Principals

1. Plan B on DNI
2. Funding freeze paused
3. Dem divide
4. MAGA state
5. Trump-Netanyahu meet
6. Fed decision
7. Sinema’s new gig
8. Early Senate positioning

PDB: Hegseth takes action against Milley

White House offers federal workers mass buyouts … Lutnick, RFK Jr. face confirmation hearings … FT: OpenAI cites evidence DeepSeek used its model to train competitor

Gabbard’s backup plan

Senate Republicans have a backup option if Tulsi Gabbard can’t win over all nine Republicans on the Senate Intelligence Committee during her hearing Thursday — although it’s not ideal, Semafor’s Burgess Everett reports. There’s now talk of moving her out of the panel without a favorable recommendation if some of the panel’s skeptics decide to oppose her nomination but are OK with her moving to a floor vote. There’s precedent for doing that — Mick Mulvaney’s OMB nomination in 2017, for example — but it’s an emergency measure to get her to a final vote if the alternative is that her nomination stalls. “There are probably, perhaps, creative ways” to get Gabbard out of committee, Senate Majority Leader John Thune told Semafor. “But obviously, ideally, you want to see a nominee that’s coming out of committee with an affirmative vote.”

Trump’s funding freeze temporarily halted

The White House directive that would have frozen a broad swath of federal funding on Tuesday night is on pause for now. A federal judge halted the order until Feb. 3, after a group of nonprofits challenged it. The White House defended the freeze, meant to ensure government spending comports with Trump’s executive orders, and said it wouldn’t affect programs that provide individual assistance, like Social Security. But confusion persisted as Medicaid portals experienced outages across states. Trump’s directive drew only muted criticism from Republicans. “If it lasts a long time, I think it could be a problem,” Sen. John Cornyn, R-Texas, told reporters, adding that every administration is entitled to “due diligence.” Senate Appropriations Chair Susan Collins questioned why it was done without a confirmed White House budget director to implement it, characterizing it as “far too sweeping.”

Dems wrestle with Trump order

Senate Democrats were divided over how to respond to the Trump administration’s budget freeze, according to people familiar with the discussion. Twenty-two Democrats flipped their votes against Sean Duffy to be Transportation secretary after the news broke, revealing yet another tactical split in the caucus over how to protest Trump’s actions. Some Democrats now want to go scorched-earth on Trump’s Cabinet nominees, but others had long planned on offering bipartisan support (which could lead to valuable relationships with Trump’s top aides). Some Democrats thought Duffy should be the target, while others argued Energy Department pick Chris Wright should bear their ire. In the end, the party brought down the International Criminal Court sanctions bill in a show of strength — but will have to navigate other nominees starting today, with EPA hopeful Lee Zeldin and then Wright, Doug Burgum (Interior), and Doug Collins (VA) in the coming days.

— Burgess Everett

Florida owns the MAGA movement

Florida is the center of the Republican Party, and politicians with ties to the state are primed to shape the MAGA movement, Semafor’s Kadia Goba reports. President Trump, who shifted his home base to Florida in 2019, has elevated a crop of Sunshine State politicians, like Marco Rubio and Pam Bondi, to his Cabinet. And some lawmakers think the highly anticipated race to replace term-limited Gov. Ron DeSantis could have national implications. Both are examples of how this once-purple state has turned solidly red, and is growing a pool of political talent that could steer the party’s future. “Anybody who wins the Florida governor’s race, it puts them on a national stage,” said Rep. Carlos Giménez, R-Fla.

Netanyahu to meet Trump

Trump’s meetings with foreign leaders will begin in earnest next week, as he welcomes Israeli Prime Minister Benjamin Netanyahu to discuss the Gaza ceasefire and Middle East peace. Trump invited Netanyahu to the White House on Tuesday Feb. 4, according to the prime minister’s office, and he accepted. “I look forward to discussing how we can bring peace to Israel and its neighbors, and efforts to counter our shared adversaries,” Trump wrote to Netanyahu. It’s a high-stakes meeting for the US president, as the Gaza ceasefire advances toward the next stage and Netanyahu faces pressure from the far right. The two enjoyed a close relationship during Trump’s first term that later turned bitter, as Trump raged at his Israeli counterpart for congratulating Joe Biden on his 2020 victory. They’ve since patched things up.

— Morgan Chalfant

Fed likely to hold rates steady

Welcome to the Federal Reserve in the Trump era. Fed Chair Jerome Powell will hold a news conference this afternoon where he’s likely to field a barrage of questions about Trump’s tariff plans and their possible impact on inflation, after central bank officials signaled worries about the president’s economic policies during an earlier meeting. Powell’s news conference will follow the Federal Open Market Committee’s first meeting of 2025. The second Trump White House is set to test the bank’s independence; Fed officials are widely expected to hold rates steady today, ignoring Trump’s demand at the World Economic Forum last week to lower them. Meanwhile, new data shows US consumer confidence weakening in January, driven in part by job market pessimism.

Coinbase hires Sinema, LaCivita

Coinbase is bringing in some heavy hitters to its Global Advisory Council this morning: Former Sen. Kyrsten Sinema and Donald Trump’s 2024 co-campaign manager, Chris LaCivita, Semafor’s Burgess Everett reports. The two will bring their Trump and Hill connections to the firm during a critical period for the crypto industry, which has a more friendly administration in power and could see critical regulatory legislation become law. “We need legislation so that consumers can feel confident that when they purchase or trade crypto, that they’re doing so in a marketplace that is fair and that is regulated and that has oversight,” Sinema said. LaCivita said anything that passes Congress needs to be easy to understand and “straightforward” but agreed now is the time to make a move: “Consumers and investors just want clear rules.”

Dem’s retirement opens up Senate seat

Michigan Sen. Gary Peters announced his retirement on Tuesday, surprising his fellow Democrats and creating a new opportunity for Republicans. First elected in 2014, Peters chaired his party’s Senate campaign committee twice and fended off now-Rep. John James in one of 2020’s closest races. James, widely seen as a prospective gubernatorial candidate next year, is now a potential Republican contender to replace Peters, along with west Michigan Rep. Bill Huizenga and 2024 Senate nominee Mike Rogers; failed 2022 gubernatorial candidate Tudor Dixon is also “considering” running. Democrats are looking at a larger potential field, with now-former Transportation Secretary Pete Buttigieg (a Michigan transplant), Attorney Gen. Dana Nessel, state Sen. Mallory McMorrow, Rep. Haley Stevens, and Rep. Hillary Scholten all mulling their options. Two high-profile Democrats — Gov. Gretchen Whitmer and Rep. Debbie Dingell — quickly ruled out running.

— David Weigel

Blindspot: Police and school lunch

Stories that are being largely ignored by either left-leaning or right-leaning outlets, curated with help from our partners at Ground News.

What the Left isn’t reading: A man was arrested at the Capitol and allegedly said he’d planned to kill Republican officials and burn down the Heritage Foundation.

What the Right isn’t reading: Rep. Rich McCormick, R-Ga., suggested on CNN that children who receive free school lunches “sponge off the government.”

Beltway Newsletters

Punchbowl News: President Trump’s funding freeze handed Democrats an opportunity to go on offense: Senate Minority Leader Chuck Schumer, who plans to do a few local TV interviews today, told his colleagues to make it “relatable” to their constituents.

Playbook: Republican senators on the Finance Committee are mostly expected to go easy on Robert F. Kennedy Jr. during his first confirmation hearing today, but Sen. Bill Cassidy, R-La., a doctor, is the one to watch because he is “seen as perhaps the most wobbly” on Kennedy’s nomination.

WaPo: Kennedy’s nomination is unique because he’s getting hit on the left and the right. Sen. James Lankford, R-Okla., previewed plans to press Kennedy on his position on abortion.

White House

• President Trump will sign the Laken Riley Act today.
• Karoline Leavitt held her first briefing as White House press secretary, during which she announced a slew of changes to the briefing room — including that “new media” representatives like social media influencers and podcasters will be allowed to apply for press credentials.

Congress

• Caroline Kennedy wrote a letter to senators opposing the nomination of her cousin, Robert F. Kennedy Jr., to lead the Department of Health and Human Services. “It’s no surprise that he keeps birds of prey as pets because he himself is a predator,” she wrote. — WaPo
• Speaker Mike Johnson is considering working with Democrats to hike the debt ceiling, rather than pushing it through via reconciliation. — The Hill

Outside the Beltway

• Democrats flipped a seat in Iowa’s Senate.
• The Bulletin of Atomic Scientists inched the famous “Doomsday Clock” another second closer to midnight, citing AI and other threats.

Business

• Boeing CEO Kelly Ortberg is optimistic about the company’s recovery plan.

Courts

• Advocacy groups are fighting President Trump’s ban on transgender troops in the military in the courts.

Health

• President Trump signed an executive order requiring federal agencies to cut off funding for health care for transgender children, which it defined as under 19 years old. It also ordered the attorney general to “prioritize enforcement” of anti-female genital mutilation and consumer fraud laws against providers of trans health care.

National Security

• Defense Secretary Pete Hegseth pulled retired Gen. Mark Milley’s security detail and clearance, and ordered the Pentagon’s inspector general to investigate his conduct while in uniform to determine whether he should be demoted — taking action against a vocal critic of President Trump.
• Federal immigration enforcement officials will target Aurora, Colorado, with large-scale immigration raids later this week, following operations in Chicago and New York City. — NBC

Foreign Policy

• European leaders are uniting to prevent a US takeover of Greenland. — Politico
• The US is sending dozens of Patriot missiles to Ukraine from Israel. — Axios

Technology

• OpenAI unveiled a new version of its chatbot designed specifically for the US government.
• The US Navy has banned the use of Chinese AI app DeepSeek. — CNBC

Media

• Daniella Diaz is leaving Politico to join NOTUS, where she will cover House GOP leadership and immigration policy, according to an announcement this morning.

Principals Team

Edited by Morgan Chalfant, deputy Washington editor

With help from Elana Schor, senior Washington editor

Contact our reporters:

Burgess Everett, Kadia Goba, Shelby Talcott, David Weigel

Samuel Bagenstos served as general counsel for the Office of Management and Budget from 2021 to 2022 under Joe Biden’s administration.