Principals

1. Trump transition chaos
2. GOP’s thin margin of error
3. GOP plots border billions
4. Bitcoin surges on SEC nom
5. Americans want Ukraine peace talks
6. Macron feels the heat

PDB: Trump to sit down with NBC

Musk, Ramaswamy head to Capitol Hill … China sanctions US defense firms … Politico: Republicans break with Trump on the Fed

Trump’s transition runs into early problems

Donald Trump’s transition started off relatively orderly and low-drama — a stark contrast to 2016. But chaos is beginning to descend on Washington: Pete Hegseth, Trump’s defense secretary pick, is facing allegations about his personal life and workplace record; a lower-ranked nominee withdrew Tuesday night (Trump says he pushed him out); Republicans are clashing over how to structure their legislative agenda; and there are still questions about how confirmable Tulsi Gabbard and Robert F. Kennedy Jr. are. Sen. Lisa Murkowski, R-Alaska, said the transition’s delay in making a vetting deal with the Justice Department has put the incoming administration “a little bit behind.” Trump’s orbit is divided on the state of affairs: One person close to the transition maintained the “curveballs” they’re experiencing are “just par for the course.” A second person, however, said phrases like “shit show” and “dumpster fire” have been used to describe the process in recent weeks.

— Burgess Everett and Shelby Talcott

What the slim House GOP majority means for Trump

The GOP’s 220-215 majority in the House next month will be its smallest in more than 90 years, and it will dip to 217-215 until the three Republicans nominated for posts in Trump’s Cabinet are replaced in special elections, Semafor’s David Weigel writes. “We know how to work with a small majority,” House Speaker Mike Johnson told reporters on Wednesday. “We have nothing to spare.” Until every vacancy is filled, any Republican can stop a bill from moving through the House, if every Democrat shows up and opposes it. But both parties will start the session more ideologically coherent than ever before. “Look, they probably have 18 months to legislate,” said Paul Ryan, the house speaker for Trump’s first majority, at a post-election forum last month. “You cannot think that you’re going to keep these razor-thin majorities past 2026.”

Republican border plans shaping up

Senate Republicans are eyeing a $60 billion to $85 billion price tag for their first party-line spending bill to kick off their legislative agenda next year. The party is looking at plowing that money into the border wall, Immigration and Customs Enforcement, and detention beds, Sen. John Hoeven, R-N.D., told Semafor on Wednesday. He said the party is looking to fund that with new energy permitting, among other proposals, while avoiding a round of deficit spending. “We’d like to pay for it,” he said. The idea here: Put some legislative points up early on one of Donald Trump’s top priorities, then return later for tax reform. Each reconciliation bill is tough, requiring approval of budgets in both chambers and then final votes with slim margins in Congress. But doing so can evade a filibuster. Hoeven said they don’t expect Democratic votes.

— Burgess Everett

SEC will take a U-turn under Trump

The Securities and Exchange Commission will get a remake under the incoming Trump administration. Trump tapped former Republican SEC commissioner Paul Atkins to lead the agency, signaling a shift away from Biden-era regulations and a friendlier approach to the cryptocurrency industry. Atkins has questioned the US crackdown on crypto under departing SEC Chair Gary Gensler and embraced light regulation when he served at the SEC under George W. Bush. During the interview process, the Trump team asked him to offer “ideas for restructuring the SEC, in line with the incoming administration’s promise to cut spending and rein in the size of federal agencies,” according to The Wall Street Journal. Bitcoin surged on Atkins’ nomination, hitting a record high of $100,000 on the expectation of lesser regulations.

Americans want US more engaged abroad

The share of Americans who want to see the US more engaged in international events is on the rise, growing by 15 percentage points to 57% in the last year, according to the Reagan National Defense Survey conducted just after the November election. The trend is being driven by younger Americans; the share of US adults under 30 who want to see more US leadership and engagement abroad surged by 32 points since 2023. Six-in-10 Donald Trump voters share this view, despite the president-elect’s sometimes isolationist tendencies. The survey commissioned by the Ronald Reagan Institute also found that confidence in the US military is recovering following a significant decline: 51% now say they have a great deal of trust and confidence in the military. And a majority — 59% — support Ukraine moving toward peace negotiations even if it means giving up some territory to Russia.

— Morgan Chalfant

Macron feels the pressure

A no-confidence vote toppled the French government, thrusting into political crisis one of the United States’ most important allies in Europe. France’s far-right and left joined together to support a no-confidence vote against Prime Minister Michel Barnier following a budget dispute, making him the first prime minister in more than 60 years to have such a short tenure. French President Emmanuel Macron, who faces the immediate challenge of tapping a new prime minister who can navigate the same fight, will deliver an address to the nation later today. The turmoil is making investors nervous and leaves Macron in a decidedly weakened state heading into Saturday, when he will welcome President-elect Donald Trump to Paris for the reopening of Notre Dame. Far-right lawmakers have called for Macron’s resignation.

Beltway Newsletters

Punchbowl News: Elon Musk and Vivek Ramaswamy will have the toughest time winning over appropriators when they meet with lawmakers about possible spending cuts. Rep. Mike Simpson, R-Idaho, said the “challenge” will be if “they come in and say, ‘Government shouldn’t be doing this, so we’re going to eliminate this.’ That’s a policy decision that Congress needs to make.”

WaPo: Rep. Marjorie Taylor Greene, R-Ga., has been working with Musk and Ramaswamy on a framework for as much as $2 trillion in government spending cuts. She said the whole federal government is “on the table” for potential cuts.

Playbook: Donald Trump is eager for a readout of defense secretary pick Pete Hegseth’s meeting with Sen. Joni Ernst, R-Iowa, “knowing full-well that everyone was looking to her … to determine whether Hegseth stands any shot at surviving.”

Axios: Some Democrats are so mad about President Biden’s decision to pardon his son Hunter that they are warning they won’t donate to his future presidential library.

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: Fulton County District Attorney Fani Willis was ordered by a judge to turn over communications with special counsel Jack Smith to the conservative group Judicial Watch.

What the Right isn’t reading: OpenAI’s Sam Altman said he isn’t worried about Elon Musk’s influence in the incoming Trump administration.

White House

• President Biden and Vice President Harris will attend the National Christmas Tree Lighting this evening.
• Biden’s aides are discussing whether he should preemptively pardon current and former officials who may become targets of Donald Trump when he assumes office, like Adam Schiff, Liz Cheney, and Anthony Fauci. — Politico

Congress

• House Speaker Mike Johnson said there would not be Ukraine aid attached to a stopgap funding bill.
• Rep. Jerry Nadler, D-N.Y., said he would not try to retain his position as the top Democrat on the House Judiciary Committee and endorsed Rep. Jamie Raskin, D-Md., for the role.
• Actor Jamie Foxx was on Capitol Hill advocating for more funding for Down syndrome research.

Transition

• Donald Trump chose Peter Navarro — who told Semafor in a written interview from jail this spring that China tariffs would have “ZERO impact on inflation” — as a White House trade adviser, former Rep. Billy Long as IRS commissioner, and JD Vance adviser Gail Slater to lead the Justice Department’s antitrust division.
• Former GOP Sen. Kelly Loeffler of Georgia is Trump’s pick to lead the Small Business Administration, while banking executive Frank Bisignano was is his choice to be Social Security Administration commissioner.
• Trump also tapped billionaire SpaceX astronaut Jared Isaacman to helm NASA.
• Trump changed course for one of the more important jobs in the White House, choosing David Warrington as White House counsel and moving GOP lawyer William McGinley — who Trump selected for that role two weeks ago — to a position with the Department of Government Efficiency effort being run by Elon Musk and Vivek Ramaswamy.

Outside the Beltway

• Kentucky Democratic Party Chair Colmon Elridge is running for president of the Association of State Democratic Parties, Semafor is first to report this morning.

Economy

• Federal Reserve Chair Jerome Powell minimized the notion he would have tense relations with the incoming Trump administration.

Business

• UnitedHealth CEO Brian Thompson was fatally shot in New York in what police said was a targeted attack.
• General Motors is taking a $5 billion hit as it struggles to salvage its troubled operations in China.

Courts

• The Supreme Court’s conservative majority appeared likely to uphold Tennessee’s ban on certain gender transition care — like hormones and puberty blockers — for transgender teens.
• Donald Trump’s attorneys moved to throw out his criminal case in Georgia, arguing that the charges are unconstitutional because he was elected president.

Polls

• Business sentiment among German and UK firms operating in China is in the doldrums, new surveys showed.

Foreign Policy

• A top aide to Ukrainian President Volodymyr Zelenskyy will meet with Keith Kellogg, Donald Trump’s pick for special envoy for Ukraine, and Mike Waltz, Trump’s incoming national security adviser, today to discuss proposals for ending the Russian invasion. — WSJ
• NATO Secretary General Mark Rutte accused Russia of supporting North Korea’s nuclear program.

Media

• Donald Trump will sit down with NBC’s Kristen Welker for an interview that will air on this Sunday’s edition of Meet the Press, NBC announced. It’ll be his first network interview since he won the 2024 election.

Principals Team

• Editors: Benjy Sarlin, Elana Schor, Morgan Chalfant
• Reporters: Burgess Everett, Kadia Goba, Shelby Talcott, David Weigel

Elise Stefanik is a Republican congresswoman from New York and Trump’s pick to be US ambassador to the UN.

BlackRock’s $12 billion acquisition of HPS Investment Partners shows that what was once set up as an existential war between public and private lending is anything but, Semafor’s Liz Hoffman wrote.

For most of its decade-long rise, private credit has been cast in opposition, and competition, to loans and bonds underwritten by banks. That’s a satisfying but outdated lens, and as more money flows into private credit, the lines will start to blur.