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National

Most House Republicans haven’t even begun to dig into the GOP leadership's 230-page debt ceiling bill, but some key lawmakers are already signaling they are prepared to vote for it.

Why it matters: House Speaker Kevin McCarthy (R-Calif.) hopes that showing he can get 218 votes for a debt ceiling increase and corresponding budget cuts finally could bring the White House to the negotiating table.

"I think it forces [Democrats] to come to the table because that shows you don't have the votes to move anything else," one House Republican told Axios.

But President Biden insisted he won't negotiate spending cuts over the debt ceiling: "Take default off the table and let's have a real serious conversation," he said in a Wednesday speech.

What we're hearing: "With what my understanding is of what's in there ... frankly, we got in there what we asked for," Rep. Bob Good (R-Va.), a member of the right-wing Freedom Caucus, told Axios.

Rep. Dan Bishop (R-N.C.) – another Freedom Caucus member who said on Tuesday he is "not there yet" – said Wednesday it is a "very meaningful and robust plan" and he's "very impressed with where we ended up."

Rep. Don Bacon (R-Neb.), a leading centrist, told reporters: "Most of us that I talked to that were in the Biden districts were supportive of it."

What caught our eye: Bishop, among the 20 House Republicans who voted against McCarthy for speaker on multiple ballots, offered praise for his erstwhile adversary on Wednesday.

"[Democrats] certainly have been floating the notion that they didn't think we can get to 218," he said, "And I think they underestimate ... how very well the speaker has undertaken the leadership role he has entered."

The state of play: Democratic campaign operatives are attacking vulnerable Republicans over the spending cuts in the bill — but Biden-district members insist they're not worried about selling it back home.

Rep. Mike Garcia (R-Calif.), whose district went for President Biden by 12 percentage points in 2020, told Axios he is "confident" about how the bill will play with his constituents. 

"This notion that we're killing the federal government — we're getting back to responsible spending that's pro-growth, pro-taxpayer," he said.

Bacon argued that the bill's work requirements and repeal of Inflation Reduction Act tax credits are "frankly, very popular" with voters.

What we're watching: Conservatives are signaling that they won't dilute the spending cuts, meaning McCarthy may have to turn to Democrats to pass any deal struck with the White House.

"This is the deal. This isn't the negotiating [position]," Good said of the GOP bill, "And we need to be willing to walk away if the Senate and the president don't accept it ... it requires all of this to get to 218."

have already begun attacking vulnerable Republicans

GOP holdouts coalesce around McCarthy's debt ceiling bill

“Most of us that I talked to that were in the Biden districts were supportive of it."

Photo: Kent Nishimura / Los Angeles Times via Getty Images

Congress

Politics & Policy

Whats Next

Axios What's Next

Airlines, aviation officials and the TSA are all telegraphing an alarming message for travelers: Flying is shaping up to be an absolute nightmare this summer.

Why it matters: It's unusual for all these powers that be to hint so loudly that we're in for a rough few months — and travelers would be wise to heed their warnings.

Tuesday's Southwest Airlines snafu, where data connection issues briefly halted departures, is a reminder of how quickly a relatively small problem can cause big headaches.

Driving the news: The TSA expects a potential record number of travelers to pass through the country's airports this summer, administrator David Pekoske told Bloomberg in a new interview.

"I expect that we're going to see very, very strong demand all the way through the summertime, and that's what we're preparing for," Pekoske said.

"It'll be a challenge, but we've faced this challenge in prior years and we’ve been able to be successful at it."

Meanwhile, several major airlines are trimming summertime service amid concerns about air traffic control staffing levels.

Staffing at a key New York-area control facility, for instance, is at about half of target levels. Nationwide staffing is at about 80%.

Because the national airspace system is so interconnected — and because New York is such a busy area — problems there can easily reverberate nationwide.

Be smart: Controller staffing problems are partially a remnant of the COVID-19 pandemic, which slowed the hiring and training process.

The intrigue: In anticipation of a potentially record-setting summer, the FAA is letting airlines fly fewer flights to reduce stress on the national airspace system without the risk of losing their "slots" at key airports.

Normally, airlines need to operate a certain number of flights to prevent their slots — essentially permission slips to service particular airports — from being reassigned to rival carriers.

Airlines are also favoring bigger planes, CNBC reports, in a bid to serve more passengers with fewer total flights.

And the FAA is reassigning some airspace around Newark Liberty International Airport to Philadelphia approach controllers to lighten the load on those in New York.

Reality check: Prepare as they might, it looks increasingly likely that the country's airlines and airports are going to be absolutely slammed this summer.

Throw in a thunderstorm or hurricane, and you've got a recipe for travel disaster.

The bottom line: If you've got plans to fly this summer, get to the airport early, prepare for delays and cancellations, and have a Plan B — and maybe C and D — ready.

Brace yourself for a summer of air travel hell

It's unusual for all these powers that be to hint so loudly that we're in for a rough few months.

Illustration of a golden airplane wing pin with a woozy or confused emoji.

Airlines

Transportation

Top stories & latest news on the Federal Reserve, real-time data, plus the biggest shifts happening in the U.S. and global economy.

Economy

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Sneak Peek

Axios Sneak Peek

House Speaker Kevin McCarthy proposed a debt ceiling increase on Wednesday of $1.5 trillion — paired with a package of spending cuts.

Why it matters: If McCarthy can get Republicans to pass the plan through the House — which is far from certain — he'll have something concrete in negotiations with the White House. 

In a speech on the House floor, McCarthy said the plan includes the following spending cuts: 

Setting discretionary spending at Fiscal Year 2022 levels

Ending President Biden's student loan forgiveness

Repealing some Inflation Reduction Act tax credits

Text of the legislation should be posted on Wednesday, McCarthy told Punchbowl News. 

A floor vote is expected next week. It would be dead on arrival in the Democratic-controlled Senate.

Between the lines: Economists are now warning the debt ceiling could come faster than expected with lower tax collections.

The bumpy economy could force the timeline to speed up from August to as early as June.

Back in February, the Congressional Budget Office said it expected a budget deficit of $1.4 trillion in 2023.

Behind the scenes: McCarthy's wrangling has alienated multiple members of his leadership team. 

In a speech on Wednesday, he said House Budget Chair Jodey Arrington (R-Texas) will lead the legislation. 

The bottom line: 16 of the 222 House Republicans have never voted for a debt ceiling hike, Axios' Stef Kight reported in February.

McCarthy unveils $1.5 trillion debt ceiling package

The plan is still fluid, but is expected to target GOP spending cut priorities.

Pro Rata

Axios Pro Rata

Staple Street Capital bought Dominion Voting Systems in 2018, with a $38 million equity check and an $80 million enterprise value. It might have been the best private equity deal ever.

Driving the news: Dominion yesterday agreed to drop its defamation lawsuit against Fox News, in exchange for $787.5 million.

The settlement came just as opening arguments were set to begin, with high-profile witnesses like Rupert Murdoch waiting in the wings. 

Fox News acknowledged in a statement that the court found that it aired false claims about Dominion, but it did not apologize. The settlement does not require Fox News or anchors like Maria Bartiromo to tell on-air viewers about the falsehoods.

By the numbers: Denver-based Dominion will be required to pay taxes on its windfall, plus give a hearty portion to attorneys. But this is still a massive amount of cash for a company of its size.

Dominion currently generates around $45 million in annual EBITDA, up from $10 million in 2018, according to comments this morning from Staple Street co-founder Hootan Yaghoobzadeh on CNBC. 

In terms of revenue, Forbes once reported that Dominion generated $118.3 million for the three-year period between 2017 and 2019.

Fox Corp. has just over $4 billion of cash on hand, and may have an insurance policy that helps it defray some of the settlement costs.

Look ahead: Yaghoobzadeh told CNBC that settlement proceeds will be distributed to shareholders, adding that Dominion management and employees "own a very significant stake in the business."

Dominion also has pending defamation lawsuits against right-wing cable news networks Newsmax and One America News (OAN), plus against Overstock.com founder and former CEO Patrick Byrne, pillow magnate Mike Lindell, Rudy Giuliani and attorney Sidney Powell. 

Fox News, meanwhile, remains subject to a $2.7 billion defamation complaint brought by election tech company Smartmatic. It also was recently sued by a former producer for allegedly trying to manipulate her pre-trial testimony in the Dominion case, and some shareholders reportedly are agitating for more records related to the Dominion situation. 

The bottom line: Staple Street had a growth plan for Dominion, which the EBITDA increase indicates was successfully executed. But what moved this from a decent private equity deal into an all-timer were Fox's lies and Dominion's insistence on getting payback.  

Fox News settlement turns Dominion into private equity gold

Staple Street Capital paid just $38 million to buy Dominion in 2018.

Illustration of lady justice with an “I voted” stickers blindfold over her eyes

Dominion- Fox News lawsuit

Media

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Israel is using its relationships with the generals leading the Sudanese military and paramilitary Rapid Support Forces (RSF) group to urge them to immediately end the fighting that has left more than 270 people dead, three Israeli officials said. 

Why it matters: Israel's normalization process with Sudan in the last three years and the relationships it built with both Army chief Gen. Abdel Fattah al-Burhan and RSF leader Gen. Mohamed Hamdan Dagalo, known as Hemedti, put it in a unique position to try to influence the two warring generals.

Israel also has motivation. Israeli officials told me they are highly concerned that the current fighting will devastate the country, prevent the formation of a civilian government, and end any prospects for a peace agreement between Israel and Sudan.

Catch up quick: Sudan was part of the Trump-brokered Abraham Accords between Israel and several Arab countries in 2020. 

But the military takeover of Sudan a year later led to the suspension of U.S. aid and the freezing of the normalization process between Israel and Sudan.

Behind the scenes: The Israeli Foreign Ministry in recent years has been engaging with al-Burhan on the normalization process, and the Mossad intelligence agency has been engaging with Hemedti on security and counterterrorism issues, Israeli officials said.

Before the fighting began, Israeli officials said they were closely following the talks in Sudan about the framework agreement that was supposed to lead to the appointment of a civilian-led government.

When Israeli Foreign Minister Eli Cohen visited Khartoum in February, he urged al-Burhan to move forward with giving power back to a civilian government and made it clear that it will be difficult to reach a peace treaty without it.

A senior Israeli official said that last week the Israeli government was sure that an agreement on appointing a civilian government was coming in days, if not hours, and was frustrated when the deal fell apart and the fighting began over the weekend. 

Israeli officials said that the White House and State Department on Sunday urged Israel to help in pressing the two warring generals to agree to a cease-fire. Israeli Foreign Ministry officials spoke to al-Burhan’s side, while officials from Mossad spoke to the Hemedti side and urged both to de-escalate.

What they are saying: "We are following with concern the events in Sudan. Israel wants stability and security for Sudan," an Israeli Foreign Ministry spokesperson said. 

"Israel calls on all parties to refrain from violence and to return to the path of internal reconciliation, in order to conclude the process of governmental transition with a large consensus."

The big picture: Israel is just one of several countries that have interests in Sudan and have been involved in the political situation in the northeast African country African country, including in the current crisis.

Saudi Arabia, the United Arab Emirates and Egypt are deeply involved in Sudan. Hemedti accused Egypt of colluding with al-Burhan and sending fighter jets and soldiers to help the Sudanese military. Egypt denied the allegations and said its forces were in Sudan for a joint military exercise.

Saudi Arabia and the UAE have been a destination for many Sudanese political leaders in recent years. Both countries are also part of the “Quad for Sudan” group, which includes the U.S. and U.K. as well. 

Other countries and international organizations, including Norway, the UN and the African Union are also involved in the situation in Sudan.

Russia also has interests in Sudan. According to several reports, the Wagner mercenary group is involved in gold mines in the country. A day before the Russian invasion of Ukraine, Hemedti visited Moscow and met Russian officials.

What to watch: The Israeli official decision was not to take sides in the crisis and not get involved in any mediation efforts other than urging a cease-fire, the three Israeli officials said.

But the officials added that they think the best way to stop the fighting is for the African Union and several of Sudan’s neighbors to urgently send a delegation to Khartoum and start diplomatic talks and give guarantees to both sides that will convince them to stop fighting.

Editor's note: This story has been corrected to reflect Sudan is in northeastern Africa (not West Africa).

Israel fears Sudan unrest could end prospects of peace treaty

Israel is using its relationships with the generals leading the Sudanese military and the RSF to urge them to end the fighting.

Axios

Wednesday's top stories

GOP holdouts coalesce around McCarthy's debt ceiling bill

Brace yourself for a summer of air travel hell

McCarthy unveils $1.5 trillion debt ceiling package

Fox News settlement turns Dominion into private equity gold

Israel fears Sudan unrest could end prospects of peace treaty

Women lawmakers come to Feinstein's defense

Trump takes DeSantis fight to Florida

Rapidly developing El Niño set to boost global warming

Record 64M Americans facing daily spikes in deadly particle pollution

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