Congress
Capitol agenda: The shrinking Trump tax cuts
The brutal political realities of the House GOP are about to upend President Donald Trump’s tax pledges.
A permanent extension of Trump’s 2017 tax cuts is under threat, as are a slew of second-term campaign promises, including exempting taxes on tips and overtime earnings and providing tax relief for seniors.
House Republicans are poised to disappoint Trump because they can’t agree on sufficient spending cuts to pay for his desired menu of tax policies under the GOP’s budget reconciliation plan. Speaker Mike Johnson told Republicans in a private meeting Thursday that he’s now targeting $4 trillion in tax cuts – a half-trillion less than many in the GOP had hoped.
It’s setting up a tough day for House Ways and Means Chair Jason Smith. The Missouri Republican is set to meet with Trump Friday, as GOP leaders scramble to keep the tax package from unraveling. Republican lawmakers and aides have been signaling this week that some of Trump’s pledges will have to be temporary to make the budget math work. Johnson also plans to talk with Trump by phone later Friday about the megabill, including the tax piece.
The tensions are rising among House Republicans who see what’s coming.
“Democrats scare some of my members,” said House Budget Chair Jodey Arrington, who chided his colleagues Thursday for getting cold feet on spending cuts. “They paralyze our conference and, quite frankly, frighten us into inaction.”
Even so, some in the White House are relieved that Congress may hold off from deeper cuts to safety-net programs and are privately rooting for swing-district moderates to win out over hard-liners fighting to slash spending.
Some senior Republicans are downplaying Trump’s last-minute push this week to raise taxes on top earners, but it’s still threatening to stir up a bare-knuckle fight within the House GOP conference with precious time running out. People with direct knowledge of the discussions told Blue Light News it appeared to be more about messaging than raising money available in the budget reconciliation bill.
What we’re watching Friday: Be on the lookout for formal markup announcements as Ways and Means, Energy and Commerce and Agriculture try to move ahead with votes on all of these tough policy questions next week.
And look for further fallout from Thursday evening’s SALT spat. New York Republican Reps. Elise Stefanik, Andrew Garbarino, Nick LaLota and Mike Lawler said they’re rejecting a $30,000 cap to the state and local tax deduction, one number House Republicans are discussing. Johnson indicated there wasn’t yet a formal offer.
What else we’re watching:
— Crypto bill crashes: One of the GOP trifecta’s first major policy pushes is in flux after Senate Democrats derailed a long-awaited crypto bill in a procedural vote Thursday. They accused Republicans of moving to a vote too early, but key Senate Democrats said they’re willing to return to the negotiating table to reach a deal. Senate Majority Leader John Thune could bring the stablecoin regulatory framework back up in the coming days.
— The Library of Congress’ next chapter: Trump’s abrupt firing of Librarian of Congress Carla Hayden Thursday evening triggered intense backlash from top Democrats. Some are now calling for the librarian’s appointment to fall under Congress’ purview, rather than the president’s. Rep. Joe Morelle, the top Democrat on the House panel that oversees the library, plans to introduce legislation to that effect. We’ll see if any Republicans join.
— Duffy pitches air traffic overhaul: Transportation Secretary Sean Duffy is calling on Congress to give his agency cash to modernize the nation’s aging air traffic control systems. The former House member is pressing lawmakers to take action quickly so his agency can execute the plan in roughly three to four years. Expect senators to discuss Duffy’s proposal when Commerce Chair Ted Cruz holds a hearing on aviation safety and air traffic control next week.
Jasper Goodman, Benjamin Guggenheim, Chris Marquette, Meredith Lee Hill, Sam Ogozalek, Oriana Pawlyk, Katherine Tully-McManus and Nicholas Wu contributed to this report.
John Thune has money on his mind in the final stretch before the midterms.
The Senate majority leader, in an exclusive conversation Monday with Blue Light News on the campaign trail, said funding for Republicans has dominated his recent conversations with President Donald Trump and his staff as the party tries to divvy up its spending to hold onto seats in closer-than-expected races while picking up spots in other states.
“I think the president is sincerely interested in trying to do whatever he can to help the team,” Thune said. “You know, some of the states have gotten very expensive.”
Thune’s focus highlights the emerging story defining the 2026 midterms: Is there enough Republican money, and can it be spent fast enough to counter surging Democratic campaigns and a lackluster national environment for the GOP?
Thune was at a news conference Monday with Senate GOP candidate Michele Tafoya in Minnesota — a state where the party increasingly sees a pickup opportunity after Democrats nominated progressive Peggy Flanagan.
Minnesota is one possible state where Trump could deploy his $400 million war chest, Thune said. But he was vague when asked about Republicans’ potential commitment to the race. He named Michigan and New Hampshire as other GOP pickup opportunities.
Republicans are simultaneously having to play defense in a growing list of red states, like Iowa, Kansas and Alaska. And the Thune-aligned Senate Leadership Fund recently pulled back spending in North Carolina — essentially surrendering a GOP-held seat to Democrats — while increasing its spending in Kansas.
Thune referred to the super PAC’s North Carolina decision as a “pause” in financial support.
And then there’s Texas, where Republicans are deploying hundreds of millions of dollars as they struggle to drag GOP nominee Ken Paxton over the finish line. Thune said “dedicated donors” focused on Texas have prevented the need to siphon funding away from other states.
Thune declined Monday to put odds on the GOP’s chances of keeping Senate control, but repeated, “I think we can keep the majority.”
The results may carry personal stakes for him, as he is expected to run for leader again. And while no other senator has raised their hand against him, some conservatives have questioned whether Trump would publicly turn on Thune if Republicans lose.
“I can’t control that,” Thune said, adding that the Republican conference would ultimately make the decision. “What the president does or doesn’t do … you just move forward and let the chips fall where they may.”
What else we’re watching:
— THUNE CHECKS TRUMP’S DAYLIGHT SAVING ZEAL — Thune also said Monday there is no “consensus” yet on Congress establishing permanent daylight saving time — even as Trump ramps up pressure to pass it. “The president feels strongly on it like he does a lot of issues,” Thune said. “It’s something we’re having conversations about, but there’s no clear path forward or consensus on it yet.” Thune also made clear that while Trump singled out Sen. Tom Cotton for scrutiny, opposition to the bill — which would lead to late winter sunrises in some parts of the country — runs deeper than one senator.
— BUCKS FOR BABIES PLAN DRAWS MURRAY IRE — Top Democratic appropriator Patty Murray is blasting a Trump administration plan to reward communities with high birth and marriage rates with a bigger share of federal transit money. “Tying funding for transit projects to marriage rates and how many babies a woman has is the sort of bizarre and dystopian idea you’d expect in a TV show, not actual policy put forth by the U.S. government — yet here we are,” Murray said in a statement. The Federal Transit Administration wants to revamp a multibillion-dollar program that helps state and local authorities fund infrastructure projects such as rail improvements and new bus lanes. The agency opened public feedback on the plan this month.
Jordain Carney and Sam Ogozalek contributed to this report.
LE SUEUR, Minnesota — The word on John Thune’s mind these days is “resources.”
In the Senate majority leader’s recollection, it was a dominant topic in his recent conversations with President Donald Trump, including at a recent visit to the White House, not to mention in his frequent conversation with Trump’s political team — and in an exclusive conversation with Blue Light News Monday during a Midwest campaign swing.
“I think the president is sincerely interested in trying to do whatever he can to help the team,” Thune said about his midterm conversations with the president and his advisers. “I also share with him, too, the importance of just the resources in some of these states. You know, some of the states have gotten very expensive.”
As Trump focuses on turning out his own voters — a message the president is taking into his own hands in a series of preelection rallies — Thune is making sure he also has money on his mind: “I … just conveyed to him the importance of ensuring that our candidates are well-resourced.”
Thune’s focus underscores the emerging question defining the 2026 midterms: Is there enough Republican money, and can it be spent fast enough, to counter surging Democratic campaigns and a lackluster national environment for the GOP?
It’s a narrative both sides largely agree on — Thune’s Democratic counterpart, Minority Leader Chuck Schumer, said as much last week — even as each leader insists his side will prevail.
Thune declined Monday to put odds on the GOP’s chances of keeping control of the Senate but said repeatedly, “I think we can keep the majority.”
“I think all of these races are margin of error, at least the ones that we have to win,” he added. “And historically, at least if you look at polls, we tend to outperform them.”
Unlike Schumer, who is keeping a low profile in October and focusing on private fundraising, Thune is barnstorming the country — visiting a mix of deep-red and battleground states.
Minnesota was not expected to be in play for Republicans when Thune took over as leader nearly two years ago. Democratic incumbent Sen. Tina Smith had a clear path to reelection in a state that has not elected a GOP senator since 2002.
But Smith chose to retire, and Democrats nominated an unabashed progressive, Peggy Flanagan, who is now facing Michele Tafoya, the well-known former sportscaster, in November. Recent public polls have shown the race in single digits, and Thune was not shy about including it alongside Michigan and New Hampshire as a GOP pickup opportunity.
Mentioning Minnesota is one thing, but investing in it is another, and national groups affiliated with Thune have not made major investments in the state so far. Standing next to Thune at a news conference Monday, Tafoya made the case for that to change.
“We have had three or four straight weeks of really solid polls,” she said. “This is one worth investing in. We are right there.”
But they both kept things vague when asked about Washington Republicans’ potential commitment to the race — including how much cash would be necessary to overcome 24 years of futility and a bad political environment.
Both Thune and Tafoya used the same words to answer that question: “We haven’t had that conversation.”
Thune put the party’s spending decisions into a larger context: “If the president is looking for places where he can make a difference … we’re in touch on a daily basis with his team and hopefully they will — as they already have — continue to help us leverage the resources that we’ve got to bring to bear to get the best possible impact and outcome in these key states.”
Thune pointed to Minnesota as one possible state where Trump could choose to deploy his $400-million-plus war chest. But the tiny national footprint in the Gopher State pales next to the hundreds of millions of dollars being spent in Texas — an expensive state Thune and Trump continue to discuss as Republicans struggle to drag Senate nominee Ken Paxton over the finish line.
Asked about the super-sized investments there, Thune declined to connect the massive spending on Paxton to tough decisions elsewhere on the map. “Dedicated donors” focused on Texas, he said, have meant GOP groups haven’t yet had to siphon funding away from other key states.
But the tough decisions are nevertheless underway. As Republican candidates play defense in a growing list of red states, the Thune-aligned Senate Leadership Fund recently pulled back spending in North Carolina — essentially surrendering a GOP-held seat to Democrats — while increasing its spending in Kansas.
Thune referred to the decision as a “pause” in financial support for nominee Michael Whatley.
The reasons for the political headwinds were on display Monday at an agriculture-focused roundtable, where Thune and Tafoya heard about the impact of Trump’s trade war with Canada, the president’s decision to import foreign beef and the high diesel prices that followed his decision to attack Iran.
Thune, a South Dakotan fluent in farm-state politics, touted Tafoya as someone who could help address some of those concerns by being a “great voice on issues like agriculture” if she makes it to the Senate.
His broader message in the interview, however, was to cast the midterm election as “choice” between the two parties rather than a referendum on the Iran war and the ensuing spike in energy prices. Democrats want “more spending,” “higher costs,” and “open borders,” he said, while Republicans had put “more money in your pockets” with their 2025 tax bill.
“Iran is temporary,” he said. “It will be behind us. Gas prices are going to come down, so who do you want to invest in for the next two years, four years?”
The midterm results carry personal stakes for Thune, who is expected to run for leader again in internal Senate GOP elections that are expected to take place just days after the midterms, regardless of the outcome.
Thune remains well-liked within the Senate GOP conference, and no other senator has raised his or her hand to run against him. But some conservatives, in and out of the Senate, have privately questioned whether Trump would publicly turn on Thune if Republicans lose their majority.
Asked about that possibility, Thune said, “I can’t control that.” He added that “the Republican conference” would ultimately make the decision.
“What the president does or doesn’t do … you just move forward and let the chips fall where they may,” he said. “All I can say is, I’m with him and his team to do the things I think are good for the future of the country.”
When Blue Light News pointed out Trump defended Thune at last month’s GOP midterm convention after some in the crowd booed the mention of his name, he laughed.
“Yeah, I know,” he said. “It’s the little things, right?”
The chair of the House Agriculture Committee said he’s not willing to “accept bad results” as a tradeoff for the benefits of advancements in artificial intelligence — a direct rebuttal to OpenAI CEO Sam Altman.
“As someone who practiced health care for 28 years, I’m never willing to accept bad results. I think we just need to do our best,” Rep. G.T. Thompson, a Pennsylvania Republican, told reporters Monday.
He was responding to Altman’s comments to Decoded by Blue Light News that people “should accept some bad things happening for the benefits of this technology and people having the agency.”
Pressed further on whether he agreed with Altman’s premise, Thompson replied, “No, I think we have to work harder to prevent any bad things from happening.”
Altman’s comments come in the wake of increased panic over the risks of catastrophic destruction from AI, with many industry leaders and experts arguing that guardrails are needed on the technology to prevent it from spinning out of human control.
Pressure is building on Congress to regulate the rapidly-advancing technology, but lawmakers are divided over whether the AI industry needs federal regulation or if it’s capable of governing itself.
The executives of major AI labs and tech companies gathered at the White House last week to discuss solutions with President Donald Trump, who believes overregulating AI will have national security repercussions. The group ended up signing a “morally binding” AI accord that critics say won’t do enough to prevent a worst-case scenario.
Thompson noted Monday he believes that AI will bring “tremendous solutions,” specifically in regards to finding cures for health issues like cancer and Alzheimer’s disease. But he also said AI has to be led with “principle” — comparing it to how he addressed digital assets in a bill to regulate the cryptocurrency industry, which he worked on as chair of the Agriculture Committee.
“The first principle is ‘do no harm.’ So we need to protect consumers, and that means, I think, building some guardrails — some guidelines — to do that,” Thompson said. He added that the second principle is to “foster innovation.”
“I think AI has a lot to do with that,” he added. “I don’t think AI works without RI: Real Intelligence.”
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