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Capitol agenda: A brutal blow for Johnson and Trump

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Donald Trump and Mike Johnson failed to convince enough deficit hawks to back the latest budget plan for the president’s agenda — forcing the speaker to punt his planned Wednesday vote on the resolution and sending House leadership scrambling for a compromise that could satisfy hard-liners’ demands for more spending cuts.

Now, the speaker is staring down two potential options to get holdouts to come on board.

Plan A: Rules — GOP leaders “tentatively” plan to bring the budget blueprint back to the Rules Committee Thursday morning, Johnson said as he emerged from a meeting late Wednesday. They would tack on an amendment that would guarantee more spending cuts in the party-line package of tax cuts, border security investments, energy policies and more.

Rep. Lloyd Smucker has proposed tying the tax cuts to spending cuts — something he said would get him to “yes.” Another option is more straightforward: Language to the budget resolution that would require that a certain level of spending cuts be achieved in a final product that hard-liner holdouts want.

“There’s a mutual commitment that we’re going to find real savings in federal spending, because we have to do that,” Johnson said Wednesday night.

But that would kick the budget blueprint back to the Senate, which already tweaked this version of the budget once and has also held two all-night vote-a-ramas in less than six weeks. Senate Majority Leader John Thune was deeply unenthusiastic about holding a third: “I think everybody realizes that we’re at the time that we’ve got to move,” he said.

Plus, Thune would have to get key senators on board yet again. And many House moderates were privately counting on the Senate’s spending levels to avoid the steep $1.5 trillion to 2 trillion cuts proposed by the House.

Johnson is already trying to reassure them. He reiterated Wednesday night that House Republicans would not cut Medicare, Medicaid and Social Security benefits, even as their framework makes Medicaid cuts likely to meet their massive deficit reduction targets.

Plan B: Conference Committee — Heading straight to conference would be a rare and time-consuming process that would require House and Senate leaders and committee chairs to hash out the differences between their chambers’ plans. It’s a last resort, but one that some hard-liners have pushed in recent days to avoid a failed floor vote and force more concessions on spending cuts.

Meanwhile, the House also hasn’t played the full Trump card (even after the president Tuesday told House Republicans to “stop grandstanding”). Johnson said he stepped out of a meeting with holdouts Wednesday night to speak with Trump, who’s closely monitoring the situation.

“The president is very anxious, as I am, for us to get this done,” Johnson said after a late Wednesday meeting.

A note for your calendars: Johnson said it is not his “intention” to leave for the scheduled two-week Easter recess before adopting a budget resolution — though he noted that Passover starts this Saturday and he doesn’t want voting to stray into the holiday. The speaker said “the calendar is not our friend,” but “if we have to come back next week, then we’ll do that.”

What else we’re watching:

GOP senators back Biden-era tax credit: Republican Sens. Lisa Murkowski and John Curtis are leading a letter to their leadership, alongside Sens. Thom Tillis and Jerry Moran, asking that clean-energy tax credits created by the Democrats’ 2022 climate law not be repealed as part of the GOP bill enacting Trump’s agenda. The senators say the credits are essential to the president’s goals of spurring American energy and manufacturing dominance.

Michelle Bowman hearing: Trump’s pick to be the Federal Reserve’s top regulatory official faces Senate Banking this morning to pitch an overhaul of how the Fed supervises banks and argue for a “tailored approach” to regulation that makes it easier for financial institutions to innovate. Her industry-friendly approach broadly echoes the roadmap that Treasury Secretary Scott Bessent outlined this week for easing bank regulations.

Katherine Tully-McManus, Jennifer Scholtes and Meredith Lee Hill contributed to this report.

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Randy Villegas is mounting a challenge to GOP Rep. David Valadao

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The latest Democrat aiming to unseat Republican Rep. David Valadao isn’t trying to do it from the center.

Randy Villegas, a Visalia, Calif. school board trustee, is hoping economic populism will resonate in a swing district that continues to be a top Democratic target. He also plans to tie Valadao to President Donald Trump, Elon Musk, and GOP efforts to slash federal government.

Like other Democrats who have embraced an anti-corporate message in the aftermath of the 2024 election, his candidacy will represent a test of progressive messaging in a purple district.

“I’m running on an economic populist message,” Villegas said in a phone interview. “I think we need to have candidates who are willing to say that they’re going to stand up against corporate greed, that they are going to stand against corruption in government, and that they are going to stand against billionaires that are controlling the strings right now.”

Affiliated with the Working Families Party, Villegas could run to the left in a Democratic primary, though he said he would “hesitate to put any labels on myself.”

The majority-Latino 22nd District in California’s San Joaquin Valley has been a top Democratic target the past few cycles, though the 2024 election saw it slide toward President Donald Trump along with many other Latino-heavy districts across the country. Valadao has represented the area in Congress for all but two of the last dozen years, representing the seat since 2021 and holding a previous version of the district from 2013 to 2019. (Valadao was ousted in the 2018 midterms but won his seat back two years later even as Joe Biden carried the district.)

He’s touted his centrist creds in the House and is one of only two House Republicans remaining who impeached Trump in the aftermath of the Jan. 6 insurrection. Still, Villegas is trying to hitch him to controversial moves by national Republicans that could result in cuts to federal programs.

“The reason that I got to where I was was because of programs like Medicaid, because of programs like free and reduced school lunch and WIC, and now all of those programs are under threat right now because Valadao won’t stand up to Musk, to Trump, to his Republican colleagues,” Villegas said. Raised in Bakersfield, Calif., he’s also an associate professor of political science at College of the Sequoias.

One wrinkle in the race: it’s not clear whether former California state Rep. Rudy Salas, Democrats’ nominee the last two cycles, will run again, though he’s pulled paperwork to run for the seat. Villegas, who noted he’d been an intern for Salas when he was a college student, said he had “all the respect for the work [Salas] did in the California State Assembly, but I think that voters are ready for a new face.”

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Khanna on Trump White House: ‘They need to have a 21st century understanding of the economy’

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Rep. Ro Khanna took sharp aim at President Donald Trump’s sweeping tariff policies on Sunday, warning they’ll raise prices on American electronics rather than bring manufacturing jobs back to the United States.

“I understand they have 19th century policies of McKinley, but they need to have a 21st century understanding of the economy,” Khanna (D-Calif) said on CBS’ “Face the Nation, referencing the Trump administration’s protectionist trade approach and his admiration for President William McKinley. Critics of Trump’s tariff policy have argued that the lessons of McKinley’s 19th century America are not applicable today.

The California Democrat said the White House’s plan to revive domestic manufacturing is already unraveling, pointing to the Trump administration’s decision to exempt smartphones and computers from his tariff regime after financial markets spiraled into chaos last week over his sweeping global tariffs announcement.

“They were chaotic and they were totally haphazard,” Khanna said. “So you had Howard Lutnick on, saying that we were going to bring manufacturing back, and electronics manufacturing back, to the United States, and they realized suddenly that that wasn’t going to happen.”

“Actually, the iPhone price would go up to 1,700 or 2,000 dollars,” he continued. “And by the way, if that manufacturing moved, it would probably move to Malaysia or Vietnam.”

Khanna, whose district includes Silicon Valley, argued that if the U.S. really wants to compete with China and rebuild advanced manufacturing, it needs investment — not tariffs.

“If you want to bring back the manufacturing to the United States, you have to invest in the workforce, you have to have some investment tax credit for the facilities, and you have to be able to buy the things we make in the United States,” he said.

Khanna’s remarks come ahead of a speech he is expected to give on Monday in Ohio — Vice President JD Vance’s home state — where he plans to cast Vance and Trump as “stubbornly cling[ing] to 19th-century dogma in a 21st-century world” with their approach to foreign and domestic policy. The speech also is part of a broader push led by Khanna to position himself as a counterweight to Vance.

“This is not something the president will be able to spin,” Khanna said. “Either we’re going to see new factories come or we’re not, and tariffs just aren’t going to do that. “

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Democrats go all in on unproven insider trading allegations as they target Trump’s tariffs

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Congressional Democrats are raising increasingly pointed concerns about potential financial malfeasance by President Donald Trump and his allies surrounding his dramatic recent tariff moves, despite a lack of evidence of wrongdoing.

Senate Minority Leader Chuck Schumer on Friday joined the growing number of Democrats formally calling for investigations zeroing in on the wild swings in the stock market amid Trump’s escalating trade war. It’s one of the central messages the party has coalesced around in the 48 hours since Trump partially reversed his implementation of sweeping trade barriers.

Trump on Wednesday morning posted to Truth Social that it was a “GREAT TIME TO BUY” despite the chaos within the financial markets. Hours later, Trump announced he was pausing the most sweeping global tariffs for 90 days, causing a temporary but dramatic stock market rally.

Some Democrats quickly questioned whether there was financial gain to be had amid the market whiplash, though no evidence has emerged of insider trading or other wrongdoing, and top party leaders have now followed suit.

In the latest salvo, Schumer joined Sens. Elizabeth Warren (D-Mass.), Mark Kelly (D-Ariz.), Ruben Gallego (D-Ariz.), Adam Schiff (D-Calif.), Ron Wyden (D-Ore.) and Schumer in requesting SEC Chair Paul Atkins to launch an investigation into where Trump or those around him “engaged in insider trading, market manipulation, or other securities laws violations.”

“It is unconscionable that as American families are concerned about their financial security during this economic crisis entirely manufactured by the President, insiders may have actively profited from the market volatility and potentially perpetrated financial fraud on the American public,” the senators said in the letter.

The White House accused Democrats of “playing partisan games instead of celebrating President Trump’s decisive action yesterday to finally corner China,” according to a statement from spokesperson Kush Desai provided to media organizations. Trump, he added, was seeking “to reassure the markets and Americans about their economic security in the face of nonstop media fearmongering.”

In a separate letter Friday, Schumer, Schiff, Warren and Wyden sent a letter requesting state attorneys general also launch investigations into any potential violations of state laws, including by members of Congress.

“We do not make this request lightly. No one — not even a president — is above the law. … Any proven misconduct must be prosecuted and punished to the fullest extent permitted by the laws of your states,” they added.

The senators’ actions followed two days of increasingly strident reactions from top House Democrats.

“We need to get to the bottom of the possible stock manipulation unfolding before the American people — including what, if any, advance knowledge members of the House Republican Conference had of Trump’s decision to pause the reckless tariffs he put in place,” House Minority Leader Hakeem Jeffries told reporters Thursday.

As the minority party in both chambers, there aren’t many options available for Democrats to force an investigation —- they don’t hold committee gavels, and they have limited avenues for getting legislation considered.

Rep. Alexandria Ocasio-Cortez (D-N.Y.) said she and her colleagues were discussing “several options” including a discharge petition to force a vote on a congressional stock trading ban, though that effort faces an uphill climb after previous attempts to ban congressional stock trading have fizzled out.

The disclosure of lawmakers’ stock trades has presented a perennial ethics issue for members of Congress. Any trades that happened around the tariff-induced market swings must be publicly disclosed through congressional ethics authorities by May 15.

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