Congress
Trump still wants a spending fight with Congress, even after memo debacle
The Trump administration has been spoiling for a legal fight over its power to ignore Congress’s spending laws since the president was last in office. But sending Washington into a tailspin over a poorly written memo was not part of the plan.
While the Trump administration intends to ax funding for initiatives it views as out of step with its priorities — like foreign aid, diversity, equity and inclusion efforts and environmental spending — it didn’t mean to blow up funding for a broader suite of programs as it did when the White House budget office on Monday released a memo that brought all federal financial assistance programs to a grinding halt, according to two senior administration officials, granted anonymity to speak about private conversations.
The memo appeared to be a brazen and sweeping attempt to challenge Congress’s power of the purse under a theory from Trump’s appointee for White House budget office director, Russell Vought, that the executive branch is not required to spend dollars that do not align with its goals.
And it was — the White House just didn’t intend for it to be quite so sweeping.
Trump’s inner circle was irked about the OMB memo, complaining Wednesday that it had not gone through the proper channels and wasn’t vetted. Its broad wording created a political and a legal problem — arousing anger and concern even from some Republican lawmakers worried their constituents would be hurt and putting the administration in a thorny legal position that has already resulted in one judge halting the spending freeze and a second poised to do the same.
“It was just poorly written from policy people, not comms people — and so people took that first line and ran with it, which was a ‘freeze of federal funding,’” said one of the senior administration officials, arguing that the memo should have been more narrow in scope.
The confusion ironically left conservatives long critical of safety net programs like Medicaid and the Supplemental Nutrition Assistance Program scrambling to clarify that those dollars remained untouched.
The administration since tried to course correct by rescinding its first memo in an attempt to assuage some of the immediate panic and confusion.
But even without it, the president’s aggressively written executive orders that preceded the memo have created their own disruption — leaving billions of dollars of federal spending up in the air as agencies review whether they are complying with orders to gut Biden administration plans for the environment and other Democratic priorities, including many that were approved by Congress.
Clarity may only come once the courts weigh in. While legal experts believe the administration’s argument won’t hold up, Vought and others appear eager for a confrontation on the matter in court, perhaps anticipating that a conservative-dominated Supreme Court would rule in its favor.
The legal fights over the executive branch’s authority to withhold spending are already underway, particularly after White House press secretary Karoline Leavitt made clear that it was only the memo — not the federal funding freeze to these same programs — that had been rescinded.
For instance, federal funding remains on hold for environmental initiatives undertaken by past administrations, including the Inflation Reduction Act’s $7 billion Solar For All program and its National Electric Vehicle Infrastructure program, which was singled out in Trump’s executive order as an example of the spending he wanted to halt.
James Capretta, who was associate director of the White House’s budget office under former President George W. Bush, said the Trump administration’s “very expansive view of” what federal spending the executive branch can cancel or delay, actions known as impoundments, got mixed up in confusion over the memo.
“I think their intention was to do something pretty expansive — to halt new spending until the new people coming in have a chance to review what’s going on,” said Capretta, a senior fellow at the American Enterprise Institute. “They just wrote it in way too expansive of a way, covering all kinds of things that are governed by laws that they have to change first if they want to change how the money is spent.”
“The impoundment issue is still there, but it’s going to be tested, I think, later when they’re ready,” Capretta added.
Trump’s White House is making no apologies for freezing congressionally allocated dollars that don’t align with his agenda — a chopping block that includes everything from infrastructure payments to diversity, equity and inclusion programs in the federal government. And the administration is still furious with the media for stoking fear of broader cuts, something officials argue was never going to happen.
But officials also privately acknowledge that their OMB document was not ready for primetime — reminiscent, to some, of the slapdash early moves during his first term, when a ban on migrants from majority-Muslim countries and other orders were quickly halted following legal challenges — and overly broad.
“Everyone got freaked out and confused by the guidance memo,” the senior administration official said. “If you go back into the history of guidance memos, there are probably none that have warranted any coverage — let alone wall-to-wall coverage.”
Still, given the broad wording of many of Trump’s executive orders, federal agencies will almost certainly need more specific instructions from the White House budget office to translate the president’s broad policy statements into actions. At least one senior Trump official acknowledged Wednesday that rescinding the OMB memo would do little to resolve questions about what exactly is being cut, and that another memo will likely be needed.
Neither the White House nor a spokesperson for the Office of Management and Budget responded to a request for comment.
Inside the federal agencies affected by the confusing guidance from the White House, the chaos has not abated. Grantees, informed via email on Tuesday that all award recipients will temporarily be unable to receive new disbursements, remain in limbo. And even after subsequent guidance from some administrators that certain payments will still be available, many who oversee aid programs are proceeding with caution, not knowing what else may be in the offing.
“It’s a mess — no one knows what we are allowed to be doing and telling grantees,” said one official at the Department of Justice. “We have no clear and understandable guidance from leadership. Meetings are being cancelled left and right. We are trying to get back to the rhythm assuming the regular course of business is in place. But everyone is really cautious.”
Also thrown into chaos were the hundreds of clinics around the country that provide free and subsidized contraception, testing for sexually transmitted infections and other services to millions of low-income people through the Title X family planning program. The clinics this week struggled to get answers to questions about the funding as Health and Human Services staff have been barred from communicating externally.
“People were trying to get in [to our government payment system] and nobody could get in, and they were getting different types of messages,” said Clare Coleman, the president of the National Family Planning and Reproductive Health Association. “We didn’t know when that hold was going to be lifted.”
Though funding has resumed, Coleman warned that some clinics in the network receive no other source of funding, and would have to close if Title X is disrupted again. For now, many are pinching pennies so they have a cushion and are able to continue operating if that happens. Coleman fears, however, that many won’t be able to survive — particularly if Medicaid funding is frozen as well.
“I don’t care how many days of cash you have on hand, that’s existential,” she said.
Alice Miranda Ollstein contributed to this report.
The Trump administration’s sudden moves to rein in Anthropic are giving fresh momentum to efforts in Congress to impose guardrails on cutting-edge artificial intelligence models.
Lawmakers are still seeking clear information about the government’s decision late Friday to impose an export ban on the AI company’s latest models, known as Fable 5 and Mythos 5, over cybersecurity concerns — a move that led Anthropic to suspend access to both for all users.
In roughly a dozen interviews on Capitol Hill this week, several lawmakers said they were shocked by the development and had yet to receive a formal briefing from administration officials. Senate Commerce Chair Ted Cruz (R-Texas), whose committee has jurisdiction over AI policy, said Monday that he had seen “what’s been reported in the press,” but had not been briefed on details.
Members of both parties said they now see an opening to mobilize their colleagues around legislation that would reclaim congressional authority at a time when the executive branch remains firmly in the drivers’ seat on AI regulation.
But lawmakers have struggled to reach consensus on a complicated and politically divisive matter in an election year. And the circumstances around the Anthropic saga could further drive a wedge between Democrats, who generally favor strong regulatory review requirements of new AI models, and Republicans, who tend to be wary of such a heavy hand.
“I think we’re landing more and more in a place where everybody’s realizing you need some type of government oversight,” said Sen. John Curtis (R-Utah) in an interview Tuesday. “I think we’re still struggling with what that is.”
Disagreements over policy are being exacerbated by Democrats’ wariness to legislate on AI in a GOP-controlled Washington ahead of the midterm elections, with some viewing a potential House majority as their best opportunity to enact AI rules more closely aligned with Democratic priorities. Some Democratic lawmakers said this week that the Anthropic episode was just the latest example of the Trump administration’s erratic decision-making.
“I think this is an indicator that this administration no longer believes in a free market,” said Sen. Brian Schatz of Hawaii, who is in line to be the No. 2 Senate Democrat in the next Congress. “They believe in picking winners and losers.”
The administration’s decision regarding Anthropic came two weeks after Trump signed an executive order establishing a voluntary vetting regime that asks AI companies to submit their advanced models to the government 30 days before they are released to the public.
“If even this … administration is suddenly saying this is a security risk, why are we allowing these entities to put this out without testing?” asked Sen. Mark Warner of Virginia, the top Democrat on the Senate Intelligence Committee.
Anthropic’s relationship with the White House has been strained since a standoff with the Defense Department earlier this year, when the Pentagon labeled Anthropic a supply-chain risk. While the unveiling of Anthropic’s latest model Mythos prompted the government to soften its stance toward the company, last week’s events signalled the repair may have been superficial.
“If Donald Trump thinks we need export controls on Anthropic, then how about putting export controls on the computer chips that will let China build their own version of Anthropic?” Sen. Elizabeth Warren (D-Mass.), said Tuesday in an interview.
When asked to rate the chances of Congress passing legislation to set federal standards for AI regulations, she replied, “It would be high if it weren’t for Donald Trump.”
This all comes as Washington was already grappling with the larger question of how to regulate the AI industry to ensure the safety of models, and whether it should be up to states or the federal government to set those guardrails. The Commerce Committee in the coming weeks is expected to consider a slate of AI bills, including potentially one that would require social media platforms to put mechanisms in place to protect users who are minors.
Some members of Congress are trying to work across the aisle on the issue despite the steep odds. In the House, Reps. Jay Obernolte (R-Calif.) and Lori Trahan (D-Calif.) last month unveiled a broad AI legislative framework that folds in preemption of state AI laws. Trahan, who has broken with House Democratic leadership in pursuing a bipartisan path on AI, seized on the Anthropic news to urge congressional action.
“This decision further illustrates the need for a thoughtful and durable national strategy on AI,” she posted on X. “Decisions this consequential shouldn’t turn on a single directive issued at 5 pm on a Friday. They should follow rules that are clear, fair, grounded in technical facts, and built to last beyond any one administration.”
Trahan’s spokesperson, in a statement Tuesday, said, “Whether the decision by the administration was political or actually based on a real threat posed … it underscores the fact that Congress must act urgently and in a bipartisan fashion.”
The Trahan-Obernolte proposal would stop short of calling for a mandatory review system for new frontier AI models, however, which could become difficult in the post-Anthropic era.
Rep. Josh Gottheimer (D-N.J.), who is co-chair of the House Democratic Commission on AI, said in an interview that the Trump administration last week “ma[d]e it clear the importance of actually mandatory reviews when it comes to government reviews, when it comes to models and national security-related issues.”
“If there were a piece of legislation for a mandatory review,” he added, “I’d certainly support that.”
Sen. Todd Young of Indiana offered a measured response to the events of the last several days, saying the Senate Commerce Committee, of which he is a member, would work to try to get answers. He added that the recent developments could “conceivably” propel lawmakers to work together on legislation that would establish a system to review new models.
“You don’t want to just be trusting private actors to do the right thing and trusting their judgment, because the risk we’re talking about here could conceivably be catastrophic,” Young said, adding, “I think everyone wants to get this right.”
Gabby Miller contributed to this report.
Todd Blanche is mounting a charm offensive with Republican senators as his nomination as attorney general inches forward. So far, he seems to be saying the right things.
The scheduling of a confirmation hearing next month and positive early reviews from GOP swing votes are raising expectations that the acting Justice Department head and former personal lawyer to President Donald Trump could be permanently installed later this year.
In his meetings Tuesday with Republicans on the Judiciary Committee, as well as key senators off the panel, Blanche sought to assuage lingering concerns about the “Anti-Weaponization Fund” the department recently proposed as it settled a Trump lawsuit against the IRS.
The fund, which could have funnelled up to $1.8 billion in payouts to Trump political allies, was withdrawn after a bipartisan outcry on Capitol Hill, and Blanche assured senators during the closed-door sitdowns that it’s gone for good.
“We had an extensive discussion on the Anti-Weaponization Fund, which he has assured me with no equivocation at all that he is not for it, will not pursue it, that it will not exist,” Sen. Susan Collins (R-Maine) told reporters, calling it a “very good meeting.”
Blanche’s private assurances come ahead of his scheduled July 15 appearance before the Judiciary Committee, where he is certain to be grilled on the fund and his handling of other matters involving Trump. With Democrats on the panel unlikely to support Blanche’s confirmation, he will need to win over all 12 panel Republicans in order to advance to a floor vote, which could take place as soon as the first week of August.
The payout fund is a major issue Blanche will have to address, but it will not be the only one. The IRS settlement also included a provision indemnifying the president and his family against future tax audits, which has raised hackles with at least one Senate Republican.
Sen. John Cornyn (R-Texas), who sits on the Judiciary Committee, said Blanche had committed to giving him a “further briefing on the tax audit issue involving President Trump and his family.” He otherwise said the two had a “positive” meeting.
More generally, Blanche has faced criticism over his close personal ties to Trump, having represented the president in various criminal cases across the country. He was on Trump’s legal team for both federal prosecutions out of former special counsel Jack Smith’s office and for the Stormy Daniels hush money case brought by local prosecutors in Manhattan.
That background has fueled the perception that Blanche has been unduly loyal to Trump in his stewardship of the Justice Department, and some Senate Republicans have indicated that they want to push Blanche on whether he understands the difference between being attorney general and being Trump’s personal lawyer.
But the mere fact that Blanche once represented Trump in a personal capacity is unlikely to derail his chances for confirmation. Every Republican present confirmed Blanche to be deputy attorney general last year knowing that history.
His actions since joining the Justice Department have garnered more scrutiny, however — especially the IRS settlement. He publicly defended the $1.8 billion fund before a Senate Appropriations subcommittee last month in the face of deep skepticism from Democrats and Republicans alike, including Collins.
Two days later, Blanche faced a brutal reception during a closed-door lunch where dozens of Republican senators grilled him over the fund. The controversy threatened to derail a GOP immigration enforcement bill, and it ultimately delayed its passage for more than a week.
Blanche subsequently helped break the stalemate when he told House appropriators that the administration would not move forward with the fund. Those remarks helped publicly assure Senate Republicans, who had been underwhelmed by his appearance at the Senate GOP lunch.
Some senators indicated he still has more assuring to do.
“I like Todd … but I think he’s going to have a rigorous confirmation,” said Sen. John Kennedy (R-La.), another Judiciary member. “I think he’ll ultimately be confirmed, but I’ve got some hard questions for him.”
Senate Majority Leader John Thune has been careful not to guarantee Blanche will be confirmed, noting he first has to get out of the Judiciary Committee where multiple GOP senators are keeping things close to the vest.
“If he can get a strong vote coming out of the Judiciary Committee, then my expectation is, we would be able to process him on the floor,” Thune told reporters this week. “You’ve got a couple people on that committee that he’ll have to convince, but I know that he’s prepared to do that.”
A critical Republican on the panel — retiring Sen. Thom Tillis of North Carolina — will meet with Blanche next week.
Tillis has previously tanked Trump nominees over concerns relating to the attack on the Capitol on Jan. 6, 2021, including Ed Martin’s nomination to be U.S. attorney in D.C. But the senator gave no initial indications this week of disqualifying marks in Blanche’s background regarding the insurrection and its aftermath.
“I haven’t seen anything that, you know, from a Jan. 6 perspective would be a problem,” Tillis said Tuesday. “So now we’re just going through all the other vetting.”
Pressed on the payout fund, he added: “It will be an issue if the weaponization fund isn’t effectively dead by the confirmation hearing because I’ve got a real problem with it being out there.”
With a month to go until Blanche’s hearing and at least another week before he gets a committee vote, further Justice Department activity involving Trump adversaries could continue to weigh on his nomination. California Gov. Gavin Newsom’s disclosure this week that he and his wife are under federal investigation have newly fanned concerns that Blanche is pursuing a retribution campaign at Trump’s behest.
Tillis said he expects to question Blanche at the hearing on the apparent targeting of Trump’s political enemies, including former FBI Director James Comey, who is under indictment in North Carolina for allegedly threatening Trump.
“I want to hear about what the details behind that Comey investigation are,” he said. “Because look, I know that the Biden administration was guilty of weaponization. I don’t believe the proper response is a mirror image.”
Blanche is also certain to face tough questioning next month on another matter: his handling of the Jeffrey Epstein files.
Ousted Attorney General Pam Bondi told Congress last month that Blanche oversaw the process of releasing Justice Department files concerning Epstein, the late convicted sex offender. The botched redaction process, which in some cases led to release of private material related to Epstein’s victims or the withholding of information about people who were not victims, has been the subject of bipartisan scrutiny.
House Oversight Chair James Comer (R-Ky.) has requested Blanche speak with his committee next month about the files’ release, which could put him in lawmakers’ crosshairs just weeks or days before a potential confirmation vote.
Senate Majority Leader John Thune said Tuesday the chamber will move forward with its first procedural vote on updated bipartisan housing affordability legislation. The movement comes after the leaders of the Senate Banking and House Financial Services Committees announced bicameral agreement on the long-awaited bill.
The text of the revised 21st Century ROAD to Housing Act was released Tuesday and contains most of the House-passed housing language, including the House’s version of a provision to restrict large institutional investors from buying single-family homes. Six Senate bills stripped from the House-passed package were also added back onto the bill with “meaningful changes” to address House concerns, according to a note the Senate Banking Committee circulated with the bill text that was obtained by Blue Light News.
“This bill is the result of years of work to lower costs, expand housing supply, cut red tape, protect taxpayers, and help more Americans achieve the dream of homeownership,” Senate Banking Chair Tim Scott said in a statement.
Scott negotiated the revised language with ranking member Elizabeth Warren and worked with House Financial Services ranking member Maxine Waters “to get her to good on the package,” according to the note.
House Financial Services Chair French Hill was able to support the revised bill after an additional change to the bill was made, which would authorize a controversial disaster relief program for only three years instead of the Senate-proposed seven-year sunset, according to two people familiar with the legislative negotiations.
“I appreciate the Senate including a three-year sunset on the CDBG-DR program and adopting key House priorities including nine community banking bills and the House’s language limiting institutional investors from outcompeting American families in the housing market,” Hill said in a statement.
Lawmakers from both parties view the legislation, which aims to increase homeownership and boost housing supply, as an answer to cost-of-living concerns that have dominated the midterm elections season. Despite bipartisan agreement on respective sides of the Capitol, the two chambers have gone back and forth for months, with the House voting on two different versions of the housing affordability legislation, and the Senate now preparing for a second round of votes on the bill.
Thune said Monday he was hopeful the bill could be passed this week.
Both chambers overwhelmingly passed their own versions of housing legislation — the Senate 89-10 in March, and the House 396-13 in May. The White House supported the Senate-passed bill and then backed the House-passed bill after it retained most of the Senate’s language on reining in private equity and other large Wall Street investors in the housing market — a top priority for President Donald Trump.
Jordain Carney contributed to this report.
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