What we learned at the Pentagon

IN THIS EDITION

How Dan Driscoll wants to change the Army

The Senate’s reconciliation standouts

The Vault: Crypto’s sniffing around Democratic swing districts

What we’re watching

House GOP staff training kicks off. Plus, a Michigan Senate endorsement.

THE TOP

How Dan Driscoll wants to change the Army

Happy Monday morning.

Welcome back. The Senate comes into session tonight. The House returns Tuesday. This week will be all about the GOP reconciliation bill, which we’ll get into in a moment.

But first, this is an important week for the U.S. Army on Capitol Hill.

Secretary of the Army Dan Driscoll and Gen. Randy George, Army chief of staff, will appear before the House Armed Services Committee on Wednesday and Senate Armed Services Committee on Thursday.

Driscoll and George are coming to Capitol Hill with a new mission — the Army Transformation Initiative. We spent some time with Driscoll at the Pentagon last week to discuss it.

ATI, as it’s known in the Pentagon, has three objectives: “deliver critical warfighting capabilities, optimize our force structure, and eliminate waste and obsolete programs.”

Lawmakers need to understand that this could be a seismic shift for the Army that impacts every member and senator, according to Driscoll.

The Army leadership — from Defense Secretary Pete Hegseth to Driscoll and George — wants Congress to stop forcing the Pentagon to buy things that soldiers don’t need. Lawmakers often seek to do this to help companies and workers in their districts, whether the Pentagon needs the equipment or not.

Driscoll, a close friend of Vice President JD Vance from Yale Law School, put it this way:

Warning to the Hill. Driscoll lays the blame for some of the Army’s problems on the Pentagon’s “calcified bureaucracy.” Fair enough — the Pentagon byzantine acquisition process can take on a life of its own.

But Driscoll also noted the Pentagon is forced to buy things they don’t need because “members of Congress and the Senate are impacted by things that have nothing to do with soldiers.”

Driscoll — a one-time congressional candidate himself — pointed out that the Army has 104,000 Humvees. The Army doesn’t want and hasn’t requested them for “a very long time.”

But Congress forces Army officials to buy Humvees, taking up funds that could otherwise be spent on more advanced or better systems for the “modern battlefield.” The war in Ukraine has been a revelation for how quickly military technology morphs in the AI age.

“We have got to stop having these spending line items that are so specific,” Driscoll insisted.

Driscoll — a former platoon leader in Iraq — was confirmed by the Senate in a bipartisan vote on Feb. 24. Even as Hegseth has faced scandal and controversy, Driscoll and other service branch leaders are pushing for dramatic internal changes.

President Donald Trump and GOP congressional leaders also are seeking tens of billions of dollars in additional defense spending as part of the GOP reconciliation package.

Driscoll canceled the M10 Booker light tank, which had an estimated $17 billion price tag. There won’t be purchases of new Boeing AH-64 Apache helicopters or Gray Eagle drones either. The Robot Combat Vehicle looks done too.

Yet remember that when the Pentagon stops buying something, that could mean that jobs get cut in someone’s district or state. Driscoll said he’s already getting pushback from both parties — a sign that he “made the right decision,” in his view.

“Our responsibility is the soldier and the American taxpayer,” Driscoll said. “And even kind of beyond that, we have taken — and I can say this with a straight face — zero parochial interests into account.”

Driscoll added that he and George are willing to travel to members’ districts to explain any of the Pentagon’s decisions.

A warning for K Street. In Driscoll’s view, lawmakers should shoulder the blame for any legislative maneuvers designed to tie military leaders’ hands on weapons acquisitions.

But the Army secretary said defense contractors should also stop lobbying to force the Pentagon to buy things it doesn’t want — or else.

“We think it is a waste of their dollars to try to impact beyond what the soldier and our leadership actually want and need,” Driscoll said.

How Silicon Valley plays into this. Driscoll worked in venture capital and seems particularly bullish on startups and how they might be able to help the Pentagon. He recently traveled to California to meet with companies that are creating new products for the U.S. military. Driscoll hopes that ATI is a “renaissance” for some of these companies.

That said, the Pentagon seems to be finding use for some of Big Tech’s products as well. The Army has Meta’s Ray-Ban sunglasses and is having mechanics wear them as they repair vehicles to train AI systems.

BIG News about Punchbowl News. We’re hiring a reporter to cover defense policy and we’re pumped. Defense will be our third premium policy vertical, and we will begin coverage later this year. It checks off all of our priorities. It’s an incredibly interesting story with fascinating personalities and the Hill has a massive impact. Apply here. Want to stay in the loop on this growing coverage area? Join the list!

– John Bresnahan and Jake Sherman

THE SENATE

The Senate’s reconciliation standouts

Senate Republicans’ red lines and warring factions are about to take over the reconciliation debate.

The Senate begins a crucial four-week stretch today as the chamber tries to get the “One Big, Beautiful Bill” Act to President Donald Trump’s desk by July 4.

This is a huge moment for Senate Majority Leader John Thune.

The South Dakota Republican has to figure out what mix of changes to the House-passed bill can win 51 GOP votes. And whatever the Senate passes will need to get back through the House, where the Republican reconciliation bill passed 215-214-1.

Senate Minority Leader Chuck Schumer vowed in a Dear Colleague on Sunday to fight the effort “with everything we’ve got” and make it as painful as possible for Republicans. Schumer emphasized increased coordination with House Democrats.

Beyond the GOP leadership suite, there are key Republican senators whose names you’ll be hearing a lot of over the next month. Here’s who you need to know.

The budget hawks. Sen. Ron Johnson (R-Wis.) has been bashing the House-passed reconciliation bill. Johnson has said it doesn’t go far enough to slash federal spending, despite over $1.5 trillion in cuts. Moderates in both chambers will have big problems with deeper cuts.

Johnson isn’t alone among Republicans who want to slash more in federal spending. There’s also Sens. Mike Lee (R-Utah) and Rick Scott (R-Fla.). But Johnson is in his own category here, claiming he doesn’t care about political pressures from Trump.

The spending-cut skeptics. This is the counterpunch to budget hawks’ demands. Just like in the House, the Senate has members wary of cutting safety-net programs like Medicaid and SNAP.

Keep an eye on Sen. Susan Collins (R-Maine), who has expressed concern about Medicaid changes. Collins is up for reelection in 2026. Democrats will hammer the GOP over Medicaid cuts on the campaign trail, so Collins will have to tread especially carefully.

Sen. Josh Hawley (R-Mo.) is another one to watch. Hawley has been loudly opposed to Medicaid benefit cuts.

The clean-energy crew. The House-passed bill claws back more than $550 billion of clean-energy tax credits from the Inflation Reduction Act.

Four Senate Republicans publicly oppose a total repeal of the credits. Sens. Lisa Murkowski (Alaska), Thom Tillis (N.C.), John Curtis (Utah) and Jerry Moran (Kan.) sent a letter asking for a “targeted, pragmatic approach” to IRA cuts. Tillis is up in 2026, too.

This group could try to tweak the clawbacks in the House GOP’s bill, though that’ll cause friction with hardline conservatives.

The committee chairs. There are 10 Senate committees with reconciliation instructions. One in particular has perhaps the best and worst job in Washington right now.

The Senate Finance Committee has jurisdiction over taxes, the debt limit and Medicaid. That makes Chair Mike Crapo (R-Idaho) critical for where Republicans land on trillions of dollars in tax cuts and reductions to Medicaid spending.

The broker. The House’s thin majority is a problem for the Senate too. Keep an eye on Sen. Markwayne Mullin (R-Okla.), a former House member.

Mullin often acts as an informal liaison with House Republicans. He’s also an ally of House Ways and Means Committee Chair Jason Smith (R-Mo.).

Also: Finance Committee Republicans have their weekly meeting tonight.

— Laura Weiss and Andrew Desiderio

THE WEEK AHEAD

What we’re watching

On air in Alaska this week. Majority Forward, a nonprofit aligned with Senate Minority Leader Chuck Schumer, is blasting Sen. Dan Sullivan (R-Alaska) in new ads that accuse him of voting to slash Medicaid. Sullivan is up for reelection in 2026.

The ads will run statewide on digital and streaming, targeting independents and families, with a starting buy of $500,000. Up to one in three Alaskans “could lose health care coverage entirely or pay thousands more,” a narrator warns in the spot. Check it out here.

Tuesday. The Senate Appropriations Committee will have budget hearings with Education Secretary Linda McMahon and SEC Chair Paul Atkins.

Wednesday. The House Foreign Affairs Committee will have a hearing on NATO. SBA Administrator Kelly Loeffler will testify in front of the House Small Business Committee. The House Financial Services Committee will have a hearing on digital assets.

The House Appropriations Committee will hold a hearing with the acting administrator of the FAA, Chris Rocheleau. OMB Director Russ Vought will also testify in front of the House Appropriations Committee. The House Intelligence Committee will hear testimony from Lt. Gen. William Hartman, who is the acting director of the NSA.

Commerce Secretary Howard Lutnick will testify about his agency’s budget request before the Senate Appropriations Committee.

Thursday. Lutnick will testify at the House Appropriations Committee. The House Armed Services Committee will hear from Air Force brass about their FY2026 budget. The House Education and Workforce Committee will hear from McMahon.

– Jake Sherman and Ally Mutnick

…. AND THERE’S MORE

House GOP staff training kicks off. Plus, a Michigan Senate endorsement.

House news: House Republicans are launching the third cohort of “Level Up,” the professional training course for GOP staffers. As more Republican staffers depart the Hill to join President Donald Trump’s administration, the internal training sessions are vital to prepare staffers for promotions to senior roles.

This month, the “Level Up” program will start with cohorts for future communication directors and schedulers. In the fall, the cohorts for legislative directors and chiefs of staff will kick off.

The training sessions are led by the offices of Speaker Mike Johnson, Majority Leader Steve Scalise, Majority Whip Tom Emmer, Conference Chair Lisa McClain and House Administration Committee Chair Bryan Steil (R-Wis.).

Michigan Senate news: Former Michigan Democratic Gov. Jim Blanchard is throwing his support behind Rep. Haley Stevens (D-Mich.) in the state’s Senate Democratic primary.

“As a former governor, I know how critical it is to have experienced, tested leaders fighting for our families in Washington, and there’s no doubt that Haley is the right person for the job in this serious moment,” Blanchard said in a statement. Blanchard, a former House member, was governor from 1983 to 1991.

— Max Cohen

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