Justice Department Drops Trump Tax Audits as Part of IRS Deal

Acting Attorney General Todd Blanche testified on the Hill today. (Reuters)
By Yuval Rosenberg and Michael Rainey

Happy Tuesday! Six states are holding primary elections today: Alabama, Georgia, Idaho, Kentucky, Oregon and Pennsylvania. One of the most closely watched races is the most expensive House primary ever. We've got some details on that and the latest on President Trump's extraordinary deal to settle his lawsuit against the IRS and his unprecedented $1.8 billion "anti-weaponization" fund.

DOJ Drops Trump Tax Audits in Expansion of IRS Lawsuit Settlement

The Department of Justice has expanded its settlement agreement with President Trump over his $10 billion lawsuit against the IRS by effectively ending all of the tax agency's investigations into the president, his family and his companies.

On Monday, DOJ announced that as part of the settlement of the Trump suit, it is creating a $1.776 billion "anti-weaponization" fund designed to reimburse people who claim they were abused by the justice system, notably including Trump supporters under President Joe Biden. On Tuesday, the department quietly added a one-page addendum to the agreement that bars the United States from pursuing any and all pending investigations, including tax audits, into Trump, his relatives and his businesses.

Unlike the settlement agreement, which was signed by the head of the IRS, an associate attorney general and Trump's lawyers, the addendum was signed solely by Acting Attorney General Todd Blanche, who previously served as Trump's personal lawyer.

Blanche defends the deal: Appearing before a Senate Appropriations subcommittee Tuesday, Blanche defended the settlement and the Justice Department's new anti-weaponization fund. Democratic Sen. Jack Reed accused Blanche of acting as "the president's consigliere" rather than the nation's chief law enforcement officer and questioned the legality of the settlement.

"This all seems to be an obvious abuse of power by the Department of Justice, by the president," Reed said. "He negotiated essentially with himself. You're his appointee, the IRS are his appointees, he's the plaintiff. And the American people, I don't think, are surprised that suddenly all this money is going to his friends or people in his orbit."

Blanche was asked by Democratic Sen. Chris Coons if people who stormed the Capitol on January 6 and were subsequently prosecuted - including members of the Oath Keepers and the Proud Boys who assaulted police officers - would be eligible for payments from the anti-weaponization fund.

"Anybody can apply," Blanche said. "The commissioners will set rules, I'm sure. That's not for me to set, that's for the commissioners. And whether an individual, an Oath Keeper, as you just mentioned, applies for compensation, anybody in this country can apply."

IRS thought it could win: Convinced they could prevail in court, IRS lawyers reportedly sent a 25-page memo on the case to the Justice Department outlining the flaws in Trump's case and encouraging DOJ officials to dismiss the case.

"The existence of the internal memo, which has not been previously reported, shows that the Trump administration disregarded readily available defenses to a lawsuit filed by the president against an agency he controls," says Andrew Duehren of The New York Times. "While the Justice Department has said that Mr. Trump will not receive money from the new fund, critics have slammed the arrangement as a corrupt attempt at paying Mr. Trump's political supporters, including, potentially, those who were convicted and later pardoned for storming the Capitol on Jan. 6, 2021."

Republicans also raise concerns: Concerns about possible corruption are bubbling up all over Washington, and not just from Democrats or government watchdogs. On Monday, the general counsel at the Treasury Department resigned, though he provided no explanation for the move. Some Republican lawmakers, however, explicitly named their concerns.

"I've got more questions than I've heard answers for," Sen. Lisa Murkowski said after the hearing with Blanche. "I don't know enough about it to feel comfortable."

Senate Majority Leader John Thune said he is "not a big fan" of the payment fund. "I think that there are, and will continue to be, a lot of questions around that, that the administration is going to have to answer," he said at a news conference.

Even Sen. Lindsey Graham, one of Trump's staunchest supporters, said lawmakers need more information about the fund. "Conceptually, I understand what he's trying to do, but I don't know," Graham said. "I think we need to ask more questions."

In the House, Republican Rep. Don Bacon said an outside authority may need to get involved. "We have the claimant negotiating with the defense, and the claimant also happens to be the boss of the defense," he said. "It appears like conflict of interest and a partial process. The White House should bring in an independent arbitrator to protect itself from accusations."

Trump Calls His Ballroom 'a Gift' to the US as Republicans Fret About the Funding

President Trump on Tuesday defended his White House ballroom, insisting that the project is being financed by donors, even as Congress debates a proposal to provide $1 billion for Secret Service and security funding, including hundreds of millions of dollars related to the new construction.

"This is all my money and donors' money. This is tax free," Trump told reporters at the construction site, as work continued behind him. He later added: "This is a gift to the United States of America.

He said that the money Congress is discussing would be used to secure all of the White House premises.

The Senate parliamentarian on Saturday nixed the Republican plan to include $1 billion in security funding as part of a $72 billion bill to fund immigration enforcement for the rest of Trump's term. Parliamentarian Elizabeth MacDonough ruled that the proposed funding in the bill violates the complex Senate reconciliation rules Republicans want to use to pass their plan by a simple majority vote, bypassing the threat of a Democratic filibuster.

Angered by that ruling, Trump reportedly pressured Senate Majority Leader John Thune to fire MacDonough. Thune reportedly rejected that idea.

Instead, Republicans are looking to rework that portion of the bill and searching for a way to secure the votes that would be needed to pass it. Many in the party are wary of supporting the ballroom and the use of public money for its construction. As they work to revise the measure and address members' concerns, Senate Republican leaders are reportedly also considering reducing the $1 billion allocated for security.

"We're going through a process that we go through every time we have a reconciliation bill and the people on both sides are mad at the parliamentarian. That's been true," Thune told NOTUS.

Speaker Mike Johnson and House Republican leaders, meanwhile, reportedly fear they won't be able to pass the reconciliation bill if it includes money for Trump's ballroom."

What's next: The Senate is still racing to pass the reconciliation bill, and Republicans succeeded in advancing part of the package through the Homeland Security and Governmental Affairs Committee on Tuesday.

The Most Expensive House Primary Race Ever

President Trump's approval ratings may be at historic lows, but he is out to show that he still dominates the Republican Party. As primary season has played out across the country, Trump has racked up some decisive wins in his campaign of retribution. He waged a largely successful effort to unseat Indiana legislators who defied his redistricting push. Then he ended the Senate career of Louisiana's Bill Cassidy, one of seven Senate Republicans who voted to convict Trump after he was impeached for the January 6, 2021, attack on the Capitol. Cassidy was the first sitting senator to lose a primary in nearly a decade.

Now the president is looking to oust Kentucky Rep. Thomas Massie, the GOP gadfly who has repeatedly crossed Trump and angered Republicans by voting against them and pushing hard for the release of the Epstein files.

Massie is being challenged in the Republican primary by Ed Gallrein, a farmer and former Navy SEAL handpicked by Trump to run in Northern Kentucky's deep red 4th Congressional District. The race has become the most expensive U.S. House primary on record, with $32.6 million spent on ads, including nearly $19 million in media buys attacking Massie or supporting Gallrein, according to AdImpact. Pro-Israel groups have reportedly spent more than $9 million to oust Massie and a super PAC launched by Trump aides reportedly has spent nearly $7 million on ads attacking the congressman and showing the president calling him a "real loser."

The bottom line: With nearly $33 million spent on the race, we'll soon find out if Massie is a "loser" or not. Either way, Trump will continue to throw his weight around: On Tuesday, he endorsed scandal-plagued Texas Senate candidate Ken Paxton in a runoff against incumbent Sen. John Cornyn, the endangered establishment favorite.

Obamacare Enrollment Could Fall by About 5 Million This Year: Report

Affordable Care Act enrollment could decline by around 5 million people this year after Congress failed to extend enhanced subsidies for insurance coverage at the end of 2025, according to a new analysis by KFF, a healthcare policy research group.

Initial sign-ups for Obamacare plans fell by more than 1 million to 23.1 million during the open enrollment period for 2026, KFF says. Actual enrollment may fall much further, though, based on reports about how many of those who signed up ultimately pay their premiums. Those premium payments have jumped by an average of 58%, from $113 to $178 per month, KFF finds.

Given the increased costs, the number of "effectuated" enrollments - people who have paid their premiums - could fall to around 17.5 million, or even as low as 16.5 million, compared to 22.3 million last year.

Out-of-pocket costs are also rising. The average ACA deductible has increased by 37%, the largest ever for ACA marketplace plans, going from $2,759 in 2025 to $3,387 in 2026.

Next year could be rough, too: Lower Obamacare enrollment could lead insurers to raise rates for 2027, especially if younger, healthier people drop their coverage, leaving an older, sicker pool to be insured.

Michelle Anderson, a director at Wakely Consulting Group who recently published a report on the early 2026 enrollment trends, told KFF Health News that she doesn't expect premium rate increases next year to match those for 2026 and said that insurers "aren't waving huge red flags" yet. Still, she said some price hikes could well be in the works: "It would not surprise me if there were some double-digit increases."

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