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Capitol agenda: Senate says SALT isn’t settled

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Pity Speaker Mike Johnson this morning.

Not only does he have to deal with Elon Musk trying to sabotage the “big, beautiful bill,” Johnson is now staring down Senate tax writers who are doubling down on threats to scale back his carefully negotiated deal to raise the state-and-local-tax deduction cap.

Senate Finance Republicans left the White House on Wednesday without decisions on key tax provisions in the bill. But two things are clear: Senators want to make President Donald Trump’s business tax incentives permanent, not just extend them for five years as the House did. And to help pay the roughly half-trillion-dollar price, they’re ready to carve up the House’s deal to quadruple the SALT deduction limit.

SALT Republicans don’t have the same leverage in the Senate that they do in the House — because they simply don’t exist in the other chamber.

“There’s not a single [Republican] senator from New York or New Jersey or California,” said Finance Chair Mike Crapo (R-Idaho). That means there’s not much appetite “to do $353 billion for states that, basically, the other states subsidize.”

But Senate Republicans are keenly aware of the House’s precarious math problem. If they send a package back to the House with significant SALT changes, it could derail the timeline for Trump’s biggest legislative priority.

“We are sensitive to the fact that, you know, the speaker has pretty narrow margins, and there’s only so much that he can do to keep his coalition together,” Sen. Todd Young (R-Ind.) told reporters. “At the same time it wouldn’t surprise people that the Senate would like to improve on their handiwork.”

Where’s Trump? The president on Wednesday didn’t directly tell lawmakers not to meddle with the House’s SALT deal. But he, too, is playing the numbers game. “He said, ‘You do this, do we lose three votes here? If you do that, do you lose three votes here?’” Sen. Ron Johnson (R-Wis.) told reporters after the meeting.

Senate Majority Leader John Thune also conceded the difficult calculus on SALT, telling reporters “we understand that it’s about 51 and 218” and “we will work with our House counterparts and the White House” to move the megabill.

There’s been a breakthrough elsewhere, though: With Commerce preparing to release its draft bill Thursday, Sen. Mike Rounds (R-S.D.) told Blue Light News Wednesday that he’s satisfied a planned spectrum auction will protect national security, with specific frequencies used by the military shielded through 2034.

One potential wrinkle: Rounds later suggested to Blue Light News that the deal that was still being finalized Wednesday could look to free up other frequencies “that the business community is going to be concerned with.”

What else we’re watching:

— Appropriations moving: Speaker Johnson plans to meet Thursday with top GOP appropriators about what funding totals to use in drafting the dozen government funding bills they’ll write this summer. House Appropriations is forging ahead with markups Thursday on two of the 12 bills, even before GOP leaders and his dozen subcommittee chairs — “the cardinals” — have settled on numbers for the full slate.

— Senate Banking meeting: Senate Banking Republicans will propose provisions that would change the pay scale for Federal Reserve employees and zero out funding the Consumer Financial Protection Bureau as part of the Senate version of the GOP megabill, according to a committee staff memo obtained by Blue Light News. Banking Republicans are scheduled to meet Thursday morning to discuss the proposal.

— Lutnick on Blue Light News (again): Commerce Secretary Howard Lutnick is back on Capitol Hill Thursday to testify in front of House Appropriations. Expect him to be back in the hot seat after Sen. John Kennedy (R-La.) grilled him on Wednesday over the Trump administration’s tariffs.

Jasper Goodman, John Hendel and Jennifer Scholtes contributed to this report.

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Rules coming back

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The House Rules Committee will reconvene at 1 p.m. as GOP leaders grow more confident they can break through an impasse that has ground the floor to a halt.

“We’re getting closer,” House Majority Leader Steve Scalise said Tuesday, sticking with a plan that would have Republicans vote later in the day on a measure teeing up votes on the Section 702 spy law, a budget resolution setting up funding for Homeland Security agencies and the farm bill.

Scalise added that they are trying to work a ban on central bank digital currencies — a key demand of conservative hard-liners — into some legislative vehicle.

“We’re going have some late night votes tonight,” he said, due to King Charles III’s joint-meeting address Tuesday afternoon.

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Capitol agenda: Mike Johnson’s week unravels

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Speaker Mike Johnson’s week just started and it’s already falling apart.

Internal GOP strife forced Republican leaders late Monday to scrap a House Rules meeting that was supposed to set up critical floor votes on an extension of the Section 702 spy law, immigration enforcement funding and a farm bill. They planned to reconvene around 8 a.m. and try again.

At least 10 Republicans are threatening to oppose the rule vote teeing up the legislation — currently scheduled for 4:30 p.m. — over problems with Johnson’s three-year Section 702 reauthorization. And there are other issues with Republicans’ budget reconciliation plan and the farm bill.

Johnson is hoping he can pass the 702 extension shortly after 9 p.m., following a state dinner with King Charles III.

The fight over the spy law is more or less where it was earlier this month, when GOP hard-liners tanked a vote on an extension. They don’t believe leadership’s latest attempt at a compromise would go far enough to shield Americans from being caught up in warrantless surveillance under Section 702, which allows such surveillance of foreigners abroad. They also want assurances that there will be a ban on central bank digital currency.

The Senate is preparing to advance a three-year 702 extension around noon Tuesday as the House GOP stalemate threatens a lapse after Thursday’s deadline.

In a private House GOP meeting Monday night, GOP leaders tried to push Republicans to pass Johnson’s latest proposal as is. That suggestion only enraged some GOP hard-liners who are still opposed to the plan they argue is just a rework of the last one they tanked.

The farm bill is rife with GOP fights over amendments.

Rep. Anna Paulina Luna threatened late Monday to “slaughter the farm bill” if pesticide provisions weren’t stripped out. MAHA advocates like Luna say the bill would shield pesticide companies from lawsuits, while farm state Republicans argue the measure would clarify labeling for critical and widely-used farm inputs.

Another farm bill problem is the continuing GOP fight over ethanol. Rules Committee Republican Reps. Michelle Fischbach of Minnesota, Randy Feenstra of Iowa and other midwestern GOP members are pushing for a vote on year-round sales of the E15 gasoline-ethanol blend.

As tempers flared, one Republican involved in the talks said the ethanol Republicans “went all in on an amendment” that failed to get consensus.

“Now they have to get something or else it’s probably lights-out for Feenstra’s governor bid and maybe a few House seats,” the person said.

“The incompetence is stunning,” House Rules ranking member Jim McGovern said in an interview. “We’re in the same place as we were last week.”

What else we’re watching:

King’s speech prep: In his 20-minute address to Congress Tuesday, King Charles III is expected to tout the U.S.-U.K. relationship as one of “reconciliation and renewal” and “one of the greatest alliances in human history” — hitting a message that the two nations can promote security and prosperity for the world if they defend shared democratic values. Ahead of his 3 p.m. remarks, the king is scheduled to meet with the four top congressional leaders and have photo ops.

Don’t bank on the ballroom: Republicans are clamoring for President Donald Trump to get his ballroom in the wake of Saturday’s shooting, but bills to greenlight it are going nowhere fast in Congress. Senate Democrats are unlikely to support a ballroom bill, and if Republicans try to go it alone they’ll face procedural and political hurdles that would make it difficult to tuck into their own party-line immigration enforcement bill.

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How Bernie Sanders convinced Democrats against arming Israel

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When Bernie Sanders moved last April to block a U.S. arms sale to Israel, only 14 Democratic senators joined the Vermont independent.

What a difference a year makes: When Sanders objected to another Israeli arms sale this month, 39 other members of the Senate Democratic Caucus joined him — a sea change that has raised eyebrows from Washington to Jerusalem.

In a recent interview, Sanders reflected on the sudden and massive shift, one that has some observers saying he — not Senate Minority Leader Chuck Schumer, who has voted to support the arms sales — is leading Senate Democrats on Israel policy.

“That’s true,” Sanders said of the claim. “I mean we got 40 votes, and Schumer got seven. We have more support for our position than Chuck has for his.”

While Republicans and a handful of pro-Israel Democrats have so far been able to push the weapons shipments through, allies of Sanders say the momentum behind his blocking effort has sent an unmistakable signal to Prime Minister Benjamin Netanyahu and other Israeli leaders that they cannot count on unquestioned U.S. support for their military campaigns targeting Gaza, Lebanon and now Iran.

One Democrat who continues to support the sales, Sen. Richard Blumenthal of Connecticut, said the Netanyahu government should be reined in but said Sanders was pursuing “the wrong vehicle to try to achieve those changes.” And most of those who recently came to oppose the arms sales cited the Iran War and the risk of further escalation in the region — not Sanders.

But fellow Vermont Sen. Peter Welch, a Democratic co-sponsor of the two most recent blocking resolutions, said Sanders “absolutely” deserves recognition for the growing support they have found:

“Having been with him from the beginning, he has been outspoken and influential,” he said.

The following interview has been edited for length and clarity.

Were you surprised Chuck Schumer didn’t change his vote? And do you think it could change in the future?

You’ll have to talk to Chuck about that. But you’re right. I mean I think what is noteworthy — and I think people are discussing it — is that you have two major leaders of the Democratic Party, both Chuck and [DSCC Chair] Kirsten Gillibrand, being in the significant minority of the party in terms of their votes on continuing to fund military aid to Israel. [Schumer and Gillibrand did not respond to requests for comment.]

The split was reportedly a topic of discussion during a Senate Republican lunch last week. Semafor reported that Majority Whip John Barrasso argued you lead Democrats on Israel — not Schumer.

That’s true. I mean we got 40 votes and Schumer got seven votes right? We have more support for our position than Chuck has for his position. That’s obviously the case.

Were you surprised by any of the votes you got this month?

As you know, we’ve had a solid group of people who have voted with us in the past. But also what we are seeing, you know, folks who are looking at both policy and politics — people like Mark Kelly of Arizona, Cory Booker of New Jersey and a number of others — who are saying it’s time that we began to vote the way our constituents would like us to vote.

Are you doing any lobbying? Are you just calling these votes up, or are you actually talking to your colleagues behind the scenes?

Well, I think the answer is mostly no. I think the issue is so clear. Every member of the Democratic Caucus fully understands that Israel is now sadly and tragically run by a right-wing extremist government led by Netanyahu. Democrats are going home, they’re holding town meetings and people are saying, “Why the hell, when we can’t afford housing and health care, are you spending our money providing military aid to Israel, which is doing such horrible things in Gaza, Iran, Lebanon and the West Bank?”

The polling out there now is quite clear that the majority of the American people, including independents and Republicans combined, now think that we should not be giving military aid to Israel. The problem for the Democrats is that [the American Israel Public Affairs Committee] is enormously powerful — they’ve spent tens of millions of dollars in campaign contributions and they have something like $93 million in their war chest right now. For Democrats to take on AIPAC is not easy, but they’re increasingly choosing to support what the people back home want.

What do you say to colleagues who have concerns about looking like they don’t support Israel as a state or don’t want to be seen as antisemitic?

Antisemitism is an absolutely disgusting ideology which has resulted in the deaths of many, many millions of people over the years, 6 million people under Hitler, and it needs to be combated in every way, shape or form. But I will oppose with every ounce of my fiber, anybody who suggests that taking on the racist and extremist policies of the Netanyahu government is antisemitic. That is nonsense.

All over this country, there is growing opposition to U.S. military aid to Israel. The reason for that is not difficult to understand: The American people were shocked and horrified by the Hamas terrorist attack against Israel and were prepared to support Israel going after Hamas, but what they were not prepared to do was to support Israel waging an all-out war against the Palestinian people. And then they look up one day a few months ago, and Israel gets the United States to engage in an absolutely unnecessary, unprovoked war with Iran, which is doing massive damage economically to us and people all over the world.

Do you have plans to force more of these arms-sale votes in the future? Do you think you can eventually win?

Obviously yes. We are going to stay on this issue. There are going to be a certain group of hardcore people in both parties who are going to remain loyal to AIPAC. But I think you’re going to see significant defections in the Republican Party and maybe some more votes in the Democratic caucus as well.

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