Congress
GOP Senators discouraged by Trump’s community development finance firings
Two senior Republican senators said Tuesday they strongly support the Treasury Department’s Community Development Financial Institutions Fund after the Trump administration moved to eviscerate the program by firing all of its staff.
The elimination of employees at the CDFI Fund on Friday was part of the larger reduction-in-force orchestrated by Office of Management and Budget Director Russell Vought. A letter to fired employees said their termination was necessary to implement the abolishment of the entire CDFI program, which enjoys strong bipartisan support.
Senate Community Development Finance Caucus co-chair Mike Crapo (R-Idaho) told Blue Light News Tuesday that he “was discouraged to see the actions taken to [RIF] the employees, and I’m hopeful that we can get that turned around.”
Sen. Mike Rounds (R-S.D.), who’s consistently been vocal in his support of the fund, said he remains “fully supportive” of the CDFI Fund and that “the CDFIs do an excellent job in particular areas” and he’s “seen it firsthand in South Dakota.”
The fund awards federal dollars through a public-private partnership to CDFIs, which are community banks, credit unions and other financial institutions that lend and provide other types of capital to communities and markets traditionally underserved by the larger banking industry. The CDFI Fund was designed to increase the accessibility of financial services and products.
Rounds said the quickest way to fix the situation at the fund is to “get a continuing resolution in place and move forward” and re-open the government.
South Dakota CDFIs received $13.3 million from the fund in 2024, making the state a top recipient per capita.
Crapo would not comment whether he had spoken with Treasury Secretary Scott Bessent or the White House on the matter but said that “Congress has a role anytime Congress chooses, it can take some action.” He added that he and his caucus co-chair, Sen. Mark Warner (D-Va.), “are going to work together to try to get this fixed.”
Warner, on a press call Tuesday, said he’s working with Crapo to try to send a bipartisan letter from the caucus like they did in March after the initial executive order requesting the fund be eliminated to the fullest extent allowed under the law, to “show strong, bipartisan pushback.”
Additionally, Warner said he sent Bessent a letter regarding the unexpected firings on the CDFI Fund’s entire staff and that he expected to hear a response back soon. Neither he nor Crapo saw the RIFs coming, Warner said.
“At least my office and Crapo’s office, the first reaction [to the CDFI Fund RIFs] was shock” and that “it appears maybe this didn’t come from Treasury, it appears that it came from the OMB. I think this goes against the law,” Warner said.
It started with a pledge to expose a Biden-era conspiracy to take down President Donald Trump. It ended with a botched attack over basketball tickets.
Armed with subpoena power in Congress and a friendly Justice Department on their side, Republican lawmakers have spent two years promising to expose former special counsel Jack Smith as the leader of an anti-Trump witch hunt that morphed into a full-blown attempt to take down the Republican establishment.
Smith’s appearance Tuesday before the Senate Judiciary Committee — his third time testifying under oath on Capitol Hill, the second time in public — was supposed to be a watershed moment for the GOP intent on extracting a smoking gun ahead of the midterm elections. Instead, the hearing was most memorable for the fusillade of insults hurled by the panel’s Republicans.
Sen. Eric Schmitt of Missouri unsuccessfully sought to implicate Smith in a plot to attend a sporting event as a cover for investigating Trump election interference claims, then called him a “dirtbag.” Sen. John Kennedy of Louisiana said the former prosecutor made him “want to throw up in my mouth.” And Sen. Ted Cruz of Texas, comparing him to “Javert from ‘Les Mis,’” said Smith’s probe was “the most egregious abuse of power in the history of the Department of Justice.”
Senate Judiciary Chair Chuck Grassley insisted the hearing was “not the end” of his investigative work, but the four-hour grilling had the feeling of finality. The Republican-led probe into Smith’s efforts to bring criminal charges against the president has already stretched for two years, and Democrats stand a chance of retaking control of Congress in the midterms.
And at least one Republican member of the panel, Sen. Josh Hawley of Missouri, said he believed the investigation into Smith had run its course in Congress.
“At this point, I think we kind of know what we know,” Hawley said in an interview following the hearing. “I think at this point, it’s up to the DOJ to either prosecute him for perjury for lying under oath, which I think the House has formally referred him for … or try to have him disbarred.”
Judiciary Committee Republicans did little Tuesday to challenge the substance of Smith’s criminal case against Trump for seeking to subvert the 2020 presidential election. Smith reinforced his contention that Trump mounted an unprecedented criminal assault on the transfer of power, seeking to derail Joe Biden’s victory and then capitalizing on the Jan. 6, 2021 riot at the Capitol — unleashed by a mob of his supporters — to further that goal.
Smith also defended the work of his staff and decried the Trump-led Justice Department’s decision to fire them as “illegal.” And he made his most forceful case yet that the probe he led was actually fueled by Republican witnesses who broke from Trump over his handling of the 2020 election.
”It’s very hard to understand how our investigation can be viewed as partisan when the strongest witnesses, the people who were the difference between the rule of law and not, were Republicans,” Smith said.
When Sen. Darline Graham (R-S.C.) ripped into Smith for secretly obtaining her late brother Lindsey Graham’s phone records as part of his inquiry, Smith hailed him as a “patriotic public servant” and who likely would have been a featured witness in Trump’s trial — because he eventually concluded Trump’s election fraud claims were false.
Smith similarly hailed Former Arizona House Speaker Rusty Bowers and former Vice President Mike Pence as heroic figures who were crucial witnesses against the president. Smith ultimately dropped his case after Trump prevailed in the 2024 election. Though he said he remained confident in his ability to secure a conviction at trial, Smith emphasized that Justice Department policy forbids criminal prosecution of a sitting president.
When they weren’t lobbing personal attacks at Smith, Republicans homed in on what they described as procedural flaws of Smith’s investigation. They criticized him for subpoenaing phone records of members of Congress, like Lindsey Graham, who communicated with Trump and his administration during the post-2020 election timeframe.
They hit Smith for securing court orders that prevented telecom companies from alerting lawmakers to those subpoenas, and challenged his respect for the constitutional protections members of Congress are afforded to avoid scrutiny from federal prosecutors. That line of questioning produced one of the only bipartisan moments of the hearing: a pitch by Sens. Chris Coons (D-Del.) and Mike Lee (R-Utah) for legislation that would limit the ability of prosecutors to obtain secrecy orders when they issue subpoenas in sensitive probes.
Lee is poised to be the next chair of the Senate Judiciary Committee in the next Congress if Republicans maintain control of the chamber.
Smith used his appearance, as well as friendly questions from the panel’s Democrats, to parry GOP criticism of his tactics. He followed all Justice Department policies and laws, he insisted, and said he had respect for the separation of powers — including Congress’ constitutional protection from executive branch scrutiny.
Smith said he never targeted GOP lawmakers but pursued critical evidence of Trump’s actions and state of mind that would have been necessary to prove his case in court, and he repeatedly returned to an overarching contention: that he had enough evidence to convict Trump of “one of the most serious crimes that’s ever happened in our nation’s history.”
He also reminded lawmakers what he couldn’t say: anything at all about his charges against Trump for hoarding classified information at Mar-a-Lago. Smith’s findings in that probe remain sealed from public view by U.S. District Judge Aileen Cannon, who has ordered the Justice Department to keep it secret.
Sen. Adam Schiff (D-Calif.) said subpoenaing that report would be one of Democrats’ first actions should they have the majority in the next Congress.
Ultimately, Smith’s hearing Tuesday may end up being best remembered for a high-profile gaffe by Schmitt, who accused Smith of secretly traveling to Atlanta at the very moment local prosecutor Fani Willis — who had also charged Trump over the 2020 election scheme — was facing damaging questions about her conduct. As proof, displayed on an elaborate poster, Schmitt offered text messages suggesting that Smith attended a basketball game on Feb. 3, 2024 — the same day the Atlanta Hawks played the Golden State Warriors.
Schmitt revelled as a clearly flummoxed Smith struggled to discern what Schmitt was talking about.
“I don’t think you know that we have this stuff,” Schmitt said. “So I’ll give you a second to process it so you don’t perjure yourself.”
After a few moments, Smith did recall having attended a basketball game — but not in Atlanta. It wasn’t the Hawks his colleagues were discussing in a series of texts, Smith explained, but the Hawkeyes, whose star Caitlin Clark was playing in Maryland that day.
“It was because Caitlin Clark was coming to Maryland to play, and so we went to the game,” Smith said.
Immediately after the exchange, Sen. Amy Klobuchar (D-Minn.) fact-checked Schmitt in real-time, confirming the date of the Iowa-Maryland game and suggested that her colleagues’ reliance on “false information based on confusion about the name of a team” warranted an apology.
“You don’t call someone a dirtbag when you haven’t done your own research and you don’t have your facts straight,” Klobuchar said after the hearing. “And it just shows how completely out of control this whole thing was.”
Schmitt did not immediately respond to a request for comment on his allegations.
Kelsey Brugger contributed to this report.
A Democratic trio attempted to pass an artificial intelligence bill via a unanimous consent request on Tuesday but were blocked on the Senate floor.
Sens. Mark Warner (D-Va.), Brian Schatz (D-Hawaii) and Andy Kim (D-N.J.) sought to pass their Artificial Intelligence Risk Management and Security Act using the procedural mechanism, which allows expedited consideration of legislation but fails if one senator opposes it.
“The whole world has recognized that we’ve got to do something,” Warner said in a speech on the floor. “We should not miss the moment to put a safety protocol in place now.”
Sen. Ted Cruz (R-Texas) objected to the bill, preventing any chance of passage.
“Congress must not legislate on the issue of artificial intelligence hastily or in a closed manner,” he said on the floor, adding that it gave some in the government too much power to dictate the technology that could be permitted to be released.
As some lawmakers grow concerned over dire warnings from AI labs’ top executives about the technology’s risk to humanity, Congress’ attempts to legislate AI guardrails have largely stalled.
In the past few weeks, two other AI-related bills, the Ratepayer Protection Act and AI Emergency Button Act, were also nixed in an attempt to pass them unanimously.
Warner, Schatz and Kim’s new bill would have established a new safety board within the Commerce Department to vet models before they are deployed and set safety standards for the industry. It would also have created a reporting process for safety and security incidents.
Sen. Darline Graham sought to take up her brother’s mantle Tuesday, going after former special counsel Jack Smith for obtaining the late-Sen. Lindsey Graham’s phone data.
“You should be ashamed of yourself,” the South Carolina Republican told Smith as he testified before the Senate Judiciary Committee, adding that the anguish the prosecutor caused her brother “makes me sick.”
Lindsey Graham, until his unexpected death in July, was among the most vocal in his outrage over revelations that Smith secretly collected electronic data from GOP lawmakers as part of the Biden-era investigation into President Donald Trump’s efforts to overturn the 2020 election.
The late senator was also unapologetic in his support for a provision tucked into a government funding package, which was later repealed, allowing senators to sue the federal government for $500,000 or more if they discover their electronic records were seized without notification — language specifically designed to compensate Smith’s targets.
But Smith replied that Lindsey Graham was not a target of his investigation and was not suspected of wrongdoing — in fact, he considered Darline Graham’s brother “a patriotic public servant” who likely would have been a “witness” in his case against Trump for attempted election subversion.
“Your brother investigated the claims that Donald Trump was making,” Smith told Darline Graham. “He found them to be false.”
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