We’re thrilled to be back with you after a company-wide holiday last week. Our brand new studio at the Punchbowl News Townhouse is almost done. Fly Out Day premieres this Thursday with an all-star newsmaker guest, who we will announce soon, and a great reporter conversation with two veteran Capitol Hill hands – Manu Raju of CNN and Jackie Kucinich of the Boston Globe.
Trump vs. Democrats and everyone else. Lawmakers return to Washington on Tuesday amid a deeply unsettled national political and economic landscape. President Donald Trump is at the center of a dozen controversies roiling the country, as he always seems to be. Congress has been on recess for the last month-plus, with members and senators back home and traveling around the world during August.
The federal government shuts down on Oct. 1, barring a bipartisan funding deal – even a short-term one – as the White House unilaterally slashes billions of dollars of previously approved spending.
Democrats are infuriated. They were skeptical about negotiating a funding deal with Republicans after Trump and GOP leaders jammed through a $9 billion rescissions package in mid-July. Now, Trump is slashing billions of dollars in funding without Congress via legally questionable “pocket rescissions.”
Yet the big question remains whether Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries are prepared to vote to shut down the government over these disputes. Or can they even trust Trump if he tries to cut a deal now only to backtrack later once it’s signed?
Trump is also threatening to take his “crime emergency” and harsh immigration crackdown into more big cities, with Chicago and possibly Boston in his sights. Democrats are outraged here too.
D.C. Mayor Muriel Bowser and local officials continue to tread carefully with more than 2,000 National Guard troops in the city, as well as hundreds of federal law-enforcement personnel. Crime has dropped significantly during the federal surge. So Democrats are in a bit of a political bind here, not wanting to look weak on crime even as ICE conducts checkpoints across the city.
Trump’s tariff regime took a massive blow last Friday when a federal appeals court ruled that the president exceeded his authority by imposing unilateral tariffs on dozens of countries. The White House will appeal the ruling to the Supreme Court, with Trump’s tariffs remaining in place until mid-October.
Tariffs have come to define the president’s economic policies over the last eight months, so this could be a huge blow to his agenda. The Congressional Budget Office said that the tariffs will decrease the deficit by $4 trillion over a decade.
Trump has also been at war with the Federal Reserve, another flashpoint for Democrats. Trump is trying to oust Lisa Cook, a Federal Reserve governor appointed by former President Joe Biden, over allegations of mortgage fraud. A federal judge heard a legal challenge to the firing on Friday but didn’t issue a ruling, meaning Cook remains in place for now.
The Federal Open Market Committee, which determines interest rates, will meet in two weeks. Fed Chair Jay Powell — who Trump has threatened to fire, too – has already signaled an interest rate cut is coming even as inflation worries grow.
The CDC – which is under HHS and Secretary Robert F. Kennedy Jr. – is in a state of absolute chaos. Trump fired Susan Monarez, the agency’s director, last week. Monarez is suing the administration, and four other top health officials resigned as a result. Schumer and other top Democrats are calling on Trump to fire RFK. That’s not going to happen, but it shows how bad things have gotten at the high-profile agency, already in turmoil following layoffs and a recent deadly shooting at its Atlanta headquarters.
Senate HELP Committee Chair Bill Cassidy (R-La.), up for reelection next year, vouched for RFK and other Trump health picks. Yet now Cassidy is vowing to use his panel to investigate the matter. RFK is slated to testify before the Senate Finance Committee on Thursday.
Trump also axed former Rep. Billy Long (R-Mo.), who spent less than two months as IRS commissioner. Treasury Secretary Scott Bessent is serving in the role as of now. But we don’t expect Bessent to serve in the role in the long run, based on our conversations with Trump administration officials.
The Trump administration has a pile of key nominees that need to be confirmed. Stephen Miran has been nominated to take Adriana Kugler’s seat on the Federal Reserve board. Kugler announced last month she would leave the board early.
Speaking of nominations, Senate Republicans are expected to move quickly this month to change the chamber’s rules in order to fast-track the confirmation of Trump’s nominees. This is in response to Democrats’ historic slow-walking of Trump’s picks, which reached a boiling point as the Senate was about to leave for the August recess.
Trump still faces the fallout from the Jeffrey Epstein scandal, too. While the Justice Department has begun to turn over troves of Epstein-related documents to the House Oversight Committee, Reps. Ro Khanna (D-Calif.) and Thomas Massie (R-Ky.) are pushing to force a full public release of the files and will hold a Capitol Hill press conference with Epstein victims on Wednesday. Remember: Massie’s discharge petition is open for signatures this week.
On the global front, there has been no public movement on ending the war between Russia and Ukraine despite Trump’s high-profile Alaska summit. The war between Israel and Hamas in Gaza is raging on, with no end in sight. A draft plan to rebuild Gaza into a “Riviera of the Middle East” is stunning in its ambition – and seemingly at odds with reality – as Israeli forces push into Gaza City, Palestinian civilian casualties mount and U.S. allies grow more frustrated.
