House Republicans blanched at the Pentagon's reported $200 billion price tag for Iran, but many are embracing the eye-popping number to help energize a stalled reconciliation process.

Why it matters: GOP leaders have struggled to build consensus around a "reconciliation 2.0" package. But injecting a must-pass defense spending bill into the equation will give Speaker Mike Johnson the urgency he needs to bring it to the floor.

• 🚪 The Pentagon's request "opens up the door to a second reconciliation package," Rep. Michael Cloud (R-Texas) said.

🔎 Zoom in: Any reconciliation process is typically painful and prolonged. And on this one, coming less than a year after the $3 trillion One Big Beautiful Bill Act, the math will be close to impossible — if deficit neutrality is the goal.

• 💬 Expect to hear lots of talk about "offsets" from fiscal hawks.
• "I would just want to see a pay-for. I think reconciliation probably is the best vehicle," Rep. Brandon Gill (R-Texas) said.
• "No blank checks," Rep. Chip Roy (R-Texas) told us. "It needs to be paid for or be a part of a reconciliation package."

The other side: The Senate is decidedly cooler on using a second reconciliation bill to replenish the munitions the Pentagon has used for Operation Epic Fury in Iran.

• "I understand the need to get this through, but it seems to me that it would be best to go through the appropriations process," Senate Appropriations Chair Susan Collins (R-Maine) told Semafor.

What we're hearing: House Budget Chair Jodey Arrington (R-Texas), one of the most vocal backers of reconciliation 2.0, has floated using tariff revenue, cuts to government programs and changes to Affordable Care Act cost-sharing reduction payments as potential offsets.

• "There are savings in reforms on the affordability side and on the anti-fraud side. Again, the question is, how big can we go?" Arrington told us.
• "How big can we get some of the members in more competitive districts who have higher levels of political sensitivity?"

💰 Yes, but: Those same pay-fors could alienate moderates, especially in swing districts.

• Rep. Brian Fitzpatrick (R-Pa.) said lawmakers need details on "offsets" and "oversight," adding that funding for Ukraine should be included if funding for Iran is added.
• House Ways and Means Chair Jason Smith (R-Mo.), who has been skeptical Republicans can pass another mega-bill, told us this week there isn't a consensus in the conference to include defense spending in reconciliation.

The bottom line: The addition of Iran funding could be key to unlocking President Trump's attention. His engagement will almost certainly be needed if GOP leaders want to pass another party-line bill when they have an even smaller majority than last year.

• "He's not a process guy. He's a results guy," Arrington told us of Trump. "The president wants the result to be money to support our troops in this conflict."

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— Kate Santaliz

Rep. Alexandria Ocasio-Cortez (D-N.Y.) told us she is keeping the door open to endorsing challengers to her House Democratic colleagues "if someone crosses some huge line."

Why it matters: That could spell bad news for Minority Leader Hakeem Jeffries, whose interest lies in getting as many of his incumbents reelected as possible.

• Ocasio-Cortez hasn't endorsed a primary challenge to a sitting member in years and even signaled to colleagues during her run for House Oversight Committee ranking member that she may abandon the practice altogether.
• ⚡️ But, asked in an interview at the Capitol about endorsing against incumbents, she told us: "Obviously, if someone crosses some huge line, it's never something that I rule out."
• "It would have to be kind of an egregious thing," she added.

🕊️ Ocasio-Cortez has extended some notable olive branches to party leadership — including telling us last year she didn't think a primary challenge against Jeffries was a "good idea."

• "Regardless of whether I get involved in a race or not, you're never going to see me disavow someone for wanting to participate in that process," she added.

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— Andrew Solender

Sen. Elizabeth Warren (D-Mass.) and her allies are looking ahead to the Minnesota Senate Democratic primary to build on the win they just lodged against the cryptocurrency industry in Illinois.

Why it matters: Crypto is wading into Democratic primaries to boost pro-crypto candidates with the industry's colossal war chest. Warren is showing up to fight back.

• 📢 A Warren-endorsed candidate — Lt. Gov. Juliana Stratton — won the Illinois Senate Democratic primary Tuesday, despite a major pro-crypto PAC spending nearly $10 million opposing her campaign.
• Warren campaigned for Stratton — who was significantly outspent by rival, Rep. Raja Krishnamoorthi — in Chicago last weekend. Warren also used her expansive digital fundraising list to raise money for Stratton.
• 🚨 Other Democratic candidates should look at Stratton's win as a cautionary tale about the consequences of "embracing the deregulatory demands of the crypto industry," a Warren ally told us.

👀 What's next: Warren, the top Democrat on the Senate Banking Committee, has also endorsed Minnesota Lt. Gov. Peggy Flanagan in the state's Aug. 11 primary.

• Flanagan's opponent, Rep. Angie Craig (D-Minn.), received an "A" rating from Stand With Crypto, which assigns grades to lawmakers based on their friendliness to the industry.
• Flanagan received an "F." Stratton was also given an "F," and Krishnamoorthi got an "A."

A Warren political adviser tells us that the senator "is not going to let dark money groups handpick compliant members of Congress to further rig the system in favor of the wealthy and well-connected."

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— Stephen Neukam