BREAKING … WAPO’S DEVLIN BARRETT, MATT ZAPOTOSKY and JOSH DAWSEY: “William Barr is leading attorney general candidate in Trump discussions”: “Barr, 68, a well-respected Republican lawyer who served as attorney general from 1991 to 1993 under then-President George H.W. Bush, has emerged as a favorite candidate of a number of Trump administration officials, including senior lawyers in the White House Counsel’s Office, these people said. Two people familiar with the discussions said the president has told advisers in recent days that he plans to nominate Barr.” WaPo

NANCY PELOSI’S OPENING GAMBIT … PELOSI, the top House Democrat, laid out her opening negotiating position as she looks ahead to the White House meeting next week on government funding.

PELOSI said she wants a yearlong stopgap bill for DHS funding — a bill that keeps the department funded from Dec. 21 until some point next fall or winter. TRANSLATION: If, somehow, she gets Trump to go along with this, that means no real wall funding at all this year.

BURGESS EVERETT (@burgessev) gets the NO. 2 SENATE REPUBLICAN to respond: “[John] Cornyn: ‘That’s unacceptable. I can’t imagine the president is willing to accept that.’”

— ALSO … PELOSI is not interested in a DACA-for-wall money trade — but PRESIDENT DONALD TRUMP told us last week he wasn’t interested in that trade either.

NEW NAFTA … PELOSI also said there are some “good features” to the new NAFTA, but it means nothing without enforcement.

AXIOS’ JONATHAN SWAN reported earlier today that Pelosi was meeting with U.S. Trade Representative Robert Lighthizer.

— PELOSI STATEMENT after the meeting: “As I reiterated to USTR Lighthizer, while there are positive things in this proposed trade agreement, it is just a list without real enforcement of the labor and environmental protections. We are also still waiting for Mexico to pass its promised law on the wages and working conditions of Mexican workers competing with American workers.”

— SABRINA RODRÍGUEZ: “Trump’s new NAFTA has hard fight in Congress while steel tariffs remain”: “‘If you’re trying to whip votes, you’d take advantage of the opportunity to lift that instead of leaving an irritant on the table,’ a former U.S. Trade Representative official told POLITICO. ‘It’s going to make [administration officials’] lives harder to get Congress on board as constituents are complaining a lot’ about the harm of the ongoing tariffs. …

“But [Robert] Lighthizer may be loath to grant any concessions on steel and aluminum because he has been in lockstep with Trump’s push to revitalize the two domestic manufacturing sectors.” POLITICO

NANCY & CHUCK UPDATE … PELOSI and SENATE MINORITY LEADER CHUCK SCHUMER (D-N.Y.) will meet with TRUMP on Tuesday at 11:30 a.m. More from Rachael Bade and Burgess Everett

THE DOW JONES INDUSTRIAL AVERAGE was down more than 430 points, 1.7% today as of 1 p.m. … WSJ: “U.S. Stocks Fall Sharply on Arrest of Huawei CFO”

THE INVESTIGATIONS … THE ATLANTIC’S ELAINA PLOTT: “The White House Has No Plan for Confronting the Mueller Report”: “[Rudy] Giuliani said it’s been difficult in the last few months to even consider drafting response plans, or devote time to the ‘counter-report’ he claimed they were working on this summer, as he and Trump confronted Mueller’s written questions about the 2016 campaign. …

“‘Answering those questions was a nightmare,’ he told me. ‘It took him about three weeks to do what would normally take two days.’ There are numerous other reasons why no response plan has been produced, White House sources said, including the futility of crafting a strategy that Trump will likely ignore anyway. There have also been few frank conversations within the White House about the potential costs of Mueller’s findings, which could include impeachment of the president or the incrimination of his inner circle.” The Atlantic

MATTHEW CHOI: “George H.W. Bush’s friends and family have intimate memorial in Houston”

Good Thursday afternoon. SPOTTED: Rep. Steve Scalise (R-La.) at the New Orleans Pelicans vs. Dallas Mavericks game Wednesday night. Courtside interview

… AT THE FOUR SEASONS this morning: Prince Turki Al-Faisal, the former Saudi ambassador to the U.S., at a central table by himself. Our tipsters didn’t see anyone go up to him at his table..… ALSO AT BREAKFAST: Rep. Debbie Dingell (D-Mich.) and Adrienne Arsht, Education Secretary Betsy DeVos, Robin Sproul, Don Baer, Eric Schmidt, Stuart Holliday, Juleanna Glover and Melissa Moss.

TRUMP INC. — FORBES’ DAN ALEXANDER: “How Donald Trump Shifted $1.1M Of Campaign-Donor Money Into His Business”: “On the day Donald Trump became president of the United States, while inauguration festivities were still in full swing, he officially launched his 2020 re-election campaign. Donations poured in from more than 50,000 people across the country. But according to the latest federal filings, Trump still has not donated a penny of his own, while his businesses continued to charge the campaign for hotels, food, rent and legal consulting.” Forbes

WHAT’S ON THE PRESIDENT’S MIND — @realDonaldTrump at 10:17 a.m.: “Without the phony Russia Witch Hunt, and with all that we have accomplished in the last almost two years (Tax & Regulation Cuts, Judge’s, Military, Vets, etc.) my approval rating would be at 75% rather than the 50% just reported by Rasmussen. It’s called Presidential Harassment!”

… at 12:07 p.m.: “My thoughts and prayers are with the @USMC crew members who were involved in a mid-air collision off the coast of Japan. Thank you to @USForcesJapan for their immediate response and rescue efforts. Whatever you need, we are here for you. @IIIMEF”

NBC’S ARATA YAMAMOTO and ALEX JOHNSON in Tokyo: “Marine dead, five missing after military aircrafts collide off Japan”: “One of two Marines, rescued after a pair of warplanes collided in midair, has died, military officials said Thursday as rescue crews continued to search for five still missing. The crash happened while their crafts were refueling some 200 miles off Japan, U.S. and Japanese authorities said.

“The planes, a KC-130 refueling aircraft carrying five crew members and an F/A-18 fighter jet carrying two, ‘came in contact’ and crashed into the sea at around 1:42 a.m. Thursday (11:42 a.m. ET Wednesday), said Yoshihide Suga, Japan’s chief cabinet secretary. The Japanese Defense Ministry initially said that two of the seven Marines had been rescued. But one of those two has since died, Marine spokesman Capt. Chris Harrison said.” NBC

THE LATEST ON CRIMINAL JUSTICE REFORM — “Influential First Step Act opponent backs some key provisions, offering hope to supporters,” by the Washington Examiner’s Steven Nelson: “Larry Leiser, president of the National Association of Assistant U.S. Attorneys, told the Washington Examiner he supports in principle three of four major sentencing reforms included in the Trump-backed First Step Act … but said that he opposes the overall package, mainly due to concerns about process and provisions that passed the House.” Examiner

IMMIGRATION FILES — AP’S COLLEEN LONG: “Judge’s order didn’t end family separations at border”: “The Trump administration separated 81 migrant children from their families at the U.S.-Mexico border since the June executive order that stopped the general practice amid a crackdown on illegal crossings, according to government data obtained by The Associated Press. …

“From June 21, the day after President Donald Trump’s order, through Tuesday, 76 adults were separated from the children, according to the data. Of those, 51 were criminally prosecuted — 31 with criminal histories and 20 for other, unspecified reasons, according to the data. Nine were hospitalized, 10 had gang affiliations and four had extraditable warrants, according to the immigration data. Two were separated because of prior immigration violations and orders of removal, according to the data.” AP

FIGHTING PHARMA — “Congress to Drug Makers: Why Stock Buybacks Over Lowered Drug Prices?” by WSJ’s Peter Loftus: “The attacks began in October, when more than a dozen Democrats in the House of Representatives sent letters to five big pharmaceutical companies saying they had benefited from recent tax cuts but kept charging high prices. …

“Drugmakers have reacted to the criticism by dialing back how much they raised drug prices this year. … Yet the companies are expected to raise prices more next year. Republicans and Democrats have made noise about taking further action in the next Congress. Reining in drug prices could become a rare area of agreement in a divided Washington, lobbyists say.” WSJ

2018 WATCH — CNN’S JIM SCIUTTO (@jimsciutto): “Breaking: Executive Director of NC Republicans says he’s open to new election in NC-9 Congressional race. Dallas Woodhouse told CNN’s Drew Griffin he was so upset after watching CNN’s coverage of alleged fraud last night, he threw up, ‘this has shaken us to the core.’”

2020 WATCH — NYT’S ASTEAD HERNDON: “Elizabeth Warren Stands by DNA Test. But Around Her, Worries Abound”: “Conservatives have continued to ridicule her. More worrisome to supporters of Ms. Warren’s presidential ambitions, she has yet to allay criticism from grass-roots progressive groups, liberal political operatives and other potential 2020 allies who complain that she put too much emphasis on the controversial field of racial science — and, in doing so, played into Mr. Trump’s hands. …

“[A]dvisers say Ms. Warren will have to confront the issue again if she announces a presidential campaign, which is expected in the coming weeks, and several would like her to act soon.” NYT

— STEPHANIE MURRAY: “Citing ‘cruelty of our elections process,’ Patrick officially backs out of 2020 bid”

ON THE WORLD STAGE — “Talks to End War in Yemen Begin Under U.S. Pressure,” by WSJ’s Sune Engel Rasmussen in Rimbo, Sweden: “The latest United Nations-sponsored effort to revive the peace process comes after a concerted push by the U.S. to end the fighting. … Expectations among diplomats and analysts leading up to the meeting are low. Neither the government of Mr. Hadi or the Houthis have shown any inclination to end the fighting.” WSJ

THE LATEST IN WISCONSIN … AP’S SCOTT BAUER and TODD RICHMOND in Madison: “Democrat says he’ll appeal to Walker to veto GOP power play”: “The incoming Democratic governor of Wisconsin says he plans to make a personal appeal to his defeated rival, Republican Gov. Scott Walker, to veto sweeping GOP legislation that would strip the new administration of some powers. If that doesn’t work, Gov.-elect Tony Evers said he might sue.” AP

CLICKER — BLOOMBERG 50 — Bloomberg put out its second annual list of the year’s most important players. The names from government and politics include Jerome Powell and the rest of the Fed’s nucleus, Rep.-elect Alexandria Ocasio-Cortez (D-N.Y.), Sen. Tim Scott (R-S.C.), Canadian Foreign Affairs Minister Chrystia Freeland, Chinese Vice Premier Liu He, California Attorney General Xavier Becerra, the Time’s Up Legal Defense Fund (Hilary Rosen, Tina Tchen, Roberta Kaplan and Fatima Goss Graves), the Parkland activists and acting CFPB Director Mick Mulvaney. The full list

SPOTTED at Esther Coopersmith’s Kalorama house Wednesday night for a dinner honoring South Korean Ambassador Cho Yoon-Je: Woo Sunae, John Walcott, Supreme Court Justice Stephen Breyer and Joanna Breyer, Commerce Secretary Wilbur Ross and Hilary Ross, Michael Chertoff, Alphonso Jackson, James Jones, John Tanner, Egyptian Ambassador Yasser Reda, Thai Ambassador Virachai Plasai, Liechtenstein Ambassador Kurt Jaeger, Carol Anderson, Eric Pelofsky, Josh Lederman, Demetri Sevastopulo, Ali and Josh Rogin, David Sanger, Bruce Klingner, Norm Ornstein, Ken Weinstein, Willee Lewis, T. Dean Reed, Connie Coopersmith, Janet Pitt, Ken and Julie Arnold, James Adams, Stephanie Culberson, Susan Greenwell, Victor Shiblie, Anna Gawel, Satu Limaye and Frank Aum.

HOLIDAY PARTY CIRCUIT — SPOTTED at the Entertainment Software Association’s party at the Rock & Roll Hotel on Wednesday night: Stan Pierre-Louis, Andrew Bowins, Dan Hewitt, Josh Dawsey, Shane Harris, Alex Slater, Rich Taylor, Erik Huey, Kaya Singleton, Katy Summerlin, Lindsay Singleton, Neil Grace, Kelley Hudak, Caitlin Carroll, Becca Glover, Allie Brandenburger, Lauren Culbertson, Amanda Khouri, Scarlet Doyle Samp and Tony Samp, Sarah Mamula and Allison Schneider.

TRANSITION — Monique Meche is now a senior adviser at Albright Stonebridge Group. She was previously VP of global public policy at Netflix.

WELCOME TO THE WORLD — OBAMA ALUMNI: Sadie Weiner, communications director for North Carolina Gov. Roy Cooper and a DSCC and Kay Hagan alum, and Zach Wineburg, who works on the elections advertising team with Google DC and is an Obama 2012 alum, on Saturday welcomed Bennett “Benny” Irving Wineburg. They emailed friends: “As of now, Benny has no comment on the possible government shutdown or the suspicious election activity in NC-9. He is, however, bummed that he will just miss the chance to vote and keep North Carolina blue in the 2036 election.” PicAnother pic

BONUS BIRTHDAY OF THE DAY: Evelyn Farkas, co-founder of Scarlet Oak Advisors and former deputy assistant secretary of Defense. What she’s been reading recently: “I finally read Erik Larson’s ‘In The Garden of Beasts.’ Everyone should read it now. It describes the early days of Nazi Germany, as Hitler was coming to power through the eyes of the U.S. ambassador at the time. It captures how people and society can willfully ignore, and downplay, an authoritarian and his actions as he eliminates democracy, and takes control of a country.” Q&A

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