A Trump administration budget proposal calls for eliminating programs like Head Start, funding for community mental health clinics and initiatives aimed at preventing teen pregnancy in fiscal 2026.

Why it matters: The 64-page document, called a budget passback, reveals the breadth and deep extent to which the Trump administration is eyeing cuts to the federal health bureaucracy.

• The Office of Management and Budget document is just a proposal but offers a preview of what President Trump's spending priorities are. Congress has the final say in how discretionary funds are allocated.
• The document was first reported by the Washington Post.

Zoom in: The proposal calls for about $20 billion appropriated to a new agency within Health and Human Services called the Administration for a Healthy America. HHS Secretary Robert F. Kennedy Jr. announced last month that he planned to combine several existing agencies into this new entity.

• The document also requests $500 million to be allocated by the HHS secretary for activities that support the administration's so-called "Make America Healthy Again" initiative, per the document.

In all, about $40 billion, or one-third of the HHS discretionary budget, would be cut under the proposal compared with fiscal 2024 levels.

• The document suggests eliminating programs for rural health care providers, HIV treatment efforts, health care workforce initiatives and childhood lead poisoning. It does not say whether or how the work done by these programs would continue.
• Some offices that the document suggests could be eliminated, including the Administration for Preparedness and Response, have existing legal authorities, with officials confirmed by the Senate.

Reality check: No final funding decisions have been made yet, OMB communications director Rachel Cauley told Axios.

Zoom out: There had been earlier reports that Head Start, a storied program created as part of President Johnson's War on Poverty, was on the chopping block.

• That was an aim of Project 2025.
• Ending the program, which provides early childhood education, nutrition and health care help to nearly 800,000 kids and their families, would have "catastrophic" consequences for some of the poorest people in the U.S. — with outsized impacts in rural communities.
• "I had a very inspiring tour [of a Head Start program]," Kennedy said last month. "I saw a devoted staff and a lot of happy children. They are getting the kind of education and socialization they need, and they are also getting a couple of meals a day."

Go deeper: Advocates worry over possible cuts to Head Start

The Trump administration asked the Internal Revenue Service to rescind Harvard's tax-exempt status, multiple outlets reported Wednesday, citing anonymous sources.

Why it matters: The Trump administration is escalating its retaliation against the Ivy League university after it refused to comply with the administration's list of demands.

Catch up quick: It cut $2.2 billion in grants and $60 million in contracts to Harvard.

Driving the news: Trump on Tuesday said on Truth Social that Harvard should "lose its tax exempt status and be taxed as a political entity."

• He said the university was pushing politics and ideology.
• "Tax exempt status is totally contingent on acting in the public interest," he wrote.

Zoom out: The majority of public and private universities and colleges are tax-exempt entities because of their educational purposes or because they're state governmental entities, according to the Association of American Universities.

• The federal government has recognized the educational mission "as fundamental to fostering the productive and civic capacity of its citizens."

Go deeper: How Trump wants to assert control at Harvard and elite colleges

A federal judge said Wednesday that he has found probable cause to hold the Trump administration in contempt for defying his order to halt deportation flights of alleged Venezuelan gang members to El Salvador.

Why it matters: The Trump administration's defiance of U.S. District Judge James Boasberg's order last month has sparked a high-stakes legal battle that could test the limits of President Trump's deportation powers.

• It has also proven to be a political lightning rod, with both administration officials and Democratic lawmakers visiting the infamous El Salvadoran mega-prison where the migrants are being sent.

The big picture: The Trump administration's decision to proceed with the deportation flights displayed a "willful disregard" for the order, Boasberg wrote in a ruling Wednesday.

• The administration has defended its decision to follow through with the deportations under the Alien Enemies Act of 1789, arguing the planes were already in international waters at the time and the ruling did not apply.
• This reasoning, Boasberg noted, "requires ignoring the clear context in which the Order was issued."

Zoom in: Boasberg wrote that the Trump administration had been given "ample opportunity to rectify or explain their actions. None of their responses has been satisfactory."

• "Probable cause exists to find the Government in criminal contempt," he added.

The other side: White House communications director Steven Cheung wrote on X Wednesday that the Trump administration plans "to seek immediate appellate relief."

• "The President is 100% committed to ensuring that terrorists and criminal illegal migrants are no longer a threat to Americans and their communities across the country," Cheung added.

Zoom out: Last month, Trump invoked an 18th-century wartime authority to justify the deportation of some 250 Venezuelan migrants it accused of being members of the Tren de Aragua gang.

• The migrants were subsequently transferred to El Salvador's Center for Terrorism Confinement (CECOT), where Boasberg has warned they are likely to suffer "significant harm."
• Meanwhile, Republicans have targeted Boasberg for impeachment for attempting to block the deportations.

What we're watching: Boasberg said he would allow the court to attempt to rectify its violation voluntarily. If they fail to do so, the court will try to determine which officials are responsible for the order's violation.

• The court would then request the Justice Department to prosecute the responsible individuals.
• If the administration "declines" to do so, "the Court will 'appoint another attorney to prosecute the contempt,'" Boasberg added.

Editor's note: This is a developing story. Please check back for updates.

Rep. Delia Ramirez (D-Ill.) is the latest Democratic trying to organize an official congressional delegation to El Salvador, Axios has learned.

Why it matters: There is a flood of interest among Democratic lawmakers to travel to the central American country, where the Trump administration has been sending deportees to a maximum security prison.

• Ramirez, in a letter to House Homeland Security Committee chair Mark Green (R-Tenn.) first obtained by Axios, requested he authorize an official CODEL to El Salvador.

President Trump expanded the portfolio of his adviser Adam Boehler and appointed him as special envoy for hostage response, according to a notification sent to Congress on April 4 and obtained by Axios.

• Boehler will coordinate across agencies on hostage issues and report to Trump and Secretary of State Marco Rubio.

The intrigue: Boehler faced a political firestorm in March after Axios revealed he had met directly with Hamas officials — making him the first U.S. official ever to do so.

• Although those talks were approved by Trump, they sparked anger among some Senate Republicans, some of whom took the issue up privately with the White House.
• In mid-March, Boehler withdrew his nomination as special presidential envoy for hostage affairs, a position that requires Senate confirmation.
• The new appointment is temporary and does not require Senate approval.

Driving the news: On Wednesday, Boehler told Al-Jazeera "it is possible" he will engage directly with Hamas again in an effort to free the remaining hostages in Gaza, including American Edan Alexander.

Zoom in: Boehler will work with all relevant government agencies "to ensure that all U.S. nationals held abroad under concerning circumstances are given focused attention by the U.S Government and appropriately resolved," the notification says.

• The role gives him a broader mandate to work on the cases of all U.S. nationals "whose detention gives rise to concerns about their health or presents extenuating or humanitarian circumstances that merit their release, unjustly detained foreign nationals whose release the United States is uniquely placed to support, and other cases of detained U.S. nationals where the detention creates a national security concern for the United States."
• He will serve in the expanded role as a special government employee until September 2025, unless extended.

President Trump's vision for elite higher education includes eliminating perceived liberal slants, sharpening discipline measures and reconstructing the makeup of student and faculty bodies.

Why it matters: The administration's recent demands of Harvard and other elite institutions show the government's playbook to influence and reorient the priorities of universities through federal funds.

• While the demands revolve around institutional policies, the freezes and cuts largely threaten scientific research.
• The Trump administration is seeking government input into hiring and admissions practices in an apparent effort to weed out not just antisemitism — the stated objective — but also to push back on progressive ideology.

Behind the scenes: A task force of about 20 people, most of whom are not publicly known, has met regularly in D.C. since February to discuss reports of discrimination, review grants and write recommendations, the New York Times reported.

• The Trump administration said it would freeze Harvard's $2.2 billion in grants and $60 million in contracts after the university said it wouldn't comply with demands.

The Trump administration's demands of Harvard in a Friday letter included:

• Governance and leadership reform, including reducing the power held by faculty "more committed to activism than scholarship."
• Merit-based hiring and admissions reform to remove any sex or race preferences. The government also ordered the university to shutter all diversity, equity and inclusion offices and initiatives.
• International admissions reform to "prevent admitting students hostile to the American values and institutions in the U.S. Constitution and Declaration of Independence."
• Viewpoint diversity in admissions and hiring with an external audit of the student body, faculty, staff and leadership.
• Reforming programs accused of biases including antisemitism, which could affect human rights, language and public health departments.

What they're saying: "Harvard has in recent years failed to live up to both the intellectual and civil rights conditions that justify federal investment," Trump administration officials said in the letter. "But we appreciate your expression of commitment to repairing those failures and welcome your collaboration in restoring the university to its promise."

• In a Wednesday post on Truth Social, Trump called Harvard faculty "woke, radical left idiots."

The other side: Harvard President Alan Garber said the demands surpass the federal government's power and encroach on the university's First Amendment rights.

• "No government—regardless of which party is in power—should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue," he wrote on Monday.

Zoom out: The administration laid out nine demands of Columbia as preconditions to formal negotiations on federal funding — several of which were distinct from the demands on Harvard.

• That list included banning masks, transferring the disciplinary power over students to the university president, and allowing campus law enforcement to arrest "agitators."

Flashback: Last year, politicians exerted pressure on universities over pro-Palestinian protests and diversity efforts, pushing administrators to align more with conservative lawmakers.

Go deeper: Trump's pressure campaign against universities hits a Harvard-sized snag

The nation's home builders are less than thrilled with the Trump economy thus far.

Why it matters: The headwinds for the companies that build single-family homes are multiplying, a bad sign for a country facing a shortage of affordable homes.

By the numbers: The National Association of Home Builders Housing Market Index ticked up a scant one point to 40 in April from the previous month, but that was before the recent mortgage-rate increase registered. (Any number below 50 indicates negative sentiment.)

• 60% of builders said their materials costs have gone up by an average of 6.3% this year, adding $10,900 per average single-family home.
• Meanwhile: U.S. homes are selling at their slowest pace in 6 years, per real estate site Redfin's data. The typical home that went under contract in March sat on the market for about 1.5 months (47 days). Double what it was during the frenzied pandemic market.
• A bright spot for buyers: Home prices are growing at the slowest pace in a year and a half, up 2.5% in March from last year. But that's hardly good news for home builders.

The big picture: It's not only that tariffs raise the cost of building a house.

• The drastic "Liberation Day" rollout sparked a Treasury bond selloff that's pushed mortgage rates higher, just as they were starting to cool. The average 30-year-mortgage rate is hovering right below 7% now, according to Mortgage News Daily, after spiking last week. (It's still below January levels, though.)
• Rising rates and economic uncertainty dampen demand for houses. Meanwhile, the threat of an immigration crackdown hangs over an industry that relies heavily on undocumented labor.

What they said: "You have to be crazy to start a new home project right now!'" a home builder told HFE Economics, per a note the ADJ GROUP sent out Wednesday.

• "The prices of materials over the next three months seem sure to rise, but no one knows by how much," HFE writes. "Tariff risks pose a huge threat to profit margins in this industry and to the prices of everything overall."
• They point out that if, say, the price of Canadian lumber goes up that would likely lead to U.S. producers to raise prices, too.

The bottom line: There was lots of campaign talk about easing the housing shortage with less regulation, but federal policies around trade are making it harder to build homes.

Rep. Elise Stefanik (R-N.Y.) is seriously considering a run for governor of New York after withdrawing her nomination for ambassador to the United Nations, two sources familiar with her thinking confirmed to Axios.

Why it matters: It could set up a clash between the former House Republican Conference chair and Rep. Mike Lawler (R-N.Y.), who has long been teasing a gubernatorial run.

• Stefanik joins a growing wave of House members looking at runs for higher office — which complicates attendance math for congressional leaders in both parties.

What we're hearing: Stefanik is seriously considering a run after being encouraged by Republicans in her home state and individuals in Trump's orbit, one of the sources told Axios.

• Stefanik gave up her role as conference chair after being nominated for UN ambassador, only to withdraw in part due to GOP concerns about her seat staying vacant — and potentially falling into Democratic hands.
• Her withdrawal created a difficult dynamic for House Speaker Mike Johnson (R-La.), who attempted to make things right by offering Stefanik her committee assignments back and a consolation role in GOP leadership.
• Johnson has reportedly been struggling with how to put Stefanik back on the Intelligence Committee.

State of play: Lawler has been considered the frontrunner for the GOP nomination to challenge Gov. Kathy Hochul — who may face her own primary challenge from Rep. Ritchie Torres (D-N.Y.).

• Stefanik, however, is a high-profile star in Trump's orbit and could easily be a formidable candidate for the nomination if she runs.

Federal Reserve chair Jerome Powell said on Wednesday that President Trump's tariffs would likely lead to a faster rise in prices and weigh on economic growth.

Why it matters: Trump campaigned on lowering prices for inflation-weary consumers, but Powell is the latest to suggest Trump's trade war might do the opposite.

• In a speech at the Economic Club of Chicago, Powell said the Fed could face a tough scenario if inflation rises alongside teetering economic growth.

What they're saying: "Tariffs are highly likely to generate at least a temporary rise in inflation," Powell said, warning of the possibility that inflationary effects could also linger.

• Powell said how long tariff-related inflation persists depends on a slew of factors, including the time it takes for tariffs to "pass through fully to prices."

The big picture: Trump's tariff regime — which has shifted week-to-week — has so far been "significantly larger than anticipated," Powell said.

• "The same is likely to be true of the economic effects, which will include higher inflation and slower growth," he added.

Between the lines: Tariffs might result in stagflation-like economic conditions, leaving the Fed in an uncomfortable bind.

• If the economy stagnates alongside rising inflation, it would force the Fed to choose whether to support the economy (likely with lower rates) or tame inflation (likely with higher rates).

"We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension," said Powell, who was first nominated to the Fed post by Trump in 2017.

• "If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close," Powell added.
• Congress assigned the Fed two mandates: maximum employment and price stability.

What to watch: The Fed has embraced a "wait-and-see" approach, preferring to wait for clarity on White House policy before adjusting interest rates.

• Market-based odds show a slightly higher chance of three Fed rate cuts this year, according to the CME's Fed Watch tool.

Go deeper: The trade war's pandemic parallel

HHS Secretary Robert F. Kennedy Jr. took the unusual step of publicly contradicting one of his own agencies' autism studies on Tuesday, suggesting at a press conference that "environmental factors" including drugs, not improved screening, were causing a spike in confirmed cases.

Why it matters: Kennedy's assertion that researchers and the media are engaging in what he called "epidemic denial" around the condition could further stoke vaccine skepticism and broader public trust in science, experts say.

• Patient advocates also contend categorizing the condition as a disease could steer attention and funding away from efforts to accommodate people with autism.

"One of the things I think we need to move away from today is this ideology that this diagnosis, rather the relentless increases, are simply artifacts of better diagnoses, better recognition," Kennedy said.

• He said he would announce a series of studies in the next two to three weeks to identify "precisely what the environmental toxins are."
• He suggested these could include mold, food additives, pesticides, air, water or medicines.

Catch up quick: Kennedy abruptly called his first Washington press conference after the Centers for Disease Control on Tuesday released a study which found one in 31 U.S. children are diagnosed with autism by their eighth birthday.

• The figure was 1 in 54 in 2016, per the agency.
• The study cited an uptick "might be due to differences in availability of services for early detection and evaluation and diagnostic practices."
• Differences in insurance coverage were also cited as a possible contributor.

Wednesday's packed event at HHS headquarters was tightly controlled, with only a handful of news outlets being offered the chance to ask questions.

• Kennedy suggested that industries are profiting off of environmental toxins that are driving more autism diagnoses.
• "Doctors and therapists in the past weren't stupid, they weren't missing all these cases. The epidemic is real," Kennedy said.
• "It's time for everyone to stop attributing this rise to epidemic denial," Kennedy said. "External factors, environmental exposures, that's where we're going to find the answer."

Zoom in: Kennedy has tapped David Geier, who has a history of promoting the discredited vaccine-autism link to lead what he termed a global effort to identify the cause of autism. He said it would be concluded by September.

• Over the weekend, the FDA's former top vaccine official Peter Marks warned the preconceptions and unrealistic timeline of this research would likely lead to flawed conclusions.

What has been a yearslong economic risk is now reality: The tit-for-tat tariffs effectively end U.S.-China bilateral trade, the final step in the economic decoupling of the world's juggernauts.

• That is the new warning from the World Trade Organization on Wednesday in the release of its latest global outlook.

Why it matters: The sudden divorce of the two economies might mean profound pain for American workers and the nation's wealth built on the back of a strong trading relationship.

• A prolonged trade fight risks splitting the global trading system into two distinct blocs — countries that trade with the U.S. and those that trade with China.

Stunning stat: The WTO anticipates trade between the U.S. and China will screech to a halt this year.

• Trade of merchandise between the two countries will drop by 80%, a drop that would have topped 90% without the White House's recent exemption for smartphones and other tech goods, according to WTO director general Ngozi Okonjo-Iweala.

What they're saying: "The drop in U.S.-China trade of the magnitudes we are talking about is virtually tantamount to a decoupling of the two economies," Okonjo-Iweala told reporters Wednesday morning.

• "This is a phenomenon we've talked about before ... and now we're seeing it emerging," Okonjo-Iweala added. " I think this is one of the most worrying factors for us."

The big picture: The total volume of goods traded around the world is expected to contract by 0.2% this year — an abrupt turnaround from the near 3% increase last year.

• The decline in world trade would be as large as 1.5% in 2025 if President Trump reinstates the reciprocal tariffs that are now on pause.
• Consider the counterfactual: If both trade and trade-policy uncertainty were low, the WTO says, world trade would grow by 2.7% in 2025.

Threat level: The group anticipates the trade slowdown — topped with uncertainty about the tariff endgame — will spill over into weaker global growth.

• The WTO expects GDP growth will reach 2.2% in 2025, 0.6 percentage point below its initial forecast that did not account for the global trade war.
• That will nudge up slightly to 2.4% next year, "substandard compared to recent history," it writes in the release.

Between the lines: The Trump administration said it would hold trade negotiations with a slew of nations facing reciprocal tariffs over the next 90 days.

• But China is the exception. The high, country-specific rates have been paused for all countries, though tariffs on China have only increased.

What's new: Trump ordered the Commerce Department to investigate America's reliance on critical minerals from other countries.

• The investigation could further crack down on trade with China, which produces the majority of all critical minerals, many of which are used in defense, energy and electronics sectors.
• Any tariffs that stem from the investigation would "take the place" of current reciprocal tariff rates, according to the executive order Trump signed Tuesday.

What to watch: The WTO says countries should cut back excessive reliance on other trading partners, an admission that Trump-like protectionism is the new threat.

• "The U.S. has a point when it says too many countries are dependent on its market, or the production of some critical inputs are too concentrated in certain sectors and geographies," Okonjo-Iweala says.
• "Building global resilience requires interdependence, not over dependence."

The bottom line: The fear of economic devastation from U.S.-China decoupling helped blunt Biden-era trade policy.

• Trump is taking an unprecedented gamble — one that WTO economists admit means its forecast might not be gloomy enough.

A dozen swing-district and centrist House Republicans are warning Speaker Mike Johnson (R-La.) that they won't vote for a budget reconciliation package that cuts Medicaid too deeply.

Why it matters: It puts Johnson in a vise as members of the right-wing House Freedom Caucus demand steep cuts to the health program for low-income individuals.

• The GOP's clash over how much to offset their planned $4 trillion in tax cuts was on full display last week as the Freedom Caucus rebelled over a Senate budget measure that mandated only $4 billion in cuts.
• The House had initially passed a budget resolution that would require $1.5 trillion in cuts — and would likely reduce Medicaid funding.

What they're saying: The 12 lawmakers wrote in a letter to Johnson and other GOP leaders that many of them represent "districts with high rates of constituents who depend on Medicaid."

• "Balancing the federal budget must not come at the expense of ... their health and economic security," they said in the letter, a copy of which was obtained by Axios.
• The lawmakers issued an ultimatum: "We cannot and will not support a final reconciliation bill that includes any reduction in Medicaid coverage for vulnerable populations."

Zoom in: The letter was signed by Reps. David Valadao (R-Calif.), Don Bacon (R-Neb.), Jeff Van Drew (R-N.J.), Rob Bresnahan (R-Pa.), Juan Ciscomani (R-Ariz.), Jen Kiggans (R-Va.), Young Kim (R-Calif.), Robert Wittman (R-Va.), Nicole Malliotakis (R-N.Y.), Nick LaLota (R-N.Y.), Andrew Garbarino (R-N.Y.) and Jeff Hurd (R-Colo.).

• Spokespeople for Johnson, House Majority Leader Steve Scalise (R-La.) and House Majority Whip Tom Emmer (R-Minn.) did not immediately respond to requests for comment.
• The letter was first reported by Punchbowl News.

A spokesperson for the House Energy and Commerce Committee said chair Brett Guthrie (R-Ky.) and Republicans on the panel "intend to strengthen, secure, and sustain Medicaid for generations to come."

• Guthrie has been "working with members across the House Republican Conference to end the waste, fraud, and abuse in the Medicaid system and ensure it remains stable for the vulnerable populations it was intended to support," they said.

Between the lines: While they are pushing against what they see as overly zealous benefit cuts, these moderate members aren't ruling out some Medicaid reforms as a way of paying for tax cuts.

• LaLota told Axios he is "committed to responsible, compassionate Medicaid reforms that strengthen the program for Americans who truly need it."
• "These reforms will prioritize work requirements for able-bodied adults, ensure benefits go only to legal residents, and increase eligibility checks from once every 12 months to every 6 months to help prevent fraud and abuse," he said.

Editor's note: This story has been updated with additional reporting.

California Gov. Gavin Newsom said Wednesday that his state plans to sue in an attempt to block President Trump's sweeping tariff regime.

Why it matters: California, the fifth-largest economy in the world, could lose billions in Trump's trade war with China. The lawsuit marks the first time a state has sued Trump over his massive, market-rattling levies that sent ripples through the global economy.

Driving the news: The lawsuit will be filed Wednesday in the U.S. District Court for the Northern District of California. It argues that Trump's use of the International Economic Emergency Powers Act to impose his levies without congressional approval was unlawful.

• The law gives the president wide-ranging power in an emergency — though it has never been used to implement tariffs since its creation in 1977. The Trump admin has said the flow of drugs, undocumented immigration and trade deficits constituted national emergencies.
• Newsom said in a statement that Trump's "unlawful tariffs" are already "wreaking chaos on California families, businesses, and our economy — driving up prices and threatening jobs."
• The tariffs have cost the state billions, inflated costs and disrupted supply chains, Newsom said.

What they're saying: "Californians are bracing for fallout from the impact of the President's choices — from farmers in the Central Valley, to small businesses in Sacramento, and worried families at the kitchen table — this game the President is playing has very real consequences for Californians across our state," said Rob Bonta, the state's attorney general, in a statement.

• State officials say that tariffs have an "outsized impact" on California businesses.

Zoom out: At least three other lawsuits filed over Trump's tariffs have argued Trump's justification under the emergency powers law is executive overreach, Axios' Courtenay Brown reports.

State of play: Newsom announced earlier this month that he was seeking agreements with other countries to try to insulate his state from the effects of Trump's trade war.

• California is the largest importer among the states, Newsom noted in a press release, emphasizing the importance of trade with Mexico, Canada and China.

The big picture: While Trump paused most of his sweeping "reciprocal" tariffs — other than on China — some levies remain in place.

• His administration's tariffs on Chinese goods are still set at 145%.
• The White House has signaled more tariffs, possibly on semiconductors and pharmaceuticals, are on the way.

Go deeper: California is caught in the crosshairs of an escalating trade war with China

Editor's note: This story was updated with additional context.

Worries are growing over funding for Head Start, the decades-old federal program that provides childcare, nutrition assistance and other services to the nation's poorest families.

Why it matters: Shuttering the program — something the White House is reportedly considering — would be "catastrophic," says Casey Peeks, senior director of Early Childhood Policy at the liberal Center for American Progress.

• More than 790,000 children, through age 5, rely on Head Start for learning, meals and healthcare services, per a report from CAP out Wednesday morning.

The big picture: There would be ripple affects for other families if child care providers lose access to this funding — straining a nationwide system already struggling with wait lists and high costs.

• Such disruption would hit "not only our staff, but our parents that are working," says Jennifer Carrol, the Assistant Director of Children's Services at Community Action Partnership of North Alabama, one of the largest Head Start programs in Alabama, serving over 1,600 children across 15 counties.

By the numbers: The impact would be particularly hard on rural America, per CAPs report.

• 46% of Head Start funding goes to rural areas, often in places without any other child care options, according to federal data from the 2023-2024 school year they analyzed. Only 22% is for those in urban areas.

Zoom in: CAP looked at Head Start funding by Congressional district and found it is pretty evenly split between parties, with 47% going to Republican districts, particularly in those rural areas.

Where it stands: Earlier this month, several regional Head Start offices were shuttered as part of broader cuts at the Department of Health and Human Services, which operates the program.

• Earlier this year, after a White House funding freeze, many Head Start programs struggled to stay afloat.
• "There's just this cloud of uncertainty right now," says Tommy Sheridan, deputy director at National Head Start Association, a nonprofit that represents children, families and programs.
• He said providers and parents are both worried about the program, started as part of Lyndon B. Johnson's war on poverty.

For the record: The White House didn't respond to questions about possible further cuts to Head Start.

Between the lines: Eliminating Head Start is one of Project 2025's goals; the conservative group says the program has little value; claiming fraud and abuse are big issues.

• But many research papers over the years have found that for kids, Head Start improves educational outcomes, reduces teen pregnancy and "criminal engagement," and even increases wages into adulthood.

Reality check: Long-time Head Start employees say they've often worried over cuts in the past, but typically funding has garnered bipartisan support — the program has received increases in 12 out of the past 15 years, including during the first Trump term.

• "We don't see them zeroing out Head Start," says Carroll in Alabama. "This has come up previously, through the 25 years."

New York Attorney General Letitia James is accusing the Trump administration of weaponizing the government after a federal agency referred her for potential criminal prosecution for alleged mortgage fraud.

Why it matters: It's the latest example of the administration following through on President Trump's pledges to seek retribution against his political enemies.

• Trump has already stripped security clearances from James, who is not facing any charges in relation to the criminal referral, and Manhattan District Attorney Alvin Bragg, who secured a historic conviction in the president's hush money case.

State of play: Federal Housing Finance Agency (FHFA) director William Pulte wrote a criminal referral relating to James to Attorney General Pam Bondi and Deputy AG Todd Blanche.

• He alleges that James "falsified bank documents and property records to acquire government backed assistance and loans and more favorable loan terms," per the letter seen by Axios and first reported by the New York Post on Tuesday evening, which cites media reports.
• Trump shared one of those reports in a Monday Truth Social post with the comment: "Letitia James, a totally corrupt politician, should resign from her position as New York State Attorney General, IMMEDIATELY. Everyone is trying to MAKE NEW YORK GREAT AGAIN, and it can never be done with this wacky crook in office."

Flashback: James successfully brought a $464 million civil fraud case against Trump, his companies and fellow defendants over the president's business practices.

• Trump is appealing the decision.

What they're saying: "Attorney General James is focused every single day on protecting New Yorkers, especially as this Administration weaponizes the federal government against the rule of law and the Constitution," said a spokesperson for the Office of the Attorney General in an emailed statement on Tuesday night.

• "She will not be intimidated by bullies — no matter who they are."
• A representative for the White House referred Axios to the FHFA and the Justice Department for comment.

The DOJ referred Axios to comments U.S. Attorney General Pam Bondi made in an interview with Fox News Wednesday morning. She said she had just learned of Pulte's referral.

• "No one in my office has read it yet," she said. "We haven't looked at it. Of course, we'll be reviewing it."

Go deeper: Trump's overflowing grudge list

Editor's note: This story was updated with a response from the DOJ and comments from Bondi.

A critical avenue of U.S.-China competition has slipped under the public's radar despite its potential outsize impacts on economies, militaries and weaponry: biotechnology.

Why it matters: Better body armor, dynamic camouflage, foods synthesized in trenches, super soldiers, landmine-detecting bacteria and sabotaged materials shipped to the enemy are all promises of this field.

• And a new report concludes that Beijing is ascending to biotech dominance, at great risk to Washington.

Driving the news: The National Security Commission on Emerging Biotechnology filed that report to Congress this month after two years of research and debate.

• Commissioners include Sen. Todd Young (R-Ind.), also a member of the intelligence committee; Eric Schmidt, the former Google CEO; and Michelle Rozo, a vice president at In-Q-Tel and former principal director for biotechnology at the Pentagon.

Here's a taste of the report's many findings, recommendations and warnings:

1. China is sprinting ahead after prioritizing biotech 20 years ago. The U.S. must course correct in three years.
2. Washington should dedicate $15 billion minimum over the next five years to supercharge the sector.
3. Beijing's advancements are fueled by military-civil fusion. But the U.S. "should not try to out-China China; that is a losing strategy."
4. There is "every reason to believe" the Chinese Communist Party will "weaponize biotechnology." Drone warfare "will seem quaint" the day the People's Liberation Army debuts genetically enhanced troops.
5. Opportunities for greater collaboration already exist, namely through NATO's innovation accelerator, DIANA.
6. Congress should require the Defense Department to incorporate military-relevant biotech into wargaming and exercises.

What they're saying: U.S. leadership should consider biotech a distinct domain of warfare, according to Young, a Marine Corps veteran.

• "Imagine if we could, in theater, biomanufacture shelf-stable blood, thereby seizing on that golden hour in which we need to provide emergency medical attention to warfighters who are under duress," he told Axios.
• "Imagine a world in which we are able to develop new energetics through biological means, with far more thrust — power — to extend the range of our existing missile systems."
• "That would, obviously, change all sorts of calculations of warfare."

Reality check: There's a lack of stateside industrial capacity. And moving from lab to market is an expensive ordeal, a red flag for increasingly risk-averse investors.

What we're watching: What makes it into the National Defense Authorization Act, a logical home for this report's suggestions.

The bottom line: "Just like the Industrial Age, just like the Information Age, this is the Biotechnology Age. Most people do not know that," Paul Arcangeli, a commissioner and former House Armed Services Committee staff director, said in an interview.

• "In 10 years, people will be surprised what biotechnology will be doing for them."

The AI boom is reshaping the Midwest, driving a wave of data center development, straining energy systems, consuming millions of gallons of water — and triggering a new debate over who benefits.

Why it matters: Data centers power the AI boom — but their soaring energy and water demands often go unreported, with unclear benefits for local communities and few permanent jobs created.

• Data centers used 4.4% of U.S. electricity in 2023 and could consume up to 12% by 2028, per the U.S. Department of Energy.
• Data center construction is at an all-time high, increasing 69% year over year from 2023 to 2024, per CBRE, a commercial real estate firm.

Yes, and: The Midwest is emerging as one of the nation's fastest-growing data center hubs, with development stretching from Kansas and Iowa to Great Lakes states like Ohio, Michigan, Indiana and Wisconsin.

State of play: Columbus, Ohio, and Chicago remain the region's primary data center markets. But companies are increasingly eyeing secondary cities like Minneapolis, Pittsburgh, Des Moines and parts of Indiana, where land is cheaper and energy is more available, says Andy Cvengros of real estate firm JLL.

• Cooler Midwest temperatures and proximity to the Great Lakes reduce the need for energy-intensive cooling — an advantage over warmer, Southern states.

Yes, but: The expansion often happens behind closed doors.

• Local governments frequently sign nondisclosure agreements with tech firms, limiting public knowledge of energy and water usage, says Helena Volzer of the nonprofit Alliance for the Great Lakes.
• Not even one-third of data centers track water consumption, according to a 2021 study.

The other side: Our world is growing increasingly digital, and the data needs to go somewhere. U.S. households had an average of 21 digital devices in 2023, per a Deloitte survey.

• As companies build to meet that surging demand, energy is a "significant cost driver," it's in their best interests to be efficient, Dan Diorio, senior director of state policy for the Data Center Coalition, tells Axios.

Data centers use unknown amounts of water and energy

Data centers house server farms that store our information, along with electrical equipment that gets hot, requiring 24/7 air cooling that uses millions of gallons of water annually as a refrigerant.

Yes, but: Volzer says their true water consumption is unknown since most rely on municipal utilities.

• The Great Lakes Compact is an agreement among Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania and Wisconsin about managing the Great Lakes water basin.
• Cities report to the compact how much water they're using, but that isn't broken down into details such as how much is from data centers.

By the numbers: Hyperscale data centers, considered some of the largest facilities, use 365 million gallons each in a year — equivalent to what roughly 12,000 Americans use in a year, according to the Alliance for the Great Lakes.

Municipalities weigh economic benefits

Beyond environmental costs, there's growing scrutiny over what communities get in return.

Why it matters: If leaders prioritize jobs, there are better industries for which to compete, says Peter Orazem, an economics professor at Iowa State University.

• But if they're counting on future property tax revenue, he says, the investment may be worth it.

The big picture: A 2023 state-commissioned report in Virginia, the country's data center hub, found that while the initial construction phase delivers economic benefits, those drop off sharply once the centers are built.

• Building a 250,000-square-foot data center employs up to 1,500 local employees for 12-18 months. But that declines to 50 full-time workers, half of them contracted.

State of play: Most Midwest states offer data-center-specific tax credits, including a mix of sales, personal property and use-tax exemptions.

• Michigan just added a sales tax exemption this year for data center equipment.
• Indiana and Illinois lawmakers are considering new transparency rules on data centers' energy usage.

The other side: A recent Data Center Coalition report touts the economic benefits of data centers beyond the jobs inside them.

• Those include bolstering supply-chain businesses, employees' spending in the community, and companies' state and local tax contributions — which come without straining public services like schools.

What's next

With rising demand and growing pushback, a regulatory reckoning may be coming. With lawmakers in Illinois and Indiana eyeing new transparency rules, advocates are watching to see whether other Midwest states follow suit.

Between the lines: It can be difficult to accurately predict future energy demand because, as time passes, systems are becoming more efficient, a 2020 study found.

What's next: Cooling systems that use refrigerants instead of evaporating water are already being developed, along with better ways of recycling water.

• Greener power sources such as natural gas, on-site wind turbines and, perhaps eventually, small modular nuclear reactors may also alter the picture.

President Trump has vowed to prevent Iran from getting a nuclear weapon — but inside his national security team there's a divide over the best way to do it.

Why it matters: This isn't a theoretical debate. Trump has dispatched negotiators to try to get a deal, and B-2 bombers and aircraft carriers for plan b.

• Officials are divided over which route is more likely to be successful. But they agree that without a deal, there will likely be war.
• "The Iran policy is not very clear mainly because it is still being figured out. It is tricky because it's a highly politically charged issue," a U.S. official with knowledge of the internal discussions told Axios.

Driving the news: Trump convened his top advisers for a Situation Room meeting on Iran on Monday, including officials on both sides of the policy divide.

• "There are different approaches but people are not shouting at each other," the U.S. official said.
• "The president is proud that he has a team with different views. He listens to all of them and finally takes the decision that thinks is in the best interest of the American people," White House press secretary Karoline Leavitt told Axios.

Behind the scenes: One camp, unofficially led by Vice President Vance, believes a diplomatic solution is both preferable and possible and that the U.S. should be ready to make compromises in order to make it happen. Vance is highly involved in the Iran policy discussions, another U.S. official said.

• This camp includes also Trump's envoy Steve Witkoff — who represented the U.S. at the first round of Iran talks on Saturday — and Secretary of Defense Pete Hegseth. It also gets outside support from MAGA influencer and Trump whisperer Tucker Carlson.
• This group is concerned that striking Iran's nuclear facilities would put U.S. soldiers in the region in harm's way when Iran strikes back.
• They also argue a new conflict in the region would send oil prices skyrocketing at a sensitive time for the U.S. economy.

The other side: The other camp, which includes national security adviser Mike Waltz and Secretary of State Marco Rubio, is highly suspicious of Iran and extremely skeptical of the chances of a deal that significantly rolls back Iran's nuclear program, U.S. officials say.

• Senators close to Trump like Lindsey Graham (R-S.C.) and Tom Cotton (R-Ark.) also hold that view.
• This camp believes Iran is weaker than ever, and therefore the U.S. should not compromise but insist Tehran fully dismantle its nuclear program — and should either strike Iran directly or support an Israeli strike if they don't.
• Iran hawks like Mark Dubowitz, CEO of the Foundation for the Defense of Democracies, are lobbying hard for that approach. "The president once called the 2015 Obama deal fatally flawed. The question now is whether he still believes it," Dubowitz told Axios, warning against accepting "a warmed-over Obama deal."

Driving the news: The 45-minute conversation between Witkoff and Iranian Foreign Minister Abbas Araghchi in Oman last Saturday was the most high-level engagement between the U.S. and Iran since the Obama administration.

• It was a particularly fraught encounter given it was Trump who withdrew from Obama's deal and ordered the assassination of Iran's most revered military commander, Gen. Qasem Soleimani.
• Now Trump wants to get a nuclear deal, and to do it quickly. He gave Iran a two-month deadline to sign an agreement — without specifying when the clock would actually start ticking.

Friction point: One particularly prominent opponent of diplomacy with Iran is Israeli Prime Minister Benjamin Netanyahu.

• Netanyahu's White House visit last week was tense, particularly when he and Trump discussed Iran, U.S. and Israeli officials say.
• "The president kinda relished sticking it to him on Iran. The same dynamic you saw in public is what happened in private," one official said, referring to the press conference in which Trump revealed the Iran talks and Netanyahu was visibly uncomfortable.
• "Trump and Bibi see things very differently on the issue of a military strike in Iran," the official said. Some in the "deal camp" also see Netanyahu's insistence that Iran must eliminate its entire nuclear program under any deal as unrealistic.

What they're saying: "President Trump has been clear, Iran cannot have a nuclear weapon and all options remain on the table. The President has authorized direct and indirect discussions with Iran to make this point clear, but he's also made clear this cannot go on indefinitely," White House national security council spokesperson Brian Hughes told Axios.

• "The Trump Administration's entire national security leadership team is committed to the President's posture on Iran to ensure peace and stability in the Middle East and security here at home."

Beyond tariffs and court battles over Trump policies, two pieces of White House palace intrigue emerged Tuesday:

1. Defense Secretary Pete Hegseth suspended two top Pentagon officials, Dan Caldwell and Darin Selnick, as part of an investigation into who leaked word of a planned top-secret briefing on China for Elon Musk.
2. Axios learned that Musk or Hegseth didn't just decide to call off that briefing after the leak. President Trump himself ordered staffers to kill it.

• "What the f**k is Elon doing there? Make sure he doesn't go," Trump said, a top official recalled to Axios.

Why it matters: Musk has annoyed several administration officials with his constant presence at the White House, his haphazard social media posts and his slash-and-burn tactics at his Department of Government Efficiency.

• The planned Pentagon briefing, however, got him cross with the boss at the Resolute Desk.
• "POTUS still very much loves Elon, but there are some red lines," the official said. "Elon has a lot of business in China and he has good relations there, and this briefing just wasn't the right thing."
• Trump also had said he wouldn't allow conflicts of interest with Musk on his watch, although critics doubt his sincerity.

Flashback: The China episode became public on March 20, when the New York Times accurately reported that Musk was scheduled the next day to receive a Pentagon briefing on military plans in case of war with China.

• At 11 p.m. on March 20, Trump took to Truth Social to call the report "Fake News" from "the Failing New York Times."
• "They said, incorrectly, that Elon Musk is going to the Pentagon tomorrow to be briefed on any potential 'war with China,' " Trump wrote. "How ridiculous? China will not even be mentioned or discussed. How disgraceful it is that the discredited media can make up such lies. Anyway, the story is completely untrue!!!"

But that Truth Social message wasn't posted until the plan for the Pentagon briefing for Musk had been changed.

• Musk still attended a briefing at the Pentagon with Hegseth on March 21. But China wasn't discussed.
• In the White House that day, Trump let slip his true feelings about Musk's entanglements with China.
• "I certainly wouldn't want, you know — Elon has businesses in China, and he would be susceptible, perhaps, to that," he told reporters. "But it was such a fake story."
• For his part, Musk wrote on X: "I look forward to the prosecutions of those at the Pentagon who are leaking maliciously false information to NYT. They will be found."

The latest: After Reuters broke the news of Caldwell's suspension, Politico reported late Tuesday that Selnick also had been put on leave and escorted from the Pentagon.

• Besides the China briefing planned for Musk, the leak probe focuses on Panama Canal military plans, Red Sea operations and intelligence collection in Ukraine, Politico reported.

Harvard's decision to push back against President Trump's pressure tactics shows other institutions targeted by his administration that there's an alternative to swift capitulation.

Why it matters: Harvard is an international brand with a $53 billion endowment — a rare institution with the resources and willpower to withstand an onslaught of funding cuts and investigations from the government.

The money quote: "Harvard has set an example for other higher-ed institutions. ... Let's hope other institutions follow suit," former President Obama posted on X.

Zoom in: In the last few weeks, American institutions have steadily buckled under pressure from the Trump administration.

• Columbia ceded control of an academic department and expanded campus police powers to try to unfreeze federal funding. The University of Michigan shut down its expansive diversity, equity and inclusion program. Several Big Law firms offered nearly $1 billion in pro bono work to get on the administration’s good side.

But Harvard’s president, Alan Garber, rejected the administration’s demands tied to its federal funding, saying Harvard is committed to combating antisemitism but will not concede academic freedom.

• "No government—regardless of which party is in power — should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue," he wrote.
• The Trump administration's Joint Task Force to Combat Antisemitism is freezing more than $2 billion in response.

Driving the news: Support for Harvard — and resistance to the Trump administration — is bubbling at other universities.

• 60 current and former university presidents co-signed an op-ed in Fortune backing Harvard.
• Stanford, which faces funding threats itself, came out in support of Harvard on Monday. "Harvard’s objections to the letter it received are rooted in the American tradition of liberty, a tradition essential to our country’s universities, and worth defending," Stanford’s president and provost told The Stanford Daily.
• So far, 950 Yale faculty members have signed a letter to Yale’s president and provost asking them to "resist and legally challenge any unlawful demands that threaten academic freedom and university self-governance."
• Several universities — including Cornell, Brown, MIT and Michigan — are joining a lawsuit against the Department of Energy to challenge cuts to indirect costs or academic research.

The other side: The administration's allies are vowing to hold the line, The Wall Street Journal reports.

• "I think Harvard got bad advice to take a different approach," Rep. Elise Stefanik (R–N.Y.), a Harvard alum, told the Journal.
• "These are all fairly simple requests the administration is making to Harvard to follow the law," Sen. Tom Cotton (R-Ark.), also a Harvard alum, said Wednesday morning on Fox.

The big picture: "If an institution was going to stand up to the Trump administration’s war on academia, Harvard would be at the top of the list," The N.Y. Times’ Elisabeth Bumiller writes.

• Last week, the university secured a $750 million loan from Wall Street to bolster its finances, The Washington Post notes.

What to watch: Several other institutions, like Cornell and Northwestern, have hundreds of millions of dollars of funding on the line.

• Their next moves will reveal whether Harvard's defiance was enough to set off a chain reaction.

Go deeper: American progress in peril

Editor's note: This story has been updated with additional details.