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Republicans Want Strings Attached to California Disaster Aid

House Speaker Mike Johnson
Sipa USA
By Yuval Rosenberg and Michael Rainey
Monday, January 13, 2025

Happy Monday! President-elect Donald Trump will be inaugurated one week from today, and the Senate will spend much of this week holding confirmation hearings for 13 of his Cabinet nominees. Pete Hegseth, the former Fox News host who was Trump’s choice to lead the Pentagon, will go before the Senate Armed Services Committee tomorrow morning at 9:30 a.m. ET.

In his final few days in office, President Joe Biden is looking to burnish his legacy. Today, he gave a foreign policy address at the State Department, and he’ll deliver a farewell address to the nation from the Oval Office on Wednesday night.

Here’s what else is happening.

Republicans Eye New SALT Cap, Tying Debt Limit to California Disaster Aid

Congressional Republicans are still plotting out the strategy and details of the budget reconciliation bill they want to use to pass major portions of President-elect Donald Trump’s agenda. Trump met with various factions of House Republicans at his Mar-a-Lago resort this weekend, where he reportedly learned that his party is not at all settled on the “one big, beautiful bill” approach to the legislation that he and House Speaker Mike Johnson prefer.

House Freedom Caucus members reportedly told Trump they would rather pursue the two-bill path favored by key senators, which would package border and energy measures in one early bill while leaving tax cuts for later.

Adding SALT: Trump also met with a contingent of Republicans from New York, New Jersey and California who are pressing for an increase in the $10,000 cap on the deductibility of state and local taxes (SALT) — a cap introduced by Republicans’ own 2017 tax law to help offset the revenue lost due to their tax cuts. Some of those who met with Trump said he was amenable to the idea. “The president certainly wants to increase the deduction for SALT to provide more relief, because he knows that our mayors and governors are crushing taxpayers,” New York Rep. Nicole Malliotakis told Politico after the meeting. “He wants us to work on what would be a fair number.”

That new number may fall in the range between $20,000 and $60,000, according to Roll Call’s Caitlin Reilly.

“Any increase, whether it’s going to be doubling it, or tripling it, or quadrupling it, is a win. But, you know, we’d like to see it a little more than doubled,” Malliotakis told reporters.

Trump’s directive may help create consensus on the issue, but many Republicans — particularly those from red states — still oppose the idea of lifting the cap. Budget watchdogs also dislike raising the limit, since it reduces revenue and primarily benefits high-earning taxpayers.

“There’s also fractious politics within the SALT caucus itself, which has had difficulties in the past agreeing on the appropriate ‘ask,’” Politico’s Benjamin Guggenheim and Meredith Lee Hill noted. “Privately, House GOP leaders have told some Republicans that without a way forward on SALT, they can’t properly plan for just how big the final package will be and how much they’ll need to cut spending to pay for it.”

Debt limit and disaster aid: Johnson had wanted to address the debt limit as part of the larger reconciliation package. That may not happen. But as Republicans game out how they want to deal with the debt ceiling, Johnson confirmed to reporters Monday that they are considering tying it to disaster aid for the Los Angeles wildfires. The idea was reportedly discussed during Trump’s meeting this weekend.

Republicans may also want to attach other conditions to the California aid. “There can’t be a blank check on this,” Sen. John Barrasso of Wyoming, the No. 2 Republican in the Senate, told CBS’s “Face the Nation” on Sunday. “I expect that there will be strings attached to money that is ultimately approved, and it has to do with being ready the next time, because this was a gross failure this time.”

Johnson also told reporters that he believes there should be conditions on the aid, and that failures by state and local leaders should be factored into the decision.

Democrats are sure to push back. “C'mon. We aren't idiots,” Democratic Sen. Chris Murphy said in a social media post responding to Barrasso’s comments. “Republicans never ask for 'strings' attached to disaster funding for Republican states. This isn't about helping California. This is about punishing California because it votes for Democrats.”

What’s next: The House Ways and Means Committee has a hearing scheduled for tomorrow morning on “The Need to Make Permanent the Trump Tax Cuts for Working Families.”

How Elon Musk Is Firing Up the DOGE

The efficiency and cost-cutting effort known as DOGE is taking formative steps ahead of President-elect Donald Trump’s return to the White House, and The New York Times has some new details about where the project is headed.

DOGE, short for Department of Government Efficiency, is being led by Tesla and SpaceX CEO Elon Musk and pharmaceutical entrepreneur Vivek Ramaswamy, with the goal of slashing wasteful spending in the federal government. “Your money is being wasted, and the department of government efficiency is gonna fix that,” Musk told rallygoers in November, as the DOGE concept was getting off the ground during the Trump campaign. “We’re gonna get the government off your back and out of your pocketbook.”

Republican lawmakers, along with a few Democrats, have embraced the project, with caucuses forming in Congress to help advance DOGE. But questions remain about the legal structure of the group, the limits of its power and its ability to make significant changes. Here are some updates on the still-developing effort:

* More of a brand than an organization: Although DOGE is recruiting personnel, it is not expected to become a formal organization and will instead operate as a network of analysts offering advice. “After some consideration by top officials, DOGE itself is now unlikely to incorporate as an organized outside entity or nonprofit,” the Times’s Theodore Schleifer and Madeleine Ngo write. “Instead, it is likely to exist as more of a brand for an interlinked group of aspirational leaders who are on joint group chats and share a loyalty to Mr. Musk or Mr. Ramaswamy.”

* Lots of volunteers: Although DOGE has indicated (through its account on X, the social network owned by Musk) that it plans to hire “a very small number of full-time salaried HR, IT, and Finance positions,” much of the work may be done by volunteers. Musk is reportedly recruiting executives who will work in six-month stints on an unpaid basis, placed in various federal agencies throughout the government. Some analysts may work on a more formal basis as special employees who are limited to 130 days of work per annum. Those not working in specific agencies may end up in the U.S. Digital Service, an Obama-era office focused on government technology, or in the Office of Management and Budget.

* Maneuvering in the dark: The effort to create “drastic change” in government is being done largely out of the spotlight and without public input. The details of DOGE are shrouded in secrecy, with much of the communication about the project being conducted on Signal, an encrypted messaging platform.

* Personal connections: To a remarkable degree, the people involved so far in the discussions about DOGE are reportedly personal friends of Musk and Ramaswamy, or at least operate in similar circles in Silicon Valley. Key figures include major tech investors Marc Andreessen and Shaun Maguire; Ramaswamy’s chief of staff and childhood friend, Matt Luby; and Steve Davis, “who is widely seen as working as Mr. Musk’s proxy on all things,” according to the Times. And some of the legal work related to the structure of DOGE is being done by Chris Gober, Musk’s personal counsel, and Steve Roberts, Ramaswamy’s personal lawyer.

* Softening expectations: Critics and even some supporters have expressed serious doubts about the ability of DOGE to achieve anything like the $2 trillion per year cuts in federal spending that Musk once promised. As we highlighted last week, Musk himself seems to be having second thoughts, saying that getting half that amount would be a victory: “I think if we try for two trillion, we’ve got a good shot at getting one.”

Read more at The New York Times.

Biden Has Now Forgiven Student Loan Debt for 5 Million Borrowers

The Biden administration announced another round of student loan forgiveness Monday, providing more than $4 billion in debt relief to about 150,000 borrowers, including 85,000 who were defrauded by their schools, 61,000 with disabilities and 6,100 public service workers.

The latest announcement brings the dollar total of debt forgiveness provided by the Biden administration to $183.6 billion, benefiting more than 5 million borrowers.

James Kvaal, Biden’s under secretary at the Department of Education, said the debt relief is part of the administration’s effort to help people who were victims of fraud or who qualified for loan forgiveness under existing or revised repayment rules. “Identifying 5 million people for student loan forgiveness means the federal government is finally keeping its promises,” Kvaal said. “People who cannot afford their student loans because they are in public service, have disabilities, were cheated by their college, or who have completed decades of payments are now getting the relief they were promised. These permanent reforms will continue to more and more borrowers every year.”

Republicans have vowed to roll back Biden’s student loan forgiveness effort, though it’s not yet clear which programs will be affected and how. The list of potential spending cuts currently being circulated by GOP lawmakers includes a line item, “End the Student Loan Bailout,” with savings pegged in a range of $200 billion to $300 billion.

Nevertheless, President Biden took note of his administration’s record over the last four years. “Since Day One of my Administration, I promised to ensure higher-education is a ticket to the middle class, not a barrier to opportunity, and I’m proud to say we have forgiven more student loan debt than any other administration in history,” he said in a statement.


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