Washington Edition
Wrangling over details continues
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This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Today, senior editor Joe Sobczyk looks at the 11th-hour wrangling over the Republican tax-cut plan. Sign up here and follow us at @bpolitics. Email our editors here.

Late Nights

The tax-cut and spending plan that forms the centerpiece legislation of Donald Trump’s second term has been months in the making, the subject of late night and early morning committee debates as well as meetings and phone calls between the president and Republican lawmakers.

Yet...

“There’s a long way to go,” Texas Representative Chip Roy, a member of the hardline House Freedom Caucus, said this morning before being summoned to yet another meeting with Trump.

That means another late night for House Speaker Mike Johnson if he has any hope of getting a bill passed before lawmakers take a weeklong break for the Memorial Day holiday, his self-imposed deadline.

Johnson managed to cover one of his flanks with a deal to raise the cap on the state and local tax deduction with a group of Republicans from high-tax states like New York and California.

Trump and Johnson at the Capitol Photographer: Bloomberg/Bloomberg

Yet that agreement didn’t sit well with some Freedom Caucus members because of its effect on the deficit and because it mostly benefits Democratic-run states. Roy and other hardliners also want deeper Medicaid cuts and a quicker end to Biden-era tax breaks for clean energy, Bloomberg’s Erik Wasson and Akayla Gardner report.

With an eight-vote majority, Johnson can’t afford too many defections.

Now enters Trump, who’s accustomed to governing via executive order and dealing with a compliant Republican majority in Congress. He summoned holdout conservatives to the White House this afternoon to break the impasse.

In any case, there’s no legislation to vote on yet. It’s still being being written. And once the House does vote, the bill will head to the Senate where it almost assuredly will changed.

None of that means the tax-cut bill won’t — eventually — pass Congress. But getting there will be a long summer slog. — Joe Sobczyk

Key Reading:

Don’t Miss

South African President Cyril Ramaphosa went to the White House to persuade Trump to stop floating the conspiracy theory about a genocide against White people in his country. Instead, he walked into a trap.

The rapidly evolving outlook for US economic growth is boiling down to the tension between the growth-boosting effects of a new tax bill and the growth-eroding effects of increased tariffs on imported goods.

A software company that handles sensitive data for nearly every US federal agency was the victim of a cyber breach earlier this year due to a "major lapse" in security measures, according to documents.

The Defense Department formally accepted a luxury Boeing 747 jumbo jet from Qatar to temporarily serve as Trump’s new Air Force One, one of the biggest foreign gifts ever given to the US government.

The Trump administration will maintain barriers to keep advanced artificial intelligence technology out of China’s hands, brushing off calls from Nvidia’s CEO to ease restrictions on chip exports.

The administration is filing criminal charges against more immigrants in the US illegally as part of an effort to skirt state and city policies that limit local cooperation.

The Department of Homeland Security said eight immigrants convicted of serious crimes remain in federal custody following a deportation attempt that sparked confusion over whether they were sent to South Sudan.

The Trump administration has asked the Supreme Court to halt a judge’s order that would force it to answer questions from a watchdog group and turn over documents about Elon Musk’s DOGE project.

The EU was expected to share a revised trade proposal with the US, as it aims to inject momentum in talks with the Trump administration amid lingering skepticism that a transatlantic deal can be reached.

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kailey Leinz interviewed Republican Representative Mike Lawler of New York about where things are headed with the GOP tax-cut bill and raising the SALT deduction cap.

On the program at 5 p.m., they talk with Republican Representative Ralph Norman, a member of the conservative House Freedom Caucus, about what the group is demanding in the tax-cut bill.

On the Big Take podcast, Bloomberg Weekend Editor-at-Large Mishal Husain’s interview with Elon Musk at the Qatar Economic Forum about his future at Tesla, his ongoing feud with OpenAI CEO Sam Altman, the possibility of Starlink going public and more. Listen on iHeart, Apple Podcasts and Spotify.

Chart of the Day

The unemployment rate in the nation's capital is now higher than in any state. Employment for government workers is down by 2,700 and down by a matching 2,700 for professional and business services employees over the past year. Trump's Department of Government Efficiency efforts to trim tens of thousands of federal jobs are likely behind the spike in the unemployment rate, which rose to 5.8% in April from 5.2% a year earlier. The unemployment rates in both Maryland and Virginia, where many government employees live, ticked up 0.1 percentage points in the past month. Among states, Nevada had the highest unemployment rate at 5.6% followed closely by Michigan at 5.5%. The lowest was South Dakota with a 1.8% unemployment rate. — Alex Tanzi

What’s Next

Weekly jobless claims will be released tomorrow.

Existing home sales in April also will be reported tomorrow.

April new home sales will be reported Friday.

The Memorial Day holiday in the US is Monday, May 26.

The Conference Board’s index of consumer confidence will be released on Tuesday.

Capital goods orders in April will be reported Tuesday.

The March S&P CoreLogic Case-Shiller composite price index for single-family homes also will be released Tuesday.

Minutes of the Federal Reserve’s May meeting will be released next Wednesday.

Seen Elsewhere

  • For all the attention given to restoring the prominence of manufacturing in the US, companies already in operation are finding it challenging to fill open jobs, the Wall Street Journal reports.
  • Business travelers from Europe are increasingly staying away from the US, with bookings down 26% in April from a year ago, data from London-based HotelHub shows, according to Politico.
  • Counterintelligence agents in Brazil have been quietly dismantling a Russian spy operation that spent years building Brazilian identities for deep undercover spies known as illegals, the New York Times reports.

(Programming note: Washington Edition won’t be published on Friday, May 23, and Monday May 26.)

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