Principals

☞ White House: President Biden’s national security adviser Jake Sullivan met with China’s top diplomat Wang Yi in Vienna for what the White House described as a “candid, substantive, and constructive” discussion. It could be a sign of an impending call between Biden and China’s Xi Jinping, or a visit by Secretary of State Antony Blinken or another Cabinet official to China.

☞ Senate: Majority Leader Chuck Schumer is out with a new Dear Colleague letter this morning that makes the case for keeping decisions about the debt ceiling and budget cuts separate. The Judiciary Committee also advanced three Biden judicial nominees who had been stalled as a result of Sen. Dianne Feinstein, D-Calif. returning to Washington. Meanwhile, NBC News reports there’s a flurry of subpoenas in the federal investigation into Sen. Bob Menendez, D-N.J., the existence of which was first reported by Semafor.

☞ House: Foreign Affairs Committee Chairman Michael McCaul, R-Texas may move to hold Blinken in civil contempt if the State Department does not comply with a subpoena for an Afghanistan dissent cable, the deadline for which was yesterday. “The committee has been more than reasonable in providing the State Department time to comply with my subpoena, as legally obligated. If the department fails to do so, I am prepared to initiate contempt proceedings,” McCaul said in a statement to Semafor ahead of the deadline, adding that he doesn’t take the decision “lightly.”

Former President Trump will appeal the verdict holding him liable for sexually abusing writer E. Jean Carroll in the 1990s and ordering him to pay $5 million in damages, his attorneys said in a notice filed in the Southern District of New York. Carroll, meanwhile, is considering suing Trump again for defamation after he called her claims “fake” and a “made-up story” during his appearance on a CNN town hall earlier this week.

Illegal border crossings have reached record highs this week as Title 42 expired, maxing out Border Patrol and processing stations. Officials say more than 10,000 people per day are crossing into the U.S. Meanwhile, a Trump-appointed federal judge in Florida blocked the Biden administration’s plans to “parole” some migrants who cross the U.S. southern border and let them continue their immigration proceedings within the country. DHS had said it was necessary to prevent dangerous overcrowding at detention centers. (Kadia Goba has more on Title 42 below.)

Twitter may be on the verge of getting a new CEO: Linda Yaccarino, head of advertising at NBCUniversal, is reportedly in talks for the role. Ben Smith’s take: “Twitter is back in the big advertising business (if this happens), sorry to everyone who paid for a subscription, or thought it might become a Tucker-centric media company.”

A federal judge in Virginia ruled that laws and regulations blocking federally licensed gun dealers from selling firearms to 18-to-20-year olds violate the Second Amendment. The Justice Department is likely to appeal the decision.

CNN chairman and CEO Chris Licht defended the network’s controversial town hall with Trump during an internal staff call, saying that the event made news by pinning Trump down on issues like Russia’s war in Ukraine, abortion, and the Jan. 6 riot. “There is so much that we learned last night about what a second Trump presidency would look like,” he told CNN employees, saying the network held him accountable “in a way that no news organization has done literally in years.” Read more from Semafor’s media reporter Max Tani.

Rep. George Santos, R-N.Y., agreed to a deal with Brazilian prosecutors Thursday in which criminal embezzlement charges against him will be dropped in exchange for Santos confessing to theft and paying restitution. The case stems from a 2008 incident in which Santos wrote two bad checks, worth $430, to pay for purchases in a local clothing store in a Rio de Janeiro suburb. Appearing virtually in a Rio-area court, Santos was given 30 days to pay $2,000 in fines and $2,800 to the victim. Now the first-term congressman, who was indicted in New York on Wednesday, can go back to focusing on his American legal troubles.

— Morgan Chalfant

Punchbowl News: White House and congressional negotiators talking about the debt ceiling have made some progress, but not enough to warrant another principals’ meeting, which is why today’s planned engagement was canceled. Punchbowl also has a rundown of the people negotiating for each side.

Playbook: Rep. Henry Cuellar, D-Texas, who progressives might try to primary again in 2024, told Politico he thinks Biden waited too long to pivot to the center on immigration.

The Early 202: In an interview with the Washington Post, New Hampshire Gov. Chris Sununu criticized Florida Gov. Ron DeSantis’s six-week abortion ban, saying it “definitely went too far” and won’t play well with voters. He also went on offense against Trump, saying he was “a shell of himself” at Wednesday’s CNN town hall. Sununu said he’s still “very strongly thinking” about a presidential run this cycle.

Washington takes a week of baby steps toward a debt ceiling deal

THE NEWS

A debt limit meeting between President Biden and Congressional leaders set for Friday was canned. But key players involved in the negotiations say that’s not necessarily a bad sign.

“We’re going to meet again,” Speaker Kevin McCarthy told reporters, adding that staff-level discussions, which began this week, will continue on Friday.

“The White House didn’t cancel the meeting. All the leaders decided it was probably in the best of our interest to let the staff meet again before we get back together,” McCarthy said.

A White House spokesperson said Biden and Congressional leaders had agreed to meet “early next week.” It’d likely fall before Biden is scheduled to travel to the G7 summit in Japan on Wednesday.

JOSEPH’S VIEW

On Tuesday, my colleague Jordan Weissmann and I said we were feeling somewhat optimistic that Democrats and Republicans were seemingly making progress toward a deal to avoid a debt ceiling calamity. After today, my sense of things is actually even a bit more upbeat, despite there being just three weeks to go before a potential default.

To be clear, there are still major policy differences that need to be bridged and probable near-death experiences down the road before something reaches Biden’s desk. But Republicans and Democrats are identifying areas where the space to cut a deal exists.

Louisiana Rep. Garret Graves, a top lieutenant for McCarthy, said Thursday House Republicans believed there was room for an agreement that rested on four components: permitting reform, work requirements, rescinding unspent COVID-19 funding, and discretionary spending limits. Notably missing: Republican demands to repeal Biden’s climate law.

“I think the last 48 hours have given us some reason for hope,” Rep. Dusty Johnson, R-S.D. said.

McCarthy also showed some new flexibility on Republican demands for $131 billion spending cuts, suggesting that rescinding unused pandemic aid could count toward that total. “We have $50-60 billion right there,” he said.

Democrats insist they won’t haggle over the full faith and credit of the United States. But they have said they’re open to budget talks, and for now, that appears to be serving as enough rhetorical cover to begin negotiations. Staff are meeting to discuss spending levels, and Biden is getting into deal mode. While in New York state on Wednesday, he talked up the importance of “cutting spending” without the specter of a calamitous default hanging over budget talks.

Meanwhile, administration officials are still pouring cold water on the possibility of using a workaround to raise the debt limit without Congress. On Thursday, Treasury Secretary Janet Yellen played down the much discussed possibility that the administration might simply declare the borrowing limit unconstitutional under the 14th amendment, calling it “legally questionable.”

Major differences still remain. A person close to the negotiations said the White House opposes Republican demands to terminate its student loan cancellation program, impose work requirements on food stamps and Medicaid beneficiaries, and repeal swaths of the Inflation Reduction Act. All are key planks in the House GOP debt limit bill. Still, the source said the nixed meeting was a “positive development” with staff-level talks continuing.

It does appear the Biden administration is entertaining some limits to discretionary spending, though not as drastic as the House GOP debt limit bill. The Republican proposal would revert government spending to last year’s levels and restrain it to 1% growth over the next ten years.  “The White House right now is certainly pushing for a shorter window,” Graves said.

A former Senate Democratic said Biden might seek something more like a two-year cap, similar to some of the appropriations deals Congress approved in the past decade. Under that scenario, the fiscal cliff would be punted until after the 2024 election.

“I would think that is a much more reasonable template for what a deal could look like,” the former aide told Semafor.

ROOM FOR DISAGREEMENT

Punchbowl News reports that sources involved in the talks believe a compromise might not be struck given the gulf between negotiating positions. On Friday morning, the outlet, which is close to McCarthy’s office, was ringing alarm bells

“Several participants in the negotiations put it this way to us last night: If they were at this stage in the talks in February, everyone would be bullish that a deal is possible,” the outlet writes. “However, as it’s only 20 days to a potentially catastrophic default for the U.S. government, they’re truly behind the eight ball.”

Both Graves and Johnson also said Thursday that a short-term debt limit extension, which in theory could create more time for talks, wasn’t guaranteed.

“I’ve been in meetings with members who have made it very clear that a short term deal would not come without a cost,” Johnson said. He declined to elaborate further to Semafor.

Republicans passed their border bill. Can the Senate return the favor?

After months of internal negotiations on one of their top priorities, House Republicans passed their border security bill H.R. 2 on a 219-213 vote the same day the pandemic Title 42 program expired.

In the end two Republicans, Rep. Thomas Massie, R-Ky. and John Duarte, R-Calif., sided with Democrats to oppose the bill.

“We are the most generous nation in the world,” Speaker Kevin McCarthy said at a press conference Thursday morning. “One million new Americans will be sworn in this year, same thing as next year and on. We believe in legal immigration. We believe the strength of this nation is the rule of law. But when you break the rule of law you break down society. We’ve watched it time and again.”

Republicans are framing it “as the strongest border security bill” the country has ever seen. It includes some Trump-era policies, like new restrictions on asylum seekers and restarting border wall construction. Some House Republicans took issue with the E-Verify mandate over concerns the internet-based system could create problems for the agriculture, hospitality, and service industries, which Duarte said was a factor in their vote.

“Unfortunately, the bill would harm many families that work in our Valley and create difficulties for our food producers,” he said in a tweet.

The bill is expected to die in the Senate but senators, working on their own version of immigration and border reform, have said the House bill laid the groundwork for dialogue.

“The bill that we’re getting, I think, is a good starting point,” Sen. Thom Tillis, R-N.C. told reporters. “It, by itself, would not get 60 votes to get out of here. But I do believe the House has done their work. They did the work in the committee and they’re putting something forward that we can build on.”

Tillis and Sen. Kyrsten Sinema, I-Ariz. hosted a rare “pen and pad” on Thursday to discuss a bill they introduced this week that would authorize a version of Title 42 that does not rely on the health emergency provision. Last Congress, Sinema and Tillis released a four-point framework that included additional border resources and new protections for DREAMers.

Despite their pivot to a Title 42-only bill, Sinema maintained they haven’t given up on their original framework and are “building bipartisan bicameral support” for it with new members.

— Kadia Goba

Maga Inc., the Trump-aligned Super PAC, is out with a new ad this morning titled “Versus” that hits Florida Governor Ron DeSantis over his past support for a Fair Tax bill, which would replace much of the current U.S. tax code with a national sales tax levied on every purchase.

“Trump versus DeSantis: On taxes,” a voice says in the ad as a rotating background of photos flashes on screen. “In Congress, Ron DeSantis pushed a 23% national sales tax, where the middle class pays more. 90% of families would get a tax hike if DeSantis replaced the current system. President Trump cut taxes — a lot.”

It’s the latest attack from Trump or his allies targeting votes and sponsored bills from DeSantis’ time in Congress, where he was part of the conservative House Freedom Caucus. The ad begins airing on Fox News this morning and Newsmax later in the day. Starting Saturday, it will also be featured on CNN, a Maga Inc. spokesman told Semafor.

Highlighting DeSantis’ past support for a Fair Tax bill (which he repeatedly sponsored as a member of Congress) is not surprising. In February, Semafor reported how multiple potential 2024 candidates were facing scrutiny over their willingness to entertain the idea, especially as conservatives in the new Republican-led House drew renewed attention to the concept. While President Biden and Democrats took the lead in attacking the latest version earlier this year, a source close to Trump noted at the time that his rivals would eventually have to “answer for what they support and what they’ve advocated in the past.”

It’s unclear where the Florida governor stands on the issue now — his team did not respond to a request for comment — but the topic has remained a polarizing one among conservatives ever since the late 1990s, when it rose in popularity.

—Shelby Talcott

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Luke Russert is a former NBC News correspondent and the author of “Look for Me There: Grieving My Father, Finding Myself,” which chronicles his time away from journalism traveling the world and coming to terms with the death of his father, former “Meet The Press” moderator Tim Russert.

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: The FBI didn’t immediately comply with a subpoena from House Oversight Committee Republicans for a document Chairman James Comer, R-Ky. claimed would show Biden’s involvement in an “alleged criminal scheme.”

WHAT THE RIGHT ISN’T READING: The Justice Department moved to halt former President Trump’s planned deposition in lawsuits filed by former FBI officials involving the response to text messages critical of the president.

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— Steve Clemons