Morning Report — Trump, Senate GOP try to get on the same page

In today’s issue:  

• How Trump, GOP will handle the budget
• Trump’s legal dramas continue
• Worst wildfires in Los Angeles history kill five
• Businesses brace for U.S.-China tariff clash

Republicans’ 2025 legislative playbook is taking shape.

President-elect Trump on Wednesday met with Senate Republicans in the Capitol, after he and Melania Trump paid their respects to former President Carter, who is lying in state in the Rotunda ahead of his funeral today.

The elephant in the room? Approving a GOP budget that encompasses the president-elect’s desire to enact his ambitious agenda in a gargantuan legislative bundle. The discussion swirled around differing opinions about preferred tactics amid a shared urgency to succeed.

Trump on Wednesday publicly said “it doesn’t matter” whether Republicans on Capitol Hill tackle his top priorities on taxes, energy and the border in one package or two as the party tries to nail down its plan for the coming months.  

“We had a great meeting. There’s great unity. Whether it’s one bill or two bills, it’s going to get done one way or the other,” the president-elect told reporters Wednesday. “I think there’s a lot of talk about two, and there’s a lot of talk about one, but it doesn’t matter. The end result is the same.” 

Privately, however, senators said Trump expressed a strong preference for one bill, often pushing back with senators during the meeting, report The Hill’s Alexander Bolton and Al Weaver.

Many Republican senators, including Senate Majority Leader John Thune (R-S.D.) and Budget Committee Chair Lindsey Graham (R-S.C.), laid out the case for moving first on a package including border security, energy provisions and defense.

Republicans already started preparing to use a special procedure known as budget reconciliation to bypass Democratic opposition in the Senate to extend Trump’s signature 2017 tax law. But calls have grown in the party in recent months to use the maneuver to enact other parts of Trump’s agenda.

Some Republicans, including Speaker Mike Johnson (R-La.), think piling all the priorities in one bill will be easier to pass in the lower chamber because members will have to take only one tough vote. But while GOP senators are publicly deferential to Johnson, they're highly skeptical of the idea that making the bill bigger — and adding huge spending cuts to it — will make it any easier to pass the House. Trump endorsed “one big, beautiful bill,” but has since backed away from the idea. 

But Republican senators fear it won’t look good for Congress to wait until midsummer or even late fall to pass legislation addressing border security and energy priorities, a likely outcome if GOP lawmakers decide to bundle the package.

Sen. Ted Cruz (R-Texas) warned that Republicans risked disaster if they put all their eggs into one basket, and said there’s a “very real risk” of one big bill “not getting the votes to pass.”

“I think there’s a much greater risk of failure doing that,” he said of the one-bill approach. “We can’t fail. The stakes are too high to fail. There was widespread agreement if not total unanimity in that room on that point. I think we had a very positive and substantive conversation and I think he absolutely heard what we had to say.”

▪ The Hill: Senate Democrats are facing an early test on Friday when the Laken Riley Act hits the Senate floor. The bill, which would mandate federal detention of immigrants without legal status accused of theft, burglary and other related crimes, is already starting to divide the party.

▪ Politico: The Senate is planning to move fast on a handful of Trump's Cabinet nominees, with hearings scheduled next week.

▪ The Hill: Immigration firebrand Rep. Adriano Espaillat (D-N.Y.) is taking the reins of the Congressional Hispanic Caucus.

▪ The Hill: Rep. Dusty Johnson (R-S.D.) will introduce a bill that would authorize the president to purchase the Panama Canal and put it under U.S. control, an acquisition that Trump has been pushing.

In the House, Freedom Caucus Chair Andy Harris (R-Md.) has taken the famously confrontational group in a slightly more agreeable direction as it prepares for a Trump-controlled Washington, where the goal will be to support the incoming President’s policy agenda rather than exerting maximum pressure on a Democratic administration. 

But even as Harris and other members of the group stress their support for Trump, clashes between the president-elect and the fiscal hawks in the group are emerging, writes The Hill’s Emily Brooks. It will be up to Harris to focus the attention of the group of around three dozen members on the president-elect’s priorities. 

“The best way to advance the conservative agenda is [to] not be constantly viewed as an obstacle,” Harris said in an interview in December. 

Harris was key in negotiating an agreement among House Republicans to raise from one to nine members the threshold for forcing a vote to oust the Speaker. And on the first day of the new Congress, Harris and other Freedom Caucus members allowed Johnson to keep the gavel rather than forcing him into multiple ballots as they did with former Speaker Kevin McCarthy (R-Calif.).

SMART TAKE with NewsNation’s BLAKE BURMAN:

Forty-seven down, one to go. The final jobs report issued on President Biden’s watch will be released at 8:30 a.m. ET Friday. It’s one of the final key benchmarks of the economy Trump will inherit.

Speaking of Trump, members of the Federal Reserve clearly have him on their minds. Minutes released from the central bank’s December policy meeting Wednesday revealed concerns about the possibility of inflation rebounding. The summary never mentioned Trump by name, but said “potential changes in trade and immigration policy” could cause inflation to stay higher for longer.  

No one, and I mean no one, has a crystal ball showing what the economy will do in the next few years. If they did, they’d probably tell you from their yacht.  

However, we do know what happened in the first go-around. Trump imposed major tariffs on China, and the economy hummed along. Annual GDP growth hit 2.5 percent in 2017, 3 percent in 2018 and 2.6 percent in 2019 (COVID muddled 2020’s numbers, but annual GDP that year was -2.2 percent). Average annual inflation in Trump’s first term was around 1.9 percent.

Burman hosts “The Hill” weeknights, 6p/5c on NewsNation. The Hill & NewsNation are owned by Nexstar Media Group.

3 THINGS TO KNOW TODAY:

▪ The AFL-CIO and the Service Employees International Union announced an alliance they believe can expand membership and protections ahead of a federal environment less friendly to organized labor. 

▪ In a sit-down interview with USA Today, Biden discussed his legacy, telling the paper he believes he could have won a second term — but isn't sure he would have had the vigor to complete four more years in the Oval Office. The president also became a great-grandfather on Wednesday.

▪ House Democrats bashed Meta for scrapping fact-checks, asserting that the company’s decision announced Tuesday by Mark Zuckerberg amounts to “genuflecting to Donald Trump.” 

LEADING THE DAY

COURTS & INVESTIGATIONS: Trump on Wednesday asked the Supreme Court to block his Friday sentencing in New York on 34 felony counts of falsifying business records. Trump’s emergency application asks the court to prevent the hush money prosecution from moving ahead until his appeals based on presidential immunity are resolved. By default, the appeal will go to Justice Sonia Sotomayor, who handles emergency matters arising from New York. The Supreme Court has asked for a response from prosecutors in New York by this morning and could weigh in on Trump's request by Friday.

Trump phoned a friend (Supreme Court Justice Samuel Alito): Ostensibly discussing references for a potential appointee to his administration, Trump spoke with Alito on Tuesday. The conservative justice denied in a statement that he and the president-elect discussed any “matter that is pending or might in the future come before the Supreme Court or any past Supreme Court decisions involving the President-elect.” Alito denied knowing at the time he spoke with Trump that the president-elect and his lawyers had filed an emergency application with the high court.

Trump election interference case: Attorney General Merrick Garland in a Wednesday court filing said the Justice Department plans to publicly release special counsel Jack Smith's findings on Trump’s alleged efforts to subvert 2020 election results. That case was dismissed when Trump won the election. 

Trump documents case: In a separate court filing Wednesday, the Justice Department said that Garland did not intend to release the government’s report on the Trump classified documents inquiry until legal proceedings concluded against two co-defendants who were charged along with Trump. 

His decision raised the prospect that the report might never be made public because Trump as president would likely end the investigation and keep all findings and evidence under wraps. Garland said that “for the time being,” the report will be “made available for in-camera review” by the chair and ranking members of House and Senate Judiciary committees. 

WHERE AND WHEN

• The House meets at 9:30 a.m. The Senate convenes at 10 a.m. 
  
• President Biden will deliver the eulogy at the 10 a.m. funeral for former President Carter at Washington National Cathedral. Carter’s funeral is expected to bring together the five living American presidents. 
  
• Vice President Harris will attend the Carter funeral, as will first lady Jill Biden and second gentleman Doug Emhoff.
  
• Secretary of State Antony Blinken will be in Rome to participate in a working dinner with European Union representatives and representatives of an informal decision-making group known as the European Quint, consisting of the United States, France, Germany, Italy and the United Kingdom.

ZOOM IN  

At least five people are dead, more than 130,000 residents in Southern California have been ordered to flee and thousands of structures have been reduced to ash as some of the most sought-after and expensive terrain in the Golden State is ravaged by wind-whipped wildfires. It is the worst inferno in Los Angeles history.

This morning, the Hollywood Hills are ablaze, and fire officials say they’ve made “zero progress” in subduing what has grown to a collection of five fires fanned by overnight winds.

Biden, who was in Santa Monica, Calif., met with California Gov. Gavin Newsom (D) and state emergency response officials Wednesday to receive a briefing and to pledge federal help. While returning to Washington, the president discussed the federal response by phone with the administrator of the Federal Emergency Management Agency as well as his homeland security adviser. Biden canceled a planned final international trip to Italy because of the California emergency. 

"The fact is that the DOD has to rapidly provide additional firefighting personnel across California. [The] National Guard is [utilizing] two monster air firefighting systems and two more are being readied for the National Guard and the Nevada National Guard [and] more are coming from Marin, from the Northern Command and the 10 Navy helicopters," Biden said in a short, prepared statement.

Helicopters and planes that had been grounded because of extremely high winds or darkness were cleared Wednesday to drop water on the blazes. Water has been a scarce resource for many firefighters battling conditions on the ground. The winds, which reached 80 to 100 miles per hour in some areas, weakened by Wednesday to 50 to 60 mph.

The Hill: The Pentagon is sending more assets, including Navy helicopters with water buckets.

For California-born Vice President Harris, the wildfires are personal. Her Los Angeles neighborhood was ordered to evacuate.  

The aftermath of the fire emergency will present yet another problem for Californians: Dropped insurance, an economic emergency now felt nationwide, according to The New York Times.

Politico reports the challenge is part of a larger trend: California had the nation’s fourth-highest insurance non-renewal rate in 2023 behind Florida, Louisiana and North Carolina, per a report published in December by the Senate Budget Committee. It’s a problem South Florida property owner Trump knows well from hurricane impacts on the insurance marketplace in the Sunshine State. His administration is likely to be pulled into the national debate about Uncle Sam’s role in post-disaster insurance pullouts. 

▪ The New York Times: See where insurance was dropped in your state.

▪ The Hill’s Niall Stanage in The Memo: Trump sparked a political fight Wednesday as the Los Angeles fires burn.

Los Angeles Mayor Karen Bass (D), who was in Ghana at the outset of the wildfires, was bashed by constituents for her absence during the city’s crisis. 

WHAT’S NEXT FOR DEMOCRATS? Downtrodden Democrats are debating future Electoral College math and the odds of mounting a victorious presidential comeback before or after the 2030 census with eyes on demographics, reports The Hill’s Amie Parnes. Because of population trends, 2028 may be the last time Democrats could envision that states would propel their nominee to the required 270 Electoral College threshold. During the 2032 election (after the U.S. census), the “blue wall” could fall short with a potential ceiling of 260 electoral votes. The outlook could force Democrats to adapt their politics in order to realistically win over voters in states where they haven't prospered. 

▪ The Hill: Here are five things to watch ahead of the Democratic National Committee’s first chair forum. The contest is scheduled Feb. 1. 

▪ The Washington Post: Former Rep. Barbara Lee (D-Calif.), 78, announced she is running for mayor of Oakland in her former district. A special election is ahead in April.

ELSEWHERE

Businesses are preparing for a trade war with China under Trump that could eclipse events during his first term. While Trump vows to levy high tariffs on Chinese goods, the threats may have served as an early-stage negotiating tactic in addition to a policy proposal. The political and economic consequences are evident in business decision-making, activity at ports and in legislative proposals.

In Congress, lawmakers are debating whether to demote China as a most favored U.S. trading partner by doing away with permanent normal trade relations. That move would be mostly symbolic since the U.S. has maintained tariffs on China for years. But it would nonetheless send a clear signal that the economic relationship between the U.S. and China is being downgraded.

“This would basically be smacking the ‘strong’ WTO in the face,” Bill Reinsch, international business chair at the Center for Strategic and International Studies, told The Hill’s Tobias Burns.

International pushback remains intense in reaction to Trump’s public fervor to buy Greenland, seize the Panama Canal, trounce Canada and rebrand a massive body of water. Secretary of State Antony Blinken and his counterpart in France told reporters in Paris Wednesday that a U.S. takeover of Greenland was an impossible idea. Dominic LeBlanc, Canada’s point person for relations with the U.S., said Trump initially was smiling last year when he suggested Canada should be America’s 51st state.

“The joke is over,” said LeBlanc. “It’s a way for him, I think, to sow confusion, to agitate people, to create chaos knowing this will never happen.” German Chancellor Olaf Scholz, after conferring with European counterparts, told reporters the U.S. president-elect’s expansionist comments were received with “incomprehension” and that “borders must not be moved by force.” Mexican President Claudia Sheinbaum hit back at Trump’s interest in renaming the Gulf of Mexico the “Gulf of America.”

“We’re going to call it Mexican America,” she quipped. 

A fragile ceasefire between Israel and Hezbollah in Lebanon that calmed months of cross-border fighting is being strained as the two sides accuse each other of violations and the U.S. races to make sure the deal holds. Israel still maintains troops on the ground in Lebanon and has continued to regularly strike Hezbollah infrastructure and weapons depots.

▪ NBC News: The bodies of father and son hostages Youssef and Hamza Alzyadni have been found in Gaza.

▪ Axios: State Department officials told the Trump administration transition team there could be a humanitarian "catastrophe" in Gaza when a new Israeli law barring contact with the U.N. refugee agency for Palestinians takes effect.

A credible process leading to a new transitional government involving all parts of Syrian society is the best way for the country’s caretaker administration to secure a smooth lifting of international sanctions, U.N. special envoy Geir Pedersen told the U.N. Security Council. Pedersen said the government, led by Ahmed al-Sharaa, the head of the Islamist group Hay’at Tahrir al-Sham, had tremendous opportunities but also risked making missteps.

“Decisions taken now will determine the future for a long time to come. There are great opportunities and real dangers,” he said Wednesday in New York. The U.S. has lifted some sanctions for six months and the EU may do the same later this month.

The Biden administration has decided to maintain the terrorist designation of Syria’s new rulers for the remainder of Biden’s tenure, leaving a critical decision about HTS and its leader to the incoming Trump administration. U.S. officials told The Washington Post the rebels must demonstrate they have made a clean break with extremist groups, in particular al Qaeda, before the label can be lifted.

▪ The Wall Street Journal: With Trudeau’s resignation, Canada suddenly has no leader, and no plan, for a Trump trade fight.

▪ The Hill: Billionaire Trump adviser Elon Musk emerges as the president-elect’s foreign policy wild card.

▪ CNN: South Korean authorities have extended a warrant to detain the country’s suspended President Yoon Suk Yeol for questioning over his surprise declaration of martial law last month.

OPINION 

■ Trump’s bully pulpit diplomacy, by The Wall Street Journal editorial board.

■ What this new era of politics looks like in Washington, by Michelle Cottle, columnist, The New York Times.

THE CLOSER

Take Our Morning Report Quiz

And finally … It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Pondering Trump’s stated real estate aspirations, we’re eager to find history buffs who know about America’s territorial expansions.

Be sure to email your responses to asimendinger@thehill.com and kkarisch@thehill.com — please add “Quiz” to your subject line. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.

President Andrew Johnson acquired Alaska from Russia. What did the U.S. pay for the vast real estate? 

1. Zero. Russia traded the land for Berdan rifles, sea otter pelts and fuel.
2. $3 million
3. $7.2 million
4. $10.1 million

Which president bought the Louisiana territory from France for approximately $15 million?

1. John Adams
2. Thomas Jefferson
3. Theodore Roosevelt
4. Herbert Hoover 

President William McKinley annexed Hawaii in 1898. But who was president when Hawaii officially achieved statehood under law? 

1. Franklin D. Roosevelt
2. Harry S. Truman
3. Dwight Eisenhower 
4. John F. Kennedy 

President Woodrow Wilson in 1917 signed a treaty transferring the Danish West Indies to the United States in exchange for $25 million in gold coins. The territory is now known as ____________? 

1. Puerto Rico
2. Seychelles
3. U.S. Virgin Islands
4. American Samoa 

Stay Engaged 

We want to hear from you! Email: Alexis Simendinger (asimendinger@thehill.com) and Kristina Karisch (kkarisch@thehill.com). Follow us on social media platform X (@asimendinger and @kristinakarisch) and suggest this newsletter to friends!