Trump Threatens Senators Over DOGE Cuts

The president, first lady Melania Trump and Texas Governor Greg Abbott
Reuters
By Yuval Rosenberg and Michael Rainey

Happy Friday! President Donald Trump traveled to Texas today to see the devastation from the recent flooding and meet with victims and rescue workers. The visit comes as questions still linger about the future of the Federal Emergency Management Agency. Before Trump left D.C., he lashed out again at Federal Reserve Chair Jerome Powell. He also issued a threat Thursday night against Senate Republicans who will soon be voting on his $9.4 billion package of spending cuts. Here's what you should know heading into the weekend.

Trump Administration Backs Off Plans to Abolish FEMA: Report

President Trump on Friday surveyed the damage from the catastrophic floods in Texas and sought to reassure residents that his administration is doing everything it can to help.

"The first lady and I are here in Texas to express the love and support and the anguish of our entire nation in the aftermath of this really horrific and deadly flood," Trump said. "Nobody has any idea how and why a thing like this could happen."

With questions still swirling about whether the deaths and destruction could have been avoided or mitigated, Trump is reportedly backing away from the idea of eliminating the Federal Emergency Management Agency (FEMA).

Citing an unnamed senior White House official, The Washington Post's Natalie Allison reports that "no official action is being taken to wind down FEMA, and that changes in the agency will probably amount to a 'rebranding' that will emphasize state leaders' roles in disaster response."

Trump has long criticized the agency, and he has called for an overhaul of disaster response that shifts emphasis to state and local governments. "Federal policy must rightly recognize that preparedness is most effectively owned and managed at the State, local, and even individual levels, supported by a competent, accessible, and efficient Federal Government," a March executive order said.

Homeland Security Secretary Kristi Noem this week reiterated her own call for an overhaul of the agency, even as search and recovery efforts continue in Texas. "This entire agency needs to be eliminated as it existed and remade into a responsive agency," she said on Wednesday. "Federal Emergency Management should be state and locally led, rather than how it has operated for decades."

Some have questioned that approach, arguing that the only federal government has the resources necessary to respond to major disasters and that it may not make sense for individual states to build up large-scale disaster response capabilities. "It doesn't make sense for each state to have a fully staffed Emergency Response Team," North Carolina Gov. Josh Stein told CNBC this week. "Because they may not have a storm for five years or 10 years, but we know the country will. So let's have that expertise in the federal government."

FEMA has also come under fire this week because of reports that the Department of Homeland Security under Noem's new budget restrictions waited 72 hours before allowing the deployment of FEMA search and rescue teams.

But on Friday, Trump praised the FEMA response in Texas. "We have some good people running FEMA. It's about time, right? We got some good ones," he said. "They failed us in North Carolina, but when we got in on January 20, they fixed it up in time."

The death toll from the flooding has risen to 121, and about 160 people remain missing.

Trump Threatens Senators Over $9.4 Billion Spending Cuts Package

With the Senate preparing to take up a request from the White House to claw back $9.4 billion in approved funding for foreign aid and public broadcasting, President Trump last night put the squeeze on Republicans who have expressed concerns about the cuts.

"It is very important that all Republicans adhere to my Recissions Bill and, in particular, DEFUND THE CORPORATION FOR PUBLIC BROADCASTING (PBS and NPR)," Trump wrote, adding a dig at those outlets and cable news channels. "Any Republican that votes to allow this monstrosity to continue broadcasting will not have my support or Endorsement."

Congress must approve the rescissions package, which includes $8.3 billion in cuts to foreign aid and $1.1 billion in cuts to public broadcasting, by July 18 or the request will be deemed to have been rejected and the funding will stay in place.

Why it matters: Some senators have taken issue with the cuts to public broadcasting, especially for rural areas that rely on such stations. Sen. Susan Collins, the top Republican on the Senate Appropriations Committee, has also expressed concerns about cuts to PEPFAR, the global AIDS prevention program. Republicans may try to amend the White House request and roll back some of the proposed cuts, but it's not yet clear what changes Trump and his budget director, Russ Vought, might accept. Trump's social media post may be a signal that he'd tolerate restoration of PEPFAR funding but not money for NPR and PBS.

Beyond those issues with the White House rescissions request, the vote on the package will also have implications for the developing fight over federal funding bills for Fiscal Year 2026. Senate Democratic Leader Chuck Schumer has warned that Republican approval of a rescission package on a straight party-line vote would spell trouble for any bipartisanship in the annual funding process, where Democratic votes would be needed to pass spending bills.

"If Republicans cave to Donald Trump and gut these investments agreed to by both parties, that would be an affront - a huge affront - to the bipartisan appropriations process," Senate Democratic Leader Chuck Schumer said this week. "It is absurd to expect Democrats to play along with funding the government if Republicans are just going to renege on a bipartisan agreement by concocting rescissions packages behind closed doors that can pass with only their votes, not the customary 60 votes required in the appropriation process."

The Trump administration has also been pushing a constitutional fight over the power of the purse. In urging Republicans to push back on Trump's request, Schumer said that the rescissions issue goes beyond this one specific package or this year's appropriations process: "This is about the role of Congress as a co-equal branch with the executive, as the Founding Fathers proposed."

What's next: The Senate is expected to begin debate on the rescissions package on Tuesday.

Trump Threatens New Tariffs on Canada as Customs Revenues Hit Record

President Trump said late Thursday that he plans to impose a 35% tariff on goods imported from Canada starting August 1, a decision that comes even as Canada and the U.S. are engaged in trade negotiations that participants had hoped would lead to a new agreement within a matter of weeks.

In a letter posted on his social media platform, Trump told Canadian Prime Minister Mark Carney that the new tariff is being imposed due to Canada's response to a set of tariffs Trump imposed earlier this year. Trump said at the time those import duties were intended to punish Canada for its role in the international trafficking of fentanyl. "Instead of working with the United States, Canada retaliated with its own Tariffs," Trump said.

Carney disputed the claim. "Canada has made vital progress to stop the scourge of fentanyl in North America," he wrote in a late-night response on X. "We are committed to continuing to work with the United States to save lives and protect communities in both our countries."

Trump and Carney appear to have developed a good relationship, and the ongoing trade talks between Canada and the U.S. were reportedly going well. It's not clear how Trump's surprise new tariff threat will affect the negotiations. As The New York Times's Matina Stevis-Gridneff reports, Trump's unilateral tariff war has resulted in a wild ride for Canada: "In just three weeks, Canada went from a friendly meeting between the two leaders and the goal of reaching a trade deal on July 21, to a brief suspension of talks and then, late on Thursday evening, a threat by Mr. Trump of yet higher tariffs and another delay in talks."

According to the letter, the 35% tariff will come in addition to sectoral tariffs Trump has imposed that target specific industries, including steel, aluminum and vehicles. It's not clear what the status of products covered under the existing trade deal between the U.S. and Canada, which Trump helped negotiate during his first term, will be.

Revenues climb to record level: Although most economists question the wisdom of Trump's still-developing trade war, they agree that the tariffs - which are essentially a domestic tax on American firms and, ultimately, consumers - are boosting revenues for the federal government. The Treasury Department reported $27 billion in customs-duties revenue in June, a record level for the month that brings the total for the calendar year to $113 billion. Treasury Secretary Scott Bessent said earlier this week that the U.S. could collect more than $300 billion in tariff revenues by the end of the year.

Much depends, of course, on how the tariffs develop over the course of the year. Trump delayed many of his "reciprocal" tariffs on dozens of countries after announcing them in April, prompting many analysts and investors to conclude that they wouldn't ultimately take effect, at least not at the levels Trump first indicated - a bet than became known as the TACO trade, for "Trump Always Chickens Out."

But University of Michigan economist Justin Wolfers updated that acronym Friday, shifting to a different Tex-Mex dish due to worries that Trump will go through with his plan this time around. Wolfers said Trump's next move may well be TACQUITO - "Trump's Aggressive Commerce Quest will Unleash Intense Tariff Orders."

If so, business leaders and investors may soon revisit the high anxiety levels they experienced when Trump first announced his tariff plan back in April.

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