| | | | |  | | By Rachael Bade and Eugene Daniels | | Presented by |  | | | With help from Eli Okun, Garrett Ross and Bethany Irvine
| | | |  | DRIVING THE DAY | | | HOPING FOR A CHRISTMAS MIRACLE — Russian President VLADIMIR PUTIN just held his annual live news conference, where — per AP’s Vladimir Isachenkov — he “made his first comments on the downfall of Syrian President BASHAR AL-ASSAD" and addressed the fate of (another) long-detained American. “The Russian leader said that he hadn’t yet met Assad, who was given asylum in Moscow, but plans to do so and will ask him about AUSTIN TICE, an American journalist who went missing in Syria 12 years ago. ‘We also can pose the question to people who control the situation on the ground in Syria,’ Putin said.”
|  Elon Musk arrives on Capitol Hill on Dec. 5, 2024, in Washington. | Anna Moneymaker/Getty Images | JOHNSON VS. MUSK — Just two days before a planned Christmas break, Speaker MIKE JOHNSON finds himself mired in a total shitstorm, facing down the threat of a government shutdown and demands from an incoming president that he cannot easily deliver on. Yesterday, Trump ally ELON MUSK banded with conservatives in the House and outside influencers to effectively tank a bipartisan government funding deal that included disaster aid and billions in farm assistance. The complaint? That Uncle Sam was spending like a drunken sailor and needs to tighten the pursestrings quickly. But then Trump and VP-elect JD VANCE dumped gasoline on the fire. In a lengthy tweet, they criticized Johnson’s CR deal as “a betrayal of our country,” and demanded that Johnson raise the debt ceiling or eliminate it entirely. “Increasing the debt ceiling is not great but we’d rather do it on Biden’s watch,” said the joint Trump-Vance statement. “Let’s have this debate now. And we should pass a streamlined spending bill that doesn’t give [Senate Majority Leader] CHUCK SCHUMER and the Democrats everything they want.” The request for a debt ceiling hike blindsided many on Capitol Hill. But it didn't come out of nowhere, we're told. In-the-know sources tell us that Trump has privately pushed Johnson to quickly raise the debt ceiling since the election, hoping to clear the decks for his post-inauguration sprint. The speaker, we're told, refused to take the request seriously — probably because he knows any debt ceiling increase would mean major concessions to Democrats, which could in turn mean kissing his speaker's gavel goodbye. Johnson’s not wrong about that: Even before Trump made his debt ceiling demand, some conservatives were so peeved with the CR that they were threatening to oppose Johnson’s bid for speaker early next year. Are those members really going to get behind a snap debt ceiling hike just because Trump said jump? But the Trump world’s point of view is this: If Johnson had heeded Trump’s advice from the start, the president-elect would have protected him from any conservative blowback, allowing him to emerge with his gavel intact. Now, Trump and his brain trust feel frustrated that Johnson gave away concessions to Democrats without giving Trump the debt ceiling hike he wanted. THE ELON FACTOR: But here's the thing — Johnson probably wouldn't be in this position if it weren't for Musk, who spent all day Wednesday stoking rage on the right over Johnson's deal. There was little evidence Trump cared much about the CR before that. We’re told that Trump’s team was aware of the contours of the deal and did not object. It was not a matter of debate during Saturday's Army-Navy game discussion, which focused mostly on reconciliation. And we're also told Republicans passed off the details of the deal to those close with Trump. So the most prominent theory of what happened yesterday is this, per multiple Hill Republicans: Musk, as the anointed co-chair of the so-called Department of Government Efficiency panel, got waaay out over his spending-slashing skis and backed Trump into a corner. Senior Hill Republicans are super peeved that Musk — whom they see as an ally in cutting government waste starting next year — began making demands that are impossible to placate with a Democratic president and Democratic Senate still in control. His tweeting against the bill — often with totally false accusations, as Daniella Diaz and Katherine Tully-McManus report — further complicated what was already a difficult whip count. Under this theory, Trump got caught flat-footed as Musk’s opposition spread like wildfire, igniting the right — and thus had to chime in with his own concerns. WHAT NOW: Johnson is in a bind, to say the least. On the one hand, he’s struck a deal with Democrats that all but seems dead. It seems unlikely he can scrounge up enough votes to get the bill through a two-thirds suspension vote, which would involve allowing Democrats to overwhelmingly carry the vote, which — again — is not great for his speakership prospects. But he’s also out of time to potentially re-negotiate something new. It’s Thursday morning. Funding runs out tomorrow at midnight. Traditionally, these sorts of negotiations take weeks. And, by the way: Raising the debt ceiling will prompt conservatives to demand further spending cuts, only prolonging talks. So good luck with that. We chatted with multiple sources last night, and no one seems to know the way out. Johnson can’t just freely give Trump what he wants — a debt ceiling increase — without Democratic buy-in, given they control both the Senate and White House. And remember, past debt ceiling negotiations have gone along with long-term spending cap deals, where Democrats have keenly protected their own interests in non-defense discretionary spending. Would Trump (and Musk) be okay with Johnson doing that for Democrats? THE DEM POV: We’re told Democrats have zero interest in helping bail Johnson out, even as some of them actually feel bad for him given that he’s tried to negotiate in good faith only to get railroaded by a tech billionaire-slash-political-novice who very clearly has zero idea how Capitol Hill works. Schumer, we’re told, was on the floor huddling with his members amid the chaos last night telling them that this was the company line: “We have a deal with Republicans, and we’re sticking with it.” House Minority Leader HAKEEM JEFFRIES tweeted something similar. Congrats, Speaker Johnson. Welcome to the speakership in the age of Trump. Good Thursday morning. Thanks for reading Playbook. Drop us a line: Rachael Bade and Eugene Daniels.
| | | | A message from Instagram: Congress can help keep teens safe online today.
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Tell lawmakers: support a national standard requiring app store parental consent and age verification for teens. | | | A FEW ADDITIONAL OBSERVATIONS: — The entire situation is absurd on many levels. Musk and his Twitter cronies are threatening to essentially primary Republicans who back a typical end-of-year spending bill before Trump is even in office. Our prediction? That these primary threats are gonna get old really fast with Hill Republicans as Musk & Co. burn their political capital. — Moving forward, Johnson will have to placate not only Trump, but also Musk — the man some Republicans in Trump world half-jokingly call “President Musk” or “Vice President Musk,” who is now firing off tweets and breaking things a la Trump circa 2017. As a businessman, he’s bragged about the mass firings he’s done at the companies he’s taken over. But you can’t fire members of Congress so easily. — Yes, the chances of a government shutdown are now dramatically greater given the ticking clock. But as always, the holiday jet fumes will mean lawmakers won’t want to be here all that long. Don’t bet against a little Christmas miracle. SPEAKING OF MUSK … Victoria Guida puts Musk and Ramaswamy’s government efficiency machine under the microscope in her latest Capital Letter column: “DOGE Can’t Do It All. Here’s What It Can Do” PLAYBOOK REAL ESTATE CORNER — HOWARD LUTNICK, the Commerce secretary-designate, is officially buying BRET BAIER’s opulent D.C. mansion, WSJ’s Katherine Clarke and E.B. Solomont scoop. “Lutnick is slated to close this week on the purchase of the French Château-style house in the Foxhall area, local agents said. Baier and his wife, Amy Baier, listed the property for $31.9 million last year. It was most recently asking $28.995 million, according to Zillow. … While Lutnick’s contract price couldn’t be determined, agents said the deal could set a record for the D.C. area, topping the $24 million sale of a Georgetown home in 2007.
| | | | A message from Instagram:   | | | | | WHAT'S HAPPENING TODAY | | On the Hill The Senate is in. The House will meet at 9 a.m. 3 things to watch …
- The Social Security Fairness Act is set for final passage this afternoon after 73(!) senators voted to advance it yesterday — a pretty stunning tally for a bill that is estimated to cost $195 billion and deplete the Social Security trust fund six months earlier. But by changing benefit calculations for some government retirees, it will result in significantly higher payouts for about 2 million seniors — and it’s hard to argue with the politics of that. Case in point: The only non-Republicans who voted no were two near-retirees: TOM CARPER (D-Del.) and JOE MANCHIN (I-W.Va.).
- Is there any hope for bipartisan border talks? Sen. MARKWAYNE MULLIN (R-Okla.) tells Axios there are “very secret” talks afoot with a small number of Democrats but there is both reason to be intrigued and reason to be extremely wary of any such efforts. Yes, Republicans want to tackle the border through reconciliation but there are some key measures — like asylum changes — that likely can’t be done that way. But as Daniella Diaz and Nick Wu reported for Inside Congress last week, there is not a lot of trust among Democrats with Trump right now — and a long trail of failed negotiations hanging over everything.
- As Republicans eye new work requirements for federal benefits as they look to implement their 2025 agenda, some Democratic senators are looking to put a spotlight on some potential abuses of existing such programs. As NYT’s Noah Weiland reports, they want a federal watchdog investigation into Georgia Pathways to Coverage, the only existing Medicaid work requirement program, “accusing its administrators of churning through tens of millions of dollars in funding while enrolling a fraction of the low-income residents estimated to be eligible for it.” Expect to hear plenty more as the GOP — and DOGE — look for ways to scale back spending.
At the White House Biden will receive the President’s Daily Brief in the morning. In the afternoon, the president and first lady JILL BIDEN will depart Wilmington, Delaware, to return to the White House.
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Pete Hegseth, President-elect Donald Trump's nominee for secretary of Defense, walks to a meeting on Capitol Hill, Dec. 3, 2024. | Francis Chung/POLITICO | REPORT REQUEST — At least a dozen senators are pushing to see the FBI’s background check on PETE HEGSETH, Trump’s embattled pick to lead the Defense Department — a rare move for the committee that oversees his confirmation and a sign the former Fox News host still faces hurdles in the Senate, Joe Gould reports. “Unlike some other committees, the Senate Armed Services usually limits access to these types of background checks to its two lead senators. But pressure is building from both Democrats and Republicans to provide more lawmakers with the ongoing report” amid a stream of allegations and negative headlines over the past few weeks that has put Hegseth on defense across the Hill. Sen. SUSAN COLLINS (R-Maine), a potential swing vote: “It would be helpful, given the allegations that have been lodged against Mr. Hegseth, to be able to see the FBI background check.” More top reads:
- But their emails: Federal officials are worried about sharing documents via email with Trump’s transition team because the incoming officials are eschewing government devices, email addresses and cybersecurity support, Alice Miranda Ollstein reports. Some agency employees are considering insisting on in-person meetings and document exchanges in light of recent hacking attempts from China and Iran that targeted top Trump officials.
- From pro-choice to multiple choice: ROBERT F. KENNEDY JR. appears to have acquiesced on abortion. Sen. JOSH HAWLEY (R-Mo.) said after his meeting with RFK Jr. that the HHS nominee “was ‘open’ to reimposing some restrictions on access to the abortion pill mifepristone,” NOTUS’ Oriana González reports. “He said he was open to that,” Hawley told reporters. “He indicated to me he wanted to support the president’s pro-life agenda.”
THE ECONOMY
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Federal Reserve Chairman Jerome Powell testifies before the House Financial Services Committee on Capitol Hill June 23, 2022. | Francis Chung/POLITICO | FED UP — The Fed yesterday “signaled greater doubt over how much it would continue to cut rates after agreeing to a reduction,” but one that officials said was a close call, WSJ’s Nick Timiraos writes. The details: “The latest cut, approved by 11 of 12 Fed voters, will lower the Fed’s benchmark federal-funds rate to a range between 4.25% and 4.5%, a two-year low. The Fed reduced rates at its two previous meetings, beginning with a half-percentage-point reduction in September amid signs the labor market might be weakening. Officials approved a quarter-point cut last month.” What they’re saying: “Today was a closer call but we decided it was the right call,” Fed Chair JEROME POWELL told reporters. “From here, it’s a new phase, and we’re going to be cautious about further cuts.” The headline Trump will care most about: “US stocks fall sharply and Dow tumbles 1,100 points after the Fed hints at just 2 rate cuts for 2025,” by AP’s Stan Choe Smart read: “The Next Big Fed Debate: Has the Era of Very Low Rates Ended?” by Timiraos More top reads:
- The U.S. economy is still digging out from the height of the Covid-19 pandemic era, closing the calendar year in a fairly stable position. As for 2025? Amid Trump’s tariff threats, vow to deport millions of undocumented immigrants, tax cut proposals and much more, the U.S. is heading down a certifiably uncertain road, NYT’s Ben Casselman writes.
CONGRESS THE DEM MARCHING ORDERS — Sen. CHRIS MURPHY (D-Conn.) sat down with The New Republic’s Greg Sargent on his podcast, “The Daily Blast,” to talk about how Democrats are responding to the Trump transition period and the looming Trump 2.0 administration. The topline? Democrats aren’t doing enough to resist. On DOGE: “Why did we all of a sudden decide to take [Musk’s] government efficiency task force seriously? Why are we acting as if this is legitimate?” Murphy said. “I don't think enough Democrats are sounding the red alert … When regular people see Democrats treating all of this as normal, they start to believe it’s normal. And it’s not normal. We have to start telegraphing that to people.” On challenging the Trump nominees: “Just because it is unlikely that we are going to defeat these nominees doesn’t mean that there [isn’t] great efficacy in having the fight. … If you don't signal outrage at how Trump is fundamentally shifting our conversation around the health of democracy now, then I don't think people will believe it later.”
| | | | A message from Instagram:   | | | JUDICIARY SQUARE TRUMP’S NEXT LEGAL TARGET? — “Trump allies suggest Illinois Gov. JB Pritzker should be sued for calling Trump a ‘rapist,’” by Shia Kapos SCOTUS WATCH — Abortion is headed back onto the docket at the Supreme Court. The justices decided yesterday to “hear arguments over the legality of an S.C. Department of Health and Human Services-led effort to cut off Planned Parenthood's access to state and federal funding for family planning services,” the Post and Courier’s Nick Reynolds writes. POLICY CORNER FOR GOOD MEASURE — The Justice Department’s Office of Professional Responsibility is conducting a review “to determine whether special counsel JACK SMITH and his team of prosecutors ran afoul of any agency regulations when prosecuting Donald Trump, according to court filings, a letter to Congress and people familiar with the probe,” WaPo’s Perry Stein and Jacqueline Alemany report. DOJ “opened the review after a prosecutor reported that a defense attorney in one of Trump’s cases had accused him of misconduct.” The opening of the report is standard DOJ procedure when wrongdoing is alleged. AMERICA AND THE WORLD DON’T CRY FOR MILEI — Argentinian President JAVIER MILEI says that “will help boost his free-market overhaul of Argentina as this large South American nation, which had long kept the U.S. at arm’s length, repositions itself closer to Washington,” WSJ’s Ryan Dubé writes from Buenos Aires. “In an interview, the 54-year-old firebrand said he is betting Trump is likely to champion Argentina’s bid to get billions of dollars in new financing from the International Monetary Fund. Milei also said he expects Trump would be inclined to negotiate a free-trade agreement with Argentina.” DANCE OF THE SUPERPOWERS — “Corruption in China’s Military Threatens Its Readiness, U.S. Says,” by WSJ’s Nancy Youssef and Chun Han Wong
| | | | POLITICO Pro's unique analysis combines exclusive transition intelligence and data visualization to help you understand not just what's changing, but why it matters for your organization. Explore how POLITICO Pro will make a difference for you. | | | | | | | PLAYBOOKERS | | Andy Kim discovered some pretty awesome congressional history. Paris Hilton’s youth treatment facilities reform bill is headed to Joe Biden’s desk. Andy Beshear is talking like he’s running. So is Glenn Youngkin. Bob Bauer and Jack Goldsmith are on Substack now. Eric Adams suggested that Tom Homan could play a role in crafting changes to NYC’s sanctuary city laws. OUT AND ABOUT — At the annual White House press office holiday party, staffers and reporters mingled over a potluck lunch. Our own Eugene Daniels and Emilie Simons spoke, James Rosen gave a tribute to Martha Kumar, and Greg Clugston rendered his 26th annual “Twas the Night Before Christmas” poem about the year’s news. SPOTTED: Jeremy Edwards, Kelly Scully, Steve Holland, Zeke Miller, George Condon, Linda Kenyon, Jared Halpern, Courtney Rozen, Brian Bennett, Weijia Jiang, Ed O’Keefe, Steven Nelson, Anita Powell, Rodney Batten, Josh Wingrove and Tamara Keith. — SPOTTED at the Ben Wikler for DNC Chair reception last night: Reps. Gwen Moore (D-Wis.), Mark Pocan (D-Wis.) and Jan Schakowsky (D-Ill.), Bob Cramer, Kim Anderson, Kristian Ramos, Mia Ives-Rublee and JB Poersch. — SPOTTED at Chanukah celebration hosted by Rep. Debbie Wasserman Schultz (D-Fla.) last night: House Minority Whip Katherine Clark, Reps. Kathy Manning (D-N.C.), Dan Goldman (D-N.Y.), Brad Schneider (D-Ill.), Brad Sherman (D-Calif.), Morgan McGarvey (D-Ky.), Darren Soto (D-Fla.), Jerry Nadler (D-N.Y.), Greg Landsman (D-Ohio), Lois Frankel (D-Fla.), Jared Moskowitz (D-Fla.), Kim Schrier (D-Wash.), Jake Auchincloss (D-Mass.) and Sheila Cherfilus-McCormick (D-Fla.), FCC Chair Jessica Rosenworcel and Deborah Lipstadt. FIRST IN PLAYBOOK — Steven Giaier will be chief counsel in Sen. John Barrasso’s (R-Wyo.) majority whip office. He most recently was general counsel for House Republican Conference Chair Elise Stefanik (D-N.Y.) and is a Kevin McCarthy alum. MEDIA MOVE — Anna Massoglia is launching a Substack, called “Influence Brief,” and will also work as an independent consultant for various groups. She previously was editorial and investigations manager at OpenSecrets. TRANSITIONS — Former Rep. Filemon Vela (D-Texas) was appointed by Democratic Leaders Chuck Schumer and Hakeem Jeffries to co-chair the congressional Commission on the Future of the U.S. Navy alongside Mackenzie Eaglen, who was appointed by Speaker Mike Johnson and GOP Senate Leader Mitch McConnell. … Taylor Deacon is joining Rep. LaMonica McIver’s (D-N.J.) office as comms director. She previously was deputy comms director for Rep. Don Davis (D-N.C.). … Lauren Ziegler is now chief of staff for Rep. Brian Babin (R-Texas). She most recently was a legislative affairs specialist for NASA’s Kennedy Space Center and is a Babin alum. … … Anatole Jenkins, Brandon Thompson and Jose Nunez are launching Contrast Campaigns, a new strategic comms organizing firm. The trio all met while working on then-Sen. Kamala Harris’ 2020 presidential campaign and have already been advising clients such as Harris’ 2024 campaign, the DNC, League of Conservation Voters and Lt. Gov. Eleni Kounalakis’s Californians for Choice. WEDDING — Jim Joice, director of crisis comms at Target Corp and a Steve Watkins alum, and Allie Mikulka, with Qualtrics, got married on Saturday at the Riggs Hotel among family and close friends. The two were set up at a Kansas political convention in 2019. Pic HAPPY BIRTHDAY: Reps. Lauren Boebert (R-Colo.), Adrian Smith (R-Neb.) and Pat Fallon (R-Texas) … DOD’s Chris Meagher … DoorDash’s Maggie Polachek … retired Marine Gen. Jim Jones … Ronan Farrow … Tal Kopan of the Boston Globe … CNN’s Josh Freedom du Lac … former Sen. Rob Portman (R-Ohio) … Puck’s Teddy Schleifer … Bronwyn Lance … Jenny Murphy … Michael Duncan of Cavalry … Ann Lewis … NPR’s Kelsey Snell … Ethan Todras-Whitehill … Ryan Jackson … Treasury’s Nicole Lindler … Sameer Punyani … Amy Best Weiss of American Express … Patrick Ventrell … Kelsey Moran … Erin Taylor of the Climate Reality Project … Shannon McGahn of the National Association of Realtors … POLITICO’s Alec Gaffney, Emily Yehle and Robert Gramer … Rebecca Edgar … Chloe Brown of SHEIN … Max McClellan … Denise Grant of Overlook Strategies … Isabel Pellegrino … Tomicah Tillemann … Sean Gallitz ... Molly Fratianne … David Lauteri … NEC Corporation’s Tak Tada Did someone forward this email to you? Sign up here. Send Playbookers tips to playbook@politico.com or text us at 202-556-3307. Playbook couldn’t happen without our editor Mike DeBonis, deputy editor Zack Stanton and Playbook Daily Briefing producer Callan Tansill-Suddath.
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