Morning Report — GOP scrambles for budget plan

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In today’s issue:

Where is the Speaker’s budget plan?
Kennedy, Gabbard, Patel in Senate spotlights
Trump seeks to detain migrants at Guantánamo
Canada’s Freeland hits back against Trump

House Republicans are chasing a moving target as they scramble to put together a reconciliation package to fund the government and push through President Trump’s key agenda items.

Conference members huddled at a retreat outside Miami for three days this week, where they discussed funding, further extending Trump’s 2017 tax cuts and border security measures. By the meeting’s end on Wednesday, lawmakers were left without a deal as fiscal hawks refused to push forward without assurances that the package would reduce the $1.8 trillion federal deficit.

Last month, Speaker Mike Johnson (R-La.) said he was aiming for $2.5 trillion in savings as part of the reconciliation process — all in “one big, beautiful bill.” But some House GOP members estimate Trump’s tax cuts, border spending and other priorities could add as much as $10 trillion to the federal budget deficit.

Post-retreat, Johnson’s hopes of uniting the fractious GOP conference around a plan and his timeline appear dashed, writes The Hill’s Mychael Schnell. The GOP members departed sunny South Florida with tensions rising in their ranks, as some Republican lawmakers express frustrations with the slow progress.

“There is a feeling that we’re running out of time,” Rep. Ralph Norman (R-S.C.), a Freedom Caucus member, told The Hill. “There’s a feeling that we’ve got to come together and whatever it takes to get the top lines done.”

This week’s meeting did give shape to House Republicans’ party-line policy plans, as several committee chairs outlined the fiscal parameters they will use to begin writing a blueprint. In addition to deep spending cuts, Republicans are aiming for $125 billion in added defense spending.

The Speaker’s initial timeline was ambitious: Release a budget resolution and mark it up by the week of Feb. 3, then hold a floor vote a week later. He would hand off the bill to the Senate the week of Feb. 17. By Feb. 27, lawmakers would have a budget resolution, then they would craft a reconciliation package in March.

The goal: Send the whole package to Trump’s desk before Easter, on April 20.

But after the Doral retreat, Johnson’s expedited timeline is looking highly unlikely.

“We have a general outline, there are some specifics in terms of money that we can save, but there is no set number for what the top line will be, and I think a lot of members are eager to hear what that is,” a GOP lawmaker told The Hill. “But we have a general understanding of where the savings will be coming from, which was good information.”

The Washington Post: Holding the House GOP retreat at a Trump property threatens to ignite the same kind of criticism that dogged Trump’s first term: that he has sought to personally profit from his public position.

TWO-STEP APPROACH: Republican senators, meanwhile, are moving ahead with their own budget plans — in the form of two bills. Senate Majority Leader John Thune (R-S.D.) said Wednesday that the “text is ready” for a two-part budget blueprint.

“We’ve been ready for a while. … Everything is ready to go,” Thune told Politico, adding that he and fellow Republican senators are “waiting to see what the House is going to do.”

“I think there’s a point at which we will decide to pull the trigger,” he added. The decision, he said, is “a question of — ultimately, of strategy.”

ORDER-REVERSE CARD: The Trump administration’s Office of Management and Budget on Wednesday rescinded a controversial memo issued late Monday that froze a wide swath of federal financial assistance, which had paralyzed many federal programs and caused a huge uproar on Capitol Hill. The decision came amid strong behind-the-scenes pushback from Republican lawmakers on Capitol Hill, The Hill’s Alexander Bolton reports.

One GOP senator expressed relief over the decision.

“Chaos is never good,” the lawmaker said.

A Trump administration official explained that the move was made to end the confusion over Monday’s directive and end the federal injunction against it. The new memo would not halt the intended freezing of funding that conflicts with Trump’s executive orders.

But a federal judge on Wednesday signaled he will issue a temporary restraining order barring the Trump administration from freezing federal loans and grants, raising concerns the White House will try to enact the same policy described in the now-rescinded memo through other means.

Politico: Monday’s memo ordering a sweeping freeze of federal financial assistance is the boldest and clearest example of the administration not only leaning on the people who wrote Project 2025 — but employing its strategies.

SMART TAKE with NewsNation’s BLAKE BURMAN:

The Federal Reserve on Wednesday declined to lower interest rates again after doing so three times since September.

President Trump is entering his second term in unfamiliar territory with relatively high interest rates. For example, 30-year fixed-rate mortgages are roughly 7 percent but hovered at around 4.2 percent when he first took office in 2017.

The president has made clear he wants interest rates lower — “I’d like to see them come down a lot,” he told reporters last week — but Fed Chair Jerome Powell said Wednesday he hadn’t heard from the White House on the topic.

After the pause on rate cuts, Trump took to social media and accused Powell and the Fed of failing "to stop the problem they created with inflation."

The Fed meets next in March, but you might be hearing about Powell a lot more between now and then.

Burman hosts “The Hill” weeknights, 6p/5c on NewsNation.

3 THINGS TO KNOW TODAY:

▪ Fatalities are confirmed, and recovery efforts are underway near Reagan Washington National Airport this morning after American Airlines Flight 5342 with 64 people aboard collided in midair on Wednesday night with an Army Blackhawk helicopter carrying three soldiers on a training flight. Both aircraft were in the icy Potomac River early today and no survivors have been reported. The president said on social media that the crash “looks like it should have been prevented.” The airport is closed until at least 11 a.m. today. Several coaches and skaters with the U.S. figure skating team were on the passenger flight from Wichita to Washington, D.C., according to U.S. Figure Skating.

▪ The Federal Reserve on Wednesday held its benchmark interest rates unchanged. Chair Jerome Powell said the U.S. economy shows “there’s a lot of resilience out there.” Inflation has climbed back toward 3 percent, rising from 2.4 percent in September.

▪ Democratic state attorneys general challenged some of Trump’s recent executive orders with speed. They’d prepared for years.

LEADING THE DAY

© The Associated Press | J. Scott Applewhite

Robert F. Kennedy Jr. on Wednesday defended his credentials and views, adding, “I am pro-safety,” amid more than three hours of grilling from members of the Senate Finance Committee. He also came under withering new criticism from a physician niece who released personal past emails she exchanged with the nominee. And Kennedy appeared to struggle while trying to explain healthcare programs he would supervise if confirmed as Trump’s secretary of Health and Human Services.

The New York Times: Kennedy’s Cabinet fate rests in the hands of a small group of Republicans. None has publicly voiced opposition.

The aura of controversy surrounding Kennedy as a potential Trump Cabinet secretary will be compounded today as senators question the president’s pick to supervise national intelligence and his nominee to “clean out” the FBI.

Some Republicans are uneasy about Kennedy’s longtime support for abortion rights prior to his decision to end his White House bid to endorse Trump. Kennedy sidestepped his record on the issue to say he agrees with the president in that the U.S. “cannot be a moral nation if we have 1.2 million abortions a year.” The GOP caution among senators on Wednesday was mild.

Democrats accused Kennedy of disseminating misinformation about vaccines and other medications to the detriment of children, families, science and public health. They said he harbored a personal agenda unsupported by science and worried about his potential impact on the Food and Drug Administration and the Centers for Disease Control and Prevention, both within the Health and Human Services Department’s 13 operating divisions.

At least one Democrat, Sen. John Fetterman (Pa.), told reporters later that Kennedy’s nomination could be in trouble. “I think we can all agree that was really a difficult performance,” Fetterman said. “I’m not sure he’ll even make it out of the committee.”

Kennedy faces another round of questions this morning from senators on the Health, Education, Labor and Pensions Committee.

Senators today will question one of Trump’s most vulnerable nominees, former Hawaii Democratic Rep. Tulsi Gabbard, tapped to be the director of national intelligence. Hardliner Kash Patel, nominated by Trump to upend the FBI, will appear this morning before the Senate Judiciary Committee.

Conservative election denier and Project 2025 contributor Russell Vought, nominated to lead a federal overhaul as Office of Management and Budget director, is expected to receive a Senate Budget Committee vote today.

▪ The Hill: Five takeaways from Kennedy’s Wednesday hearing.

▪ The Hill: The Senate on Wednesday voted 56-42 to confirm former Rep. Lee Zeldin (R-N.Y.) to lead the Environmental Protection Agency. Three Democrats backed his appointment.

▪ The Hill: The Senate Judiciary Committee on Wednesday voted along party lines to advance the nomination of Pam Bondi to be U.S. attorney general.

▪ The New York Times: Financier Howard Lutnick, a Trump transition adviser nominated to be secretary of Commerce, told the Senate Commerce, Science and Transportation Committee during a hearing Wednesday that he favors “across-the-board” tariffs, does not believe tariffs aggravate inflation and vowed, if confirmed, to take a tough stance on oversight of technology sales to China.

▪ The Hill: Former Sen. Kelly Loeffler (R-Ga.), Trump’s pick to be administrator of the Small Business Administration, told members of the Senate Small Business and Entrepreneurship Committee Wednesday that if confirmed, she would donate her federal salary to charity. She was profiled five years ago as the richest politician on Capitol Hill at that time.

▪ The New York Times: Tracking Trump’s Cabinet confirmations.

Vice President JD Vance defended the administration’s crackdown on immigration, saying during a Fox News interview that aired Wednesday night that he and the president campaigned to “regain control of our own border.”

WHERE AND WHEN

The House convenes for a pro forma session Friday at 10 a.m.
The Senate meets at noon.

ZOOM IN

© The Associated Press | Evan Vucci

The president’s blitz of executive decrees continued Wednesday, showing no signs of slowing as he plows into a 10th day of flexing his executive say-so to test legal hurdles while erasing Biden-era policies.

Trump signed an executive order he said would combat anti-Semitism while vowing the U.S. would deport non-citizen college students and other resident aliens who were part of pro-Palestinian protests on campuses.

Trump put his pen to an order on Wednesday to boost school choice programs using federal funds and K-12 scholarships.

He directed the Pentagon to prepare to house up to 30,000 detained migrants at the Guantánamo Bay detention camp at the U.S. Navy base in Cuba, which has long been associated with U.S. torture and abuse of terror suspects. The population of detainees still held by the U.S. at the prison dropped to 15 at the end of the Biden administration, 23 years after the attacks on 9/11.

The Nation: The uncertain fate of Guantánamo under Trump.

At a military base in Aurora, Colo., Immigration and Customs Enforcement will process deportations of migrants without legal status, tying the military and law enforcers together in Trump’s campaign to deport undocumented immigrants from the United States, according to the White House.

The Hill: The administration’s buyout offer to 2 million federal employees on Tuesday raises legal and logistical questions.

Politics: The Justice Department reportedly discussed with Manhattan prosecutors dropping a corruption case against New York City Mayor Eric Adams (D), who recently met privately with Trump at his Mar-a-Lago resort in Florida.

Adams could soon be challenged for mayor by former New York Gov. Andrew Cuomo (D), who resigned in 2021 after being accused of sexual harassment — and while denying wrongdoing.

Courts: Trump appealed his New York hush money conviction with a new roster of lawyers. … The Justice Department on Wednesday dropped charges against two Trump co-defendants in the government’s criminal classified documents case in Florida and moved to dismiss an appeal filed by former special counsel Jack Smith, who resigned from the Justice Department this month. … Former Sen. Bob Menendez (D-N.J.) was sentenced Wednesday to 11 years in prison following his conviction for trading bribes for political favors.

ELSEWHERE

Canada can work with Trump to reshape global trade and weaken China’s dominance of supply chains, according to Chrystia Freeland, the Canadian politician who is vying to replace Justin Trudeau as prime minister. Freeland said she believes Trump is threatening to impose huge tariffs on Canada, Mexico and other allies in part to pave the way for tougher policies on China.

Meanwhile, Freeland on Monday released what she's calling her “plan to stand up to Trump” — a policy document that includes the threat of big tariffs on U.S. goods to make the Americans pay if they go after the Canadian economy.

“Being smart means retaliating where it hurts,” Freeland said. “If President Trump imposes 25 percent tariffs, our counterpunch must be dollar-for-dollar — and it must be precisely and painfully targeted.”

Trump’s Middle East envoy Steve Witkoff on Wednesday made a rare visit by a U.S. official to Gaza to oversee the implementation of the fragile ceasefire between Israel and Hamas that he helped broker. On Tuesday, Witkoff met with a senior adviser to Palestinian President Mahmoud Abbas in Saudi Arabia.

Witkoff on Wednesday also met with Israeli Prime Minister Benjamin Netanyahu, as part of a diplomatic effort by the Trump administration to end fighting across the Middle East. Netanyahu will travel to Washington next week to meet with Trump at the White House.

CNN: As part of the ceasefire deal, Hamas is expected to free three Israeli and five Thai hostages today in exchange for Israel’s release of 110 Palestinian prisoners.

Trump’s recent tough rhetoric on Russia is what Russian President Vladimir Putin is “afraid of,” according to Ukrainian President Volodymyr Zelensky. Trump has put pressure on Putin to negotiate with Ukraine to reach a peace agreement that would potentially end Russia’s nearly three-year invasion. Trump said Putin is “destroying his country” and threatened to slap sanctions on the Kremlin if the agreement is not forged soon.

“We are not afraid,” Zelensky said during a Fox News interview. “Russia is not that strong, but we don’t want to lose more of our lives, men and women.”

▪ The Washington Post: An armed rebel group backed by Rwanda took full control of a key provincial capital in eastern Congo on Wednesday, following days of bloody fighting that left streets lined with bodies and displaced thousands.

▪ The Hill: A large majority of residents in Greenland are against Trump’s wish to acquire the island territory.

OPINION

■ If all this sounds delusional, that’s because it is, by Jamelle Bouie, columnist, The New York Times.

■ Tulsi Gabbard, Edward Snowden and intelligence, by The Wall Street Journal editorial board.

THE CLOSER

Take Our Morning Report Quiz

And finally … It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Inspired by Trump’s flurry of executive action, we’re eager for some smart guesses about executive orders.

Be sure to email your responses to asimendinger@thehill.com and kkarisch@thehill.com — please add “Quiz” to your subject line. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.

The Constitution does not explicitly define a president’s right to issue executive orders. Instead, this implied and accepted power derives from which article of the Constitution?

Seven
Two
One
Four

Which president on this list signed the most executive orders in one term?

Barack Obama
Donald Trump
Jimmy Carter
Ronald Reagan

Which president did not issue any executive orders?

William Henry Harrison
James Polk
George Washington
John Adams

Which law standardized the documentation of executive orders?

Federal Property and Administrative Services Act of 1949
Executive Orders Act of 1912
Federal Register Act of 1936
The 21st Amendment

Stay Engaged

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