More-Tax-Breaks-Less-Medicaid Bill Inches Forward
First, the bottom line: the combo package of tax cuts, debt limit increase, and squeeze on Medicaid and other federal spending is no longer stalled. It’s also not yet in its final form and there’s still no agreement on doing better for high-tax states on the so-called SALT federal tax deduction.
“There’s a lot more work to do. We’ve always acknowledged that, towards the end, there will be more details to iron out,” said Speaker Mike Johnson (R-La.)
Late last night, the House Budget Committee did its part thanks to weekend negotiations, the intervention of the White House, and hardliners who felt the product wasn’t yet good enough voting “present” rather than “no.”
To get to that point, party leaders agreed to speed up cuts to Medicaid health coverage — a decision that could make it more difficult to win Senate passage because the program is so important to rural hospitals and to large percentages of residents in less-prosperous states.
The deal also includes Medicaid work requirements and phasing out clean energy tax credits, and there are plans to insert a gun provision eliminating the taxation of suppressors, Ken Tran and Jack Fitzpatrick report.
To meet Johnson’s goal of a floor vote this week, the House Rules Committee is planning to meet at 1 a.m. on Wednesday. BGOV subscribers, you can dig into more details in today’s Budget Brief and Congress Tracker. There’s also a full analysis of the megabill here: BGOV Bill Analysis: House GOP Reconciliation Package
See also:
- Trump Tax Bill Advances After GOP Deal for Faster Medicaid Cuts
- GOP to End Energy Tax Credits Earlier in Deal With House Leaders
Potentially Pivotal Phone Call
European leaders are worried about the consequences for Ukraine from today’s phone call between President Donald Trump and Vladimir Putin.
Those allies and Ukrainian President Volodymyr Zelenskiy believed they had a commitment from Trump to hit the Kremlin with fresh sanctions if Putin refused to observe a ceasefire.
And clearly there’s no ceasefire — Zelenskiy was engaged in a flurry of diplomacy yesterday at the Vatican, including a meeting with Vice President JD Vance, and Russia yesterday unleashed one of the biggest drone barrages against Ukraine since the start of its invasion.
A European official tells our Bloomberg News colleagues that the Europeans are hoping that Trump will realize that he risks looking like a loser if he forces a bad deal on Ukraine. Read More
See also: Bacon Confirms Pause in Cyber Operations Against Russia — CBS News
In the Rose Garden Today
There’s been a lot of attention lately on the infrequent White House sightings of First Lady Melania Trump, so the announcement of this afternoon’s big splash was eye-catching.
The first lady had personally lobbied for legislation (S. 146) that seeks to criminalize the publication of non-consensual intimate imagery and crack down on AI-generated non-consensual “deepfake revenge porn.” She’ll be a prominent part of the bill-signing ceremony in one of springtime Washington’s best stages: the White House Rose Garden.
Biden Diagnosed With Cancer
Former President Joe Biden’s office announced that the 82-year-old has an aggressive form of prostate cancer that has metastisized to his bones. He and the medical team are considering treatment options, according to the statement.
Since Biden’s case is described as hormone-sensitive, it might be managed by hormone therapy and newer anti-androgen medications that have been shown to control the disease, sometimes for many years. Read More
Eye on the Economy: Fedspeak
We have a chance to hear four well-informed economic viewpoints today as Federal Reserve officials speak at events in Florida and New York.
Scheduled to talk at a conference on Amelia Island are Atlanta Fed President Raphael Bostic, Dallas Fed President Lorie Logan, and Fed Vice Chair Philip Jefferson. In addition, New York Fed President John Williams is to speak at an event organized by the Mortgage Bankers Association.
We’ll be interested in anything those policy-drivers have to say about the impact of Trump’s tariffs — especially how they’re affecting the more than 30 million small businesses estimated to account for half of the nation’s private-sector workforce.
Data from the American Bankruptcy Institute showed an April uptick in a type of bankruptcy filing typically used by small businesses.
“Small businesses that import from China will still take a beating,” said Heidi Crebo-Rediker, a senior fellow at the Council on Foreign Relations and a former State Department official. “This is still a huge nightmare to navigate,” she said.
Catch up on the coverage of the small business-tariffs crossroads:
Trade Truce Is Small Comfort to US Firms Facing Hefty Costs
Check out an economic development that was easy to overlook as Trump made news on his Middle East tour: Irish Exports to US Quadrupled in March on Tariff Threat
See also:
- Fed to Shrink Staff Over Next Couple Years
- Bessent Calls Moody’s ‘Lagging Indicator’ of US Fiscal Health
How Well Do You Know Washington -- Birthday Edition
Readers of Skye Witley‘s BGOV Farm Brief will have a leg up on this week’s quiz.
The Department of Agriculture was founded in May of 1862. To mark its 163rd birthday, the USDA unfurled huge banners outside its headquarters. When you’re on the National Mall looking up at that building, who do you see?
A) John Deere
B) Abraham Lincoln
C) George Harrison Shull
D) Donald Trump
Scroll down for the answer.
Fetterman’s Unlikely Bud
John Fetterman spent years trying to reach the US Senate, only to land in a job that seems ill-suited to his style strengths and weaknesses.
Bloomberg Government’s Jonathan Tamari interviewed more than 20 current and former Democratic officials, ex-Fetterman staffers, and party operatives to get some insight into how the senator’s caustic style, loner persona, and disinterest in policy details have clashed with the clubby, procedure-bound chamber.
He also checked every committee meeting to verify the Pennsylvania Democrat’s attendance — or more often, his absence as he continues to deal with the aftermath of his 2022 stroke — and reveals a pal and defender you might find surprising.
“I like John a lot. He’s become a friend,” said Sen. Ted Cruz (R-Texas). He’s “not nearly as bound by the partisan mentality we see in Washington, of red shirts and blue shirts, and my team hates your team.” Read More
Scowling Hawks
President Donald Trump’s flurry of artificial intelligence deals during his tour of the Middle East is opening a rift within his own administration, our Bloomberg News colleagues report.
In particular, China hawks are concerned that the new projects will put US national security and economic interests at risk if there aren’t sufficient guardrails to prevent American chips shipped to the Gulf from ultimately benefiting Beijing. There’s also been some internal pushback to shipping large quantities of chips to any location outside the US.
“I’m genuinely perplexed how any self-proclaimed ‘China Hawk’ can claim that President Trump’s AI deals with UAE and Saudi Arabia aren’t hugely beneficial for the United States,” White House AI Adviser David Sacks wrote on X. “The only question you need to ask is: does China wish it had made these deals? Yes of course it does. But President Trump got there first and beat them to the punch.”
Read the full story, which was based on interviews with nearly a dozen people who spoke about internal administration discussions on condition of anonymity: Trump Rush to Cut AI Gulf Deals Opens Rift With China Hawks
Did You Ace the Quiz?
The faces are USDA founder Lincoln (Option B) and Trump (Option D.) And if you picked one of the other choices, give yourself a star for knowing some agricultural history.
John Deere made it easier to plant food by swapping cast iron for steel in the all-important plow. Botanist George Harrison Shull’s groundbreaking research helped lead to today’s hybrid corn.
Before You Go
Changing Course: The Justice Department’s Public Integrity Section is charged with ensuring cases against elected officials are not politically motivated. The Trump administration is considering changing that, the Washington Post reports. Read More
Back to Work: The IRS and Treasury Department will bring back all IRS probationary employees who were on administrative leave by May 23, according to a email seen by Erin Slowey at Bloomberg Tax. Read More
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