Principals

1. Thune-Trump relationship
2. AI ban scrutiny
3. Dem Medicaid plan
4. Dems struggle on economy
5. Hogg exits DNC
6. US NGOs head to UK
7. Iran tensions rise
8. Bessent on China

PDB: Ex-Trump advisers form new group

House votes on rescissions package … Air India plane carrying 242 passengers crashes following takeoff … Trump threatens to set unilateral tariffs in two weeks

Thune-Trump alliance deepens

Senate Majority Leader John Thune and President Donald Trump are coordinating ever more tightly as they prepare the president’s megabill for the Senate floor, Semafor’s Burgess Everett reports. The two are moving together to shield the president’s priorities from senators who want to ax them, particularly Trump’s Big Four: cutting taxes on tips, on overtime, on car loan interest, and for senior citizens. Those provisions are going to change when the Senate reveals them as soon as Friday, but all four are expected to be in the final bill. Thune and Senate Finance Chair Mike Crapo will head to the White House to talk to the president today, the second such meeting between Thune and the president this week. Importantly, each has their own power base: Trump can move the conservatives, while Thune is working on critical policy deals.

GOP chair doubts future of AI regulatory ban

The head of the powerful House Energy and Commerce said at a Semafor event Wednesday that the 10-year ban on state and local regulation of artificial intelligence included in Trump’s party-line megabill isn’t likely to pass in its current form. “I do believe it will change in the Senate — probably not be the full 10 years, be some kind of different timeframe,” Rep. Brett Guthrie told Semafor’s Elana Schor. The AI regulatory moratorium is already drawing scrutiny from conservatives like Rep. Marjorie Taylor Greene, R-Ga., who said she would have opposed the massive tax-and-spending package had she been able to fully digest the ban. Guthrie acknowledged “we didn’t socialize it” among fellow Republican lawmakers as much as he would have liked to. The provision is already facing tweaks in the Senate.

— Eleanor Mueller

Senate Dems unveil anti-fraud measure

Sen. Catherine Cortez Masto, D-Nev., will release Senate Democrats’ answer to Republican efforts to combat Medicaid and Medicare fraud as part of the GOP’s sweeping tax-and-spending bill. A discussion draft crafted by the Nevada Democrat and shared with Semafor would boost funding for the Health Care Fraud and Abuse Control Program, which recovered $11 for every $1 it spent in 2022, and expand it to oversee all Centers for Medicare and Medicaid Services programs, including the Affordable Care Act’s health insurance marketplace. The centerpiece of a larger suite of proposals Senate Democrats will announce today, it’s “exactly what our agencies need to root out real fraud and abuse in Medicare and Medicaid while protecting Americans’ access to care,” Cortez Masto said. Its release comes as congressional Republicans continue their push to pass their package by July 4.

— Eleanor Mueller

Dems struggle with economy messaging

Democrats are missing an opportunity to take advantage of Trump’s weaknesses on the economy, according to the center-left think tank Third Way. A new memo from the group argues that Democrats need to lean into the fight over fiscal responsibility by painting Republicans as irresponsible on the economy and the national debt. Third Way commissioned a poll across five 2026 Senate battlegrounds, finding that only 39% of voters there rate Trump’s job on the economy as excellent or good; majorities don’t view maintaining tariffs as fiscally responsible; and many are broadly concerned about a possible recession. Even so, it showed that voters trust Republicans more to handle tax and fiscal policy. “Democrats can drive public sentiment with a simple message: The Trump plan will bankrupt us,” the memo advises, noting that Democrats have a “serious brand problem on spending.”

— Morgan Chalfant

David Hogg leaves DNC role

David Hogg’s tumultuous 130-day tenure as a Democratic National Committee vice chair ended on Wednesday, after party members decided to hold a new vote for his job and he decided not to compete for it. Hogg, a 25-year-old gun control activist whose Feb. 1 election was challenged by one of the candidates who lost, frustrated some Democrats when he said his PAC would help defeat incumbents who were “asleep at the wheel.” That clashed with plans by DNC chair Ken Martin to bar members from intervening in primaries, and led to a very public argument that lost Hogg some of his support inside the party — a situation that became toxic after Politico obtained audio of Martin saying that the tensions with Hogg were making it impossible to do his work.

— David Weigel

US nonprofits seek shelter in UK

The Committee to Protect Journalists has directed a British law firm to set up a legal entity in the UK, in part as a precautionary measure against potential Trump administration executive orders targeting American nonprofits. CPJ’s board approved the move in April, a spokesperson told Semafor. The decision was partly driven by a long-term desire to expand CPJ’s fundraising efforts outside the US, but reports that the White House is considering executive orders targeting a raft of nonprofits were also a factor: “The actions of the new administration [have] certainly focused our minds as a nonprofit based in the United States,” CPJ Chief Executive Jodie Ginsberg said. UK law firms have reported a surge in US-based nonprofits inquiring about creating legal entities in Britain, while charity advisers and consultants said nonprofits were also considering other countries including Belgium, France, and the Netherlands.

US braces for Israel attack on Iran

The US is paring back its diplomatic presence in Iraq amid signs of a potential Israeli attack on Iran. Israel has informed US officials that it is “fully ready to launch an operation into Iran,” CBS news reported, while The New York Times cited US and European officials believing an attack was imminent. Such an operation, which the US reportedly believes could lead Tehran to retaliate on US sites in Iraq, would jeopardize the Trump administration’s efforts to broker a nuclear agreement with Iran. Talks are set to resume in Oman this weekend. Trump has recently expressed pessimism about the prospect of a breakthrough, telling the New York Post that he is “less confident” Iran would agree to a deal that ends its uranium enrichment. The UN’s nuclear watchdog declared Thursday that Iran is not complying with its nuclear obligations, the first time it has done so in two decades.

Congress presses Bessent on China

Lawmakers will get another chance to grill Scott Bessent for more information on Trump’s announcement of a new trade “deal” with China when the Treasury secretary testifies before the Senate Finance Committee today.

Members of the House Ways and Means and Senate Appropriations committees bombarded Bessent with questions about the agreement in hearings that stretched all day Wednesday. Despite Trump proclaiming that the agreement is “done,” Bessent told lawmakers that the administration is still “in the midst of constructing it.” Asked whether the US would export more chips to China in exchange for importing more rare earths, Bessent said that “there is no quid pro quo” — but declined to rule out more chip exports down the line. In other trade news, Bessent said that officials would likely extend a pause on tariffs past July for the EU and countries negotiating “in good faith.”

— Eleanor Mueller

Blindspot: Investigations and arrests

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: Rep. Darrell Issa, R-Calif., asked for an investigation into the Los Angeles Police Department’s allegedly slow response to the protests in the city.

What the Right isn’t reading: Homeland Security Secretary Kristi Noem wrote to Defense Secretary Pete Hegseth asking him to order US military officials to detain or arrest “lawbreakers” in Los Angeles, which would go beyond the authority invoked by President Trump.

Beltway Newsletters

Punchbowl News: The House and Senate will likely clash over SALT deductions and the pullback of clean energy credits in the GOP’s massive tax cut-and-spending bill.

Playbook: President Trump’s appearance at the Kennedy Center’s opening night of Les Misérables wasn’t a coincidence or out of convenience. MAGA loves the play: “It’s very populist. It appeals to our sensibilities in that regard,” one Trump ally said.

WaPo: Trump’s decision to send troops to Los Angeles is deepening his fight with Democratic governors. “This president has shown he wants to get what he wants,” Kentucky Gov. Andy Beshear said. “And looks for ways to change the custom or practice, or to change the law, where it limits his authority.”

Axios: Trump’s reputation as a dealmaker is taking a beating.

White House

• Two former Trump aides are launching a new 501(c)(4) outside group to push “America First” policy ideas, according to an announcement shared first with Semafor. The organization, called Public Policy Solutions, will be helmed by Joe Grogan, Trump’s first-term domestic policy adviser, and John Czwartacki, who was a top adviser to Mick Mulvaney in the White House.
• Vice President JD Vance and White House chief of staff Susie Wiles called Elon Musk to lobby him to make up with President Trump. — WSJ
• Musk called Trump before making his public apology. — NYT

Congress

• Senate Majority Leader John Thune said he’ll cancel the upcoming July 4 recess if the GOP reconciliation package isn’t passed by then.
• Discharge petitions on Sen. Chris Murphy’s dual resolutions to block the sale of US military equipment to Qatar and to the United Arab Emirates were struck down on Wednesday — with five Democrats’ support. In comments ahead of the vote, Murphy had accused Trump of swapping the tech for “cash into [his] pocket.”
• Republicans handily beat Democrats 13-2 at the annual Congressional Baseball Game.

Outside the Beltway

• Anti-ICE protests continued in Los Angeles, though relatively few demonstrators stayed out past the curfew in the city’s downtown.
• Former Republican congressman Joe Walsh is considering moving to South Carolina to challenge Sen. Lindsey Graham as a Democrat.

Polls

• Only 28% of individuals living in the UK, Germany, or France believe that the US is a somewhat or very “reliable guarantor” of European security, down from 52% last year, according to a new survey from the Institute for Global Affairs.

Economy

• The Consumer Price Index rose 2.4% in May year-over-year as inflation was steady, suggesting tariffs haven’t yet spurred runaway price increases like some businesses had feared.

Health

• Health and Human Services Secretary Robert F. Kennedy Jr. announced eight new members of the CDC’s vaccine review board, replacements for the 17 board members he fired this week. Two of his picks have criticized the Biden administration’s COVID-19 vaccine policies.

Education

• The board governing the Fulbright program resigned, saying the State Department had subverted them to cancel almost 200 scholarships.

Courts

• The federal government cannot deport or continue to hold Columbia student and green card holder Mahmoud Khalil, a judge ruled, though the Trump administration has until Friday to appeal.

National Security

• The soldiers filling the grandstands behind President Trump during his speech at Fort Bragg on Tuesday were selected for their appearance and political beliefs. — Military.com

Foreign Policy

• Ahead of next week’s meeting in Canada, the G7 decided it will not release the typical joint communiqué on what all seven members have agreed on.
• China pledged to cut tariffs for almost all African nations, offering a sharp contrast with Washington as Beijing deepens ties with the continent.

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

Joe Courtney serves as ranking member of the House Armed Services subcommittee on seapower and projection forces and co-chairs the Congressional Friends of Australia Caucus. We asked him about news of the Pentagon reviewing the AUKUS nuclear-powered submarine deal with the UK and Australia.