‘Anti-Weaponization’ Fund Is Dead, Blanche Says, but Trump's IRS Immunity Remains

Acting Attorney General Todd Blanche (Reuters)
By Yuval Rosenberg

Happy Tuesday! Six states - California, Iowa, Montana, New Jersey, New Mexico and South Dakota - are holding primary elections today, with the most high-profile races happening in the Golden State, where voters will be narrowing down the field running to replace Democratic Gov. Gavin Newsom, and the Hawkeye State, where they'll choose candidates to fill the Senate seat being vacated by Republican Joni Ernst.

Here's what else is happening.

$1.8 Billion 'Anti-Weaponization' Fund Is Dead, Blanche Says - but Trump's IRS Immunity Remains

Acting Attorney General Todd Blanche confirmed at a congressional hearing Tuesday that the Trump administration is abandoning its $1.776 billion "anti-weaponization" fund after the plan drew widespread criticism and warnings that it would serve as a "slush fund" of taxpayer money benefitting President Trump's allies.

"We are not moving forward with the fund. Period," Blanche told lawmakers at a Tuesday afternoon oversight hearing of a House Appropriations subcommittee.

The Justice Department said Monday that it would abide by a court order halting work on the fund at least until a hearing scheduled for June 12, but the statement left some uncertainty as to whether the administration was dropping the plan and doing so permanently.

Those questions left a cloud over Republican efforts to move ahead this week with a $70-plus billion budget reconciliation bill to fund Immigration and Customs Enforcement and the Border Patrol. The Senate last month had to scrap a planned vote on that funding bill amid a bipartisan backlash to the "anti-weaponization" fund and a separate $1 billion proposal that included money for Trump's White House ballroom.

Blanche on Monday defended the impetus behind the "anti-weaponization" fund even as he sought to make clear that it is dead. "The reasons for the fund I think remain as important as they were before, but we are not moving forward with the fund," he said.

Democratic Rep. Grace Meng asked if that meant the administration would never proceed with the fund.

"Correct," Blanche said.

Blanche added that the administration is still moving ahead with other parts of the settlement of Trump's $10 billion lawsuit against the Internal Revenue Service over the leaking of his tax records. Trump, two of his sons and his business dropped the suit last month in a deal that led to the announcement of the "anti-weaponization" fund. The agreement also barred the IRS "forever" from pursuing "any and all claims" regarding past tax filings that have been or could be filed against Trump and the other plaintiffs in the case. That portion of the deal reportedly could benefit Trump to the tune of $100 million.

"Nothing has changed with that," Blanche said.

Democratic Rep. Rosa DeLauro expressed outrage over what she described as broad immunity for Trump and his family and a conflict of interest given Blanche's former service as Trump's personal attorney.

Blanche argued that portion of the agreement was normal as part of a settlement and did not represent broad immunity for Trump or the other plaintiffs in the lawsuit. "It's standard. It's typical," he said.

A federal judge last week reopened the dropped IRS lawsuit and launched an inquiry into the suit and settlement agreement.

Some Republican senators on Tuesday objected to the ongoing bar of Trump audits. Sen. John Curtis of Utah reportedly called that portion of the deal "part of the problem" and said he wants it struck down, too. "I need it dead, dead," Curtis said.

The bottom line: Lawmakers worried that the "anti-weaponization" fund was only mostly dead - and everybody knows that there's a big difference between mostly dead and all dead. Blanche's testimony provides some assurance that the administration won't pursue the controversial fund, but Democrats still want to get that commitment in writing, and the audit portion of the deal could still prove to be a contentious political issue that creates problems for Republicans.

Trump Picks Controversial Loyalist as Acting Intelligence Chief

President Trump today announced a stunning pick to serve as acting director of national intelligence, replacing Tulsi Gabbard. Trump chose Bill Pulte, a real estate scion who heads the Federal Housing Finance Agency. Pulte is a MAGA loyalist with no national security background of the sort normally expected of the person leading the 18 agencies that make up the U.S. intelligence community.

Trump wrote in a social media post announcing the appointment that Pulte "has deep experience managing the most sensitive matters in America, the safety and soundness of the Markets, and over 10 Trillion Dollars at Fannie Mae/Freddie Mac, a substantial increase from where it was just 12 months ago." He added that Pulte will also continue as director of the housing finance agency and chairman of Fannie Mae and Freddie Mac, the government-sponsored mortgage giants.

The announcement was greeted with skepticism - or outright alarm - by a range of lawmakers in both parties, especially given Pulte's recent history of using his post to attack perceived Trump foes by raising allegations of mortgage fraud against Federal Reserve Governor Lisa Cook, New York Attorney General Letitia James and Democratic Sen. Adam Schiff of California. Those officials have all denied any wrongdoing. Schiff and Cook have not faced charges and a case against James was dismissed by a judge and then rejected by a grand jury.

Pulte would have to be confirmed by the Senate to fill the DNI position on a permanent basis, but he would likely face stiff bipartisan opposition from lawmakers worried about further politicization of a top intelligence role. A 2004 law requires the director of national intelligence "to have extensive national security expertise."

Sen. Mark Warner, the top Democrat on the Senate Intelligence Committee, said that Trump's pick shows that the president wants an intelligence chief who will push the White House's preferred narratives and political agenda. "Rather than selecting a respected national security professional capable of delivering independent judgments, the president has chosen an official who has demonstrated not just willingness but eagerness to use the authorities of government to pursue political retribution," Warner said in a statement.

Republican Senate Majority Leader John Thune also expressed concern. "We don't need a weaponized DNI. We need professionals there," Thune said when asked by reporters about Pulte's use of mortgage records to pursue Trump's perceived enemies. "I'm trying to get more information about the current state of their thinking about that position. And, again, if he's somebody they want in that position permanently, he's got, as you all know, a lengthy road ahead of him."

Trump Admin Moves to Delay Tariff Refunds

When the Supreme Court ruled in February that a broad set of tariffs imposed by President Trump last year violated the constitutional separation of powers, the federal government was faced with the task of refunding roughly $166 billion in import fees that had been collected illegally. Trump said he hoped companies wouldn't file for refunds - "I think it's brilliant if they don't do that," Trump told a reporter - but many major importers signaled that they planned to get all they are owed.

As ordered by the U.S. Court of International Trade, which handled the details of the Supreme Court's ruling, the Trump administration started the process of making tariff refunds, opening a web portal to collect claim. It has paid out more than $20 billion. But last Friday, the Justice Department informed the trade court that it plans to appeal the order to issue refunds.

In a motion filed with the court, the Justice Department said it will challenge a ruling that requires U.S. Customs and Border Protection to reprocess tariff fees that have been finalized through a process called liquidation. About half of the illegal tariff fees paid have passed through that process, and the motion argues that "Once an entry is finally liquidated, CBP has no authority to reliquidate or refund money without a court order."

The filing introduces a new strain of uncertainty into the refund process. One law firm cited by Bloomberg is advising clients to delay making any legal moves until the dispute is cleared up in the appellate courts.

"The administration seems to be suggesting that any company that wants to be reimbursed for unlawful border taxes might need to sue on its own accord," the editorial board of the Washington Post wrote Monday. "But some companies might decide this isn't worth it if the legal costs are great and the tariffs they paid are relatively small. Others might not want to sue to get their money back for fear of regulatory or other reprisals by the Trump administration."

Some tariffs reduced: Separately, in a presidential proclamation Monday, Trump lowered the tariffs on some imports made from aluminum and steel, including machinery used in agriculture and manufacturing.

Starting on June 8 and running through the end of 2027, the tariff on a set of products derived from aluminum and steel will be 15%, down from the current 25%. Foreign equipment made from at least 85% U.S. steel or aluminum will be eligible for a 10% tariff rate.

In April, Trump imposed a 50% tariff on imported goods made entirely or largely from aluminum, steel or copper, while derivative goods "substantially" made from those metals, such as harvesters and bulldozers, were hit with a 25% tariff rate. The tariffs were applied under Section 232 of the Trade Expansion Act of 1962, which gives the president the power to restrict imports in response to national security threats.

As Bloomberg's Derek Wallbank and Michael Hirtzer note, the tariff adjustment comes at a time when American farmers are facing soaring costs for fertilizer and equipment, and manufacturers are struggling with higher input costs for metals such as aluminum, the price of which has soared in the wake of Trump's global tariffs and the war in the Middle East. The White House said the temporary reduction in the tariff is intended "to spur near-term investments that will rebuild the Nation's industrial base."

Op-Ed of the Day: No More Tax-Cut Band-Aids

Most Americans enjoy a nice tax break, and lawmakers have been competing to make them happy. Republicans' "big, beautiful bill" last summer provided new tax cuts focused on tipped wages and overtime workers. Now a handful of Democratic lawmakers are advocating for some Americans to pay no federal income taxes at all.

Former Biden administration economic advisor Natasha Sarin, who cofounded the Yale Budget Lab, warns in a New York Times op-ed today that all these tax cuts won't help much with affordability and will only make the long-term fiscal situation worse.

The United States is already a low-tax country, Sarin says, with Americans paying less in taxes relative to GDP than in most developed countries. And the boost provided by the latest round of focused tax cuts has proved to be relatively modest, raising the average tax refund by $350 this year.

"Tax cuts are a Band-Aid, not a solution," Sarin writes.

If taxes are reduced much lower, funding the most basic government functions could become a problem. Sarin argues that lawmakers should aim to hold taxes steady, or even raise them on wealthier individuals, to ensure that society continues to thrive.

One problem, Sarin notes, is that Americans currently get relatively little for the taxes they do pay, and so are understandably hostile to the idea of paying more. Once they see the benefits of programs like paid maternity leave and efficient public transit, though, they may come to understand the positive impacts of paying taxes.

"Without taxes, society falls apart," Sarin writes. "Policymakers would do well to offer a vision of government that all constituents think is worth paying into, rather than racing to the bottom with tax cuts for all, which may feel expedient but ultimately undermine our capacity to build the society we deserve."

Read Sarin's full piece here.

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