The United States faces a dire and unsustainable fiscal outlook. You'd never know it from the action in Washington, Axios chief economic correspondent Neil Irwin writes.

• Across parties and policy areas, you'd never guess that the U.S. faces fiscal constraints created by its high-and-rising debt, ballooning deficits without precedent in times of prosperity, and a looming entitlement spending crisis when the Social Security trust fund runs out.

State of play: Consider recent policy developments that will meaningfully make the fiscal picture worse.

• President Trump is seeking $200 billion to fund the Iran war and replenish depleted weaponry.
• The Supreme Court struck down the use of emergency authority to impose tariffs, and legal battles are underway over refunds.
• For all the attention on DOGE last year, there's little evidence of lasting restraint of federal spending.

Zoom in: That all follows tax legislation enacted last year, scored by the Congressional Budget Office as increasing cumulative deficits by $3.4 trillion over a decade, with backloaded spending cuts smaller than combined tax cuts.

• Even if Democrats regain power, some lawmakers are emphasizing possible further tax cuts. Sens. Chris Van Hollen (D-Md.) and Cory Booker (D-N.J.) have proposed cutting taxes on middle- and upper-middle-class households.

🧮 By the numbers: The CBO projects deficits of around 6% of GDP each year for the next decade — numbers that predate the Iran war or Supreme Court tariff ruling. Other than in recent years, deficits of that scale have only been seen in times of economic crisis or major war.

• Those same CBO projections have the public debt soaring to 120% of GDP by 2036, up from about 100% now. The all-time record for federal debt was 106% of GDP, reached during World War II.
• Social Security could run out of funds in 2032, resulting in a politically toxic cut in payouts if Congress can't agree to extend benefits.

The bottom line: America's fiscal health is miserable. Nobody in Washington is acting like it.

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War latest: President Trump posted last night that if Iran "doesn't FULLY OPEN, WITHOUT THREAT, the Strait of Hormuz, within 48 HOURS from this exact point in time, the United States of America will hit and obliterate their various POWER PLANTS, STARTING WITH THE BIGGEST ONE FIRST!"

After three weeks of war, the Trump administration has begun initial discussions on what peace talks with Iran might look like, Axios' Barak Ravid and Marc Caputo report.

• Why it matters: President Trump said Friday that he's considering "winding down" the war, though U.S. officials said they expect two to three more weeks of fighting. In the meantime, Trump's advisers want to start laying groundwork for diplomacy.

🔎 Behind the scenes: Trump's envoys Jared Kushner and Steve Witkoff are involved in the discussions around potential diplomacy, sources say.

• Any deal to end the war would need to include the reopening of the Strait of Hormuz, address Iran's stockpile of highly enriched uranium, and establish a long-term agreement on Iran's nuclear program, ballistic missiles and support for proxies in the region.
• There has been no direct contact between the U.S. and Iran in recent days, though Egypt, Qatar and the U.K. have all passed messages between the two, a U.S. official and two additional sources said.
• The Iranian demands include a ceasefire, guarantees that the war will not resume in the future, and compensation.

What's next: The sources said Trump's advisers want to be prepared if talks with Iran take shape in the near future. The Witkoff and Kushner terms will be similar to the ones they presented in Geneva two days before the war started.

• Keep reading.

Elon Musk took the stage in Austin last night for what he called a "profoundly important announcement … the most epic chip-building exercise in history, by far." His goal: producing 1 trillion watts (1 terawatt) of compute power per year, most of it deployed in space.

• Why it matters: Musk said his Terafab chip-building project — a joint effort of his Tesla, xAI and SpaceX companies — is "the next step towards becoming a galactic civilization" and turning "science fiction to science fact."

Rendering above: Musk said the project will kick off with an advanced technology fab (semiconductor manufacturing facility) in Austin — headquarters of Tesla and home of its Gigafactory. His Neuralink, Boring, and SpaceX companies also have growing Texas operations.

• Musk's ambition is to manufacture his own chips for AI, humanoid robots and space data centers.
• Speaking with dramatic lighting at a historic power plant in downtown Austin, Musk said his "existing supply chain" is "much less than we would like. And so we either build the Terafab, or we don't have the chips."

Musk "showed an animation of how SpaceX could potentially launch satellites from the surface of the moon," Bloomberg notes, "and reiterated his vision for a future filled with 'amazing abundance' — something he has been touting in recent months."

• For instance, he said anyone who wants to will be able to fly to Saturn.

Watch the announcement.

Skiers donned leis and swimsuits in 50° weather yesterday at Arapahoe Basin ski resort in Summit County, Colo.

• Denver International Airport hit 86° at 4:53 p.m., making it the Mile High City's hottest March day in 119 years — the third record-breaking day in a row. The previous record for March was 81° in 1907.

Sen. Markwayne Mullin (R-Okla.), nominated for Homeland Security secretary, has negotiated for weeks with centrist Rep. Josh Gottheimer (D-N.J.) on terms to end the Homeland Security shutdown, the N.Y. Times' Michael Gold scoops.

• Key provisions include requiring federal immigration agents to obtain judicial warrants "for forced home entry, unless in hot pursuit," and effectively barring civil immigration enforcement actions at sensitive locations, including hospitals, churches, schools and polling places.

👂 What I'm hearing: House Minority Leader Hakeem Jeffries is good with the Mullin-Gottheimer terms, though he'd prefer including a requirement that immigration agents "stop hiding behind masks with impunity." But Senate negotiations aren't as far along.

• Keep reading (gift link).

Several Democratic senators — including a liberal "Fight Club" of Sens. Chris Murphy of Connecticut, Elizabeth Warren of Massachusetts and Tina Smith of Minnesota — are incensed by Senate Minority Leader Chuck Schumer's midterm strategy and are plotting to get the New Yorker to step aside as leader, The Wall Street Journal reports:

"In more than four dozen interviews with Democratic senators, candidates, current and former congressional aides, activists and advisers, many said the concern about Schumer's leadership was widespread. Meetings between Democratic chiefs of staff on Senate business often veer into airing discontent with Schumer and how to pressure him to step aside as leader after November's elections."

Schumer told the Journal that criticism of congressional leaders "goes with the territory — it's true for anyone who's a leader." He said his "support in the caucus is deep and strong, because people feel I've done a very good job" of positioning Dems to flip the Senate in November.

• But liberal senators contend Schumer "favors centrist candidates in some key races and is disregarding the enthusiasm a new crop of outsiders is stoking," the Journal reports.

Keep reading (gift link).

Robert Mueller, the former FBI director who as special counsel probed President Trump and Russian interference in the 2016 election, died at 81 on Friday night. His family said last year he was battling Parkinson's disease.

• Mueller's probe resulted in a series of criminal cases against people in Trump's orbit and earned him the president's lasting ire, Axios' Ben Berkowitz and Avery Lotz write.

At the FBI, Mueller set about almost immediately overhauling the bureau's mission to meet the law enforcement needs of the 21st century, beginning his 12-year tenure just one week before the Sept. 11 attacks and serving presidents of both parties.

• He was the second-longest-serving director in FBI history, behind only J. Edgar Hoover. (AP)

Former President George W. Bush said: "Bob dedicated his life to public service. As a Marine in Vietnam, he proved he was ready for tough assignments. He earned a Bronze Star and a Purple Heart before returning home to pursue law. In 2001, only one week into the job as the 6th Director of the F.B.I., Bob transitioned the agency mission to protecting the homeland after September 11. He led it effectively, helping prevent another terrorist attack on U.S. soil."

• Former President Obama wrote: "Bob Mueller was one of the finest directors in the history of the FBI, transforming the bureau after 9/11 and saving countless lives. But it was his relentless commitment to the rule of law and his unwavering belief in our bedrock values that made him one of the most respected public servants of our time."

N.Y. Times obit by Tim Weiner (gift link).

Illinois Gov. JB Pritzker (D) got a big laugh at last night's 141st annual Gridiron Dinner when he said: "I still love reading Washington Post writers — which is why I subscribe to The Atlantic."

• Another banger: "I put the 'gov' in 'Wegovy.'"

The white-tie dinner at the JW Marriott in Washington drew 560+ journalists, media execs, lawmakers, ambassadors and military officers.

🐘 The GOP speaker was Arkansas Gov. Sarah Huckabee Sanders, who began: "As a Republican, I'm this year's Gridiron DEI hire."

• "My father was governor of Arkansas," she noted. "Huckabee, not Clinton. We checked."
• "The best thing for me about being out of the White House: I don't have to wear those Florsheim shoes."

President Trump was invited, like every president since Grover Cleveland, but didn't come.

• ABC News' Jon Karl, the emcee, came onstage talking into his iPhone, pretending to negotiate with Trump to swing by: "What if we called it the Donald J. Trump Gridiron Dinner?"