Washington Edition: Red ink blues

This is Washington Edition, the newsletter about money, power and politics in the nation's capital. Today, congressional correspondent Steven T. Dennis looks at some of the Republican dissent over the tax and spending bill passed by the House . Sign up here and follow us at @bpolitics. Email our editors here.

Hard Bargaining

Elon Musk's not the only one disappointed in the way President Donald Trump's "one, big beautiful bill" turned out in the House.

Joining Musk in the jeering section are four hardline Republican senators — Rick Scott, Ron Johnson, Mike Lee and Rand Paul. They are demanding much bigger spending cuts, a smaller debt limit hike than the House's $4 trillion, or both.

The bill can't pass the Senate without at least one of them, given the GOP only has 53 seats. And there are more than a few Republicans in the House, where the legislation squeaked through by one vote, who wouldn't mind seeing spending slashed more.

Musk and Scott earlier this year Photographer: Al Drago/Bloomberg

That portends some tough negotiating ahead, and it's not a good sign for getting it done and dusted by the notional deadline of July 4.

Johnson sees the $1.6 trillion in spending cuts in the bill over a decade as a paltry number given the $89 trillion in outlays and more than $20 trillion in additional debt the government is expected to rack up over that time frame on autopilot. He and Lee are pushing to return to pre-pandemic spending levels.

Rick Scott wants a path to a balanced budget, not one that adds $2 trillion a year in debt. Paul opposes the House's $4 trillion debt limit hike, which Republican leaders and the White House want so they can push the next debt cliff until after the midterm elections.

And that doesn't account for other complaints from moderates about the bill, including the cuts to Medicaid and green energy tax credits.

The hardliners, though, haven't so far put together a specific plan. And it will be hard to get enough votes for bigger spending cuts in the Senate, let alone the House, where a group of swing-district Republicans blanched at digging deeper.

Cutting spending is hard — just ask Musk, whose DOGE project fell far short of its original goals.

Trump himself said he's not happy with all aspects of the legislation while acknowledging the political reality.

"We can't be cutting," he said at the White House today, when asked about Musk's criticism. "You know, we need, we need to get a lot of support."

Something is all but certain to pass eventually. But as I've written about past budget wrangling, expect a lot more "NO NO NO NO NO" moments before they get to "YES." — Steven T. Dennis

Don't Miss

The Trump administration is moving to restrict the sale of chip design software to China, people familiar with the matter said, as the US government evaluates a broader policy announcement on the issue.

Trump bristled at suggestions that Wall Street believed he was ultimately unwilling to follow through on extreme tariff threats, saying his repeated retreats were strategic efforts to exert trade concessions.

The president said he told Israeli Prime Minister Benjamin Netanyahu that a military strike against Iran would risk disrupting efforts to broker a deal on Tehran's nuclear program.

Trump Photographer: Chris Kleponis/CNP

The US is holding off on new sanctions against Russia in order to preserve the chance for a deal with President Vladimir Putin to end the war in Ukraine, Trump said.

The Department of Education is pushing to strip workplace protections for pregnant or LGBTQ staff, telling its employee union the policies must be changed to conform to Trump's executive orders.

The Labor Department will no longer urge 401(k) overseers to act with "extreme care" before offering cryptocurrencies, a decision that will be welcomed by some firms lobbying to add private assets to those accounts, too.

Moves by Trump to bolster digital currencies are set to hit even closer to home as the industry increasingly drives the fate of his family's personal fortune.

The president said Harvard University should cap foreign student enrollment at 15%, ratcheting up his effort to force policy changes at the elite institution.

Elite American universities have taken on more than $4 billion in additional debt since March that will help protect their finances as the Trump administration takes aim at their budgets.

The Trump administration is telling immigration officials to ramp up arrests to 3,000 per day with a goal of more than 1 million a year, a target that would significantly escalate the pace of detentions.

The Federal Reserve has disbanded a number of internal groups set up to help the US central bank identify and respond to financial stability threats posed by climate change.

Fed officials broadly agreed heightened economic uncertainty justified their patient approach to interest-rate adjustments, minutes from their latest policy meeting showed.

The US government would retain guarantees and an oversight role over Fannie Mae and Freddie Mac, Trump said, even as he pursues a public offering for the mortgage giants.

A federal judge granted WilmerHale's request to strike down Trump's executive order targeting the law firm, finding the order unconstitutional.

Trump said he would consider pardoning those connected to a plan to kidnap Michigan Democratic Governor Gretchen Whitmer.

Watch & Listen

Today on Bloomberg Television's Balance of Power early edition at 1 p.m., hosts Joe Mathieu and Kailey Leinz interviewed Florida Republican Representative Byron Donalds from the bitcoin conference in Las Vegas about crypto legislation in Congress and cutting federal spending.

On the program at 5 p.m., they talk with David Hale, former ambassador and Middle East envoy, about the prospects for a US-Iran agreement, aiding Gaza and Israel's killing of a top Hamas commander.

On the Big Take Asia podcast, host Rebecca Choong Wilkins talks to Bloomberg's Ruth Carson about what's driving Asia's shift away from the dollar and what a rewiring of global financial ties means for the region's biggest economies. Listen on iHeart, Apple Podcasts and Spotify.

Chart of the Day

Economic activity in 15 states contracted or was unchanged last month, according to indexes for the 50 states from the Federal Reserve Bank of Philadelphia. The Philadelphia Fed uses seasonally adjusted data for each state's payroll employment, unemployment rate, average hours worked in manufacturing, and wage and salary disbursements to gauge how well each state economy is doing. The trend for each state's index is also set to its gross domestic product direction, so long-term growth in the state's index matches long-term growth in its GDP. The indexes decreased in nine states. Massachusetts is the only state with 4 months of consecutive declines, but decreases in both March and April were seen in Missouri, Minnesota, Iowa, and Rhode Island. — Alex Tanzi

What's Next

The second estimate for first quarter GDP will be released at 8:30 a.m. tomorrow.

Initial jobless claims for the week ending May 24 will be reported tomorrow.

Pending home sales for April also will be released tomorrow.

The personal consumption expenditures index for April is out on Friday.

The University of Michigan's final read of consumer sentiment for May also will be released on Friday.

Construction spending and factory orders in April will be reported on Monday.

Job openings and layoffs for April will be released Tuesday.

Total vehicle sales in May will be reported on Tuesday.

The US trade balance for April will be released on June 5.

The jobs report for for May will be released June 6.

Seen Elsewhere

Health and Human Services Secretary Robert F. Kennedy Jr. Said he may bar government scientists from publishing their work in established medical journals that he says are "corrupt," Politico reports.
A scam run out of North Korea uses stolen identities and "laptop farms" set up by sometimes unwitting accomplices in the US to rake in millions of dollars from remote-work jobs, according to the Wall Street Journal.
Summers have gotten hotter nationwide and over 60% of the 242 cities analyzed by a climate research group now have at least two more weeks of hotter-than-normal days than they did in 1970, Axios reports.