Senate Leaders Strike Deal to Avert a Pre-Election Shutdown

Todd Blanche could be confirmed as attorney general this week.
Reuters
By Yuval Rosenberg and Michael Rainey

Happy Monday! The Senate has plenty on its agenda this week before it heads out for a scheduled summer break. Senate Majority Leader John Thune is looking to tackle a list of legislative priorities, including a short-term government funding bill, the nomination of Todd Blanche to be attorney general, a bundle of 74 other nominations, a Russia sanctions bill, a cryptocurrency regulation bill and more - maybe even a budget resolution to set the stage for the GOP's third reconciliation package this Congress, though Republicans don't yet have a firm plan for that. "We have a bunch of stuff that we have to finish, and we'll just stay here until we finish it," Thune told reporters. That means there's already talk about the possibility of weekend work ahead.

Here's what we're watching.

GOP Holdouts Say They'll Back Blanche After He Rescinds 'Anti-Weaponization Fund'

A pair of Republican senators who threatened to block the confirmation of Todd Blanche as attorney general said Monday that they will now support his nomination after Blanche issued written confirmation that a controversial $1.8 billion "anti-weaponization" fund is rescinded.

In a joint statement, Senate Judiciary Committee members John Cornyn and Thom Tillis said Acting Attorney General Blanche had met their demand to confirm in writing the termination of the fund that was created as part of the resolution of President Trump's $10 billion lawsuit against the IRS, as well as to clarify the limitations of an immunity agreement that ended all investigations into tax filings by the president, his family and his businesses.

"We are pleased that the Department of Justice has issued a formal order terminating the anti-weaponization fund," the senators said. "Additionally, the Department has acknowledged in a binding written order that the audit settlement is limited to the plaintiffs and the scope does not extend beyond the defendants in the lawsuit, the IRS and the Treasury, addressing concerns that multiple of our Republican colleagues share."

Cornyn and Blanche announced the agreement late Sunday, and Blanche provided a copy of two documents in a post on social media. The first document, signed by Blanche, says the May 18 order establishing a fund intended to provide compensation for people who claimed they had been wrongly prosecuted by the federal government has been "rescinded." The second document, which is not signed, states the May 19 order relating to IRS immunity applies "only retroactively."

Courting controversy: The anti-weaponization fund was controversial from the start, with critics charging that it was little more than a slush fund to pay off Trump's allies, including those who were arrested for violent acts committed at the Capitol on January 6, 2021, following Trump's loss to Joe Biden. Lawmakers from both parties expressed reservations about the fund, which the Trump administration backed away from following intense pushback.

Still, the status of the fund remained uncertain, even after the White House signaled that it was dead, with Trump repeatedly saying it was necessary and Blanche resisting efforts to formally declare its termination, even as Cornyn and Tillis held up his nomination. Over the weekend, Trump threatened to revive the fund via legislation in retaliation for the block by Cornyn and Tillis, writing on his social media platform that if Blanche isn't approved, "I will keep Todd as Acting A.G., and push hard to get the Anti-Weaponization Bill, which takes care of those who have been so badly treated by the Crooked Joe Biden (and Obuma!) Administration (I get nothing, although I was treated horribly!), PASSED."

Blanche's written statements appear to settle the matter, at least as far as Cornyn and Tillis are concerned. But there are still questions about the documents Blanche has provided. As The Wall Street Journal put it Monday, "It isn't clear how legally binding or significant the Justice Department's new commitments are."

Pesky details: One potential problem is that the original order creating the fund involved three parties - the IRS, the Justice Department and Trump - all of whom were required to agree on any changes. Blanche's new statements do not appear to alter that structure, raising questions about whether they are valid or could lead to legal challenges.

In addition, although Tillis said he was looking for reassurance that the federal government wouldn't make payments to anyone who assaulted police officers, as some of the pro-Trump rioters did on January 6 - "Anybody who equivocates and supports the thugs that harm police officers will never get my vote, in committee or on the floor," Tillis said - Blanche's statements do nothing to prevent payments to those claiming mistreatment by the federal government. As The New York Times reported last week, the Trump administration is already making payments from a separate fund to people who claimed they were victims of government prosecutions.

The IRS agreement also raises questions. Blanche's statement is unsigned and appears to contradict the original statement. CNN's Aaron Blake said Monday that the original document was quite broad and provided Trump with considerable leeway to challenge any IRS actions. "It's difficult to square that with how limited Blanche says the immunity deal actually is," Blake said. More fundamentally, it's not clear that Blanche has the authority to provide immunity from IRS investigations in the first place.

Critics line up: Blanche's new statements have drawn serious criticism from both politicians and legal experts.

"These assurances are not worth the paper they're written on," Brandon DeBot, policy director of the New York University Tax Law Center, told the Journal. "They don't do anything new to stop the president from trying to bring back the fund, as he threatened to this weekend. It's abundantly clear we need congressional action."

Democratic Sen. Adam Schiff, a long-time Trump foe, noted that the Trump administration is still free to reward those who have claimed they were harmed for being prosecuted for their actions on January 6. "This supposed 'deal' doesn't prevent payouts to violent insurrectionists in the future," he said. It doesn't prevent the [administration] from bringing the slush fund back from the dead next week."

Dan Greenberg, a senior legal fellow at the libertarian-leaning Cato Institute, said the agreement may just be a way for Cornyn and Tillis to show they are making serious demands. "But once you become familiar with the particulars of this situation, it doesn't really look like they're driving much of a bargain at all," he told the Associated Press.

Even if the anti-weaponization fund remains a thing of the past, and the IRS immunity deal is indeed limited, Trump still stands to gain considerably from the agreements. There's now a good chance the Senate will confirm his former personal lawyer as the chief law enforcement officer in the country, and even a merely backward-looking immunity deal from the IRS could be worth more than $100 million to the president, who was reportedly facing the threat of a major ruling against him by the tax agency for filings that occurred years ago.

What comes next: With the backing of Cornyn and Tillis, the Judiciary Committee is expected to approve Blanche's nomination on Tuesday. That would clear the way for a vote on the Senate floor before lawmakers leave town for their summer break at the end of the week, though it's not clear whether Blanche has sufficient support to win a majority of the vote.

Sen. Lisa Murkowski, one of the Republicans who said she was undecided about Blanche, said Monday that the fact that he signed an agreement about the anti-weaponization fund was "a pretty good step," adding that "it says a lot" that Cornyn and Tillis are satisfied with his statements.

Senate Leaders Strike Deal to Avert a Pre-Election Shutdown

The Senate voted 89-4 tonight to advance a bipartisan bill that would fund federal agencies from October 1 through December 11, averting a potential shutdown. As lawmakers look to push off negotiations on full-year spending bills until after November's midterm elections, the full Senate is poised to pass the stopgap later this week before lawmakers head out for a five-week recess that will stretch into mid-September.

"The American people have faced two - two - record-breaking government shutdowns in the past 10 months. We need to ensure that they do not face a third," Senate Majority Leader John Thune said late last week. "We owe the American people some certainty here."

The Senate's continuing resolution, or "CR," would also temporarily block the Trump administration from finalizing a new rule putting the president's political appointees in charge of hundreds of billions of dollars in federal grants and allow them to terminate funding at any point for any reason. It does not, however, include military funding boosts that the administration wants, including $1 billion for the "Trump-class" battleship.

The action also sets up a clash with the House, which passed its own funding patch before it began its August break. The House bill, written by Republicans and approved largely along party lines, would extend funding until December 4 but does not include the Senate's adjustments to certain spending levels or the rebuke of the administration's proposal on grants.

Sen. Susan Collins, the Republican chair of the Appropriations Committee, said the Senate bill is straightforward, with no "poison pills" that would make it unacceptable to Democrats: "It continues current government funding levels until December 11th and includes necessary adjustments for programs like the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), vital national security programs, including shipbuilding across multiple vessels, and the Disaster Relief Fund."

Collins and her Democratic counterpart, Sen. Patty Murray, both praised the provision blocking the administration's proposed political control over grants.

Collins said in a statement that she is "pleased" that the bill would prevent the new rule from taking effect and noted that she had "advocated for significant changes" to it in a letter she sent last month to the White House Office of Management and Budget.

Murray said that Republicans had rejected killing the new rule outright but that she will continue to fight for that outcome.

"The proposed rule would systematically politicize federal funding and allow Trump officials to cancel grants at any time for any reason," she said in a statement. "Enabling this rule would only give Trump the greenlight to take even more federal funding hostage."

Murray also said that the Senate bill addressed some Democratic priorities and includes key differences with the House-passed continuing resolution.

"This bill includes important extensions and language that House Republicans' CR did not, and it rejects Trump's frivolous war spending wish list," she said. "Importantly, we closed the loophole in House Republicans' CR that would have allowed the Trump administration to transfer funding provided for other programs to Border Patrol, which desperately needs reform, not more money."

Rep. Rosa DeLauro, the top Democratic appropriator in the House, said in a statement Sunday that the Senate bill "is a clear improvement" over the House GOP's version, which she called "an incomplete and inadequate first draft of a continuing resolution." She added that Congress should be working to pass bipartisan full-year funding bills and must "permanently prevent" the proposed OMB rule on grants, which she called a "corrupt, harmful power grab."

What's next: The Senate will look to pass the stopgap bill this week. If it does, when House lawmakers return at the end of the month, they will have to decide whether to accept the Senate bill or try to fight for their version.

25 States Sue to Stop Trump's New Tariffs

A group of 25 states filed a lawsuit on Monday to halt a new round of double-digit tariffs that the Trump administration is imposing on dozens of trade partners.

The suit alleges that the new tariffs were imposed simply to make up for the loss of earlier tariffs that were ruled unconstitutional by the Supreme Court, and that the Trump administration's official reason for the action - to punish nations that do too little to restrict goods produced with forced labor - is a mere pretext.

"There is no rational fit between the purported problem of forced labor in international supply chains and the blanket global tariffs the [U.S. trade representative] imposed," the complaint says.

In a statement, New York Attorney General Letitia James said the tariffs are unconstitutional and impose costs on ordinary citizens: "After losing at the Supreme Court, the administration is once again trying to illegally raise taxes on families and businesses with a new round of tariffs."

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