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Capitol agenda: Inside Trump’s hesitation on Medicaid

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Make no mistake: Medicaid is at the center of the GOP’s challenges as they try to assemble their “big, beautiful” bill. And the problems start at the very top.

Donald Trump is deeply skeptical of the emerging House Republican plan to make deep cuts to Medicaid to pay for the GOP’s megabill. And Speaker Mike Johnson is running out of time to convince him.

Senior House Republicans are expected in the coming days to present Trump with a menu of potential Medicaid changes, along with estimates of the savings they will generate and the impacts on beneficiaries.

Among the options the White House has agreed to consider is “per capita caps” — a controversial proposal that would limit the federal allotment to states that have expanded Medicaid under the Affordable Care Act.

The Trump administration has other ideas that have nothing to do with Medicaid: White House officials have requested proposals to instead find savings by pursuing a “most favored nation” drug-purchasing policy linking certain government payments for pharmaceuticals to the lower prices paid abroad, reviving a failed push from his first term.

Johnson has been scrambling to secure Trump’s support, shuttling up and down Pennsylvania Avenue and calling him multiple times a day to ensure they remain in lockstep and avoid a repeat of the GOP divisions that doomed the president’s 2017 push to repeal the Affordable Care Act.

But divisions abound: While moderates continue raising concerns about rolling back Medicaid expansion, fiscal hawks have been angling for even steeper cuts to the program. House Freedom Caucus members, including Reps. Chip Roy, Andrew Clyde and chair Andy Harris, met with Energy and Commerce Chair Brett Guthrie late into Wednesday night — without reaching an agreement on how to proceed.

GOP senators, meanwhile, were briefed Wednesday on polling and options for Medicaid changes, including new work requirements, during their closed-door lunch by Foundation for Government Accountability’s Tarren Bragdon. Sen. Josh Hawley issued a warning afterward, saying benefit cuts would be “catastrophically unwise.”

Elsewhere, House Republicans are being hammered on multiple other fronts as their megabill dreams come crashing into political reality. Johnson failed Wednesday to resolve his standoff with vulnerable Republicans over raising the cap on state and local tax deductions, even as he expects Ways and Means to take up its draft of the GOP tax plan next week.

Key GOP lawmakers also yanked controversial provisions around car fees and antitrust enforcement from their Wednesday markups. And GOP Rep. Mike Turner is warning that a provision cutting federal government pensions that Oversight Republicans advanced Wednesday won’t pass the full House in its current form.

What else we’re watching:

– Thune’s Ed Martin problem: Senate Majority Leader John Thune has churned through the most controversial of Trump’s nominees, but he’s facing early warning signs over another: Ed Martin, the acting U.S. attorney for D.C. Sen. Thom Tillis, whose Judiciary committee vote could be pivotal, says he plans to meet with Martin as controversy swirls over his past comments about Jan. 6.

– “Skinny budget” incoming?: White House budget director Russ Vought will meet this morning with House Appropriations Chair Tom Cole and his dozen subcommittee chairs. The appropriators are clamoring for Vought to send a “skinny budget” this week, followed quickly by a full budget request, so they can start cranking out their dozen fiscal 2026 funding bills.

– Raining on REINS: Senate Republicans are already casting doubts that the version of the REINS Act that their House counterparts advanced Wednesday as part of Judiciary’s megabill markup can pass muster with their chamber’s parliamentarian. And that’s after House Judiciary Republicans stripped a different provision, on consolidating antitrust oversight, for a similar reason. “They always think they know what the Byrd rule is, and they have no clue what the Byrd rule is,” Sen. Rand Paul said.

Rachael Bade, Adam Cancryn, Jordain Carney, Brian Faler, Meredith Lee Hill and Myah Ward contributed to this report.

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Congress

Impeachment snafu prompts a friendly reminder to House Democratic aides

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A top aide to Rep. Jerry Nadler reminded fellow Democratic staffers to let each other know when their bosses sign on to bills after several lawmakers removed themselves as cosponsors from Rep. Shri Thanedar’s impeachment resolution targeting President Donald Trump.

“Members can walk away with different impressions of a conversation, and a quick check-in with staff can go a long way in avoiding confusion,” the aide, Andrew Heineman, wrote in an Thursday email to all Democratic legislative directors obtained by Blue Light News. “I don’t think any of us want to learn that their boss was added to a bill that’s been introduced from a Google Alert.”

Thanedar (D-Mich.) introduced a resolution Monday to impeach Trump with four Democrats listed as cosponsors: Nadler of New York, plus Reps. Jan Schakowsky of Illinois, Robin Kelly of Illinois and Kweisi Mfume of Maryland. All four have since withdrawn as cosponsors and implied that they were mistakenly added to the legislation after conversations with Thanedar.

Thanedar’s office didn’t respond to a request for comment.

“The Congresswoman was under the impression that the resolution was drafted and reviewed by experts from the House Judiciary Committee,” Kelly’s spokesperson said.

A Mfume spokesperson said he removed himself “because he was made aware it was not cleared by Democratic leadership and not fully vetted legally — and he preferred to err on the side of caution.”

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Crockett starts stumping for Oversight post, telling colleagues she’s ‘made for the moment’

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Rep. Jasmine Crockett of Texas has started pitching fellow Democrats on a run for the party’s top Oversight Committee position, according to two people familiar with the situation.

Crockett’s entreaties — playing out in phone calls, text messages and floor conversations — mark the beginning of a contested race to succeed Rep. Gerry Connolly (D-Va.) as Oversight’s ranking member. Rep. Stephen Lynch of Massachusetts is also seeking the job, though Connolly — who announced plans to step aside after suffering a recurrence of esophageal cancer — has not yet formally done so.

Crockett has told other lawmakers that she’s “made for the moment,” the people said, an apparent reference to the desire among Democratic voters for more forceful resistance to President Donald Trump.

She told Blue Light News in a text message that, while there isn’t a vacancy, “knowing that Rep Connolly doesn’t plan to seek re-election & knowing that our oversight powers are broad, I’m ready to shine a light on the very dark things taking place in our country under this administration.”

She added, “I wouldn’t want anyone to think that I’m not interested in leading our investigative body while also communicating & educating the country on our findings.”

Semafor first reported that Crockett intended to seek the top Oversight post.

Crockett could be part of a crowded field of younger progressive Democrats who seek the job, including Reps. Robert Garcia of California, Ro Khanna of California and Maxwell Frost of Florida.

But Rep. Alexandria Ocasio-Cortez of New York could clear the field if she chooses to run. She lost to Connolly when she ran for the Oversight job last year and has since said she’s “weighing” a bid to run.

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What Wall Street is watching in the GOP megabill

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Congressional Republicans are rushing to advance the crown jewel of President Donald Trump’s legislative agenda — a sweeping tax, energy and border package that they hope will be a boon to businesses and offset the tariff-induced economic turmoil of recent weeks.

But financial firms are watching warily as they lobby lawmakers not to turn Wall Street into a pay-for in the reconciliation package.

A variety of proposals that could eliminate tax breaks used by financial institutions are on the table as Republicans look to pay for tax cuts that Trump has promised. The coming weeks are poised to test GOP lawmakers’ willingness to defy some of their traditional allies in the business world to deliver the “one big, beautiful bill” Trump wants.

The House Financial Services Committee — which oversees Wall Street and its regulators — voted along party lines late Wednesday to approve its portion of the reconciliation package after a nine-hour markup. The legislation, which will be wrapped into the broader reconciliation package, would slash the amount of funding the Consumer Financial Protection Bureau can get by almost 60 percent and fold the U.S.’s top audit watchdog, the Public Company Accounting Oversight Board, into the Securities and Exchange Commission.

Democrats on the panel threw up procedural hurdles to slow the meeting down and offered dozens of amendments that Republicans voted down.

Financial Services Chair French Hill (R-Ark.) said he expects the savings produced by the legislation to exceed the $1 billion in cuts that the panel was required to produce by a budget resolution adopted by both chambers of Congress. But those savings remain a small fraction of what Republicans need to produce to pay for the Trump tax cuts. All eyes are on Congress’ tax-writing committees — House Ways and Means and Senate Finance — which are considering an array of more controversial savings proposals.

Several targets that could touch financial services firms are on the table. Tax writers are expected to release an initial proposal in the coming weeks, but the dynamics could change as the reconciliation bill moves forward and lawmakers look for additional savings.

Most controversially, the Ways and Means panel is weighing whether to close the so-called carried interest loophole, a controversial tax break that gives favorable treatment to the profits earned by private equity firms, hedge funds and venture capital investors. The latest signals suggest Hill Republicans may be souring on the idea, but conversations among tax writers are ongoing. Any effort to kill the tax break would be met with opposition from more business-friendly members, including on Financial Services. Hill told MM last week that the policy “is a major source of economic growth, jobs, that impacts every community in the country — it’s not a loophole.”

Hill and other Financial Services Republicans are also pushing tax writers not to strip municipal bonds of their tax-exempt status. They wrote in a letter to Ways and Means Chair Jason Smith last month that the exemption is “a critical tool that has underpinned American infrastructure and community development for over a century.”

Finally, the U.S.’s credit union lobby is playing defense as lawmakers face calls to strip the institutions of their tax-exempt status — a major lobbying push for community banks. Jim Nussle, the president of America’s Credit Unions and a former Republican lawmaker who chaired the House Budget Committee in the early 2000s, said the industry is “in a strong position going into this.”

But some credit union advocates — like lobbyists representing other segments of the financial services industry — worry that a last-minute deal could put them on the chopping block.

“We take nothing for granted,” Nussle said.

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