Washington On One - March 17, 2025

THE LEDE:  Government funded until Sept 30 2025…The Trump administration said it arrested and expelled hundreds of alleged members of Venezuela’s Tren de Aragua gang to El Salvador for imprisonment, even as a federal judge ordered a halt to some deportations…US Senate confirms Trump’s cabinet…The S&P 500 slid into a correction on Thursday…Navy warship deployed on U.S.-Mexico border mission…Trump threatens, then reverses, new Canadian tariffs…EU announces $28 billion in counter tariffs on U.S. goods…Education secretary announces mass layoffs at DoE…The U.S. and Iraq have killed Abdallah Makki Muslih al-Rifai, a leader of the Islamic State in Iraq and Syria and the terrorist group’s head of global operations…The Trump Administration on Saturday ordered nearly all 1,300 employees of Voice of America (VOA) to be placed on leave…White House pulls CDC Nominee, former Congressman Dave Weldon (R-FL), from consideration…Jeanne Shaheen (D-NH) will retire from the Senate…Rep. Raúl Grijalva, one of Arizona's longest-serving congressmen, dies at 77…RIP former Rep. Nita Lowey, first woman to lead House Appropriations…RIP former Wyoming Senator Alan Simpson…

THE WEEK AHEAD:   House and Senate out this week…The Kremlin confirmed that Russian President Vladimir Putin is due to speak to President Donald Trump on Tuesday amid the US push for a ceasefire in the war in Ukraine… Trump is scheduled to take part in a Kennedy Center board meeting and tour at 3 p.m. Eastern time Monday…

NUMBERS:  The consumer price index increased 2.8% in February from a year ago, Wednesday’s report from the Labor Department showed, down from 3% the previous month. Core prices, which exclude the volatile food and energy categories, rose 3.1% from a year earlier, down from 3.3% in January. The core figure is the lowest since April 2021… More registered voters say the U.S. is heading in the right direction (44%) than at any point since early 2004, though a majority (54%) still say the country is on the wrong track, according to an NBC News poll…Population growth in U.S. metro areas outpaced previous years and is largely being fueled by international migration, the Census Bureau found. In 2024, immigration drove the overall U.S. population growth to its fastest rate in 23 years. The U.S. now has more than 340 million residents.  

CONFIRMATIONS:  Lori Chavez-DeRemer to be Secretary of Labor…Stephen Miran to be Chair of White House Council of Economic Advisors…Steven Bradbury to be Deputy Secretary of Transportation…Keith Sonderling to be Deputy Labor Secretary…Jeffrey Kessler to be Undersecretary of Commerce for Industry and Security…William Pulte to be Director of the Federal Housing Finance Agency…Abagail Slater Assistant Attorney General for Antitrust

CIRCULAR FIRING SQUAD:  Senate Minority Leader Chuck Schumer is under fire from within his own party after backing a GOP-led funding stopgap that narrowly averted a government shutdown. The decision has exposed deep divisions among Democrats, with House Minority Leader Hakeem Jeffries refusing to support his fellow Brooklynite.  A Democratic strategist close to former Speaker Nancy Pelosi warned that Jeffries is letting emotions dictate his strategy, while former Pelosi aide Ashley Etienne lamented the party’s lack of coordination, saying, “To beat Trump, we need clarity of purpose, discipline, and coordination. It’s clear none of that exists right now.”  Some Senate Democrats are now questioning Schumer’s leadership, with one senator telling POLITICO that discussions have started about replacing him. Schumer, however, remains defiant, insisting he has the support of his caucus.  Progressive groups are already plotting political consequences. Adam Green of the Progressive Change Campaign Committee warned Schumer will face protests at upcoming book tour stops.

TRADE:  President Trump’s escalating trade war is hitting the alcohol industry, with his latest threat to impose 200% tariffs on European wine and Champagne in response to the EU’s 50% levy on American whiskey.  The U.S. imports over $6.7 billion in wine annually, mostly from France and Italy, making the proposed tariffs a major concern for the hospitality sector. Industry groups warn of job losses and economic harm, urging a zero-for-zero tariff agreement with the EU.  Trump, however, remains defiant, signaling he won’t back down from retaliatory measures if the EU maintains its whiskey tariffs.

HOUTHIS:  In the most significant strikes of Trump’s presidency, the U.S. bombarded Houthi targets in Yemen, aiming to weaken the Iranian-backed militants' ability to attack regional shipping. Trump warned Iran to stop supporting the Houthis. The campaign, expected to last weeks, has already killed at least 31 people, per the Houthi-run health ministry, though that remains unverified. The U.S. claims it targeted Houthi leaders. Meanwhile, Trump’s new policy allowing military strikes without White House sign-off has also led to attacks on ISIS in Syria and al-Shabab in Somalia. The Houthis vow retaliation.

UKRIANE:  Ukraine has agreed to a U.S. proposal for a 30-day ceasefire with Russia, marking a potential breakthrough in the three-year war. The Kremlin has yet to respond.  Secretary of State Marco Rubio emphasized, "The ball is now in their court." The U.S. has resumed military aid and intelligence sharing with Ukraine, signaling a shift in pressure toward Russia. President Trump expressed hope for Russian approval and invited Ukrainian President Zelensky to the White House.  Negotiations on a broader peace deal, including security guarantees, are set to begin, with Trump’s envoy meeting Putin in Moscow soon.

BESSENT:  Treasury Secretary Scott Bessent described the recent 10% drop in the S&P 500 and 11% decline in the Nasdaq as a necessary correction, warning that prior stock gains reflected an unsustainable “euphoric” market.  While Treasury secretaries rarely welcome market declines, Bessent emphasized that economic “transition” is essential as deficits shrink and government spending slows. He compared today’s risks to the 2008 financial crisis, arguing that earlier intervention could have prevented it.  Bessent declined to rule out a recession but said long-term growth depends on tax policy, deregulation, and energy security, despite ongoing uncertainty from Trump’s tariff policies. 

EPA:  The EPA announced plans to revise or rescind two key climate policies—the endangerment finding and the social cost of carbon—signaling a major shift in U.S. environmental policy.  The endangerment finding justifies regulating greenhouse gases, while the social cost of carbon assigns a monetary value to climate pollution. The Trump administration aims to limit EPA’s regulatory power, arguing prior decisions didn’t fully consider economic impacts.  Critics call it a political move to weaken climate protections, and lawsuits are expected. The administration also plans to recalculate the social cost of carbon, a key metric shaping future climate regulations.

TIKTOK:  The White House is in advanced talks with Oracle to manage TikTok’s U.S. operations. Key concerns remain over the role of the app’s Chinese founders. Sen. J.D. Vance and national security adviser Mike Waltz are leading negotiations, while senators seek more transparency. The deal would make Oracle responsible for safeguarding U.S. user data and preventing Chinese government access, a major national security concern.

CDC:  The collapse of the Trump administration’s effort to install vaccine critic Dave Weldon as CDC director highlights the limits of HHS Secretary Robert F. Kennedy Jr.’s influence on public health policy. Weldon’s long history of vaccine skepticism and poor interview performance derailed his nomination, despite Kennedy’s backing.  Republican senators, including Sen. Bill Cassidy (R-La.), determined there weren’t enough votes for confirmation, with Sen. Thom Tillis (R-N.C.) warning against anti-vaccine rhetoric. Given the CDC director’s role in vaccine policy, Weldon’s views posed both political and public health risks, ultimately making his nomination untenable.

RECONCILIATION:  Congressional Republicans are struggling to align on a legislative strategy amid looming deadlines, deep intraparty divisions, and pressure to deliver on Trump’s agenda. While they successfully muscled a funding bill through the House, critical priorities—including tax cuts, border security, defense, and energy—remain stalled as House and Senate Republicans clash over budget resolutions and spending offsets.  Speaker Mike Johnson is pushing an ambitious timeline to pass a sweeping reconciliation bill before Easter, but Senate Republicans are signaling a much slower pace, with some suggesting an August deadline. The House, which passed its budget plan weeks ago, is frustrated by the Senate’s delay, and Majority Leader Steve Scalise has urged GOP committee chairs to publicly pressure the upper chamber.  Further complicating matters, Trump has provided little clear direction, occasionally adding confusion to negotiations. A major sticking point is whether to attach a debt ceiling hike to the reconciliation bill. While Johnson insists it will be included, Senate Republicans remain divided, fearing it could derail negotiations.  If the timeline slips into late summer, Johnson risks backlash from hardliners demanding immediate border funding and more aggressive spending cuts. Delays could also force a separate, high-stakes debt ceiling fight, something Johnson is eager to avoid. Senate Majority Leader John Thune has been meeting regularly with Johnson to bridge differences, but the path forward remains uncertain, with Republicans scrambling to resolve their deep divisions before deadlines force their hand.

TAX:  President Trump told GOP senators he supports an accounting method that would make trillions in tax cuts appear cost-free, easing passage of a massive Republican tax package. Sen. Steve Daines (R-Mont.) confirmed Trump’s backing, saying it opens new avenues for spending cuts.  House and Senate Republicans are divided on the tactic, known as current policy baseline, with Speaker Mike Johnson increasingly open to it. Hard-liners insist on traditional accounting, which shows the tax cuts’ full cost. Resolving this will be crucial as Congress seeks to deliver on reauthorizing the “Trump Tax Cuts”, while potentially not needing the full scope of spending cuts.  GOP senators, still struggling to unify around Trump’s agenda, are holding ongoing meetings to gauge support for the tax and spending provisions.

WAIT…WHAT IS IT?   "Current Policy Baseline."  This approach assumes that existing tax policies—such as the 2017 Trump tax cuts—will be extended indefinitely, rather than expiring as scheduled under current law. By using this baseline, the cost of extending tax cuts does not appear as new spending, effectively making them seem "free" in budget projections.  Critics argue that this method masks the true fiscal impact, while supporters claim it provides a more realistic picture of long-term policy intentions. Traditional congressional budgeting, in contrast, follows the "current law baseline," which assumes policies will expire as scheduled, making extensions appear costly.

IMMIGRATION:  For the first time since World War II, Trump invoked the Alien Enemies Act of 1798 to deport members of an alleged foreign invading force—Venezuela’s Tren de Aragua gang—without judicial review. But federal judge James Boasberg immediately blocked the move, even ordering planes in transit to turn around. His temporary restraining order lasts two weeks, during which he’ll determine the legality of Trump’s action.  The Trump administration has already appealed. Trump, who designated Tren de Aragua a foreign terrorist organization, argues he has unilateral authority to expel threats. Opponents warn this could allow deportations without due process. Reports also question whether all deportees are actual gang members.  Before the ruling, the U.S. struck a $6 million deal with El Salvador to imprison 300 alleged Tren de Aragua members for a year. Leavitt announced this morning they had been transferred, along with two MS-13 members.

WATCH THIS SPACE:  The Trump administration proceeded with deporting 250 alleged Venezuelan gang members despite a federal judge’s order to halt the flights mid-air. Officials argue the ruling came too late, as the planes were already over international waters and beyond U.S. jurisdiction.  The deportations, orchestrated by White House Deputy Chief of Staff Stephen Miller and DHS Secretary Kristy Noem, were part of Trump’s invocation of the Alien Enemies Act, granting broad deportation powers. Critics warn this defiance signals a constitutional crisis.  El Salvador’s President Nayib Bukele mocked the court ruling, while the White House remains confident in a Supreme Court victory.

TRAVEL BAN?:  The New York Times reported that the Trump administration is weighing expanded travel restrictions on up to 43 countries. A draft plan includes a “red” list banning entry from 11 nations.  “Orange” and “yellow” lists impose visa limits or compliance deadlines. Critics call it discriminatory; the policy remains under review. Red List (All Travel Banned)  Afghanistan, Bhutan, Cuba, Iran, Libya, North Korea, Somalia, Sudan, Syria, Venezuela, Yemen  Orange List (Visas Sharply Restricted), Belarus, Eritrea, Haiti, Laos, Myanmar, Pakistan, Russia, Sierra Leone, South Sudan, Turkmenistan  Yellow List (60 Days to Address Concerns)  Angola, Antigua and Barbuda, Benin, Burkina Faso, Cambodia, Cameroon, Cape Verde, Chad, Republic of Congo, Democratic Republic of Congo, Dominica, Equatorial Guinea, Gambia, Liberia, Malawi, Mali, Mauritania, St. Kitts and Nevis, St. Lucia, São Tomé and Príncip, Vanuatu, Zimbabwe

CRYPTO:  Senate Banking on Thursday approved digital assets legislation that would create a regulatory structure for stablecoins, marking the first time a Senate panel has ever advanced major crypto legislation, our Jasper Goodman reports. It was one of Congress’ most significant steps yet toward giving the crypto sector a long-sought stamp of legitimacy that could turbocharge its growth.  Five Democrats voted for the GOP-led legislation, despite strong opposition from the top Democrat on the Banking panel, Sen. Elizabeth Warren.

THE COURTS – PERKINS COIE:  On Wednesday federal judge ruled Trump’s executive order punishing Democratic-linked law firm Perkins Coie is likely unconstitutional. U.S. District Judge Beryl Howell blocked provisions barring its attorneys from federal agencies or buildings, calling the order’s “retaliatory animus” blatant and a clear violation of First Amendment protections against viewpoint discrimination.

THE COURTS – FEDERAL EMPLOYEES:  A federal judge ordered agencies to reinstate tens of thousands of probationary employees fired during Trump’s push to shrink the federal workforce.  U.S. District Judge William Alsup called the mass firings a “sham” by the government’s HR office to bypass legal workforce reduction rules. He directed the Departments of Defense, Treasury, Energy, Agriculture, and Veterans Affairs to “immediately” rehire affected employees, ruling the terminations unlawful.  The decision is expected to be appealed.

THE COURTS – NATION WIDE INJUNCTIONS:  On Thursday, President Trump urged the Supreme Court to eliminate a key legal tool used to block his policies. In an emergency appeal, Trump seeks to narrow or halt three nationwide injunctions against his executive order ending birthright citizenship. His request could reshape judicial power far beyond this policy.  Judges have frequently used nationwide injunctions to stall Trump’s agenda, including efforts to end DEI programs and cut federal medical research. Acting Solicitor General Sarah Harris argues district judges lack authority to issue sweeping nationwide orders, warning the practice has reached "epidemic proportions."  The case could impact future litigation, particularly on immigration and state-led lawsuits against federal policies.

THE COURTS – DEI EO:  On Friday, a federal appeals court has given President Donald Trump’s administration the go-ahead to enforce a pair of controversial executive orders that seek to root out diversity, equity and inclusion efforts in federal agencies and government contractors.  The three-member appeals panel — including two judges appointed by Democratic presidents — lifted a lower court’s injunction that had put the policy on hold last month.  The ruling from the panel of the Richmond, Virginia-based 4th Circuit Court of Appeals is not a final decision on the legality of Trump’s anti-DEI policy. It merely allows the government to administer the policy while litigation continues.

2028 AIN’T TOO FAR AWAY:  Former Transportation Secretary Pete Buttigieg is fueling speculation about a 2028 presidential run after ruling out Michigan gubernatorial and Senate bids. He joins a growing field of potential Democratic contenders, including Gavin Newsom, Tim Walz, JB Pritzker, Rahm Emanuel, Gretchen Whitmer, and Jared Polis.  Newsom has built a national donor network, while Emanuel is urging Democrats to rethink their strategy. Walz is launching a national tour, Pritzker is positioning himself as a progressive leader, and Whitmer is balancing centrism with party priorities.  Democrats remain divided on how to challenge Trump, with contenders crafting different strategies to position themselves for 2028.

HOUSE CALENDAR ASPRIATIONS:  With government funding secured through September, House Republicans are prioritizing bills to overturn Biden administration regulations and advance conservative policies.   Week of March 24: The Deterrent Act (tightening foreign funding disclosures in U.S. colleges) and resolutions to reverse Biden’s energy regulations on commercial refrigeration.  Week of March 31: The SAVE Act, requiring proof of citizenship for voting, returns for debate. Key moderate Democrats could sway its outcome.  Week of April 7: GOP leaders may consider a House-Senate budget resolution for reconciliation, alongside potential additional regulatory rollbacks.

ALMOST HOME:  A SpaceX Dragon capsule docked Sunday with the International Space Station, bringing a replacement crew and paving the way for NASA astronauts Suni Williams and Butch Wilmore to finally return home after an unexpectedly prolonged stay of nine months in space. After handover duties between the crews, the NASA pair will begin a journey back to Earth, possibly as early as Wednesday morning.  We’ll put a candle in the window….