Happy Thursday! President Trump indicated Thursday that he's prioritizing a tax audit immunity deal that benefits him and his family over having Todd Blanche, his nominee for attorney general, confirmed to the job permanently. We've got details.
Trump Threatens to Pull Blanche Nomination for Attorney General
President Trump said Thursday that he is willing to temporarily withdraw his nomination of Todd Blanche to be attorney general rather than give in to the demands from two Senate Republicans who are pushing for concessions related to the controversial settlement of Trump's lawsuit against the Internal Revenue Service.
Negotiations to resolve the standoff reportedly continued Thursday afternoon and made some progress, but the fate of Blanche's nomination - and the details of any concessions the holdout senators might win - remain unclear.
Senate Republicans were forced to postpone a planned Judiciary Committee vote Thursday to advance Blanche's nomination after Republican Sens. John Cornyn and Thom Tillis failed to get the written assurances they were demanding about the settlement deal. With all Democrats opposed to confirming Blanche, a "no" vote from either GOP senator would likely doom his nomination.
The GOP holdouts want to make sure that a proposed $1.776 billion "anti-weaponization" fund is officially dead. The Trump administration had agreed to create the fund and then scrapped it in the face of bipartisan outrage over the likelihood that it would serve as a slush fund benefitting the president's allies.
The senators have also been pressing to clarify and limit a deal that would shield Trump, his family and his business from IRS tax audits "forever." Cornyn and Tillis are reportedly pressing the administration to expressly limit the agreement to existing audits, not future filings. That element of the agreement reportedly is the main sticking point.
Both Cornyn and Tillis have just months left in office after clashing with Trump and have made clear they are willing to continue their fight against the IRS settlement. They blamed the White House for standing in the way of a deal.
"I think as far as Blanche and the Department of Justice, we were pretty much on the same page," Cornyn told reporters Thursday. "But then when the president got wind of it, he wasn't willing to go along with it."
Tillis reportedly suggested that Trump's refusal to formally kill off the payout fund raises suspicions that the White House may still hope to revive the arrangement. "The president's getting bad advice. He should listen to Blanche and others who think if it's dead, it should be rendered completely dead," Tillis told reporters.
Trump, in response to the senators' demands, threatened to have Blanche continue in his current role as acting attorney general until the holdouts are gone.
"Todd Blanche is a STAR, and everyone knows it!" Trump wrote in a post on his social media site, adding, "I have no objection to temporarily withdrawing Todd's name, if they do not do the right thing, and putting him back after Cornyn and Tillis are out of office."
Cornyn pushed back in a social media post of his own.
"POTUS is mistaken if he believes concerns about the provisions in his tax lawsuit settlement are limited to me and Senator Tillis," he wrote, referring to Trump.
Republicans kill an effort to block Trump's immunity deal: As Cornyn and Tillis worked to resolve their concerns over Blanche and the Trump-IRS settlement, Republicans on the Senate Finance Committee on Thursday blocked a Democratic effort to end the audit immunity portion of the agreement altogether.
As the committee considered a tax administration bill, Sen. Ron Wyden, the top Democrat on the panel, offered an amendment that would have banned the IRS from entering an audit immunity deal with a sitting president, their family or related entities.
The Democrats argue that Trump's immunity deal is already illegal, even without their amendment, but the measure they offered would also have extended the statute of limitations so that Trump and his family could have their past filings audited by the IRS under a new administration.
"Trump's sweetheart audit immunity deal is perhaps the most brazenly corrupt action taken by a president in American history, and Congress must permanently put a stop to the unchecked greed on display," Wyden said in a statement yesterday.
On Thursday morning, Republicans defeated the amendment in a 14-13 vote along party lines. Republican Sen. Mike Crapo, the Finance Committee chair, reportedly argued that the amendment would likely doom the Taxpayer Assistance and Service Act, a bipartisan bill to modernize the IRS and improve efficiency in tax administration.
"This is not the place," Crapo reportedly said of the Democratic amendment, arguing that the proposed changes would erode bipartisan support for the broader legislation and "would turn this bill into a bill that has a much dimmer future for becoming law."
In the end, the Finance Committee advanced the bill in a 26-1 vote, with only Democratic Sen. Elizabeth Warren opposing the measure. "No other taxpayer, ever, has gotten this kind of a deal," she said, according to Politico. "I cannot support a bill that rubber stamps Donald Trump's corruption. Congress needs to stand up and put a stop to it."
The bottom line: The standoff continues. While Tillis argues that the settlement agreement and payout fund make for horrible policy and politics, Trump may have little to lose in shrugging off the senators' demands. As he said in his social media post, pulling Blanche's nomination wouldn't prevent the acting attorney general from continuing in the job under that title or as deputy attorney general, the post he was confirmed to by the Senate last year.
US Economy Slows as Inflation Remains Elevated
The U.S. economy grew at a sluggish 1.5% annual rate in the second quarter of 2026, slowing from the 2.1% rate recorded in the first quarter, the Commerce Department announced Thursday.
The slowdown reflects a decline in government consumption, led by a decrease in non-defense spending at the federal level. Imports, which are subtracted from the headline growth number, also rose, driven by business investment in artificial intelligence infrastructure, including computer chips. Imports cut the overall growth number by 1.5 percentage points.
At the same time, some sectors showed signs of strength. Consumer spending, which is responsible for about 70% of all economic output, increased at a 3.2% annual rate, up from 0.5% in the first quarter. A broader measure known as final sales to domestic purchasers grew at a 3.1% annual rate, up from 2.2% in the January through March period. And a version of that measure that focuses just on private consumption rose a healthy 3.9%, up from 1.7% the quarter before.
Inflation remains elevated: A separate report Thursday showed that the personal consumption expenditures price index, the Federal Reserve's preferred measure of inflation, fell by 0.1% from May to June, leaving the 12-month PCE inflation rate at 3.7%. The month-to-month drop was driven largely by a short-term decline in energy prices during a lull in the war against Iran. The core PCE measure, which ignores volatile food and fuel prices, rose 0.1% from month to month, and 3.3% on a 12-month basis.
The results were about as expected and continue to reflect inflationary pressure resulting from the war in the Middle East, which has sent energy prices sharply higher.
The report also showed that growth in personal income and consumption slowed in June relative to the month before, though both remained positive. Personal income rose 0.2%, while real consumption expenditures rose 0.4%. The savings rate, however, declined, falling to 2.7% in June.
What the analysts are saying: The economy continues to present a mixed picture, with decent fundamentals battered by higher prices and elevated uncertainty associated with war and President Trump's tariff policy.
"Underlying growth was strong," Eric Wallerstein of the Clocktower Group said, per The New York Times. At the same time, "real incomes and spending have been trending lower," he added.
Still, consumers continue to power the economy. "The consumer rescued the quarter,'' said Olu Sonola, head of U.S. economic research at Fitch Ratings, per the Associated Press. "AI investment remains a powerful growth story, but the import surge underpinning the buildout is a reminder that an AI boom does not automatically translate into an equally large boost to U.S. GDP."
Dan Alpert, a partner at Westwood Capital, said he expects the mixed picture to persist. "It's a chug-along economy until further notice," he said, per The New York Times.
Brian Bethune, an economics professor at Boston College, agreed. "It's an economy that's doing okay," he said, per The Washington Post. "It's not overheating. It's not underheating."
Other analysts were more pessimistic. "The economy is soft and vulnerable," Mark Zandi, chief economist at Moody's Analytics, said on social media. Zandi said the underlying economic growth rate is 2% at best, driven largely by massive investments in artificial intelligence and the consumption of wealthy households. "And given that real disposable income is flat and personal savings are about as low as they ever get, spending by middle- and lower-income households is under significant pressure," Zandi said. "The longer the Iran war drags on, and the higher energy prices and interest rates go, the more likely these consumers are to pull back - and take the rest of the economy with them."
Fiscal News Roundup
- Trump Threatens to Pull Attorney General Nominee Amid GOP Revolt – CNN
- Finance Republicans Kill Bid to Stop Trump IRS Audit-Immunity Deal – Politico
- Top Senators Consider Blocking Trump's Grant Shakeup in Spending Stopgap – Politico
- John Thune Hopes to Orchestrate a Great Senate Escape – Politico
- Commerce Department Quietly Announces 7 New Equity Stakes in Private Companies – The Hill
- Pentagon Commits Over $120 Billion for Patriot Missiles, Submarines – Wall Street Journal
- A Shrinking Weapons Stockpile Is Testing the Pentagon's Sweeping New Strategy – Washington Post
- Senate Democrats Lay Out Health Insurance Redesign Targets – Axios
- US Economy Grows at a Sluggish 1.5% in Second-Quarter With Inflation Remaining Stubbornly High – Associated Press
- Trump's Tariff Exemptions Include Diamonds, Oil and Gas, Copper and Other Items – New York Times
- Senate Committee Advances Nomination of Dr. Erica Schwartz to Be Trump's CDC Director – Associated Press
- Judge Declines to Block Strict Work Rule for Sick Patients on Medicaid – Politico
- Senate Education Committee Blocks Parts of Trump's Education Department Breakup – Politico
- New Nominee to Lead Voice of America's Parent Agency Pledges to Take 'Close, Fresh' Look at Staffing – Politico
- US Weighs $100,000 Fee for Foreign Students Wanting to Work After Graduation – Wall Street Journal
- RFK Jr. Launches an HHS Cooking Show – Associated Press
Views and Analysis
- Blanche's Slush Fund by Any Other Name Is Still Corrupt – Barbara McQuade, Bloomberg
- Cornyn, Tillis Become Fighting Faces of Quiet Republican Concerns Over Blanche – Rebecca Beitsch and Helen Huiskes, The Hill
- Trump Puts Immunity From Probes Over His Fight for Blanche – Chris Strohm and Steven T. Dennis, Bloomberg
- Kevin Warsh's Approach to Fed Policy Is Deeply Flawed – Bill Dudley, Bloomberg
- Kevin Warsh Asked the Market to Speak. It Answered – Nick Timiraos, Wall Street Journal
- 'Talk Is Cheap': Wall Street Delivers Harsh Verdict on Warsh Fed – Carter Johnson, Bloomberg
- The Tepid Trump Economy – Wall Street Journal Editorial Board
- The Goldilocks US Inflation and Spending Data Are an Illusion – Jonathan Levin, Bloomberg
- The Trump Administration Is Ending a Medicare Drug Subsidy Program. Here's How It Could Affect Costs – Ali Swenson, Associated Press
- A VA Medical Center Meltdown – Suzanne Gordon, American Prospect
- We Can't Fix America's Schools Without Data – Michael R. Bloomberg, Bloomberg
- We've Officially Entered the Twilight of Late-Stage Trumpism – Greg Sargent, New Republic