Washington on One - July 14, 2025

THE LEDE:   Trump’s threats to further escalate tariffs continued over the weekend, with a  Saturday announcement that the U.S. would charge a 30% tariff on goods from the EU and Mexico, effective Aug. 1. “This is now the time for negotiations,” European Commission President Ursula von der Leyen said…MAGA whisperer Steve Bannon warns GOP could lose 40 House seats over Epstein files…Trump, finally fed up with Putin, teases more Russian sanctions “at my option”… The European Commission has dropped plans to levy a tax on digital companies, a move that hands victory to Donald Trump and U.S. tech giants like Apple and Meta… Supreme Court green-lights Trump’s order for mass firings across federal government…State Dept. lays off more than 1,300 people as Rubio pledges more efficiency… Over 2,000 senior staff set to leave NASA under agency push… Trump named Transportation Secretary Sean Duffy to run it temporarily…Judge blocks Trump’s order revoking birthright citizenship… Trump administration sues California over transgender athlete policy… DHS subpoenas Harvard over international student information… Biden’s physician declines to cooperate in GOP probe of former president’s mental fitness… Powell requests IG review on $2.5 billion renovation amid Trump pressure… Senate report details "preventable failures" surrounding Butler assassination attempt… The price of a postage stamp went up to 78 cents this weekend…

THE WEEK AHEAD:   The House returns. It will take up cryptocurrency legislation and work through appropriations bills. The Senate will consider Trump’s rescissions request and more Trump nominees, including Luke Pettit, an aide to Sen. Bill Hagerty, to be assistant secretary of the Treasury and Joseph Edlow to be the director of U.S. Citizenship and Immigration Services at DHS.

CONFIRMATIONS:   The Senate confirmed Bryan Bedford to be Administrator of the Federal Aviation Administration at the Department of Transportation, Wells Griffith to be Undersecretary of the Department of Energy, Bill Briggs to be Deputy Administrator of the Small Business Administration, Scott Kupor to be Director of the Office of Personnel Management, and Jonathan Gould to be Comptroller of the Currency at the Department of Treasury.

THE FED:  Fed Chair Jerome Powell has signaled a lower bar for cutting rates than seemed likely this spring. Amid debate over how to address risks from Trump’s tariffs, Powell suggested that softer inflation or weaker job data could justify cuts by summer’s end. Minutes from the Fed’s June meeting show most officials expect to resume cuts this year.

TARRIFS:  The U.S. announced a broad expansion of tariffs set to take effect August 1, targeting more than 20 countries with rates between 15% and 40% as part of a new “reciprocal” trade policy. Key commodities like copper, steel, and aluminum will see tariffs raised to 50%, with copper designated as a national security concern. President Trump raised tariffs on Brazilian imports from 10% to 50%, citing political retaliation for Bolsonaro’s trial, and imposed a 35% tariff on Canadian goods, linking it to fentanyl-related issues. The EU is preparing a large-scale retaliation package but is holding off until formal U.S. notices are delivered. ASEAN countries have expressed concern, though U.S. officials are signaling room for case-by-case negotiations. Markets have largely absorbed the news, but analysts warn the higher tariffs could raise consumer prices, lower earnings, and strain trade relationships in the coming months.

UKRAINE:  President Trump will announce a new plan Monday to arm Ukraine with offensive weapons, marking a sharp shift from his previous policy of providing only defensive systems, according to two sources familiar with the plans.  The move could escalate the conflict, with U.S., Ukrainian, and European officials hoping the weapons will shift the war’s trajectory and force Russian President Putin to reconsider a ceasefire. Sources said the package may include long-range missiles capable of striking targets deep inside Russia, though no final decisions have been confirmed.  Sen. Lindsey Graham (R-S.C.) told Axios, “Trump is really pissed at Putin. His announcement is going to be very aggressive.”  The plan, to be unveiled alongside NATO Secretary General Mark Rutte, involves European nations paying for U.S.-made weapons to be sent to Ukraine.  The shift follows Trump’s frustration after a July 3 call in which Putin outlined plans to escalate the war.  Trump told reporters Sunday the package would include Patriot air defenses and that “Europe is going to pay us 100% for them.”

GAZA:  Senior U.S., Israeli, and Qatari officials held secret talks at the White House on Tuesday focused on a key sticking point in ceasefire and hostage deal negotiations for Gaza, sources tell Axios.  President Trump has met with Israeli Prime Minister Netanyahu twice in 48 hours, pressing for a deal. White House envoy Steve Witkoff said three of four major issues have been resolved. The remaining dispute centers on how far Israel’s forces would withdraw during the proposed 60-day truce.  Sources say Qatar and the U.S. rejected Israel’s initial proposal as too limited. Witkoff warned Israel that a withdrawal resembling the hardline “Smotrich plan” would be unacceptable to the Trump administration.  Following the talks, Israel presented a new map with broader withdrawals, moving the process forward.  The proposed deal would release 10 hostages alive and the remains of 18 others. Trump said it’s “very possible” progress was made. Talks continue.

RUSSIAN SANCTIONS:  Speaker Mike Johnson and Sen. John Thune say they’re ready to move forward on a bipartisan bill to impose additional sanctions on Russia, but President Trump wants more control.  A senior administration official said the bill must reflect the president’s authority over foreign policy, despite revisions from Sens. Lindsey Graham and Richard Blumenthal to expand presidential waiver powers.  “The administration is not going to be micromanaged by Congress,” the official said.  Thune praised progress and said the bill would strengthen Trump’s leverage in Ukraine talks. He hopes for Senate action before the August recess.

BACK FOR MORE?:   Senate Finance Republicans are eyeing tax and health policies for a possible second budget reconciliation package this fall. Sen. James Lankford said he wants to reform pharmacy benefit managers (PBMs) after bipartisan efforts stalled. His priorities include addressing drug “tiering” and “spread pricing,” where PBMs charge insurers more than they reimburse pharmacies.

APPROPRIATIONS:  The Senate appropriations process is on hold after Sen. Lisa Murkowski (R-Alaska) backed a Democratic amendment to block President Trump’s plan to relocate the FBI headquarters within Washington, D.C. Senate Appropriations Chair Susan Collins (R-Maine) recessed the meeting after the amendment’s surprise passage. However, the committee advanced the FY 2026 Agriculture and Legislative Branch Appropriations bills.  Sen. Chris Van Hollen’s (D-Md.) amendment bars funds from relocating the FBI outside Greenbelt, Maryland. It passed 15-14, with Murkowski the only Republican supporting it. Some Republicans withdrew support for the larger Commerce-Justice-Science bill, prompting Collins to pause proceedings.  In the House, appropriators released their FY 2026 Transportation-HUD and Energy-Water bills. The Transportation-HUD bill cuts $9.4 billion, reducing discretionary funding to $89.9 billion. The Energy-Water bill prioritizes nuclear and defense efforts, cutting renewables, with $57.3 billion total funding. Subcommittee and full committee markups continue this week across multiple spending bills.

BIRTHRIGHT CITIZENSHIP:  A federal judge in New Hampshire on Thursday temporarily blocked President Trump’s executive order restricting birthright citizenship and granted class-action status to a lawsuit challenging the policy. The lawsuit was brought on behalf of immigrant parents and their children who would be denied citizenship under the order.   U.S. District Judge Joseph Laplante approved class-action status, but only for affected infants — not their parents. He also issued a preliminary injunction preventing the order from taking effect nationwide but stayed his ruling for seven days to allow the Department of Justice time to appeal.   DOJ attorneys argued the plaintiffs’ request was overly broad and that the motion for class certification and injunctive relief was premature. The case now proceeds with both sides preparing for a potential appellate review.

RECISSIONS:   Congress faces a Friday deadline to deliver on President Trump’s $9.4 billion rescissions request targeting foreign aid and public media, while also trying to salvage government funding talks that are unraveling.  White House budget director Russ Vought will meet with senators Tuesday to discuss the plan, as the Senate holds its first procedural vote on the rescissions bill. Senate Appropriations Chair Susan Collins is emerging as a key player. She opposes the rescissions in their current form and is looking at amendments.

“PUBLIC CHARGE”:  Health Secretary Robert F. Kennedy Jr. announced Thursday that the Department of Health and Human Services is restricting undocumented immigrants’ access to programs like Head Start, community health centers, and other federally funded services. While undocumented immigrants are already barred from most federal benefits, HHS is going further by rescinding a 1998 policy that had allowed access to certain programs. The change reclassifies services such as free preschool, health clinics, mental health and substance use treatment, and family planning as federal benefits, making them off-limits to undocumented individuals. HHS noted that more programs could be added to the restricted list.

STUDENT LOANS:  The federal government is retreating from its central role in financing higher education under President Trump’s new tax-and-spending law, which imposes strict borrowing caps and eliminates popular repayment plans. Graduate students will be limited to $100,000 for master’s degrees and $200,000 for professional degrees, while Parent PLUS loans are capped at $20,000 annually. The Graduate PLUS loan program is eliminated entirely.  Borrowers will also lose access to income-driven repayment plans like SAVE and Pay As You Earn. Instead, new loans will offer a fixed plan or a new income-driven option with 30-year forgiveness.  Critics warn the changes will drive families to higher-cost private loans, reducing access to graduate education. Private lenders like SoFi see an opportunity to fill the gap.  Republicans argue the reforms will reduce taxpayer risk and pressure colleges to lower costs. Advocates fear it will price out middle-class families and reshape access to higher education.

DEPT OF ED:  The Trump administration has delayed the release of federal funding for after-school and summer programs under the 21st Century Community Learning Centers (21st CCLC) program for the 2025–2026 school year. These funds were appropriated by Congress in the FY25 budget, signed into law by the president on March 15, 2025, and were expected to be available to states by July 1.   However, the Department of Education issued a memo stating it will not obligate funds until it completes a review of 21st CCLC and four other formula grant programs. The memo states that the department is ensuring spending aligns with "the President’s priorities and the Department’s statutory responsibilities."   The delay may affect nearly 10,000 program sites and up to 1.4 million students. While some states may use remaining FY24 funds to sustain summer programs temporarily, the long-term viability of many sites is in question if the funding freeze continues.  

EPSTEIN:  Steve Bannon warned Friday that Republicans could lose dozens of House seats in 2026 over the Trump administration’s handling of files related to Jeffrey Epstein.  “If we lose 10% of the MAGA movement, we’re gonna lose 40 seats in ’26. We’re gonna lose the president,” Bannon said on his “War Room” podcast.  Bannon’s comments followed a Justice Department memo confirming Epstein died by suicide and had no client list. Attorney General Pam Bondi, who previously suggested she possessed such a list, defended the DOJ’s findings but faced backlash.  FBI Director Dan Bongino reportedly considered resigning over the controversy.  Trump dismissed Epstein questions at a Cabinet meeting, saying: “Are people still talking about this creep? That’s unbelievable.”

FEDERAL EMPLOYEES:  Tens of thousands of federal workers face layoffs this summer after the Supreme Court cleared the way for agencies to proceed with reductions in force (RIFs).  Critics warn the cuts will permanently weaken the government’s capacity. The Trump administration says it’s a step toward greater efficiency.  Thousands of employees across 19 agencies had been on paid leave since receiving termination notices this spring, pending the court’s decision. With the stay lifted, agencies are moving ahead.  The State Department began layoffs Friday, announcing 3,000 departures in a cable from Secretary Marco Rubio, including 1,353 job cuts.

AUTO PEN:  Former President Biden told The New York Times he authorized widespread use of the autopen at the end of his presidency, including for pardons and clemency, because “we’re talking about a whole lot of people.”  House and Senate Republicans, along with Trump’s Justice Department, are investigating whether Biden’s health affected his ability to serve and whether aides abused the autopen to sign documents without his direct involvement.  Biden said, “I made every decision,” though aides acknowledged he didn’t approve every individual case but did approve the broader criteria.  Emails obtained by The Times show then-Chief of Staff Jeff Zients authorized autopen use on Jan. 19, 2025.

WATCH THIS SPACE:  Not for nothing, but anyone remember how this turned out the last time TX did this?  We do.  Bet the Hammer does as well. Texas Gov. Greg Abbott announced Wednesday the state Legislature will focus on redistricting during a special session later this year, as Republicans look to defend their narrow House majority in 2026.  The move could potentially reshape the state’s congressional map — which already heavily favors Republicans.  President Donald Trump’s allies have encouraged Texas Republicans to redraw the state’s maps to create more House districts that favor Republicans ahead of next year’s midterms.  POLITICO previously reported that members of the Texas delegation to Congress were wary about a potential redraw. “This is a political play fraught with tons of land mines that the Texas Leg[islature] and governor would never do but for requests from outside,” one Texas GOP lawmaker, granted anonymity to discuss the dynamics, told POLITICO last month.  Texas is currently facing a lawsuit over the congressional maps the state drew in 2021 after claims that the maps underrepresented nonwhite Texas voters. The Department of Justice originally filed the lawsuit during the Biden administration but withdrew from the challenge after Trump returned to office.