Principals

1. Hill’s war-and-tax week
2. Fragile Mideast ceasefire
3. Oil prices fall
4. NATO summit
5. Mamdani v. Cuomo
6. Murkowski opens up

PDB: SCOTUS allows third-country deportations

Powell testifies on Capitol Hill … Noem in Panama … Dow futures ⬆️ 0.73%

Senate GOP juggles Iran and tax cuts

Senate Democrats and Sen. Rand Paul, R-Ky., want to force a vote on President Donald Trump’s Iran strikes this week, before Republicans try to muscle through their party’s tax-and-spending legislation, Semafor’s Burgess Everett and Eleanor Mueller report. Lawmakers in both chambers will receive briefings on Iran today; senators could vote on a related proposal as soon as Wednesday (assuming a ceasefire doesn’t render it moot); and Republicans leaders rushing to meet a July 4 deadline could line up a vote on their megabill afterward —that is, if they can find a compromise. “It’s like drinking out of a fire hose,” Sen. Shelley Moore Capito, R-W.Va., said. Still, she and others were optimistic that Iran could even grease the skids for tax cuts: “This actually helps us, in terms of: We need to get our economic policy in place,” Rep. Adrian Smith, R-Neb., said.

A chance for de-escalation?

The White House is celebrating the prospect of de-escalation in the Middle East. Trump said late Monday that Iran and Israel agreed to a ceasefire hours after Tehran retaliated to US strikes by launching missiles at a US air base in Qatar in what was viewed as a symbolic attack. But peace is far from assured: Israel quickly accused Iran of violating the ceasefire, throwing it into doubt. Iran’s reply to the weekend strikes was limited. “We think they gave us some warning because they didn’t want to kill Americans and they didn’t want to escalate,” Vice President JD Vance told Fox News. Trump officials, who had prepared for a range of responses, argued Iran aimed to retaliate in a manner that wouldn’t escalate the conflict further. Trump and Israeli Prime Minister Benjamin Netanyahu spoke on the phone on Monday while Vance got in touch with Tehran, Reuters reported.

— Shelby Talcott and Graph Massara

Oil prices fall on news of ceasefire

Oil prices fell to their lowest point on Tuesday since Israel and Iran began trading rocket attacks on news of the ceasefire. Analysts expect oil prices to fall back to the low $60s. Ever since the Arab oil embargoes of the 1970s, a full-blown war across the Middle East has been the oil market’s nightmare scenario. Yet over the past two weeks, higher energy prices were the dog that didn’t bark. One key reason: The conflict seems to have been resolved relatively quickly. But the other factors — record US drilling, Iran’s overwhelming reliance on China as an oil customer, and an already oversupplied global oil market — underscore how the “drill, baby, drill” mentality of both Trump and Joe Biden granted the US a geopolitical insurance policy, and how the global clean energy transition leaves exporters like Iran with fewer leverage points.

— Tim McDonnell

Iran eclipses NATO summit

Trump, buoyed by the fragile ceasefire between Israel and Iran, heads to The Hague this morning for the NATO leaders summit. Trump will notch a win as alliance members agree to a higher defense spending target of 5% GDP, though Spain plans to opt out of the pledge. The target will cover security-related expenses like infrastructure and cybersecurity, not strictly weapons. Iran will loom large, as well as the impending tariff deadline and Russia’s ongoing war in Ukraine — which has faded to the back of minds in Washington, despite fresh Russian strikes in Kyiv.

Democrats and Republicans are as divided as ever on NATO. Seventy-seven percent of Democrats view NATO favorably, while only 45% of Republicans say the same, according to the Pew Research Center.

New York Democrats vote for mayor

New York Democrats will pick their nominee for mayor today, in a race that’s come down to former Gov. Andrew Cuomo and Zohran Mamdani, a left-wing state legislator who’s half his age. Mamdani, who began running before Mayor Eric Adams quit the primary and Cuomo entered it, has become a phenomenon; he’s dominated the primary’s policy conversation by running on a $10 billion agenda of social welfare improvements, including a rent freeze. His win would be a boon for progressives — and centrist Democrats’ worst nightmare, Semafor’s David Weigel writes. Cuomo, helped by a super PAC that got more than $8 million from former Mayor Mike Bloomberg, ran on public safety, battling the Trump administration, and his record. But Mamdani closed a polling gap, and trails just three points behind Cuomo in some recent preelection polling; the two were tied after the ranked-choice count, which won’t start until July 1.

Murkowski on Trump, her place in the GOP

Sen. Lisa Murkowski, R-Alaska, opened up to Semafor’s Burgess Everett ahead of the release of her new book, Far From Home, and revealed that, yes, she has been asked whether she’d be willing to switch caucuses. “I would be not being honest with you if I said I’ve never been asked … ‘Why don’t you switch?’ Or people have said: ‘You should switch,’” she said. “Have I considered it? Yes, because I’ve been asked the question.” In her book, Murkowski, who remains an unpredictable vote in the GOP, shares new details about her appointment to the seat by her dad, her 2016 write-in vote for John Kasich, and her conversations with Trump. The two actually spoke more recently and Murkowski thanked Trump for his Alaska focus. “And I said, ‘I have been critical. I get that,’” she told Semafor.

Blindspot: Lawsuit and agents

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 Trump administration is suing Washington state over a law that requires Catholic priests to cooperate with law enforcement to report suspected child abuse or neglect.

What the Right isn’t reading: Masked agents in Border Patrol vests were filmed in Southern California kicking and beating a landscaper and shoving him in a car, outraging locals and his family.

Beltway Newsletters

Punchbowl News: During a closed-door Republican conference meeting on Monday, Sen. Bill Cassidy, R-La., told his colleagues the House wouldn’t pass the Senate’s amended tax cut package, but Senate Majority Leader John Thune responded that the House would accept what the upper chamber passes.

Playbook: President Trump spoke by phone with Tamim bin Hamad Al Thani, the emir of Qatar, to serve as a “broker with Iran” on the ceasefire, following his call with Israeli Prime Minister Benjamin Netanyahu.

Axios: Trump moved to de-escalate the situation in the Middle East shortly after the strikes on Iranian nuclear facilities, directing special envoy Steve Witkoff to tell the Iranians of his desire for a deal to end the war.

WaPo: Abortion will be a key issue in coming elections, especially in states where laws protecting access haven’t been passed or restrictions on the procedure are in place, predicts the executive director of Swing Left, a progressive organization.

White House

• The Agriculture Department plans to strip environmental protections for nearly 59 million acres of forest and open them to logging.

Congress

• Senate Republicans are frantically attempting to modify provisions in their megabill to help them pass the chamber’s parliamentarian, including marquee provisions like cuts to SNAP and to the Consumer Financial Protection Bureau. — Politico
• Sens. Richard Blumenthal and Angus King are demanding a probe into VA contracts algorithmically canceled by DOGE using AI.
• The Democratic steering committee picked Rep. Robert Garcia, D-Calif., to succeed Gerry Connolly as the top Democrat on the House Oversight Committee, ahead of the party’s full vote today.

Outside the Beltway

• New York state plans to build the first major nuclear power facility in the US in 15 years. — WSJ
• Texas officials are directing public universities to identify undocumented students.

Campaigns

• Former DNC co-vice chair David Hogg said he plans to stay in politics. — The Hill

Business

• The Federal Reserve said Monday that it will join other bank regulators in ignoring so-called reputational risk when supervising banks — a move applauded by congressional Republicans, who have argued the practice created pressure on financial institutions to cut ties with businesses like crypto firms and gun manufacturers.
• A long-term hurdle to President Trump’s manufacturing reshoring ambitions may be a shortage of Americans willing to do blue-collar factory work. — NYT

Courts

• The Supreme Court ruled that the administration can deport migrants to countries they aren’t from, and would not need to give deportees a chance to challenge accusations against them in court. The US is now “free to deport anyone anywhere without notice or an opportunity to be heard,” Justice Sonia Sotomayor wrote in a dissent. Flights may resume immediately: “Fire up the deportation planes,” DHS spokesperson Tricia McLaughlin said in a statement.
• A federal judge temporarily blocked the White House’s efforts to prevent foreign students from enrolling at Harvard.

Foreign Policy

• Canada and the European Union signed a security pact, as the former tries to reduce its dependence on the US.
• Germany will turn to conscription if there are not enough volunteers for its armed forces, its defense minister said.

Health

• Three years after the overturning of Roe v. Wade, the number of abortions performed annually nationwide is still trending up.
• GOP Sen. Bill Cassidy, who helped confirm Robert F. Kennedy Jr. to lead the Health and Human Services Department, said the CDC’s vaccine advisory panel should delay its upcoming meeting because many of Kennedy’s picks for it have a “preconceived bias” against mRNA shots.

Technology

• The House has banned WhatsApp on staffers’ phones, citing cybersecurity risks. — Axios

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

Activists place an anti-billionaire banner in St. Mark’s Square, ahead of the expected wedding of Amazon founder Jeff Bezos and Lauren Sanchez, in Venice, Italy. The full thing reads: “If you can rent Venice for your wedding you can pay more tax.”

There was an eerie calm in Dubai after the US struck Iran’s nuclear sites, Semafor’s Mohammed Sergie wrote.

Gulf states are calling for restraint. They are in the line of fire if Iran decides to strike US bases across their territory. The stakes are high: Any disruption in the region’s waterways — especially the Strait of Hormuz — could plunge the global economy into recession. A worst case for the region is radiation contaminating the Gulf’s only water source.