NEWS: Johnson and Thune preview their first meeting with Trump

IN THIS EDITION

How Johnson and Thune can use today’s meeting with Trump

Rubio confirmed, but who’s next?

Treasury expected to hire key Hill tax aide

The Vault: Steil wants Congress to go big and bigger on crypto

THE TOP

How Johnson and Thune can use today’s meeting with Trump

Happy Tuesday morning.

There are 52 days until the federal government runs out of money. And just over five weeks until Speaker Mike Johnson has said a GOP-controlled Congress would pass a budget resolution needed to unlock tax cuts and other key Republican priorities.

Johnson and Senate Majority Leader John Thune head to the White House today to meet with President Donald Trump, the first get-together for the leaders of the GOP trifecta that now controls Washington. Trump will meet with the entire bicameral Republican leadership afterward.

Trump spent the hours after his Monday inauguration signing a wide array of executive orders, issuing threats and delivering on campaign promises. He pardoned 1,500 Jan. 6 rioters; threatened trade wars with Canada, Mexico and China; gave TikTok another 75 days before being banned; withdrew the United States from the World Health Organization and Paris climate agreement again; ordered an end to birthright citizenship (if it makes it through court); declared an emergency at the U.S.-Mexico border; made it easier to fire federal workers; and lots more.

It was Trump moving at warp speed, as he promised during the campaign. Trump even filmed a video for the College Football Playoff national championship that touted his return to office: “The golden age of America has begun.”

But Johnson and Thune are looking for legislative wins. That requires planning, focus and execution, not exactly Trump’s strong points during his first term. Hill Republicans — especially a razor-thin House GOP majority that’s about to get thinner — are hoping for a different outcome this time around.

We spoke to Johnson and Thune Monday about what they hope to get out of the meetings today — and what their strategy is heading in.

Johnson. Johnson told us he wants to talk about the “legislative outlook for the first 100 days and the strategy on reconciliation.” The speaker said it’s his goal to “align the Senate and House together” on a final strategy for reconciliation.

Just last week, Johnson met with Sens. Ted Cruz (R-Texas) and Lindsey Graham (R-S.C.) about why he thinks it’s so important to move quickly on reconciliation. Cruz and Graham have been leading advocates of Thune’s preferred two-step approach for reconciliation, arguing it’s a national security imperative to act on immigration and defense first.

To that end, the House leadership will host more reconciliation-focused listening sessions this week. Johnson said he hopes the conversations will lead to “final decisions on the components from the committees” for the reconciliation package carrying Trump’s agenda.

Thune. During Senate Republicans’ Jan. 8 meeting with Trump, Thune floated the idea of having the Senate continue to work on the two-bill track in the event the House’s one-bill effort falters. Trump said he was open to that.

Thune told us Monday night that he expects reconciliation and government funding to be the focal points of today’s meeting. Remember that government funding runs out on March 14 and there’s no deal yet even on how much to spend overall, much less what 12 spending bills will look like.

“It’s a chance for everyone to touch gloves now that the formalities are over with — the ceremonial part of this,” Thune added. “And now it’s time to roll up our sleeves and go to work.”

Here are the topics that still need work:

Reconciliation. The House and Senate need to get aligned on their reconciliation package — and soon. GOP senators are hopeful that Trump will abandon his “one big, beautiful bill” preference and see the wisdom of two bills. This looks unlikely. Trump told Republican senators over the weekend that he still wants one bill.

But there’s so much more that Johnson and Thune need to hear from Trump. What precisely are his true must-haves in the reconciliation bill? Is Trump still intent on the smattering of tax policies that he talked about on the campaign trail, such as cutting taxes on Social Security and Americans living abroad? What about tariffs?

The truth is, Trump would probably benefit from hearing just how messy the process of passing this reconciliation package will be. Johnson and Thune need Trump locked in and listening to the White House legislative affairs team and the GOP congressional leadership. This package can only pass if Republicans pitch a perfect game.

Debt limit. Nothing has angered Trump as much as having to deal with the debt limit during the first year of his presidency. In the Capitol, Republicans have all but given up on addressing the debt limit as part of the reconciliation package.

Wait until Trump finds out that he is going to have to do it in a government-funding bill or a disaster-aid package that will almost assuredly be passed with Democratic votes, driving the GOP base mad. There’s even disagreement on that front — some Republicans want the debt limit to ride on disaster aid. But Democrats are already pushing back on that.

Trump told House Minority Leader Hakeem Jeffries on Monday that it was good to meet him during the signing ceremony in the Capitol. And Trump said he wants to work with Senate Minority Leader Chuck Schumer more. He may have to.

Disaster aid. Senior lawmakers and aides estimate that California will need $100 billion or more in emergency assistance to help the state rebuild following the disastrous wildfires this month. Johnson has said that he might try to condition the aid to policy changes in California. This is something that Johnson and Thune will have to get aligned on. Thune will need 60 votes to advance anything in the Senate. And Johnson’s House will be ready to take a whack at blue California.

— Jake Sherman, Andrew Desiderio and John Bresnahan

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THE SENATE

Rubio confirmed, but who’s next?

The Senate confirmed one of their own — Sen. Marco Rubio (R-Fla.) — as secretary of state Monday night in a unanimous vote, giving President Donald Trump a day-one Cabinet confirmation.

Now the hard part begins.

None of Trump’s other Cabinet picks will get confirmed this easily — especially on the national security side, which GOP leaders want to prioritize in the early days of Trump’s second presidency.

Over the next few days, Senate Majority Leader John Thune will look to round out Trump’s national security team by helping confirm a CIA director, Pentagon chief and DHS secretary. Thune will be looking for ways to blow past Democratic objections that could tie up the floor for several days on individual nominees.

At this point, it’s all but certain that Trump’s most critical Cabinet picks will get confirmed. It’s simply a question of whether Democrats will try to run out the procedural clock — and whether Thune will play hardball in response. All it takes is one senator to slow things down.

Thune has vowed to keep the Senate in session to grind through each nominee, nights and weekends if necessary. This could be enough to force Democrats to the table on fast-tracking some Cabinet nominees, although not all of them.

Next up: On his way out of the Capitol last night, Thune indicated that former Rep. John Ratcliffe (R-Texas), Trump’s pick for CIA director, could get a vote sometime today. Thune said there are some Democrats who want to speak about Ratcliffe’s nomination on the Senate floor before agreeing to a quick vote.

“I think there are people who want to talk on it [and] let people have their voices heard,” Thune said.

Ratcliffe cleared the Senate Intelligence Committee Monday evening on a 14-3 vote. Sens. Tom Cotton (R-Ark.) and Mark Warner (D-Va.), the panel’s chair and vice chair, released a joint statement calling for an immediate floor vote.

If Ratcliffe gets confirmed today, Thune could begin the floor process on Pete Hegseth’s nomination for defense secretary. Absent a time agreement with Democrats — which we don’t foresee — Hegseth’s confirmation vote would take place sometime over the weekend.

Would Democrats agree to a quicker vote to salvage senators’ weekends? It’s unclear. Democratic senators will be under immense pressure from their base to raise hell about Trump’s more controversial nominees, especially Hegseth. But as any Senate watcher knows, jet fumes can be intoxicating.

Another option would be to punt Hegseth to next week and try to confirm Kristi Noem as the head of the Department of Homeland Security by the end of the week. Noem won committee approval on Monday in a bipartisan 13-2 vote. This could be a signal that Democrats are willing to shorten the floor process, even by a small amount.

So it’s possible that Noem could be confirmed by Thursday or Friday, allowing senators to head home for the weekend and deal with Hegseth next week.

Latest on Gabbard: The Intelligence Committee has yet to schedule a confirmation hearing for former Rep. Tulsi Gabbard (Hawaii), Trump’s pick for director of national intelligence. The holdup has been paperwork-related, including financial and ethics disclosures as well as an FBI backgrounder.

We’re told that the committee is now just waiting for Gabbard’s FBI file. Cotton, the panel’s chair, indicated to us last week that he’d schedule a hearing immediately when all paperwork has been transmitted.

As we’ve reported, Gabbard’s confirmation prospects are far from certain.

— Andrew Desiderio

TAX MOVES

Treasury expected to hire key Hill tax aide

News: Speaker Mike Johnson’s tax adviser Derek Theurer is expected to take a job in the Treasury Department where he would play a key role in shaping Republicans’ tax plans.

In that role, Theurer would assist the treasury secretary in coordinating closely with Congress on the GOP’s big plans for a tax bill this year. Theurer would also aid in Republicans’ agenda for altering the course of the Organization for Economic Cooperation and Development’s global tax negotiations.

Theurer would bring a clear view of the challenges that Trump’s tax agenda could face on Capitol Hill with a paper-thin House majority. The House GOP leadership has been holding listening sessions with members and working for months on plans for a sprawling reconciliation package that would include an extension of the 2017 Trump tax cuts.

During the Biden administration, Republicans railed against the course of OECD negotiations over a 15% global minimum tax on multinational companies. Redirecting those talks is also expected to be a focus for the Trump administration, as the president made clear in a day-one action declaring the deal has “no force or effect in the United States.”

Theurer has been with Johnson’s office as senior policy adviser since the spring. Before that, he was chief tax counsel for the House Ways and Means Committee under both Chair Jason Smith (R-Mo.) and former Chair Kevin Brady (R-Texas).

When the Trump tax cuts became law in 2017, Theurer was on the Hill as a senior tax counsel in Sen. Bill Cassidy’s (R-La.) office. He was previously at the Business Roundtable and ExxonMobil.

Now Johnson needs to find a new tax staffer in the heat of the reconciliation fight.

The Treasury staffing news comes as Senate Republicans are moving quickly to get Trump’s pick to lead the department, Scott Bessent, confirmed. The Senate Finance Committee is voting on his nomination at 10:15 a.m.

— Laura Weiss

The Vault: Steil wants Congress to go big and bigger on crypto

The incoming chair of the House Financial Services Subcommittee on Digital Assets, Financial Technology and Artificial Intelligence said lawmakers should chart a more ambitious crypto agenda for the 119th Congress.

Rep. Bryan Steil (R-Wis.) will be only the second lawmaker to hold a crypto-focused gavel in the House, following now-HFSC Chair French Hill (R-Ark.). We discussed Steil’s plans and priorities for the job as Congress mulls significant changes to the financial system.

Crypto: Steil’s topline priorities won’t come as a shock to most financial policy watchers.

“We need to make sure that we’re doing a couple of things in the space — one, preventing fraud, protecting customers, and two, really importantly, ensuring the U.S. remains a leader in the market space,” Steil told us, pointing to competition from China.

But the Wisconsin Republican also made clear that high-profile crypto legislation that cleared the House last year would only be a starting point in the 119th Congress. “The playing field has shifted,” Steil said, pointing to the Republican Senate. The House passed the FIT for 21st Century Act last spring with dozens of Democrats in tow.

“I am not committing myself to the text of the bill from the last Congress,” Steil said. FIT 21 gave lawmakers a “starting point,” he said, adding: “There will be potential for real changes inside the legislation.”

And as we’ve written elsewhere, House lawmakers are focused squarely on work products that can survive the Senate. “The way that we’re successful in that is not simply passing a bill out of committee or passing it in the House, but getting it all the way across the line and signed into law,” Steil said.

On debanking — another political priority for the crypto sector — Steil is a bit more circumspect. “It’s important that we examine whether or not pressure was placed inappropriately by the administration to remove financial access to some innovative companies,” Steil said. “There’s a lot of questions that need to be asked.”

The other stuff: “Artificial intelligence” is a new titular focus for Steil’s subcommittee this year. The Wisconsin Republican’s main priority there is keeping the federal government out of its own way.

“Yes, you need to navigate the risks of a new technology. But you also need to leverage the benefits of a new technology,” Steil said. He added that “what we don’t want the federal government doing is preventing the technology from being implemented.”

That philosophy will also cover less flashy products. Steil has legislation on “earned wage access” programs, a quickly growing form of consumer finance that allows customers to access portions of their paycheck early, often for a fee.

Steil’s bill includes exemptions from the Truth in Lending Act for EWA programs. That law dictates some of the federal protections and disclosures that come with loan products.

Consumer groups don’t love EWA products, which they say bear an awfully close resemblance to payday loans. Fintech advocates argue they’re safer and less costly than other forms of emergency loans.

— Brendan Pedersen

THE CAMPAIGN

Defend American Jobs, the crypto-backed big-money super PAC, is up on the air in Florida, weighing in on the successor for former Rep. Michael Waltz’s (R-Fla.) seat. The super PAC is airing an ad backing Randy Fine. Fine is a state senator who has endorsements from President Donald Trump and Speaker Mike Johnson.

— Jake Sherman

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