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MORNING REPORT

Tuesday, May 30

by Alexis Simendinger & Kristina Karisch

Can McCarthy get the votes?

After the financial markets close Wednesday, the House is expected to decide whether to suspend the debt ceiling for two years and reshuffle some federal spending. The Senate stands ready to vote by Friday or the weekend, although there's uncertainty about how things will go in the House.

Congress is cutting it close: A U.S. default is projected for Monday. The debt debate has consumed Washington for five months, and this week's questions are not just about action by Congress, but also about what the two sides in the end might accomplish.

CNN: Ahead of a key House Rules Committee hearing today to consider the compromise measure, committee member Rep. Chip Roy (R-Texas), raised a new (disputed) wrinkle, claiming Monday that all nine GOP members on the committee must be in lockstep if a measure is to go to the full House.

How much are the estimated spending cuts, which Republicans used their dramatic default leverage to achieve? Although the GOP had initially called for 10 years of spending caps, the compromise includes just two years of caps and then switches to spending targets that are not bound by law — essentially described as suggestions (The New York Times). There are handshake "adjustments" made by negotiators for future budgeting, which don't appear in the legislative language released Sunday.

Using White House estimates of the actual funding levels in the agreement, not just the levels in the legislative text — suggests it would shrink federal spending by about $55 billion next year, compared to nonpartisan Congressional Budget Office (CBO) forecasts, and by another $81 billion in 2025. If spending then returned to a growth path forecast by CBO, the total savings over a decade would be about $860 billion, according to a New York Times analysis.

When asked for an estimate on the net deficit reduction from the agreement, a White House official said discretionary savings are "likely" to be close to $1 trillion but would await the CBO's official estimate this week (ABC News).

The near freeze that appears to be in the offing includes "wins" and concessions on both sides. In the end, it is closer to the type of federal spending deal anticipated during divided government, even if it's not what Democrats would prefer, according to a Washington Post analysis.

Speaker Kevin McCarthy (R-Calif.) has called the pact he championed with President Biden "transformational." Freedom Caucus member Roy called the deal a "turd sandwich." Across the aisle, progressives are livid that companies and wealthy Americans will pay no more in taxes while low-income Americans will face additional work requirements to qualify for some federal aid. The measure would "put at risk food assistance for very low-income older adults … [which] runs contrary to our nation's values and should be rejected," the left-leaning Center on Budget and Policy Priorities wrote in a statement.

The two-year agreement would hold spending flat for 2024 while boosting spending for defense and veterans and capping increases at 1 percent for the year after the presidential election. It would suspend the debt limit until January 2025, meaning the Treasury Department could continue to borrow to pay bills. The package would also make policy tweaks, including by adding those work requirements for some food aid recipients and streamlining an environmental law that Republicans say has made it harder to build energy projects (PBS). The measure would fast track construction for a new natural gas pipeline from West Virginia to Virginia, a project backed by Republicans and centrist Democrat Sen. Joe Manchin (W.Va.).

The Hill and Politico: Selling the debt deal. Punchbowl News reports the president is lobbying Democratic lawmakers to back the bill. Senior White House aides and Cabinet officials have spoken with dozens of rank-and-file House Democrats and similar calls are being made to Senate Democrats.

Former President Trump — with whom McCarthy spoke by phone during last week's back-and-forth with the White House — has over the years been of two minds about the nation's borrowing authority. He was a proponent as president of escalating debt, but he switched gears as a candidate, urging Republicans last week to let the country default unless Democrats agreed to "massive" spending cuts. "Republicans should not make a deal on the debt ceiling unless they get everything they want (Including the 'kitchen sink')," Trump wrote on Truth Social. "That's the way the Democrats have always dealt with us. Do not fold!!!" Trump's opinion, if he weighs in this week, will influence Republican thinking in Congress and could impact McCarthy's strategy.

Politico: The White House to Dems: The agreement with House Republicans could have been a lot worse.
The Hill: Senate Minority Leader Mitch McConnell (R-Ky.) endorsed the compromise debt deal and urged Senate conservatives not to delay it.

The agreement represents a compromise, which means not everyone gets what they want," Biden said in a weekend statement. "That's the responsibility of governing."

The New York Times: Why spending cuts in the debt deal likely won't shake the economy.
The Hill: Here's why the U.S. was placed on credit watch by ratings agencies ahead of the announced debt deal.
The Hill: Business groups endorse the debt limit deal as McCarthy scrambles for votes.
The Hill: Florida Republican Gov. Ron DeSantis, now a presidential candidate, claimed to Fox News on Monday that the debt ceiling deal keeps the U.S. "careening toward bankruptcy."

Leading the Day

➤ POLITICS

Trump's legal problems mount, his 2024 campaign leans into "retribution" for those who feel they have been wronged by the government. He is frequently lashing out at a familiar target: judges, and the federal agencies leading the legal inquiries against him. Trump has criticized the judge overseeing the rape and defamation civil case involving writer E. Jean Carroll as "Clinton-appointed."

The former president has also claimed the judge handling the case brought by Manhattan District Attorney Alvin Bragg (D) over alleged hush money scheme "hates" him. It is not a new tactic for Trump, who throughout his real estate career and presidency questioned the motivation or legitimacy behind court rulings. But, as The Hill's Rebecca Beitsch and Brett Samuels report, it is notable at a time when his 2024 campaign for the White House has included vows for "retribution" for those who feel they have been wronged by the government.

"Irresponsible attacks in social media, that are based on misinformation or untruths or merely designed for partisan gain … do damage to our justice system," said Marcy Kahn, who spent more than 30 years on the bench and now is the head of the New York City bar's Task Force on the Rule of Law. "They undermine the rule of law and the system we have in place to provide justice for all."

The Hill: Here are five high-profile Trump supporters who've switched to Florida Gov. Ron DeSantis (R).
The Washington Post: Women who support Trump cite party, economy over sexual misconduct.
The New York Times: A small town's tragedy, distorted by Trump's megaphone.
Politico: Biden world confident in a Trump rematch but preps for a surprise.

Meanwhile, colleges are attempting to find ways to save their diversity, equity and inclusion (DEI) initiatives as Republican-led states advance efforts to shut down the programs. As The Hill's Lexi Lonas reports, a number of red states have introduced or passed legislation targeting certain aspects of DEI in universities, from mandatory diversity statements to entire offices, causing confusion and fear for faculty and staff.

Texas lawmakers passed a bill Sunday that would ban DEI programs and offices at state colleges and universities (The Texas Tribune). It now heads to the governor's desk, where, if signed, it would become the second such law to take effect, after a similar ban in Florida, which left colleges scrambling.

"I know that, for coursework and for some of the things, they're just changing the names of committees as opposed to, you know, doing away with them altogether," said Allan Barsky, professor for the Sandler School of Social Work at Florida Atlantic University.

The Chronicle of Higher Education: Students and faculty fear tenure and DEI bills could "destroy" Texas colleges.

Elsewhere, Republicans are exhaling a sigh of relief, The Hill's Al Weaver reports, after Pennsylvania state Sen. Doug Mastriano (R) surprised many by announcing that he will forgo a run for Sen. Bob Casey's (D-Pa.) seat and support whomever the eventual nominee is. Last November, Mastriano lost to Gov. Josh Shapiro (D) by nearly 15 points in the gubernatorial race, which the GOP establishment viewed as proof that the hard-right lawmaker is not viable in a statewide general election.

The Hill: Biotech entrepreneur Vivek Ramaswamy is casting himself as the true outsider in the Republican presidential field as he takes on Trump.
Politico: Longshot Democratic presidential candidate Marianne Williamson is polling at 9 percent. Is she for real?

In Focus / Sharp Takes

➤ TECH

TikTok, the video sharing app, is wildly popular among millions of users but is seen by respected U.S. state and federal officials as a threat to Americans' privacy and to national security. Montana this month took some dramatic steps against TikTok, arguing the company's Chinese owner, ByteDance, could spy on Montanans.

To help understand TikTok and what may lie ahead, Morning Report spoke with The Hill's Rebecca Klar, who covers tech policy.

Alexis: TikTok last week filed a federal lawsuit against Montana claiming violations of free speech from a new state law. How might its lawsuit impact TikTok's U.S. standing? Does it mean Montanans can continue using TikTok?

Rebecca: Montana is the first state to ban TikTok outright, taking more assertive action than other states and the federal government, which have banned the app on government-owned devices. At the same time, TikTok's battle to sue over the ban adds another hurdle to growing scrutiny of the company in states as well as in Congress. Montanans can use TikTok; the state law now challenged in federal court was to take effect in January.

Alexis: Is Montana right to be concerned about TikTok's ties to China?

Rebecca: National security experts have said there are some reasons to be concerned but have also warned that an outright ban may not be the right course of action. A ban is difficult to enforce and there are loopholes for users to get around them, including using VPNs [virtual private networks]. Bans also pose First Amendment concerns, as TikTok has raised in its lawsuit against Montana's new law.

Experts have also warned that issues posed by TikTok, based on data gathered and shared by the company, are also posed by other social media companies. In that sense, critics of TikTok bans argue a more comprehensive approach, as well as a federal data privacy law, could be beneficial compared with targeting a specific company.

Alexis: What happened to the nationwide TikTok bank the Biden administration had threatened?

Rebecca: The administration is reviewing TikTok under a process steered by the Treasury Department's interagency Committee on Foreign Investment in the United States. It began in June 2021 when Biden reversed a Trump administration order that would have banned new downloads of the app in the U.S. Few details have emerged about the review. In the meantime, the administration in March threatened to ban TikTok if owner ByteDance did not divest its stakes in the company.

TikTok confirmed the U.S. threat of a ban. CEO Shou Zi Chew testified before Congress and lawmakers proposed other potential remedies in addition to the ongoing federal review.

Alexis: In March, nearly half of all senators sponsored a bipartisan bill that would ban TikTok or force a sale of the app. Since then, the urgency appears to have ebbed among lawmakers. What's the strategy in Congress?

Rebecca: The bipartisan RESTRICT ACT, led by Sens. Mark Warner (D-Va.) and John Thune (R-S.D.), would create a system that gives the administration the power to review and ultimately ban apps linked to foreign adversaries, which could include TikTok.

The bill gained more bipartisan support than other GOP-led efforts that targeted TikTok specifically. Experts, however, say the RESTRICT Act poses privacy concerns and could limit Americans' freedom online.

For more coverage about tech, TikTok and national security concerns, catch up with Rebecca's reporting for The Hill. You can follow her on Twitter @rebeccaklar_:

Opinion

Pass the debt limit deal. Then figure out how to end the drama, by The New York Times editorial board.
SpaceX and the science of failure, by Chris Impey, opinion contributor, The Hill.

Where and When

📲 Ask The Hill: Share a news query tied to an expert journalist's insights: The Hill launched something new and (we hope) engaging via text with Editor-in-Chief Bob Cusack. Learn more and sign up HERE.

The House will meet at 2 p.m.

The Senate will meet at 3 p.m. to resume consideration of the nomination of Darrel Papillion to be a U.S. District Court judge for the Eastern District of Louisiana.

The president and first lady Jill Biden will return to the White House from Wilmington, Del., by 11:05 a.m.

The first lady will travel at 8:30 p.m. to Amman, Jordan, and remain abroad with additional itineraries in Egypt, Morocco and Portugal before returning to Washington on Monday. It will be her initial visit to the Middle East as first lady and her second to the African continent

Vice President Harris will travel to New York City to speak at a Democratic National Committee fundraiser at 6:45 p.m. She will return to Washington tonight.

Secretary of State Antony Blinken is traveling to Sweden, Norway and Finland through Friday. Ukraine is a central topic and the U.S. wants NATO countries to make Sweden a member (The Hill). Blinken's schedule today in Luleå, Sweden, includes a tour of a steel plant, an evening meeting with Swedish Prime Minister Ulf Kristersson and Swedish Foreign Minister Tobias Billstrom, a joint press conference with the prime minister, plus a dinner hosted by the U.S.-EU Trade and Technology Council.

⚖️ The Supreme Court in coming weeks will hand down major rulings on student debt relief, affirmative action and the Voting Rights Act, with opinions in 30 remaining cases expected to be released by June 30 (The Hill).

The White House daily press briefing is scheduled at 2:45 p.m. and will include Office of Management and Budget Director Shalanda Young, a lead negotiator for the president and Democrats during debt ceiling talks with House Republicans.

Elsewhere

➤ INTERNATIONAL

At least two residential buildings in the Russian capital were hit by drones Tuesday morning, Moscow's mayor said, blaming Ukraine. No one has been seriously injured so far, the mayor said. The strikes came after Russia conducted its third aerial attack on Kyiv in 24 hours, where falling debris killed at least one person and wounded at least four people, the mayor said, adding the air raid was the 17th this month (The Washington Post). The blasts in Kyiv on Monday and Tuesday unnerved locals, already under strain from the night attacks over the weekend (The Associated Press).

"After what happened last night, I react sharply to every siren now," Alina Ksenofontova, who took refuge in the subway with her dog Bublik, told the AP. "I was terrified, and I'm still trembling."

Moscow on Friday targeted Sen. Lindsey Graham (R-S.C.) for arrest after he said that U.S. military aid to Ukraine is "the best money we've ever spent" (The Hill).

The New York Times: Inside Sudan's war, "There's another war for art."
The Washington Post: Uruguay, hot and dry, adds saltwater to public drinking supply.
Reuters: Uganda's parliament enacts a harsh anti-LGBTQ law that includes the death penalty.

Turkish President Recep Tayyip Erdoğan won the country's runoff elections Sunday, securing another five years in power, but his call for unity sounded hollow as he ridiculed his opponent Kemal Kılıçdaroğlu — and took aim at a jailed Kurdish leader and the LGBT community. Erdoğan's victory came after a surprise surge in the polls following a close first round of voting, and it had looked possible that his 20-year strongman leadership of Turkey may have come to an end. Under his rule, Turkey's role as a regional and international power broker has grown substantially, even as Erdoğan has become increasingly intolerant of dissent (BBC and The Washington Post).

The election results were watched closely across the Middle East and around the world, and Kılıçdaroğlu denounced the result as "the most unfair election in recent years."

NPR: Erdoğan's victory could be fateful for Turkey's democracy and role in the world.
Reuters: Biden says he and Erdoğan talked about F-16s, Sweden's NATO bid.
The Washington Post: Erdoğan's political path from mayor to one-man rule of Turkey.
The Associated Press: With a new mandate secured, Erdoğan is likely to continue engaging with both the West and Russia.

➤ YOUR WALLET

💵 Millions of Americans stand to lose Medicaid health care coverage they gained during the pandemic, even if they are still eligible (The Hill).

Americans owe $1 trillion on their credit cards, and the average interest rate on new cards is 24 percent, the highest in decades. Amid high inflation, Americans' overall savings decline, and their indebtedness is on the rise (The Hill).

Consumer frugality is rising as shoppers hunt for deals and trade down in certain categories. Even higher-income consumers are scaling back big-ticket discretionary items and purchases of general merchandise. It means U.S. growth is slowing (The Washington Post).

✈️ Consumers are splurging in one category this summer: travel (NewsNation and The Washington Post).

The Closer

And finally … How about some "aahhhh" and "oh!" news about animals?

Headlines by land: The Great Ape House at the Smithsonian National Zoo in Washington reopens today after welcoming the Saturday birth of a western lowland gorilla, an endangered species, born to 20-year-old mom Calaya. The father is 31-year-old Baraka. The zoo says the newborn's gender will eventually be learned, but for now, Calaya is caring for her baby without interference. Zoologists "are cautiously optimistic that the newborn will thrive" (The Washington Post). YouTube video clips are collected HERE and HERE.

The western lowland gorilla population in Africa has declined by 60 percent since 2000, a dropoff blamed on habitat loss, disease and poaching, according to scientists and zoo officials.

And by sea: Orcas, which are also endangered, are purposely damaging and sinking boats off the coast of Spain and Portugal. Why? Scientists have two theories: juvenile killer whales learned a new behavior and are repeating it as a form of play. Or, vengeance. The destruction of vessels could be aggressive behavior taught by one innovative killer whale to others. Suspect: an orca named White Gladis. Social media includes photos and video clips (The Washington Post and HuffPost).