author is moving on, and this is the last Trump After Dark. Thank you for your readership, tolerance of puns and senses of humor. Be kind!

Elsewhere in President Trump’s orbit:

POMP, YOU UP: The Senate confirmed Mike Pompeo as secretary of state, installing a close confidant of President Trump in Foggy Bottom. The White House also released a photo of Pompeo meeting with North Korean leader Kim Jong Un.

HE GOT PRUITT: EPA Administrator Scott Pruitt dodged blame, said staff were responsible for costly decisions about his security and pegged complaints to critics of President Donald Trump during a daylong congressional hearing that appeared, for now, to slow calls for his job.

NOT RUSSIAN, BUT: President Trump said at some point he may change his mind and decide to get involved in the Department of Justice’s Russia probe.

NO FRIENDS ZONE: When President Trump talked off the cuff during an interview with Fox Friends this morning he once again showed how he can disrupt his legal strategy with stray comments.

FOREVER WAR: President Trump has been at odds with the press for a long time, long before he made “fake news” a buzz phrase.

EAST MEETS WEST: The New Yorker explains why Kanye West and President Trump are drawn together.

CALL THEM RED CARDS?: President Trump hinted on Twitter that he would remove support for certain nations if they didn’t back a joint bid by the United States, Canada and Mexico to host the 2026 World Cup.

There you have it. You’re caught up on the Trump administration. TGIT.

HUD Secretary Ben Carson to propose raising rent for low-income Americans receiving federal housing subsidies

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Housing and Urban Development Secretary Ben Carson proposed far-reaching changes to federal housing subsidies Wednesday, tripling rent for the poorest households and making it easier for housing authorities to impose work requirements.

Carson’s proposals, and other initiatives aimed at low-income Americans receiving federal assistance, amount to a comprehensive effort by the Trump administration and Republicans in Congress to restrict access to the safety net and reduce the levels of assistance for those who do qualify.

The ambitious effort to shrink federal assistance has been dubbed “Welfare Reform 2.0’’, after Bill Clinton’s overhaul of the welfare system in 1996. The proposals — affecting housing, food stamps and Medicaid — would require congressional approval.

Trump earlier this month signed an executive order directing federal agencies to expand work requirements for low-income Americans receiving Medicaid, food stamps, public housing benefits and welfare. The agencies are supposed to issue recommendations to the White House within 90 days.

Just last week, House Republicans advanced a plan to strengthen work requirements for the Supplemental Nutrition Assistance Program, commonly known as food stamps, as part of the 2018 Farm Bill. Housing and Urban Development Secretary Ben Carson proposed far-reaching changes to federal housing subsidies Wednesday, tripling rent for the poorest households and making it easier for housing authorities to impose work requirements.

The proposal approved by the House Agriculture Committee would expand work initiatives, mandating that most adult recipients under 60 work part-time or enroll in a state-run training program. It would apply to as many as 7 million adults.

The Trump administration has also started allowing states to impose work requirements on residents enrolled in Medicaid.

The initiative unveiled by Carson Wednesday would raise the rent for tenants in subsidized housing to 35 percent of gross income (or 35 percent of their earnings working 15 hours a week at the federal minimum wage), up from the current standard of 30 percent of adjusted income. About half of the 4.7 million families receiving housing benefits would be affected, HUD officials said.

The cap on rent for the poorest families would rise to about $150 a month — three times higher than the existing $50 ceiling. About 712,000 households would see their monthly rents rise to $150, the officials said.

“There is one inescapable imperative driving this reform effort,” Carson said in a call with reporters. “The current system isn’t working very well. Doing nothing is not an option.”

The HUD secretary said government spending on housing increases every year — without reaching the vast majority of those who qualify for aid. Only 1 in 4 eligible families receive housing benefits, he said. The rest remain on the waiting list for years and may never receive help.

“Every year, it takes more money, millions of dollars more, to serve the same number of households,” Carson said. “It’s clear from a budget perspective and a human point of view that the current system is unsustainable.”

He added that decades-old rules on rent calculations are “far too confusing,” often resulting in families who earn the same income paying vastly different rent “because they know how to work the system.”

HUD wants to scrap rules allowing deductions for medical and child-care costs when determining rent, which Carson said gave some tenants an unfair advantage.

“They know how to include certain deductions that other people may not be aware of,” Carson said. “We really want to level the playing field and make it much more even for everyone.”

Housing advocates criticized the HUD proposals as “cruel hypocrisy,” coming on the heels of tax breaks to wealthy Americans and corporations.

“When we are in the middle of a housing crisis that’s having the most negative impact on the lowest-income people, we shouldn’t even be considering proposals to increase their rent burdens,” said Diane Yentel, president of the National Low Income Housing Coalition.

Carson’s proposed bill would also allow public housing authorities to impose work requirements. Currently, only 15 out of 3,100 housing authorities across the country require some sort of work or job training in return for benefits, HUD officials said.

In Atlanta and Charlotte, at least one adult needs to work 30 hours a week for a household to receive housing benefits. Chicago requires able-bodied beneficiaries to work 20 hours a week.

Seniors over the age of 65 and individuals with disabilities would be exempt from the rental increases for the first six years. They would also be exempt from any work requirements. HUD officials said that group makes up more than half of the 4.7 million families receiving subsidies.

The proposal would also move to verify tenants’ household income every three years instead of annually, which Carson said would encourage residents to work more without immediately facing a rent increase.

The Trump administration has long signaled through its budget proposals that it aims to raise the bar for federal assistance, in large part through expanding work requirements.

On food stamps, Republicans have pitched new work requirements as a way to help people out of poverty while focusing assistance on those most in need. About 42 million Americans depend on food stamps.

Democrats and anti-hunger advocates say the proposed work requirements could force as many as 1 million people off the program over the next 10 years, citing estimates from the Congressional Budget Office. They have also expressed doubts about the proposed expansion of state job training programs for recipients.

“Food is coming off the table to pay for this vast bureaucracy,” Stacy Dean, the vice president for food assistance at the Center on Budget and Policy Priorities said.

Separately, the Agriculture Department is reevaluating work requirements in areas that had been exempted because of high unemployment during the economic downturn.

Trump’s budget proposal also included a controversial suggestion to replace half of families’ cash benefits with a box of nonperishable, government-sourced goods.

After failing to repeal the Affordable Care Act through Congress in 2017, the Trump administration has started allowing states to impose work requirements on residents enrolled in Medicaid — a first in the history of the 53-year health care program.

Three states — Kentucky, Indiana, and Arkansas — have enacted Medicaid work requirements. Seven additional states have applied to do the same.

Kentucky says the changes will lead 95,000 people to lose Medicaid coverage over the next five years.

The Trump administration also gave states permission to impose much higher premium payments and kick people off Medicaid for failing to pay. The Obama administration had permitted more limited versions of these policies for states during the expansion of Medicaid, but Trump officials approved changes aimed solely at reducing enrollment.

“There’s a retrenchment of the policies passed under the Affordable Care Act that helped people stay enrolled on Medicaid,” said MaryBeth Musumeci, associate director of the Kaiser Family Foundation’s program on Medicaid and the uninsured.

Carson laid out the administration’s housing plans in a press call about an hour before a House Financial Services subcommittee hearing on rent reform.

“Changes that are made to the rental structure ultimately have to be approved by Congress,” Carson said. “These are the suggestions that we are making.”

Michael Cohen to Take Fifth Amendment in Stormy Daniels Lawsuit

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Michael D. Cohen, President Trump’s personal lawyer and confidant, said a federal investigation in New York will keep him from testifying in a separate lawsuit brought against the president.


Jeenah Moon for The New York Times

Michael D. Cohen, President Trump’s longtime personal lawyer, will invoke his Fifth Amendment right in a lawsuit filed against the president by Stephanie Clifford, the pornographic film star better known as Stormy Daniels.

Mr. Cohen’s decision, disclosed Wednesday in a court filing in California, where the suit was filed, came a day before a federal judge in Manhattan was set to hold a hearing regarding materials seized from Mr. Cohen during an F.B.I. raid earlier this month.

Mr. Cohen cited the Manhattan investigation in his filing on Wednesday, saying that, if called as a witness in Ms. Clifford’s lawsuit, “I will assert my 5th Amendment rights in connection with all proceedings in this case due to the ongoing criminal investigation by the F.B.I. and U.S. Attorney for the Southern District of New York.”

Ms. Clifford was paid $130,000 to keep quiet about claims that she had an affair with Mr. Trump. She sued last month to get out of the nondisclosure agreement she signed in October 2016, alleging that it was void because Mr. Trump had never signed it.

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Citing the Fifth Amendment in the Clifford case allows Mr. Cohen to avoid being deposed and revealing sensitive information in the more important criminal investigation. That investigation — which prosecutors say has been going on for months — became public in dramatic fashion on April 9, when agents from the New York office of the Federal Bureau of Investigation raided Mr. Cohen’s office, apartment and a room at the Loews Regency Hotel he had been using. The inquiry is said to be focusing on hush-money payments that Mr. Cohen made to — or helped arrange for — Ms. Clifford and Karen McDougal, a former Playboy model who has also said she had an affair with Mr. Trump.

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For days now, prosecutors from the United States attorney’s office in Manhattan have been sparring with Mr. Cohen’s lawyers — and with lawyers for Mr. Trump — for the right to review the records first, a step that will shape the contours of how the government presses its investigation into whether Mr. Cohen tried to suppress negative news coverage of the president in the run-up to the 2016 election.

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VA nominee accused of drunken behavior, reckless prescribing

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WASHINGTON — White House doctor Ronny Jackson exhibited a pattern of recklessly prescribing drugs and drunken behavior, including crashing a government vehicle while intoxicated and doling out such a large supply of a prescription opioid that staffers panicked because they thought the drugs were missing, according to accusations compiled by Democratic staff on the committee considering his nomination as Veterans Affairs secretary.

The summary was based on conversations with 23 of Jackson’s current and former colleagues at the White House Medical Unit. It is the latest blow to his nomination to lead the government’s second-largest Cabinet agency.

In just a matter of days, the allegations have transformed Jackson’s reputation as a celebrated doctor attending the president to an embattled nominee accused of drinking on the job and over-prescribing drugs. He was seen pacing back and forth on the White House grounds Wednesday.

And while the White House put on a full-scale defense of Jackson, spokesman Raj Shah said aides are “of course” preparing for the possibility that he might withdraw. “This is, as the president said, Dr. Jackson’s decision,” Shah said on CNN.

Jackson huddled late Wednesday evening with top White House press staff. They declined to comment on the situation.

A former colleague who spoke to The Associated Press described Jackson as a gregarious, Type A charmer who knew how to position himself for success — attentive to bosses but also causing unnecessary grief and consternation among colleagues.

He said Jackson became known as “Candyman” because of the way he handed out drugs. The ex-colleague spoke on condition of anonymity because of fear of retaliation.

The “Candyman” nickname was also cited in the summary released by the Democrats.

In a section on Jackson’s prescribing practices, the summary said that in one case, missing Percocet tabs threw members of the White House Medical Unit into a panic — but it turned out he had prescribed a “large supply” of the opioid to a White House Military Office staffer.

The allegations also referred to multiple incidents of Jackson’s intoxication while on duty, often on overseas trips. On at least one occasion he was nowhere to be found when his medical help was needed because “he was passed out drunk in his hotel room,” according to the summary.

At a Secret Service going-away party, the summary says, Jackson got drunk and wrecked a government vehicle.

Jackson has denied allegations of bad behavior and told reporters at the White House he was “still moving ahead as planned.”

“I never wrecked a car,” he said. “I have no idea where that is coming from.”

Reports of overprescribing and alcohol-related behavior problems can jeopardize a doctor’s license. Many state medical boards allow doctors to keep their licenses and return to practice if they complete special treatment programs and submit to random urine screens.

The allegations were publicly released on the day that Jackson’s confirmation hearing was to have been held. The hearing was postponed indefinitely while the allegations against him are reviewed.

“He treated the people above him very, very well. He treated the people below him very, very poorly,” Sen. Jon Tester, the ranking Democrat on the Senate Veterans Affairs Committee, told the AP. “It’s not surprising the people above him think he was doing a really, really good job.”

White House Press Secretary Sarah Huckabee Sanders said Wednesday that Jackson had passed “at least four independent background checks” that found “no areas of concern.”

“He has received more vetting than most nominees,” she said.

Marc Short, the White House legislative director, could not say he was confident the allegations were false. He was “not familiar” with car wreck episode.

But Short also suggested Tester was airing the allegations for political gain.

“It’s quite unusual for a United States senator to take allegations that have not been fully investigated, but to flaunt them to the national public to suggest he’s the ‘candyman’ I think is outrageous,” Short said.

Tester, speaking on MSNBC, acknowledged that not all the allegations had been verified.

“Am I 100% rock solid sure that he did this? No,” Tester said. “But I’ve seen a pattern here that continues on and on and on.”

Jackson met late at the Capitol with a key Republican on the Veterans Affairs Committee, Sen. Thom Tillis of North Carolina. They discussed a variety of subjects — “some were the allegations” — as well as Jackson’s credentials for the job.

“It was just getting through the facts,” Tillis said.

Veterans groups are dismayed over the continuing uncertainty at the VA, already beset by infighting over improvements to veterans care.

“The American Legion is very concerned about the current lack of permanent leadership,” said Denise Rohan, national commander of The American Legion, the nation’s largest veterans organization.

A watchdog report requested in 2012 and reviewed by the AP found that Jackson and a rival physician exhibited “unprofessional behaviors” as they engaged in a power struggle over the White House medical unit.

That report by the Navy’s Medical Inspector General found a lack of trust in the leadership and low morale among staff members, who described the working environment as “being caught between parents going through a bitter divorce.”

It included no references to improper prescribing of drugs or the use of alcohol, as alleged in the summary compiled by the Senate Democratic staff members.

The White House has released handwritten reports from Trump and former President Barack Obama praising Jackson’s leadership and medical care and recommending him for promotion.

Trump’s first VA secretary, David Shulkin, was dismissed after an ethics scandal and mounting rebellion within the agency. But Jackson has faced numerous questions from lawmakers and veterans groups about whether he has the experience to manage the department of 360,000 employees serving 9 million veterans.

___

Associated Press writers Darlene Superville, Lisa Mascaro, Catherine Lucey, Matthew Daly and Jill Colvin in Washington and AP Medical Writer Carla K. Johnson in Seattle contributed to this report.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Supreme Court’s conservative justices appear to back Trump’s authority for travel ban

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The conservative majority on the Supreme Court seemed to agree Wednesday that President Trump has the authority to ban travelers from certain majority-Muslim countries if he thinks that it is necessary to protect the country.

Lower courts have struck down each of the three iterations of the president’s travel-ban proclamation, the first of which was issued just a week after he took office in January 2017. But the conservative-leaning Supreme Court may be Trump’s best hope, and it gave the administration a boost by allowing the ban to go into effect in December while considering the challenges to it.

[In travel-ban case, Supreme Court considers ‘the president’ vs. ‘this president’]

Solicitor General Noel Francisco told the justices that the president was well within his power to issue the proclamation and that it came after a thorough, worldwide review of the vetting procedures of countries.

“The vast majority of the world, including the vast majority of the Muslim world, was just fine,” Francisco said, while a “tiny” number of countries were not.

If it were meant to be a Muslim ban, he said, “it would be the most ineffective Muslim ban that one could possibly imagine, since not only does it exclude the vast majority of the Muslim world, it also omits three Muslim-majority countries that were covered by past orders.”

Chief Justice John G. Roberts Jr. was most active in advancing the notion that the president is privy to national security information that courts are ill prepared to second-guess.

And Justice Anthony M. Kennedy, who always seems to occupy the pivotal position when conservative and liberal justices disagree, asked questions that mostly seemed supportive of the president’s authority.

It would seem almost impossible for challengers to prevail without one of those justices joining their colleagues on the left.

The high-profile hearing, the last of the court’s term as it turns now to writing opinions, called for the justices to balance their usual deference to the president on matters of national security with a never-before-seen barrage of campaign statements, tweets, retweets and comments from the president tying Muslims to terrorism.

Just hours after Francisco told the court the president had made it “crystal clear . . . he had no intention of imposing the Muslim ban,” White House press secretary Sarah Huckabee Sanders sidestepped a reporter’s question about whether the administration disavowed Trump’s campaign promise to enact one.

Sanders read a statement about the ban that said residents of many majority-Muslim countries could travel to the United States. “I think that alone in action answers your question clearly,” she said.

The court is considering the iteration of Trump’s travel ban, issued last fall, that barred various travelers from eight countries, six of them with Muslim majorities. They are Syria, Libya, Iran, Yemen, Chad, Somalia, North Korea and Venezuela. But restrictions on North Korea and Venezuela are not part of the challenge. Chad was removed from the list earlier this month.

The first questions for Francisco came from the two liberal justices, Ruth Bader Ginsburg and Sonia Sotomayor, who had noted their dissent from the high court’s earlier order to allow the ban to go into effect while challenges continued.

Sotomayor suggested that Congress had already taken steps to ensure national security by implementing a heightened vetting process for travelers from other countries.

“Where does a president get the authority to do more than Congress has already decided is adequate?” she asked.

Francisco pointed to the removal of Chad from the list as evidence that the review process was working as anticipated, by encouraging more cooperation from countries to help screen out those who might intend to harm the United States.

The challengers are led by the state of Hawaii, which said its citizens and educational institutions have suffered because of the ban.

Former Obama administration acting solicitor general Neal K. Katyal, representing Hawaii, said Trump had taken an “iron wrecking ball” to the law Congress had implemented to govern immigration and keep the nation safe.

“If you accept this order, you’re giving the president a power no president in 100 years has exercised, an executive proclamation that countermands Congress’s policy judgments,” Katyal said.

Conservative justices Samuel A. Alito Jr. and Neil M. Gorsuch, along with Roberts, peppered Katyal with questions on how the president had exceeded his lawful authority, given that Congress had granted the executive branch broad latitude to bar people’s entry into the United States.

Alito noted the law says that if the president found the entry of “any aliens” to be detrimental to U.S. interests, he could bar them. How, he asked, did the travel ban not fall “squarely” within that power?

Alito also said the ban affected only 8 percent of the world’s Muslim population.

“If you look at what was done, it does not look at all like a Muslim ban,” Alito said.

Roberts posited a hypothetical: If the intelligence agencies told the president that 20 Syrian nationals planned to enter the United States with biological weapons, could the president ban the entry of Syrians to stop them? Katyal conceded that he could, because in that instance — unlike this one — there was a true emergency.

Roberts asked whether there were a “statute of limitations” on a president’s campaign statements.

“Tomorrow, he issues a proclamation disavowing those statements, then the next day he could reenter this and your discrimination argument would not be applicable?” Roberts asked.

Katyal said that it probably would. But Trump and his administration have “rekindled” the comments.

Justice Elena Kagan similarly asked Francisco about a hypothetical anti-Semitic candidate for president who, once elected, put in place a proclamation blocking entry for citizens of Israel. She asked: Could the courts intervene in such a situation?

“This is an out-of-the-box kind of president in my hypothetical,” Kagan added, prompting laughter from the courtroom.

Francisco called it a “tough hypothetical” but said such a president could impose the measure if it came at the recommendation of staffers who had identified a genuine national security problem.

In contrast, Francisco said Trump’s travel ban is an “easy case” because it came after a multiagency review and on the advice of Cabinet officials. He conceded that if Cabinet officials knew the president was ordering a ban based on religious animus, because he told them as much, they would be “duty bound” to resign or refuse to comply with his order to come up with a justification.

“Is everything that the president said effectively that?” Kagan asked.

Kennedy picked up on Kagan’s questioning, asking Francisco to consider a local candidate for mayor who made “hateful’ comments and then upon being elected acted on those impulses. “You would say whatever he said in the campaign is irrelevant?” Kennedy asked.

Francisco said he would.

But Kennedy had more, and tougher, questions for Katyal.

When Katyal said Trump’s travel ban had no end, Kennedy said, “So you want the president to say, ‘I’m convinced that in six months we’re going to have a safe world?’ ”

And if there is a question about whether there is a threat to security, Kennedy asked Katyal, did he think “that’s for the courts to do, not the president?”

The justices are reviewing a unanimous ruling from a three-judge panel of the U.S. Court of Appeals for the 9th Circuit in San Francisco. That panel said the third version of the travel ban suffered from the deficiencies of the first two — that Trump had again exceeded his lawful authority and that he had not made a legally sufficient finding that entry of those blocked would be “detrimental to the interests of the United States.”

The U.S. Court of Appeals for the 4th Circuit in Richmond struck down the ban on the constitutional question. The 9-to-4 decision took a deep dive into Trump’s statements and tweets since he became president and concluded that the proclamation, like the first two, was motivated not by national security concerns but by antipathy toward Muslims.

The case is Trump v. Hawaii. The court will issue its decision some time before the conclusion of the term at the end of June.