'To hell with Congress'

IN THIS EDITION

The appropriations process is already a mess

Senate tax changes hit House where it hurts

The Creator Economy: Setting the Stage

Tech: Fischer takes over rural internet group

Cruz talks reconciliation, spectrum policy

THE TOP

The appropriations process is already a mess

Happy Thursday morning.

The House is set to vote today on a $9 billion-plus rescissions package, cutting huge chunks of money from U.S. foreign aid and $1.1 billion from the Corporation for Public Broadcasting, which helps fund PBS and NPR.

Republican moderates don’t love it – and Democrats hate it – but the White House-drafted package is likely to pass, House GOP leaders tell us.

It’s the latest blow to Congress’ power of the purse. And it’s only going to get worse.

While the calendar says it’s only mid-June, it’s already late in the FY2026 appropriations season. Neither the House nor Senate Appropriations committees are doing well on their 12 annual spending bills.

And another continuing resolution to avoid a government shutdown this fall looks all but certain at this point. The only questions are how long any CR lasts, and is a spending deal possible at all.

House GOP appropriators will have four bills marked up by the full committee by tomorrow. But these bills are written to a Trump-proposed level that cuts tens of billions from domestic programs. Democrats and the Senate won’t go for that.

Meanwhile, the Senate Appropriations Committee won’t even have a topline number until after the Republicans approve a reconciliation bill, which means July at the earliest. And House Republicans may oppose any deal reached by Sens. Susan Collins (R-Maine) and Patty Murray (Wash.), chair and ranking Democrat on the panel.

It’s a tough time to be an appropriator.

“If I were betting man right now, given the current environment, we will appropriate money by CR for the foreseeable future,” said Sen. John Kennedy (R-La.), who serves on Senate Appropriations. “So if you have a chance to change from the Approps Committee to Finance, you probably ought to do it.”

“The question is, do you have a long-term CR again or do you have a CR because you’re negotiating?” added House Appropriations Committee Chair Tom Cole (R-Okla.). “Let’s assume we pass the ‘Big Beautiful Bill.’ I don’t think we know what that does. Does that break things loose or not? We just don’t know yet.”

Cole noted: “There’s plenty of people on our side who like a CR. It could easily happen again. It’s bad governance.”

Even more importantly, we’ve spoken to members and senators in both parties who believe that the future of the Appropriations panels — once one of the most coveted assignments in Congress — is in doubt, to the detriment of the entire institution.

Both sides blame the other for the appropriations dysfunction, although more should probably fall on Republicans. Look at the House Freedom Caucus and what it’s done to the appropriations process.

Former Speaker Kevin McCarthy lost his job over a CR, and Speaker Mike Johnson has been pushed to the wall on the issue too. Remember that Johnson promised early on in his speakership that he wouldn’t pass any more CRs.

A government shutdown is definitely on the table this fall too. A number of Republicans believe President Donald Trump would be just fine with that — especially if the “One Big, Beautiful Bill” Act is already signed into law. That measure includes $175 billion in border security funding, plus another $150 billion for the Pentagon. There’s also a debt-limit increase that’s good for two years.

“I think there are probably some people in the administration who think quite frankly that they have more flexibility under a CR or even a shutdown,” said Rep. Ken Calvert (R-Calif.), who chairs the Defense subcommittee on House Appropriations. “I think that shocks a lot of members here.”

To the non-Capitol Hill world, a CR doesn’t sound like a big deal. Yet it gives a president and White House officials enormous discretion over federal spending while putting Congress at a huge disadvantage in terms of oversight.

Add to this equation Trump and OMB Director Russ Vought, who are eager to challenge Congress’ power over the purse. Even Republicans complain that the White House hasn’t submitted a full FY2026 budget, stymieing appropriators’ ability to write spending bills.

“If we do two CRs in a row, it will be a self-inflicted wound by Senate Republican appropriators and Senate Republicans to diminish not just the power of the committee but to diminish Congress’s power of the purse,” said Sen. Chris Van Hollen (D-Md.), an appropriator.

“Any long-term CR plays into what it seems this administration would like, which is bills with no guardrails,” said Sen. Tammy Baldwin (D-Wis.), another appropriator.

Republicans bash Senate Minority Leader Chuck Schumer for not cutting an omnibus deal in the spring, which they say forced a CR to be enacted. Schumer and Murray were holding out for language binding Trump to spend money as Congress appropriated.

Democrats loudly counter that they were justified in making the demand because Trump and Vought have done just that since coming into office – spent money (or not) as they wanted to, despite the 1974 Budget and Impoundment Control Act. That law requires the president to spend money approved by Congress.

However, Republicans noted then and now that there was no way they were going to go along with new restrictions on Trump’s spending latitude. “You’re not gonna have a Republican Senate and the House limit a Republican president,” Cole said.

So what to think about all this? Rep. Rosa DeLauro (Conn.), top Democrat on House Appropriations, gets the last word.

“To hell with the Congress,” DeLauro said. “It’s bad for the American people. It’s bad for the American people. They’re lying about what’s in these bills. That’s the tragedy.”

GOP romps again: Republicans easily won Wednesday night’s annual congressional baseball game, defeating Democrats 13-2. It’s the fifth GOP win in a row.

A record 31,000-plus tickets were sold for the game, which raised $2.8 million for charity.

– John Bresnahan and Samantha Handler

New! Join us on Tuesday, July 8, at 8:30 a.m. ET, for a conversation with Sen. Mike Rounds (R-S.D.). We’ll sit down with Rounds to discuss the news of the day, financial services innovation and payments security. Afterward, Rajat Taneja, president of technology for Visa, will join us for a fireside chat. RSVP now!

RECONCILIATION

Senate tax changes hit House where it hurts

We don’t know exactly what the Senate’s reconciliation bill will look like.

But what we do know is that Senate Republicans are looking to rewrite two of the hardest-fought provisions in the House’s bill.

Senate Finance Committee Chair Mike Crapo (R-Idaho) told GOP senators Wednesday that he plans to scale back the House’s SALT cap deal and rework repeals of clean energy tax credits from the Inflation Reduction Act.

The changes could put Speaker Mike Johnson in a perilous position in his quest to get the reconciliation bill done by July 4. Here’s why:

1) Two New York Republicans have said they won’t vote for a dollar less than the House’s $40,000 cap on deducting state-and-local taxes. There are a handful of other SALT Caucus Republicans who’ve warned the Senate against changes and view the negotiations as settled.

The SALT backers are expecting Johnson to sell the cap to the Senate and make sure it sticks. If it doesn’t, expect some furious blue-state lawmakers.

Aware of the potential pitfalls in changing SALT, Sen. Markwayne Mullin (R-Okla.) said he’s been talking with blue-state House Republicans about it “almost every day.” Mullin, who often acts as a liaison with the House, said it’s his “number one issue” right now.

2) Crapo told senators that Finance’s plan for IRA credits involves accelerating some repeals and allowing gentler phase-outs for others based on energy type. The IRA cuts could get close to the more than $500 billion that the House included, but may tally somewhat lower.

The House Freedom Caucus has been pressing senators to hold the line on the House version. The details of the Senate’s plan will matter a lot. Remember: House Republicans like Rep. Chip Roy (R-Texas) want nothing short of gutting the IRA to its core.

Over a dozen House GOP moderates are tracking the IRA changes closely, too. The House had to walk a tightrope on the IRA cuts, and now the Senate is as well.

Senate strategy: Senate Majority Leader John Thune is trying to be cautious of the House’s needs, but he can only do so much.

The Senate’s vote-counting math is simply different than the House’s. GOP senators are totally dug-in against the House bill’s SALT cap. They see it as a small minority of lawmakers in one chamber forcing them to accept a policy they dislike — and that costs more than $350 billion compared to extending the current cap.

Thune is juggling different IRA demands, including at least four senators who want a less aggressive approach to repeals.

There’s also the money factor. The Senate Finance Committee is planning to make key business tax breaks for R&D spending, interest expenses and buying machinery and equipment permanent in their rewrite of the House-passed package. This is a top priority for many Finance Committee Republicans.

Permanence balloons the tax bill’s cost, so GOP senators have to find savings elsewhere, such as with SALT. Senate Republicans also want to dial back some of President Donald Trump’s tax priorities in order to reduce the overall cost.

Finance is still working on finalizing the bill text. To that end, Crapo and Thune are heading to the White House today to meet with Trump. Senate Republicans are tentatively planning a conference meeting Monday to discuss reconciliation plans and tax details.

— Laura Weiss and Andrew Desiderio

THE CREATOR ECONOMY

The Creator Economy: Setting the Stage

Digital content creators are ready to make their mark on Capitol Hill.

Today, we launched the first feature in our new series, The Creator Economy, in partnership with YouTube. In this four-part series, we explore the impact creators have on the economy – it’s significant – and how they’re starting to drive the policy debate in Washington.

For our first feature, we sat down with YouTube star Cowboy Kent Rollins and his wife Shannon. They detail how their business, which started off as chuckwagon catering, now goes far beyond Kent’s wildly successful online cooking show.

The Rollinses sell branded sauces, spice blends and cookbooks online and in stores. “Cowboy Kent” has three full-time employees besides Rollins and his wife, plus a number of contractors.

“We’ve had stores that approach us that we have product in, and their sales have increased, their volume increases,” Kent told us. “People are coming in. They know that our products are in there.”

The Rollinses are hardly alone. Roughly 67 million people around the world call themselves at least part-time creators, with the total market at about $250 billion, according to Goldman Sachs reports. And, just in 2024, content creators contributed $55 billion to U.S. GDP, according to a new report from YouTube.

Policy play. With this burgeoning new industry comes new policy questions, as many creators function more as successful small businesses as opposed to solo content makers.

We spoke with Reps. Yvette Clarke (D-N.Y.) and Beth Van Duyne (R-Texas), leaders of the newly launched Congressional Creators Caucus, about the policy debate.

Here’s more from Clarke on the hurdles creators encounter:

The most immediate challenge for creators, however, may just be teaching members of Congress about the sector.

“Nearly every single congressional district has people who are out there that are turning their creativity into paychecks,” Van Duyne said.

Read the full feature here.

— Ben Brody

Tech: Fischer takes over rural internet group

Sen. Deb Fischer (R-Neb.) is relaunching a bipartisan group Thursday to weigh changes to a government program that helps pay for internet in rural areas, schools and libraries.

The revival of the working group on the Universal Service Fund, of which Sen. Ben Ray Luján (D-N.M) will be the Senate Democratic lead, comes as lawmakers await a Supreme Court ruling on the program’s constitutionality. The ruling could potentially be in the coming weeks.

“Our goal is to evaluate broadband programs and the USF to help support the mission of connecting unserved and underserved communities across the country,” Fischer said in a statement.

Fischer and Luján are, respectively, chair and ranking member of the Senate Commerce Committee’s telecom subcommittee. Their House counterparts — Reps. Richard Hudson (R-N.C.) and Doris Matsui (D-Calif.) — will lead the group for their chamber.

The working group aims to “close the digital divide with solutions that support sustained access to universal connectivity while improving interagency coordination and eliminating waste, fraud, and abuse,” according to an announcement.

Fischer, who is taking over the group from Senate Majority Leader John Thune, is also planning to open the group up for formal comments on USF in the next few weeks.

Under Thune, the working group sought extensive comments on USF, including how to measure its effectiveness, whether it’s sufficiently transparent, how to ensure enough money in the program and who should pay.

USF and rural connectivity in general have bipartisan support. Still, the fund, which is administered by the Federal Communications Commission and paid for by a fee on telecom providers, has determined foes.

Last year, a conservative group won an appeals court ruling saying that the program violates the Constitution.

The Supreme Court heard arguments on that question in March, though the justices appeared ready to uphold the subsidies. FCC Chair Brendan Carr, who’s urged that Big Tech platforms pay the USF fees, notably sidestepped when we asked him if he wanted the Supreme Court to keep the fund alive.

When the high court hears arguments in March, it often rules in June.

Sens. Jerry Moran (R-Kan.), Amy Klobuchar (D-Minn.), Shelley Moore Capito (R-W.Va.), Gary Peters (D-Mich.), Dan Sullivan (R-Alaska) and Jacky Rosen (D-Nev.) will also be part of the working group.

— Ben Brody

PUNCHBOWL NEWS EVENTS

Cruz talks reconciliation, spectrum policy

Sen. Ted Cruz (R-Texas) joined us Wednesday for a very newsy conversation on the reconciliation negotiations and spectrum policy.

Cruz, chair of the Senate Commerce Committee, cast doubt on Republicans sending the reconciliation bill to President Donald Trump by July 4.

Cruz also took a victory lap on his spectrum proposal in the GOP reconciliation bill despite continuing opposition from a handful of Republican senators.

Cruz is pushing to make more radio spectrum commercially available through auctions held by the Federal Communications Commission. His plan would raise a projected $85 billion.

You can watch the full conversation here.

– Diego Areas Munhoz and Ben Brody

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