Washington, DC

1. Dems prep corporate probes
2. Netflix abandons WBD deal
3. Block slashes staff
4. FEMA funds dwindle
5. Texas Senate hopefuls
6. Moreno’s 2028 move
7. GOP housing push
8. Russia sanctions bill

PDB: More Americans sympathize with Palestinians over Israelis

Bill Clinton appears for House Oversight deposition … Pakistan in ‘open war’ with Afghanistan after strikes … US releases Producer Price Index

Dems gear up to probe corporate America

Top Democrats are weighing how harshly they would go after corporations that have courted President Donald Trump’s approval if they retake the House in November, Semafor’s Nicholas Wu reports. And businesses are already greeting House Democrats’ rising midterm prospects with prep for a flurry of subpoenas and information requests. Rep. Robert Garcia, the Oversight panel’s top Democrat, told Semafor he would focus on alleged corruption in the Trump administration, Jeffrey Epstein, immigration enforcement, and even cost-of-living issues. “There’s opportunities to look at not just corporations that we think are enabling some of Trump’s corruption, but certainly corporations that are not supporting American families and not really focusing on affordability,” Garcia said. But the more they talk about future investigations, the closer this brings them to an impeachment Pandora’s box — a discussion Democratic leaders are loath to have.

Netflix walks away from Warner Bros. bid

Netflix has learned a bruising lesson about dealmaking in Trump’s Washington, Semafor’s Rohan Goswami writes. The company walked away from its deal for Warner Bros. Discovery Thursday, saying it wouldn’t match the $111 billion offered by Paramount. The move clears the way for David Ellison to take over a storied movie studio in Warner Bros. and a dominant but controversial news channel in CNN. Having swung and missed at its first big M&A deal, Netflix now has to reassure investors that its business is fine. Netflix co-CEO Ted Sarandos seemed to have contained the administration’s preference for Paramount, which owns Bari Weiss’ right-leaning site The Free Press and has been pushing CBS News rightward since buying it in October. That lasted until a week ago, when Netflix board member Susan Rice criticized companies which “take a knee” to Trump.

Jack Dorsey’s Block to slash headcount

The financial services company Block will cut its headcount by 40%, citing AI advancements, and predicted that other businesses would follow suit. The firm’s co-founder, former Twitter boss Jack Dorsey, said “intelligence tool capabilities are compounding faster every week” and a smaller team could “do more and do it better.” Block’s shares went up 24% on the news. Other companies have made similar moves, including Amazon and JPMorgan, although skeptics suspect they are ordinary layoffs under an AI smokescreen: Tech firms in particular saw hiring sprees during the pandemic, and are returning to 2019 numbers, CNN reported. Nonetheless, AI tools have become more powerful, and software firms’ stocks cratered when Anthropic unveiled more powerful coding tools.

FEMA running low on disaster funds

The Department of Homeland Security shutdown is threatening the federal government’s disaster response, Semafor’s Burgess Everett reports. FEMA’s Disaster Relief Fund is expected to dip below $5 billion later this week, a line that puts the agency’s ability to respond to potential disasters at risk, according to two senior Trump administration officials. They call it the “red zone,” but Sen. Patty Murray, D-Wash., called the timing a “transparent political ploy.” “These resources should have gone out the door many months ago,” the top Democrat on the Senate Appropriations Committee told Semafor. “Are disaster relief funds only going to get out when DHS is shut down?” The yearlong DHS funding bill contained more than $26 billion for disasters, but now the fund is tied up with the ongoing DHS shutdown. With Congress gone, it will stretch well past the two-week mark.

Texas Senate hopefuls seek Trump nod

All three Republicans in the Texas Senate race will have one more chance to get a surprise endorsement from Trump as they shake up their pre-primary plans to join him in Corpus Christi today, Semafor’s David Weigel and Burgess Everett report. “Obviously, if the president comes to town, we want to welcome him,” incumbent Sen. John Cornyn told Semafor. “We had some get-out-the-vote stuff; we flipped it to Saturday.” Cornyn has trailed or tied Texas Attorney General Ken Paxton in public polling. Republicans are skeptical that either can hit 50% of the vote on Tuesday and avoid a 12-week runoff — despite tens of millions of dollars in ad spending to aid Cornyn. Some of those ads have targeted Rep. Wesley Hunt, a two-term Houston congressman who’s running as the pro-Trump, scandal-free alternative to Cornyn and Paxton.

Moreno locks down support for 2028

It’s only 2026, but Republican Bernie Moreno is making moves for 2028, Semafor’s Burgess Everett reports. The freshman Ohio senator is moving quickly to lock down support to lead the National Republican Senatorial Committee next cycle, winning endorsements from a bunch of senators who came into the Senate with him last year, including Sens. Jim Banks of Indiana, Tim Sheehy of Montana and Dave McCormick of Pennsylvania. He’s also gotten backing from as varied a crowd as moderate Sen. Susan Collins of Maine and Trump-aligned strategist Alex Bruesewitz. These races are often won months before the actual party elections, and for now Moreno has “first-mover advantage” over potential rivals, said Jason Thielman, a former NRSC executive director. We’ve also heard Oklahoma Sen. Markwayne Mullin’s name going around, but he told us he hasn’t given the job “any consideration.”

Tax breaks could deliver housing pledge

Republican policymakers are considering using tax breaks to deliver on Trump’s promise to shut institutional investors out of housing ahead of Senate action next week. In a meeting this week, Treasury Secretary Scott Bessent told House Republicans “this is not a free market for the American family, because investors … have special tax write-offs … that aren’t available to single families,” Rep. Marlin Stutzman, R-Ind., told Semafor. “The secretary was very clear he’s open to multiple ideas — but the tax incentives seem to be the one that may have a little bit of traction.” Sen. Mike Rounds, R-S.D., said that senators were weighing both “tax incentives for individual homeownership” as well as “tax incentives to decrease investment companies” — but he’d rather see lawmakers focus on the former. Meanwhile, Trump met with New York Mayor Zohran Mamdani on housing Thursday.

Senators look to fast-track Russia penalties

Momentum is building around a Senate bill to target Russia’s “shadow fleet” of oil tankers, as another proposal to ramp up secondary sanctions against Russia stalls out. “It’s now become a significant bipartisan issue in the Senate,” Sen. Sheldon Whitehouse, D-R.I., told Semafor of the shadow fleet bill, predicting it would “easily” garner 60 votes and White House backing. The bill passed the Foreign Relations Committee last month and aims to impose new penalties on sanction-dodging vessels and their owners and insurers. Sen Jeanne Shaheen, D-N.H., one of the cosponsors, told reporters it may be “a more effective way at this point to impact Russia’s economy” than the sanctions bill. But she warned neither would get a vote without “tacit approval from the White House.” Shaheen and others are working to bring the bill for a vote via unanimous consent, Whitehouse said.

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Debatable: AI at the Pentagon

At the center of the feud between the Pentagon and Anthropic is a heated debate over whether there should be more constraints on the military’s use of artificial intelligence, Semafor’s Morgan Chalfant writes. Anthropic wants guarantees that its technology won’t be used in mass surveillance or autonomous weapons. But Defense Secretary Pete Hegseth wants unfettered access to Anthropic’s Claude model and gave the company until today to drop its demands for guardrails — or face consequences. “These threats do not change our position,” Anthropic’s CEO said Thursday. Sen. Angus King, I-Maine, argued that there should be more constraints around the use of AI by the military and domestic national security agencies, warning the technology could “turn us into a police state.” But Sen. Tommy Tuberville, R-Ala., argued AI will “enhance our military and we don’t need to restrict it.”