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THE TOP
The USAID fight both sides want

Happy Tuesday morning.
Washington’s pitched battle over the United States Agency for International Development is, in many ways, a brawl that suits both parties.
For President Donald Trump and Hill Republicans, the agency is a clear example of a sprawling federal bureaucracy run amok. As GOP Rep. Wesley Hunt (Texas) pointed out on X Monday, USAID spent $20 million to produce Ahlan Simsim Iraq, an Arabic-language version of Sesame Street, gave the Jordanians $100 million to build schools, funneled $11 million to Vietnam as part of an environmental protection program and spent $27 million for reintegration gift bags for deportees.
White House Press Secretary Karoline Leavitt also mocked some of USAID’s outlays on Monday, including “$70,000 for a production of a DEI musical in Ireland, $47,000 for a transgender opera in Colombia, $32,000 for a transgender opera in Peru.”
For Democrats, Trump’s decision to fold USAID into the State Department isn’t only about the life-saving mission of the foreign aid agency but rather an example of a burgeoning plutocracy with no guardrails. They see Trump’s attacks on a myriad of small agencies — USAID, EEOC, and NLRB — as well as larger ones — the FBI, Justice Department and possibly the Department of Education — as part of his push to create an imperial presidency unchecked by Congress.
Mega billionaire Elon Musk — a “special government employee” — has been tasked with beginning to wind down USAID, dispatching DOGE aides to start dismantling the 10,000-person organization. Senior officials have been put on leave, contractors laid off and humanitarian assistance paused. Musk blasted Democrats for defending USAID, claiming, “the corrupt politicians ‘protesting’ outside the USAID building are the ones getting money from USAID,” which is a bizarre line.
Senate Minority Leader Chuck Schumer warned that Trump, Musk and DOGE aren’t interested in the inner workings of USAID. Their ultimate goal, Schumer said, is dismantling the federal government:
“[T]his is just the beginning. If DOGE attacks USAID today, then you can be sure they’ll move on to another target tomorrow. Who knows? Maybe it’ll be the Postal Service, or the IRS or even the Social Security Administration. They could be next. Or maybe our national security agencies.”
Democrats point to huge potential conflicts of interest for Musk, whose businesses include Tesla, SpaceX, Starlink, X and others. Federal contracts for Musk-controlled companies could run into billions of dollars. Democrats have honed in on attempts by DOGE aides to gain access to the federal payments system run by the Treasury Department as particularly worrisome. Schumer and House Minority Leader Hakeem Jeffries are drafting legislation to bar that.
Yet with USAID, DOGE is feasting on low-hanging fruit. There’s nothing that draws as much GOP ire as foreign aid, especially when the U.S. government is saddled with $36 trillion in debt.
Of course, no one doubts that USAID does some important work that aligns with U.S. values. Some Republicans are coming to the agency’s defense, especially when it comes to PEPFAR, the Bush-era program designed to fight AIDS in Africa.
Senate Appropriations Committee Chair Susan Collins (R-Maine), who supports a full review of USAID’s operations, said the Trump administration can’t overhaul the agency without congressional approval.
“However, having said that, the law is very specific that if there’s going to be a reorganization of USAID, that Congress has to be informed 15 days in advance and a detailed explanation of any changes has to be provided,” Collins told reporters. “All we have received is a very brief letter, which we received today. So I do not believe that satisfies the requirements of the law.”
And a new CRS report released Monday says plainly that “the president does not have the authority to abolish [USAID]; congressional authorization would be required to abolish, move, or consolidate USAID.”
It’s also true that USAID uses soft diplomacy to help stabilize troubled regions around the globe. Equally as important, USAID has managed billions to help prop up Ukraine’s economy and government since Russia’s 2022 invasion.
Yet after Congress approved more than $120 billion supporting Ukraine, plus billions more for other regions, Republicans are happy to fight about U.S. spending abroad. Why? Because foreign aid isn’t something that directly affects the lives of most Americans. Republicans see this as an easy win, especially when there’s so much to mock.
“It is not too much to ask that our foreign aid and its delivery to actually comport with the objectives of our foreign policy,” Sen. Josh Hawley (R-Mo.) said.
The USAID fight has already spread to other areas, including nominations. Sen. Brian Schatz (D-Hawaii) is vowing to place holds on Trump’s State Department nominees.
“It’s about maintaining stability overseas so that that instability doesn’t visit us in the United States,” Schatz said of USAID.
“The wealthiest country on Earth cannot turn its back on starving children around the world. That’s not who we are,” declared Sen. Bernie Sanders (I-Vt.).
– Jake Sherman, John Bresnahan and Max Cohen
New Interns: We’re excited to welcome our spring interns, Joy Mazur and Lillian Juarez. Mazur is a recent graduate from the University of Missouri and Juarez is pursuing a master’s in journalism and public affairs at American University.
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PRESENTED BY APOLLO GLOBAL MANAGEMENT
America’s next chapter of growth requires bold investment. Over the next decade, an estimated $75 to $100 trillion in CapEx will be needed to modernize and meet the capital needs of American companies. This unprecedented level of investment goes beyond the scope of traditional financing sources. Apollo’s flexible capital solutions are helping to create jobs, finance critical infrastructure, and drive long-term economic growth.
NOMS, NOMS, NOMS
Crunch time for Gabbard and Kennedy
It’s crunch time for former Rep. Tulsi Gabbard (Hawaii) and Robert F. Kennedy Jr., two of President Donald Trump’s most controversial nominees, as both face critical committee votes today.
After the pair endured less-than-ideal public hearings last week, the outlook has improved greatly for their confirmation, especially for Gabbard, a former Hawaii Democratic lawmaker who became a vocal Trump supporter.
Gabbard, Trump’s pick to be director of national intelligence, received a massive boost on Monday when Sen. Susan Collins (R-Maine) announced she’d be backing the nominee.
Winning over Collins, a prominent GOP moderate and a member of the Senate Intelligence Committee, is a huge step toward confirmation for Gabbard. The final remaining obstacle in the Intel Committee for the DNI nominee is Sen. Todd Young (R-Ind.).
But senior Senate Republicans believe that Young will vote to advance Gabbard out of committee. And if Gabbard wins the support of both Collins and Young, it’s hard to see how she fails to get confirmed.
Young wouldn’t comment on Monday, repeatedly fending off questions from reporters.
On RFK Jr.: The Senate Finance Committee will vote on Kennedy today. The only Republican who is in play here is Sen. Bill Cassidy (R-La.), who notably clashed with Kennedy over his vaccine beliefs during last week’s HELP Committee hearing.
Cassidy hasn’t said how he will vote today. The Louisiana Republican told reporters he spoke with Kennedy over the weekend but wouldn’t divulge any details beyond describing the chat as “cordial.” If Cassidy opposes Kennedy, the HHS nominee wouldn’t advance out of the Finance panel.
The drama over Gabbard and RFK is playing out during a big week for Trump nominees. The Senate confirmed Chris Wright as energy secretary on Monday night by a 59-38 margin. Seven Senate Democrats crossed the aisle to back Wright.
Republicans were also successful in overcoming a Democratic filibuster of Pam Bondi, Trump’s attorney general nominee. That sets up a final vote on Bondi for very early Wednesday morning at the latest.
Plus, Republicans won a procedural vote that allowed Senate Majority Leader John Thune to file cloture on Russell Vought’s nomination for OMB director. Thune also filed cloture on Scott Turner’s nomination for secretary of housing and urban development.
And former Rep. Doug Collins (R-Ga.) will be confirmed as secretary of veterans affairs on Tuesday.
— Max Cohen and John Bresnahan

The Vault: The quiet lobbying war you might have missed
Two industries within the financial services sector are gearing up for a fight years in the making as the reconciliation process rumbles ahead.
Credit unions and community banks have never been buddy-buddy in Washington. Aligned in some places, both industries tend to represent smaller, locally-focused lenders and compete fiercely for similar types of business.
But a shifting economic, legal and lobbying environment has changed the nature of their single biggest fight — ending credit unions’ federal tax exemption.
Look back: As we reported last month, Republicans on the House Budget Committee floated an end to credit unions’ tax-exempt status in a much larger menu of pay-for options in a reconciliation package. That change has a long way to go before being seriously considered by tax writers.
But community bank advocates see a narrow opening to rally lawmakers to close what they’ve long described as a tax “loophole” for the nonprofit credit union sector.
The credit union industry has doubled in assets since 2017 — though its share of the financial sector has stayed flat — and some larger players have demonstrated an M&A appetite for smaller banks. That has made smaller community banks increasingly nervous.
Lobbying look: Whether or not the tax exemption push has serious legs, this policy fight will offer both lobbies their first serious test — and display of force — for the second Trump administration.
Rebeca Romero Rainey, CEO of the Independent Community Bankers of America, said the tax exemption issue was “nothing new.”
“What is new is the record number of acquisitions of tax-paying community banks by tax-exempt credit unions that is garnering the attention of policymakers in Washington,” Romero Rainey said.
The ICBA is changing its strategy in one notable way for the 119th Congress, according to people familiar with the group’s advocacy efforts. The trade group is expected to advocate for lawmakers to limit the tax exemption to credit unions worth less than a billion dollars, rather than a wholesale end to the tax benefit.
Are credit unions especially worried? Not so, says America’s Credit Unions CEO and former GOP Rep. Jim Nussle (Iowa). Nussle said he didn’t blame community banks for their push, and his read of the landscape facing their advocates was brutal.
“Smaller banks are under more pressure than they ever have been. They’re going out of business,” Nussle said. “That pressure is not so much putting pressure on small banks as much as it’s putting pressure on the bank lobbyists, the small bank lobbyists. They are losing members hand over fist. Their voice is shrinking dramatically.”
Nussle argued credit unions have stepped up to service areas where community banks have shuttered. “In many instances, credit unions are taking the place of many of those small banks in service to communities and consumer members like never before. And I think that’s putting the pressure on the small banks, like ICBA and others like that, and it’s the reason why they’re rolling out the tax-credit-union bandwagon,” Nussle added.
Romero Rainey fired back. “ICBA continues to note how credit unions are increasingly straying from their founding mission and have come under increased scrutiny for redlining violations and multimillion-dollar stadium naming rights deals,” she said.
— Brendan Pedersen
BUDGET UPDATE
After the House punted on a budget resolution, could the Senate go first?
The House Budget Committee has punted on marking up a budget resolution this week, delaying a key step toward passing President Donald Trump’s agenda. We scooped this for you in the PM edition Monday.
So what comes next? There are a few potential reconciliation scenarios, including the Senate moving first, which would be a real stunner. We’ll explain how that could happen.
House Republican leaders could continue to try to reach a consensus with conservative hardliners on the level of spending cuts, the critical dispute behind the internal GOP impasse over the budget blueprint. In-person meetings will resume today as House members return to Washington.
But the two sides are still pretty far apart at the moment. House GOP leadership initially pitched $500 billion in spending cuts, which hardliners balked at. Republican leaders came back with a slightly higher number of $700 billion, but fiscal hawks were still unsatisfied. Party leaders have tried to emphasize that these numbers are the floor, not the ceiling, of what they can achieve via reconciliation — but hardliners aren’t buying it.
Rep. Ralph Norman (R-S.C.), a House Freedom Caucus member who serves on the Budget panel, told us he wants at least $2 trillion in spending cuts — a figure most in the House GOP leadership believe to be an impossibility.
Norman also dismissed the idea of just marking up a “shell” budget resolution, which could be a potential compromise to get around the internal GOP disagreement and allow House Republicans to move forward in the reconciliation process.
But House Republican leaders have a difficult hand here. They’re limited in where they can cut, given Trump’s insistence that they don’t touch Medicare or Social Security (and reconciliation rules).
Top House Republicans are also trying to be sensitive to the moderates who could be vulnerable to political attacks over steep spending cuts to other social safety net programs.
Which brings us to the next potential scenario: the Senate grows impatient and moves first. Senate Republicans have already drafted a budget blueprint outlining a two-step process for reconciliation, putting a border security, energy and defense bill first and saving taxes and big spending cuts for later. And some Senate Republicans are already itching to get going, as we noted on Sunday.
The longer the House is at an impasse, the more pressure the Senate GOP may feel to take over and get the ball rolling on Trump’s agenda.
The House Freedom Caucus also prefers the two-bill approach. Trump has been generally agnostic on the process, though he’s favored a single package. But if the House continues to struggle, Trump may also get antsy and make a play call.
Given the legislative calendar and ambitious timeline that Speaker Mike Johnson has laid out to get reconciliation done this spring, leaders will have to make a decision pretty soon if they want to stick anywhere near that desired timeframe to deliver.
— Melanie Zanona and Laura Weiss
… AND THERE’S MORE
Downtown download: Some big personnel news at the Senate Banking Committee — GOP staff director Lila Nieves-Lee is departing the Hill and returning to Visa to be a VP of federal affairs.
Bipartisan watch: Sens. Katie Britt (R-Ala.) and Maggie Hassan (D-N.H.) are introducing the Rural Obstetrics Readiness Act. The bill, which is also supported by Sens. Tina Smith (D-Minn.) and Susan Collins (R-Maine), will provide federal grants, training programs and telehealth pilot programs to better equip rural hospitals for obstetric emergencies.
— Brendan Pedersen and Max Cohen
MOMENTS
ALL TIMES EASTERN
10:30 a.m.
The Senate Judiciary Committee will hold a hearing on permanent fentanyl scheduling. Judiciary Chair Chuck Grassley (R-Iowa) is a lead co-sponsor of a bill — which will receive a House vote this week — to address the issue.
2 p.m.
President Donald Trump will sign executive orders.
4 p.m.
Trump will greet Israeli Prime Minister Benjamin Netanyahu at the White House.
4:05 p.m.
Trump will host a bilateral meeting with Netanyahu.
5:10 p.m.
Trump and Netanyahu will hold a news conference in the East Room.
5:40 p.m.
Trump will have dinner with Netanyahu.
CLIPS
NYT
“Jeffries Works With N.Y. Democrats to Weaken G.O.P. Control of the House”
– Nick Fandos in New York and Benjamin Oreskes in Albany, N.Y.
NYT
“Inside Musk’s Aggressive Incursion Into the Federal Government”
– Jonathan Swan, Theodore Schleifer, Maggie Haberman, Kate Conger, Ryan Mac and Madeleine Ngo
WaPo
“China strikes back at Trump’s tariffs with levies on U.S. imports”
– Katrina Northrop, Lyric Li and Vic Chiang
WSJ
“U.S. Readies New $1 Billion Arms Sale to Israel”
– Jared Malsin and Nancy A. Youssef
PRESENTED BY APOLLO GLOBAL MANAGEMENT
America’s next chapter of growth requires bold investment. Over the next decade, an estimated $75 to $100 trillion in CapEx will be needed to modernize and meet the capital needs of American companies. This unprecedented level of investment goes beyond the scope of traditional financing sources. Apollo’s flexible capital solutions are helping to create jobs, finance critical infrastructure, and drive long-term economic growth.
Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.

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