Washington On One February 10, 2025

THE LEDE:  U.S. added 143,000 jobs in January, jobless rate drops… Trump says he will announce 25% tariffs on all imports of steel and aluminum...China's $800 de minimus exemption reinstated until Commerce can establish enforcement…The Senate confirmed Secretary of Energy Chris Wright, Secretary of Veterans Affairs Doug Collins, Attorney General Pam Bondi, Secretary of Housing & Urban Development Eric Scott Turner, and Office of Management & Budget (OMB) Director Russel Vought…Treasury has used more than 60% of its debt-cap special measures, Congress still hasn’t decided how and when to address the Debt Limit…President Trump calls for review of all US funding to NGOs…Trump meets with Israeli PM Netanyahu and Japanese PM Ishiba at the White House…As the House stalls, the Senate looks to take the lead in budget reconciliation (which would mean two bills, immigration and defense first with extending the Trump tax cuts coming second)…Trump said curbs are in place to prevent Musk from doing anything in the government without White House blessing…The CIA offered buyouts to its entire workforce…Marco Rubio notified lawmakers that he intends to work with Congress to reorganize the U.S. Agency for International Development… Trump called for the U.S. to take long-term control of Gaza…Companies that expect to be hard-hit by US tariffs on goods from Canada, China and Mexico are starting to prepare their arguments in hopes of getting an exclusion from the duties…The Kremlin said contacts between the U.S. and Russia had taken place and recently intensified…Administration halts program to expand US EV chargers…The CFTC is reorganizing its enforcement division in a move it said would end the practice of regulation by enforcement…During remarks at the National Prayer Breakfast, President Trump said after the assignation attempt in PA, “something changed in me,” telling attendees that he now feels “much more strongly” about God…

THE WEEK AHEAD:  The House will vote later in the week on a bill that would allow lawmakers to more easily roll back federal rules under the Congressional Review Act and a bill that would criminalize the act of fleeing from border patrol agents. The Senate is expected to vote on Tulsi Gabbard’s confirmation for Director of National Intelligence, as well as take up Robert F. Kennedy Jr. for HHS secretary, Howard Lutnick for secretary of Commerce, Brooke Rollins for Agriculture secretary and Kelly Loeffler to be administrator of the SBA. Tuesday: The House Homeland Security Committee will hold a hearing on China’s investment in Western Hemisphere ports.  The House Ways and Means Committee will hold a hearing on IRS modernization.  Federal Reserve Chair Jay Powell will testify in front of the Senate Banking Committee.  The House Financial Services Committee will hold a hearing on digital assets.  Wednesday: The House Financial Services Committee will also hear from Powell.  The House Judiciary Committee will hold a hearing on the “censorship-industrial complex.” Matt Taibbi will testify.  The House Energy and Commerce Committee will hold a hearing on AI in manufacturing.  The House Oversight Committee will hold a hearing on government waste.  The Senate HELP Committee will hold a confirmation hearing for former Rep. Lori Chavez-DeRemer (R-Ore.) to be labor secretary.  The Senate Commerce Committee will hold a hearing on “Greenland’s geostrategic importance to U.S. interests.”  The Senate Budget Committee will mark up its budget resolution for reconciliation.  Thursday: The Senate Budget Committee has Day Two of its markup.  The House Foreign Affairs Committee will hold a hearing entitled “The USAID betrayal.” Former Rep. Ted Yoho (R-Fla.) and former Bush-era USAID Administrator Andrew Natsios will testify.  The Senate Judiciary Committee will hold a vote to confirm Kash Patel as FBI director.  Top officials for Southern Command will testify in front of Senate Armed Services.  Senate HELP will hold a hearing to consider the nomination of Linda McMahon to be secretary of education.

WHAT IS HE DOING?:  President Donald Trump’s second term has seen an aggressive expansion of executive authority, with Congress offering little resistance. While the U.S. Constitution envisions checks and balances, Trump has bypassed legislative authority on immigration, federal appointments, and spending. His orders include suspending asylum laws, firing independent agency commissioners, and withholding funds from congressional programs.  Legal experts note Trump’s broad assertions of executive power are distinct from past presidents. He has ignored statutory constraints, arguing that Article II grants him sweeping control over budgets, personnel, and foreign policy. His administration has also challenged a Nixon-era law requiring the president to spend congressionally appropriated funds.  Congress has largely failed to push back. While some lawmakers have questioned his removal of inspectors general, many Republicans fear political retaliation if they oppose him. The Senate recently advanced Russell Vought’s nomination as budget chief, reinforcing Trump’s grip over federal spending.  With multiple legal challenges underway, the Supreme Court will likely define the limits of Trump’s authority. However, as Congress continues to relinquish power, the presidency is becoming increasingly dominant, reshaping the balance of government.  The resistance to these efforts is being led by Democratic State Attorneys Generals and you’ll be hearing from them A LOT.  They will in fact see the Administration in Court.

WHAT THE LAWYERS DOING?:  President Donald Trump is aggressively testing executive power, setting the stage for multiple Supreme Court battles that could delay or block his policies.  This week, the White House abruptly rescinded a freeze on federal grants, just one day after a judge temporarily blocked it. The freeze reignited legal debates over whether presidents can withhold funds appropriated by Congress—a constitutional question likely headed to the Supreme Court.  Trump’s executive order ending birthright citizenship is already tied up in lawsuits, with judges citing the 14th Amendment’s guarantee that “all persons born or naturalized in the United States” are citizens. Legal experts doubt the Justice Department can overturn this precedent.  Other challenges include lawsuits over Schedule F, which strips civil-service protections, and the firing of inspectors general, an issue where the Court may favor presidential authority. Trump’s restructuring of DOGE and rollbacks of diversity protections also face legal scrutiny.  With each action, Trump is forcing the courts to define the limits of executive power, ensuring prolonged legal battles over his administration’s agenda.

WHAT ABOUT THE OTHER GUY?: The White House considers Musk a “special government employee” and says he has a top-secret security clearance. Reuters reports that Musk’s team has been given applicable clearances, too.  Musk’s allies are rapidly asserting influence over federal agencies, demanding access to sensitive information and working to block government spending deemed excessive. Musk, who leads the Department of Government Efficiency (DOGE) under President Trump, secured access to Treasury’s payment system, which processes trillions in federal funds. DOGE representatives gained access to internal systems of the Centers for Medicare and Medicaid Services (CMS), though it’s unclear which systems.  DOGE representatives also gained entry to USAID, prompting security concerns and the removal of key officials.  Democrats and some Republicans condemned Musk’s overreach, questioning the legality of his influence and potential conflicts of interest. Former White House ethics lawyer Richard Painter called the actions “completely unprecedented.”  Musk, using his platform on X (formerly Twitter), announced plans to shut down HHS grants and alleged, without evidence, that terrorist groups received Treasury payments. He also vowed to dismantle USAID, calling it a “criminal organization.” The agency’s website and social media accounts were subsequently removed, and Trump is expected to sign an order folding USAID into the State Department.  Amid the controversy, Musk continued engaging with Trump allies, including former national security adviser Michael Flynn, while also targeting a Republican senator—only to later retract his criticism. The administration has yet to disclose DOGE’s full structure, personnel, or oversight mechanisms.  Republican support for Musk has significantly dropped since Trump won the 2024 election. In November, 47 percent of Republicans said they wanted Musk to have “a lot” of influence, but that number has already dropped to 26 percent (!), according to polling by The Economist/YouGov. You’ll be unsurprised to hear those figures are significantly lower among Democrats and independents.

WHAT ABOUT THE DEMS:  Newly elected Democratic Party Chairman Ken Martin urged Democrats to lead the fight against President Donald Trump, but many doubt the party’s readiness. As Trump reshapes federal policy, Democrats remain disorganized and divided, struggling with low public approval.  Martin, a party insider, defeated Ben Wikler, Wisconsin’s Democratic chair, in a race with little ideological contrast. Both pledged to revitalize grassroots organizing, but the party remains fractured over its focus and messaging.  At a Democratic National Committee forum, activists disrupted proceedings with protests on climate change and identity politics. Most candidates embraced their demands, though Faiz Shakir, a former Bernie Sanders adviser, warned the party’s obsession with identity politics risks alienating voters.  Despite recent electoral setbacks, party leaders offered little introspection. As Martin secured 246 votes, Joe Biden and Kamala Harris praised outgoing chairman Jaime Harrison, signaling continuity over change in a party searching for direction.

BUDGET RECONCILIATION:  Senate Republicans are pressing ahead with their budget resolution, aiming for a committee vote this week, despite doubts over Speaker Mike Johnson’s ability to unite House Republicans behind a single package.  Senate Budget Chair Lindsey Graham outlined a plan with $150 billion each for border security and defense, with Senate Armed Services, Homeland Security, and Judiciary Committees determining spending details. Tax priorities will be addressed separately, with Republican senators set to meet Trump at Mar-a-Lago on Friday to discuss budget reconciliation.  Meanwhile, House Republicans remain divided. Some are considering a short-term tax cut to contain costs and appease hardliners, though Treasury Secretary Scott Bessent insists on permanent cuts. Ways and Means Chair Jason Smith criticized Graham for moving first.  Despite skepticism, Rep. Ralph Norman believes a budget blueprint could be released soon, while Rep. Chip Roy supports a 10-year tax cut extension if paired with $2.5 trillion in spending cuts.

BUDGET RECONCILIATION II:  President Donald Trump outlined his tax priorities in a meeting with Republican lawmakers, proposing ending the carried interest tax break for private equity managers and expanding the state and local tax deduction. He also reaffirmed his campaign pledges to eliminate taxes on tips, Social Security payments, and overtime pay, while targeting tax breaks for billionaire sports team owners and creating incentives for made-in-America products.  The carried-interest tax break, which allows private equity managers to pay lower rates on investment earnings, was a new addition to Trump’s agenda and could help offset the multi-trillion-dollar tax cuts Republicans aim to pass this year. Treasury Secretary Scott Bessent confirmed tax reform is a top priority for the administration.  However, GOP lawmakers are split on strategy. Senate Republicans want to delay tax cuts until passing a budget reconciliation package, while House Speaker Mike Johnson plans to combine tax and immigration policies into a single bill. The impasse presents an early test for Trump’s administration as Republicans seek to fund mass deportations and resume border wall construction.

BUDGET RECONCILIATION III:  Rep. David Schweikert (R-Ariz.), a senior member of the House Ways and Means Committee, warned he would oppose his party’s tax bill if it increases the national debt, criticizing proposed scoring methods that could obscure its true cost. He cautioned against extending provisions of the 2017 tax law without addressing its impact on deficits.  Schweikert called the "current policy baseline" scoring method, which assumes tax cuts remain permanent, “intellectually vacuous.” Senate Republicans, including Finance Chair Mike Crapo (R-Idaho), favor this approach to avoid the $4.6 trillion price tag estimated by the Congressional Budget Office.  Republicans are unlikely to scale back tax cuts and instead plan to offset costs through spending reductions, though structural reforms to Medicare and Social Security remain politically difficult. Lawmakers must also balance competing demands, including expanding the child tax credit and raising state and local tax deductions.  With GOP divisions and a narrow House majority, negotiations remain challenging. Douglas Holtz-Eakin, (whom your editors have a soft spot for) a former CBO director, quipped, "Peace in the Middle East will be easier."

WATCH THIS SPACE:  Speaker Mike Johnson warned that government funding negotiations had stalled, accusing Democrats of walking away and urging House Minority Leader Hakeem Jeffries to re-engage. Jeffries dismissed the claim as “projection,” arguing Republicans, who control the House, bear responsibility.  Despite Johnson’s warning, top appropriators remain optimistic. House Appropriations Ranking Member Rosa DeLauro insisted Democrats had sent an offer, while Chair Tom Cole assured, “We are not shutting down the government.”  With five weeks until a potential shutdown, lawmakers must finalize spending agreements quickly. Rep. Chip Roy suggested a continuing resolution may be necessary to avoid a lapse in funding.

NETANYAHU:  President Donald Trump hosted Israeli Prime Minister Benjamin Netanyahu at the White House, proposing U.S. control over Gaza, clearing the area for redevelopment and permanent resettlement. He did not rule out deploying U.S. troops, calling Gaza “a hell hole” and envisioning it as the “Riviera of the Middle East.”  On Iran, Trump pledged stricter sanctions to cripple its economy and prevent nuclear weapons. Netanyahu praised Trump as “Israel’s greatest friend in the White House” and credited him for moving the U.S. Embassy to Jerusalem and brokering the Abraham Accords.  As Israel-Hamas cease-fire talks continue, Trump expressed hope for lasting peace but emphasized U.S. strength. He announced the U.S. withdrawal from the U.N. Human Rights Council and ended funding for the U.N. Relief and Works Agency. Both leaders criticized former President Joe Biden, with Netanyahu highlighting Trump’s swift military and diplomatic actions.

TARIFFS:  The president will announce today a 25 percent tariff on all steel and aluminum imports, escalating his long-threatened global trade war. Speaking to reporters aboard Air Force One on Sunday afternoon, Trump stated that these universal tariffs on imported metals will be followed by additional measures this week targeting countries with perceived trade imbalances with the U.S. His latest actions come shortly after China’s retaliatory trade measures against certain U.S. imports took effect Sunday night.

CHINA TARIFFS:  China imposed tariffs and launched an antitrust probe into Google minutes after President Trump’s new tariffs on Chinese imports took effect. The U.S. delayed similar tariffs on Canada  and Mexico for 30 days amid negotiations.  China announced 15% tariffs on U.S. coal and LNG and 10% on crude oil and autos, while expanding export controls on critical minerals vital to U.S. tech. It also investigated Google and placed PVH Group and Illumina on an economic blacklist. Trump’s order also suspended a popular trade exemption, the de minimis provision. It has let bargain platforms such as Shein and Temu skirt import duties and red tape on low-value packages from China.

SEC. RUBIO:  Secretary of State Marco Rubio began his first foreign trip in office, traveling to Central America to advance President Donald Trump’s top priorities: curbing illegal immigration and reclaiming U.S. control over the Panama Canal. His visit underscores both Rubio’s personal ties to the region and the administration’s focus on Latin America.  Rubio’s first stop is Panama, where President José Raúl Mulino has firmly rejected negotiations over canal ownership. However, Rubio insists the U.S. has national security concerns over China’s growing influence in the region. His five-nation tour will also address migration, drug trafficking, and U.S. foreign aid policies.

DOJ:  Newly sworn-in Attorney General Pam Bondi immediately issued 14 directives, signaling a major shift in Justice Department priorities under President Donald Trump.  She established a task force on the "weaponization" of DOJ, targeting investigations into Trump, including cases brought by Special Counsel Jack Smith, Manhattan DA Alvin Bragg, and New York AG Letitia James. Bondi also ordered a crackdown on illegal immigration, redirecting FBI terrorism task forces and dissolving the Foreign Influence Task Force.  She reinstated the federal death penalty, ending a Biden-era moratorium, and launched an "Oct. 7 Task Force" to prosecute Hamas-related crimes in the U.S. She also moved to eliminate DEI programs, pausing DOJ grants supporting sanctuary cities and groups assisting undocumented immigrants.  Bondi warned career DOJ attorneys against defying Trump’s agenda, threatening termination for noncompliance. Her sweeping changes set the stage for legal challenges and major policy shifts.

SANCTUARY CITIES:  Attorney General Pam Bondi has issued a directive to halt federal funding to jurisdictions that do not comply with federal immigration authorities. This action primarily targets "sanctuary jurisdictions"—states or localities that refuse to cooperate with federal immigration enforcement. The Department of Justice will pause the distribution of all funds to these jurisdictions until a comprehensive review is completed. Additionally, the DOJ will terminate any agreements found to be in violation of the law or associated with waste, fraud, or abuse, and will initiate procedures to reclaim funds where appropriate. The directive also prohibits the DOJ from entering into new contracts or agreements with non-governmental organizations that support or provide services to removable or illegal aliens. This move underscores the administration's commitment to enforcing federal immigration laws and ensuring that federal funds are not allocated to entities that hinder these efforts.

BIRTHRIGHT CITIZENSHIP:  A federal judge extended a block on President Trump’s order denying birthright citizenship to children of undocumented migrants.  U.S. District Judge Deborah Boardman ruled that the order contradicts 250 years of U.S. history and likely violates the 1898 Supreme Court ruling in Wong Kim Ark. She issued a nationwide injunction, stating the executive order is likely unconstitutional and harms public interest.  Trump’s order, signed on his first day in office, restricts citizenship for children born to non-permanent residents.

EPA:  EPA Administrator Lee Zeldin on Tuesday introduced the "Powering the Great American Comeback Initiative," focusing on AI leadership, streamlined permitting, and auto job growth.  Zeldin’s plan encourages AI investment in the U.S. while ensuring data centers use clean, American-made energy. Environmentalists warn of AI's high energy and water consumption, but Trump’s Jan. 23 executive order rolled back Biden-era AI regulations.  The plan also seeks to expedite environmental permits, aligning with Trump’s directive to replace federal permitting rules with non-binding guidance. Additional goals include boosting U.S. auto manufacturing, lowering energy costs, and protecting air, land, and water.

DEBT LIMIT:  Treasury Secretary Scott Bessent confirmed his department is consulting major U.S. debt holders on their views regarding the federal debt ceiling. Speaking with Bloomberg’s Saleha Mohsin, Bessent said Treasury’s markets desk is actively engaging large bondholders to assess concerns about debt-limit volatility.  During his Senate confirmation hearing, Bessent warned of the fragile equilibrium in U.S. bond sales. While he has opinions on the issue, he emphasized the need for data from investors.  The $28 trillion Treasury market experiences major swings during debt-limit standoffs, as short-term bill issuance halts and later surges to replenish cash reserves. Some analysts suggest Treasury reduce cash holdings as a long-term strategy.  Bessent reiterated that “the United States will never default on its debt” and remains open to eliminating the statutory debt ceiling if President Trump pursues that policy. Trump has previously called abolishing the limit “the smartest thing” for lawmakers to do.

LAST WEEK’S EXECUTIVE ORDES: 

Addressing Egregious Actions of The Republic of South Africa

This Executive Order addresses perceived violations of citizens' rights in South Africa, specifically the Expropriation Act 13 of 2024, which allows the government to seize property from ethnic minority Afrikaners without compensation. The order outlines U.S. policy to halt aid to South Africa while encouraging the resettlement of Afrikaner refugees fleeing government-sponsored discrimination. It directs U.S. agencies to cease assistance programs and prioritize humanitarian relief for affected individuals, asserting that continued injustices will lead to U.S. withdrawal of support.

Establishment of The White House Faith Office

This Executive Order establishes the White House Faith Office within the Executive Office of the President to empower faith-based organizations, community entities, and houses of worship in their efforts to support American families and communities. The Office is tasked with ensuring these entities can compete for federal funding, enhance their service capacity, and protect religious liberty. It also aims to facilitate collaboration between faith-based organizations and the federal government while promoting innovative initiatives that address various social issues.

Protecting Second Amendment Rights

This Executive Order aims to reinforce and protect the Second Amendment rights of American citizens. It mandates the Attorney General to review all relevant actions taken by executive agencies since January 2021 to identify any measures that may infringe upon these rights. The review will focus on regulations, policies, and classifications related to firearms and related litigation. The Attorney General is required to propose a plan of action within 30 days to address any infringements, which will subsequently be finalized for implementation. The order emphasizes the importance of safeguarding these rights as foundational to American liberty.

Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China

This Executive Order amends a prior directive aimed at addressing the synthetic opioid supply chain originating from China. It updates provisions concerning duty-free treatment for specific articles, allowing such treatment to cease if the Secretary of Commerce notifies that sufficient systems for processing and collecting applicable tariffs are in place. The order reaffirms existing authorities and clarifies that it does not create enforceable rights against the U.S. government. It underscores efforts to tackle the opioid crisis through economic measures.

Imposing Sanctions on the International Criminal Court

This Executive Order imposes sanctions on the International Criminal Court (ICC) following its actions against the United States and Israel, claiming these actions are illegitimate and harmful. It declares a national emergency, asserting that ICC's investigations threaten U.S. national security and foreign policy. The order blocks property of those associated with the ICC's actions and suspends entry to the U.S. for ICC officials and their families. It requires a report on additional individuals for potential sanctions and prohibits any transactions that evade its provisions.

Eradicating Anti-Christian Bias

This Executive Order aims to address perceived anti-Christian bias in government actions and policies. It establishes a Task Force within the Department of Justice, chaired by the Attorney General, to review prior administration practices for any unlawful targeting of Christians. The Task Force is tasked with recommending revocations of such policies, enhancing protections for religious liberties, and reporting its findings to the President. This initiative stems from claims of increased hostility towards Christians and alleged negligence in addressing violence against Christian institutions.

Keeping Men Out of Women’s Sports

This Executive Order aims to protect opportunities for women and girls in sports by prohibiting biological males from competing in women's sports categories. It emphasizes adherence to Title IX, mandating federal funding rescindments for educational institutions that violate this principle. The order highlights concerns about safety, fairness, and dignity for female athletes. It mandates enforcement actions against institutions that permit male participation, and also seeks to influence international sports policies to establish clear sex-based eligibility criteria, promoting the interests of female athletes.

Withdrawing the United States from and Ending Funding to Certain United Nations Organizations and Reviewing United States Support to All International Organizations

This Executive Order refocuses U.S. involvement in international organizations, specifically targeting certain United Nations bodies. It mandates a withdrawal of U.S. participation and funding from the UN Human Rights Council (UNHRC), the UN Educational, Scientific, and Cultural Organization (UNESCO), and the UN Relief and Works Agency for Palestine Refugees (UNRWA). The order cites concerns over anti-American and anti-Israel actions within these groups and outlines a review process to assess U.S. support for all international organizations, aiming to align them better with American interests

National Security Presidential Memorandum/NSPM-2

This Presidential Memorandum outlines a comprehensive strategy for the United States to impose maximum pressure on Iran, aiming to deny it access to nuclear weapons, disrupt its military capabilities, and counter its support for terrorism. It delineates specific actions for various government departments, including the imposition of heightened sanctions, diplomatic efforts to isolate Iran internationally, and legal measures to investigate Iranian operations in the U.S. The Memorandum reflects concerns about Iran's hostile activities, its nuclear program, and its role as a state sponsor of terrorism.

Progress on the Situation at Our Northern Border

This Executive Order addresses concerns regarding the failure of Canada to effectively combat drug trafficking and related crimes contributing to security threats in the U.S. Initially, tariffs were imposed on Canadian goods to mitigate these issues. However, recognizing Canada's recent cooperative efforts, the order pauses the implementation of additional tariffs until March 4, 2025. During this pause, an assessment will continue to evaluate Canada's actions in addressing the crisis, with potential reinstatement of tariffs if the situation deteriorates.

A Plan for Establishing a United States Sovereign Wealth Fund

This Executive Order establishes a framework for creating a United States Sovereign Wealth Fund aimed at enhancing the long-term financial health and global leadership of the nation. It emphasizes the importance of managing national wealth for the benefit of American citizens, with goals of improving fiscal sustainability, reducing tax burdens on families and small businesses, and ensuring economic security for future generations. The order mandates the Secretaries of the Treasury and Commerce to develop a detailed plan within 90 days, addressing funding mechanisms, investment strategies, and governance.

Progress on the Situation At Our Southern Border

This Executive Order addresses concerns about illegal migration and drug trafficking from Mexico to the United States, which were deemed to pose a significant threat to national security and the economy. It identifies actions taken by the Mexican government to mitigate these issues and pauses the implementation of a previously proposed 25% tariff on goods from Mexico until March 4, 2025. This pause allows for further assessment of Mexico's efforts. The order includes provisions for potential reimplementation of tariffs if conditions do not improve.