Principals

1. Graham pushes for Bessent
2. Billions to TSMC
3. Kennedy to HHS
4. Thune’s tough job
5. Betting on nominees
6. Trump lobbied on AI
7. Booming US economy

PDB: Anti-abortion group leader criticizes Kennedy nomination

Biden at APEC … China’s economy shows signs of stabilizing ... WSJ: Iran told Biden admin it wasn’t trying to kill Trump

Graham wades into Treasury secretary race

As Wall Street waits for Donald Trump to select his Treasury secretary, Sen. Lindsey Graham is lobbying behind the scenes for fellow South Carolinian Scott Bessent to get the nomination, Semafor’s Burgess Everett and Liz Hoffman report. A close Trump ally, Graham said he and Sen. Tim Scott, R-S.C., the incoming Banking Committee chair, share a “good opinion” of Bessent and that he has spoken to Trump’s transition team about the investor. “I think he’s been well-vetted,” Graham expanded. Meanwhile, Trump transition co-chair Howard Lutnick is making a late charge for the sought-after role. Bessent, who has a plan for sidelining Federal Reserve Chair Jerome Powell, seems to be appealing to Trump on his favorite programs: He praised Trump’s economic record in his first administration during an interview on Fox & Friends Thursday.

Commerce finalizes billions for TSMC

The Biden administration agreed to provide Taiwan Semiconductor Manufacturing Co. with $6.6 billion in funding to expand its operations in Arizona, a significant milestone in the implementation of the bipartisan chips law. TSMC is building three facilities there, bringing production of its most advanced chips stateside. The company will receive at least $1 billion of the funding this year, a senior administration official said. The administration is working to finalize agreements before Trump — who has criticized the law — takes office. However, administration officials emphasized both the bipartisan nature of the law and the fact that such agreements are binding. “The company as long as it meets its milestones has a contractual-binding agreement from the government to move forward,” another senior administration official said.

— Morgan Chalfant

RFK Jr. tapped to lead HHS

Trump tapped Robert F. Kennedy Jr. to lead Health and Human Services. The president-elect made the announcement on Thursday afternoon, but it had been in the works — and somewhat expected — for days: Earlier this week, Semafor reported on the growing appetite “across every faction” of Trump’s orbit for empowering Kennedy (despite transition co-chair Howard Lutnick dismissing the possibility shortly before the election). Ultimately, we’re told the decision came down to two people — Kennedy and Trump — and that the main holdup was nailing down which health job would be best. But it remains to be seen how tumultuous Kennedy’s confirmation process will be: While some in the party are ready to help Trump stock his Cabinet however he sees fit, a few moderate senators may give him trouble.

— Shelby Talcott

Trump’s picks crash Thune’s Grand Old Party

The GOP celebration over John Thune’s election as incoming majority leader is being quickly overtaken by some other names: Robert F. Kennedy Jr., Tulsi Gabbard, Pete Hegseth, and Matt Gaetz. Those are the toughest of Trump’s Cabinet picks, and they present Thune with an immediate challenge that encapsulates the difficulties of being the Senate leader during Trump’s presidency. “John is talented at bringing people together and trying to find a path forward,” Sen. Susan Collins, R-Maine, told Semafor. “But to have the Matt Gaetz nomination on the very day that he became chosen as leader was certainly unfortunate timing. And it illustrates the challenges he’s going to face in defending the Senate as an institution.” The next few weeks will be critical to figure who can and can’t get through the chamber as Trump watches warily.

Political markets weigh Trump’s nominees

People are making book on whether Trump’s more controversial nominees will get confirmed. On Polymarket, which successfully signaled a resounding Trump victory in the presidential election when traditional polls did not, betters are putting money on whether Matt Gaetz and Pete Hegseth will be confirmed to respective posts at the Justice Department and Pentagon. So far, while the pool for Hegseth is small, they favor him by 79% as of this morning. Gaetz’s confirmation, meanwhile, has attracted more money, but the market rates his chances at just 27%. Meanwhile, immediately after Trump announced Kennedy’s nomination, odds on whether the incoming administration recommends removing fluoride from water spiked from less than 25% to more than 50%.

— Claire Cameron

Tech industry group pushes Trump on AI

A tech industry lobbying group is urging the incoming Trump administration to review existing federal rules covering artificial intelligence to single out regulations that may be “unnecessarily impeding AI adoption,” Semafor’s Morgan Chalfant reports. In a letter to Trump and JD Vance, BSA | The Software Alliance — which represents companies like Microsoft and OpenAI — also implores the incoming administration not to abandon efforts with allies to develop international frameworks on AI governance and standards and to pursue an “open data agenda” for AI. Trump has vowed to undo President Biden’s landmark executive order, signaling his White House will impose fewer rules on the fast-moving technology. But BSA is pushing Trump to keep a few of Biden’s initiatives, and is calling for a boost in research and development funding for AI.

US economy dominates

The US economy’s persistent strength is leaving other nations in the dust and reshaping global markets. Comments by the Federal Reserve chair describing US growth as “by far the best of any major economy in the world” came as Goldman Sachs projected the country would outpace other rich nations for a third straight year. Traders reduced their bets that the Fed would cut rates next month. Meanwhile, slowing growth in Europe — coupled with the impact of potential Trump tariffs — drove forecasts for aggressive rate cuts in the eurozone. This has fueled a growing belief that the euro will fall to parity against the dollar. Overall, US stocks are outperforming their European peers by the most in 30 years, according to Bloomberg.

Beltway Newsletters

Punchbowl News: Mike Johnson and John Thune will be responsible for managing Donald Trump’s “daily political maelstrom” once he takes office. The two Republicans have gotten acquainted with each other over the past year, in frequent conversations about government funding.

Playbook: Outgoing Sen. Sherrod Brown, D-Ohio, didn’t rule out running to fill the remainder of JD Vance’s term.

WaPo: A conservative project run by advisers of Elon Musk targeted Muslim voters with “false-flag” ads praising Kamala Harris for being an ally to Israel and Jews.

Axios: Rahm Emanuel is considering running to become the next chairman of the Democratic National Committee.

White House

• On the sidelines of APEC in Lima today, President Biden will meet with the prime ministers of Japan and South Korea and hold a bilateral meeting with Peru’s President Dina Boluarte Zegarra.
• Kamala Harris’ campaign is still asking for money. — NBC

Congress

• A woman testified to the House Ethics Committee that Matt Gaetz had sex with her when she was 17. — ABC
• “I love people that are absolutely going to vote for Trump. They’re not fascists,” Sen. John Fetterman, D-Pa., said of Kamala Harris’ decision to call Donald Trump a fascist during the presidential campaign. “They’re not those things. I think if you go to the tickle switch, use those kinds of terms, then it’s kind of hard to walk back on those things.” — Politico
• Rep. Maxwell Frost, D-Fla, launched a bid to be co-chair of the Democratic Policy and Communications Committee, becoming the first Gen Z congressional leader from either party if he wins the post.

Transition

• Trump selected former Georgia congressman Doug Collins as his nominee to lead the Department of Veterans Affairs, and North Dakota Gov. Doug Burgum as Interior secretary. He also chose two of his criminal defense attorneys for top roles at the Justice Department. Dean John Sauer, the attorney who argued Trump’s immunity case before the Supreme Court earlier this year, has been named as the next solicitor general, and Trump tapped former SEC chair Jay Clayton to be Manhattan’s top prosecutor.
• Michael Anton and Sebastian Gorka are being considered for the role of deputy national security adviser in the Trump White House. — Politico
• Anti-abortion advocates aren’t excited about Donald Trump’s decision to nominate Robert F. Kennedy Jr. to lead HHS. “There’s no question that we need a pro-life HHS secretary, and of course, we have concerns about him. It’s all new, and so I don’t have a lot more to say about that right now. But it’s the most important position, and he’s made it pretty clear where he stands,” Marjorie Dannenfelser, president of SBA Pro-Life America, told Semafor’s David Weigel.

Economy

• Ukraine’s sovereign bonds increased in price on expectations that Donald Trump will bring an end to Russia’s war there. — FT

National Security

• Senior Biden administration officials said the US needs to increase its nuclear force to counter the growing threats from Russia, China, and North Korea, but they are leaving decisions on the matter to the incoming Trump administration. — WSJ

Foreign Policy

• Elon Musk met with Iran’s ambassador to the UN this week. — NYT

Environment

• Donald Trump will try to end the electric vehicle tax credit, which Elon Musk has said may hurt Tesla slightly but would be “devastating” to its competitors in the US. — Reuters

Technology

• The Federal Trade Commission is planning to launch a probe of Microsoft’s cloud-computing business over alleged anticompetitive practices.

Media

• The Onion won a bankruptcy auction to buy Infowars and plans to reintroduce the site as a parody of itself.

Blindspot

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: Donald Trump said there won’t be a role for JPMorgan Chase’s Jamie Dimon in his administration.

What the Right isn’t reading: Sen. Tommy Tuberville, R-Ala., said Republicans would try to get colleagues who oppose Trump’s nominees “out of the Senate.”

Principals Team

Editors: Benjy Sarlin, Elana Schor, Morgan Chalfant

Reporters: Burgess Everett, Kadia Goba, Shelby Talcott, David Weigel

Max Rose is a former Democratic congressman from New York.

Silicon Valley bigwigs have been in talks to join the Trump administration, but government ethics rules requiring divestitures of certain investments are getting in the way, Semafor’s Reed Albergotti reported.

Ethics rules around conflicts of interest are extremely important, but the system isn’t functioning properly, Reed noted, and it might make sense for the government to create some leeway for complicated financial situations.