Spiegel Stuff: The Hill's Morning Report — Sponsored by Better Medicare Alliance — Justice Anthony Kennedy’s retirement shakes Washington | Trump, McConnell vow to move quickly on Kennedy successor | House rejects GOP compromise immigration bill | Senate to question IRS nominee | Washington dissects incumbent Crowley’s upset | Trump-Putin summit in mid-July | Inside the burgeoning Democratic leadership race

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📺 Hill.TV’s “Rising” program, starting at 8 a.m., has another packed lineup: Tune in to see interviews with former Trump campaign manager Corey Lewandowski and pollster Mark Penn. The president of the International Association of Firefighters, Harold Schaitberger, talks about the Supreme Court’s bombshell decision yesterday impacting some unions, and look for interviews from Capitol Hill with Senate Judiciary Committee members Kamala Harris (D-Calif.), Patrick Leahy (D-Vt.) , Dick Durbin (D-Ill.) and Lindsey Graham (R-S.C.) … http://thehill.com/hilltv

Supreme Court Justice Anthony Kennedy’s retirement has scrambled the political landscape in Washington, setting off a mammoth fight over who should replace him less than five months before the midterm elections.

If President Trump can replace Kennedy, the court’s swing vote, with a younger conservative, the result could tip the balance of Chief Justice John Roberts’s court toward conservatives for a generation.

The Hill: Kennedy exit gives Trump a chance to reshape the court for decades.

Democrats will battle to the end but don’t appear to have a procedural means of stopping a nominee. Prior to 2017, Supreme Court nominees needed 60 cloture votes to move to the floor. Senate Majority Leader Mitch McConnell (R-Ky.) changed the rules last year to push Justice Neil Gorsuch through. The new nominee will be confirmed under those same rules, needing only 51 votes for cloture and 51 votes for confirmation. There are any number of ways for Trump to get to 51. It has been eight years since a nominee to the high court secured more than 60 votes on final confirmation.

The Hill: Senate faces bitter fight over Trump’s next pick.

Bloomberg: Senate Democrats have little chance to delay Trump’s court pick.

Here’s where the new battle lines are being drawn:

Potential replacements

Trump said Wednesday he intends to nominate a justice from a list of 25 candidates the White House published in November. You can read the list HERE.

New names could also come into the discussion, while others are revived. Sen. Mike Lee (R-Utah), who once clerked for Justice Samuel Alito, confirmed his interest on Wednesday. Lee’s close friend and colleague, Sen. Ted Cruz (R-Texas), already is touting him for the job.

The game plan

McConnell, who refused to hold a hearing for former President Obama’s nominee to replace the late Justice Antonin Scalia during an election year, says the Senate will vote on the president’s nominee in the fall before the November elections.

Reaction from liberals and Democrats

Democrats are still seething at McConnell for blocking Obama’s nominee in 2016. They’re demanding that he apply that same standard now and decline to vote on a Supreme Court nominee during an election year.

“Millions of people are just months away from determining the senators who should vote to confirm or reject the president’s nominee and their voices deserve to be heard … anything but that would be the absolute height of hypocrisy.” – Senate Minority Leader Charles Schumer (D-N.Y.).

Liberals will hold Democrats to a high standard and demand they do everything in their power to keep a Trump nominee from getting confirmed. Sens. Joe Manchin (D-W.Va.), Heidi Heitkamp (D-N.D.) and Joe Donnelly (D-Ind.) voted to confirm Gorsuch and will be under pressure to back the new nominee. Those three and seven other Democrats are up for reelection this year in states Trump won in 2016.

Reaction from conservatives and Republicans

They can’t believe their luck. One Supreme Court justice is a gift. Two would be a dream.

The network of groups affiliated with the billionaire conservative donors Charles and David Koch has pledged more than $1 million for a public campaign for confirmation. The Judicial Crisis Network is matching that buy with its own round of national cable and digital ad buys aimed at pressuring vulnerable Senate Democrats to get on board. Other groups will follow.

And conservatives believe that the court opening may help them close the enthusiasm gap with voters ahead of November’s elections.

"In a closely divided U.S. Senate, every vote matters. If values voters needed a reason to engage in this election cycle - they certainly have it now.” – Family Research Council president Tony Perkins.

The issues at stake

Every potent issue is now on the table, but abortion is likely to be a flashpoint, given Kennedy’s standing as the fifth vote in the 1992 ruling that upheld Roe v. Wade, the landmark abortion rights case.

The Hill: Anti-abortion groups see opening to overturn Roe v. Wade.

That’s where things get tricky for Republicans and their slim majority in the upper chamber. Sens. Susan Collins (Maine) and Lisa Murkowski (Alaska) support abortion rights. Collins has already said she’s looking for a justice that will uphold Roe v. Wade.

“Abortion will be illegal in as many as 20 states because Roe v. Wade is dead today." - CNN legal analyst Jeffrey Toobin.

The sophisticated, veteran activist groups for and against will pull out all the stops and spend whatever it takes for many months to try to influence the Senate outcome.

The takeaway

The makeup of the court becomes the primary issue on Capitol Hill and in campaigning for House and Senate majorities.

The president understands what comes next. Trump announced his initial list of potential Supreme Court picks in May of 2016, about three months after Scalia died and before Trump locked up the GOP nomination. Many Republicans who felt uneasy about voting for Trump decided to back him because they feared a Democratic president – Hillary Clinton – would load the court with liberals. The White House has since stocked the lower courts with conservatives and has sold this trend to Republican voters as one of the party’s most significant legacy achievements.

“Some people think outside of, obviously, war and peace, it’s the most important thing that you could have.” – Trump on Wednesday at the White House.

The battle for the next justice may also help drive liberals to cast ballots this fall. The anger at Trump on the left is palpable, evident in polling, on social media, at public protests, and in the midterm primary contests to date. Most analysts believe Democrats will fall short of Senate control next year – the map favors Republicans – but a Supreme Court confirmation fight could boost the turnout, the money and the messaging in House races, where a Democratic majority is an easier projection to make.

LEADING THE DAY

Kennedy has been hailed by liberals for taking positions that protected abortion rights and legalized gay marriage, but this term’s final decisions left a bitter taste among Democrats.

The swing-vote justice sided with conservatives in upholding Trump’s travel ban, as well as on religious liberty and partisan gerrymandering cases. That continued in a ruling on Wednesday, when the Supreme Court dealt a major blow to state and local public-sector unions, ruling that nonunion members can’t be forced to pay a “fair-share” union fee (The Hill).

The rest of this drama will play out for months, so we’ll leave you this morning with a smattering of smart analysis about the high court at this moment:

Ezra Klein: Democrats sat out the 2014 midterms and lost the Supreme Court for a generation.

David French: The ramifications of Kennedy’s retirement are immense.

Emily Cochrane: The major cases where Kennedy left his mark.

Garrett Epps: The last of the small-town lawyers.

Jonathan Chait: The Republican court and the era of minority rule.

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IMMIGRATION & CONGRESS: An uphill push for immigration progress in the House failed on Wednesday and has a faint pulse in the Senate. And meanwhile, Congress is poised to escape Washington for the July 4 recess.

House – immigration: The Hill: As expected, the House rejected a GOP compromise immigration measure on Wednesday, effectively ending a months-long drama that put the conference’s divisions on public display. It's still possible the House could act on a narrower measure aimed at ending migrant family separations, although the form for that intervention is unclear. Competing immigration efforts remain in limbo in the Senate, where McConnell broke with the president to say additional immigration judges are needed at the southern border. On another issue, trade tariffs, McConnell is feeling the heat at home in Kentucky, where bourbon is serious business and the repercussions of tit-for-tat tariffs from nations responding to Trump’s tariffs are unwelcome (The Hill).

House - Investigations: The House today will vote on a resolution critical of the Justice Department for withholding documents related to investigations tied to the 2016 election. (It’s a show vote.) … And in the category of more heat than light, lawmakers on both sides of the aisle in the House reacted Wednesday to subpoenaed testimony from FBI agent Peter Strzok, whose anti-Trump texts had spawned conspiracy theories about partisan plots to thwart Trump’s election in favor of Clinton. Strzok defended his messages as "intimate" texts with an "intimate friend," adding little to what was previously reported by the news media and described by the Department of Justice inspector general (The Hill and Politico).

Senate - IRS nominee: The Hill: Senators today will question Trump's nominee to lead the revenue service, Charles Rettig. The agency is charged with implementing the GOP tax law enacted last year, and faces technology challenges.

Senate hearing – cellular merger: The Hill: Executives from T-Mobile and Sprint on Wednesday pitched their $26 billion merger to Congress, telling a Senate Judiciary Committee antitrust panel that the combination would give their companies the ability to develop increased capabilities and catch up with bigger wireless carriers.

Senate – North Korea: The Hill: A bipartisan pair of senators introduced a bill to apply “stringent” oversight to diplomacy with North Korea aimed at denuclearization. It is yet another example of mostly unsuccessful efforts in the last year to place checks on Trump’s executive improvisations.

Senate – filibuster stays: The Hill: McConnell again made clear on Wednesday that he doesn’t have enough votes to end the Senate’s 60-vote filibuster threshold. (It’s an oft-communicated lament from the president.)

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IN FOCUS/SHARP TAKES

➔ CAMPAIGNS & POLITICS: The president held a campaign rally last night in Fargo, N.D., to boost Rep. Kevin Cramer (R-N.D.), who is running for Senate against Heitkamp. Trump carried North Dakota by more than 30 points in 2016, making Heitkamp one of the most vulnerable Democrats up for reelection this year.

The Associated Press: Trump dubs Heitkamp a “liberal Democrat,” urges for her defeat.

Washington is still reeling from the fallout over Alexandria Ocasio-Cortez’s primary upset of Rep. Joseph Crowley (D-N.Y.), the chairman of the House Democratic Caucus.

Is the election of Ocasio-Cortez, the 28-year-old Hispanic progressive, a sign that liberals are primed to take over the party? Or is it a rare result in a majority-minority district that connected with this exciting newcomer?

House Minority Leader Nancy Pelosi (D-Calif.) said Wednesday that the outcome is specific to the district, and is “not to be viewed as something that stands for anything else." Progressives might disagree.

At any rate, the result also called into question Pelosi’s future as leader of the House Democrats. Many believed that if Democrats took over the House, Pelosi would be Speaker but at some point pave the way for Crowley to take over. It will not work out that way.

Pelosi was asked on Wednesday whether it wasn’t time for a young, female progressive to take over. She had a solid response:

“I’m female, I’m progressive … what’s your problem? Two out of three ain’t bad.”

One other new wrinkle: Following her election, Ocasio-Cortez said she would support Trump’s impeachment and the abolishment of Immigration and Customs Enforcement.

Expect Republicans to pressure Democrats to account for those views.

More from the campaign trail … The Koch-backed group Americans for Prosperity (AFP) is launching a new six-figure ad buy targeting two Republicans and four Democrats up for reelection this year over congressional spending (The Hill) … AFP is also launching a seven-figure ad buy to promote Gov. Scott Walker’s (R) policies in Wisconsin (YouTube) ...The Democratic National Committee (DNC) is moving forward with a proposal to reduce the influence of superdelegates (Politico) … Former Vice President Joe Biden leads this poll of potential Democratic presidential candidates (The Hill) … Midterm turnout surges for both parties (The Hill) … Former President Obama headlines a DNC fundraiser today in Los Angeles (Politico).

➔ ADMINISTRATION & WHITE HOUSE: Another summit, continued talks with China, eyes on North Korea, and more West Wing turnover. And it’s only Thursday.

Trump-Putin summit: The Hill: Washington and Moscow will today announce a summit between Trump and Russian President Vladimir Putin, expected to take place in mid-July in a neutral location, most likely in Europe. It’s a meeting both presidents have wanted, but one that NATO dreads and even members of the administration worked for months to postpone or delay because of the domestic political complications (The New York Times).

> Although Trump recently urged leaders of Group of Seven countries to readmit Russia to the club of leading industrialized nations, from which it was jettisoned following its takeover of Crimea and attacks on Ukraine, Senate Majority Leader McConnell said Wednesday he opposes that idea (The Hill).

U.S. trade and investment restrictions: The Hill: Trump deferred his executive options to impose investment restrictions aimed at China, and instead endorsed related legislation pending in Congress. Financial markets, already battered by fears of tariff wars sparked by the United States, breathed a sigh of relief at the news (The Hill).

> About China and trade talks, White House National Economic Council Director Larry Kudlow told reporters on Wednesday that Trump remains “unsatisfied with [Beijing’s] response on trade talks and so he put out there the possibility of additional tariffs…we’re exploring that obviously, we’ll see how they respond. The ball is in their court.”

State Department – North Korea: Secretary of State Mike Pompeo told senators on Wednesday that Pyongyang remains a nuclear threat, despite Trump’s recent tweet that the nuclear threat had been eliminated, CNN reported. Hours later, The Wall Street Journal reported that analysts believe that North Korea is upgrading a nuclear site, despite Kim Jong Un’s pledges in Singapore to end his country’s nuclear weapons program.

> During the same appearance on Capitol Hill, Pompeo said that United States and the world hear angry protests from the Iranian people “who are demanding their leaders share the country’s wealth and respond to their legitimate needs” (The Hill).

Veterans Affairs Department – nominee: The Hill: During his Senate confirmation hearing on Wednesday, Robert Wilkie, nominee to succeed David Shulkin as the next secretary of the sprawling department, defended his record with women and minorities following news reports critical of his past affiliations and views.

HHS watchdog: The Health and Human Services Department’s inspector general launched a wide-ranging review of conditions at shelters used to detain migrant children (The Hill).

White House staff salaries and turnover: The White House within days is expected to send Congress its annual, mandated list of staff salaries, and release the data publicly. The list from 2017, dated June 30, is here.

White House staff turnover: Trump has been hemorrhaging senior White House personnel since his inauguration; his turnover rate at the upper tier of his advisers is now 75 percent, by far the highest of any modern president at this point in a first term, Brookings Institution political scientist Katie Dunn Tenpas wrote on Wednesday.

> Political Scientist Martha Joynt Kumar, director of the White House Transition Project, tracks similar trends across West Wing organizations, studying those aides given the title “assistant to the president.” Kumar’s data reveals that Trump’s turnover was 61 percent at 17 months for such senior advisers, a record among his recent predecessors. By way of comparison for the same first-term time periods: Barack Obama’s turnover was 14 percent among such aides; George W. Bush (5 percent); Bill Clinton (42 percent); George H.W. Bush (19 percent); and Ronald Reagan (29 percent), according to an unpublished report Kumar shared with The Hill (to be posted soon to the Transition Project website).

And speaking of West Wing turnover … former Fox News co-president Bill Shine is likely to assume a senior White House communications role (The New York Times hedged on Wednesday, while ABC News reported he accepted a job offer). Shine follows in the footsteps of at least four predecessors who performed similar duties for the president, underscoring how Trump sees himself as the chief White House strategist for communications. The last aide to hold the title was Hope Hicks, who departed Washington in the spring. A formal personnel announcement may emerge this week.

OPINION

No one on Trump’s short list is fit to replace Kennedy, by Nan Aron, opinion contributor for The Hill. https://bit.ly/2lDVqZp

Trump on track to turn Kennedy retirement into another conservative victory, by Ben Shapiro, contributor for The Hill. https://bit.ly/2KrRUMD

WHERE AND WHEN

The House begins at 9 a.m. The House plans to vote on a resolution criticizing the Justice Department for withholding documents related to investigations into the 2016 election. Deputy Attorney General Rod Rosenstein and FBI Director Christopher Wray will testify on "Oversight of FBI and DOJ Actions Surrounding the 2016 Election" at a House Judiciary Committee hearing at 9:30 a.m.

The Senate convenes at 10 a.m. and resumes consideration of the 2019 farm bill.

The president will be in Wisconsin today. This morning, he headlines a GOP political fundraiser in Milwaukee before celebrating Taiwan’s Foxconn Technology Group’s new plant in Mount Pleasant, Wis. Foxconn built a large manufacturing site in the United States in response to lucrative inducements offered by the state.

Vice President Pence, along with Department of Homeland Security Secretary Kirstjen Nielsen, will meet in Guatemala with the presidents of Guatemala and Honduras and the vice president of El Salvador about immigration at the U.S. southern border.

The White House Office of National Drug Control Policy (ONDCP) will release a training video created for first responders today at 1 p.m. in the Eisenhower Executive Office Building. The video demonstrates protective techniques for responders in the presence of the powerful synthetic opioid fentanyl. Speakers: Attorney General Jeff Sessions; Department of Health and Human Services Secretary Alex Azar; Kellyanne Conway, White House senior counselor; and Jim Carroll, deputy director of the ONDCP.

ELSEWHERE

> Democrats bet on a new generation of vets to deliver the House (Bloomberg Businessweek)

> Disney wins U.S. antitrust approval for Fox deal in blow to Comcast (Bloomberg)

> The demise of Toys `R’ Us is a warning (The Atlantic). The private-equity companies swooping in to buy floundering retailers may ultimately be hastening their demise.

THE CLOSER

And finally … If you’ve skimmed the news this week, you have an excellent chance of matching these speakers and their remarks in the Morning Report’s QUIZ CONTEST. Send your correct matchups to jeasley@thehill.com or asimendinger@thehill.com to earn some newsletter fame in Friday’s report. (Please put “Quiz” in your subject line.) Best of luck!

Speakers (six): President Trump; Attorney General Jeff Sessions; Associate Justice Sonia Sotomayor; Rep. Maxine Waters (D-Calif.); former White House senior adviser Stephen Bannon; and Utah Senate candidate Mitt Romney.

Match with their remarks:

“The opposition to Trump is unhinged.”

“President Trump has never disavowed any of his prior statements about Islam. Instead, he has continued to make remarks that a reasonable observer would view as an unrelenting attack on the Muslim religion and its followers.”

“[T]he president of the United States shapes the character of our country.”

“[H]ave no fear, America is now stronger than ever before, and I’m not going anywhere!”

“These same people live in gated communities, many of them. … If you try to scale the fence they’d be even too happy to have you arrested and separated from your children.”

“If you see anybody from that Cabinet in a restaurant, in a department store, at a gasoline station, you get out and you create a crowd. And you push back on them.”

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Correction: Washington’s Rep. Cathy McMorris Rodgers is the fourth-ranking Republican in the House leadership, not Virginia GOP Rep. Barbara Comstock. Morning Report regrets Wednesday’s error.

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The Morning Report is created by journalists Jonathan Easley jeasley@thehill.com & Alexis Simendinger asimendinger@thehill.com. Suggestions? Tips? We want to hear from you! Share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!