Washington On One - May 19, 2025

THE LEDE:  House GOP struggles with One Big beautiful Bill Act amid conservative pushback (they know the Senate gonna change it to right?)…Moody’s downgrades US credit rating…Supreme Court, with only Justices Thomas and Alito dissenting, extended a block on Trump’s effort to deport alleged Venezuelan gang members under the Alien Enemies Act…President Joe Biden’s interview with special counsel Robert Hur released (again, where does Hur go to get his reputation back?)…Democrats caught in accusations of a cover-up as media claim WH misled them on Biden condition…The U.S. and China agreed to a 90-day truce, reducing tariffs on Chinese imports from 145% to 30%, while China lowered its tariffs on U.S. goods from 125% to 10% . Despite this easing, a 10% baseline tariff and a 20% levy related to fentanyl remain in place…POTUS fires up the “cruddy” jet and visits the middle east…The White House reported over $2 trillion in deals across the three countries, including $600 billion from Saudi Arabia, $1.2 trillion plus $243.5 billion in economic and defense deals from Qatar, and $200 billion from the UAE. Some figures, like Qatar’s aviation deal, showed inconsistencies (e.g., $96 billion vs. $200 billion). The UAE’s $1.4 trillion AI investment claim over a decade lacks corroboration and seems aspirational. …Deals aside, his speech in the Kingdom signals a reset…Trump’s plan to accept a Boeing aircraft from Qatar as a free Air Force One replacement raised ethical, legal, and security concerns…Talks between Russia and Ukraine in Istanbul ended with the two sides pledging to exchange 1,000 prisoners of war but fell short of an unconditional ceasefire deal… Senate crypto plan re-emerges …One wonders if cracks are emerging in the Senate as Vice President Vance has to cast a tie-breaking vote to kill a bipartisan effort to rebuke Trump’s trade policy…Speaking of the VP,  Vance and Ukrainian President Volodymyr Zelenskyy shook hands at the Vatican Sunday… A federal judge partly sided with HHS over its decision to not approve proposals from Bristol Myers Squibb Co., Novartis AG, Eli Lilly & Co., and Sanofi SA that would dramatically change how they discount medicines to providers that treat lower-income and uninsured patients… FAA seeks to cap Newark Airport flights…President Trump signed an executive order aimed at lowering drug costs for Americans, setting a 30-day deadline for the Department of Health and Human Services to negotiate new drug price tags…Former President Biden diagnosed with prostate cancer (F Cancer by the way)…

THE WEEK AHEAD:  President Donald Trump announced that he plans to call Russian President Vladimir Putin Monday at 10 a.m. to discuss an end to the war...A 1am Wednesday Rules Hearing on the One Big Beautiful Bill Act…Memorial Day Recess in sight…Cabinet Secs back in front of Appropriators, singing for their – smaller – suppers.

HEARINGS OF NOTE:  Monday: The House Rules Committee will meet at 4 p.m. to consider several Congressional Review Act resolutions.  Tuesday: DHS Secretary Kristi Noem will be in front of the Senate Homeland Security and Governmental Affairs Committee.  Secretary of State Marco Rubio will testify before the Senate Foreign Relations Committee and the Senate Appropriations Committee.   HHS Secretary Robert F. Kennedy Jr. will be in front of the Senate Appropriations Committee.  Interior Secretary Doug Burgum will appear before the House Appropriations Committee. SEC Chair Paul Atkins will also be in front of the House Appropriations Committee. EPA Administrator Lee Zeldin will be at the House Energy and Commerce Committee.  Wednesday: FCC Chair Brendan Carr will testify in front of the House Appropriations Committee. Education Secretary Linda McMahon will also testify in front of the House Appropriations Committee. Rubio will also appear before House Appropriations.  Rubio will testify in front of the House Foreign Affairs Committee.  Zeldin will testify in front of the Senate Environment and Public Works Committee. SBA Administrator Kelly Loeffler will testify in front of Senate Appropriations, as will Energy Secretary Chris Wright.   Thursday: Labor Secretary Lori Chavez-DeRemer will testify in front of Senate Appropriations.

THE COURT:  President Trump’s effort to use an 18th-century law to quickly deport alleged Venezuelan gang members hit another legal setback Friday, as the Supreme Court extended its block on the removals. In an unsigned opinion, the Court ruled that the men — labeled “alien enemies” by the administration — are entitled to greater due process. That includes advance notice and a meaningful opportunity to contest their deportations in court. The case involves dozens of detainees held in northern Texas immigration facilities.  The Supreme Court gave a cold reception to President Trump’s executive order seeking to end birthright citizenship, with justices strongly suggesting it is likely unconstitutional. However, the Court appeared more open to limiting the use of nationwide injunctions — a legal tool lower courts have used to block Trump’s policies on immigration, spending, and diversity initiatives. During over two hours of arguments, no justice defended the order’s legality, but several indicated concern over the broad use of injunctions by district judges to halt federal actions across the country, signaling a possible shift in how such remedies are applied.

DEBT LIMIT:  Secretary of the Treasury Scott Bessent requested Congress to raise the debt ceiling by mid-July as the Treasury Department projected that the “federal government’s cash and extraordinary measures will be exhausted in Augst while Congress is scheduled to be in recess.” In a letter addressed to Speaker Johnson, Bessent highlighted the risks of “waiting to the last minute” that would cause significant harm to businesses and consumer confidence as well as raise short-term borrowing costs. GOP Leadership tied the debt ceiling limit to The One, Big Beautiful Bill as the legislation increases the statutory debt limit by $4 trillion.

RECONCILIATION:  The House Budget Committee approved the Republicans’ reconciliation bill late Sunday night, with four conservative hardliners voting “present” rather than blocking the measure for a second time.  Still, Speaker Mike Johnson and GOP leaders face steep challenges ahead. Both hardline conservatives and swing-district moderates are growing uneasy, fearing Johnson will cave to the other side on major issues—particularly Medicaid cuts, tax policy, and clean energy credits.  The political and fiscal stakes are high. Democrats argue that more than 13 million Americans would lose health coverage under the GOP’s proposed Medicaid changes, while Republicans estimate the number is closer to 8 million. Meanwhile, President Donald Trump is pressuring Republicans to extend his 2017 tax cuts, which expire at year’s end. And following a recent downgrade of the U.S. credit outlook by Moody’s, GOP leaders are under additional pressure to show fiscal discipline.  After the bill failed in committee on Friday, Johnson and House Budget Chair Jodey Arrington (R-Texas) reconvened the panel at 10 p.m. Sunday. Following a 25-minute delay while Johnson cut a deal behind closed doors, the committee voted 17-16 to advance the bill.  In a warning sign, Reps. Chip Roy (R-Texas), Josh Brecheen (R-Okla.), Ralph Norman (R-S.C.), and Andrew Clyde (R-Ga.) voted “present”—allowing the bill to move forward while signaling their reservations. The House Freedom Caucus issued a statement late Sunday warning that the legislation “does not yet meet the moment.”  “There’s a lot more work to do this week,” Roy said. “We made progress this weekend … but they didn’t get nearly far enough.”  Among the weekend negotiations, Johnson proposed moving up the effective date for Medicaid work requirements to December 31, 2026—three years earlier than the original 2029 date. Moderates oppose the change and are preparing to fight it.  Johnson also suggested accelerating the phase-out of clean energy tax credits enacted in the 2022 Inflation Reduction Act, with GOP leaders proposing a full sunset by 2028.  One flashpoint remains FMAP—the federal formula for Medicaid payments to states. Conservatives want to restructure it, but moderates oppose reopening the debate. Although moderates believed they had killed the proposal, it reemerged over the weekend. Roy publicly criticized the existing formula, claiming it gives states “seven times more federal dollars for each dollar of state spending for the able-bodied relative to the vulnerable.”  Another sticking point is the state and local tax (SALT) deduction cap. Johnson has yet to offer a revised SALT proposal to appease blue-state Republicans, who rejected the Ways and Means Committee’s proposed $30,000 cap. As of late Sunday, moderates hadn’t heard any updates from leadership. There’s some speculation moderates might accept deeper Medicaid cuts if they secure a stronger SALT deal—though others, like Reps. Rob Bresnahan (R-Pa.), Juan Ciscomani (R-Ariz.), Don Bacon (R-Neb.), and Brian Fitzpatrick (R-Pa.), oppose further Medicaid changes regardless of SALT.  Johnson is expected to meet with both factions today. Trump and top administration officials are also preparing an aggressive push to secure votes.  But make no mistake: a final deal is not close. Many of the conservative demands are non-starters for moderates, and a consensus remains elusive.  The House Rules Committee is scheduled to take up the bill at 1 a.m. Wednesday—yes, 1 a.m. Any last-minute compromises will be incorporated through a manager’s amendment, which Rules must approve. Roy and Norman, both on the committee, could use the opportunity to stall the bill again.  House GOP leaders have warned members not to expect a Memorial Day recess unless the reconciliation bill passes. Yet even if Johnson pushes the bill further to the right, the Senate is likely to reject or significantly revise key provisions—particularly on Medicaid, clean energy, and SALT.  Republican leadership has pledged to get the bill to Trump’s desk by July 4—just 47 days away.

WHAT’S IN THE BILL?:  Ways and Means Committee  The Ways and Means Committee bill would permanently extend President Trump’s 2017 tax cuts. It also includes provisions from Trump’s campaign platform, such as exempting tips and overtime from taxation through 2028, and temporarily increasing the Child Tax Credit. Notably, the tax exemption on municipal bonds remains unchanged.  Energy and Commerce Committee  The Energy and Commerce committee bill included significant Medicaid reforms. It does this by proposing mandatory work requirements for childless adults aged 19 to 64 (with specific exemptions), prohibits states from taxing healthcare providers to fund Medicaid programs or increase their federal match, and penalizes states that provide Medicaid coverage to undocumented immigrants.  Additionally, it codifies changes to shorten the Affordable Care Act's open enrollment period, aligning with previous Trump administration policies.  Agriculture Committee  The committee approved a proposal to cut the Supplemental Nutrition Assistance Program (SNAP) by $290 billion. Starting in 2028, states would be required to fund up to 25% of SNAP benefits, which are currently fully federally funded.  Education and Workforce Committee  The Education and Workfroce bill saves $330 million by eliminating Grad PLUS loans, lowering graduate loan limits, restricting PSLF eligibility for medical and dental internships, introducing new repayment plans, requiring colleges to repay some defaulted loans, repealing student aid regulations, limiting the Education Secretary’s authority, and reducing Pell Grant eligibility.  Judiciary Committee  The Judiciary Committee advanced funding for Trump’s immigration priorities, including higher fees for asylum seekers and expanded resources for detaining and deporting migrants. It also includes $45 billion to construct Trump’s long-promised border wall.  Oversight   and Reform Committee  This committee’s proposal would generate nearly $51 billion in savings by overhauling the Federal Employee Retirement System (FERS). It includes $11.7 billion in cuts to employee benefits, resulting in $39.2 billion in new revenue.  Homeland Security Committee  The bill allocates $46.5 billion to complete the border wall and related infrastructure, $5 billion for Customs and Border Protection (CBP) facilities, and $6.1 billion to recruit and retain CBP personnel, alongside other homeland security investments.

TARIFFS:  President Donald Trump said the U.S. would begin unilaterally informing many of its trading partners of new tariff rates, rather than securing deals with the countries individually as the White House has repeatedly promised. After his sweeping April tariff plan sent markets spiraling and set in motion a global trade war, Trump reversed course and issued a 90-day pause on the new duties for every affected country except China, opening the door for individual countries to negotiate deals with his trade team.

MIDDLE EAST TRIP:  President Donald Trump embarked on a four-day tour of the Middle East, visiting Saudi Arabia, Qatar, and the United Arab Emirates. The trip focused on securing substantial economic and defense agreements, including a $600 billion investment commitment from Saudi Arabia and a $96 billion Boeing deal with Qatar . Trump also announced the lifting of U.S. sanctions on Syria after meeting with its new president, Ahmed al-Sharaa . Notably, Israel was excluded from the itinerary, raising concerns about shifting U.S. alliances in the region . The trip was marked by opulent receptions and sparked ethical debates over Trump's acceptance of a luxury Boeing 747-8 aircraft from Qatar, intended as a temporary replacement for Air Force One.

THE RECIEPTS:  Saudi Arabia (May 13–14, 2025)  Strategic Economic Partnership Agreement    Description: A broad agreement encompassing defense, energy, technology, and infrastructure cooperation, aimed at strengthening U.S.-Saudi economic and strategic ties.  Value: Total package valued at $600 billion, with potential to reach $1 trillion with future agreements.    Details: Includes a $142 billion letter of intent for defense capabilities, described as the largest defense cooperation deal in U.S. history.  Defense Cooperation Agreement    Description: Focused on military cooperation, including arms sales and long-term sustainment partnerships with Saudi entities.    Value: Nearly $142 billion (part of the $600 billion package).    Details: Enhances Saudi Arabia’s defense capabilities with American systems and training.    Energy Cooperation Agreement    Description: Signed between the U.S. Department of Energy and Saudi Arabia’s Ministry of Energy to collaborate on energy innovation, development, financing, and infrastructure deployment.  Value: Not separately quantified.    Details: Focuses on advancing energy security and innovation.    Mining and Mineral Resources Memorandum of Cooperation    Description: Signed between the U.S. Department of Energy and Saudi Arabia’s Ministry of Industry and Mineral Resources to collaborate on mining and mineral resources.   Value: Not specified.    Details: Aims to diversify and strengthen critical mineral supply chains for economic development.    Judicial Cooperation Agreement  Description: Agreement between the Saudi Ministry of Interior and the U.S. Federal Bureau of Investigation (FBI) for judicial cooperation. Value: Not specified.    Details: Enhances collaboration on legal and law enforcement matters.   Medical Research Cooperation Agreement Description: Agreement for cooperation on medical research related to infectious diseases.  Value: Not specified.  Details: Supports joint efforts in healthcare research. 

Customs Authorities Cooperation Agreement   Description: Agreement to enhance cooperation between U.S. and Saudi customs authorities.  Value: Not specified.    Details: Facilitates trade and security measures.  NASA and Saudi Space Agency Agreement Description: Agreement for a Saudi CubeSat to fly on NASA’s Artemis II test flight.  Value: Not specified.   Details: The CubeSat will measure space weather and deploy in high Earth orbit.   Air Transport Agreement Modernization  Description: Agreement allowing U.S. airlines to carry cargo between Saudi Arabia and third countries without stopping in the U.S., with reciprocal rights for Saudi carriers.   Value: Not specified.  Details: Supports cargo hub operations and trade efficiency.  Cultural and Scientific Partnerships  Description: Agreements between the Smithsonian Institution’s National Museum of Asian Art and the Royal Commission for AlUla for collaborative research and an exhibition on ancient Dadan artifacts, and between the Smithsonian’s National Zoo and the Royal Commission for AlUla to support Arabian leopard conservation.  Value: Not specified.  Details: Promotes cultural, educational, and scientific ties.   Technology Investment Agreement  Description: Commitment by Google, Uber, Salesforce, AMD, and Saudi Arabia’s DataVolt to invest in revolutionary technologies.  Value: $80 billion (part of the $600 billion package).  Details: Focuses on technology development in both countries.  Qatar (May 14–15, 2025)  Aviation Agreement (Boeing Aircraft Purchase)  Description: Qatar Airways signed an agreement to purchase up to 210 Boeing widebody jets (787 and 777x models).  Value: White House reported $96 billion; Trump claimed $200 billion for 160 jets (inconsistent figures).   Details: Described as one of the largest jet orders in Boeing’s history, supporting 154,000 American jobs annually (per White House claims).    Economic Cooperation Agreement  Description: A comprehensive economic exchange agreement strengthening U.S.-Qatar ties.  Value: $1.2 trillion (per White House).  Details: Covers commercial and defense sectors, including $243.5 billion in additional economic deals.  Defense Cooperation Agreement  Description: Statement of intent for defense cooperation, including offer and acceptance letters for MQ-9B aircraft and FS-LIDS (Fixed Site-Low, Slow, Small Unmanned Aircraft System Integrated Defeat System).  Value: Over $38 billion in future defense investments.  Details: Includes procurement of state-of-the-art military equipment from U.S. defense companies.  Joint Declaration of Cooperation  Description: A broad agreement between the U.S. and Qatar to deepen bilateral cooperation.   Value: Not separately quantified.    Details: Encompasses various sectors, reinforcing strategic partnerships.  United Arab Emirates (May 15–16, 2025)  Commercial Investment Agreements  Description: Agreements covering energy, healthcare, aviation, and infrastructure.  Value: $200 billion total, including a $14.5 billion commitment from Etihad Airways for 28 Boeing 787 and 777x aircraft powered by GE Aerospace engines.    Details: Strengthens U.S.-UAE economic ties, with a focus on American manufacturing.  US-UAE AI Acceleration Partnership Framework   Description: Agreement to establish a 5-gigawatt AI data center complex in Abu Dhabi, the largest outside the U.S., starting with a 1-gigawatt AI data center.  Value: Not specified (UAE claimed $1.4 trillion investment in U.S. AI sector over a decade).  Details: Expands American AI and cloud companies’ presence in the Middle East, with Nvidia’s involvement noted.   Strategic Energy Agreement  Description: Agreement with ADNOC (Abu Dhabi National Oil Company) for a potential $500 million investment in Occidental’s South Texas Direct Air Capture Hub, alongside a U.S. Department of Energy grant.  Value: $500 million (potential).   Details: Advances energy security through direct air capture technology. 

GAZA:  The Trump administration is “working on a plan to permanently relocate up to 1 million Palestinians from the Gaza Strip to Libya,” NBC’s Courtney Kube, Carol Lee and Gordon Lubold report, noting that the plan is “under serious enough consideration that the administration has discussed it with Libya’s leadership.” In exchange, the U.S. would “potentially release to Libya billions of dollars of funds that the U.S. froze more than a decade ago.” However, the report was met with pushback after publication. An admin spokesperson told NBC that the reported plan was “untrue,” adding that the “situation on the ground is untenable for such a plan. Such a plan was not discussed and makes no sense.”

CRYPTO:  For the second time in two weeks, Senate Majority Leader John Thune is moving forward with major cryptocurrency legislation, with a procedural vote set for this evening. Senators circulated updated text over the weekend, featuring modest changes related to data sharing and foreign crypto firms. While likely the final version, further revisions remain possible. Senate Democrats discussed the bill on a Sunday caucus call, but it’s unclear whether enough support exists to meet the 60-vote threshold. Progressive Democrats, led by Sen. Elizabeth Warren, are urging opposition due to concerns about the Trump administration’s ties to the crypto industry.

DRUG PRICING:  President Trump on Monday unveiled a “most favored nation” prescription drug policy aimed at lowering U.S. drug prices to match those paid in similarly wealthy countries. The executive order directs HHS Secretary Robert F. Kennedy Jr. to establish drug pricing targets within 30 days, initiating negotiations with manufacturers. If talks fail, Kennedy is authorized to impose a pricing model capping U.S. prices at the lowest rate among peer nations. Trump warned that the administration may consider expanding drug importation or taking regulatory action if companies don’t comply. “Basically, all we are doing is equalizing,” Trump said. However, he offered no legal justification for compelling price cuts. Americans pay nearly three times more for prescription drugs than residents of other wealthy countries, according to a 2024 RAND report. The proposal was excluded from the House GOP’s reconciliation package, and Energy & Commerce Committee staff say they do not plan to add it.

HITTING THE ESCAPE HATCH:  The Administration’s efforts to shrink institutional Washington is sticking as federal employees avail themselves of a offered buyout.  The first resignation offer, sent in January, saw 75,000 workers across government agree to quit and keep drawing pay through September, the administration has said. But a second round, rolling out agency by agency through the spring, is seeing a sustained, swelling uptick that will dwarf the first, potentially climbing into the hundreds of thousands, the employees and the records show.

WATCH THIS SPACE:  Senate Republicans are expected to vote next week on a Congressional Review Act (CRA) resolution to overturn California’s emissions waiver, which allows the state to set stricter standards than the federal government. Majority Leader John Thune has not confirmed a floor vote but says discussions are ongoing. The effort faces procedural hurdles: both the Government Accountability Office and the Senate parliamentarian have said the waiver isn’t subject to CRA reversal. This has sparked internal GOP concerns about setting a risky precedent. Despite that, Sen. John Barrasso insists the vote will happen, and GOP momentum is growing, especially with support from Sen. Mitch McConnell.

REALLY DUDE?!?:  James Comey was questioned by the Secret Service over a social media post in which the former FBI director posted a photo showing the numbers “86 47” arranged in seashells on the beach, which quickly set off the right, who claimed that Comey was calling for a threat against Trump’s life.  The interview is said to have taken place at a Secret Service office in Washington. Mr. Comey is said to have voluntarily consented to the interview, and was driven to the interview by Secret Service agents.  He remain available for walks on the beach.

F CANCER:  Former President Joe Biden has been diagnosed with an aggressive form of prostate cancer, with metastasis to the bone, according to a statement from his personal office Sunday.  Doctors diagnosed Biden last week with a prostate nodule after he experienced increasing urinary symptoms. By Friday, they diagnosed him with cancer.  Biden’s office said the cancer “appears to be hormone-sensitive which allows for effective management.”  A spokesperson said in a statement that Biden and his family are reviewing treatment options with his physicians.