Wednesday, February 12 | By Alexis Simendinger & Kristina Karisch |
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| ▪ Gear up for the budget battle ▪ Under scrutiny, Musk defends DOGE ▪ Netanyahu threatens fragile Gaza ceasefire ▪ Zelensky floats territory swap |
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©️ The Associated Press | J. Scott Applewhite |
It's bears vs. bulls in House budget debate
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Budget, taxes and tariffs: These are some of the buzzwords on Capitol Hill this week as lawmakers tackle their legislative priorities while keeping pace with the Trump administration's breakneck speed of executive action. House GOP leaders are striking a bullish tone on budget negotiations, despite weeks of delays as the fractious conference struggles to unify around "one big, beautiful bill" to advance President Trump's legislative agenda. Spurred on by Senate GOP plans to release their own, two-bill budget plan this week, Speaker Mike Johnson (R-La.) said Tuesday he has had "very productive" conversations this week about his new fiscal blueprint. But skepticism is running high among House Republicans that they can advance a framework by the end of the week. Johnson's plan, which would encompass a massive party-line tax, border and energy bill, would increase spending cuts but also leave less room for sweeping tax policies. House Budget Committee Chair Jodey Arrington (R-Texas) announced his panel will meet tomorrow to mark up the draft. The framework Arrington outlined includes a $1.5 trillion floor for spending cuts with a $2 trillion target, a structure meant to give committees flexibility when crafting the package, writes The Hill's Mychael Schnell reports. The blueprint also includes a $4.5 trillion cap on the deficit impact of the Republicans' plan to extend Trump's 2017 tax cuts. Because most of those cuts will reduce federal revenues, they add to the federal debt. One source said there was "some degree of understanding" that if the $2 trillion in cuts is not achieved, the deficit increase number could decrease. With key members still squabbling about the numbers to put in the budget resolution, The Hill's Emily Brooks and Mychael Schnell report there is broad skepticism that the committee will actually advance a House bill. "It's pretty unlikely," one House GOP member said of the budget resolution advancing this week, adding that "there's a lot of frustration" across the conference directed at the fiscal hawks seeking to secure a higher baseline for budget cuts. ▪ Politico: The House Freedom Caucus plans to throw another tax plan into the mix. It would follow a smaller bill focused on the border and energy and represent a separate track from the one proposed by House GOP leadership. ▪ The Hill: Republicans are considering doing away with one of Wall Street's favorite tax breaks at the encouragement of Trump. The tax break on carried interest allows the managers of investment funds like private equity firms and hedge funds to count their income as capital gains and thereby have it be subject to a lower tax rate. As House Republicans struggle to get their ducks in a row, House Democrats are vowing to play hardball in the partisan battle over government spending, The Hill's Mike Lillis reports. They're driving to extract steep concessions from Republicans who will need bipartisan buy-in to prevent a shutdown next month. Democratic leaders are warning that they won't support a funding package that includes steep cuts to their favored programs. The early maneuvering sets up a game of high-stakes chicken as both sides race to keep the government running beyond March 14. "I'm not a cheap date," said Rep. Jim McGovern (D-Mass.). "They want to run and tell everybody that they have this huge mandate — that they can do whatever the hell they want to do. Well, if that's the case then they should put their mandate-pants on and do whatever the hell they want to do. But if you want us to be helpful, then you have to engage us. And we're not going to just be there to bail you out." The threats have teeth, since House Republicans haven't ironed out their differences over spending levels. Those dynamics mean that Democratic votes will be needed to get a federal spending bill through Congress and on to Trump's desk — leverage Democrats said they intend to optimize to the greatest degree possible. "For us to support a deal we have to really rein in these rogue billionaires, because I think it is outrageous what's going on now," said Rep. Juan Vargas (D-Calif.). "The price that the Republicans have to pay here is going to be very, very high — to bring some sanity back to government — because I think at the moment it's insane, all of these executive orders, all of these illegalities." ▪ The Hill: A coalition of 30 House Democrats is asking Republicans and Democrats on the Senate Judiciary Committee to oppose Kash Patel's nomination to lead the FBI. ▪ New York magazine: The Senate will vote today on the confirmations of former Rep. Tulsi Gabbard (Hawaii) as director of national intelligence and Robert F. Kennedy Jr. as secretary of Health and Human Services. ▪ The Hill: Democrats on Tuesday called on Trump to retract tariffs on Canada and Mexico before they are implemented. |
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Smart Take
with Blake Burman |
| Trump, Musk, Vance, DOGE, USAID. You've likely heard references to those quite a few times recently, but how about this one: the American dream. Americans trying to buy a home right now face a roughly 7 percent interest rate on a 30-year mortgage. At this same point in the first Trump presidency, it was around 4.2 percent. While several factors determine a prospective buyer's rate, Federal Reserve Chair Jerome Powell made clear while testifying on Capitol Hill on Tuesday there are no plans at the moment to lower interest rates. "Once we lower rates and rates return to a lower level, mortgage rates will come down. I don't know when that will happen," he said. "And even when it does happen, we're still going to have a housing shortage in many places." Interest rates higher for longer is something we all should probably get used to, and something President Trump will have to deal with for the first time. |
Burman hosts "The Hill" weeknights, 6p/5c on NewsNation. |
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- Trump ally Steve Bannon, a former top White House adviser and now a conservative podcaster, pleaded guilty Tuesday to felony fraud in New York for helping to defraud donors who were giving money to build a wall at the southern U.S. border. As part of a plea deal, he will serve no jail time.
- Federal Reserve Chair Jerome Powell will testify to the House today after telling a Senate panel on Tuesday that the economy is strong overall, the central bank is patient about interest rates and it has no role in devising trade policies.
- The Hill's third in a three-part "Future of Energy" series explores why red states are pulling ahead in America's clean energy race, reported by Sharon Udasin and Saul Elbein. Catch up on the first report in the series HERE and the second HERE.
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©️ The Associated Press | Alex Brandon |
Trump adviser Elon Musk on Tuesday defended federal cost-cutting initiatives he and his Department of Government Efficiency (DOGE) team have launched since Jan. 20, arguing they have uncovered a federal bureaucracy rife with cheats and corruption. Standing next to a seated Trump in the Oval Office, the billionaire suggested his group is being transparent amid lawsuits arguing the opposite. He provided no evidence of federal corruption or DOGE steps to refer suspected fraud to the appropriate authorities. Musk and his team have cited (on social media platform X) tallies of potential taxpayer savings after canceling various federal contracts and Musk has said the target is to cut between $1 trillion to $2 trillion from the budget, considered a challenge based on current discretionary spending. 👉The newly created House Oversight Subcommittee on DOGE, chaired by Rep. Marjorie Taylor Greene (R-Ga.), holds its first hearing at 10 a.m. about the "scourge of improper payments and fraud." Part of Trump's strategy to expand the power of the presidency and test constitutional limitations involves laws on the books, precedents in Washington and the Framers' intentions. He hopes a conservative majority on the Supreme Court will back his reasoning. However, Trump's flood-the-zone strategy has left the typically sluggish judiciary flat-footed. "All of our actions are maximally transparent," Musk told reporters. "I don't know of a case where an organization has been more transparent than the DOGE organization." Trump on Tuesday ordered most federal agencies to obtain DOGE approval before making any new hires, effectively expanding Musk's power. Meanwhile, the president's hoped-for path to the high court may have emerged Tuesday. The U.S. Court of Appeals for the 1st Circuit on Tuesday denied an administration request to stay an order by federal Judge John J. McConnell Jr. to unfreeze billions of dollars in federal grants for 22 states that sued. The appeals court ruling suggested the trip through the judiciary branch will go higher. For the government to ask the highest court to take up the case at this early stage would be a "long shot," Yale Law School professor Akhil Reed Amar told The New York Times,"but the Supreme Court might want to jump in if they either want to encourage this president, or stop him before he builds up a head of steam." ▪ The Hill: GOP lawmakers urge Trump to respect federal court rulings. ▪ NBC News: U.S. Agency for International Development contractors sued the administration Tuesday in federal court, alleging that Trump's funding cuts violate federal law and the Constitution. Trump ousted USAID Inspector General Paul Martin Tuesday, a day after the IG's office released a report warning of dangers associated with a sudden gap in staffing, including a lack of oversight that may leave the agency "susceptible to inadvertently funding entities or salaries of individuals associated with U.S.-designated terrorist organizations." The Department of Homeland Security on Tuesday fired the Federal Emergency Management Agency chief financial officer and three other employees, all allegedly tied to use of pre-approved federal funds in New York City hotels to house migrants. The department said the terminations were "for circumventing leadership to unilaterally make egregious payments for luxury [New York City] hotels." City officials deny FEMA disaster relief grant money was rerouted to help migrants or that federal expenditures were made for "luxury" accommodations. ▪ The New Yorker: What will DOGE's moves mean for the Labor Department's OSHA? ▪ The New York Times: Musk's business empire scores benefits under the Trump shake-up. ▪ ProPublica: The Federal Aviation Administration tried to regulate Musk's SpaceX. Now its fate may be in his hands. |
- The House will convene at 10 a.m.
- The Senate meets at 10 a.m.
- The president will sign executive orders at 2:30 p.m.
- The White House daily press briefing is scheduled at 1 p.m.
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©️ The Associated Press | Elaine Thompson |
EDUCATION: Republican states are embracing the idea of a future with no federal Department of Education, preparing plans for its Trump-promised demise and voicing confidence their own agencies can pick up the slack. The Hill: DOGE will be kept out of the Education Department's databases until at least Feb. 17 as a result of a Tuesday agreement tied to a California lawsuit that triggered an initial court hearing Friday. The Hill's Lexi Lonas Cochran writes Trump has long called for the dismantling of the Education Department, and he's reportedly eyeing executive actions to gut its major functions while simultaneously pushing lawmakers to perform the coup de grâce. The heads of the education departments in multiple GOP-led states describe the move as a potential opportunity to get rid of red tape around funding and burdensome reporting requirements on their schools. The Trump administration is "providing states greater control over the education of the children in their states," said Frank Edelblut, the Republican commissioner of the New Hampshire Department of Education. POLITICS: As Trump argues he won a mandate from voters, he continues to refer to former President Biden as a foil and political punching bag, writes The Hill's Amie Parnes. On Tuesday while discussing the situation in Gaza in the Oval Office, Trump said the Biden administration "didn't know what the hell they were doing." He used social media over the weekend to criticize his predecessor, and days later, the president said he removed Biden's security clearance and his access to classified information. NBC News: The arm of the Democratic Party focused on state legislative races announced its initial target map for the upcoming election cycle, identifying 10 states where they will seek to combat Trump's agenda and prepare for the next redistricting cycle at the end of the decade. |
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©️ The Associated Press | Alex Brandon |
GAZA CEASEFIRE: Israeli Prime Minister Benjamin Netanyahu warned Tuesday that the Gaza ceasefire will end this weekend unless Hamas frees Israeli hostages it is holding in captivity. "If Hamas does not return our hostages by Saturday at noon — the ceasefire will be terminated, and the [Israel Defense Forces] will return to intense combat until the final defeat of Hamas," Netanyahu said in a statement after a meeting of his security cabinet. Netanyahu's threat comes after Hamas announced it would stop releasing Israeli hostages until further notice over what it said were Israeli violations of the agreement. Hamas claims Israel has been slow to allow aid into Gaza. Trump warned "all hell is going to break out" if Hamas does not release "all" the remaining hostages this week. Meanwhile, Trump on Tuesday met in the Oval Office with Jordan's King Abdullah II, where the two leaders discussed Trump's proposal for neighboring countries to take in large swaths of the Palestinian population in Gaza while continuing to double down on the U.S. taking over the coastal strip and sending mixed signals on whether residents could ever return. Abdullah pledged to take in 2,000 sick Palestinian children from Gaza, and he outlined that his country will focus on children with cancer or who are sick, which Trump praised as a "beautiful gesture." ▪ Politico: Jordan's king buys more time on Trump's Gaza plan with flattery. ▪ The Hill: Trump's Gaza plan is drawing muted pushback from Republicans over concerns that the declaration is impractical and should be viewed as an opening gambit. UKRAINE: Treasury Secretary Scott Bessent will make his first trip abroad in his new role, headed to Kyiv to discuss Trump's interest in Ukraine's rare earth minerals as a form of compensation for U.S. military aid to Ukraine during its defense against Russia's war. The secretary has said he would support stronger sanctions against Russia and oil companies tied to the war with Ukraine. Meanwhile, Ukrainian President Volodymyr Zelensky is proposing an exchange of seized territory with Russia as part of any potential negotiations to end the war. Ukraine holds control of a small pocket of Russian territory, parts of Kursk Oblast, captured during a surprise incursion in August. Zelensky told The Guardian that he planned to offer Russia control of Kursk in exchange for Ukrainian territory under Russian occupation. "We will swap one territory for another," Zelensky said. CNN: Trump wants China to play a role in peace in Ukraine. Is President Xi Jinping willing to help? TEACHER RELEASED: Trump on Tuesday secured the release of American Marc Fogel — who was imprisoned in Russia — as part of a deal with the Kremlin negotiated by the president's special envoy to the Middle East, Steve Witkoff. Fogel, a teacher who was arrested on charges of bringing medical marijuana into Russia in August 2021, was released by the Kremlin and flown out of the country on Witkoff's plane. Although he began serving a 14-year sentence in June 2022, Fogel was only classified as wrongfully detained by the Biden administration late last year. Trump met with Fogel at the White House on Tuesday. The Wall Street Journal: As Trump turns up the heat on Beijing, China is trying to become more technologically self-sufficient, but its efforts have a significant cost. |
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- Why DOGE is unconstitutional, by Alan Charles Raul, guest essayist, The Washington Post.
- Secretary Rubio should take a page from Senator Rubio's book on foreign aid, by Fatema Z. Sumar, opinion contributor, The Hill.
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©️ Associated Press | Julia Demaree Nikhinson |
And finally … Monty, a 5-year-old black giant schnauzer from New Jersey, took home the coveted "best in show" prize Tuesday night at the annual Westminster Kennel Club Dog Show, proving that three times can indeed be the charm — and that beards are in. He made history for his breed, coming out ahead of more than 2,500 canines (and becoming the star in the "working dog" category) during two days of competition at Madison Square Garden. "He always tries so hard. I'm just so proud of him. I call him my Secretariat because he never stops," said tearful handler Kate Bernadin, after Monty's triumph. |
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