How Trump is blowing up capitalism

IN THIS EDITION

Trump is changing American capitalism

Frontliners erupt at DNC’s Martin

What’s on tap ahead of the Senate recess

What the RSC wants in Reconciliation 2.0

THE TOP

Trump is changing American capitalism

Happy Tuesday morning.

It’s another surreal week for Corporate America.

The nation’s business sector — Wall Street in particular — is facing a torrent of headlines coming out of Washington that are difficult to grasp in the absence of an immediate economic crisis.

President Donald Trump will address the Detroit Economic Club this afternoon. We expect the president to expand on some of the policies he’s floated through his Truth Social account and White House advisers in recent days.

Just in the past week, the Trump administration has:

— Endorsed legislation to crack down on credit card swipe fees from Sens. Roger Marshall (R-Kan.) and Dick Durbin (D-Ill.), called for credit card interest rates to be capped at 10% no later than Jan. 20 (one week from today) and urged Congress to ban institutional investors from purchasing single-family homes.

— Begun a criminal inquiry into Federal Reserve Chair Jay Powell, setting off a political clash with the world’s most important central banker. Jeanine Pirro, the U.S. attorney for D.C., tweeted late Monday night that Powell was the only person talking about an “indictment,” signaling that the fight may be over sooner rather than later.

— Leaned on the Senate Banking and Agriculture panels to advance legislation that would overhaul the shape and function of the financial system to incorporate crypto assets.

— Continued to roll out tariffs, most recently targeting Iranian “trade partners” with a 25% levy.

— Floated barring Exxon from anything to do with Venezuela’s oil business (which Trump is “running”) because Trump didn’t like the CEO’s response during a White House roundtable.

The corporate world cares about all of these threads. Each represents a distinct undercurrent in the Trump-MAGA ethos.

The credit card push is affordability populism, plain and simple. The Powell inquiry is about power over the U.S. central bank and interest rates. And the crypto policymaking is ultimately about serving an insurgent industry that spent its way to prominence in the 2024 election. The oil sector is another benefactor Trump loves to woo.

Trump’s style has always blended populism with corporate giveaways. Following his inauguration nearly a year ago — attended by some of the world’s richest people — Trump successfully focused on passing his massive tax cut package. Then Trump’s attention seemed to focus more on foreign policy as crises in Gaza, Ukraine and now Venezuela beckoned.

Yet following Democrats’ wins in November — and the very real threat of a partially Democratic-controlled Congress next year — Trump has shifted back to his populist approach. In spurts anyway.

Taken together, this rollout has left many, many congressional Republicans unsettled about the direction of the president and his economic policy, all as the midterms begin to ramp up. Unlike other Trump controversies, the grumbling this week has largely occurred in public.

The party’s over. Numerous Republican senators chastised the Trump Justice Department for opening a criminal inquiry into Powell, including Senate Majority Leader John Thune, Sens. Thom Tillis (R-N.C.), Lisa Murkowski (R-Alaska), John Kennedy (R-La.), Susan Collins (R-Maine) and others.

“If you want to make interest rates go up instead of going down, I can’t think of a better way than to have the Federal Reserve getting into a pissing contest with the executive branch of government,” Kennedy told reporters Monday night.

Meanwhile, the push for credit card price controls is dividing Capitol Hill in strange ways. Sen. Elizabeth Warren (D-Mass.) gave an address Monday that urged the Democratic Party to embrace populist policies and abandon the whims of its donor class.

Just hours later, Warren announced she’d received an unscheduled phone call from Trump, where the two discussed credit card rate caps, as well as the ROAD to Housing Act.

“I told him that Congress can pass legislation to cap credit card rates if he will actually fight for it,” Warren said in a statement Monday afternoon. Uhhh, that smell you smell is the hair of bank lobbyists being set aflame.

Odds of a congressional move here remain low, for now. Many Republicans are either outright critical or extremely circumspect of the effort.

“Obviously, the idea of just putting in some type of cap, from a traditional finance standpoint, I don’t think very many of us would support,” Rep. Mike Lawler (R-N.Y.) said.

Plus, many progressives don’t believe Trump will commit to seeing this through.

“Trump is a total opportunist,” Sen. Bernie Sanders (I-Vt.) said. Sanders has introduced his own legislation to cap credit card interest rates at 10%, saying he “would hope that we can do that.”

But “this is what he says today,” Sanders said. “Tomorrow will be something else.”

Meanwhile in crypto: Monday night, we scooped a partial market structure bill offer from Senate Banking Committee Republicans, which was developed with some Democratic input. Negotiations continue. Here’s the official bill noticed for Thursday, which is not final.

Key language in Section 404, which would address limits on stablecoin yield and rewards, remains unresolved. That portion of the bill is currently subject to an all-out lobbying war between the crypto industry and banks. The 404 text being negotiated is so sensitive that the Banking panel has required outside legislative staff to review physical copies inside in the committee’s Dirksen office, according to two sources familiar with the arrangement.

Read the draft here.

Clinton-Epstein watch. House Oversight Committee Republicans are threatening to launch contempt of Congress proceedings against Bill and Hillary Clinton if they don’t appear at closed-door depositions scheduled for today and Wednesday. The panel subpoenaed the Clintons to testify as part of its Jeffrey Epstein investigation.

Smith speaks. Former Trump special counsel Jack Smith will publicly testify before the House Judiciary Committee on Jan. 22.

– Brendan Pedersen, John Bresnahan, Jake Sherman and Laura Weiss

HOUSE DEMOCRATS

Frontliners erupt at DNC’s Martin

News: Vulnerable House Democrats confronted DNC Chair Ken Martin over the committee’s anemic fundraising and midterm plans during a heated meeting last month, per multiple sources with direct knowledge of the incident.

The tense exchanges show a wide gulf between Democratic Frontliners and the man charged with rebuilding the party following 2024’s setbacks.

Martin attended a meeting of Democratic Frontliners on Dec. 18, where many of the vulnerable lawmakers made clear they fear he isn’t putting Democrats in a position to win back the House this fall.

During the meeting, lawmakers said they hoped the DNC would prioritize transferring funds directly to the DCCC instead of state parties ahead of the midterms.

Martin, a former chair of the Minnesota Democratic-Farmer-Labor Party, defended the DNC’s focus on state parties, which typically don’t run ads in congressional races but do work to bolster voter registration and organizing efforts. Martin has made state party building a key piece of his 2026 strategy.

Rep. Susie Lee (D-Nev.), the battleground leadership representative who organized the meeting, also pressed Martin on his focus on building up state parties.

Martin promised to support the DCCC and said the DNC could invest in both the party committee and state parties.

“We will be there for House Democrats,” Martin said, per a source in the meeting.

Another sticking point: some Frontliners were miffed that Martin tried to offer messaging advice, per sources in the room. Rep. Kristen McDonald Rivet (D-Mich.) — one of the top electoral overperformers in the country — spoke up and said she needed more resources from the DNC, not messaging guidance.

Overall, the feedback from the Frontliners was this: Helping out state parties won’t matter if Democrats fail to take back the House in 2026. Some members present also told us they felt as though they were being lectured on messaging by a party chair whose name has never been on the ballot.

Money moves. The DNC is in a terrible financial situation. The committee took the highly unusual step of taking out a $15 million loan in October of an off-year.

House Democrats in tough races are terrified of being outspent in the fall. The disparity between the two national committees is staggering. Per the latest available fundraising data, the RNC ended November with $90 million in the bank. The DNC had just $12.6 million

Plus, this threat looms even larger because the Supreme Court is poised to strike down coordination limits between party committees and candidates. Democratic lawmakers are concerned the RNC will funnel vast sums to Republican candidates if this happens.

Martin has had a tumultuous tenure as DNC chair since winning the post in February 2025. Martin’s early tenure was marred by clashes with then-Vice Chair David Hogg over Hogg’s intent to primary Democratic incumbents. While the party overperformed in many special elections last year, the fundraising situation remains a chief concern.

Members are also frustrated over the DNC’s decision not to release an “autopsy” into why the party lost in 2024.

— Max Cohen and Ally Mutnick

THE SENATE

What’s on tap ahead of the Senate recess

The Senate is racing to pass a three-bill funding package and finish processing the Venezuela war powers resolution ahead of a scheduled recess.

But it’s going to take a lot of cooperation from both sides and deft maneuvering by Senate Majority Leader John Thune, who will likely need to allow a number of amendment votes in order to speed up final passage of the FY2026 funding measure.

“We’re going to stay here until we get it done,” Thune told us Monday.

A bipartisan group of senators is heading to Denmark on Thursday evening amid President Donald Trump’s threats toward Greenland. Other CODELs are planned, too.

War powers. After five Republicans joined Democrats in voting to advance a war powers resolution for Venezuela last week, there was some concern that completing the floor process would complicate Thune’s bid to pass the minibus funding bill before the recess.

But Democrats signaled on Monday that they’re willing to move more quickly to final passage.

Sen. Tim Kaine (D-Va.), who’s leading the war powers resolution, said Democrats may not offer any amendments as part of a limited vote-a-rama that comes before final passage of any war powers measure. Thune said he expects this to happen on Wednesday.

Kaine said he’s spoken with all five Republicans — who drew Trump’s wrath last week — and didn’t expect any defections on final passage. Sen. Susan Collins (R-Maine), for example, said her position was unchanged after Trump fumed at her over the phone.

But Sen. Josh Hawley (R-Mo.) said he got calls from Trump and Secretary of State Marco Rubio, who tried to sway his vote. Hawley wouldn’t say if he plans on switching his position, but sounded more amenable to some of the administration’s arguments.

Funding. Thune will likely need to hold votes on a number of amendments to the minibus — which includes the Energy and Water, Commerce-Justice-Science and Interior bills — in order to secure a time agreement to pass it by Thursday.

An amendment from Sen. Martin Heinrich (D-N.M.) could be problematic. Heinrich wants to strike a previously-passed provision that allows senators to sue for $500,000 if their phone records are surveilled.

There’s broad bipartisan support for scrapping that provision, but passing Heinrich’s amendment would mean the funding package needs to be sent back to the House. GOP leaders want to avoid this.

Collins, who chairs the Senate Appropriations Committee, said she supports repealing that provision but also doesn’t want to trigger a House re-vote.

Meanwhile, the fatal shooting of Renee Good by an ICE agent in Minneapolis is making it much harder for appropriators to agree on a Department of Homeland Security spending bill. Sen. Chris Murphy (Conn.), the top Democratic appropriator for DHS, said Democrats should demand that any money DHS spends will be spent lawfully.

Murphy also doesn’t want a continuing resolution, which he said “doesn’t do anything to constrain the way that they’re acting lawlessly.”

If appropriators can reach an agreement on DHS funding, the House could vote on the bill next week along with Labor-HHS, Defense and Transportation-HUD, House Appropriations Chair Tom Cole (R-Okla.) said. Otherwise, lawmakers will need to pass a CR.

— Andrew Desiderio, Samantha Handler, Laura Weiss and Anthony Adragna

THE MAJORITY

What the RSC wants in Reconciliation 2.0

The Republican Study Committee will release its framework for a second reconciliation package today. It’s called “Making the American Dream Affordable Again.”

We got our hands on it. This is important for two reasons:

No. 1. It shows the fervor with which some Republicans want to spend 2026 on big-ticket legislating. Senate Majority Leader John Thune has been skeptical about another reconciliation package. Speaker Mike Johnson is a bit more interested.

No. 2. The RSC, the 188-member group run by Rep. August Pfluger (R-Texas), has a long list of policy provisions that it wants to enact. This could, in theory, form some of the basis of what Republicans push for in the reconciliation package. But it also shows why another bill will be difficult, underscoring that conservatives would like significant health care overhauls, another shot at items that fell out of the One Big Beautiful Bill Act and more spending cuts.

The details. The bill has six categories: home ownership, “health care freedom” and lowering drug prices, reducing energy costs, “rebuilding the American family,” cutting spending and codifying President Donald Trump’s executive orders.

Here are some of the notable policy items:

— “The Don” payment program is a “zero- to low-down payment” mortgage for “creditworthy borrowers.”

— The bill eliminates capital gains for a home seller if the home is sold to a first-time buyer.

— Repealing the estate tax, which would cost $281 billion in revenue over a decade.

— A new “parallel” option for people to buy health insurance in a “separate marketplace” from Obamacare.

— Send insurance subsidies directly to individuals instead of through credits to health insurance companies, which is in line with what President Donald Trump has called for.

— Require pharmacy benefit managers to pass on rebates to consumers.

— Jake Sherman and Laura Weiss

… AND THERE’S MORE

Russell Dye, House Judiciary Committee Chair Jim Jordan’s (R-Ohio) communications director, is heading to Watchtower Strategy as a senior director. Watchtower is the firm that Dan Conston started with former Speaker Kevin McCarthy, Arthur Schwartz, Cliff Sims, Jeff Miller and Brian Walsh.

Dye has been one of Jordan’s top aides since 2019, working on multiple impeachments, a speaker race and every GOP investigation.

On the airwaves. Affordable Virginia is running a $2 million ad campaign targeting vulnerable GOP Rep. Jen Kiggans (Va.). The ad features a Navy veteran who served in Vietnam slamming Kiggans for voting to cut veterans’ health care.

Unrig Our Economy is running an $130,000 ad buy attacking Rep. Mike Lawler (R-N.Y.) over Medicaid cuts.

Fundraising. Jessica Killin, a Democrat running to unseat GOP Rep. Jeff Crank in Colorado’s 5th District, raised $610,000 in Q4 and has $1.1 million on hand. Killin put $257,000 of her own funds into the race last quarter.

Endorsement news. New Politics, a group dedicated to electing candidates with service backgrounds, is endorsing Zach Beecher in the Democratic primary in New Jersey’s 11th District.

— Jake Sherman and Max Cohen

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