Principals

1. House passes tax bill
2. Plan B on foreign aid?
3. Biden’s Michigan challenge
4. Zuckerberg’s apology
5. Feds disrupt China hack
6. Hamas victims sue
7. No rate cuts in March

PDB: Biden leads Trump 50% to 44% in a new Quinnipiac poll

Biden, congressional leaders attend National Prayer Breakfast … EU reaches deal for Ukraine funding … NYT: Congress may actually act on online child safety

— edited by Benjy Sarlin, Jordan Weissmann and Morgan Chalfant

The tax bill cleared the House. Can it survive the Senate?

The House passed its bipartisan, $78 billion tax bill Wednesday night, overcoming hardline conservative opposition on the way to a 357-to-70 vote. Now comes the hard part: Winning over Republican senators, many of whom are sounding deeply skeptical of the bill, which combines business deductions with a Child Tax Credit expansion. Some, including Senate Finance Chair Mike Crapo, R-Idaho, have expressed reservations about boosting the child benefit. But to many it seemed like Sen. Chuck Grassley, R-Iowa said the quiet part out loud, when he told Semafor’s Joseph Zeballos-Roig he was wary of passing a bill that would make President Biden “look good” before the election. Not everyone is pessimistic about the bill’s chances, though. “All of the outside pressure focused on the House the past few weeks will be redirected to the Senate side,” one GOP lobbyist told Semafor. “Senate Republicans in the minority won’t be the final obstacle to a bill that clears a Republican House with 300+ votes.”

Democrats say no to splitting Ukraine aid from border (for now)

Senate Democrats are saying no to splitting Israel and Ukraine funding from a border security deal, even as the path forward for such a package looks increasingly dire thanks to House GOP resistance. “We on the Democratic side are pursuing getting all of this done — Ukraine, Israel, humanitarian aid, Indo-Pacific, border — together,” Senate Majority Leader Chuck Schumer said at a news conference Wednesday. But some Republicans are already exploring a Plan B that would involve breaking off the foreign aid from border reforms, Bloomberg reported. “Hopefully we can work this border issue out in a way that is satisfactory, but there’s bipartisan support here in the Senate for both Israel and Ukraine,” Senate Minority Leader Mitch McConnell told reporters. Senators still haven’t released the text of the border security policy deal, and Sen. Mike Rounds, R-S.D. said that some GOP senators aired frustration at a closed-door lunch Wednesday about the fact that they hadn’t yet been able to review it. Sen. James Lankford, R-Okla., the lead GOP negotiator, told Semafor they would unveil it “as quick as we can” this week. Meanwhile, the the European Union announced this morning that it had reached a deal for a 50 billion euro aid package for Ukraine, after Hungarian Prime Minister Viktor Orbán gave up his veto.

— Morgan Chalfant

Amid polling trouble, Biden leans into labor in Michigan

President Biden is leaning on his latest union endorsement as he courts the key swing state of Michigan later today amid some warning signs there for his campaign. Biden will meet with members of the United Auto Workers at a union hall near Detroit, as his campaign seeks to highlight his union support and cast former President Trump, who just met with the Teamsters union for the second time, as anti-labor. “We can elect a President who stands up for workers, or we can elect a billionaire who sides with the billionaires,” UAW President Shawn Fain said this morning in a statement released by the Biden campaign. Biden faces challenges in Michigan, in part due to backlash from Arab Americans over his handling of the war in Gaza. A new Bloomberg/Morning Consult poll finds Biden trailing Trump in seven swing states including Michigan. Some prominent Michigan Democrats say they’re still confident about Biden’s prospects nonetheless. “I’m glad he’s coming,” Rep. Debbie Dingell, D-Mich. told Semafor. “Michigan is a purple state, and we’re going to talk about the issues that are going to matter in November.”

— Morgan Chalfant and Kadia Goba

Senators rake Zuckerberg over child safety

The Senate Judiciary Committee aimed its harshest criticism at Meta CEO Mark Zuckerberg as it grilled several Big Tech CEOs over their platforms’ commitment to online safety for children and teens. Lawmakers were hoping to push the executives into supporting bipartisan legislation aimed at regulating exploitative content on social media, though observers agree that there is “very little room” to pass these bills in an election year. The hearing reached a climax when Sen. Josh Hawley, R-Mo. asked if Meta had compensated the families of online child abuse victims — including relatives of teens who had died by suicide — prompting Zuckerberg to stand up and directly apologize to parents in the audience. But Zuckerberg still said he opposed several aspects of the proposed bills while downplaying social media’s impact on mental health and blaming competitors Apple and Google for unregulated app markets.

— Diego Mendoza

Feds warn Chinese hackers are targeting U.S. critical infrastructure

Federal officials confirmed they disrupted a Chinese state-sponsored hacking campaign that infiltrated hundreds of routers based in the U.S. to target domestic critical infrastructure. At a hearing on Capitol Hill, top national security officials including FBI Director Christopher Wray warned about China increasingly targeting U.S. critical services for possible disruptive and destructive attacks. “This is a world where a major crisis halfway across the planet could well endanger the lives of Americans here at home through the disruption of our pipelines, the severing of our telecommunications, the pollution of our water facilities, the crippling of our transportation modes,” Jen Easterly, director of the Cybersecurity and Infrastructure Security Agency told the House select committee on China. “All to ensure they can incite societal panic and chaos and to deter our ability to marshal military might and civilian will.” Wray also seemed to doubt China’s reported assurances it wouldn’t interfere in the 2024 presidential election. “China’s promised a lot of things over the years, so I guess I’ll believe it when I see it,” he said.

— Morgan Chalfant

Oct. 7 attack victims sue Iran and Binance

The families of American victims of Hamas’ Oct. 7 attack on Israel sued the governments of Iran and Syria as well as the crypto giant Binance, in what is expected to be the first in a flood of cases tied to last year’s assault, Semafor’s Jay Solomon reports. The plaintiffs accuse Iran and Syria of arming and financing Hamas, while alleging that Binance allowed the terrorist group to use its platform to conduct transactions. The lawsuit is a reminder that while U.S. and regional powers are looking toward an end to the Gaza war, a protracted legal battle lies ahead over those affected by the initial Hamas attack. U.S. officials are currently pushing for a ceasefire tied to the release of hostages that could pave the way for a more permanent cessation of hostilities, The Wall Street Journal reported. Meanwhile, Axios reported that Secretary of State Antony Blinken asked officials for policy options for possible U.S. and international recognition of a Palestinian state post-war.

Powell crushes hopes for March rate cuts

Federal Reserve Chair Jerome Powell dashed investors’ hopes that the central bank might start lowering interest rates sooner rather than later on Wednesday. As expected, the Fed’s monetary policymakers kept rates unchanged after their first meeting of the year. But with inflation seemingly on the wane, Wall Street had been hoping for cuts by March. Powell doused the idea, telling reporters at his afternoon press conference that it was “probably not the most likely case.” So what’s the Fed waiting for? “More good data,” Powell said. He noted that while the Fed’s favored inflation measure has been running near their 2% inflation target for six months, he and his colleagues want to make absolutely sure it’s not a headfake. “The question really is: That six months of good inflation data, is it sending us a true signal that we are really in fact on a sustainable path down to 2% inflation,” he said. The key question many economists are now asking: Whether the Fed’s caution leads to it holding rates high too long and bringing on that recession we all thought we’d avoided.

— Jordan Weissmann

In an exclusive interview with  Semafor  on Feb. 5, Rep. Krishnamoorthi will explore the House Select Committee on China’s achievements and answer questions about key priorities such as addressing forced labor, protecting U.S. intellectual property, and examining the future of TikTok in the United States. Sign up here.

Beltway Newsletters

Punchbowl News: Another reason the Senate might not readily pass the House-passed bipartisan tax bill: the current logjam in the upper chamber, which includes the emerging national security supplemental, as well as a forthcoming government funding fight and a potential impeachment trial for Homeland Security Secretary Alejandro Mayorkas.

Playbook: Committees backing President Biden began this year with $117.4 cash on hand after raising $97.1 million in the final quarter of last year. It’s less than Donald Trump had at this point in 2020, but more than Trump has now.

Axios: The new chair of the Business Roundtable, Chuck Robbins, said that CEOs believe global economic chaos is now the norm. “You have a group of CEOs that actually expect the next crisis will happen and we just deal with it. We don’t overreact too much either way,” he said.

White House

• President Biden will attend the National Prayer Breakfast at the U.S. Capitol this morning along with Speaker Mike Johnson and Democratic leader Hakeem Jeffries.
• The White House announced that Biden will visit East Palestine, Ohio later this month to meet with people affected by the train derailment and chemical spill one year ago.
• Biden’s clean energy adviser, John Podesta, will take over for John Kerry as the U.S. global climate representative.
• The Biden administration is sending initial offers to drug companies that make the 10 drugs chosen for the first round of negotiations through the Medicare drug price negotiation program established by the Inflation Reduction Act.

Congress

• The House Rules Committee will meet over the chamber’s bill to loosen up the SALT cap, but only for couples making less than $500,000. Quips Bloomberg columnist Conor Sen: “A tax break for married homeowners making $200-500k? Might as well call it the Suburban Romney-Clinton-Biden Tax Relief Act of 2024.”
• The House Oversight and Judiciary Committees will interview James Biden, President Biden’s brother, behind closed doors on Feb. 21, a week before Hunter Biden’s scheduled appearance.
• The Capitol Visitor Center reported Rep. Rich McCormick, R-Ga. to the House sergeant at arms for doing pull-ups on a safety railing in the Capitol dome suspended hundreds of feet in the air while on a tour earlier this week. — Politico
• Senate Foreign Relations Committee Chairman Ben Cardin, D-Md. sharply criticized China’s decision to change a flight path closer to the median line in the Taiwan Strait as “dangerous and provocative” and part of an effort to “coerce” Taiwan. “It is no coincidence that this action is being taken within weeks of a free and fair election in Taiwan, the result of which Beijing had made abundantly clear was not its preferred outcome,” Cardin said.
• The Washington Press Club Foundation’s Annual Congressional Dinner took place on Wednesday night in Washington. Sens. Peter Welch, D-Vt. and John Fetterman, D-Pa. posed for a photo.

Economy

• The U.S had by far the strongest economic growth among the G7 last year and is forecast to lead the pack again this year. — Axios
• An agreement negotiated between the U.S. and 13 other countries to secure global supply chains will take effect on Feb. 24, Semafor’s Morgan Chalfant reports. The pact is one of four pillars of the Biden administration’s Indo-Pacific Economic Framework.

Courts

Fulton County District Attorney Fani Willis and the prosecutor she tapped to work on the election subversion case, Nathan Wade, were subpoenaed to testify on Feb. 15 at a hearing considering motions from one of the defendants pushing to disqualify them from the case.

A federal judge dismissed Disney’s lawsuit accusing Florida Gov. Ron DeSantis of violating its First Amendment rights by retaliating against the company over its criticism of a state bill that limited classroom discussion about gender identity and sexual orientation.

Polls

President Biden has an edge over Donald Trump in a hypothetical general election matchup, according to a new Quinnipiac poll that finds the current president besting the former 50% to 44% among registered voters nationally. (Yes, it’s a bit of an outlier.)

National Security

Donald Trump’s former national security adviser John Bolton calls him a danger to U.S. security. “A second Trump term would bring erratic policy and uncertain leadership, which the China-Russia axis would be only too eager to exploit,” he writes in The Wall Street Journal.

Foreign Policy

• The U.S. left a large amount of military equipment and vehicles behind in Australia after high-profile joint military exercises last year, in part to prepare for the possibility of a Chinese invasion of Taiwan in the coming years. — Reuters
• France’s National Assembly voted overwhelmingly to enshrine abortion rights in the constitution, the first step toward what would be a historic move.

Media

• Fox News hosts don’t like the idea of Taylor Swift endorsing President Biden in the 2024 election. — NYT
• The Messenger, a digital news website that launched less than a year ago, is shutting down. Semafor’s Max Tani writes that it caps “a remarkable implosion for a company that raised $50 million last year with ambitions to hire 550 journalists and win over millions of readers.”

Blindspot

Stories that are being largely ignored by either left-leaning or right-leaning outlets, according to data from our partners at Ground News.

What the Left isn’t reading: A man who worked at the Commodity Futures Trading Commission under the Trump administration was critically injured after being shot during an attempted carjacking in D.C.

What the Right isn’t reading: Donald Trump’s political action committees spent $50 million on legal bills last year.

Principals Team

Editors: Benjy Sarlin, Jordan Weissmann, Morgan Chalfant

Editor-at-Large: Steve Clemons

Reporters: Kadia Goba, Joseph Zeballos-Roig, Shelby Talcott, David Weigel

Meet  Flagship  Asia  Morning, a new edition of our Flagship newsletter. Timed for the Asian morning and North American afternoon, the new edition’s mission remains the same — to keep readers informed without overwhelming them, ensuring they are aware of the world yet still able to go about their day — while offering a deeper look at the changes underway in the world’s most populous continent.

Kadia Goba covers Congress for Semafor. The Washington Press Club Foundation’s Annual Congressional Dinner took place Wednesday night.