FBI HQ and Epstein: Funding wars begin

IN THIS EDITION

Today is an example of the Hill’s government funding mess

The Vault: Treasury’s top tax bill challenges

Army vet preps run against Gonzalez in South Texas

Tech: The social media factor in Trump’s Brazil tariffs

THE TOP

Today is an example of the Hill’s government funding mess

Happy Thursday morning.

We wrote Wednesday that there’s a chance the federal government could shut down sometime this fall.

Today is a good example of why.

The Senate Appropriations Committee often passes each of its 12 annual spending bills on a bipartisan basis. This is what makes the Senate the Senate — and not the House.

Yet the Senate Appropriations panel has its first FY2026 markup this morning, and senators still don’t have a deal on what they want to spend this year. There’s also no sense that they’ll be able to reach one.

It gets worse.

The two sides appear to have a tacit agreement on two bills – Agriculture and Legislative Branch – to spend slightly more than FY2025. This puts the Senate at odds with House Republicans and the White House, which are seeking tens of billions of dollars in cuts to non-defense discretionary spending, aka social programs.

However, a third bill — Commerce-Justice-Science — has become a partisan battleground over one of President Donald Trump’s longstanding targets: the FBI.

The Trump administration has decided to move the FBI out of its decrepit Pennsylvania Ave. headquarters and into the Ronald Reagan Building and International Trade Center near the White House. Administration officials will divert $555 million already approved by Congress to help pay for the move, and they’re not asking for permission from lawmakers to make this dramatic shift.

The problem here is the Maryland congressional delegation won a contentious bidding process back in 2023 to build a new, multi-billion dollar FBI campus in Greenbelt, Md. This was going to bring lots of money and jobs to Prince George’s County.

Faced with this threat from the White House, Sen. Chris Van Hollen (Md.), the top Democrat on CJS, made the unusual demand on Wednesday to have his subcommittee mark up the bill – a small declaration of war on the usually bipartisan panel.

If CJS doesn’t advance through the committee on a bipartisan basis, that doesn’t bode well for the more complex spending bills, such as Labor-HHS and THUD.

“We’re the test case, and I hope it goes well,” said Sen. John Hoeven (R-N.D.), a member of the Appropriations Committee. “That’ll expedite the others if it does.”

FBI trouble. The problems began surfacing Wednesday night. Van Hollen said he’d offer an amendment at today’s hearing to ensure that the FBI headquarters can only be built in Maryland.

Despite Trump’s preferences, Van Hollen said the administration’s FBI HQ move contradicted a “longstanding position” of the Appropriations Committee. Failing to include language protecting the FBI project would set a bad precedent for future administrations, Van Hollen insisted.

“This is a bigger issue than just the FBI building,” Van Hollen said. “I do think this goes to the prerogatives of the committee, because it’s the FBI building today. It could be any other project tomorrow.”

If the panel doesn’t approve his amendment, Van Hollen will oppose the CJS bill and try to kill it on the Senate floor. Van Hollen said that he doesn’t think the bill can get 60 votes without his FBI language.

Otherwise, Van Hollen said he’s supportive of the CJS bill. The legislation provides a total of $79.7 billion in funding, a slight boost over FY2025 levels, CJS Chair Jerry Moran (R-Kan.) noted.

Jeffrey Epstein exclusive. Van Hollen has another amendment he plans to offer today, this one related to disgraced financier Jeffrey Epstein, that will also be worth watching.

While MAGA world melts down over an alleged Epstein coverup – this time by the Trump administration – Van Hollen has an amendment calling on Attorney General Pam Bondi to “retain, preserve, and compile any records or evidence related to any investigation, prosecution, or incarceration of Jeffrey Epstein” and then provide a report to the CJS panel within 60 days of enactment of the bill.

Van Hollen’s amendment calls for information on the “investigation of co-conspirators, internal reviews and misconduct findings by the Department of Justice, the current status of investigations into the financial and trafficking networks of Jeffrey Epstein, an intelligence assessment of Jeffrey Epstein’s financial ties, clients, and connections (if any) to the United States Government or foreign governments, and oversight failures at the Metropolitan Correctional Center in New York, New York.”

Epstein committed suicide at that jail back in August 2019, although conspiracy theories are rampant over his death and secret “client list.” DOJ recently reported that Epstein committed suicide and no client list exists.

Rescissions rage. Senate Minority Leader Chuck Schumer and other top Democrats have repeatedly warned that the outlook for this year’s spending process hinges on whether Republicans pass Trump’s $9.4 billion rescissions package next week.

“It depends on whether the Republicans want to pass a bunch of rescissions,” Sen. Patty Murray (Wash.), the top Democrat on the Appropriations Committee, said Wednesday when asked whether the two sides can reach agreement.

We scooped that Senate Appropriations Committee Chair Susan Collins (R-Maine) warned her colleagues during a party lunch that she wants changes to the rescissions package, especially on PEPFAR, the George W. Bush-era HIV/AIDS prevention program.

Collins reiterated her position during a Wednesday night interview on the Christian Broadcasting Network: “Cutting this program will literally cost lives, and that’s why I’ve made it very clear that I will not support the hundreds of millions of dollars that the OMB has proposed.”

But even those changes won’t make the rescissions package acceptable to Democrats, who see this as part of a broader challenge by the Trump administration to Congress’ power of the purse. They’re also very critical – especially in the House – of GOP leaders’ failure to defend that prerogative against the Trump onslaught.

– Samantha Handler, John Bresnahan and Laura Weiss

NEW EVENT! Join us on Tuesday, July 22nd, at 9:30 a.m. ET as Punchbowl News Technology Reporter Ben Brody hosts a conversation with Sen. Ed Markey (D-Mass.) discussing news of the day and online safety for kids. Afterward, Kate Charlet, global director for privacy, safety and security policy at Google, will join Punchbowl News Founder Anna Palmer for a fireside chat. RSVP here!

THE LONE STAR STATE

Army vet preps run against Gonzalez in South Texas

News: Eric Flores, an Army veteran and former federal prosecutor, is gearing up to challenge Democratic Rep. Vicente Gonzalez for his South Texas battleground district.

Flores has already met with the National Republican Congressional Committee, according to sources familiar with his plans. Gonzalez’s 34th District is a prime pickup opportunity for the GOP because it has been rapidly trending to the right. President Joe Biden won it by 16 points in 2020. Four years later, President Donald Trump won it by 4 points.

GOP operatives involved in the race are excited over Flores’ profile. A Spanish speaker, Flores grew up in the Rio Grande Valley. He was commissioned as an infantry officer in the Army and rose to the rank of captain. Flores has served in the Texas Army National Guard and led troops to help secure the U.S.-Mexico border.

Flores is a former assistant U.S. attorney and served as a municipal judge in the city of Alton. Flores lives in Mission, Texas, which is just outside the current district lines. Texas Republicans, however, are preparing to redraw the congressional map.

Several other Republicans are already running in the March primary. The race will advance to a runoff if no candidate clears 50%.

In the past, Republicans have struggled to recruit for this seat. Gonzalez has twice beat former Rep. Mayra Flores (R-Texas), who is now running in a neighboring district.

Another recruitment scoop: Rosie Pino, a Republican city council member in Clifton, N.J., is running to knock off Rep. Nellie Pou (D-N.J.) in the state’s 9th District. Trump carried this seat in 2024 as it swung 20 points to the right at the presidential level. Pino is a child of Ecuadoran immigrants and has served in local politics for more than a decade.

– Ally Mutnick and Max Cohen

Tech: The social media factor in Trump’s Brazil tariffs

There is a tech storyline behind President Donald Trump’s feud with Brazil.

Trump announced Wednesday that he’d impose a 50% tariff on Brazilian goods coming into the United States after Aug. 1. While Trump has been outspoken in his opposition to the Brazilian judiciary’s prosecution of former President Jair Bolsonaro, the president said he’s also protecting the interests of American social media platforms.

The new tariffs are partly “due to” the Brazilian Supreme Court’s “hundreds of SECRET and UNLAWFUL Censorship Orders to U.S. Social Media platforms,” Trump said in his letter to Brazilian President Luiz Inácio Lula da Silva announcing the new tariff.

Bolsonaro’s charges for an attempted coup in 2022 are certainly front and center in the new tariffs. But the move also highlights just how far Trump is willing to go to protect U.S. social media companies from complying with “censorship” laws abroad — even if it means meddling in a powerful partner’s internal affairs.

The measure comes after everyone from Federal Communications Commission Chair Brendan Carr to House GOP conservatives and Secretary of State Marco Rubio warned that there’ll be consequences for countries who want to regulate speech on U.S. platforms.

It’s personal. Trump has beef particularly with one Brazilian judge who Trump Media is suing in the United States.

The company filed a joint lawsuit in February with conservative platform Rumble against Brazilian Supreme Court Justice Alexandre de Moraes. The judge has issued a series of rulings directing social media platforms to take down accounts he said were propagating anti-democratic and hateful content.

Anti-democratic activity, racism and other forms of hate speech are crimes under Brazilian law. Moraes says he’s enforcing the law, while critics say he’s clamping down on speech.

Republicans in Congress have also taken issue with the Brazilian judge and some want to see him sanctioned. Rep. Rich McCormick (R-Ga.) has urged the administration to issue “immediate visa bans” and “economic penalties” to Moraes.

Bolsonaro’s son, Eduardo, has moved to the United States and has been lobbying the administration and Congress for months to punish the judge under the Global Magnitsky Act. Sanctions under that law, which was designed to crack down on human rights violators, can be severe and include freezing of assets and restrictions on financial transactions.

Sen. Mike Lee (R-Utah), McCormick and other Republican lawmakers have been asking the administration to consider applying Magnitsky against Moraes.

Meanwhile, Lula has stood by the independence of his country’s judiciary in both the Bolsonaro and the social media cases in the face of the Trump attacks.

–Diego Areas Munhoz

THE CAMPAIGN

News: House Majority Whip Tom Emmer will announce raising $6.5 million in the second quarter and more than $16 million this year.

This brings Emmer’s fundraising total to $16 million this year. He’s raised nearly $50 million since becoming whip two and a half years ago.

Also: BOLD PAC is endorsing two Democratic challengers in Nebraska and Pennsylvania.

The Congressional Hispanic Caucus’s political arm is backing Denise Powell in Nebraska’s 2nd District and Carol Obando-Derstine in Pennsylvania’s 7th District.

Powell, who we recently wrote about, is running to replace retiring Rep. Don Bacon (R-Neb.).

Obando-Derstine is looking to challenge GOP freshman Rep. Ryan Mackenzie (Pa.) but first faces a competitive primary. Obando-Derstine is endorsed by former Democratic Rep. Susan Wild (Pa.), who previously held the seat.

Money game: JoAnna Mendoza, a Democrat seeking to unseat Rep. Juan Ciscomani (R-Ariz.), raised $436,000 in the second quarter.

Pennsylvania launch: Democrat David Oxman, a Philadelphia-area doctor, is launching a primary campaign to succeed retiring Rep. Dwight Evans (D-Pa.). Oxman has already raised $282,000.

– Mica Soellner, Max Cohen and Jake Sherman

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