Why Musk could be a big problem for Trump and the GOP

IN THIS EDITION

How Musk could be dangerous to Trump and the GOP

The CBC’s Oversight dilemma

Dems calibrate their reconciliation messaging

HFC pressures Senate for more reconciliation cuts

ICYMI: The Future of Medicine series

THE TOP

How Musk could be dangerous to Trump and the GOP

Happy Friday morning.

Because of his celebrity, larger-than-life persona, command of the media and vast wealth, Donald Trump bulldozed the political establishment and was elected president twice.

And because of his celebrity, his larger-than-life persona, command of the media and unimaginable gobs of money, Elon Musk poses a potential challenge to Trump, Speaker Mike Johnson, Senate Majority Leader John Thune and the Republican infrastructure both in Washington and beyond. We’ll see how serious it ultimately becomes.

Musk’s very public breakup with Trump over the last week was entertaining for many, especially Democrats and Trump haters. It was also a bit cartoonish. Yet the insult hurling obscures the larger problem facing Republicans.

Musk is the richest man in the world with a fortune of $368 billion. He owns one of the most important social media platforms on Earth. Despite many Americans’ misgivings about DOGE or some of his recent policy positions, Musk is seen by millions of admirers as a technological visionary and a business genius without parallel.

The South African-born Musk can go toe-to-toe with Trump in a way that perhaps no other Republican has been able to since the president descended that Trump Tower escalator in June 2015. Musk has vast vulnerabilities – look at what happened to Tesla’s stock on Thursday – but also has essentially infinite resources to deploy if he chooses to do so.

By late Thursday night, Musk posted a number of messages indicating he wants a truce. This makes sense because he has more to lose than Trump does. The GOP base will stick with Trump. Musk’s biggest worry is stockholders, who are much more fickle. Politico reported Musk’s camp will speak to Trump’s as soon as today; the two camps were one just a few weeks ago.

If the breakup holds — and there’s no guarantee it does — Musk could dump a small sliver of his wealth into dozens of Republican primaries, potentially costing the GOP its majorities in Congress and hurting Trump in the process. He could put money into a third-party operation to siphon off Republican votes or run TV ads bashing Trump’s agenda.

It all depends on the mercurial Musk’s pain tolerance and the state of his rapidly unraveling relationship with the president.

Yet Musk insulted Trump in deeply personal terms, saying the president’s name can be found in the Jeffrey Epstein files and that was the reason they haven’t been released yet.

Musk also claimed credit for Trump’s November victory. But for our audience — and the Trump presidency — that’s nothing compared to his biting criticism of the reconciliation package.

Musk took to X — which he owns, of course – to tell his over 220 million followers that the reconciliation package is a pork-laden, deficit-swelling piece of trash. Musk asked his followers to call Capitol Hill to urge GOP lawmakers to vote no.

Absent a detente, consider what this could mean. A flood of calls to members’ offices in the next week, saying they shouldn’t vote for the reconciliation bill. These efforts make a difference.

Think back through modern congressional history and you’ll find a litany of examples of interest groups lighting up switchboards and forcing lawmakers to pause before big votes.

Alternatively, Musk can back off, allowing Trump and Republicans to try to get this bill through Congress and reap the benefits — or suffer the consequences.

Republican Hill leaders seemed like deer caught in headlights during the Musk-Trump barrages. Thune didn’t address reporters as the feud was heating up Thursday afternoon. Johnson initially bolted past a group of reporters waiting for him at the Memorial Door — where the chatty and media-savvy speaker frequently gaggles.

When Johnson reemerged from his office, Johnson briefly chatted with reporters.

Rep. Ralph Norman (R-S.C.), a hardline conservative, said the break up was “bound to happen” because Trump and Musk are both “high-profile, strong-ego leaders.”

“Its unfortunate,” Norman said. “I hate it for the country but Elon is a strong personality. It doesn’t dim the fact of what he’s done for Americans. Two strong egos have a right to say things.”

The Musk-Trump flap may turn out to be just that – a temporary blip. Again, it’s up to Musk how far he wants to take this. If he wants a feud now or in the future, Trump will give him one.

Perhaps the biggest lesson – for the millionth time – is that for Trump, all allegiances are situational. Every relationship is a transaction. Trump will exploit a situation or person until they’re no longer of use to him and then move on. That’s never going to change.

Reconciliation news: Major trade groups for international companies with operations in the United States are pressing Thune and Senate Finance Committee Chair Mike Crapo to drop “Section 899” from the reconciliation bill in a new letter.

The regime could raise taxes for foreign companies with U.S. operations by as much as 20% if their home countries charge “unfair foreign taxes.” It hits back at the global minimum tax deal the Biden administration negotiated.

The message comes after the tax cleared a key procedural hurdle. The Senate parliamentarian ruled that it falls under the Senate Finance Committee’s jurisdiction, which means it’s in line with Republicans’ reconciliation instructions.

— Jake Sherman, John Bresnahan, Mica Soellner and Laura Weiss

Next week: Join us Wednesday, June 11, at 9 a.m. ET for a conversation with Sen. Ted Cruz (R-Texas). Punchbowl News Founder Jake Sherman will sit down with Cruz to discuss news of the day, 5G and spectrum policy. This event is the first in our two-part series, “America’s 5G Leadership,” presented by CTIA, and will include a fireside chat with their new CEO Ajit Pai. RSVP here!

HOUSE OVERSIGHT

The CBC’s Oversight dilemma

The Congressional Black Caucus is in an uncomfortable spot.

Two Black lawmakers — Reps. Kweisi Mfume (D-Md.) and Jasmine Crockett (D-Texas) — are seeking the ranking member post on the House Oversight Committee. On top of that, neither is the most senior member of the panel, a sticking point for many in a caucus that often places an extremely high premium on seniority. That would be Rep. Stephen Lynch (D-Mass.).

And, in a reflection of that awkwardness, few top CBC members will say who they’re backing — at least for now. The Democratic Caucus election for the post will be held on June 24.

“I know, but I don’t have to tell you,” Rep. Jim Clyburn (D-S.C.) said.

“I have my leanings, of course,” Rep. Greg Meeks (D-N.Y.) added.

“Who’s running?” Rep. Bobby Scott (D-Va.) joked.

Even Mfume was cagey when asked if he believed he had the support of the majority of the CBC: “I don’t know if I should tell you that.”

There are a ton of clashing dynamics in play here. Mfume is 76 at a time when age is a major factor for the House Democratic Caucus. Crockett, 44, considered deferring to Mfume as the more senior member but ultimately decided to run.

All four candidates, Lynch, Crockett, Mfume and Rep. Robert Garcia (D-Calif.), will pitch the CBC on an endorsement next week, though it’s unlikely the CBC will weigh in.

A touchy question. The Oversight faceoff has sparked a broader conversation about the importance of seniority in the Democratic Caucus. Many Black lawmakers believe seniority is essential to ensure they get a chance at top positions.

“Once we get away from seniority, it’s going to be about money, and people of color cannot raise the money that some others can, which means that we won’t get a lot of these positions,” one CBC member said.

But the makeup of the CBC has changed in recent years. Its ranks have skewed younger and many of these members represent districts that don’t have majority Black constituencies.

“I don’t think that we should ever look at someone who’s ready today, who’s the best person for the job and say, ‘Wait, you haven’t been here long enough,’” said Rep. Troy Carter (D-La.). Carter is backing Crockett.

Lynch, first elected in 2001, is the most senior member of the panel seeking the top post. Lynch told us he has CBC support but he declined to name names.

“They think seniority is their future,” he said, “in terms of giving people an opportunity.”

– Ally Mutnick

RECONCILIATION

Dems calibrate their reconciliation messaging

Democrats see the controversy surrounding the GOP reconciliation package as a political gold mine, using it to attack vulnerable Republicans over Medicaid cuts and other funding reductions.

But some Democrats say that’s not enough. Some argue that the party should be more proactive in telling voters what they’re for, not just policies they oppose, as they try to reconnect with working-class voters who voted for Republicans in the 2024 election.

Sen. Jacky Rosen (D-Nev.), who defied significant political headwinds last November by winning reelection in a state carried by President Donald Trump, wants her fellow Democrats to hear that message.

“This bill has… so many things in it that hurt everyone,” Rosen said. “And I think the best thing for Democrats to do is just go home and talk to people like you talk to someone you’re out to dinner with. You don’t need fancy explanations to know when people are hurting.”

A few weeks ago, Rosen went to the Senate floor to seek unanimous passage of her legislation with Sen. Ted Cruz (R-Texas) to eliminate taxes on tips, a watered-down version of which is included in the House-passed reconciliation bill. And it’s a key Trump priority.

To everyone’s surprise, no senator objected. The bill passed.

To be sure, Rosen — like all Democrats — is a staunch opponent of the broader GOP reconciliation bill. And there’s no chance the Rosen-Cruz bill clears the House on its own.

But Rosen believes that shouldn’t stop Democrats from being out front in support of popular bipartisan tax policies like “no tax on tips.”

It’s personal for Rosen. Not only does Nevada have the highest percentage of tipped workers in the country; but Rosen once worked as a cocktail and banquet waitress in Las Vegas.

The politics. In an interview, Senate Minority Leader Chuck Schumer praised Rosen for her focus on issues that impact her state.

But Schumer said Democrats should continue to focus on the reconciliation bill more broadly because “the overall negative theme has overwhelmed any positives.”

“I think it’s the contrast that serves us well,” Schumer told us. “The fact that we’re not for tax breaks for the rich shows what we’re for.”

Schumer is confident Democrats will be able to use the reconciliation bill to their advantage in 2026. Rosen wants that effort to include promoting popular policies, too.

“We all all worry about the same things — health care, food insecurity, stability for every family,” she said. “That is really the rock of our communities. If we don’t support that, then who are we?”

— Andrew Desiderio

CONSERVATIVE CORNER

HFC pressures Senate for more reconciliation cuts

House conservatives are ramping up pressure on their Senate GOP counterparts to find more spending cuts for the Republican reconciliation bill.

House Freedom Caucus members met with several conservative senators on Wednesday night for two hours to urge their colleagues to fight for increased cuts. CBO estimates the bill would add $2.4 trillion to the national debt over 10 years.

“They’ve got to hold the line and make it better,” Rep. Ralph Norman (R-S.C.) said.

Senate GOP leadership is scrambling to get enough votes to pass a bill through its chamber and back through the House by the GOP’s self-imposed July 4 deadline.

But Norman and other conservative House members haven’t said whether they’d support a Senate-passed reconciliation bill that doesn’t further reduce federal spending. We’ll note that nearly all of the House members who initially threatened to vote against the reconciliation package ended up supporting it in committee and on the floor.

HFC Chair Andy Harris (R-Md.) was the only Freedom Caucus member to vote “present” on the reconciliation bill, while Reps. Thomas Massie (R-Ky.) and Warren Davidson (R-Ohio) voted against the package. Neither Massie nor Davidson are in the HFC.

Rep. Scott Perry (R-Pa.) said in an X post that he has “serious doubts” about voting for a bill that doesn’t include further reductions.

Harris said he wants to see more cuts to the Inflation Reduction Act and “fraud, waste and abuse” in Medicaid.

“We got to ensure these spending cuts remain, but at a bare minimum the Senate cannot reduce or roll back any of these spending reductions,” Harris said.

Sen. Rick Scott (R-Fla.), who has been hosting weekly dinners with HFC members, said they’re all on the same page when it comes to more cuts.

“We’ve got to figure out how to balance the budget, we’ve got to figure out how to reduce spending, we’ve got to understand that we have a significant spending problem,” Scott said.

– Mica Soellner

SPECIAL PROJECTS

ICYMI: The Future of Medicine series

While the United States is a global leader in medical innovation and pharmaceutical manufacturing, the industry faces pressure from all directions that will shape its future.
Our series, The Future of Medicine, explored the complicated interplay between industry players, policymakers, advocacy groups and Capitol Hill.

The relationships between those groups have implications for the pace of drug development, the price of medicines, access to life-saving drugs and more.

At the same time, new technological advancements such as artificial intelligence hold lots of promise for the sector. Drug makers, healthcare providers and federal regulators have already embraced AI as a tool for driving the sector into the future.

The four-part series examined:

The State of Play: An overview of the state of the life sciences industry and the factors driving it into the future.

The Legislative Landscape: How the industry is navigating key rules and legislating actions that would impact the drug development process.

A Leading Voice: An interview with Senate Health, Education, Labor and Pensions Committee Chair Bill Cassidy (R-La.), a medical doctor, for insight into how Congress is approaching the issue.

The Players: The main people and institutions influencing the future of medicine.

Be sure to check them out.

– Elvina Nawaguna

MOMENTS

CLIPS