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Political Wire logo White House Explains Reasons for Poor Health
A Collision with the Bond Markets Awaits
Judge Blocks Layoffs at Department of Education
Another Sign Elon Musk Has Moved On from Politics
Americans Now Support Unions by Record-High Margin
Lutnick Teases Launch of Trumps ‘Gold Card’ Visa

Budget Marathon Sets Up Budget Sprint

As we have noted a couple of times in the past week, Speaker Mike Johnson (R-LA) is trying desperately to get the "big, beautiful bill" over the finish line as rapidly as is possible. He's actually got a self-imposed deadline, which is Friday of this week. If the members of the House leave for the Memorial Day recess, they will be exposed to lots of coverage of the bill from news media, and lots of complaining from constituents. Johnson desperately wants to bank the 217 votes he needs before that can happen, which means that by the time you read this, he has maybe 36 hours (or less) left.

In service of that deadline, the House Rules Committee held a 22-hour markup session, ultimately voting 8-4 to advance the bill to the floor of the House for a vote. In theory, the Speaker planned to start debate last night, and then to vote today. We will see if that happens. The bill is 1,000+ pages, was cobbled together at breakneck speed, and then was amended substantially during the Rules Committee hearing. So, you can't really be sure what's in it, and you definitely can't be sure what's been hidden deep within the bowels, in some subsection on page 433, or some other sub-subsection on page 801. That said, here are a dozen things that are apparently included, based on reporting from various outlets:

  1. SALT cap lifted to $40,000
  2. Work requirements for Medicaid recipients, to start in late 2026 (right after the midterm elections, by completely random chance)
  3. Loss of Medicaid matching funding for states that cover undocumented immigrants
  4. Changes to the Supplemental Nutrition Assistance Program (SNAP) that will boot millions of people, mostly children.
  5. No federal taxes on tips
  6. No more taxes on gun silencers. However, after much debate (really!), taxes on tanning beds will remain intact.
  7. Phasing out Biden-era green-energy tax credits
  8. More tax credits for nuclear power plants
  9. A new type of IRA called "Trump Accounts"
  10. No federal payments for Affordable Care Act policies that cover abortions
  11. Tax cuts totaling $3.8 trillion, mostly an extension of the 2017 tax cuts.
  12. Not coincidentally, a $4 trillion increase in the debt ceiling

Moderate Republicans are grumbling, conservative Republicans are grumbling, but nobody has come out and said they are a "no" vote, except for Rep. Thomas Massie (R-KY), who is pretty much always a "no" vote. So, Johnson might just get this thing across the finish line.

That said, there's still a little thing called the United States Senate. If Johnson does herd the cats, his message to Senate Majority Leader John Thune (R-SD), et al., will be: "This is the bill I got through the House, and I'm not going to be able to do better. So, you can take it, or you can leave it." We haven't the faintest idea what the 53 Republican senators might do, though we do know that several of them, including Lisa Murkowski (AK) and Susan Collins (ME) have expressed opposition to the Medicaid changes.

The other thing we know is that the bill is not yet law, but the financial sector has already kindly shared its opinion. Earlier this week, Moody's became the last of the three major credit raters to yank the United States' perfect credit rating. This means that. in the judgment of the experts, U.S. Treasury bonds are more risky, and so the federal government should pay higher interest to investors. If so, that makes it more expensive for the government to borrow, and so to make budgets—like the one Mike Johnson is trying to move—work.

And then yesterday, as details of the latest budget bill were trickling out, the Treasury Department's regular bond auction produced worrying results. The average rate demanded by the investors, who bought $16 billion in bonds, was 5.047% on a 20-year note. The last six auctions saw an average rate of 4.613%, which implies that the Moody's rating and/or the GOP budget increased rates by about half a percent. Usually, things don't move that fast. And the news spooked Wall Street, with the result that all the major indices were down yesterday, between 1.4% and 2%.

We don't write too much about the budgetary sausage-making, because things are so fungible. But now, it looks like the House is at a denouement, one way or another. We'll probably know, by the time we write tomorrow's posting, if we were right in thinking that.

Last minute update: At 7 a.m. this morning, the bill passed the House 215-214. If Rep. Gerry Connolly (D-VA) hadn't died yesterday (see below), it would have failed. There will be writeups of the bill all over the place today. Here is the Washington Post's. (Z)

This Is Not Normal, Part I: Trump Administration Defies Another Judge

Sorry, but today's post is a pretty big downer, as there was just so much news related to Donald Trump's democracy-damaging actions. And even once we get through those, then it's an item about somebody dying. That's how it runs some days.

Yesterday, we had an item about one of the cases involving the Alien Enemies Act. Today, it's a different group of deportees to a different country with a different justification. The deportees are... well, eight people, about whom little is known, other than most of them are apparently Asian and/or African. The country is South Sudan, which has just descended (again) into a violent civil war. And the justification is... a mystery, as the Trump administration is claiming it involves some sort of national security concern. All that is certain is that the justification is NOT the Alien Enemies Act.

When the eight people were detained, their lawyers hustled to court to get a temporary injunction, which they got from U.S. District Court Judge Brian Murphy. In the Judge's order, he told the Trump administration that the detainees could not be sent to any country other than the one from which they came, until the Court had an opportunity to adjudicate the matter. And over the weekend, despite the Court's injunction, the eight people were deported anyhow.

Once Murphy learned what had happened, he held an emergency, late-night session in which he demanded answers from Trump administration attorneys. Because the session was (mostly) sealed, details are a little sparse. However the Judge definitely said: "The department's actions are unquestionably violative of this court's order." Meanwhile, the White House insists it followed all relevant laws and judicial directives.

The wheels of justice grind slowly, of course, and no federal judge particularly wants to commence a war with the executive branch. But one of these days, we will get a clear answer as to exactly what these judges are going to do in response to the Trump administration's intransigence. It may be James Boasberg who gives us that answer and, now, it might be Brian Murphy. (Z)

This Is Not Normal, Part II: Trump Ambushes Another Foreign Leader

Readers will recall the occasion, about a month and a half ago, when Volodymyr Zelenskyy was invited to the Oval Office and was tag-teamed by Donald Trump and J.D. Vance.

Well, yesterday, the same basic dynamic played out (although Trump soloed this time, even though Vance was sitting 6 feet away). Cyril Ramaphosa is the president of South Africa, and he paid a visit to the White House. Ramaphosa knows how the game is played when Trump is sitting on the other side of the chess checkers Candyland board, and so he came prepared to kiss some presidential posterior, highlighted by some golf-centric flattery. The South African even brought props, in the persons of famed South African golfers Ernie Els and Retief Goosen. But once that was done, Trump dimmed the lights in the Oval Office, and compelled his guests to watch a video supporting claims of genocide against White South Africans.

Once the video was over, Trump presumed to lecture Ramaphosa for several minutes. Here's the key part (or, at least, the most comprehensible part):

They're taking people's land away, and in many cases, those people are being executed, but in many cases, it's not the government that's doing it. It's people that kill them and then take their land, and nothing happens to them. But we have thousands of people that want to come into our country. They're also going to Australia in a smaller number. But we've thousands of people that wanna come into a country and they're white farmers and they feel that they're going to die in South Africa. And it's a bad thing.

And for an encore, of sorts, Trump also turned to NBC News reporter Peter Alexander, and began lecturing him on his network's failure to cover the South Africa genocide story, because NBC is too busy covering Qatari Air Force One.

Here, incidentally, are the facts of the situation in South Africa. Last year, the South African parliament passed Expropriation Act 13, which allows the government to seize private land, if there is a compelling public interest in doing so, and if the government compensates the owner. The United States has the same thing; it's called eminent domain. On top of that, the South African government has not yet used the power. And, despite Trump's claim that he's heard it from "thousands of people" (boy, he talks to a lot of people!) there have not been killings, much less "genocide."

Initially, Ramaphosa was dumbstruck, and tried to push back against Trump's narrative—pointing out, in particular, that the claim about white people being killed is a lie. When it became clear that The Donald had his narrative, and his goals, and that nothing was going to dissuade him, Ramaphosa shifted into button-pushing mode, and said "I'm sorry I don't have a plane to give you." Game, set and match.

We are not exactly sure what Trump's motivation is here, but we have two pretty good theories. The first is that Trump is easily manipulated, and may well have absorbed and internalized propaganda fed to him by white South African Elon Musk—hook, line and sinker. Musk, incidentally, has a giant bug up his a** when it comes to the Ramaphosa administration. Beyond the fact that Musk seems to have internalized some of the apartheid-era attitudes he grew up with, he was not allowed to launch his Starlink Internet service in his home country because it does not adhere to laws about having enough black African ownership/management.

The second theory is that this was political theater for the benefit of the considerable chunk of Trump's base who are racists, to remind them that the Trump administration is a government by white people, for white people (except trans white people). If so, then there's a very good chance that it was Stephen Miller, who is one of those racists, who put the video together. Of course, it could be that both of these theories are on the mark.

When there is one incident (Zelenskyy) like this, it could be a fluke. Two (Ramaphosa) is a pattern. So, what will other foreign leaders do, going forward? Some of them might decline White House meetings, knowing they could end up as targets of ranting and raving from Trump and/or Vance. Most probably can't afford to snub the world's wealthiest and most militarily powerful country, but will come prepared with defenses to whatever lines of attack might come up. Whatever happens, it is unlikely this ambush shtick will work especially well going forward. (Z)

This Is Not Normal, Part III: Department of Justice Ends Oversight of Police Departments

Everyone remembers "defund the police," a slogan that caught fire after the deaths of George Floyd and Breonna Taylor, and that was easily, and often deliberately, misinterpreted. The kind of aggressive overhaul of policing that Black Lives Matter and other activist groups wanted was not going to happen, in part because Americans don't like rapid change, and in part because the general notion became politically toxic.

So, the Biden administration did what it could to steer a middle course. The Merrick Garland-led Department of Justice launched investigations of 12 different police departments, completing four of those before Biden and Garland left office: Minneapolis, Louisville, Phoenix and Lexington, MS. In all cases, the DoJ found evidence of systemic police misconduct. The Biden administration also reached accountability agreements with the Minneapolis PD (killed Floyd) and the Louisville PD (killed Taylor). These agreements called for enhanced training, greater accountability for problematic cops, and improved data collection of police activity. That list actually sounds an awful lot like the agenda of the "defund the police" folks, except without the radioactive slogan.

Well, it's all over now. Yesterday, the Department of Justice's "Civil Rights" Division announced that the eight uncompleted investigations will be canceled. The two investigations that were completed, but not yet acted upon (Phoenix and Lexington) will be tossed into the garbage. The two accountability agreements (again, Minneapolis and Louisville) will be torn up.

In the item above, we describe the Trump administration as a government by white people, for white people. That is a pretty provocative thing to write. But when the evidence becomes this overwhelming, what can we do? Pretend there is NOT a racial dimension to the Trump regime? He's leading the most overtly racist administration since, quite possibly, that of Woodrow Wilson. And we gotta call 'em as we see 'em. (Z)

This Is Not Normal, Part IV: Trump Takes the Plane

Yesterday, the Secretary of Defense Pete Hegseth announced that, after careful consideration, he has decided to accept the Qataris' offer to donate a "palace in the sky," ostensibly to serve as Air Force One. The U.S. Air Force will use existing fleet maintenance funds to pay for upgrades, and is expected to give the job to military contractor L3 Harris Technologies.

As a reminder, the Foreign Emoluments Clause of the Constitution says: "No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State." The Trump administration is very clearly trying to circumvent that by having Hegseth accept the gift in the name of the Department of Defense. Obviously, that technically means that Trump is not personally accepting the obvious bribe. However, Hegseth is also a person holding an office of profit or trust under the United States, and his claim that he is speaking for his entire department, and not as an individual, is pretty flimsy, legally speaking.

And then, of course, there's the other end of the process, wherein the plane goes with Trump when he leaves office. In an attempt to address that, the White House insisted that the President has no intention of using the plane once he's done being president, and that he just wants to park it at his presidential library as a historical exhibit. Is there anyone who actually believes that? He knows full well that if, on January 21, 2029, he just so happens to announce "Hey! I changed my mind!", there will be no penalties, criminal or otherwise.

We're not terribly surprised that Trump took the deal, for three reasons. First, he badly, badly, badly wants a nicer airplane than the 757 he currently owns (which is actually pretty run-down, as far as these things go). Second, he is absolutely obsessed with "deals"—getting things for less than the actual cost (such as "free"). He's probably internalized the notion that it's a $400 million plane, but that's actually the "new" price tag. In its current state, it's actually worth more like $100 million (still nothing to sneeze at, of course).

Third, and this is surely what sealed the deal, Trump knows that he's not going to pay any of the political costs of making such a corrupt bargain. After all, his name will never again be on a ballot. He doesn't particularly care about anyone else's political career. And while he might nominally prefer to have a Republican majority in the House, he's got one right now, and he probably won't have one after January 3, 2027, plane or not.

That means the ball is in the court of Congressional Republicans. They are clearly willing to look the other way when it comes to gross ethical lapses and other bad behavior, but they are still concerned with their own self-interest and with the fact that most of them, unlike Trump, have to worry about getting reelected.

And make no mistake, this is manna from heaven for the Democrats. As we have pointed out, the corruption that turned Trump into a convicted felon is ultimately pretty abstruse, and difficult for many voters to understand and/or get angry about. On the other hand, a Middle Eastern nation looking to curry favor with the government, and giving away a "palace in the sky" to make that happen? You couldn't design a cleaner example of corrupt behavior if you tried. And there is no "status" for the plane that makes things better. If Trump actually starts using it in the next 18 months, then every picture of him and the plane becomes an opportunity to talk about corruption. And if he doesn't start using it, then it's "Think of all the tax money being spent to refurbish the plane Trump isn't using, because he acquired it for his retirement."

So, we think it's at least possible Congress might have something to say about this, despite Trump trying to do an end-run around the Constitution. We'll soon learn if, in particular, the Republican members of the Senate feel that "the 'donation' is being accepted by the Pentagon, not by any person" gives them enough cover or not. (Z)

This Is Not Normal, Part V: This Is Wildly Corrupt, Too...

The airplane is such an obvious, and high-profile example of corruption that another instance of grossly corrupt behavior from Donald Trump this week has basically gotten no attention at all.

The Trump family is trying to squeeze as much money out of crypto as it can, in the event that the whole house of cards collapses. They have three different crypto ventures; the most scammy of those is $TRUMP, which is a meme coin that has no intrinsic value. In other words, you can't use it to buy or sell things; it's just a collectible, like the "limited edition" crap sold by roughly half the advertisers on Fox. Making things worse is that there is considerable evidence that the Trumps and their allies orchestrated things so they could execute a "pump and dump" scheme. In other words, they held, and then sold, a bunch of $TRUMP coins while the value was at its highest (around $40/coin), and then left the rubes holding the bag when the price plummeted (to around $10/coin).

As part of drumming up interest in $TRUMP, on April 23, the President announced a "contest." He declared that, at some date and time in April/early May, chosen apparently at random, his employees would create a list of the 220 largest $TRUMP coin holders. Those folks received an invitation to a fancy dinner hosted by Trump at his Washington, DC, golf club. And the top 25 also received a guided tour of the White House, conducted by Trump himself. The dinner and the tour took place this past weekend.

As with the "new" Air Force One, Trump performed some verbal gymnastics to try to make all of this OK, insisting that he was attending the dinner (and, presumably, conducting the tour) as a private citizen, and not as President of the United States. This is ridiculous, since there is nobody among that 220 "winners" who was mindful of the distinction. The very last person to make the cut had $55,000 in $TRUMP coins, while the guy at the very top of the list holds $37.7 million. The average attendee holds about $1.8 million in $TRUMP coins; the median attendee holds about $350,000. You can be damn sure that these folks are not also spending between five and eight figures on Franklin Mint collectible plates, pogs, or Beanie Babies.

No, they were buying face time and influence with Trump, and every single one of them was sending him far more money than is possible under federal campaign limits ($3,500 a person). And it gets worse. Foreign nationals aren't legally allowed to give ANY money to candidates or officeholders. However, the users' crypto wallets make it possible to figure out that 73% of the dinner guests, and 23 of the 25 people who got to take the White House tour, are foreign nationals. And wait, it gets worse still. While it's possible to figure out that the great majority of the donors are foreign nationals, it's not possible to figure out exactly who they are, Except for #1 $TRUMP coin holder Justin Sun, who outed himself, and a couple of others, most of them are known only by their online handles. For example, one of the people who got a White House tour was PW21, with about $7 million in $TRUMP holdings. That could be Vladimir Putin (Putin Wallet 21?) and nobody but Trump and Putin would know for sure.

And so, Trump is selling access to foreigners, for huge amounts of money, and nobody can even track who he's whoring himself out to. REKT, the #5 $TRUMP coin holder, with about $12 million in holdings, could be bidding on a multi-billion-dollar federal contract right now, and there would be no paper trail at all connecting the crypto with the contract.

In contrast to the airplane, we seriously doubt this will become a liability for Trump. It's got too many moving parts, and it's too complicated to communicate easily. Further, quite a few politicians see crypto as the next big thing (many of them because of campaign contributions made by the crypto industry) and are not eager to take a posture that could be seen as anti-crypto. And that's true of members of Congress on both sides of the aisle.

When (Z) lectures on Boss William Magear Tweed, students often wonder how he could get away with such gross corruption without the people of New York pitching a fit. And the answers are: (1) He kept things a little too complicated for people to quickly understand, and (2) He committed so many different corrupt acts, it was hard to focus on any one of them. Trump seems to be following right in the footsteps of his fellow New Yorker. That said, Tweed was eventually brought down when the political cartoonist Thomas Nast managed to dumb things down enough that anyone could understand what was going on. The Qatari plane could well be Trump's Thomas Nast. (Z)

Gerry Connolly Has Died

Yesterday, Rep. Gerry Connolly (D-VA), who was in the midst of his ninth term in the House of Representatives, passed away at the age of 75. His passing is not unexpected, as he announced just last month that his esophageal cancer had returned, and that he was therefore giving up his plum position as ranking member of the House Oversight Committee.

Connolly had a long career in public service. After completing his education, which included a Master's degree from the Kennedy School of Government, he served as a staffer for the Senate Foreign Relations Committee for 10 years, from 1979-89. In that capacity, he worked closely with a senator from Delaware, a fellow named Biden. After 6 years working for a think tank, Connolly ran for and won a seat on the Fairfax (VA) County Board of Supervisors. He served there for 15 years before moving on to what proved to be a 16-year career in the House. Broadly speaking, he was liberal on social issues and moderate on economic and foreign affairs issues. That's also a pretty good description of Biden and, whaddya know, Connolly voted with Biden 100% of the time, according to FiveThirtyEight (RIP).

Naturally, everyone is saying nice things about Connolly (although J.D. Vance has not weighed in yet, and with him, you never know). As an example, we'll pass along the comment from Rep. James Comer (R-KY), who is chair of the Oversight Committee, and who often locked horns with Connolly: "He was a dedicated public servant who represented Virginia's 11th Congressional District with honor and integrity. We mourn the loss of our friend and colleague, and our thoughts and prayers are with his family during this difficult time." That is called "being classy."

With Connolly's death, the 220-213 Republican majority in the House becomes a 220-212 majority. That does not actually help Speaker Mike Johnson (R-LA) all that much, especially since Connolly was not present for the last month or so, anyhow. With Connolly present, and all Democrats sticking together, three GOP defections meant "the bill passes, 217-216," while four defections meant "the bill fails, 216-217." Without Connolly, and again with all Democrats sticking together, three GOP defections means "the bill passes, 217-215" and four defections means "the bill fails, 216-216," since a tie vote is not enough for passage.

There is no question that, once a replacement is elected, the seat will remain in Democratic hands, as Connolly's now-vacant district, VA-11, is D+18. Virginia law instructs Gov. Glenn Youngkin to call a special election, but is entirely silent on timeline. In theory, he could wait until December of next year, and still be within the letter of the law. That said, because Virginia has a general election scheduled for this year anyhow, the Governor will likely set things up so the seat is filled then. If so, that means that, barring any other deaths or resignations, Johnson will keep his 220-212 majority until September 23, when the good people of AZ-07 will choose a replacement for Raúl Grijalva.

Incidentally, the last eight members of Congress to die in office were all Democrats. Probably that's just a coincidence, but maybe not, because there was also a run of nine Democrats in a row from December 15, 2007 (Julia Carson) to June 3, 2013 (Frank Lautenberg). The last time the Republicans had a run like that was back in the 1920s. (Z)

Election, Foreign, Part II: Portugal's Long National Nightmare Continues

We had a brief item yesterday on the recent elections in Romania, and we thought we'd follow that up with one on the recent elections in Portugal, another nation where people are trying to decide if far-right populism is the way to go.

The Portuguese, as some readers will know, are in a situation similar to that of Israel (and many other multi-party parliamentary democracies). In short, no party is able to win an electoral majority, or even to win a plurality and then to form a stable governing coalition. This weekend's election was a snap election, the third in as many years, called by Prime Minister Luis Montenegro, leader of the center-right Democratic Alliance (AD).

The good news for Montenegro is that, once the ballots are all counted, he and his party will have at least 89 seats (there are 4 seats, set aside for Portuguese citizens living abroad, that have yet to be called). That's an increase from the 80 seats that AD currently controls. The bad news is that 89 is well short of the 116 needed for a majority. So, the snap election did not achieve its goal.

There is another bit of bad news, both for Montenegro and, arguably, for the world community. The center-left Socialist Party (PS) took a beating, dropping from 78 seats to 58 (though again, with four to still be called). Meanwhile, the far-right-populist party CHEGA! (it means "Enough!" in Portuguese) grew its representation from 8 seats to 58 seats. The problem for Montenegro is that while he has a tough time working with PS, it's even harder to work with CHEGA! The PM has described them as "unreliable" and "not suited to governing." And the bad news for the world, of course, is that far-right-populists are rarely interested in the well-being of anyone but the far-right-populists, and are willing to do whatever damage needs to be done in service of that goal.

The dominant issues in the election were inflation, housing costs and immigration. Perhaps that list sounds familiar. Events in Portugal, and in so many other countries that we have written about, suggest to us that: (1) the world is changing rapidly, in many different ways; (2) many voters have glommed onto various things that seem to be manifestations of those changes; (3) the things those voters have glommed onto are largely beyond government control, and so (4) whoever is elected, on a "change" mandate, is pretty much bound to fail, because they can never deliver on the things that got them elected.

Maybe we are overgeneralizing here, but we don't think so. And watch for an item on this basic subject next week. Think walls, both great and otherwise. (Z)


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---The Votemaster and Zenger
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