Congress
Capitol agenda: Thune’s biggest megabill fires
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.
Texas Attorney General Ken Paxton raised $18 million in the third quarter of 2026 across his campaign and his joint fundraising committees, his campaign tells Blue Light News, a significant haul for the homestretch of the election.
Paxton’s number is double his $9 million second-quarter total, and signals Republican donors are rallying behind their Texas nominee. The campaign did not provide a current cash-on-hand total.
Democrat James Talarico’s campaign has yet to release his fundraising totals for the quarter. He raised $30 million last quarter.
“We now have the resources to make sure every Texan sees Talarico’s radical record between now and Election Day,” said Nick Maddux, senior adviser to the Paxton campaign.
The past quarter — the first full reporting period after Paxton’s primary runoff victory in May — saw Republicans flock to Texas for their midterm convention, which featured pro-Paxton fundraisers on the sidelines. Last week, the Paxton campaign announced a massive $20 million ad buy across the state, one of the largest-ever single media investments in a Texas Senate race.
Paxton needs the money: In a recording of a private donor event last month shared with POLITICO, he said he has “never been in a race where I felt less control over the campaign,” pointing to influence “from D.C.”
Texas has emerged as a huge money suck for Senate Republicans, who have poured tens of millions into the state to aid Paxton. Senate Leadership Fund, their top super PAC, has spent or reserved well over $100 million in the state to date, and the Trump-aligned MAGA Inc. and its affiliates plan to spend near $45 million in the state through Oct. 12.
Paxton has acknowledged that money has changed the race’s narrative: In a recording of a private donor event last monthshared with POLITICO, he said he has “never been in a race where I felt less control over the campaign,” pointing to influence “from D.C.”
Most recent public polling shows Talarico with a small lead in the race in spite of the recent onslaught in GOP spending, though Paxton’s campaign released an internal poll last week showing Paxton leading by three points.
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.”
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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