Schumer's Redemption, Nikki’s 250th Anniversary & Seinfeld to The Free Press

Plus Tax Reform Jitters & Pile Up at the FDA

Welcome back to The Red Letter! It’s been a brutal week for Chuck Schumer after he voted for the Republican-backed funding bill. But there may be an opportunity for him to get his mojo back, and soon. In this newsletter and in the interview above with Republican Governor Kelly Armstrong of North Dakota, we discuss some of the quiet concerns Republicans are feeling about passing President Donald Trump’s hallmark legislation—tax reform. 

But before we get into it, some murmurs from around town... 

Print This One Out for Trump: Public Relation mogul Richard Edelman, a registered Saudi Agent who somehow manages to run the “Trust Barometer” at the World Economic Forum in Davos, has a new client—America250. Sure, everyone in D.C. seems to have a contract with Saudi Arabia or Qatar, but to win major deals like America’s 250^thAnniversary and the Saudi Golf LIV league may seem like a bridge too far for those who consider things like, say, human rights. I doubt this would disturb Trump, who seems happy to wheel-and-deal with the Saudis. After all, he just hosted the PGA commissioner and the LIV golf chair at the White House last month to work out a deal between the two leagues. Important stuff! Everything is transactional—unless, of course, you’ve slighted him, like deciding to run against him for President. So when I learned that Edelman had also hired Nikki Haley as as Vice Chair, I knew that would be the rub. Just the thought of Haley being somehow attached to the pageantry of his 250^th Anniversary bonanza would surely make Trump apoplectic. An Edelman spokesperson got back to me on Friday morning to clarify that despite their press release announcing her hire, she’s just a part-time consultant working on trade and will not be working on America250 in any capacity.

Seinfeld to The Free Press:  No, it’s not Jerry, but his 24-year-old daughter Sascha who has joined the ranks of Bari Weiss’s burgeoning newsroom from The Daily Beast, where she produced Joanna Coles’s podcast with Samantha Bee. Last year, Weiss posted a gripping podcast with Jerry on which he was brought to tears while talking about his Jewish roots. If Sascha is anything like her father, she will be a strong addition to Weiss’s newsroom as she continues to add pro-Israel writers. 

FDA ‘Junkyard’: Back to the office isn’t going so smoothly at the Federal Drug Administration, the agency under Robert F. Kennedy Jr, which saw its ranks expand during the COVID crisis and is now overwhelmed in its existing space. The parking lot looks like a “junkyard,” one agency official told me, with staffers parking on sidewalks, crosswalks, next to fire hydrants, in the grass, and making two spaces into one. Once inside, officials don’t have desktops, keyboards, or monitors. They’re sharing closets because of a lack of office space. “If they’re not in a closet, they’re working on folding tables and folding chairs in public places,” the official said. “It’s not just that they’ve been shoved into a small space, but everyone's afraid of being fired.” It gets weirder from there. Every few hours, they get instructions to change their signatures, like dropping the pronouns, or to send bullet points on what they’re doing. “Morale is very low, everyone's just terrified and fighting for their jobs, it’s very low energy,” the official said. Not a great thing to hear from the agency that monitors everything from the bird flu to baby formula.  

                         How Schumer Gets his Groove Back

Republicans have had a remarkable two week stretch—they made Schumer blink and pass the continuing resolution. He in turn had his ass handed to him by everyone from Nancy Pelosi to AOC. But in the next two months there is a high probability that Republicans will be crawling back to Schumer when they have to raise the debt ceiling again, something that no Republican wants to put on their scorecard. Trump relied on Democrats three times during his first term to raise the limit. In fact, just 65 Republicans in the House and 17 in the Senate voted in favor of it in 2019. Given this dynamic, it would seem impossible to pass it along a party-lines through reconciliation. It’s only happened four times in history and surely Republicans are not in a position to make that happen when they only have two to three votes to lose. Raising the debt ceiling is the critical first step before passing the real prize for Republicans—tax reform. 

The trap for Republicans could be the thing that gives Schumer his mojo back—an opportunity to restore his reputation by winning some concessions for Democrats. But after this past week, the expectations from the party are going to be steep. 

“The Democratic party is in a fighting mood,” said a longtime GOP Senate aide. “The reality of what [Schumer] can get is a different story. They’re not going to shut down DOGE for him. Either way, it’s going to be a bad trade for Republicans.”

Republicans tell me they are starting to wake up to the fact that passing tax reform is not a given. For one thing, they still haven’t agreed on a budget. The Senate is pushing for two bills and the House is pushing for one. They don’t have the votes in the Senate so they have to pass the bill through reconciliation, which means that the bill must be budget neutral. The Senate Parliamentarian still hasn’t tipped her hand as to whether she thinks the existing tax policy they’re essentially trying to extend is budget neutral.

“If she is to rule against that, all hell is going to break loose, because then I don't know how they pay for this thing,” said another Senate source. 

But even Republicans who are terrified of Trump, have privately remarked to me that it’s nearly impossible to deliver on the “goodies” that Trump promised on the campaign trail like no tax on tips, overtime, or social security while keeping the bill budget neutral. Some fear the only option is to slash entitlements, if they are going to balance the budget, but that could be political suicide before the midterm elections. Then there are the members from high-tax states like New York, New Jersey, and Connecticut, who helped deliver Republicans the majority, and want to lift the cap on state and local tax deductions. 

“Everyone has been living in Lalaland, and the rubber is hitting the road that this is going to be hard,” said the second Senate source.

“All of this is expensive, and the longer it sits out there, the more slings and arrows you take.” 

It’s also no secret that 13 House Republicans, including Elise Stefanik of New York, defected the first time Trump tried to pass tax reform in 2017. This time, they can only afford to lose two to three votes in the House. There were also a handful of tax wonks crafting the bill like Speaker Paul Ryan, Ways and Means chairman Kevin Brady, Treasury Secretary Steve Mnuchin, and National Economic Council Gary Cohn. Many fear Trump is wasting precious political capital on trade wars and impeaching judges, like POLITICO’s Rachael Bade reported. 

Governor Armstrong, a former Congressman who identifies as MAGA, told me there’s an 85-percent chance that tax reform is passed in the packaging that Trump promised. 

“I think the downside to not doing it is having the Senate, the House, and the White House effectively implement a tax increase,” Armstrong said. 

 “The alternative is untenable for Republicans when they hold all three.” 

I’ve heard a few ways to go about passing the bill. Some suggest that they make it too big to fail, and ensure there’s something in it for everyone, so they can’t say no to it. Of course, that makes it nearly impossible to achieve budget neutrality. Rep. Thomas Massie of Kentucky is a reliable “no” vote. He’s already been threatened with a primary by Trump’s attack dogs Elon Musk, Tony Fabrizio, Mike Davis, and Chris LaCivita. Massie has survived these challenges before, claiming to be more MAGA than any of them. But the pressure cooker created by Trump’s political apparatus and his popularity within the party is undeniable. Everyone clearly fears him right now. Just watching Senator Joni Ernst collapse under the pressure to confirm Pete Hegseth was telling. That may be easy when Trump’s approval rating is at an all-time high, (not for all Presidents). But with Trump, easy is no guarantee.