The Budget Battle Continues

Happy Thursday! Many thanks to the more than 1,400 of you who participated in our annual TMD March Madness pool—and congratulations to Bradley H., who had the winning bracket! We’ll be in touch about your prize soon. 

Quick Hits: Today’s Top Stories

• President Donald Trump on Wednesday announced a 90-day pause on nearly all of his tailored, or “reciprocal,” tariffs hours after they took effect. The reversal excluded China, which Trump said would face a 125 percent tariff “effective immediately.” Meanwhile, goods from all other countries will be subject to a blanket 10 percent tax. Earlier on Wednesday, China had announced 84 percent tariffs on all U.S. imports, as the country vows to “fight to the end” in the escalating trade war. “At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump wrote in a Truth Social post announcing the adjusted duties. 
• The stock market rallied on Wednesday following Trump’s suspension of parts of his sweeping tariffs rollout. The S&P 500 rose 9.5 percent, its largest single-day gain since 2008. Meanwhile, the Nasdaq Composite increased 12.2 percent—its best day since 2001—and the Dow Jones Industrial Average went up by 7.8 percent. All three indices are down from their close on April 2, “Liberation Day,” when Trump announced his sweeping tariffs.
• Ksenia Karelina, a Russian-American woman who was detained by Russian authorities in February 2024 and later sentenced to 12 years in prison for treason, was freed on Thursday. Karelina is “on a plane back home to the United States,” Secretary of State Marco Rubio announced Thursday. U.S. officials considered her arrest, which followed her donation of $52 to a pro-Ukraine charity, a wrongful detention. Her release was reportedly part of a prisoner exchange, though it remains unclear which detainees were returned to Russia as part of the agreement.
• The Treasury Department on Wednesday unveiled sanctions on five entities and one individual connected to Iran’s nuclear program. U.S. officials said the sanctioned entities, all based in Iran, were responsible for “procuring, or manufacturing, critical technologies” for organizations involved in the country’s nuclear program. The sanctioned individual—an Iranian national, Majid Mosallat—is the managing director for one of the sanctioned entities and allegedly involved in facilitating illegal shipments to assist Tehran’s nuclear development. The latest sanctions come ahead of planned negotiations between U.S. and Iranian officials, which Trump said are set to begin Saturday. 
• The Department of Homeland Security announced plans on Wednesday to begin monitoring immigrants’ social media accounts for antisemitic content “as grounds for denying immigration benefit requests.” According to a notice from the U.S. Citizenship and Immigration Services, the move is intended to “protect the homeland from extremists and terrorist aliens, including those who support antisemitic terrorism, violent antisemitic ideologies and antisemitic terrorist organizations” including Hamas, Hezbollah, and the Houthis. The new policy will empower immigration authorities to factor in antisemitic social media posts when considering the status of green-card applicants and student visa holders. 
• The Senate voted 52-44 on Wednesday to confirm Paul Atkins as chair of the U.S. Securities and Exchange Commission (SEC). Atkins, a Wall Street consultant and former SEC commissioner, will now oversee the independent agency tasked with enforcing laws against market manipulation. He is expected to champion deregulation and a friendlier approach to cryptocurrency in the role. 

GOP Rifts Emerge Over Budget Plan

A vote was scheduled for the House of Representatives to pass the Senate’s amendment to its budget resolution Wednesday—until there wasn’t.

House members gathered in the chamber around 6 p.m. for a series of four votes, the third of which was on the blueprint to unlock the budget reconciliation process, by which Republicans can pass President Donald Trump’s key legislative priorities with a 51-vote simple majority in the Senate. But when the time to vote on the measure came, GOP leadership stalled for more than an hour as Speaker of the House Mike Johnson tried to sway holdouts. He could afford to lose the support of no more than three Republicans—and many more had already threatened to vote against the measure. Ultimately, the last-minute lobbying failed, and Johnson pulled the resolution from the vote series and punted it to today.

Johnson now has one more day to push the plan through before the chamber breaks for a planned two-week recess. But yesterday’s chaotic scenes laid bare GOP divisions as the speaker attempts to shepherd Trump’s domestic agenda through the lower chamber’s narrow and fractious Republican majority. And as the clock ticks down, it remains unclear whether Johnson can carve a path that hardliners, rank-and-filers, and moderates alike can agree on.  

Republicans are eager to see Trump’s legislative priorities come to fruition soon for several reasons, not least of which is to boost their own standing with voters and the party ahead of the 2026 midterm elections. Achieving bicameral agreement on a resolution is only one of the early steps in the budget reconciliation process, and, having already faced a series of delays since January, the GOP increasingly recognizes that it’s time to get moving.

Until now, the Senate and House had passed dueling budget resolutions. Seeking quick legislative wins, Senate Republicans—led by Majority Leader John Thune—favored a slim resolution to pave the way for a bill including funding to border security and defense. But Johnson, skeptical he could move several bills through his rowdy House conference, joined with Trump in support of “one big, beautiful” bill including border and defense funding, as well as such priorities as tax legislation, spending cuts, and an increase to the debt ceiling. Both chambers passed their own resolutions in February.

House and Senate leaders began the process of hammering out their differences last week, and on Saturday, the Senate passed a compromise resolution that included elements the House had agreed to on spending cuts. At the same time, the Senate plan encouraged trillions in spending cuts that many House Republicans want, but stopped short of requiring those spending cuts and instead obligated Congress to make $4 billion in cuts while making the 2017 Tax Cuts and Jobs Act permanent.

A collection of House Republicans balked at the Senate’s revisions. Though most lawmakers expected the final product to cut far more than that minimum, they did not believe it guaranteed anything above the expressly allocated $4 billion—well shy of the $1.5-$2 trillion in spending cuts outlined in the House’s original resolution. Republican opponents of the Senate plan included not only hardliners belonging to the fiscally hawkish House Freedom Caucus but also other members closer to leadership, including Reps. Jodey Arrington of Texas and Lloyd Smucker of Pennsylvania, the chair and vice chair of the House Budget Committee. 

The new measure’s chances of passing in the House did not look positive as lawmakers returned to Washington early this week. On Monday, at least 10 House Republicans were vowing to vote against the measure, particularly the spending cuts.

On one hand, the text of the Senate plan kept intact the House’s original instructions to cut trillions of dollars in spending, leaving the door open to pursue cuts even under the Senate’s revised budget plan. On the other, many holdouts were skeptical of a blueprint that didn’t explicitly require trillions of dollars in cuts.

“The Senate version of the budget resolution does not prevent the House from achieving the goals we set for ourselves earlier in this process,” House Majority Whip Tom Emmer said at a Tuesday press conference. “In fact, it doesn’t mean a thing in the House. We will continue to advocate for the final reconciliation bill to include historic spending reductions while protecting essential programs, but we must act now to bring the process to moving the America First agenda on track.”

Some Republican House members insisted the Senate instructions allowing for the smaller spending cuts would be the only ones that were binding. Although they acknowledged the $4 billion in guaranteed cuts would be a floor and not a ceiling, they called for more than just a verbal promise of a much higher spending reduction.

“They’ve indicated they’re not willing to go above the $4 billion, which is 0.2 percent of the $2 trillion that we offered,” Rep. Ralph Norman of South Carolina told The Dispatch. “So, all we’re asking is, put it in writing. The math doesn’t add up, what they’re saying.”

Part of the clash between the House and Senate revolves around how to calculate the cost of extending the 2017 Trump tax cuts. Holdouts in the House were concerned the new Senate resolution used the current policy baseline to justify extending permanently the expiring provisions of the 2017 Trump tax cuts. Senate Republicans had contemplated using the metric, which officially measured the cost of a permanent extension as $0, but they needed a green light from the parliamentarian, the Senate’s rulekeeper. At least, they thought they did. In the end, they argued that it was Senate Budget Committee Chairman Lindsey Graham who had the authority to decide whether using that baseline was acceptable, so they pressed forward.

Rep. Chip Roy of Texas, a fiscal hawk like Norman, said he wanted spending cuts to accompany the baseline. “If current policy baseline allows for tax permanence, I’m fine with tax permanence,” he told reporters Tuesday. “But if the policy baseline is being used, as it is, by the Senate to basically say they can do a one-way ratchet on tax cuts, and say they’re going to be able to do everything they want to do on tax cuts, but nothing on the spending side—or limited on the spending side—that math doesn’t add up.”

Such was the state of play Tuesday, as Trump and Johnson rallied the remaining holdouts ahead of a Wednesday evening vote. That effort included a Tuesday White House meeting with a few skeptics, but several opponents of the plan remained unconvinced. “The math still doesn’t math,” Roy said afterward. What’s more, not all the key holdouts were in attendance. Norman said he did not receive an invitation. Rep. Andy Harris, the chair of the Freedom Caucus, was invited but declined. “There’s nothing that I can hear at the White House that I don’t understand about the situation,” he told The Hill.

At a dinner for the National Republican Congressional Committee Tuesday night, Trump told House Republicans in a speech, “Close your eyes and get there. It’s a phenomenal bill. Stop grandstanding.”

Despite the holdouts, Johnson forged ahead with his plan for a Wednesday night vote. As the chamber debated the resolution and neared the time for the vote, Thune helped out with some last-minute lobbying from across the Capitol. But as the skeptics emerged from his office and headed to the House chamber, they were reticent about how they would vote. “We have to discuss with our colleagues. We usually take action more or less as a group,” Harris told reporters who hounded him after the meeting, referring to his fellow hardliners.

As the series of votes started, Johnson huddled on the floor with the holdouts. Eventually, they all moved into the Speaker’s Ceremonial Office, a room just outside of the chamber. After the meeting—which left members on the floor in limbo, waiting for the resolution to be called up—Johnson, having not flipped enough people in his favor, emerged to tell reporters there would be no vote on the resolution that night.

Now, Republicans need to figure out what they’ll do next. There are two main options on the table. The first is to create a formal conference between the House and Senate to iron out the differences between the two chambers’ plans. The second is to put language into a rule—the procedural measure that enables the House to vote on a piece of legislation—that guarantees the House will not take up a reconciliation bill unless the Senate agrees to reduce spending by $1.5 trillion.

Now Trump, Johnson, and Thune must find a path that unites the perpetually unruly House majority. When it comes to the legislative priorities of this session of Congress, this was supposed to be the easy part.

Today’s Must-Read

Toeing the Company Line

Worth Your Time

• Ahead of Passover, Natan Sharansky and Gil Troy considered a complex question: Why are Israelis so happy? “Despite constantly facing vicious enemies and enduring a year and a half of sustained fighting and funerals, Israel ranks in the top 10 countries with the highest levels of happiness, according to the newly released 2025 World Happiness Report. … Even advanced Western nations such as Great Britain and the United States, in 23rd and 24th place, respectively, have a glee gap with Israel,” the pair wrote for Tablet magazine. “Israel’s historical optimism proves that identity is built through shared stories and values, not political agendas and competing grievances. When nurtured thoughtfully, group identity doesn’t compromise our freedom; it enhances our journey, filling our free, prosperous lives with the sounds of others, inspired by the ideas of our ancestors. The West needs good tribalism: A healthy commitment to community, connectedness, and history anchors us. It motivates us to defend ourselves when necessary, while inspiring us always to build a better world. That’s the essence of most Israelis’ Zionism, which many just call patriotism. And that’s the essence of the Passover seder message, too.”

Presented Without Comment

Wall Street Journal: Trump Says He Did Tariff Pause Because of ‘Yippy’ Reaction

President Trump said that he decided to pause the bulk of his reciprocal tariff program because of growing concern about the economy. “They were getting yippy,” Trump said when asked why he enacted a temporary rollback. “They were getting a little bit yippy, a little bit afraid.”

Also Presented Without Comment

The White House on X: DO NOT RETALIATE AND YOU WILL BE REWARDED

Also Also Presented Without Comment

New York Times: Councilwoman Who Bit Officer Has Charges Dropped After ‘Healing’ Course

In the Zeitgeist

The Boston Red Sox are familiar with having a national spotlight. But now, Netflix is bringing the baseball team’s off-the-field realities to the screen. A camera crew followed the team through the 2024 Major League Baseball season for an eight-episode documentary series, which hit the streaming service earlier this week.  

Let Us Know

Were you surprised by President Trump’s decision to partially walk back his sweeping tariffs?