In today’s issue:

• Senate, House GOP finalize leadership
• Gaetz as Justice nominee elicits gasps
• Ukraine, Israel consider truces under Trump
• Inflation rose slightly. Why?

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© The Associated Press | Evan Vucci 

“Isn’t it nice to win?” 

President-elect Trump’s question received raucous applause from House Republicans during a Wednesday meeting on Capitol Hill. The former president, who is in Washington kick-starting his presidential transition, met with members of Congress and later President Biden, all the while making headlines for his latest controversial Cabinet picks.

Trump and Biden pledged a smooth transition of power during their meeting. It was a marked contrast from four years ago, when Trump contested the results of the election and broke a postelection tradition by never inviting Biden to the White House. The former president has yet to acknowledge his 2020 election loss.

“Politics is tough, and in many cases it’s not a nice world, but it is a nice world today,” Trump said Wednesday while the two leaders sat by the fireplace.

Trump said the discussion with Biden about wars in Ukraine and the Middle East was “really good.” National security adviser Jake Sullivan told reporters Biden reinforced his view that it’s in the U.S. national security interest to stand with Ukraine so “we don’t end up getting dragged directly into a war.”

On Capitol Hill, incoming Senate Majority Leader, Sen. John Thune (R-S.D.), sought to quell any doubts among the GOP that he can’t work with Trump in the hours before his colleagues narrowly voted for him to lead them, insisting there was “no daylight” between him and the president-elect. 

“This Republican team is united. We are one team, we are excited to reclaim the majority and get to work with our colleagues in the House to enact President Trump's agenda,” Thune told reporters after the closed-door election on Wednesday. “We have a mandate from the American people — a mandate not only to clean up the mess left by the Biden-Harris-Schumer agenda, but also to deliver on President Trump's priorities.”

The win sets up what will be a fascinating relationship between Trump and Thune, writes The Hill’s Alexander Bolton. Only hours after Thune locked down his votes, he immediately found himself in a tough spot when Trump nominated conservative Rep. Matt Gaetz (R-Fla.) and former Hawaii Rep. Tulsi Gabbard, now a Republican,to serve as attorney general and director of national intelligence, respectively. The announcements immediately sparked controversy, with some Republican senators expressing surprise or outright opposition.

One Republican senator said “there’s a fair amount of skepticism” about whether the new Senate majority leader can be counted on to back the president-elect without waffling.

But another senator predicted the conference would rally behind the South Dakotan.

“The conference will move on, and John [Thune] will be a good unifier,” the senator said.

House Republicans locked in their majority and top leadership positions for the looming 119th Congress, as the conference readies its slim majority to legislate under full GOP control of Washington. GOP lawmakers unanimously nominated Speaker Mike Johnson (R-La.) to retain the gavel, sending his candidacy to the House floor for a full vote in January.

Behind Johnson, Republicans re-elected Rep. Steve Scalise (R-La.) as majority leader, Rep. Tom Emmer (R-Minn.) as majority whip. The Hill’s Mychael Schnell breaks down the other members of the GOP leadership.

Meanwhile, hard-line conservatives struck a tentative deal with House Republicans concerned about chaos in the chamber, agreeing to raise the threshold to force a vote to oust the Speaker in exchange for concessions on rule changes. The deal would eliminate the threat of any one member triggering the kind of snap vote that resulted in the ouster of former Speaker Kevin McCarthy (R-Calif.). 

In exchange for that concession, other members would drop the proposed rules changes — spearheaded by those in the Main Street Caucus — that aimed to punish members for rebelling against the majority of the party in ways that risked grinding legislative activity to a halt. One proposed amendment from Rep. Derrick Van Orden (R-Wis.) would have consequences for members who support a “motion to vacate” the Speaker, removing them from committees. 

“We need to have cohesion and unity. We need to have parameters set,” Van Orden told The Hill in an interview on Wednesday morning, before the deal was struck. “If we don’t act boldly and decisively, then we have no business governing. And that is a flag that I’m planting in the ground.”

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SMART TAKE FROM THE HILL'S BOB CUSACK:

President-elect Trump’s initial picks for his second term were fairly conventional and attracted widespread praise. Then, the Trumpian picks came: Fox News host Pete Hegseth to be Defense secretary, Gabbard as director of national intelligence and Gaetz as attorney general.

Hegseth and Gabbard are controversial choices, but they have a decent chance to be confirmed. Gaetz doesn’t.

Even in a Republican-controlled Senate next year, Gaetz probably won’t get the votes. There is no doubt Gaetz is a loyalist to Trump. Yet, he has rubbed lawmakers — including many Republicans — the wrong way. He was also the subject of an ongoing House Ethics Committee investigation, which now is moot since he resigned from the lower chamber on Wednesday. 

Soon after the bombshell Gaetz nomination, tongues wagged in the nation’s capital with various theories on what Trump was thinking. Is Gaetz a distraction? A shiny object for senators and the media to focus on while he tries to get the rest of his team through the Senate? Is it an extreme loyalty test for Republicans in the upper chamber?

Who could defect? It’s early but some possibilities include Sens. Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), Thom Tillis (R-N.C.), Bill Cassidy (R-La.) and Mitch McConnell (R-Ky.). Incoming Sen.-elect John Curtis (R-Utah) is another to watch. If most of these Republicans publicly oppose Gaetz, his nomination would not even make it to the Senate floor.

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In other Capitol Hill news: Rank-and-file House Democrats started to air their grievances about what they think went wrong on Election Day, as the party began its internal reckoning in their first closed-door meeting since last Tuesday.

House Foreign Affairs Committee Chair Michael McCaul (R-Texas) on Wednesday acknowledged he had been briefly detained at Dulles International Airport earlier this month because airport authorities thought he appeared drunk. McCaul told reporters he made a “mistake” in mixing the sleep medication Ambien and alcohol.

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3 THINGS TO KNOW TODAY: 

▪ Record-setting drought conditions in parts of the United States have raised fears of new wildfires, including in New Jersey. And without rain, drinking water supplies are threatened.

▪ In an impoverished Peruvian fishing village today, Chinese President Xi Jinping christens a gigantic deepwater port as a global node of commerce that cost $1.3 billion to construct and is now majority-owned by a Chinese shipping giant. China’s interest in resource-rich South America is on display during a global economic forum.

▪ Chipmaker Nvidia went to the Supreme Court to seek a ruling on the company’s attempts to avoid a lawsuit. A complaint alleges its executives misled investors about the extent that its sales depended on volatile cryptocurrency miners, which verify transactions and make them visible to all.

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LEADING THE DAY

Trump is quickly rolling out administration appointments that underscore his faith in fealty, his determination to score points and Washington’s firm bets that some of his surprising picks are destined for rough scrutiny. And another early observation: Trump’s rollout of nominees betrays a leaky transition team.

Scales of justice: There were audible gasps from lawmakers in the Capitol on Wednesday when Trump announced he’d nominate pugnacious loyalist Gaetz, 42, to be attorney general. Gaetz earned a law degree in 2007 and was in private practice for three years before entering politics. Trump’s antipathy toward the Justice Department and determination to bring the department under his thumb as president is no secret. Gaetz — whose resignation from the House on Wednesday ended a House probe of allegations against him — long denied having a sexual relationship with a 17-year-old girl. The Justice Department last year declined to bring any charges. Gaetz strained the patience of many fellow Republicans with bullying tactics that eventually undercut confidence in McCarthy, who resigned last year. One theory making the rounds among whisperers with ties to the Trump transition is that the president-elect is using Gaetz, even if unconfirmable, to preemptively flush rattled career Justice employees out of what the president-elect calls the “deep state” before January. 

Murkowski, who voted to convict Trump after impeachment for his actions on Jan. 6, 2021, called Gaetz “not a serious candidate.” 

Unconventional intelligence: Trump’s choice of Gabbard to be the director of national intelligence turns to a former Democratic presidential candidate who left the party in 2022 and officially became a Republican while endorsing Trump this year. Her political shift has accompanied numerous other statements and actions that have promoted accusations that she is peddling disinformation or could even be a Russian asset. Gabbard paid a visit in 2017 to Syrian President Bashar al-Assad to pursue peace, she said. In an interview before campaigning for president, she said Assad was “not the enemy of the United States.” She answered “yes” when asked if Russian President Vladimir Putin was a U.S. adversary.  

On Defense: Hegseth, a longtime Fox News anchor and military veteran chosen to lead the Pentagon, met with blowback among lawmakers who say they’re eyeing the experience needed by the next Defense secretary in a turbulent world. Some observers question the media personality’s interest in jettisoning “woke” generals.

A president and the press: The names of multiple potential picks to serve as White House press secretary are circulating. Alina Habba is a name that appears to have risen to the top in Trump World.

From campaign to West Wing: Trump announced Wednesday that longtime aide and social media assistant Dan Scavino, once a golf caddie, will serve as a White House deputy to the president. Campaign political director James Blair will be deputy for legislative, political and public affairs. And Taylor Budowich will become deputy chief of staff for communications and personnel. All will hold the top White House staff rank of assistant to the president.

Code name “Schedule F”: Trump would like to shift tens of thousands of protected civil servants to political status in order to jettison them from the federal bureaucracy at will and replace them with workers loyal to his agenda. Civil servants fear Trump may eventually succeed with what his transition team describes as a revival of Schedule F. The Biden administration recently implemented a final rulemaking to try to protect federal workers. 

Nervous educators: Trump’s vows to delete funding from K-12 and higher education institutions if they do not align with his views on subjects such as diversity, equity and inclusion have left some educational institutions “holding their breath” in anticipation of the new administration.  

The Hill: Elon Musk’s government “efficiency” endeavor for Trump faces some roadblocks.

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WHERE AND WHEN

• The House will meet at 10 a.m. The Senate will convene at 10 a.m. 
  
• The president will travel to join the Asia Pacific Economic Cooperation (APEC) forum in Peru, followed by a visit to the Amazon in Brazil. Biden departs for Lima at 11 a.m.  
  
• Vice President Harris has no public schedule.
  
• Secretary of State Antony Blinken is in Lima, Peru, and participating in opening sessions of APEC.

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ZOOM IN

ECONOMY: Inflation rose year over year in October a bit more than analysts expected, according to federal data released Wednesday, but within expectations. What prices were rising? Housing and shelter costs, used vehicles and car insurance rates, according to the Labor Department.

Consumer prices rose 0.2 percent in October and 2.6 percent over the previous 12 months. Economists surveyed by The Wall Street Journal expected the consumer price index (CPI) to rise 2.4 percent over the past year. Core CPI, which excludes more volatile food and energy prices, rose 0.3 percent last month.

The Federal Reserve’s inflation goal continues to be 2 percent. Market traders have sharply raised their expectations that the central bank will cut its key interest rate by another quarter percentage point in December. 

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ELSEWHERE

UKRAINE: Among Ukraine’s European allies, there is a quiet but growing shift toward the idea that the war with Russia will end only through negotiations between Kyiv and Moscow — and concessions of Ukrainian territory. The conversation has taken on new urgency as Trump prepares to return to the White House. He has said he would quickly end the war, without detailing how, and signaled he could back a deal that keeps some territory in Russian hands.

Meanwhile, Ukrainian officials told The New York Times that Kyiv’s interest in potential talks would hinge not on territorial boundaries, but on what assurances are in place to make a cease-fire hold.

“The territorial question is extremely important, but it’s still the second question,” one official said. “The first question is security guarantees.”

CEASE-FIRE: A close aide to Israeli Prime Minister Benjamin Netanyahu told Trump and Jared Kushner that Israel is rushing to advance a cease-fire deal in Lebanon, The Washington Post reports. The truce would be an early foreign policy win for the president-elect.

“There is an understanding that Israel would gift something to Trump … that in January there will be an understanding about Lebanon,” an Israeli official told the Post.

▪ Axios: Trump's Middle East envoy has a big asset: a direct line to the president.

▪ CNN: The FBI has arrested the alleged leaker of U.S. intelligence documents related to Israel’s attack plans against Iran.

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OPINION 

■ For Trump, dubious nominees come in threes, by The Washington Post editorial board.

■ Pentagon has two years to prevent World War III, by Mike Gallagher, guest essayist, The Wall Street Journal.

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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 the lame-duck session, we’re eager for some smart guesses about lame ducks in history.

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 U.S. borrowed the term “lame duck” from the British, where it originally referred to what?

1. A political scandal involving duck a l’orange
2. Lazy members of parliament 
3. Bankrupt businessmen in the 18th century and 19th century politicians whose time in office was quickly running out
4. The monarch’s flock of runner ducks, who cannot fly

Lame-duck periods used to be much longer. Which constitutional amendment moved Inauguration Day from March 4 to Jan. 20?

1. The 18th Amendment
2. The 20th Amendment
3. The 12th Amendment
4. The 24th Amendment

Lame-duck sessions in history have produced lots of bills, but not all of those that pass are considered by political watchers to be “substantive” in impact. With that in mind, what major political event triggered the enactment of 138 substantive, impactful laws in a lame-duck session?

1. The Great Depression
2. The Civil War
3. The Cuban Missile Crisis
4. The Watergate scandal

Which president was impeached during a lame-duck session?

1. Bill Clinton 
2. Donald Trump
3. Richard Nixon
4. Andrew Johnson

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