Principals

1. Travel ban chaos
2. Foreign tax scrutiny
3. Crypto push
4. Dems test megabill messaging
5. WH avoids Musk drama
6. Tweaking Russia sanctions
7. House’s Fed leverage push
8. Dem infighting

PDB: Trump orders Biden probe

Hegseth in Brussels … European Central Bank expected to cut rates … Bloomberg: Trump presses Serbia to accept deported migrants

Trump spurs chaos with new travel ban

President Donald Trump is testing the limits of his power — and drawing attention away from Elon Musk — with a new version of the controversial travel ban marred by court battles during his first term. Trump signed the expansive order late Wednesday, banning nationals of 12 countries, mostly in Africa and the Middle East, from entering the US, and imposed heavy restrictions on citizens from seven more in the name of US national security. The ban, set to take effect June 9, is more likely to withstand legal challenges than Trump’s first term iterations of the policy, legal experts told The New York Times. The policy will “trigger chaos and disruption to travel and daily life, especially for communities already facing precarious circumstances,” like Afghans fleeing Taliban rule (Afghanistan is among the nations affected by the ban), The Washington Post wrote.

Senate GOP weighs changes to ‘revenge tax’

Senate Republicans are reviewing the House’s “revenge tax” against foreign countries as business groups warn it could stifle investment in the US, Semafor’s Burgess Everett and Eleanor Mueller report. Wall Street has spent much of the past few days sounding off on potential pitfalls from the tax, and the Senate is listening. Sen. Thom Tillis, R-N.C., said at the moment he’s not comfortable with the retaliatory tax and other Republicans said there could ultimately be changes. “There are some issues that have been raised there and we are looking at it,” Senate Finance Committee Chair Mike Crapo, R-Idaho, said. Removing the provision altogether could create its own problems: It’s meant to bring in $116 billion in revenue. House Ways and Means Committee Chair Jason Smith put out a statement defending the proposal and asking the Senate to pass it and the rest of the megabill ASAP.

Senate GOP pushes to add crypto to megabill

Sen. Cynthia Lummis is pushing to add language to her party’s tax-and-spending bill that would revamp how the US taxes cryptocurrency. The Wyoming Republican told Semafor she sent Senate Finance Chair Mike Crapo tax-related provisions of her regulatory overhaul with Sen. Kirsten Gillibrand — including a proposal to apply the wash-sale rule to crypto, which could rake in billions of dollars in revenue, and another to absolve bitcoin miners from reporting gains and losses. “That has needed to be fixed — and since this bill is a tax bill, it’s just the right place to do it,” Lummis said. Gillibrand was more skeptical: “It’s so premature,” she said. Senate Republicans capped a whirlwind day of reconciliation meetings Wednesday as Finance Committee members went to the White House to meet with Trump on the bill. “He wants some working account benefits,” Sen. Bill Cassidy, R-La., said after.

— Eleanor Mueller and Burgess Everett

Dems message on GOP tax-and-spending bill

House and Senate Democrats’ campaign arms teamed up on internal polling that surveyed almost 20,000 voters to test how lawmakers can run on Republicans’ sprawling tax-and-spending bill in 2026. The results: “Messages that highlight GOP plans to cut key programs like Medicare and Medicaid … are consistently the most effective,” the DCCC and DSCC wrote in a memo shared with Semafor. The firm that conducted the polling, Blue Rose Research, also found that only one in four voters believe the bill will “help them and their families.” It’s a useful road map for how Democrats in both chambers plan to keep talking about the legislation headed into the midterm elections. “There is a clear argument that is persuasive to voters — instead of lowering costs, Republicans are cutting health care and food assistance to pay for a tax giveaway for billionaires,” the DCCC and DSCC wrote.

— Eleanor Mueller

White House pushes past Musk irritation

Trump and administration officials are irritated with Elon Musk’s growing attacks on the president’s “big, beautiful bill” — but are notably navigating the drama with caution. Musk’s two-day-and-counting public campaign against Trump’s megabill took officials by surprise, with one person with knowledge of the situation describing the attitude inside the White House as “furious.” But Trump has remained remarkably silent on Musk’s barbs, and officials are publicly brushing it all off. That’s by design. “They don’t want any big public fight or dispute,” one person close to the White House said. A White House official, meanwhile, said Trump’s only goal is getting the bill passed, not fighting with Musk online. Whether that continues remains to be seen. “There’s a lot of different angles here that make it pretty difficult” when it comes to the Musk-Trump relationship, the person close to the White House added.

— Shelby Talcott

Graham offers carveout to Russia sanctions

Congress is gearing up to act on Russia sanctions as growing tensions between Russia and Ukraine preclude a potential peace agreement. Sen. Lindsey Graham, R-S.C., told Semafor’s Burgess Everett he plans to amend his bipartisan Russia sanctions bill to exempt countries that help Ukraine’s defense, offering a carveout for European countries who might otherwise be nervous about the measure’s secondary sanctions. The tweak would likely make the legislation easier to pass, and is the latest sign the upper chamber is readying it for primetime. Meanwhile, Trump said Russian President Vladimir Putin told him over the phone that he would respond to Ukraine’s recent drone attack. Trump described the conversation as “good” but not one “that will lead to immediate Peace.” The war should come up during Trump’s meeting with German Chancellor Friedrich Merz later today.

House group urges easier leverage rules

Top lawmakers on the House Financial Services Committee are asking regulators to consider handing Wall Street a big win by loosening requirements for how much cash banks must set aside to offset potential losses. “Given the adverse and unintended impact these requirements can have on financial institutions’ ability to participate in the Treasury market, we encourage the Federal Reserve Board to carefully consider the need for reforms that will support liquidity in the Treasury market, especially in times of stress with haste,” Reps. Andy Barr, R-Ky., Bill Foster, D-Ill., Ann Wagner, R-Mo., and Brad Sherman, D-Calif., wrote in a letter to Federal Reserve Chair Jerome Powell and acting Comptroller of the Currency Rodney Hood and shared with Semafor. They also asked for more information on regulators’ plans, after Powell told lawmakers recently that revamping leverage ratios was something “we will return to and … get done.”

— Eleanor Mueller

Democratic center picks fight with left

Centrist Democrats gathered in Washington on Wednesday for their second annual “WelcomeFest,” including welcoming an attack from the party’s left as a corporate plot. Swing-seat and moderate members of Congress came to the Hamilton Hotel to share what worked in their elections, and listen to polling and takes that urged a louder focus on voters’ economic needs, and a shift away from what they see as unpopular climate and immigration topics. That tension was dramatized when Climate Defiance charged onstage during remarks by Rep. Ritchie Torres, D-N.Y., to accuse him of supporting “genocide” in Gaza. ​​“If you can financially afford to go to a protest every day, you are a different person than most people in my community,” said Rep. Marie Gluesenkamp Perez, D-Wa., who added that rural voters like herself needed to be shown more respect from the national party.

— David Weigel

Blindspot: Army and Pride

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: The Army met its annual recruiting goal far ahead of schedule.

What the Right isn’t reading: DC police reversed plans to close Dupont Circle for the upcoming Pride celebrations.

Beltway Newsletters

Punchbowl News: Senate Republicans and the White House disagree on potential changes to tax items in the House-passed megabill, such as provisions related to SALT, business tax breaks, and no tax on overtime.

Playbook: President Trump and his aides need to understand “you can’t make [Russian President Vladimir] Putin walk away from Ukraine; you have to put Ukraine out of his reach.”

WaPo: German Chancellor Friedrich Merz has been prepping for his Oval Office meeting with Trump today, consulting with UK Prime Minister Keir Starmer and French President Emmanuel Macron for tips on handling the president in person.

Axios: Trump believes Ukraine’s attack over the weekend was “strong” and “badass.”

White House

• President Trump endorsed getting rid of the debt limit and shouted out Sen. Elizabeth Warren, who suggested putting forward a bipartisan bill to nix it.
• Several of Elon Musk’s former aides at DOGE, including “Big Balls,” have taken on permanent government jobs. — WIRED

Congress

• The Congressional Budget Office estimated that President Trump’s megabill would add $2.4 trillion to the debt over a decade.
• The Senate confirmed Trump’s nominee to serve as vice chair of bank supervision at the Fed, Gov. Michelle Bowman, by a party-line vote of 48-46. Her predecessor, Michael Barr, was confirmed 66-28 in 2022.

Executive Orders

• President Trump signed an order on Wednesday that seeks to ban new foreign students from enrolling at Harvard — and only Harvard — for the next six months. He also directed his Cabinet to look into revoking foreign Harvard students’ visas.
• In another order, Trump directed the Justice Department to launch a sweeping probe of the Biden administration’s policy moves and statements, on the grounds that the “conspiracy” to cover up the former president’s “inability to discharge his duties” and his use of an autopen could constitute a misuse of presidential authority. (Courts have upheld the autopen’s validity; Trump has used an autopen himself.)

Outside the Beltway

• Former New York Gov. Andrew Cuomo found himself on defense during a nine-way New York City mayoral debate.

Economy

• Economists are concerned that the US’ inflation data may be skewed by budget cuts and short-staffing at the Bureau of Labor Statistics. — WSJ

• Private-sector hiring rose by 37,000 in May, a more than two-year low, according to payroll processor ADP.

Education

• The Education Department said Columbia University does not meet standards for accreditation (a decision the federal government does not actually make).

Immigration

• ICE is deploying 3,000 agents in a massive nationwide sweep to arrest and deport migrants, bolstered by up to 21,000 National Guard troops. — NBC

National Security

• The US says it won’t provide backstop air defenses for the anti-Russia “reassurance force” France and the UK are planning to launch after the end of the Russia-Ukraine war. — Bloomberg
• The FBI has arrested and charged the alleged accomplice of a man accused of trying to blow up a California fertility clinic last month.

Foreign Policy

• The US vetoed a UN Security Council resolution demanding a ceasefire in Gaza. All 14 other countries voted yes.
• Buried in the flurry of deals President Trump made in Saudi Arabia: plans for the National Zoo to host a pair of rare Arabian leopards at a new exhibit (something the president was “very interested” in). — NYT

Media

• Biden press secretary Karine Jean-Pierre is promoting a new book that describes her decision to leave the Democratic Party and become an independent. Her former colleagues did not take kindly to the news, per Politico.
• UnitedHealthcare is suing The Guardian for defamation over its story about nursing home billing, Max Tani scoops.

Principals Team

Edited by Morgan Chalfant, deputy Washington editor

With help from Elana Schor, senior Washington editor

And Graph Massara, copy editor

Contact our reporters:

Burgess Everett, Eleanor Mueller, Shelby Talcott, David Weigel

Maxar satellite photos taken Wednesday show the extent of the damage done to Russian bomber jets by Ukraine’s game-changing drone attack.