Intrigue abounds. Is Bannon out of favor within Trump’s inner circle or is there less to this than meets the eye?

Contra Drudge’s blaring red-font headline, by the way, Bannon has apparently not lost his security clearance. He’s off the Council, but as the president’s chief strategist he’s still cleared for all manner of sensitive intelligence.

President Donald Trump reorganized his National Security Council on Wednesday, removing his chief strategist, Stephen Bannon, and downgrading the role of his Homeland Security Adviser, Tom Bossert, according to a person familiar with the decision and a regulatory filing.

National Security Adviser H.R. McMaster was given responsibility for setting the agenda for meetings of the NSC or the Homeland Security Council, and was authorized to delegate that authority to Bossert, at his discretion, according to the filing…

A White House official said that Bannon was placed on the committee in part to monitor Trump’s first national security adviser, Michael Flynn, and never attended a meeting. He’s no longer needed with McMaster in charge of the council, the official said.

That’s one possible explanation. It never made sense to place Bannon, a political figure, on a natsec body that normally scrupulously avoids political considerations in making its security judgments. Bannon’s appointment to the NSC’s Principals Committee in January was big news for exactly that reason; he was taking on a role that even powerful presidential gurus like Karl Rove hadn’t dared to fill. Trump is now changing course, to his credit, ostensibly because Bannon is no longer needed to babysit Flynn. Although that raises a question: H.R. McMaster was appointed NSA six weeks ago. If Bannon’s role on the Council ended with Flynn’s departure, why is he only being removed now? Have he and McMaster spent the past six weeks in a power struggle over whether he should remain on the Council, with Trump finally ruling in McMaster’s favor?

Bannon himself offered a second explanation for his removal to the WSJ:

Mr. Bannon said in a statement: “Susan Rice operationalized the NSC during the last administration. I was put on to ensure that it was de-operationalized. General McMaster has returned the NSC to its proper function.”

Is that the truth or an excuse conveniently timed to capitalize on the media attention this week to Susan Rice’s possible role in unmasking Trump personnel in surveillance reports last year? It seems too cute by half, but remember, one of the people who reportedly helped Devin Nunes access the intelligence reports he saw on incidental surveillance of Trumpers was Ezra Cohen-Watnick, the senior director for intelligence programs on the National Security Council. McMaster wanted Cohen-Watnick moved to a different position within the NSC after Flynn left — but Bannon and Jared Kushner intervened with Trump to keep him in place. Was that because Bannon knew Cohen-Watnick was digging around on Rice’s “unmasking” measures and wanted him to continue, knowing that that story would be a useful counter to the Russiagate attacks on Trump? If so, with the Rice stuff now out in the open, Bannon might no longer see a reason to continue on the NSC. Although there’s another possibility: McMaster might have been angry upon discovering Cohen-Watnick’s role in a White House political counterattack, fearing that the politicization of the NSC would damage its credibility. If, hypothetically, he went to Trump and threatened to resign unless the Council was de-politicized immediately — which would mean, at a minimum, chief political strategist Steve Bannon being ousted — what would Trump have said? He’s not going to move to his third national security advisor in less than three months.

But there’s another possibility. What if Bannon really was on the National Security Council to keep an eye on Flynn? We’re not hearing about that theory for the first time today. The Times wrote this all the way back on January 29th, after Bannon landed on the Principals Committee:

People close to Mr. Bannon said he is not accumulating power for power’s sake, but is instead helping to fill a staff leadership vacuum created, in part, by Mr. Flynn’s stumbling performance as national security adviser…

Mr. Flynn, a lifelong Democrat sacked as head of the Pentagon’s intelligence arm after clashing with Obama administration officials in 2014, has gotten on the nerves of Mr. Trump and other administration officials because of his sometimes overbearing demeanor, and has further diminished his internal standing by presiding over a chaotic and opaque N.S.C. transition process that prioritized the hiring of military officials over civilian experts recommended to him by his own team…

[I]t is unclear when the maneuvers to reduce Mr. Flynn’s role began. Two Obama administration officials said Trump transition officials inquired about expanded national security roles for Mr. Bannon and Mr. Kushner at the earliest stages of the transition in November — before the younger Mr. Flynn became a liability — but after Mr. Flynn had begun to chafe on the nerves of his colleagues on the team.

Flynn was under a cloud within the White House from the beginning, for reasons that we may never fully know. The day after he resigned, the Times reported that Trump had been “uncomfortable” with him for weeks and that Jared Kushner had lobbied against making him NSA even before the inauguration. Just last week the Times revealed that Kushner, Bannon, and Priebus were all angling to shove Flynn out the door even before he committed his supposed firing offense of misleading Mike Pence about what he told the Russian ambassador about sanctions. If you’re sitting there thinking, “Isn’t it sort of insane that Team Trump would have named Flynn NSA in the first place when everyone in the inner circle had misgivings about him, to the point where Bannon felt he needed to monitor his NSC meetings?” — well, yes, it is. But it also makes Bannon’s seemingly far-fetched excuse, that his seat on the Council was only ever really about keeping an eye on Flynn, more plausible than it otherwise would be.

There’s one last possibility. What if Bannon doesn’t need a seat on the NSC because he’s built his own rival foreign policy shop inside the White House? A White House source told the Hill yesterday that the Strategic Initiatives Group, a collection of advisors organized by Bannon during Flynn’s brief tenure, never actually existed, but Sebastian Gorka once claimed to be a member of it. Another source told the Hill that it did exist, albeit informally, and that it’ll end up being folded into the new Office of American Innovation run by Jared Kushner. It’s hard to believe McMaster would tolerate a natsec counterweight to the NSC inside the White House, but we’ll see how the Office of American Innovation develops. Kushner is, after all, the de facto Secretary of State. Why wouldn’t his new “government reorganization” project end up with some foreign policy responsibilities too?

Update: One more possibility:

Fox News chief WH correspondent @johnrobertsFox on Bannon’s removal from National Security Council pic.twitter.com/mFX0eClmjg

— Oliver Darcy (@oliverdarcy) April 5, 2017

Update: If this is true, Bannon leaving the NSC begins to feel more like a true demotion:

In recent weeks, Jared Kushner, Trump’s son-in-law and senior adviser, has asked searching questions – sometimes for hours – of inside and outside advisers about the White House’s performance and complained about Bannon in particular, according to people who have spoken with Kushner. Kushner, a onetime New York Democrat, and Bannon, a hard-right nationalist, have clashed as Kushner has told people that Bannon’s desire to deconstruct the government, is hurting the president.

One person familiar with Kushner’s thinking says Kushner believes Bannon is more of a problem than Reince Priebus, the chief of staff.

“Big fight is between nationalists and the ‘West Wing Democrats,” one senior administration official said.