1 big thing — Scoop: Manchin's new '24 hint

2. ⚖️ Indictment alleges three Santos schemes

3. 💰 Moderates eye "low-hanging fruit" on debt ceiling

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4. 🐘 Republicans shrug after Trump verdict

5. 🏛️ Parting shot

Welcome back to Sneak. Smart Brevity™ count: 1,044 words ... 4 minutes.

📬 Thanks for reading tonight. This newsletter was copy edited by Kathie Bozanich.

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Take a look at both ends of Penn Ave — and our best scoops

Axios Sneak Peek

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1 big thing: Biden's new budget trap

2. ⛰️ GOP closes in on Montana recruit for Senate

3. 🚓 Republicans prep more intervention in D.C.  

4. 👀 Ex-Trump official jumps ship for DeSantis

Welcome back to Sneak. Smart Brevity™ count: 983 words ... 3.5 minutes.

🚨 Breaking: Manhattan's district attorney has offered former President Trump the chance to testify next week in the investigation of hush money payments to Stormy Daniels — signaling criminal charges are likely, the N.Y. Times reports.

📬 Thanks for reading this week. This newsletter was edited by Zachary Basu and copy edited by Kathie Bozanich.

1 big thing: Jordan under fire

2. 🐘 The incredible shrinking anti-Trump lane

Larry Hogan in front of a picture of Trump

3. 🇹🇼 McCarthy's Taiwan optics

4. ⚖️ By the numbers: 1,000 Jan. 6 arrests

5. Fetterman on the mend

Welcome back to Sneak. Smart Brevity™ count: 1,026 words ... 4 minutes.

📅 Join Axios’ Courtenay Brown, Sophia Cai and Eleanor Hawkins on Wednesday at 8am ET for an International Women's Day event with Sen. Mazie K. Hirono (D-Hawaii), German ambassador to the U.S. Emily Haber, and PBS NewsHour co-anchor Amna Nawaz. Register here to attend in person in D.C.

📬 Thanks for reading tonight. This newsletter was edited by Zachary Basu and copy edited by Brad Bonhall.

1 big thing: House GOP's first big win

2. 📊 Trump tries to juice CPAC straw poll

3. 💰 Scoop: GOP spends $2 million to flip script on Medicare

4. 🚂 Biden backs rail reform

Welcome back to Sneak. Smart Brevity™ count: 961 words ... 3.5 minutes.

📬 Thanks for reading this week. This newsletter was edited by Zachary Basu and copy edited by Sheryl Miller.

1 big thing: Zients' zen White House

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2. 🔎 Poll du jour: Indictment skeptics

3. ⚡ Senate's Wednesday frenzy

4. 🤝 Charted: Partisan priorities

5. ❤️ Pic du jour 

Welcome back to Sneak. Smart Brevity™ count: 971 words ... 3.5 minutes.

🇨🇳 Situational awareness: China's top diplomat in D.C. warned that Taiwan President Tsai Ing-wen's stops in the U.S. — where she will meet with House Speaker Kevin McCarthy (R-Calif.) — "could lead to serious, serious, serious confrontation in the U.S.-China relationship."

National

President Biden and House Speaker Kevin McCarthy (R-Calif.) have reached a tentative deal to raise the debt ceiling to 2025, Axios has learned from sources in both parties.

Why it matters: The deal could put Congress on track to increase the debt ceiling — and avoid a catastrophic default by the U.S. government — before the June 5 deadline laid out by Treasury Secretary Janet Yellen on Friday.

Details: The deal between Biden and McCarthy — who spent 90 minutes on the phone Saturday evening — would raise the debt ceiling until January 2025 in exchange for spending cuts and deficit reduction measures, according to  sources familiar with the negotiations.

Spending: Non-defense discretionary spending would be kept roughly flat in 2024, with a 1% increase in 2025 and no caps on growth afterward.

Welfare work requirements: Changes to Temporary Needy Assistance for Needy Families (TANF) and phased-in time limits for Supplemental Nutrition Assistance Program (SNAP) recipients under age 54 until 2030. Medicaid is unchanged.

Defense: The plan includes $885 billion Biden sought in his 2024 budget proposal, up from just under $800 billion in the 2023 budget. Veterans Affairs spending also would be increased.

Permitting reform: Streamlines the environmental review process to speed up approval for new energy projects.

COVID aid: Claws back $29 billion in unspent COVID aid.

IRS funding: Rescinds $1.9 billion of the $70 billion in funding for new Internal Revenue Service agents in the Inflation Reduction Act.

What’s next: McCarthy told reporters that legislative text will be released on Sunday in preparation for the House voting on Wednesday.

This story is breaking news. Please check back for updates.

White House and GOP reach tentative debt ceiling deal

House Republicans are scheduled to have a call on the deal.

McCarthy at a press conference. Photo: Alex Wong/Getty Images

Debt ceiling

Politics & Policy

Sen. Kyrsten Sinema (I-Ariz.) has inserted herself into the debt ceiling negotiations, working with both sides to try to bridge differences on permitting reform, according to people familiar with the matter.

Why it matters: Her late entrance is a sign that negotiators are willing to explore new avenues to resolve thorny issues before June 5, the new deadline from Treasury Secretary Janet Yellen for when the U.S. government will run out of money.

Permitting reform — a catch-all category that includes both Republican and Democratic plans to improve energy production and transmission — is emerging as a tough-to-resolve disagreement between the White House and congressional negotiators.

Republicans want to change the National Environmental Policy Act (NEPA) with the goal of cutting red tape for oil and gas companies when they develop new projects. Democrats want to make it easier for solar and wind farms to access transmission lines. 

Negotiators also are at an impasse on a demand from House Speaker Kevin McCarthy (R-Calif.) to add new work requirements to welfare benefits, according to Biden administration officials.

But the two sides are making progress on overall spending levels, with the goal of capping spending for two years at lower levels. In exchange, the debt ceiling would be raised past the 2024 elections.

Driving the news: By removing any wiggle room on the government's default date, Yellen's new pronouncement is adding urgency to the negotiations.

“We’re within the window for which we meet the June 5 deadline,” Rep. Patrick McHenry (R-N.C.) told reporters on Capitol Hill. "It’s not over. We’re not done.”

House Majority Whip Tom Emmer (R-Minn.) told his team late Friday that negotiators still didn't have a deal, but that they should be prepared to find the votes to pass it when the details are finalized, lawmakers said. 

Zoom in: Sinema is trying to use her status as an independent senator — and her experience as a key vote in last year's showdown over the legislation that became President Biden's Inflation Reduction Act — to find common ground.

But some Democratic lawmakers are privately concerned that her 11th-hour effort to save the day will water down key green energy provisions.

A spokesperson for Sinema declined to comment; the White House also had no comment.

Zoom out: Both parties' ideological bases — Democratic progressives and the most conservative Republicans -- have voiced concerns about the contours of a potential deal.

Divided by ideology, the two groups essentially are saying the same thing: Their leaders aren't fighting hard enough for their party's core principles.

What they're saying: “If rumors are accurate, and I certainly hope they are not, the negotiated deal would be devastating to the nation’s fiscal future,” said Rep. Bob Good (R-Va.)

Biden “needs to continue to stand firm against cruel eligibility requirements on TANF or SNAP programs,” said Rep. Steven Horsford (D-Nev) chair of the Congressional Black Caucus, referring to the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF).

Go deeper: On energy permitting revisions, Rep. Garret Graves (R-La.), a top McCarthy negotiator, have made NEPA reform a priority. 

Democrats, for the most part, oppose significant changes to NEPA, but they do want to make it easier for renewable energy sources to plug into the electricity grid.

Sen. John Hickenlooper (D-Colo.) and Scott Peters (D-Calif) are pushing legislation that would incentivize the construction of new transmission lines and require different power regions to have the capacity to transfer up 30% of their electricity to each other.

Sinema wants to explore ways to lower that 30% power-sharing requirement, which would make the transition slower, but easier for the energy industry.

The bottom line: McCarthy and Biden still need to nail down a plan that allows them to cobble together a coalition of 218 votes in the 435-member House — and energy permitting is a key issue standing in the way.

Scoop: Sinema enters debt ceiling negotiations

Her late entrance signals that negotiators are exploring new ways to solve thorny issues.

Sen. Kyrsten Sinema (I-Ariz) is interviewed on Capitol Hill earlier this month. Photo: Al Drago/Bloomberg via Getty Images

Sen. <a class="gtmContentClick" data-vars-link-text="Kyrsten Sinema" data-vars-click-url="https://www.sinema.senate.gov/" data-vars-content-id="6285af10-1e58-4213-ba9f-003a0b0d51d8" data-vars-headline="Scoop: Sinema enters debt ceiling negotiations" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.sinema.senate.gov/" target="_blank">Kyrsten Sinema</a> (I-Ariz.) has inserted herself into the <a class="gtmContentClick" data-vars-link-text="debt ceiling negotiations" data-vars-click-url="https://www.axios.com/2023/05/18/progressives-debt-ceiling-tensions-biden" data-vars-content-id="6285af10-1e58-4213-ba9f-003a0b0d51d8" data-vars-headline="Scoop: Sinema enters debt ceiling negotiations" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/05/18/progressives-debt-ceiling-tensions-biden" target="_self">debt ceiling negotiations</a>, working with both sides to try to bridge differences on permitting reform, according to people familiar with the matter.Why it matters: Her late entrance is a sign that negotiators are willing to explore new avenues to resolve thorny issues before June 5, <a class="gtmContentClick" data-vars-link-text="the new deadline" data-vars-click-url="https://www.axios.com/2023/05/26/yellen-warns-that-us-will-run-out-of-money-on-june-5" data-vars-content-id="6285af10-1e58-4213-ba9f-003a0b0d51d8" data-vars-headline="Scoop: Sinema enters debt ceiling negotiations" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/05/26/yellen-warns-that-us-will-run-out-of-money-on-june-5" target="_self">the new deadline</a> from Treasury Secretary Janet Yellen for when the U.S. government will run out of money.

Treasury Secretary Janet Yellen has given Congress a more precise date — June 5 — for when the U.S. government will hit the debt ceiling and run out of money to pay its bills. 

Why it matters: Yellen's previous warnings estimated the U.S. would hit the so-called X-date as early as June 1, but her latest letter provides a firmer deadline as lawmakers and the White House work to avoid a damaging debt default.

What they're saying: "Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government’s obligations if Congress has not raised or suspended the debt limit by June 5," Yellen said in a Friday letter to congressional leadership.

"I continue to urge Congress to protect the full faith and credit of the United States by acting as soon as possible."

Flashback: On Monday, in her third warning, Yellen said the U.S. government is "highly likely" to run out of money as early as June 1.

The big picture: While House Speaker Kevin McCarthy (R-Calif.) claimed this morning that progress in the negotiation was being made, he cautioned that a final deal wasn’t at hand.

“There is forward progress,” Rep. Patrick McHenry (R-N.C.) told reporters today. “But each time there’s forward progress, the issues that remain become more difficult and more challenging.”

Go deeper: What the credit rating agencies are saying about the U.S.

What the credit rating agencies are saying about the U.S.

Yellen warns U.S. will run out of money on June 5

It's the most precise warning yet from the Treasury secretary.

Joe Biden

Treasury Secretary <a class="gtmContentClick" data-vars-link-text="Janet Yellen" data-vars-click-url="https://www.axios.com/2023/05/15/yellen-debt-ceiling-x-date" data-vars-content-id="6fff3dfd-f249-4e66-90d3-45f84170eca9" data-vars-headline="Yellen warns U.S. will run out of money on June 5" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/05/15/yellen-debt-ceiling-x-date" target="_self">Janet Yellen</a> has given Congress a more precise date — June 5 — for when the U.S. government will hit the debt ceiling and run out of money to pay its bills. Why it matters: <a class="gtmContentClick" data-vars-link-text="Yellen&#x27;s previous warnings" data-vars-click-url="https://www.axios.com/2023/05/22/yellen-debt-ceiling-deadline-xdate-june" data-vars-content-id="6fff3dfd-f249-4e66-90d3-45f84170eca9" data-vars-headline="Yellen warns U.S. will run out of money on June 5" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/05/22/yellen-debt-ceiling-deadline-xdate-june" target="_self">Yellen&#x27;s previous warnings</a> estimated the U.S. would hit the so-called X-date as early as June 1, but her latest letter provides a firmer deadline as lawmakers and the White House work to avoid a damaging debt default.

With a 314-117 House vote to lift the debt ceiling until 2025, Speaker Kevin McCarthy (R-Calif.) proved he could harness his narrow majority to force President Biden to make policy concessions on issues that are deeply important to both parties.

Why it matters: Now Biden and McCarthy will have to decide whether their debt deal will be the first of their political compromises — or their last.

Both leaders demonstrated a willingness to forsake their party’s base to find common ground. 

But neither treated the debt ceiling showdown as a trial run for legislating during divided government.

McCarthy started his post-vote victory lap by thanking his negotiating team and then touting his accomplishment.

"Tonight we all made history because this is the biggest cut in savings this Congress has ever voted for," he said, adding that he'll be seeking more budget cuts moving forward.

The other side: In his statement, Biden stayed focused on the importance of bipartisan compromise. "This agreement is good news for the American people and the American economy," he said.

Biden also was careful to publicly praise McCarthy. The president called him and the other congressional leaders after the vote, which the president watched from a hotel room in Colorado Springs.

"I want to thank Speaker McCarthy and his team for negotiating in good faith," he said.

Driving the news: The bill now moves to the Senate, and it seems likely to land on Biden's desk before Monday. That's Treasury Secretary Janet Yellen's latest deadline for when the U.S. government needs to raise the debt ceiling to avoid a disastrous default.

Biden urged the “Senate to pass it as quickly as possible so that I can sign it into law.”

A vote in the Democrat-led Senate could come as early as today, Senate Minority Leader Mitch McConnell (R-Ky.) hinted. But Friday is a more likely scenario.

Senate leaders are still working out a time agreement to give senators a chance to vote on symbolic amendments that will not alter the shape of the deal.

Zoom out: In the two-weeks of shuttle diplomacy between the White House compound and the Capitol, there were fits and starts between the president’s and the speaker’s negotiating teams.

But there were no made-for-TV moments when the economy appeared in imminent danger.

The markets never revolted. And McCarthy’s conservatives, long a thorn in his side, never really bolted. Only when the outcome was assured did a faction of 71 House Republicans vote against final passage of the bill.

Zoom in: The final vote on the bill was more intriguing than it was dramatic.

For all the strength that McCarthy gathered during the negotiating by keeping his members — and Senate Republicans — united, the floor action on the last day showed the challenges McCarthy will continue to face with his caucus.

In the final vote, Democrats gave the bill more support than Republicans: Democrats voted 165-46 in favor, compared to 149-71 for Republicans.

The bottom line: The debt ceiling was suspended in the House with more than 300 votes, a win for McCarthy. His hold on power has been reinforced, not reduced — even though he will have to deal with angry far-right conservatives, a few of whom now are openly discussing a move to oust him.

By a more than 2-to-1 ratio, GOP lawmakers backed McCarthy on the final vote. 

Any of McCarthy's allies would have taken those results a month ago, when Biden called congressional leaders to the White House to jump-start negotiations and the prospect of a government default seemed quite real.

Go deeper: Listen to the Axios Today podcast, where host Niala Boodhoo and Hans Nichols share what the debt ceiling deal says about future fights in Washington.

After debt ceiling vote, McCarthy takes a victory lap

McCarthy proved he could harness his narrow majority to force Biden to make policy changes.

House Speaker Kevin McCarthy speaks during a press conference at the U.S. Capitol on Wednesday. Photographer: Ting Shen/Bloomberg via Getty Images

With a 314-117 House <a class="gtmContentClick" data-vars-link-text="vote to lift" data-vars-click-url="https://www.axios.com/2023/06/01/house-passes-bill-to-raise-debt-ceiling-into-2025" data-vars-content-id="93de0a0b-1000-4058-b6ae-aa108f8d7c04" data-vars-headline="After debt ceiling vote, McCarthy takes a victory lap" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/06/01/house-passes-bill-to-raise-debt-ceiling-into-2025" target="_self">vote to lift</a> the debt ceiling until 2025, Speaker Kevin McCarthy (R-Calif.) proved he could harness his narrow majority to force President Biden to make <a class="gtmContentClick" data-vars-link-text="policy concessions" data-vars-click-url="https://www.axios.com/2023/05/28/mccarthy-biden-big-debt-ceiling-test" data-vars-content-id="93de0a0b-1000-4058-b6ae-aa108f8d7c04" data-vars-headline="After debt ceiling vote, McCarthy takes a victory lap" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/05/28/mccarthy-biden-big-debt-ceiling-test" target="_self">policy concessions</a> on issues that are deeply important to both parties.Why it matters: Now Biden and McCarthy will have to decide whether <a class="gtmContentClick" data-vars-link-text="their debt deal" data-vars-click-url="https://www.axios.com/2023/05/28/debt-ceiling-deal-republicans-white-house" data-vars-content-id="93de0a0b-1000-4058-b6ae-aa108f8d7c04" data-vars-headline="After debt ceiling vote, McCarthy takes a victory lap" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/05/28/debt-ceiling-deal-republicans-white-house" target="_self">their debt deal</a> will be the first of their political compromises — or their last.

House leaders are confident that the chamber today will approve the debt ceiling deal between President Biden and Speaker Kevin McCarthy (R-Calif.) — and move toward avoiding a disastrous government default.

Why it matters: Not all victory laps are the same. The number of votes the Fiscal Responsibility Act gets from each party could signal who made the better deal. 

A solid Republican tally — with clearly more GOP votes than the Democrats — would allow McCarthy to show strength in the face of criticism from the most conservative members of his caucus.

McCarthy's lieutenants hope to get 150 of the 222 GOP Republican House members to vote yes, and virtually assure passage of the bill.

"I want Republican votes," Rep. Patrick McHenry (R-N.C.), a key member of McCarthy's negotiating team, told reporters late Tuesday. "That would be the cleanest way for me to show it was a good bill for Republicans.”

But a big Democratic vote for the bill — say, well over a majority of the 213 Democrats in the 435-member House — could bolster the notion held by some lawmakers in each party: that Biden outfoxed GOP negotiators. 

And if McCarthy winds up relying on more Democratic votes than Republican ones to get the bill passed, it could be an embarrassment that jeopardizes his hold on the speaker's gavel.

Far-right conservatives, angry that McCarthy didn't hold out for more budget cuts and other GOP priorities, are publicly saying that's a possibility.

Between the lines: That political reality has put pressure on House GOP leaders to not just find the necessary votes for passage, but to try to run up the score.

It's also given some Democratic lawmakers an incentive to hold their noses and vote for a bill they might not love — to help their president avoid an economic quagmire, and tweak the Republican speaker.

Driving the news: Republicans whips were pressing and prodding their members Tuesday evening, trying to ensure that they had the votes. 

The bill cleared the House Rules Committee on Tuesday after winning support from Rep. Thomas Massie (R-Ky.), a conservative lawmaker who has raised concerns about the package. The full House will consider it Wednesday, with a vote expected in the evening. 

Republicans were claiming momentum late Tuesday. 

"There were members this morning who were undecided," House Majority Leader Steve Scalise (R-La.) told reporters. "They're now going to vote for the bill.”

The big picture: The stakes for McCarthy couldn't be higher.

He is on the cusp of a political accomplishment few predicted just a few months ago: Passing a substantial bill that cuts spending and raises the debt ceiling with a clear majority of his conference supporting him on strategy and substance.

But he faces a potential revolt — and threat to his speakership — if he falters. 

Conservative lawmakers have warned McCarthy that he’ll face a "motion to vacate" — a procedural move that could spell the end of his speakership — if he brings forward a bill that isn't backed by a majority of House Republicans.

McCarthy doesn’t appear worried about falling short of the "majority of the majority" threshold.

But late Tuesday it was unclear whether the number of Republicans backing the bill will surpass the number of Democrats who'll vote for it — even if McCarthy's team reaches its goal of 150 yes votes from GOP lawmakers. 

What we're watching: Conservatives who dislike the bill are preparing to seize on strong Democratic support for it as proof that McCarthy's compromise betrayed their values.

“I think it will get more Democrat votes than Republican votes,” said Rep. Bob Good (R-Va.) “And I think that just demonstrates that it is a Democrat wish list.”

The other side: Progressive Democrats haven’t been shy about broadcasting their complaints over many of the bill’s provisions, such as increasing work requirements for welfare recipients.

But very few have issued clear statements saying they'll vote against the bill.

For Democrats, voting no would undercut their president — and contradict months of messaging in which they've stressed the need to raise the debt ceiling.

McCarthy's magic number on the debt ceiling deal

The number of votes the bill gets from each party could signal who made the better deal.

House Speaker Kevin McCarthy (R-Calif.) talks to reporters at the U.S. Capitol after talking on the debt ceiling on May 17.  Photo: Win McNamee/Getty Images

House leaders are confident that the chamber today will <a class="gtmContentClick" data-vars-link-text="approve the debt ceiling deal" data-vars-click-url="https://www.axios.com/2023/05/28/debt-ceiling-deal-republicans-white-house" data-vars-content-id="ebb05d07-bbc9-4a12-8e0f-191ac8464bd8" data-vars-headline="McCarthy&#x27;s magic number on the debt ceiling deal" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/05/28/debt-ceiling-deal-republicans-white-house" target="_self">approve the debt ceiling deal</a> between President Biden and Speaker Kevin McCarthy (R-Calif.) — and move toward avoiding a disastrous government default.Why it matters: Not all victory laps are the same. The number of votes the Fiscal Responsibility Act gets from each party could signal who made the better deal.

Hans Nichols

Stories

After debt ceiling vote, McCarthy takes a victory lap

McCarthy's magic number on the debt ceiling deal

White House and GOP reach tentative debt ceiling deal

Yellen warns U.S. will run out of money on June 5

Scoop: Sinema enters debt ceiling negotiations

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