Washington, DC

1. Immigration funding in focus
2. Sexual misconduct reckoning
3. Talks back on track
4. Gulf’s DC reach

Shares in a basket of psychedelic stocks ▲ 20% after Trump’s order to expedite research.

Senate Republicans plot budget sprint

Senate Republicans plan to finalize their budget resolution tomorrow, setting up a party-line immigration enforcement spending bill. Senate Majority Leader John Thune said the entire GOP conference will discuss the budget for a bill providing three years of funding for ICE and border protection. “It’s a narrowly crafted piece of legislation. But, obviously, we will hear from all of our colleagues with their reaction to what it is that we’ve got out there,” Thune said. The budget resolution will need a simple majority vote to proceed, followed by a maximum 50 hours of debate, an amendment vote-a-rama, and a final vote to send it to the House. Only then can the party craft a party-line spending bill. Some Republicans want to do a third budget reconciliation bill after that, but Thune said he “can’t make any guarantees” with such narrow majorities.

— Burgess Everett

Ethics panel reveals record on sexual misconduct probes

The usually secretive House Ethics Committee spoke up today and laid out its record on sexual misconduct investigations, as Capitol Hill faces a reckoning after the resignations of Eric Swalwell and Tony Gonzales. The committee said in recent years it has “adopted a more aggressive and robust approach” to such allegations, launching 20 investigations into members of Congress since 2017, including five cases that were not public previously. Inquiries into Swalwell and Gonzales ended when they resigned and the committee lost jurisdiction. The panel disclosed an ongoing sexual misconduct investigation into Rep. Cory Mills, R-Fla., whom The Washington Post reported DC police nearly arrested earlier this year after a woman called about an alleged assault. The panel also said it has not received any notifications of sexual harassment-related settlements by members of Congress, required under #MeToo-era reforms.

— Nicholas Wu

Islamabad talks appear on track

A second round of US-Iran talks looks like a go — for now. Iranian officials told mediators they would send representatives to Islamabad for talks this week and the White House announced Vice President JD Vance will lead the US delegation, which is expected to depart Tuesday. Peace negotiations appeared to stall this morning after a dramatic weekend in the Gulf, where Iran closed the Strait of Hormuz again and the US military struck and seized an Iranian commercial ship — an act an Iranian official called “piracy.” President Donald Trump reiterated his threat to strike Iranian power plants and bridges if a deal isn’t reached; the US-Iran ceasefire expires on Wednesday. Meanwhile, the State Department will host another round of talks between Israel and Lebanon amid a 10-day ceasefire between the countries. Iran has said any deal would require an end to Israeli operations in Lebanon.

Caution, not retreat

At Semafor World Economy, it was clear that Gulf countries still have a voice in Washington — even if they didn’t choose this war — and many investors are eager to get back to business in the region. On whether the shaky ceasefire will hold or the war will flare again, current and former US officials were divided. Most see the negotiations moving in the right direction — this was before Tehran said they wouldn’t be attending talks this week despite an announcement from the US. But several warned that the US military buildup leaves Washington room to escalate if Tehran rejects a deal and uses the Strait of Hormuz as leverage. As Gulf officials return home, attention is shifting to Islamabad.

Congress

• President Trump’s Federal Reserve nominee, Kevin Warsh, plans to tell senators at his confirmation hearing tomorrow that “Fed independence is largely up to the Fed,” according to a statement shared with Semafor.
• Virginia Democrat Sen. Mark Warner’s 36-year-old daughter died after a decades-long battle with juvenile diabetes and other health challenges.

White House

• The SEC and CFTC proposed requiring hedge funds to share less data with the federal government.

Campaigns

• Fault lines over Israel appeared at Michigan Democrats’ convention this weekend.
• A New York Times polling analysis puts the Senate in play for Democrats.

Economy

• US homebuilders fear the Iran war will cause them another “lost year.” — Bloomberg
• Federal Reserve board members are skeptical of Kevin Warsh’s pitch that an AI boom could merit interest rate cuts. — WSJ
• Stocks are surging, but other markets, like bonds, are telling a more cautious story. — WSJ

World

• The Iranian ship seized by the US military in the Gulf is part of a fleet that sails frequently to China. — WSJ
• Asian financial regulators are trying to address cybersecurity risks from Anthropic’s Mythos model.
• Pope Leo XIV decried “authoritarians” during a speech in Angola.

Health

• Measles outbreaks have inspired more parents to vaccinate their children. — Bloomberg

–– A complaint filed by FBI Director Kash Patel in US district court, alleging The Atlantic defamed him in a recent article.

Laura McGann, editor

With help from Elana Schor, senior Washington editor, and Morgan Chalfant, Washington briefing editor

Graph Massara and Lauren Morganbesser, copy editors

Contact our reporters:

Burgess Everett, Eleanor Mueller, Shelby Talcott, Nicholas Wu, David Weigel