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IN THIS EDITION

A president at the apex of his power – with a lot of challenges

How Dems will respond to Trump

Three things to watch on foreign policy

What industry wants to hear from Trump

The Punch List

THE TOP

A president at the apex of his power – with a lot of challenges

Happy Tuesday!

Just after nine o’clock tonight, President Donald Trump will address a joint session of Congress for the first time in five years.

Trump is making history: This is the first time the president has ever come back to Capitol Hill after five years to give a speech to a joint session.

The world has so drastically shifted since Trump last addressed Congress on Feb. 4, 2020. The Senate was about to acquit Trump in his first impeachment trial (where Ukraine and Ukrainian President Volodymyr Zelensky played an essential role). The Covid-19 pandemic was yet to ravage the United States or the world. In fact, Trump only mentioned coronavirus once during his address. Trump’s loss to Joe Biden was still nine months away, followed by the Jan. 6 insurrection.

This time, Trump will return to the House chamber as a second-term president at the apex of his power. House and Senate Republicans march in lockstep behind his remaking of the party and the country. Trump has morphed the GOP into a tariff-loving, isolationist gang that favors granting the president expansive powers while shrinking the influence of the legislative branch.

But Trump still faces serious challenges. His fraying relationship with Zelensky is giving lots of Republicans pause. Trump’s on-camera clash with Zelensky last week is being felt in Kyiv, Moscow, Europe and across the globe. Mega billionaire Elon Musk is slashing federal spending, even without Congress’ explicit buy-in. Consumer prices are still high. The U.S. economy is in overall good shape, although there are warning signs everywhere. Trump is slapping restrictive tariffs on allies and adversaries alike. He’s open to changing elements of Medicaid and other entitlement programs, although not the two biggest entitlements — Medicare and Social Security.

Yet this is Trump’s moment. He has roughly a year to get the bulk of his legislative agenda through Congress before the midterm elections, and the fight for the House closes that window.

The three things to watch for tonight:

1) Length. Trump’s addresses to Congress typically run for more than an hour. In 2017, Trump spoke for an hour. His 2018 address ran for 80 minutes, 2019 for 82 minutes and 2020 for 78 minutes. With Republicans in control of both chambers, expect there to be a lot of hollering and applause. Will Democrats boo, like Republicans did with Biden? It’s likely.

2) Theatrics. Trump is known for his theatrics during these speeches. Remember how he awarded the late Rush Limbaugh the Presidential Medal of Freedom during the State of the Union in 2020? What does Trump have up his sleeve this time? Will there be an appearance by a former Israeli hostage held by Hamas? There are several in town this week to meet with Trump.

3) What do Democrats do? Democrats loathe Trump — that’s no secret. They think he’s destroying democracy and the country’s future. They disagree with just about everything Trump does. But how many Democrats will protest? House Minority Leader Hakeem Jeffries has said he doesn’t want any protests. We’ll see if lawmakers listen.

In this edition, we’ll use our reporting and analytical expertise to tell you what we’re focused on in all of our coverage areas. Please always feel free to get in touch. And thank you for reading.

– Jake Sherman and John Bresnahan

THE DEMOCRATIC RESPONSE

How Dems will respond to Trump

As Democrats continue their search for a party leader, they’re turning to Sen. Elissa Slotkin (D-Mich.) to deliver the response to President Donald Trump’s joint address.

Slotkin is one of the party’s best electoral talents and has won competitive elections time after time in Trump country. A former CIA officer first elected to a battleground House seat in 2018, Slotkin won a Senate election in November even with Trump carrying the state.

Slotkin has consistently styled herself as a moderate Democrat with a national security background who’s willing to work in a bipartisan fashion to get results. That blueprint catapulted Democrats to success in the 2018 blue wave. The party is betting that eight years later, that center-left pragmatic approach can benefit Democrats in the midterms.

When reporters asked Slotkin last week what her speech would center on, Slotkin said she will stay true to her home-state roots.

“I’m from Michigan. I’m not going to suddenly pretend I’m from somewhere else,” Slotkin said. “I’m from a state that feels a lot of these economic issues pretty powerfully.”

The response to a high-profile presidential speech provides a chance to elevate a politician’s standing. Last time Trump was president, Michigan Gov. Gretchen Whitmer delivered the response.

But the speech also contains potential pitfalls. Just ask Sen. Katie Britt (R-Ala.), Secretary of State Marco Rubio and former Louisiana Gov. Bobby Jindal.

Rep. Adriano Espaillat (D-N.Y.), the chair of the Congressional Hispanic Caucus, will deliver the Democratic Spanish-language response. Espaillat has urged his CHC members to move to the center on immigration following Trump’s victory.

What leadership is doing: House Minority Leader Hakeem Jeffries instructed his colleagues to show “a strong, determined and dignified Democratic presence” in the chamber. Rather than skip, Jeffries wants his caucus to illustrate they won’t “run off the block or be bullied.” We’re told in-speech disruptions have been discouraged by leadership.

Senate Minority Leader Chuck Schumer is inviting guests affected by Trump and Elon Musk’s aggressive plan to overhaul the federal government. The guests include two Medicaid recipients, two recently fired federal workers and an individual who received life-saving care thanks to NIH funding.

At 12:30pm, Schumer and a group of Senate Democrats will go to the Senate steps and speak about their guests for the speech and how they’re being impacted by the cuts.

— Max Cohen

WASHINGTON X THE WORLD

Three things to watch on foreign policy

President Donald Trump has orchestrated a dramatic shake-up of U.S. foreign policy in his short time in office — one that has exacerbated an already deep divide within the GOP over national security.

The most significant and obvious shift has been on Russia and Ukraine. We expect this to be a major focus of Trump’s speech. There’s also the ceasefire between Israel and Hamas which appears to be crumbling. And while it hasn’t been a major focal point yet, Trump is sure to delve into China and the Indo-Pacific.

Russia-Ukraine. Trump’s Oval Office blowup with Ukrainian President Volodymyr Zelensky was a setback because it prevented the signing of a critical minerals deal that the administration had hailed as a major step toward a potential peace deal.

But Trump’s allies were cheering the president afterward, saying it shows he’ll put America’s interests first.

It will be interesting to see which of these themes Trump leans into more. Will he continue to play to the base by attacking Zelensky? Or will he express a desire to repair the relationship and get a deal?

Israel. The first phase of an Israel-Hamas ceasefire negotiated in part by Trump’s team ended on Sunday, but Israeli Prime Minister Benjamin Netanyahu’s government asked that it be extended by another six weeks.

The Israeli government later imposed a pause on all humanitarian aid into Gaza, presumably as a way to exert leverage to extend the first phase of the increasingly fragile ceasefire.

Trump has stood steadfastly by Netanyahu and his government and has sought to facilitate the release of hostages from Hamas’ captivity. The latter will be a bipartisan message at the joint address, with Senate Minority Leader Chuck Schumer expected to bring as guests the parents of two Israelis who were killed on Oct. 7.

China. Trump has focused very little on China — at least publicly — since he came into office, but lawmakers in both parties will want to hear the president talk about it as the long-term pacing threat.

While Congress has been focused on the military threats emanating from Beijing, Trump and his team have sought to use tariffs to change China’s behavior.

Trump signaled this week that existing tariffs on Chinese exports will be hiked by 10%. Meanwhile, there were reports that the Chinese government was looking at imposing retaliatory tariffs targeting U.S. agricultural products.

— Andrew Desiderio

CORPORATE RETREAT

What industry wants to hear from Trump

The U.S. economy looks shaky, and corporate America is beginning to sweat. This would be a good time for them to hear some sweet nothings from POTUS.

The business world has tried to keep its cool in the Trump administration’s first 100 days. But some warning lights are beginning to flash on the U.S. economic dashboard, and markets are showing some strain.

This is the bargain much of the business world made with President Donald Trump: Sign up for chaos and the threat of trade wars, but hope for a whole lot of deregulation and hanging onto big tax cuts from Trump’s first term.

Trump’s address tonight will be a high-profile opportunity for corporate America to receive a coherent economic vision or, barring that, a fresh list of things to worry about.

Here’s what industry leaders will be listening for during the joint address.

Tax watchers: Republicans are taking steps to move Trump’s agenda and trillions of dollars in tax cuts on Capitol Hill. Trump has, at times, given some clarity on what he wants in that bill and left GOP lawmakers guessing at other times.

We’re sure businesses and Republican lawmakers alike would love some strong statements from Trump on how and when he wants this tax bill done.

The business world is going to be keeping an ear out for whether Trump says anything about tax bill timing — does he need it ASAP? Plus, if Trump weighs in on making the 2017 tax cuts permanent in the bill.

Then there’s Trump’s expensive wish list of new tax cuts — plus a couple of smaller revenue raisers — that the White House said he’s pushing for in the tax bill. If we had to bet, “no tax on tips” is the most likely to get a shoutout tonight. But any kind of clarity on what Trump needs in the tax bill will catch businesses’ ear.

But as much as the tax bill is a huge deal for lots of businesses, the threat of new tariffs is an equal or bigger focal point for some industries. It’s already a big day for tariffs. And companies are on edge about what kinds of new trade wars Trump may tee off or escalate tonight.

Financial world: Just about everyone in finance is waiting to hear more details about what the White House has in mind for digital asset policy.

Trump knows. The president on Sunday announced some initial details on an otherwise hazy plan to create a national reserve of crypto assets. This has evolved a bit since Trump addressed a bitcoin conference in Nashville, Tenn., last July and promised to create a “strategic national bitcoin stockpile” after a pitch from Sen. Cynthia Lummis (R-Wyo.). Trump said on Sunday the “reserve” would hold specific assets beyond bitcoin and ethereum.

We don’t expect the president to get into the particulars of stablecoin reform, which is up next for Congress. For that, you can read our Sunday Vault.

Tech arena: Tech policy is emerging as one of the key areas for this administration, and there’s a lot the industry will be looking to hear from Trump.

For starters, many in the tech world are anxious about where Trump is looking to go on tariffs. Major electronics manufacturers like Apple, in particular, have some skin in the game as it makes most of its products in China.

Trump’s plans for artificial intelligence, too, are something many people will be keeping an ear out for. The president has made AI a key component of his administration, announcing several deals for investment in the industry in the United States, with the $500 billion Stargate project as the most high-profile.

The administration is turning away from AI “safety,” as Vice President JD Vance recently indicated. So, many will be watching whether Trump will speak of where he may go on regulating, or not, this new technology.

On the tax front, tech also wants benefits for research and development. Then, there’s also big demand for educational and immigration policies that can foster a workforce pipeline. While the Trump administration is theoretically open to the high-skilled immigration the industry wants, it’s very much focused right now on clamping down on immigration more broadly.

Energy is big, too, as artificial intelligence is expected to become ever more insatiable in its power demands.

Trump could also weigh in on an important fight currently playing out on the Hill over radio spectrum auction. Senate Commerce Chair Ted Cruz (R-Texas) and many other Republicans want to make more spectrum commercially available in the reconciliation bill.

But the Pentagon and its allies on the Hill have balked at the idea as the Defense Department holds much of those frequencies Cruz and the industry want to auction off. The cable industry, too, has an interest in blocking more exclusive spectrum for wireless carriers. If Trump picks a view on this, it could be pretty big and would put the other side in an awkward spot.

And anything he says about TikTok will draw a lot of attention.

– Brendan Pedersen, Laura Weiss, Diego Areas Munhoz and Ben Brody

BINGO!

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