Trump Announces Two-Week Ceasefire in Iran War

Good evening. President Trump on Tuesday evening announced a two-week ceasefire in the war with Iran, subject to the Strait of Hormuz being reopened. Here's what you should know tonight.

Trump Announces Two-Week Ceasefire in Iran War

President Trump said in a social media post Tuesday evening that he had agreed to a Pakistani proposal for a two-week ceasefire in the war with Iran. The apparent deal, which the president said is subject to the reopening of the Strait of Hormuz, comes ahead of the 8 p.m. ET deadline Trump had set for Iran to reopen the strait or see much of its civilian infrastructure demolished.

"Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, of Pakistan, and wherein they requested that I hold off the destructive force being sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks," Trump wrote on Truth Social. "This will be a double sided CEASEFIRE! The reason for doing so is that we have already met and exceeded all Military objectives, and are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East."

Trump added that he had received a 10-point proposal from Iran that he sees as "a workable basis on which to negotiate." He said that agreement had been reached on "almost all" points of contention between the U.S. and Iran, and that the ceasefire will allow time for a deal to be finalized.

The announcement came after Trump issued a shocking threat Tuesday morning.

"A whole civilization will die tonight, never to be brought back again. I don't want that to happen, but it probably will," Trump wrote in a social media post. "However, now that we have Complete and Total Regime Change, where different, smarter, and less radicalized minds prevail, maybe something revolutionarily wonderful can happen, WHO KNOWS? We will find out tonight, one of the most important moments in the long and complex history of the World. 47 years of extortion, corruption, and death, will finally end. God Bless the Great People of Iran!"

Even after more than a month of war in Iran - and weeks of Trump threats of escalation and conflicting claims about the status of the military campaign and diplomatic efforts - it was hard to simply shrug off the president's latest post as just another example of Trumpian menacing, just another attempt to build leverage toward a last-minute deal or even just another set-up for a TACO moment. The threat by a president of the United States to exterminate "a whole civilization" landed as an extraordinarily unusual, unsettling and unpresidential one.

Trump had already threatened to unleash "Hell" on Iran and said the whole country "could be taken out in one night." Experts had already warned that his threatened strikes against Iranian civilian energy infrastructure and bridges would likely constitute war crimes, placing military leaders and members at legal risk. But the commander-in-chief's new threat raised the alarm level even higher. One human rights lawyer and Columbia University lecturer reportedly told The Washington Post that Trump's latest threat meets the "very definition of terrorism - to seek to achieve political ends through violence or threats of violence directed at civilians."

Trump's rhetoric drew sharp criticism from a broad range of political figures. "This is an extremely sick person," Senate Democratic Leader Chuck Schumer said in a post on X. "Each Republican who refuses to join us in voting against this wanton war of choice owns every consequence of whatever the hell this is."

House Democratic leaders called for Congress to return from its recess to vote to end the war before Trump "plunges the country into World War III." They called the president "completely unhinged."

On the Republican side, some lawmakers defended or downplayed Trump's remarks while others condemned them. Sen. Ron Johnson, a stalwart Trump supporter, said "it would be a huge mistake" to strike the infrastructure Trump has threatened. "He loses me if he attacks civilian targets. Whatever we do has to be within the laws of warfare," Johnson said in an interview with The Wall Street Journal.

Former Republican Rep. Marjorie Taylor Greene, a critic of Trump's war, suggested that Trump was unfit for office and the 25th Amendment should be invoked to remove him. "25TH AMENDMENT!!! Not a single bomb has dropped on America. We cannot kill an entire civilization," Greene said in a post on X. "This is evil and madness."

Pope Leo XIV also criticized Trump's post, calling the threat "truly unacceptable."

What's next: It's not entirely clear. Trump seemed to have boxed himself in, but the Pakistani proposal may have given him a face-saving way to back away from his war. Trump's announced ceasefire now raises hopes that the war might come to an end and Trump won't have to act on his extraordinary ultimatum.

House Freedom Caucus Rejects GOP Leaders' Plan to Fund DHS

Republican congressional leaders announced a deal last Wednesday to fund the Department of Homeland Security, except for its immigration enforcement agencies, and follow up with a plan that would bypass Democrats to provide money for Immigration and Customs Enforcement and Customs and Border Protection.

That plan has run into staunch resistance from House conservatives, even though it seemed to have the backing of President Trump. The far-right House Freedom Caucus on Tuesday publicly rejected the plan and instead called for Republicans to fund all of DHS via a party-line reconciliation bill similar to the one they used to enact their package of spending and tax cuts last year.

"We cannot leave ICE and CBP hanging with nothing but hopes and prayers that reconciliation 2.0 comes together," the Freedom Caucus said in a social media post. "That's why we must use reconciliation to fully fund ALL of the Department of Homeland Security! We can tightly control this process with strict instructions to the various committees involved, so no one can sneak in unrelated garbage and distract us from our mission."

The group called for funding DHS for the rest of Trump's term, but some Republicans reportedly favor a narrower approach that might be easier to pass quickly. Senate Budget Committee Chair Lindsey Graham reportedly said Monday that he wants to give ICE and CBP "all they need for three to 10 years." A narrower approach might relegate the Trump administration's request for additional war funding to a later bill.

House Speaker Mike Johnson had initially derided the two-step plan for DHS, which originated in the Senate, as a "joke, but he embraced the idea after Trump seemingly backed it and called on Republicans to send him the reconciliation bill by June 1.

The Freedom Caucus comments, and continuing anger from other House Republicans about the two-step plan, highlight the ongoing intraparty split over the DHS funding fight as Democrats refuse to provide more money for the Trump administration's immigration crackdown without reforms to enforcement tactics.

The bottom line: The House held a pro forma session on Monday but did not take steps to pass the Senate's funding plan. With Republicans divided, there's no immediate end in sight to the DHS funding showdown. Trump signed an executive order last Friday to have all DHS workers paid, easing some of the pain of the shutdown and relieving the pressure on Congress to resolve the funding fight and address the immigration enforcement concerns.

Chart of the Day: A Massive Jump in Defense Spending

President Trump sent his 2027 budget request last week, and as we outlined last week, it includes an exceptionally large increase in defense spending, along with smaller cuts in most non-defense areas.

In an overview that includes the chart below, Axios's Zachary Basu notes the tension between the populist and anti-interventionist message that helped Trump twice win the White House and the new direction Trump is now proposing for the federal government and the nation.

"President Trump's new budget lays bare the transformation of his presidency, pairing a historic surge in military spending with historic cuts to domestic programs," Basu writes. "The most powerful populist of this century is at risk of becoming what he ran against - a deficit-spending interventionist asking working-class Americans to shoulder the cost of war."

Op-Ed of the Day: Petrodollar in Trouble

In an op-ed Tuesday, Bloomberg columnist Aaron Brown argues that the war in the Middle East has broken the petrodollar system, a major part of the global economy that helps maintain the dominance of the U.S. dollar while easing the cost of running massive federal budget deficits.

The petrodollar system traces back to 1974, Brown writes, when Henry Kissinger struck a deal with Saudi Arabia to price oil exclusively in dollars in exchange for a security guarantee, an arrangement that soon became the standard in the Gulf. The massive dollar-based profits were increasingly recycled into U.S. assets, including U.S. Treasuries.

"The arrangement was elegant in its circularity: Oil consumers paid dollars for energy, those dollars flowed to Riyadh and Abu Dhabi, and from there back into Washington's debt," Brown writes. "For 50 years, this petrodollar loop quietly subsidized American borrowing costs and cemented the greenback's role as the world's reserve currency."

The war with Iran has "fractured" that system. Following Iran's closure of the Strait of Hormuz, huge quantities of oil and gas are now stuck in the Persian Gulf. At the same time, central banks are selling Treasuries as they seek to raise cash to help cover the rising cost of energy, and there has been no "flight to quality" into Treasuries as investors seek safety.

"The petrodollar loop requires two moving parts: dollars earned and dollars invested," Brown says. "Both have stopped."

The system always had a political premise, Brown writes: "That in a global crisis, the United States is a stabilizer or bystander, not a combatant. But the calculus changes when the US itself is the belligerent; when the conflict is partly America's war, driving the oil shock, straining Gulf relationships, and generating the fiscal pressure that has bond investors worried about US budget deficits. Not completely. Not permanently. But enough."

The 1974 arrangement has helped shape global finance for decades, Brown says, through wars and panics, but it may be coming to an end. "The petrodollar loop was always a political arrangement dressed in financial clothing," Brown says. "Now that the politics have changed, the finance is following."

Number of the Day: $15 Million

The White House plans to put $15 million in National Endowment for the Humanities funding toward the triumphal arch that President Trump wants to erect across from the Lincoln Memorial. Mark Alfred reports at NOTUS that a new spending plan from the Office of Management and Budget "confirms for the first time the president's intention to use taxpayer dollars to at least partially fund his project. Trump previously told a group of donors that the archway was fully funded, floating the idea that unused funds for his White House ballroom project could be utilized."

Fiscal News Roundup

• Trump Pulls Back on Iran Threat – Associated Press
• Trump Rebuked Over Threat to Wipe Out Iran Civilization – Wall Street Journal
• Congress Is Absent as Trump Threatens Iranians 'Will Die' – Politico
• Democrats Call for Trump's Removal Over Threat Against Iran – The Hill
• Some Republicans Set Their Own Deadline on Iran War. It's Getting Close – Wall Street Journal
• Stopgap Measures Aren't Enough to Halt Rising Prices as the World Scrambles for More Oil – Associated Press
• Iran War Gives U.S. Consumers the Inflation Jitters – Axios
• Freedom Caucus Calls for Full DHS Funding in GOP-Only Bill, Rejecting Trump-Endorsed Plan – The Hill
• Republicans Weigh How Big to Go on Immigration Funding – Semafor
• Sen. Tim Kaine Says Congress Will 'Have a Hard Time' Reviewing Trump's Military Budget Request – NBC News
• The White House Is Keeping Kristi Noem's $70 Million Jet – Wall Street Journal
• The $97 Million Utah Warehouse ICE Bought for $145 Million – The Atlantic
• Trump Administration's Secrecy on Health Deals Alarms Experts, Governments – Washington Post
• Trump Will Fund New Archway With $15 Million From the National Endowment for the Humanities – NOTUS

Views and Analysis

• The Iran War Just Broke the Petrodollar – Aaron Blake, Bloomberg
• Tax Cuts Are the Hot New Idea for Democrats – Sahil Kapur, NBC News
• Why Trump's Huge $1.5T Defense Budget Is Worth Every Penny – Rich Lowry, New York Post
• Trump's $1.5 Trillion for War Comes From Americans' Pockets – Ben Beckett, Jacobin
• Exploring the Moon While Cutting NASA? Why Trump's 2027 Budget Misfires – Michael Hiltzik, Los Angeles Times
• Can the US Afford Guns and Day Care? – Joel Mathis, The Week
• Trump's DHS Paycheck Promise Is a Major Problem – Hayes Brown, MS Now
• What Spending Probes at DHS Reveal About Kristi Noem's Time in Office – Brianna Sacks, Maria Sacchetti and Marianne LeVine, Washington Post
• The K-Shaped Economy's Defining Statistic Has Some Problems – Justin Fox, Bloomberg
• The Backward Logic of Pharmaceutical Tariffs – Washington Post Editorial Board
• As Viktor Orban Goes, So Goes MAGA? – Jim Geraghty, Washington Post
• A Retrospective on Bidenomics – Ryan Cooper, American Prospect
• Overdose Deaths Are Plummeting. Here's What Worked – Sam Quinones, Washington Post
• One Hospice Doctor. One Year. $71.7 Million Worth of Medicare Claims – Laura Geller, Rachel Gold, Adam Yamaguchi and Grace Manthey, CBS News