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Capitol agenda: Thune’s biggest megabill fires

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Senate Majority Leader John Thune has some “big, beautiful” conflicts to resolve — and fast — if he wants to pass his party’s tax-and-spending package next week as planned.

Here’s a look at the biggest fires Thune needs to put out to meet his deadline, some of which are newly raging following Senate Finance’s release of long-awaited bill text:

MEDICAID JITTERS — “Medicaid moderates” are reeling after Republicans on the key committee proposed lowering the provider tax,from 6 percent to 3.5 percent by 2031 for states that have expanded Medicaid offerings under the Affordable Care Act. Several states rely heavily on this tax to help fund their Medicaid programs.

Republicans, including Sen. Josh Hawley (Mo.), were already rebelling against the House-passed megabill’s move to find savings by freezing the provider tax. Now, Hawley is saying he’s “alarmed” that Senate Finance would go even further and that the plan “needs work.”

“I don’t know why we would defund rural hospitals in order to pay for Chinese solar panels,” he told reporters Monday evening, in a nod to Senate Republicans’ plan to ease some of the House GOP’s deep cuts to clean-energy tax credits (more on that below).

Sen. Susan Collins (R-Maine) also expressed concern about the provider-tax change, though she declined to elaborate as she left the closed-door meeting Monday night where Finance Chair Mike Crapo (R-Idaho) was briefing GOP senators on his proposal. But Sen. Rick Scott (R-Fla.) said he doesn’t think the plan would go far enough in slashing spending on the safety-net program, suggesting senators should reconsider including a provision that would scale back the federal government’s share of paying for states’ Medicaid expansion.

Expect this to be a topic of discussion when GOP senators meet with CMS Administrator Mehmet Oz Tuesday during the conference’s weekly lunch.

HOLD THE SALT — Blue-state House Republicans are seething as senators continue to haggle down their state-and-local-tax deduction cap. GOP senators included the current $10,000 deduction limit — rather than the $40,000 the House passed — as a placeholder in the draft bill text Senate Finance released Monday, giving space for talks to continue.

Rep. Mike Lawler (R-N.Y.) declared the Senate’s proposal “dead on arrival” in the House. But Sen. Markwayne Mullin (R-Okla.), who’s been backchanneling with SALT Republicans including Lawler, insisted to reporters that the deduction is “fully open for negotiating.” Thune also told reporters Monday that senators are “prepared to have discussions” amongst themselves to “figure out a landing spot.”

LESS GUTTING FOR GREEN CREDITS — Senate Republicans are extending some of the House’s aggressive phase-out dates for credits benefitting “baseload” energy technologies like nuclear, geothermal and hydropower, leaving one GOP proponent of the incentives, Sen. Thom Tillis (R-N.C.), “generally satisfied.” They are still making significant cuts to solar, wind and electric vehicle incentives in Democrats’ 2022 climate law, but that’s not going to satisfy conservatives who want a full repeal of what they call the “Green New Scam.”

House Freedom Caucus members, who pushed for deep cuts to the green credits in order to get behind the megabill in their chamber last month, could fight the Senate’s slower roll. One member, Rep. Chip Roy (R-Texas), declared on X he “will not vote for this.”

Dive deeper into the long list of other Senate Finance megabill changes.

What else we’re watching:

— Lawmaker safety after Minnesota shootings: Senators have a classified security briefing with the chamber’s sergeant at arms and Capitol Police this morning, where the question of resources for lawmaker safety could come up. Across the Capitol, House Minority Leader Hakeem Jeffries is asking Speaker Mike Johnson to increase funding for members’ security as more elected officials learn they were potential targets of the man suspected of the shootings in Minnesota.

— Senate’s first major crypto overhaul: The Senate is set this afternoon to pass landmark cryptocurrency legislation, one of Trump’s biggest policy priorities outside the megabill. The bipartisan bill would create a regulatory framework for digital tokens known as stablecoins that are pegged to the value of the dollar. But the legislation faces a murky future in the House.

— Gabbard, Ratcliffe on Blue Light News: Director of National Intelligence Tulsi Gabbard, CIA Director John Ratcliffe and NSA acting Director Lt. Gen. William Hartman will testify on behalf of the president’s fiscal 2026 budget request for intelligence during a closed Appropriations subcommittee hearing.

Jordain Carney, Brian Faler and Jasper Goodman contributed to this report.

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Congress

Where Warnock is visiting in the final midterms sprint

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Sen. Raphael Warnock is hitting the road for the last month before Election Day.

The Georgia Democrat’s final midterm campaign surrogate sprint will only increase chatter around the possibility that he might run for president in 2028, according to a nine-stop itinerary shared first with Blue Light News.

First, he’ll touch down in New Hampshire on Tuesday before hitting Nevada on Wednesday. Next, he’ll travel to South Carolina (Oct. 13), Mississippi (Oct. 14), North Carolina (Oct. 15), South Carolina (Oct. 16-17), Michigan (Oct. 20-21), Wisconsin (Oct. 23) and Ohio (Oct. 24-26).

“Senator Reverend Warnock will be hitting the trail to energize voters who are sick of the President enriching himself while ordinary people continue to pay more for everything,” a spokesperson told Playbook. “Tapping into the righteous anger that voters are feeling across the country, the pastor in the Senate will again make the campaign trail his pulpit: calling out Trump’s corruption, while leaving voters hopeful for the next generation of Democratic leadership.”

Asked recently at the Texas Tribune Festival about whether he would run for president, Warnock said: “We’ll see what happens.”

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Capitol agenda: Dems split on probing Trump corporate allies

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Democrats are eager to win back subpoena power if they retake Congress, but they’re split on how hard they’ll go after corporate America.

The party is united by the idea of aggressive oversight of President Donald Trump’s administration, which will help shape their messaging in the run-up to the 2028 election. But Democrats are at odds over how fiercely to use their probing power to go after the corporations, law firms and universities that courted the White House over the past two years.

“We don’t want to turn into a banana republic where you lose an election and it’s all about retribution,” Rep. Bill Foster, a senior member of the Financial Services Committee, said.

“We’re going to have to be a little bit wise about when companies simply did something they had to do to survive this unprecedented level of corruption, compared to companies that actually got on board and profited more by being a partner in his corruption,” he added.

Some progressives counter that a restrained approach would sit uneasily with the party’s base.

“It would be political suicide for Democrats to campaign on fighting corruption and then turn around and go easy on the very companies that are facilitating it,” said Ella Fanger, corporate power policy adviser at the liberal nonprofit group Demand Progress.

Prime targets for some Democrats are the tech companies that have taken steps to be on the president’s good side, like Apple, Amazon and Meta, which have all donated to Trump’s ballroom effort. Major cryptocurrency players, including Coinbase, Ripple and Tether also chipped in for the ballroom, and will be subject to questioning from Democrats.

The late convicted sex offender Jeffrey Epstein’s networks and associates are also poised for probes — a push that has ensnared big banks like JPMorgan Chase, Deutsche Bank and Bank of America in the past.

Sen. Chris Murphy said the party should focus on the nexus between Trump and corporate corruption.

“We should get to the bottom of the corrupt relationship that exists between corporations in this country and the Trump administration,” Murphy said, pointing to questions he’s posed about a tobacco company’s donation to Trump’s super PAC before new e-cigarette rules were unveiled.

Still, Sen. Catherine Cortez Masto, who serves on Senate Banking, warned against the weaponization of power.

“Our focus should be solving problems that we’re seeing happening,” she said, pointing to cost-of-living issues around health care, housing and energy.

What else we’re watching: 

— FIRST IN IC: BUILD AMERICA CAUCUS AGENDA — Energized by progress on permitting and housing legislation this term, a bipartisan development-focused caucus is rolling out a detailed agenda for next term. The 40-member Build America Caucus is releasing a 95-page package of proposals, first shared with Blue Light News, that outlines plans touching on health care, transportation, child care and research. The group launched last year with the goal of cutting red tape and regulatory bottlenecks to spur development.

— AI COLLAB STILL ILLUSIVE FOR CRUZ, CANTWELL — Commerce Chair Ted Cruz and ranking member Maria Cantwell might still be celebrating Senate passage of their landmark college sports bill last week, but it’s unclear the momentum will carry forward to agreement on another committee priority: artificial intelligence. Among the dozen lawmakers, aides and industry experts who spoke to Blue Light News, few expect the two senators to shed their well-established ideologies and styles after the mutual win. That could doom their ability to replicate their latest achievement in something as complex and divisive as an AI regulatory framework.

Jasper Goodman, Katherine Hapgood, Riley Rogerson and Kelsey Brugger contributed to this report.

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It took four years, but a Capitol Hill office finally has a union contract

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Four years ago, California Rep. Ro Khanna’s staff voted to unionize — one of a handful of Democratic offices that sought to ride a wave of organizing momentum during then-President Joe Biden’s administration.

Much has changed since, to put it mildly, but Khanna aides persevered and recently won approval of their first collectively bargained contract — the first labor agreement of its kind inside Congress.

“This was four years in the making,” Nicole Waring, a deputy director of constituent services for Khanna and the union steward, said in an interview. “We finally, finally reached the point where we were able to finalize our contract and ratify it.”

The agonizing process of turning pro-union enthusiasm into an actual binding agreement is both a breakthrough for the fitful labor movement on Capitol Hill while also underscoring how that movement has sputtered in the years since Biden left office, Donald Trump took back the White House and unionization moved off the front burner for Democratic staffers.

Since an initial wave of offices voted to unionize in 2022, that momentum has largely petered out. Less than a dozen offices are now unionized as staffers’ efforts are complicated by heavy workloads, adversarial bosses and Congress’ recent record high turnover rates that have led some aides to the conclusion that unionizing is more trouble than it’s worth.

Against that backdrop, that the eight-person union in Khanna’s office was able to win a contract constitutes a bright spot for organizers.

The agreement establishes a higher salary floor and a mechanism to renegotiate salaries if the office’s budget allowance increases, according to Waring and portions of the text reviewed by Blue Light News.

The document also codifies a procedure to resolve internal grievances. When Khanna almost certainly wins reelection, the agreement — which was officially ratified in August — will continue through next term.

“I’m proud of our office for signing the first long-term contract in the history of the U.S. Congress. I hope this can serve as a model for other offices in Congress,” Khanna said in a statement thanking his staff. “We need to be a model for the collective bargaining in our offices that we want to see across our nation.”

Waring said Khanna and his senior aides were supportive and trusting during contract negotiation but noted that, even under those positive circumstances, the effort was time- and labor-intensive.

“There’s a lot of back and forth. It takes time to review each passback of the contract, redline everything,” Waring said. “The biggest thing was we wanted to make sure that this contract would be governable, and rather than just make things convenient and take shortcuts, make sure that it was going to be something that we knew would stand the test of time.”

Khanna’s chief of staff, Marie Baldassarre, said in an interview the process for her office took years because “we realized like this is going to actually impact people’s lives, and it’s a binding contract, and so we have to get it right.”

“It’s just never been done before, and none of us were experts,” she added.

Staffers on Capitol Hill often face a grueling office cultures that can hamstring efforts to advance worker protections. Staffers for pro-labor Rep. Dina Titus (D-Nev.), for example, voted to unionize in 2023 but then faced internal retaliation, according to the Nevada Independent.

Staffers for lawmakers across the ideological spectrum can be subjected to long hours, eyebrow-raising member requests and unrelenting demands that can spur staffer interest in pursuing labor protections — but also fears about potentially hindering their careers.

A person involved in the Congressional Workers Union — an umbrella group that provides support to individual office bargaining units — called the Khanna office contract “historic” and acknowledged it was “probably the biggest win recently” for the broader organizing effort.

“There’s small wins all the time,” added the person, who was not authorized to speak publicly on behalf of the group.

Staffers for former Rep. Andy Levin (D-Mich.) ratified a contract in the final days of his term in December 2022. While that contract was technically the first for a member office, it was largely symbolic given Levin’s imminent departure. Staff for Reps. Mark Pocan (D-Wis.) and Val Hoyle (D-Ore.) secured “memorandums of understanding” with their members in 2024, but not formal contracts.

“Hats off to them for getting it done,” Levin said in an interview. “In terms of what comes next, much will depend on the outcome of the midterms.”

Levin, a labor attorney, said that Republican majorities and White House have had a chilling effect on Capitol Hill unions and predicted that if Democrats take back the House majority next year, a flurry of labor activity will ensue. He added that several Democrats with close ties to organized labor are poised to enter the House, naming fellow Michigan Democrat and former SEIU organizer Donavan McKinney.

“In this political climate, the idea of getting contracts negotiated on Blue Light News, where it’s hardly ever been done, I think that seems very challenging to me,” Levin said. “I do think it’s great that another office has gotten the first contract, and I think the momentum will continue to grow from here.”

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