Principals

1. The tax march
2. Carried interest divide
3. Trump targets IRS
4. Dem’s tax message
5. DOGE confusion
6. US-Russia talks
7. DHS ad campaign
8. SHIPS momentum

PDB: Coinbase lays out legislative priorities

Trump to speak at Saudi investment conference … Labor pick Chavez-DeRemer sits for confirmation hearing … More tariffs coming?

Tax timing? It’s going to be a while

Even as both chambers of Congress work on budget resolutions to fill out President Trump’s agenda, it’ll be quite a while before a tax bill becomes law. The Senate began work on its border and defense approach on Tuesday evening, with tax policy to be considered later. Next week the House is looking to advance its effort to roll everything together. “A lot of questions need to be resolved in terms of: What can the House do?” Senate Finance Committee Chair Mike Crapo told Semafor. “And until we see some of those answers, I don’t think we’ll be able to move quickly.” Senators say they will consider the House’s big bill if it gets done, but either way, they insist those 2017 tax cuts won’t be allowed to expire. “It’s not whether they and we can do it, it’s when and how,” Crapo said.

— Burgess Everett

Senate GOP at odds over carried interest

GOP senators are divided so far over whether to more heavily tax private equity profits — ending a break known as carried interest — in order to pay for extending Trump’s tax cuts. “The entire tax code is … on the table,” Senate Finance Chair Mike Crapo, R-Idaho, told Semafor Tuesday when asked about the industry-despised proposal, which Trump has proposed reviving in this year’s tax debate. Sens. John Cornyn, R-Texas, and Thom Tillis, R-N.C, said they were open to considering it. Others were skeptical: “It’s not a big money-raiser,” Sen. Bernie Moreno, R-Ohio, told Semafor. Industry hopes members will push back. “We have to go up there and educate people on how important the venture industry is to all the priorities of the administration and most folks in Congress,” like crypto and AI, National Venture Capital Association CEO Bobby Franklin told Semafor.

— Eleanor Mueller

Trump stress tests the IRS

The Internal Revenue Service has emerged as an early target of the second Trump administration, raising concerns in some corners about its enforcement operations. The Department of Homeland Security asked the Treasury Department to loan IRS agents for immigration enforcement work, The New York Times reported — a move that could reduce the number of employees investigating tax crimes. The Department of Government Efficiency has also sought access to IRS systems containing sensitive financial information on US taxpayers, as part of a purported effort to eliminate government waste and streamline operations. Democratic senators have complained that DOGE’s work raises “serious concerns that Elon Musk and his associates are seeking to weaponize government databases… to target American citizens and businesses.” Meanwhile, the IRS is also bracing for employee cuts that Reuters says could be in the thousands.

Democrats prep tax attacks

House Democrats are using the short recess to message against tax cuts, betting that headlines about DOGE or Ukraine will shrink as the congressional GOP hammers out its spending plan. “Their objective, actually, is to pass massive tax cuts for billionaire donors and their wealthy corporations,” House Democratic Leader Hakeem Jeffries told MSNBC over the weekend. Progressive allies like Fair Share America are organizing local events against the “Trump tax steal” this week, and House Majority PAC is running ads in swing seats that accuse Republicans of prepping to cut Medicaid in order to extend 2017 tax cuts. Democrats used some of this playbook in 2017, when they organized resistance to the initial cuts and — more successfully — to the Obamacare repeal effort. That work is harder now, they say, as House Republicans rarely hold in-person town hall meetings, which became focal points for the first #Resistance.

— David Weigel

With a GOP trifecta now in power, calls for tax reform are swelling. Semafor’s Burgess Everett and Eleanor Mueller will explore the high-stakes debates shaping these proposals: How will Congress navigate tax cuts amid record deficits? Join Sen. Elizabeth Warren (D-Mass.), Ranking Member, Committee on Banking, Housing, and Urban Affairs; Adam N. Michel, Director of Tax Policy Studies, Cato Institute; Natasha Sarin, Professor of Law and Finance, Yale University; and David Chavern, President and CEO, American Council of Life Insurers, for newsmaking discussions on the tax battles that could reshape Washington.

Mar. 6, 2025 | Washington DC | RSVP

Who’s top DOGE?

There’s no question that Elon Musk is the public face of the Department of Government Efficiency. But DOGE, born out of what was once the US Digital Service, may not have an official administrator, Semafor’s Shelby Talcott and Burgess Everett write. That distinction will be key, as Democratic lawsuits attempting to block DOGE’s actions as out of bounds work through the courts. Musk has been identified as a White House “special government employee” but not an employee of DOGE; press secretary Karoline Leavitt said Musk is not the DOGE chief, but declined to say who is. Senators disagreed, with some telling Semafor that Musk is in charge and others not so sure. “I can’t give you the org chart right now in terms of the structure,” Steve Daines, R-Mont., said. “I like the output, though.”

US, Russia talk as Europe watches warily

The US and Russia tiptoed towards less frosty relations during a four-hour summit in Saudi Arabia that saw both countries agree to tap teams for negotiations to end Moscow’s war in Ukraine. Both also agreed to increase staff at their respective embassies and improve economic relations, a remarkable development after three years of non-engagement. “It sets the table for future conversations,” Secretary of State Marco Rubio said. Following the talks, Trump said he was “much more confident” in the possibility of a deal to end the war, as he suggested Ukraine bore responsibility for it. There is much trepidation in Europe, which has been largely left out of the conversations up until this point, but Rubio sought to reassure European counterparts in a call following the meeting.

DHS budgets $200M for migrant ad campaign

The Department of Homeland Security has budgeted as much as $200 million for a new ad campaign warning undocumented migrants in the US to “leave now,” Semafor’s Shelby Talcott reports. Homeland Security Secretary Kristi Noem announced the two-year “nationwide and international” ad campaign on Monday evening, debuting a spot in which she tells migrants the US “will hunt you down.” One of the companies awarded the first contracts for the campaign, People Who Think LLC, has ties to Trump’s orbit and Corey Lewandowski, who was recently tapped as a special government employee for DHS. A DHS spokesperson said “multiple career government officials” oversaw the “competitive procurement process,” and that Lewandowski was not involved.

Bipartisan SHIPS bill could appeal to Trump

Sen. Mark Kelly, D-Ariz., has an idea he believes can help the US compete with China and lead to more domestic manufacturing — and he thinks it will appeal to Trump. Kelly and his bipartisan partners are readying the latest version of the SHIPS Act for release in the coming months. The bill aims to revitalize the US maritime industry, and last year was cosponsored in the House by Michael Waltz, now Trump’s national security adviser. “It does seem like it’s in line with the way Donald Trump views industrial capacity and competitiveness with China,” Kelly told Semafor Tuesday after visiting the Hanwha Philly Shipyard. He said he’s spoken to Waltz about it and thinks the House GOP will be interested, too. NSC spokesman Brian Hughes told Semafor that “the Trump administration is supportive of a comprehensive approach to revitalize US shipbuilding and maritime industries.”

— Burgess Everett and Morgan Chalfant

Blindspot: Border and parks

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: Data from US Customs and Border Protection shows apprehensions at the southwestern US border declined in January.

What the Right isn’t reading: The Trump administration fired hundreds of National Park Service employees.

Beltway Newsletters

Punchbowl News: Senate Majority Leader John Thune said he is willing to give Secretary of State Marco Rubio, a former Senate colleague, “some space and some time” to figure out talks to end Russia’s war in Ukraine. But he insisted: “The Ukrainians have to be there — and the Europeans for that matter, too.”

Playbook: The big question hovering over the bond between President Trump and Elon Musk: “Can this powerful relationship really survive the white heat and intense scrutiny of government?”

Axios: A Republican revolt might be building over DOGE. “I think you’re going to see a clash when they ... start abolishing [agencies],” one House Republican said. “Say like USAID, right? We authorized that. That’s a creature of Congress.”

White House

• President Trump signed an executive order meant to expand access to IVF and another codifying his efforts to strip power from independent government agencies.
• The White House told federal agencies to stop considering companies’ DEI practices when deciding on which companies will receive government contracts. — WSJ
• US Postmaster General Louis DeJoy is stepping down.

Congress

• The Senate confirmed Howard Lutnick to be commerce secretary in a 51-45 vote, and advanced Kash Patel’s nomination to be FBI director.

Outside the Beltway

• Roughly 300 US deportees are being held in a hotel in Panama, after that country agreed to accept migrants removed from the US.
• Pope Francis has pneumonia.

Economy

• Scores of academics warned Congress that continued erosion of budgets and staffing at agencies that collect economic data will bring serious negative consequences.
• The G7 is considering tightening the Russian oil price cap. — Bloomberg

Business

• Coinbase, the largest US cryptocurrency exchange and one of the industry’s top political donors, is outlining its legislative priorities in a blueprint first reported by Semafor’s Eleanor Mueller. A major change proposed by Coinbase would be shifting oversight of crypto spot trading to the CFTC.

Polls

• Two-thirds of Americans surveyed by Pew say it would be “too risky” to give the president more expansive powers, though just 39% of Republicans agreed.

Courts

• The White House has ordered the Justice Department to fire all remaining Biden-era US attorneys.
• Federal judge Dale Ho has scheduled a conference for 2pm this afternoon regarding the Justice Department’s effort to drop the criminal case against New York City Mayor Eric Adams.
• Federal judge Tanya Chutkan declined to block DOGE from implementing mass firings and accessing data across seven federal agencies.
• Denise Cheung, a top prosecutor in the US attorney’s office in Washington, resigned after refusing an order from the Trump administration to freeze billions in EPA climate change funds.

National Security

• The CIA is flying MQ-9 Reaper drones over Mexico to spy on drug cartels. — CNN
• The Pentagon is readying for layoffs. — WaPo

Foreign Policy

• Jair Bolsonaro, Brazil’s former president, was charged over an alleged coup plot.

Principals Team

Edited by Morgan Chalfant, deputy Washington editor

With help from Elana Schor, senior Washington editor

Contact our reporters:

Burgess Everett, Kadia Goba, Eleanor Mueller, Shelby Talcott, David Weigel

Stephen Moore is a fellow at the conservative Heritage Foundation and a former economic adviser to President Trump.