Note: We are going to take a break today from discussing what is going on in Minneapolis as there is also plenty of other political news. That subject will be back tomorrow (although our first item is about the immediate political impact of events there, which we first addressed in yesterday's posting).

Senate Democrats Will Block DHS Funding

The outrage in the country about CBP killing a second American citizen in cold blood (and on camera) in Minneapolis is giving Democrats an opening. There will be a government shutdown on Saturday unless Congress passes six necessary spending bills, including one for DHS. Senate Democrats are planning to use their leverage to force changes to ICE. In particular, they will filibuster funding unless there are accountability measures for ICE included in the budget bill. It takes 60 votes to invoke cloture so bills can be passed but Republicans have only 53 seats in the Senate. This is what gives Democrats some power and they say they will use it.

Senate Minority Leader Chuck Schumer (D-NY) issued a statement yesterday afternoon that read in part: "What's happening in Minnesota is appalling—and unacceptable in any American city. Democrats sought common sense reforms in the Department of Homeland Security spending bill, but because of Republicans' refusal to stand up to President Trump, the [Department of Homeland Security] bill is woefully inadequate to rein in the abuses of [Immigration and Customs Enforcement]. I will vote no. Senate Democrats will not provide the votes to proceed to the appropriations bill if the DHS funding bill is included."

He isn't the only one. Sen. Patty Murray (D-WA), the ranking member of the Senate Appropriations Committee, tweeted on Saturday that she no longer supported the DHS bill. Sen. Chris Murphy (D-CT), the ranking member of the Homeland Security appropriations subcommittee, said: "I don't think we will look sincere in our moral outrage about what's happening in DHS if we vote to fund a budget that puts no constraints on their illegal, inhumane operations." Sen. Tim Kaine (D-VA) said he would not vote for the Homeland Security bill without significant amendments. Sen. Catherine Cortez Masto (D-NV) said the administration is "putting undertrained, combative federal agents on the streets with no accountability." Sen. Amy Klobuchar (DFL-MN) is furious about what ICE is doing in her state and will not vote for DHS funding. Sen. Angus King (I-ME) ditto. Sen. Jacky Rosen (D-NV) and Sen. Martin Heinrich (D-NM) both said "Enough is enough." They won't vote for the bill either. Heinrich added that major reforms are needed at DHS. Other Democratic senators made similar statements, but this group includes some of the key votes (specifically, Kaine, Rosen, and Cortez Masto) that allowed the can-kicking bill to pass a couple of months ago.

What might "reform" look like? If Democrats really want to go to the mat on this, they could write into the law some provisions that rein in the worst things ICE is doing, including forbidding agents from wearing masks and requiring agents to wear name tags with their last name and a unique personnel number. There could be a provision mandating that ICE turn over all evidence to state authorities if the state AG has a suspicion that a state law was violated. All criminal and civil immunity for agents who violate state or federal law could be stripped. The idea would be to tackle the problem from the bottom up, making it clear to agents that they can be prosecuted, convicted, and imprisoned for violating state laws. There could also be provisions to tackle the problem from the top down, for example, limiting the kinds of weapons ICE agents may carry and requiring at least 3 months of training, including training on citizens' legal rights to follow and record them and conditions under which they are allowed to use lethal force. To ensure compliance, the funding could last only 3 months. If ICE complied, Congress could take up a new funding bill for the rest of the year. If ICE didn't comply, no more funding. Would Donald Trump like this? Probably not, but the power of the purse lies with Congress. Politically, this might not be a bad fight for Democrats to pick.

If Schumer sticks to his guns—which would be something new for him—another shutdown is likely, as Republican senators don't want to anger Donald Trump, who wants the funding with no strings attached. One potential compromise to save most of the government would be to split off the DHS funding from the package and pass the rest while debating what to do to rein in ICE. However, that would require the House to come back from its recess to pass the new stripped-down package.

An additional complication is that the chair of the Senate Appropriations Committee is Sen. Susan Collins (R-ME), who is in the fight of her life for reelection. ICE invaded Maine last week and arrested over 100 people in Portland and Lewiston. This was widely condemned by Mainers. If Collins tries to pass the funding bills as is, with $10 billion for ICE, Democrats will beat her over the head with that during her campaign. But if she sides with Schumer and strips ICE funding from the package, at least for the moment, Donald Trump will be more furious with her than he already is and will try to defeat her in November. She is concerned and is exploring all options. Since Democrats see her as their top Senate target this year, they are unlikely to help her out of this bind.

Republican Senators were mostly hiding over the weekend. Sen. Bill Cassidy (R-LA), who is also in the battle of his life for reelection, said: "The credibility of ICE and DHS are at stake. There must be a full joint federal and state investigation. We can trust the American people with the truth." On the other hand, Sen. Bill Hagerty (R-TN), who is also up in 2026 but not under any pressure, blamed Gov. Tim Walz (DFL-MN) in this tweet: "Instead of bowing to his socialist flank, what Schumer should be doing is telling [Gov. Tim Walz] to stop encouraging violence and let law enforcement do its job. He must turn the rhetoric down and all the chaos is on his hands." (V)

Trump Threatens 100% Tariffs on Canada

Donald Trump has a limited repertoire of maneuvers that he uses over and over. He has a very strong preference for one-on-one "deals" rather than multilateral deals. This way he can isolate his opponent, especially if the opponent is smaller or weaker than himself in some way. One of his favorite plays is to make outlandish threats unless the opponent gives him something he wants. Given the outlandishness of the "deal," the opponent rarely gives in. Then Trump can "settle" for a deal not quite as outlandish as his first proposal.

The most recent example occurred on Saturday, when Trump posted this bleat on his "Diplomacy? What's that?" social media network:

If Governor Carney thinks he is going to make Canada a "Drop Off Port" for China to send goods and products into the United States, he is sorely mistaken. China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life. If Canada makes a deal with China, it will immediately be hit with a 100% Tariff against all Canadian goods and products coming into the U.S.A.
Thank you for your attention to this matter!
President DJT

There is so much to unpack here. First, communication between world leaders is not done by bleating on your private social media network. Typically, important messages are given in direct phone calls between the leaders or between the secretary of state and foreign minister. Posting a message somewhere and hoping that the other leader sees it is insulting, especially so with a (former?) ally.

Second, Canada is not a state and will never be a state and Mark Carney is not a governor. He is a prime minister. It is not acceptable to insult foreign leaders, especially (former?) allies. Trump would never dare do this with Chinese President Xi Jinping, who is roughly his equal in many ways. Xi would never accept this and would take action to make sure Trump got the message very quickly. Bullies pick only on people weaker than themselves. Always.

Third, China has no intention of destroying Canada. It just wants favorable deals for food and other resources. If Carney wants a deal to sell agricultural products, lumber, minerals, or other products, Xi will bargain hard for a good price, but Carney will not accept a deal that destroys the social fabric of Canada. Xi does not mind this. He just wants a good price for the stuff he is buying. Xi's focus is on building up China's economy, not destroying other countries.

Fourth, Trump is not going to levy a 100% tariff on Canadian exports. It is an idle threat meant to intimidate Canada. The American automobile industry is now widely distributed across Canada, the U.S., and Mexico (as a result of the USMCA, which Donald J. Trump signed on Jan. 29, 2020). Putting a 100% tariff on auto parts would wreak havoc with the auto industry and cost the Republicans dozens of House seats in the Midwest. It would also cause the prices of new houses to skyrocket because many of them are built using Canadian lumber, which would become twice as expensive, if available at all. Home buyers might just notice the huge price spike. Democratic politicians, too.

Fifth, and finally, before he was a politician, Mark Carney was an economist and banker who held several posts of enormous prominence (e.g., Governor of the Bank of England). He's spent decades up to his ears in international finance. Trump is not going to be able to pull the wool over his eyes when it comes to the viability of these sorts of financial shenanigans. It's like trying to intimidate a former general by telling him you'll shoot his country with your secret death ray.

So what is Trump doing and why? This is primarily a response to Carney's speech at the World Economic Forum in Davos, where Carney said that middle-size powers should band together to be able to stand up to bigger powers. Trump didn't like that and when he is angry, he always lashes out, without thinking through the consequences. In the end, he typically gives in one way or another, and the status quo ante remains in place. If he does impose 100% tariffs, he will no doubt exempt car parts, construction materials, oil, gas, uranium, electricity, and everything else Canada exports to the U.S. except maybe hockey pucks and maple syrup, and then brag to his base what a great dealmaker he is. (V)

Europe Might Not Play Ball

Donald Trump has temporarily taken an invasion of Greenland off the table, but that could turn on a presidential whim. Nevertheless, he still insists he must have the island, one way or another. For him, closing the world's biggest real estate deal has become an obsession and Europe has to deal with it.

European prime ministers and foreign ministers are just beginning to realize that the old ways of doing diplomacy don't work with Trump. Appealing to his sense of morality doesn't work because he doesn't have any. Appealing to history doesn't work because he knows nothing about history. Appealing to international law doesn't work because he sees all laws as nuisances to be ignored. Appealing to the value of NATO doesn't work because he sees NATO as a rip-off. Besides, like all bullies, he views anyone he thinks is weaker than he is with contempt.

So far, diplomacy, flattery, and appeasement have all failed. What else is on the menu? A trade war is one option. Millions of American jobs depend on trade and millions of the people who will lose their job in a trade war voted for Trump. They aren't going to blame Nancy Pelosi for their unemployment and the resulting recession. A small step in this direction is killing the trade agreement that Ursula von der Leyen agreed to, with 15% tariffs on European exports to the U.S. and 0% tariffs on U.S. exports to Europe. A trade war could also tank the stock market, which could influence the votes of people when they see their 401(k) accounts nosedive.

Another option is invoking the E.U. anti-coercion instrument. It gives the E.U. the power to impose tariffs, restrict imports, and even curtail intellectual property rights. Oracle, Microsoft, and other U.S. software companies would not be happy if the E.U. voided their patents and copyrights and said anyone could duplicate the software for free with no fear of being punished for it.

But perhaps the most intriguing idea is not about economics but about... soccer. The 2026 World Cup will be hosted by Mexico, the U.S., and Canada. Trump covets the attention it will bring very much. An idea being bandied about is to have all the European teams boycott the Cup. That would reduce the value of the Cup to almost nothing and be a kick where Trump really feels it—in his ego. Left-wing French parliamentarian Eric Coquerel tweeted: "Seriously, can we imagine going to play the World Cup in a country that attacks its 'neighbors,' threatens to invade Greenland, destroys international law, wants to torpedo the UN, establishes a fascist and racist militia in its country, attacks the opposition, bans supporters from about 15 countries from attending the tournament, plans to ban all LGBT symbols from stadiums, etc.?" Center-right German parliamentarian Roderich Kiesewetter told a newspaper reporter: "If Donald Trump carries out his threats regarding Greenland and starts a trade war with the E.U., I find it hard to imagine European countries participating in the World Cup." If Trump takes action to actually carry out his threats, these calls will only grow.

Actually boycotting the Cup would require the heads of the national soccer organizations to get on board. Some of them are beginning to realize that sports and politics are now and forever intertwined. Witness the calls to ban Israel's team to punish Israeli Prime Minister Benjamin Netanyahu. What once seemed farfetched could become a weapon if Trump keeps at it. (V)

Young Voters Are Through with Trump

Republicans were delighted when young voters—especially Black and Latino voters—went for Trump in unprecedented numbers in 2024. They thought they had found the secret key and turned them all into Republicans. There is an increasing amount of polling data suggesting that nothing of the kind happened. These voters didn't like the economy and some of them were not keen on voting for a Black woman. That is not the same as becoming a Republican.

Here are the data about young voters from three recent quality polls.

Pollster	Age range	Approve	Disapprove	Net
YouGov	18-29	36%	62%	-26%
Siena University	18-29	26%	69%	-43%
SSRS	18-34	30%	69%	-39%

When reporters talked to young voters about why they disapprove of Trump, this is what they were told: First, they want to see results quickly, and the prices have not gone down since Trump was inaugurated. Second, they do not have as much party loyalty as older voters. Third, they view Trump's policies as more extreme than they expected. Fourth, the podcaster Joe Rogan, who is popular with young men, has soured on Trump on account of ICE. Rogan said: "You don't want militarized people in the streets just roaming around, snatching up people—many of which turn out to be U.S. citizens that just don't have their papers on them. Are we really going to be the Gestapo: 'Where's your papers?' Is that what we've come to?"

John Della Volpe, a pollster at the Harvard's Institute of Politics, runs focus groups. He recently said of Trump: "In our spring focus groups, many seemed willing to give him some time, but that goodwill is dissipating fast—especially when daily life feels so expensive, and Trump's attention has turned elsewhere."

Both Democratic and Republican operatives have seen the data and reports about the focus groups. Republican operatives are simply denying the data. Danielle Alvarez, a senior advisor to Trump's 2024 campaign, said: "It's hard to argue with people who are consistently and incredibly wrong. Four weeks before the 2024 election, media-sponsored polls insisted Kamala Harris was ahead in key battlegrounds. The results speak for themselves." That attitude—"There's no need for us to do better"—is not going to win the midterms. (V)

Peace Through Skyscrapers

Jared Kushner wants to build 180 skyscrapers in Gaza. It will be a marvelous and peaceful place. It will be Dubai, but with better weather. Tourists and companies will flood in. Gaza will be transformed from the (actual) image of what it looks like now (on the left below) to what some AI bot thinks it will look like in the near future (on the right). What could possibly go wrong?

In Kushner's hallucination vision, Gaza will have a coastal tourism zone with all those modern skyscrapers, many of them hotels or office buildings. There will also be two new cities, New Rafah, with 100,000 housing units, 200 schools, and 75 medical facilities, and New Gaza, which would be a center of industry that would generate full employment. There will also be a modern port and airport. It sounds great, with only a couple of minor problems that need to be ironed out:

• What about the Palestinians?: In Kushner's plan, the 2 million people who live in Gaza play no role. He, his co-developers, and maybe Saudi Crown Prince Mohammed bin Salman (MbS), are calling all the shots. Will the locals be happy to let a handful of developers and a foreign dictator redevelop their land as a profit center? The photo on the right above looks more like a real estate ad to show to potential buyers than a plan to build a country from scratch.
  
  
• What will the status of Gaza be?: Will Gaza become a regular country and a member of the United Nations Donald Trump's Board of Peace? Will any other country recognize it? Especially Israel? What will its relation with the West Bank be, if any? If they become separate countries, will people from one be allowed into the other? Does the Palestinian Authority have any future role or will it quietly vanish when the current aged and corrupt leadership dies off?
  
  
• Who will rule Gaza?: Missing in the plan is the small detail of who will rule Gaza. Will it be a democracy? An oligarchy? A colony of Saudi Arabia? Will it have an army? If not, who will defend it? Who will run the show during the many years of construction and who will feed the people during this period? Does it matter if the people there don't especially like whatever arrangement Kushner cooks up?
  
  
• What will Hamas do?: None of this works if Hamas remains an armed terrorist organization bent on driving out all foreigners. Hamas leaders have said they will turn in their weapons only to a functioning Palestinian army that is part of a Palestinian state. Until then, they are planning to hide all their weapons for future use. Also, suppose some hotels get built and Hamas sets off bombs in them once in a while. With people lugging large suitcases into the hotels every day, smuggling in bomb parts won't be that hard. Also, some Hamas members could get jobs in "hotel security" in order to let terrorists in. What will happen to tourism if a bomb goes off every couple of months? Gaza probably won't make Forbes Travel Guide's list of the world's best tourist destinations, in that scenario.
  
  
• Where will the money come from?: Building all this stuff will cost hundreds of billions of dollars (and take many, many years, assuming the current truce holds). Who is going to pay for it? Saudi Arabia could toss a few billion into the pot to start the ball rolling, but it will take far more money than even Saudi Arabia can provide. Also, from MbS' point of view, does he really care if there is another Dubai in the area? What's it to him? Will private developers want to risk building in such an unstable area, where a bomb could destroy a billion dollars' worth of property in a flash, or war could break out at any moment?
  
  
• What industry?: New Gaza is supposed to be an industrial center, making things. New factories could either be fully automated, in which case they do not offer much employment, or not automated, in which case they need a (somewhat) skilled workforce, of which there is currently none. What could Gaza possibly make that Asian countries can't make much better and cheaper?

In short, this doesn't seem to be a serious plan that is going to have the buy-in from the major players in the area: the Palestinian people, Hamas, and Israel. Unless, of course, Trump buys both Gaza and Greenland and ships all the current residents of Gaza to Greenland, which has a couple of problems of its own. But a guy can hallucinate dream, can't he? (V)

House Subpoenas People in Epstein's Inner Circle

On Friday, the House Oversight Committee issued subpoenas to several of Jeffrey Epstein's closest "associates" to come and have a nice chat with the Committee. These included Leslie Wexner, Darren Indyke and Richard Kahn. Democrats fought to get them subpoenaed and ultimately won because if the Republicans refused to interrogate people who were close to Epstein, it might look like a cover-up, which the Democrats could exploit in the midterms.

Wexner, a billionaire, was long Epstein's "benefactor." He is mentioned at least 89 times in the Epstein documents released so far. They had complicated financial dealings the Committee would like to explore. He may not be a reliable witness, though. In a transcript of a 2011 phone interview, Epstein's victim Virginia Giuffre was asked about Wexner. She said: "I think he has relevant information, but I don't think he'll tell you the truth." It could well be that Wexner appears on one or more of those DVDs Epstein made of visitors to his island. That might explain why Wexner was Epstein's "benefactor." Another recently released message was from a reporter to Ghislaine Maxwell, asking her about a claim that Giuffre was forced to have sex with many people, including Wexner. Maxwell forwarded the message to Epstein, who replied: "It is so salcisous [sic] and ridiculous, im [sic] not sure how to respond, the only person she didn't have sex with was Elvis."

Indyke was Epstein's lawyer. Now the lawyer has a lawyer, Daniel Weiner, who is also representing Kahn, Epstein's accountant. Weiner responded to the subpoena by saying: "It is worth emphasizing that not a single woman has ever accused either Mr. Indyke or Mr. Kahn of committing sexual abuse or witnessing sexual abuse, nor claimed at any time that she reported to them any allegation of Mr. Epstein's abuse." This could well be true in that the people accusing his clients are men. Also, it may well be so that they didn't partake in the activities on the island personally, but know a lot about it. In May 2006, Epstein was indicted for procuring a minor for prostitution. He pleaded guilty and received a sweetheart deal in which he was sentenced to 18 months in prison, but was free to go home during the daytime and had only to sleep in prison every night. Indyke was Epstein's lawyer for years and was paid millions for his services. He might know quite a bit about Epstein's many crimes.

Kahn, the accountant, might be able to shed light on the more than 4,000 bank transactions using Epstein's account at J.P. Morgan Chase. The Committee might want to know who was on the other end of the transactions, why were there so many, and what were they for?

It is likely that the witnesses have interesting stories to tell. Will they tell them or plead the Fifth Amendment? Or maybe take the easy route and just lie? (V)

How Soon They Forget

After the 2008 financial crisis, Congress passed laws in an attempt to prevent another meltdown. Among other things, Congress passed the 848-page Dodd-Frank Act, which created the since-gutted Consumer Financial Protection Bureau and did many other things to reduce the rampant speculation the banks had been doing until it all fell apart. The banks didn't like Dodd-Frank at all. It required them to maintain large cash reserves and liquid assets (like T-bills) that could be used in an emergency. This was money that they couldn't loan out at high interest rates. The laws also blocked many risky practices the banks engaged in because they led to large profits—if everything went well (which it didn't in 2008).

Treasury Secretary Scott Bessent knows all this very well. He has a long history in the financial world, including starting and running a billion-dollar hedge fund, initially with George Soros' money back when Bessent was a Democrat.

However, it looks like Bessent either has a very short memory or some very greedy friends. He is now in the process of quietly dismantling as many of the Dodd-Frank and other 2008 regulations as quickly as he can. Bank executives will no doubt be very pleased, knowing that if all goes well they can make huge profits and if it does not go well, the taxpayers will bail them out. Just as one example, banks are now allowed to own cryptocurrencies themselves. If there is a sudden drop in crypto, having a large cash buffer could help them weather the storm. However, if that buffer is too small, a bank could find itself insolvent and that could lead to a bank run and other problems. Will we get a new financial crisis as a result? We don't know, but Bessent is paving the road for it.

In particular, previous Treasury secretaries left regulation to the judgments of the various agencies in the department. Bessent is centralizing that and amassing all the power in his own hands. This way, people who still remember 2008 and don't want a repeat will be sidelined and not get in his way.

Sen. Elizabeth Warren, the ranking member of the Senate Banking Committee and a fierce opponent of the banks, is very upset about Bessent giving the banks free rein. She said: "Our financial cops on the beat are no longer independent from the White House—and they are certainly not independent from Wall Street. Secretary Bessent has spearheaded Trump's Wall Street First agenda that is good for bank executives and billionaire hedge fund investors while leaving the economy vulnerable to another financial crash." Specifically, Bessent wants to give the banks more leverage and that is precisely what Warren thinks is dangerous. (V)

Republicans May Hold a Convention This Year

On Friday, the RNC gave in to Donald Trump's wish and updated its bylaws to allow the Party to hold a "midterm convention" to highlight all of Trump's "achievements," like deporting hundreds of thousands of people. The idea is to get Republican voters all fired up to vote. The Republicans have never held a midterm convention before, but the Democrats held some in the 1970s.

The most likely locations are Las Vegas or Dallas, probably in the early fall, just before early voting starts. The convention would be very different than presidential nominating conventions, where the delegates are elected during the primaries. The RNC is not planning to have elections for delegates. Most likely, each GOP state party would send the allowed number of party hacks to the convention, all carefully vetted to make sure they toed the party line.

Unlike the nominating conventions, where there is sometimes some excitement, such as "Who will the veep be?," this one is likely to be very predictable and not good television, so ratings could be disappointing. It may attract some of the MAGA faithful, but probably not a lot of others. That said, Lee Greenwood can surely use the work. (V)

Talarico and Crockett Debated

There are exciting senatorial primaries upcoming in Texas. State Rep. James Talarico (D) and fire-breathing U.S. Rep. Jasmine Crockett (D-TX) are vying for the Democratic nomination to take on whoever wins the Republican nomination. If Texas AG Ken Paxton (R) wins it and faces Talarico, the Democrats have a puncher's chance, otherwise probably not.

On Saturday, the first Democratic debate took place before hundreds of union members and their families at the annual Texas AFL-CIO political convention. Talarico, a Presbyterian seminarian, was looking to win over Republicans disgusted with what has happened to their party. Crockett, who is Black, was looking to engage Black voters. Surprisingly, the affair was rather low key, with no fireworks. On issues of likely interest to union members, there wasn't a lot of difference between them.

Crockett understands that she is a firebrand and a lot of Democrats don't like her at all. She tried to pre-defend herself by saying that these are not normal times and these are not times for normal responses. She said: "We are not looking at politics as usual." She promised to do edgy things that political consultants tell candidates never to do. For one thing, she wants to destroy ICE—which she called a rogue organization— and impeach Homeland Secretary Kristi Noem.

Talarico wasn't in the mood for arguing about anything. He emphasized his experience in the Texas state legislature to show that he knew what Texans wanted. He also talked about his background as a schoolteacher and a Presbyterian seminarian. The intention was to give off a calming image, not a wild, out-of-control image.

An Emerson College poll taken last week shows Talarico with a 9-point edge. On the Republican side, it showed Paxton with a 1-point edge over Cornyn. The Republican establishment will move heaven and earth to get Cornyn nominated. That said, if the Party decided, then Donald Trump would never have become president. (V)

Amy's In

Although Sen. Amy Klobuchar (DFL-MN) is the #3 Democrat in the Party leadership, she doesn't think it is worth being in the Senate anymore. She has now filed the paperwork to run for governor of Minnesota. She is not up in 2026. Since Minnesota does not have a "resign-to-run" law, she will remain in the Senate all year. If she wins, she can delay resigning until after she is sworn in next January, in which case she can appoint her replacement. If she loses, she just continues being a senator until her current term runs out, or runs for reelection in 2030.

Her candidacy wasn't in the cards at all last year until Gov. Tim Walz (DFL-MN) unexpectedly decided not to run for reelection. His decision came after a welfare fraud scandal in Minnesota got renewed attention recently. He wasn't involved in it, but it happened on his watch.

With Minneapolis so much in the news now, Klobuchar is going to have to answer many questions about how she would have done things differently than Walz and what she is going to do to clean up welfare fraud. Her statements about ICE and her vote on removing DHS funding will be inspected with a microscope. On the other hand, Minnesota is a pretty blue state, so she is already the odds-on favorite, no matter whom the Republicans nominate. (V)

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