Principals

1. Biden meets Hill leaders
2. Bipartisan tax deal unveiled
3. Middle East tensions
4. Debates deferred
5. Judge rejects JetBlue merger
6. E. Jean Carroll trial

PDB: Early DeSantis campaign obits start rolling in

Senate advances bill to avert shutdown … Biden takes on banks with rule on overdraft fees … Israeli president at Davos with hostages’ families

— edited by Benjy Sarlin, Jordan Weissmann and Morgan Chalfant

Biden to press congressional leaders on Ukraine funding

President Biden is summoning the top four congressional leaders to the White House later today to discuss the stalled national security bill that would provide money for Ukraine, Israel, and border security, among other priorities. The administration warns that assistance to Kyiv has basically run out. But a new round has been held up by Senate negotiations around border policy changes that have yet to produce an agreement. House GOP leaders, including Speaker Mike Johnson, have already signaled they’re likely to reject the upper chamber’s evolving deal. That prompted warnings from top Senate Republicans on Tuesday, who cautioned that conservatives won’t have a better opportunity to address the border in the future — even if they win back a trifecta after this year’s elections, since Democrats will have less reason to compromise. “There’s absolutely no way that we would get the kind of border policy that’s been talked about right now with a Republican majority in the Senate, unless we get a 60-vote majority, which isn’t going to happen,” South Dakota Sen. John Thune, the chamber’s No. 2 Republican, told reporters. Meanwhile, White House officials are trying to reassure allies that more help is on the way to Ukraine. National security adviser Jake Sullivan, ever the optimist, said at Davos that he was confident Congress would eventually pass additional assistance “after a lot of twists and turns.”

— Morgan Chalfant

Child Tax Credit deal gets mixed reviews

There’s plenty of skepticism in Washington about whether the big new bipartisan tax proposal unveiled Tuesday is capable of passing Congress. But there were at least a few positive signs shortly after its debut, Semafor’s Joseph Zeballos-Roig writes. The $78 billion package — brokered by Senate Finance Chair Ron Wyden, D-Ore. and House Ways and Means head Rep. Jason Smith, R-Mo. — would temporarily expand the Child Tax Credit in return for reviving and extending a handful of popular business tax deductions, among other measures. The proposal won a quick endorsement from Senate Majority Leader Chuck Schumer but top Senate Republicans have yet to sign on, and it looks like they’ll want to tinker with the details before giving it their blessing. Sen. Mike Crapo, R-Idaho, the ranking member on the Fiance panel, told reporters on Tuesday evening that he’s seeking a committee markup that would open the bill to debate and amendments from Republicans. Sen. Todd Young, R-Ind., another Finance member, said both the Child Tax Credit changes and business deductions would need to be adjusted further to win votes. Still, he offered a cautiously optimistic assessment: “It’s really close,” Young told reporters. “I think that negotiators have done a good job. It appears there’s some more work to be done.”

Middle East violence spreads

The conflicts in the Middle East are looking more like a regional war with every passing day. The U.S. launched a new strike against four Houthi missiles the Pentagon said were about to be launched from Yemen. The Wall Street Journal reports that the Biden administration plans to add the Houthis back onto a list of terrorist organizations as the U.S. grapples with how to defang the group’s threat to international shipping in the Red Sea. It’s a major shift after President Biden had reversed former President Trump’s decision to put the Houthis on the list. Semafor’s Jay Solomon writes that the situation in the Red Sea complicates ties between the U.S. and China, which is especially affected by the disruptions to shipping routes and has warned the U.S. against escalating attacks against the Houthis. Meanwhile, Iran followed up its attacks inside Iraq and Syria by launching strikes on Pakistan in what it called a strike on militant group bases, killing two children. Not every headline is so violent: Qatar announced it has mediated a deal that will see humanitarian aid allowed into Gaza in exchange for medicine provided to Hamas’ hostages.

The Republican debates appear to be over

Farewell Republican primary debates, we hardly knew ye. The showcase events, already boycotted by Donald Trump through the cycle, appear fully dead after Nikki Haley announced Tuesday she was pulling out unless he started participating, Shelby Talcott reports. “There’s a debate?” Trump spokesman Steven Cheung texted in response. Hours later, ABC News and WMUR-TV canceled their Thursday debate, and a Sunday CNN debate appears likely to meet the same fate. Ron DeSantis, who offered to debate “two empty podiums,” accused his rivals of ducking the voters. But with his campaign struggling to even crack double digits in state polling, Haley clearly sees little upside in providing him with free oxygen that a nationally televised spark might ignite. “DeSantis is polling at 4 — I’m sorry, he has no money, no game,” Gov. Chris Sununu, who is supporting Haley, told reporters after she spoke in Bretton Woods, N.H. “It’s a one-on-one race, Haley versus Trump. And if Trump decides he’s man enough to get on the stage, she’ll be there first thing.”

Federal court halts JetBlue-Spirit merger

The White House is celebrating after a federal trial court in Massachusetts blocked the proposed merger between JetBlue and Spirit Airlines. Judge William G. Young sided with the Justice Department and a group of state attorneys general who had argued that the corporate tie-up would further hurt competition in the heavily consolidated air travel industry. “Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one’s for you,” Young wrote in his opinion. President Biden released a statement afterwards calling the decision “a victory for consumers everywhere who want lower prices and more choices.” As Politico notes, it’s a marquee legal win for an administration that has sought to revive U.S. antitrust enforcement, and could strengthen the DOJ’s hand as it reviews a proposed merger between Alaskan Air and Hawaiian Airlines. The result may also be a mixed bag of sorts for JetBlue, which saw its stock rise 5% after the news. “The carrier will continue to be relegated to second-tier status behind the industry’s big four,” according to Bloomberg, but it also won’t be stuck paying billions “for a discount carrier as demand wanes at the lower end of the travel market.”

Trump’s legal saga continues as E. Jean Carroll prepares to testify

Donald Trump’s rape accuser E. Jean Carroll is expected to testify at a trial in New York today that will decide how much the former president owes her in damages, after a panel of nine “anonymous” jurors was picked to hear the case. (Judge Lewis Kaplan explained that nobody will know the jurors’ identities, and went so far as to suggest they address each other using fake names.) Trump sat in the courtroom Tuesday morning and watched the selection process, “sometimes turning around to look at prospective jurors as they answered questions about their voting history,” according to the New York Times. Two prospective jurors indicated that they believed the 2020 election was stolen — and neither made the cut. On Truth Social, Trump was more lively, attacking Carroll and Kaplan. He left before opening statements, and later headed to an evening rally in New Hampshire. The jury must answer the narrow question of how much Trump owes Carroll in damages for defaming her in 2019, when he was president. She was already awarded $5 million in a defamation suit at a separate trial last year involving comments he made later.

Beltway Newsletters

Punchbowl News: House Homeland Security Committee Chairman Mark Green, R-Tenn. asked Homeland Security Secretary Alejandro Mayorkas to submit written testimony for the impeachment hearing scheduled for tomorrow, after Mayorkas said he couldn’t appear due to a conflict. DHS accused Republicans of not reaching out to find a workable time for Mayorkas to testify and said it was evidence of their “sham process.”

Playbook: The White House “has been trying to find a compromise on parole” as the Senate’s border talks continue, according to a person close to the talks — an issue that has been particularly divisive as the negotiations have unfolded.

Axios: Sixty-three percent of Americans say their current financial situation is “good,” with 19% calling it “very good,” according to a new Axios survey. Sixty-six percent say they believe 2024 will be better than 2023.

White House

• President Biden spoke with German Chancellor Olaf Scholz about Ukraine support and the Gaza war.
• Second gentleman Doug Emhoff is representing the Biden administration at the World Economic Forum in Davos.
• Vice President Harris will sit for a live interview on ABC’s “The View” later today.

Congress

• In a 72-11 vote, the Senate struck down a resolution from Sen. Bernie Sanders, I-Vt. that would have forced the Biden administration to report on any human rights violations by Israel in Gaza. Ten Democrats and Sen. Rand Paul, R-Ky. voted to support the resolution. Sen. Brian Schatz, D-Hawaii released a statement saying he would have voted to support the resolution if he were able to make it.
• After canceling votes yesterday due to the winter weather, the House convenes today. Speaker Mike Johnson is holding a bipartisan candlelight vigil tonight to mark the 100 days since Hamas’ Oct. 7 attack on Israel.
• Sen. Chuck Grassley, R-Iowa was hospitalized in Washington with an infection.
• Back in his home state, Johnson is upset over a proposed new congressional map that would draw Rep. Garret Graves, R-La. into a Democratic district. — Washington Examiner
• The Senate Foreign Relations Committee will receive a closed-door briefing this morning from the State Department’s Daniel Kritenbrink about the implications of Taiwan elections on cross-strait relations.
• Senate Democrats will host a briefing on abortion rights ahead of the anniversary of Roe v. Wade.
• House Republicans pressed pause on their resolution to hold Hunter Biden in contempt amid talks about scheduling an interview.
• The House Foreign Affairs Committee will hold a hearing today on restricting outbound U.S. investments in China, a topic that has been a source of debate within the GOP. The members will hear from former Trump National Security Council official Matthew Pottinger and former Biden NSC official Peter Harrell.

Regulators

The war on junk fees continues: The Consumer Financial Protection Bureau is announcing new rules aimed at clamping down on bank overdraft charges today. “This is about the companies that rip off hardworking Americans simply because they can,” President Biden said in a statement this morning.

Outside the Beltway

Democrats flipped a Florida state house seat while DeSantis was busy running for president.

Courts

• The Supreme Court is set to hear arguments in two cases today — Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce — that could have a major impact on the federal government’s ability to set and implement regulations.
• The Supreme Court won’t hear an antitrust dispute between Apple and Epic Games over payment methods.

On the Trail

• NBC News’ Alex Seitz-Wald profiles the Democrats trying to ensure a write-in victory for President Biden in New Hampshire, where he’s off the ballot under the new DNC schedule: “Like a jilted lover reluctantly coming to the aid of a former partner in need, New Hampshire Democrats have largely decided to help Joe Biden win their beloved primary this month — even though many are still mad he tried to kill it.”
• After the Iowa caucus results, U.S. media called Donald Trump the inevitable candidate, China’s state-run tabloid quoted experts who said the Chinese public enjoys witnessing the “drama” of the U.S. election, and Europe panicked over a possible resurgence of isolationism. Semafor’s Helen Li captured the domestic and global reactions to Trump’s victory.
• Asa Hutchinson dropped out of the Republican presidential race after getting just 191 votes in Iowa.
• Biden is talking trash on social media. “All these Republican candidates in the primary trying to beat Donald Trump, and I’m still the only person to ever beat Donald Trump —and I’m looking forward to doing it again,” he said in a short video.
• Trump is now referring to Nikki Haley as “Nimrada” in scare quotes on Truth Social, in a familiar, race-baiting reference to her first name, Nimarata (Nikki is her middle name; she’s gone by it since birth).
• Longshot Biden challenger Rep. Dean Phillips, D-Minn. removed a reference to “Diversity, Equity, and Inclusion” on his campaign website. — Politico

National Security

• An aide to Secretary of Defense Lloyd Austin who called 911 on his behalf on Jan. 1 asked that the ambulance that ultimately took him to Walter Reed “not show up with lights and sirens” because they were trying to “remain a little subtle.” — The Daily Beast
• OpenAI is working with the Pentagon to develop tools for open-source cybersecurity software, despite previously barring the use of its technology by militaries. — Bloomberg

Foreign Policy

• At the World Economic Forum in Davos, Samantha Power, the administrator for the U.S. Agency for International Development, will announce new steps to reduce lead exposure among children, including a $4 million investment in programs in countries like India and South Africa, according to an announcement shared first with Semafor. Power will also announce that USAID is joining the Global Alliance to Eliminate Lead Paint, a joint initiative from the World Health Organization and United Nations that advocates for lead paint laws.
• Outgoing U.S. climate envoy John Kerry insisted he would stay in the fight against climate change during remarks at Davos.

Media

• Sen. John Fetterman, D-Pa. is writing a memoir called “Unfettered” with Buzz Bissinger, Semafor’s Max Tani reported. The book will explore his political rise and recent battles with physical and mental health.
• A new book from journalists Hunter Walker and Luppe B. Luppen reports on speculation that Vice President Harris and Transportation Secretary Pete Buttigieg could join together for a Democratic ticket in 2028. It also quotes a former Harris 2020 campaign aide as saying she “should not be president of the United States.” — The Guardian

Big Read

• Ron DeSantis thought he staved off the campaign obits with his second-place Iowa finish, but conservative commentator Ryan Girdusky decided to kick things off early with a tell-all in The Spectator about the advice he gave his team that fell on deaf ears in favor of a doomed “Ted Cruz 2.0” approach. At one point, he confronted DeSantis in a May meeting with right-wing influencers and told him he had blown it by staying above the fray for months while Trump attacked him. “The first time you ignore it, you seem honorable; the fiftieth time, you look like a pussy,” he recalls telling him.
• Also joining the preemptive obit game: Longtime DeSantis chronicler Marc Caputo at The Messenger, whose insider account focused on DeSantis’ reliance on a small “fan club” of advisers who refused to challenge bad ideas: “Ron is the smartest guy in the room. Everyone else is an idiot. No one tells him he’s wrong. So it didn’t happen that often,” one consultant said.

Blindspot

Stories that are being largely ignored by either left-leaning or right-leaning outlets, according to data from our partners at Ground News.

What the Left isn’t reading: Pro-Palestinian protesters marched outside a New York City cancer hospital.

What the Right isn’t reading: Anthony Scaramucci, who served a brief stint as White House communications director under the Trump administration, suggested he’d campaign for President Biden to keep Donald Trump out of the White House.

Principals Team

Editors: Benjy Sarlin, Jordan Weissmann, Morgan Chalfant

Editor-at-Large: Steve Clemons

Reporters: Kadia Goba, Joseph Zeballos-Roig, Shelby Talcott, David Weigel

Derek Kilmer is a Democratic congressman from Washington state.

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