Washington Edition

This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Every Friday, White House correspondent Akayla Gardner delivers a roundup of the key news and events in politics, policy and economics that you need to know. Sign up here and follow us at @bpolitics. Email our editors here.

Pressure Cooker

President Donald Trump wants senators working through the weekend on his megabill of priorities from tax cuts to immigration. He’s spending a rare weekend in Washington, too — skipping his usual trek to New Jersey — as he seeks to get fellow Republicans in line.

Support for the policy package moved closer to the finish line after Republicans in blue states secured a major tax break for their constituents, bringing the limit for state and local deductions back up to the House’s figure at $40,000.

A decision by the Senate’s independent parliamentarian also derailed more than $250 billion of cuts to Medicaid that were an issue for Republicans with large numbers of low-income constituents who rely on the program. That could remove a big pay-for, with the GOP already facing internal scrutiny about how much the bill would raise the deficit, but members are scrambling to rewrite the provision to comply with the ruling.

Democrats have petitioned the parliamentarian to gut parts of the bill, using their only tool to influence the legislation set to pass along party lines using a special procedure. “The parliamentarian has been a little difficult,” Trump told reporters today, without specifying what decisions he disagreed with.

Trump at a White House press conference on Friday Photographer: Yuri Gripas/Abaca

The White House has assailed Republican lawmakers who could stand in the way of the so-called One Big Beautiful Bill. Trump has frequently called them “grandstanders.”

Independence Day has been the administration’s official deadline for Congress to pass the bill, though the president said today “it’s not the end-all” if it isn’t done by then.

Trump’s allies have embraced the idea of passing the bill in line with the holiday on July 4, hoping to juice political points out of the pomp-and-circumstance of the celebration. Tennessee Congressman Andy Ogles mused about passing the legislation on the same day and hosting a barbeque for lawmakers on the Capitol lawn. “We can call it one Big Beautiful BBQ,” he wrote on X.

Other developments this week:

Intel fight: Trump plans to slash staff at the Office of the Director of National Intelligence, Bloomberg’s Natalia Drozdiak, Jamie Tarabay and Nancy Cook report. That’s after a weeklong war of words over intel assessments following US strikes on Iran. Trump and top officials like Defense Secretary Pete Hegseth have lashed out at early findings – and the media that published them — suggesting nuclear facilities may not have been completely “obliterated” as the president claims.
NATO flattery: Trump declared a win at this week’s summit in The Hague, where European members pledged to hike defense spending to 5% of GDP. Much of the cash will likely end up in the coffers of US weapons manufacturers. The Europeans worked hard to choreograph the meeting in ways that flattered Trump, seeking to keep him on board the military alliance, Bloomberg’s Andrea Palasciano, Flavia Krause-Jackson and Josh Wingrove report. NATO chief Mark Rutte even called the US president “daddy.”
Consumers confused: With investors still seeking to figure out the likely impact of Trump’s trade war, new data offered conflicting signals of how US consumers are faring. The good news: Sentiment rose sharply in June, Bloomberg’s Nazmul Ahasan reports, reaching a four-month high. The bad news: Actual spending by US shoppers unexpectedly fell in May, for the first time since the start of the year. Maybe the tariffs are biting after all.

Don’t Miss

Trump said he was ending all trade discussions with Canada after the country moved to implement a digital services tax, and threatened to impose a fresh tariff rate within the next week.

The European Union and the US believe they can clinch some form of a trade agreement before Washington’s July 9 deadline for hiking tariff rates.

Trump hardened his threat to raise tariffs on some other countries by July 9, while Treasury Secretary Scott Bessent signaled there may be some extensions to wrap up major agreements by the start of September.

The Supreme Court limited the power of judges to block government policies nationwide, but left the fight over Trump’s restrictions on automatic birthright citizenship unresolved.

The court also ruled that public school parents have a right to opt out of classroom lessons that intrude on their religious beliefs.

And it upheld a $8.6 billion fund that helps cover the cost of telecom services for low-income people, rural residents, schools and libraries.

The Federal Deposit Insurance Corp. advanced regulators’ plan to ease a key capital rule that big banks have said limits their ability to act as intermediaries in the Treasuries market.

European countries planning to boost defense spending are confronting the reality that they’ll have to rely on the US for many of the new weapons.

University of Virginia President James Ryan is stepping down amid a Trump administration probe of the school’s diversity, equity and inclusion efforts.

Watch & Listen

Today on Bloomberg Television’s Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kailey Leinz interviewed Senator Dick Durbin, an Illinois Democrat and ranking member of the Senate Judiciary Committee, about today’s Supreme Court ruling and the implications for birthright citizenship.

On the program at 5 p.m., they talk with Senator Steve Daines, a Montana Republican.

On the Odd Lots podcast, Bloomberg’s Tracy Alloway and Joe Weisenthal talk to Maciej Wojtal of AmtelonCapital, an Amsterdam-based specialist in Iranian stocks, about the war’s impact on markets and businesses there. Listen on iHeart, Apple Podcasts and Spotify.

On the Big Take podcast, Bloomberg’s Amanda Mull, Lily Meier and Sarah Holder discuss the challenges that Trump tariffs pose to clothing brand Gap. Listen on iHeart, Apple Podcasts and Spotify.

Chart of the Day

As analysts wait to see when and how Trump’s tariffs will affect the economy, the latest Philadelphia Fed data shows broad strength across the states — a tailwind for the president as he pushes his agenda through Congress. Forty-two states posted growth in May, including key swing states like Pennsylvania, Georgia and Michigan. The state coincident index — a proxy for GDP based on labor market and production trends — rose more than 1% in a dozen states. While a few states including Iowa and Minnesota contracted, the overall picture bolsters Trump's case that the economy remains resilient despite rising trade tensions. — Gregory Korte

What’s Next

Construction spending for May will be reported Tuesday.

May’s job openings and layoffs data also will be released Tuesday.

Job cut announcements compiled by Challenger, Gray & Christmas will be reported Wednesday.

Nonfarm payrolls for June will be reported Thursday.

The US trade balance for May will also be released Thursday.

Financial markets in the US will close early on Thursday and won’t be open Friday.

The 90-pause for Trump’s reciprocal tariffs on most counties is scheduled to end on July 8.

(Programming note: Washington Edition will be on a limited schedule next week, publishing Tuesday and Thursday.)

Seen Elsewhere

The US southern border is eerily quiet as would-be migrants stay away and undocumented workers hide at home, amid federal immigration sweeps that have triggered nationwide protests, the New York Times reports.

General Dan Caine, the chairman of the Joint Chiefs of Staff, has vaulted into the top tier of Donald Trump’s advisers, with the president lavishing praise on his conduct of strikes against Iran, according to the Wall Street Journal.