President Trump's firing of Democratic FTC commissioner Rebecca Slaughter was illegal, a federal judge ruled Thursday.

Why it matters: The White House says it will appeal the decision, which will set up a Supreme Court challenge.

• Conservatives have long been trying to tee up a case that would weaken a precedent that has protected independent agency commissioners.
• Trump fired Slaughter and fellow Democratic commissioner Alvaro Bedoya in March. They both sued the administration shortly after, and Bedoya resigned from the FTC in June.

What they're saying: Judge Loren L. Alikhan wrote that the "attempt to remove Ms. Slaughter from her position as an FTC Commissioner did not comply with the FTC Act's removal protections."

• "Because those protections remain constitutional, as they have for almost a century, Ms. Slaughter's purported removal was unlawful and without legal effect."
• "As the Court recognized today, the law is clear, and I look forward to getting back to work," Slaughter said in a statement. "The for-cause removal protections that apply to my colleagues and me at the FTC also protect other independent economic regulators like the SEC, the FDIC, and the Federal Reserve."

The other side: "The Supreme Court has repeatedly upheld the President's constitutional authority to fire and remove executive officers who exercise his authority," said White House spokesman Kush Desai.

• "The Trump Administration will appeal this unlawful decision and looks forward to victory on this issue."

House Democrats are largely shooing away the idea of trying to make Republicans miss their deadline to codify around $9 billion in DOGE cuts to public broadcasting and foreign aid, Axios has learned.

Why it matters: While on paper it appears to be a rare opportunity to satisfy the demands of their base to use procedural tools to obstruct the GOP agenda, lawmakers and aides told Axios it's not that simple.

• House Republicans are scrambling to pass the rescissions bill, which would codify cuts to PBS, NPR and foreign aid, before a Friday deadline mandated by the Impoundment Control Act of 1974.
• But there is a widespread belief among Democrats, including leadership, that the Trump administration would simply ignore or side-step that deadline as they have in other cases.

Driving the news: At a press conference on Thursday, House Minority Leader Hakeem Jeffries (D-N.Y.) demurred when asked if he would pull a repeat of the record-breaking eight hour, 44 minute speech he gave to delay passage of the "big, beautiful bill."

• Jeffries, House Speaker Mike Johnson (R-La.) and House Majority Leader Steve Scalise (R-La.) can all speak for unlimited time in what is known as a "magic minute" speech.
• "I do expect I will participate in the debate, and I expect I will speak longer than a minute," Jeffries told reporters.
• When pressed, he added, "I think Democrats are going to continue to fight hard and do everything we can to make sure that we are pushing back aggressively against this rescissions package."

What we're hearing: Senior House Democrats and leadership aides told Axios that the prospect of a long speech appeared unlikely as of Thursday afternoon.

• One House Democrat told Axios they were told by leadership that Republicans "can play with the date, so [the deadline is] not hard and fast."
• A senior House Democrat told Axios on Thursday afternoon that leadership "doesn't think [the speech] will be long at this point."

Zoom in: Instead of trying to hold up the bill, Democrats see the most productive strategy as continuing to force Republicans to block their efforts to bring up bills forcing the Justice Department to release the Jeffrey Epstein files.

• "Democrats have succeeded in tying the House GOP in knots over Epstein files amendments," a Democratic leadership aide told Axios.
• "It's lunacy to wring our hands over a statutory deadline that the administration will simply ignore when we've been able to send the Republicans into utter chaos," the aide said.

Zoom out: Jeffries will have to contend with expectations from his grassroots base, which are sometimes untethered to the reality of congressional procedure.

• Some Democrats said those expectations alone may be reason enough for Jeffries to deliver a long speech.
• "I think it's smart, I think he should do it. People like it. People liked the last one," Rep. Suhas Subramanyam (D-Va.) told Axios.

Yes, but: Members "would be really unhappy," if Jeffries gave a long speech "after what he did on July 4," a third House Democrat said on the condition of anonymity.

• Some lawmakers were frustrated that Jeffries spoke for nearly nine hours after his team maintained he would only go for about one, forcing them to scramble to reschedule flights ahead of the July 4 recess.
• "The base doesn't even give a s*** about this. The rescissions thing is not on their radar," the lawmaker added, arguing that if the grassroots does take notice of it, "they'll forget about it two days later and be like, 'What's next.'"
• "You can't feed that beast," they said.

Israel issued a rare statement of regret for a strike on the only Catholic church in Gaza, which killed three people, injured 10 and left the church seriously damaged on Thursday.

The big picture: The strike, which Israel claims was a mistake, led to backlash from world leaders, including Pope Leo XIV, and a call from President Trump to Israeli Prime Minister Benjamin Netanyahu.

Driving the news: Asked about Trump's reaction to the strike in Thursday's press briefing, Press Secretary Karoline Leavitt said it was "not a positive reaction."

Behind the scenes: A U.S. official told Axios that Trump was upset when he heard about the attack on the church, asked his team why Israel did it, and wanted to get Netanyahu on the phone right away.

• On that call, Trump asked Netanyahu for clarification. When Netanyahu said it had been a mistake, Trump demanded he put out a statement to that effect, the official said. Soon thereafter, he did.

What they're saying: "Israel deeply regrets that a stray ammunition hit Gaza's Holy Family Church. Every innocent life lost is a tragedy. We share the grief of the families and the faithful. We are grateful to Pope Leo for his words of comfort. Israel is investigating the incident and remains committed to protecting civilians and holy sites," the Israeli statement released soon thereafter said.

Between the lines: Israel hardly ever admits fault over its military's conduct in Gaza, particularly this quickly.

• This swift statement of regret underscores Trump's significant leverage over Israel when it comes to Gaza.

How it happened: Hundreds of Palestinians were sheltering in Holy Family church, which has provided refuge to the enclave's small Christian minority during the war, when the roof was struck on Thursday morning local time.

• Cardinal Pierbattista Pizzaballa, the Latin patriarch of Jerusalem, said a tank fired on the church and that while Israel said it was a mistake, "we are not sure about this. They hit the church directly."
• Parish priest Father Gabriel Romanelli, who came to international attention when it emerged that the late Pope Francis would call him every evening during the war, was lightly injured.
• The Vatican said Pope Leo was "deeply saddened" by the loss of life, and renewed his call for a ceasefire.

The latest: The Israel Defense Forces released a statement claiming preliminary indications were that "shrapnel" struck the church, but that the incident was under review.

Zoom out: The church sustained significant damage, according to statements from church authorities. It has continued to hold mass throughout the war and provide other services to Palestinian civilians.

• Around 70% of buildings in Gaza had been damaged or destroyed as of January, according to a UN estimate. More than 58,000 Palestinians have been killed, according to the Health Ministry in Hamas-run Gaza.

What to watch: There has been progress this week toward a ceasefire and hostage deal, which the mediators hope will be concluded in the coming days.

The MAGA backlash from the Jeffrey Epstein saga is spilling into a niche but influential corner of President Trump's coalition: the "manosphere."

Why it matters: Anti-establishment comedians and podcasters like Joe Rogan, Theo Von and Andrew Schulz were widely credited with expanding Trump's support among young men in the 2024 election.

• Many hosted Trump or Vice President Vance on their shows and voiced support for populist themes, while generally steering clear of overtly partisan messaging.
• Their organic outrage over the administration's handling of the Epstein case marks a rare rupture — one that could threaten Trump's cultural foothold with Gen Z and millennial men.

Driving the news: "There was supposed to be an Epstein joke here, but I guess it got deleted," comedian Shane Gillis, popular among conservatives for his irreverent humor, deadpanned at the ESPY Awards on Wednesday night.

• "Probably deleted itself, right? Probably never existed, actually. Let's move on as a country and ignore that."

What they're saying: The revolt reached critical mass in recent days across a constellation of "manosphere" podcasts — a term that came to describe their guys-being-dudes energy in 2024.

• "Flagrant" host Andrew Schulz, whose last three podcast episodes have all been dominated by Epstein discourse, accused Trump of "insulting our intelligence" by claiming that the notorious sex trafficker had no "client list" or blackmail ring.
• A clip of Vance saying "we need to release the Epstein list" on comedian Theo Von's podcast last month has gone viral in recent days. Von himself reposted the video on X and wrote: "Yeah what changed?"
• Joe Rogan, who has one of the most popular podcasts in the world, joined the pile-on this week: "They can lie about all kinds of things. Where's the Epstein files? 'Oh, can't find them, don't exist.' Like, they can get away with sh*t, man."

State of play: Nearly two weeks after the Justice Department released a memo announcing that the Epstein case would be closed, Trump's MAGA base is refusing to heed the president's calls to move on.

• A frustrated Trump is responding in increasingly personal terms, disavowing supporters who continue to focus on what he claims is a Democratic "hoax."
• "Let these weaklings continue forward and do the Democrats work, don't even think about talking of our incredible and unprecedented success, because I don't want their support anymore!" Trump posted Wednesay.

Reality check: This isn't the first sign of manosphere unease with Trump. Some voices have questioned his immigration raids or criticized the bombing of Iran's nuclear facilities.

• But nothing has pierced the broader cultural conversation — or triggered as visceral a reaction — as the Epstein scandal.

Between the lines: The manosphere is distinct from the core MAGA media ecosystem.

• While pro-Trump influencers like Charlie Kirk deliver explicitly partisan content, figures like Andrew Schulz and Joe Rogan have more wide-ranging and often light-hearted discussions.
• When they do discuss politics, it's largely through an anti-establishment lens.

The bottom line: At a time when MAGA is looking to expand upon gains it made with Gen Z voters in 2024, manosphere podcasters could serve as key conduits — but only if they stay in the tent.

A former Louisville police detective convicted of violating Breonna Taylor's rights by using excessive force when he fired 10 shots at her apartment should serve one day in jail, Justice Department officials said in court filings.

Why it matters: The recommendation signals the dramatic shift the Trump administration is making from the Biden administration on police misconduct cases that helped spark the now-defunct racial reckoning.

Driving the news: DOJ attorneys said in filings on Wednesday that although Brett Hankison "was part of the team executing the warrant," he "did not shoot Ms. Taylor and is not otherwise responsible for her death."

• Prosecutors wrote that they were unaware of another case "in which a police officer has been charged with depriving the rights of another person under the Fourth Amendment for returning fire and not injuring anyone."
• They are asking a federal judge to sentence Hankison to one day behind bars, meaning a sentence of time served and not returning to jail.
• Hankison faces a maximum of life in prison.

Context: Hankison, who is white, became the first Louisville police officer on Friday convicted in the deadly raid that was a flash point in the Black Lives Matter movement.

• Along with the murder of George Floyd, the police encounter that killed Taylor, a Black woman, generated racial injustice protests nationwide in 2020.

Caveat: None of the shots Hankison fired in 2020 hit Taylor, a 26-year-old emergency room technician.

• In 2023, a federal judge declared a mistrial in the first federal case involving Hankison, whose lawyers argued that he was acting properly "in a very tense, very chaotic environment."

Flashback: The U.S. Justice Department under the Biden administration said Hankison and other Louisville police officers broke into Taylor's home with a falsified "no-knock" search warrant as part of a drug investigation.

• Former Kentucky Attorney General Daniel Cameron said the police did knock and announce their presence, though neighbors and Taylor's boyfriend, Kenneth Walker, said they heard no announcement or knock.
• Walker, who believed that intruders were entering the home, fired one shot from a handgun, striking one officer. The police responded by opening fire and striking Taylor multiple times.
• Taylor was alive for at least 20 minutes after police shot her but did not receive any medical attention, according to Walker and police dispatch logs.

Federal prosecutors previously accused Hankison of violating Taylor's civil rights by firing his weapon into her apartment through a covered window and covered glass door and using excessive force.

• Hankison faced the federal charges after he was acquitted last year by a state jury of three felony wanton endangerment charges stemming from the raid.

Between the lines: Not only is the Trump administration no longer seeking harsh penalties for officers already convicted of excessive force, it's no longer pursuing federal consent decrees that hold police departments accountable.

• Federal probes into nearly a dozen city police departments by President Biden's Justice Department are unlikely to reach reform agreements.
• Those investigations came in response to allegations of systemic, unconstitutional misconduct by police departments, such as using excessive force and conducting illegal traffic stops.

As Jeffrey Epstein's case becomes the talk of Washington, the family of the woman convicted for her role in assisting the disgraced financier is claiming she received an unfair trial.

The big picture: Ghislaine Maxwell is serving a 20-year sentence in Florida after being found guilty of sex trafficking and other charges in 2021.

• The once-girlfriend and associate of the deceased sex offender was accused of recruiting and grooming teenagers for Epstein from around 1994 to 2004.
• She was also found guilty of conspiracy to entice minors to travel to engage in illegal sex acts, conspiracy to transport minors to participate in illegal sex acts, transporting a minor to participate in illegal sex acts and sex trafficking conspiracy.

Driving the news: "Our sister Ghislaine did not receive a fair trial," her family argued in a Tuesday release.

• Earlier this year, Maxwell petitioned the Supreme Court to review her case, arguing a clause in Epstein's non-prosecution agreement with federal prosecutors in Florida should have shielded her.
• The Justice Department on Monday urged the high court to turn away that appeal. Lower courts have also rejected her legal team's arguments.
• The clause in question, the government contended, "cannot reasonably be construed as reflecting some 'global' scope broader than the Florida-based state and federal charges that Epstein resolved for himself."
• Maxwell's family, in its statement, said her legal team will file a reply to the government "in short order," and, "if necessary, in due course" would file a writ of habeas corpus in U.S. District Court for the Southern District of New York.

What they're saying: Maxwell's attorney mentioned President Trump by name in a statement, writing, "I'd be surprised if President Trump knew his lawyers were asking the Supreme Court to let the government break a deal."

• David Oscar Markus continued, "He's the ultimate dealmaker—and I'm sure he'd agree that when the United States gives its word, it should keep it."
• The DOJ declined to comment.

Catch up quick: Amid a simmering MAGA rift over Epstein, Trump on Wednesday blasted "PAST supporters" who had bought into what he called the "Jeffrey Epstein Hoax."

• While Democrats have seized on the divide on the Hill — where even some Republicans are questioning the administration's moves — Trump has urged his rattled base to not "waste [t]ime" on the conversation.

Zoom out: Maurene Comey, a federal prosecutor who worked on the cases against Maxwell and Epstein, was fired Wednesday.

• She is the daughter of former FBI Director James Comey, one of several people — alongside former Presidents Biden and Obama — Trump recently accused, without evidence, of making up documents pertaining to Epstein's case.

Go deeper: 3 ways Trump might try to defuse the Epstein mess

Editor's note: This story has been updated with the Justice Department declining to comment.

President Trump's push to switch the sweetener in Coke to cane sugar could cost thousands of U.S. jobs, an influential corn industry group said.

Why it matters: A can of soda just became a minor political crisis, adding to a White House pile that includes the Jeffrey Epstein controversy, drama at the Federal Reserve, and a near-boiling trade war.

Catch up quick: Trump, in a Truth Social post Wednesday night, said Coca-Cola Co. had agreed to use real cane sugar in its products, which he added was "just better!"

• The company later issued a statement that did not confirm it was switching its entire Coke product line to cane sugar from high fructose corn syrup (HFCS), saying only it would have "more details on new innovative offerings" soon.

Yes, but: That was enough for the Corn Refiners Association to warn Wednesday of huge consequences.

• "Replacing high fructose corn syrup with cane sugar would cost thousands of American food manufacturing jobs, depress farm income, and boost imports of foreign sugar, all with no nutritional benefit," the group's president and CEO, John Bode, said in a statement on its website.
• Bode's group is the trade association representing companies that make sweeteners, oils and other products from corn.

The intrigue: If Coke really did shift entirely to cane sugar from high fructose corn syrup, it could represent an economic hit to Iowa (the country's largest corn producer), while serving as a boon to Florida (the top cane sugar producer).

• It would also weigh on the corn industry.
• An analysis conducted by AI investment analytics group Reflexivity found the switch could cost the corn industry almost $1.2 billion annually in lost revenue to farms and HFCS processors.
• At the same time, Reflexivity said, it could add more than $600 million a year to Coca-Cola's sweetener costs.
• Were all that cane acquired domestically, the firm estimated, it would require a roughly 36% increase in U.S. production.

By the numbers: Shares in corn refiners Archer Daniels Midland and Ingredion were both about 1% lower in mid-afternoon trading, having pared much sharper early losses.

The bottom line: Coke's product roadmap was always of high interest to farmers and investors.

• Now, it'll be near the top of the D.C. agenda, too.

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

If President Trump fires Federal Reserve chair Jerome Powell, it would likely bring a period of short-term market volatility — along with higher long-term borrowing costs, as the Fed would be viewed as more subject to a president's whims.

The big picture: Trump appears to be itching to push out the Fed chief he originally appointed, perhaps by claiming that an over-budget building renovation constitutes legal cause.

• Paired with efforts to staff the Fed with more overtly political loyalists, that could remake what has been a bedrock of U.S. financial assets for decades — a central bank that is removed from the day-to-day political maw.

State of play: In the immediate aftermath of a Powell firing, there would be a period of deep uncertainty around who was in charge of the world's most powerful central bank.

• Would Powell be able to stay in his job while pursuing legal challenges? And how long would it take those legal challenges to be resolved one way or the other? Nobody really knows, because this hasn't happened before.
• Presumably vice-chair Philip Jefferson — not particularly well-known to financial markets — would temporarily lead the Board of Governors, while New York Fed president John Williams would lead the policy-setting Federal Open Market Committee. (By tradition the New York Fed chief is vice-chair of the committee.)

Zoom out: Short-term volatility is one thing. The bigger question strategists are weighing is how market might price in a new monetary regime under more direct White House control.

• A strong possibility is that a new Fed chair aligned with Trump's desires to cut short-term interest rates might end up delivering a much steeper yield curve — lower short-term rates paired with higher long-term rates.

By the numbers: The 30-year U.S. Treasury bond yielded 5.01% at yesterday's close, and prices of comparable inflation-protected securities imply that investors anticipate 2.35% annual inflation over that time horizon.

• If investors come to believe that any Fed chair who displeases the president will be fired, they could lose confidence inflation will hover at that low level, driving long-term bond rates up.

What they're saying: The long end of the Treasury yield curve "already has an elevated fiscal deficit and upside to consumer price pressures coming from tariffs to worry about," write Padhraic Garvey, Francesco Pesole and Chris Turner at ING in a note.

• "Adding front-end rates that are arguably too low for the economy risks adding permanence to the higher inflation prints," they add. "The outcome then is a much steeper curve, with front-end yields lower and longer-term yields higher."
• They argue that it would generate a flight away from the U.S. dollar and toward the euro, Japanese yen, and Swiss Franc.

The bottom line: If Trump follows through with his threats, expect a period of volatility, paired with cheaper short-term borrowing and higher long-term borrowing costs.

Immigration and Customs Enforcement (ICE) arrests of people without criminal charges or convictions surged in June, newly obtained data shows.

Why it matters: The numbers illustrate a major shift that came soon after the Trump administration tripled ICE's arrest quota.

Driving the news: People without criminal charges or convictions made up an average of 47% of daily ICE arrests in early June, up from about 21% in early May, before the quota increase.

• The average number of daily arrests for those with charges or convictions also increased in early June, but not to the same degree.
• As of June 26 — the most recent data available — ICE was reporting an average of 930 daily arrests, about 42% of which involved people without charges or convictions.

How it works: That's according to agency data obtained by the UC Berkeley School of Law's Deportation Data Project via Freedom of Information Act requests, and based on seven-day trailing averages.

The big picture: The spike in non-criminal ICE arrests came despite the Trump administration's claimed focus on criminals living in the country illegally.

• And it happened just after the Trump administration told ICE to arrest at least 3,000 people daily, up from 1,000.

Context: Being in the U.S. illegally is a civil, not criminal, violation.

What they're saying: "The media continues to peddle this FALSE narrative that ICE is not targeting criminal illegal aliens," Department of Homeland Security assistant secretary Tricia McLaughlin said in a statement emailed to Axios.

• "The official data tells the true story: 70% of ICE arrests were criminal illegal aliens with convictions or pending charges. Additionally, many illegal aliens categorized as 'non-criminals' are actually terrorists, human rights abusers, gang members and more — they just don't have a rap sheet in the U.S. This deceptive 'non-criminal' categorization is devoid of reality and misleads the American public."
• A DHS spokesperson did not immediately answer Axios' follow-up question about the origins of the 70% figure.

Between the lines: "ICE has the authority to arrest immigrants who are suspected of violating immigration laws, regardless of criminal history," writes Austin Kocher, research assistant professor at Syracuse University's S.I. Newhouse School of Public Communications and immigration expert, in an analysis of the new data.

• "Nevertheless, the administration has gone to great lengths in the press and on social media to emphasize the criminality of people they are arresting. Both things can be true, of course. ICE can arrest some people with violent criminal histories and a lot of people without criminal histories."

The latest: New legislation in Congress would stop ICE from detaining — and possibly deporting — U.S. citizens, Axios' Russell Contreras reports.

What's next: Trump's plan to deport millions of immigrants likely will depend not on removing criminals, but on telling people who are in the U.S. legally that they're no longer welcome, Contreras and Axios' Brittany Gibson write.

President Trump has set a radical new course in the U.S.-China rivalry, ceding ground to Beijing in pursuit of a far narrower vision of America's role in the world.

Why it matters: Six months into office, the Trump administration has hollowed out the machinery of American soft power and retreated from key arenas where the U.S. has sought to blunt China's rise.

• Some of it is strategic: an "America First" rejection of the institutions and norms Trump officials view as bloated, failed or captured by a liberal foreign policy establishment.
• But some of it, critics warn, is shortsighted: focused more on scoring domestic political points than sustaining the long-term foundations of American exceptionalism.

Driving the news: Voice of America — the U.S.-funded broadcaster long trusted to reach audiences inside authoritarian regimes — has gone dark in key regions after the Trump administration gutted its parent agency.

• Chinese state media is moving aggressively to fill the vacuum, expanding broadcasts in Nigeria, Thailand, Indonesia and other countries where VOA once saturated the airwaves, The Wall Street Journal reports.
• In a scathing report this week titled "The Price of Retreat," Senate Democrats accused Trump of damaging America's diplomatic toolkit and failing to offer "a viable alternative" to counter Chinese propaganda.

The big picture: Across domains where the U.S. once projected influence without military force, the Trump administration is unilaterally disarming.

• Alliances: Trump's tariff threats and bullying have undermined trust among allies critical to countering China's influence, complicating efforts to present a unified front in the Indo-Pacific and beyond. Trump officials say the president has been consistent — and successful — in his demand for allies to do more to pay for their own defense.
• Global institutions: Trump has pulled the U.S. out of multilateral bodies he deems hostile or ineffective, such as the World Health Organization and UN Human Rights Council.
• Science: Trump's funding cuts to research and crackdown on elite universities have triggered fears of a U.S. "brain drain." China is making massive, long-term investments and recruiting top talent in AI, biotech and space — and already leads the U.S. in 57 of 64 advanced technologies tracked by the Australian Strategic Policy Institute.
• Clean energy: The passage of Trump's "Big, Beautiful Bill" is poised to kneecap America's renewable energy boom, widening China's already dominant lead in electric vehicles, batteries and clean tech supply chains.

Zoom in: In prioritizing trade and market access, Trump has adopted a less confrontational approach to the Chinese national security challenges that had — until recently — united Washington across partisan lines.

• AI chips: Trump reversed course this week and approved the sale of advanced chips to China after a personal request by Nvidia CEO Jensen Huang. Some national security experts also warn that Trump's push to make the Persian Gulf a hub for AI development could give China backdoor access to cutting-edge U.S. technology.
• TikTok: Trump has openly defied a new law requiring Chinese parent company ByteDance to divest from the popular app or face a ban in the U.S. He's repeatedly granted extensions, brushing off the national security concerns that his own administration elevated during his first term.

What they're saying: "The Biden administration oversaw a bloated and waste-ridden operation that doled out billions of dollars annually without oversight and resulted in duplicative or even contradictory foreign policy," White House spokesperson Anna Kelly said in a statement.

• "President Trump and Secretary Rubio have made America respected again while ensuring that all actions align with the America First agenda that people voted for."

Between the lines: While Beijing has stepped into some voids left by America's retreat, it has shown little appetite for taking on large-scale humanitarian aid or governance reform work.

• China has had some success in pitching itself as the more globally responsible superpower, but Beijing's aid commitments and diplomatic initiatives often are less substantive than they might appear, says Elizabeth Economy, a former Commerce Department adviser on China now at the Hoover Institution.

Secretary of State Marco Rubio, a China hawk who aggressively advocated for foreign aid as a senator, has embraced the "America First" model of tying U.S. assistance to the nation's interests, rather than promoting values.

• "What Marco is doing is turning that upside down. He's saying, 'We have our interests. What are yours?' And if there's mutual benefit, let's do it," an outside adviser to the Trump administration told Axios.
• "Ambassadors are lining up for this and saying, 'Thank God — you're not telling us what to do.'"

The intrigue: Rubio's firing of thousands of State Department officials, including China policy staff, has raised concerns that the U.S. is sidelining its own expertise in ways that ultimately could benefit Beijing.

• "What you're hearing is the howling of the dying establishment that fed like pigs at the trough — a bunch of Oberlin grads pushing climate change and gender now don't have a job," the outside adviser argued.
• "And they think Russia and China are celebrating. But the fact is, this means we're being realists for the first time in a long time."

The flipside: Economy argues there's a dangerous short-termism to the administration's cuts in areas such as foreign aid or educational exchanges.

• "These things aren't always 1-to-1, you give this and get that. You're building up goodwill and support over the long term," she says, citing U.S. investments after World War II to rebuild countries that became democratic allies — and still are, 80 years later.
• "You don't win over friends with the kind of coercive diplomacy this administration prioritizes."

By the numbers: A new Pew Research poll of 25 countries found that China — not the U.S. — is now the world's leading economic power.

• China was seen as the top power by pluralities in 13 of those 25 countries, vs. just six countries in a similar poll in 2023.
• China's favorability in most countries polled by Pew has ticked upward, while America's global favorability has diminished significantly since Trump took office.
• Still, suspicion toward China persists — particularly in Indo-Pacific countries like Japan, India and South Korea, where the U.S. remains the more trusted partner.

Axios' Marc Caputo contributed reporting.

Elon Musk's xAI, even more than rival AI startup leaders like OpenAI and Anthropic, is a cash incinerator — and despite the company's soaring valuations, it has little prospect of building significant revenue, let alone profit.

Yes, but: There's one niche of a future AI business ecosystem that xAI fits perfectly. It could end up as the Fox News of the AI infosphere — a right-skewed source of truth for those who view mainstream alternatives as too "woke."

The big picture: Musk is trying to raise an additional $5 billion for xAI, and he's turning to his own companies for cash — including SpaceX and Tesla — presumably because it's convenient and free of strings.

• It could also mean that outside investors are tiring of throwing money at the company, which has already raised more than $20 billion in debt and equity but continues to show little return.

By the numbers: xAI's AI business is expected to bring in $500 million in revenue this year, per Bloomberg, chiefly from API fees and subscriptions.

• Now that Musk has rolled X into xAI, xAI can add the former Twitter's $2.26 billion estimated ad revenue (per eMarketer).
• That figure may look paltry next to the income of social media giants like Meta and YouTube, but it's transformative for xAI's top line.
• The company also made headlines last week with an announcement that it has a deal for "up to $200 million" with the Pentagon, which is exploring uses for advanced AI and has also made similar deals with OpenAI, Google and Anthropic.

So the revenue line is beginning to move up — but hardly enough to justify the $200 billion valuation that Musk is reportedly seeking from new investors in xAI, or even cover its estimated $1 billion-a-month burn rate.

• The company does have some real assets: Its foundation model, Grok, has matured to a level where, for the moment, it's beating rivals like OpenAI's GPT, Anthropic's Claude and Google's Gemini on a variety of benchmark tests. And its Colossus data center in Memphis is one of the largest AI development facilities in the world today.

But turning those assets into cash flow is going to be very hard.

• The AI model business is ridiculously competitive, with those three rivals all boasting larger customer bases, more impressive research records and better reputations.
• It's unlikely that the U.S. market will support four separate, wildly expensive and largely duplicative frontier-model makers. That would leave Musk's company as the AI equivalent of the losers in the 1990s search engine wars. Who remembers Lycos or Excite?

xAI's biggest advantage is its integration with X. It gets real-time news and information from X users at the same time that it can promote its chatbot's services to them.

• The problem is, this edge is also an Achilles' heel for xAI, because X itself has become such a troubled media environment.
• Since Musk bought Twitter in 2022 and renamed it X, he has opened the doors wide to racists, extremists, Nazis and other hate groups — in the name of free speech.
• That's had an impact not only on the social media platform, which has seen an exodus of left-leaning users and nervous advertisers, but also on xAI's Grok, which recently went on a pro-Hitler posting bender.

What's next: The likeliest path for xAI is to continue to cultivate and refine its appeal to the deep red side of America's red-blue split.

• Google, Apple, Microsoft, Meta, Amazon, OpenAI, Anthropic and other startups are all in a race to connect consumers and businesses to AI.
• The key differentiator will be how well they integrate AI with the rest of the tech we use every day — whether that's phones and desktop software, education and medical platforms, or cars and TV sets.

But some potential AI users will also choose based on ideology.

• Many of these users don't want their chatbots telling them that Donald Trump lost the 2020 election, that ivermectin is not a cure-all, and that climate change is real.
• There might even be some who don't mind hearing that Hitler was an admirably decisive leader.
• AI makers who want their chatbots to provide a middle-of-the-road consensus reality may not satisfy such users. That opens a lane for Musk's Grok — which can be intentionally provocative and, at one point, was instructed to "not shy away from making claims which are politically incorrect."

Of course, it's hard to predict what the size of that market is, or how xAI could tap it for enough revenue to support a ten-figure valuation.

• Fox News has dominated the conservative media for several decades, but at a roughly $24 billion market cap, Fox Corporation today is worth 1/8 what Musk is reportedly asking for xAI.

The Senate early Thursday passed President Trump's requested clawback of $9 billion in federal funding for the Public Broadcasting Service, National Public Radio and foreign aid programs.

Why it matters: It's a win for conservative fiscal hawks who wanted to follow on DOGE's work, while Democrats fear the victory for the White House opens the door for more rescissions packages negating bipartisan spending deals.

• The measure passed 51-48 with only Republican support. Two Republicans — Susan Collins (Maine) and Lisa Murkowski (Alaska) — voted with Democrats against the bill.
• The package will now need to gain final approval in the House, which is facing a Friday deadline to get the measure to Trump.

The big picture: The GOP's rescissions package takes back money that has already been appropriated by Congress and signed into law by the president.

• The Senate stripped parts of the version the House passed in June, including cuts to PEPFAR — a global health program to prevent HIV and AIDS.
• To secure the support of Sen. Mike Rounds (R-S.D.), GOP leaders committed to fund tribal broadcast services in South Dakota.
• Democrats waged a messaging campaign against the bill, hoping to pick off the support of enough Republicans to sink it.

Driving the news: Senators endured hours of yet another vote-a-rama, with Democrats raising numerous amendments to try to undo parts of the bill.

• Collins and Murkowski at times voted in favor of amendments, though none passed.

Between the lines: Democrats worry Trump will ask Congress to approve even larger rescission packages in the future, potentially undermining bipartisan deals to avoid a government shutdown.

• Senate Minority Leader Chuck Schumer (D-N.Y.) has warned Republicans against more attempts to rescind federal funding, signaling that could threaten Democrats' support for government funding bills ahead of a Sept. 30 deadline.
• Unlike the rescissions bills, which have a simple majority threshold for passage, any measure to fund the government before the end of September will require Democratic support to get to 60 votes in the Senate.

The House voted late Wednesday to take up a bill establishing a regulatory framework for stablecoin issuers, after a record-breaking session that involved intense negotiations to quell a rebellion from hardliners.

Why it matters: "The vote puts the GENIUS Act on a glide path to Trump's desk this week for his signature.

• After huddling in Speaker Mike Johnson's (R-La.) office, members of the House Freedom Caucus switched their votes to "yes," ending a nearly 10-hour standoff.
• The House is set to vote Thursday on the GENIUS Act as a standalone measure. Conservatives were pushing to combine a trio of crypto bills into one package, but ultimately settled for a partial win.

The latest: House GOP leadership unlocked support for the vote by agreeing to attach one of the key crypto measures, the Anti-CBDC Surveillance State Act, to the must-pass National Defense Authorization Act.

• Johnson told reporters he spoke with Senate Majority Leader John Thune (R-S.D.) on Wednesday about adding the provision to the NDAA.
• "We're hopeful that they'll hold the line," Johnson said of the Senate.

The big picture: Wednesday's revote prevailed 217-212 and follows a meeting Trump said he held late Tuesday in the Oval Office with opponents.

• "I am in the Oval Office with 11 of the 12 Congressmen/women necessary to pass the GENIUS Act and, after a short discussion, they have all agreed to vote tomorrow morning in favor of the Rule," Trump posted on his Truth Social account.
• But that confidence proved premature.

Catch up quick: The House floor ground to a halt Tuesday after the chamber rejected a procedural vote setting terms for floor debate on the GENIUS Act.

• Johnson abruptly cancelled votes for the rest of the day amid demands to combine the GENIUS Act with two other crypto bills the chamber is considering this week.
• That would have forced the Senate to reconsider the legislation, likely leading to significant delays.

Zoom out: After months of delicate bipartisan negotiations, the Senate passed the GENIUS Act in June by a 68-30 vote.

• Although the House has drafted its own stablecoin legislation, it ultimately chose to take up the Senate-passed version — in part to avoid having to go back to the Senate.
• Trump has said he wants the GENIUS Act on his desk as soon as possible.

Storms sweeping through the U.S. this summer have dumped intense rain on cities across the country, left towns flood-ravaged and forced water rescues.

The big picture: Scientists who spoke to Axios say the deadly floods in Texas that killed more than 130 people underscores the risk that climate change can worsen extreme rainfall events.

• By the early hours of the Fourth of July, storms over Texas had dumped some 12 inches of rain in certain parts of the region, according to National Weather Service radar estimates cited by The Texas Tribune.
• But the threat didn't stop that day, with more rain falling and hindering desperate search efforts throughout the following week.

Driving the news: Meanwhile, on the East Coast, Tropical Storm Chantal rapidly formed — and slowly drenched North Carolina with flooding rains.

• Last week, storms sparked floods in New Mexico that killed three in the Village of Ruidoso.
• Widespread rainfall along the I-95 corridor in the Mid-Atlantic Monday set off flash flood warnings, grounded flights and sent torrents rushing through New York City subway stations.
• In New Jersey, two people died after the vehicle they were in was swept away by floodwaters.

Context: Climate change "is supercharging the water cycle," sparking heavier precipitation extremes and related flood risks, according to Climate Central, a climate research group.

• Among 144 U.S. cities analyzed by the group in a report from earlier this year, 88% experienced an increase in hourly rainfall intensity between 1970 and 2024.
• The summer months already provide the weather patterns for higher rainfall rates in some regions, and climate change makes that risk worse.

The latest: A National Weather Service discussion warned the risk wasn't over, noting that a "[p]otent summer storm system" will bring the threat of flash flooding and severe weather "to the Midwest and northern/central Plains Wednesday."

• It also noted "storms will continue ahead of the cold front across the interior Northeast/northern Mid-Atlantic/Upper Ohio Valley Thursday."
• In Louisiana, New Orleans and Jefferson Parish is bracing for up to 10 inches of rainfall as a tropical system moves through the region.

Friction point: The Washington Post reported Wednesday that the development of a tool aiming to predict how rising temperatures will impact extreme rainfall frequency had been delayed amid a Commerce Department review.

• A NWS spokesperson confirmed to the Post the move to delay the forward-looking part of the Atlas 15 project.
• But a National Oceanic & Atmospheric Administration spokesperson told Axios the administration "has not stopped the production of Atlas-15."
• The Commerce Department did not immediately respond to Axios' request for comment.

What they're saying: "With all these events, what they have in common is that in a warmer world, our atmosphere can hold more moisture," said meteorologist Shel Winkley, the weather and climate engagement specialist at Climate Central.

• In Texas, he said, the remnants of a tropical system primed the area for a heavy rain event over a part of the state prone for flash floods. In a stable climate, it still would have been a significant weather event. But with climate change, "we're essentially just loading up" systems, he said.
• Winkley continued, "We're adding a little bit more moisture, so that allows for higher rainfall intensity. It allows for a little more heavier rain to come down, and it allows for these weather systems to become more likely and ... more frequent."

By the numbers: For every 1°F of warming, the air can hold an extra 4% of moisture, per Climate Central.

• With climate change, the atmosphere becomes "greedier," Winkley said, meaning it can release more moisture — but it can also take more from the ground.

Zoom in: In New Mexico, rain fell over an area that had been previously hit by wildfires, increasing its risk of flash floods.

• Similarly, the ground in areas hit by drought — like Kerr County, Texas — may not be able to handle downpours, exacerbating flash flood risk.

The bottom line: With 2°C of global warming, a large majority of U.S. counties are likely to experience a 10% or higher increase in precipitation falling on the heaviest days, Winkley noted.

• "We understand that there's an even bigger increase ... where we're headed versus where we are now," he said.

Go deeper: How the Texas floods compare to the deadliest floods of the past decade

Editor's note: This article has been updated with comments from the NOAA.

The Trump administration is being sued by 20 states that are seeking to block the cancellation of a grant program that helped protect against potential natural disasters.

The big picture: "By unilaterally shutting down FEMA's flagship pre-disaster mitigation program, Defendants have acted unlawfully and violated core separation of powers principles," says the lawsuit that was filed in Boston on Wednesday. The program has helped state, local and territorial governments and tribal nations work to reduce their hazard risk.

Driving the news: In April, FEMA announced that it would end the Building Resilient Infrastructure and Communities grant program and cancel all BRIC applications from fiscal years 2020–2023.

• The post announcing the cuts was titled: "FEMA Ends Wasteful, Politicized Grant Program, Returning Agency to Core Mission of Helping Americans Recovering From Natural Disasters." It appears to have since been removed.
• The suit led by Washington and Massachusetts argues that by "refusing to spend funds Congress directed toward BRIC or trying to spend them on other programs," the administration had violated the Constitution and unlawfully intruded on Congress' "power of the purse."

Zoom in: "The impact of the shutdown has been devastating. Communities across the country are being forced to delay, scale back, or cancel hundreds of mitigation projects depending on this funding," the states argue in the suit.

• Projects that have been in development for years, and in which communities have invested millions of dollars for planning, permitting and environmental review, are now threatened. And in the meantime, Americans across the country face a higher risk of harm from natural disasters.

For the record: Most of the states suing the Federal Emergency Management Agency, acting FEMA head David Richardson, the Department of Homeland Security and Homeland Security Secretary Kristi Noem are Democratic-led.

• The states suing the administration are: Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and Wisconsin.
• Representatives for the DHS and FEMA did not immediately respond to Axios' request for comment on Wednesday evening.

Go deeper: Governors accuse Trump admin of stalling disaster recovery

Editor's note: The photo in this story was changed as the previous photo incorrectly identified Agriculture Secretary Brooke Rollins as Homeland Security Secretary Kristi Noem.

House Republicans broke the record Wednesday for the lower chamber's longest vote in history — for the second time in as many weeks.

Why it matters: It's the latest example of House Speaker Mike Johnson's strategy for dealing with his razor-thin majority — holding votes open for hours as he tries to sway opponents in his own party.

• Wednesday's record-setting vote was on a resolution setting the terms of debate on several measures, including the GENIUS Act, which would establish a regulatory framework for stablecoin issuers.
• That broke the previous record, set two weeks ago to the day amid grueling negotiations over President Trump's "big, beautiful bill."

The big picture: Before two weeks ago, the previous record was set in 2021, when the House took seven hours and six minutes on a procedural vote related to then-President Biden's Build Back Better legislation.

• This was Johnson's (R-La.) second attempt after the House floor ground to a halt Tuesday when the chamber rejected the procedural vote on the first try.
• Johnson is facing demands from hardliners to combine the GENIUS Act with two other crypto bills the chamber is considering this week.
• That would force the Senate to reconsider the legislation, likely leading to significant delays.

Between the lines: Wednesday's revote followed a meeting Trump said he held late Tuesday in the Oval Office with opponents — after which he declared victory, apparently prematurely.

• "I am in the Oval Office with 11 of the 12 Congressmen/women necessary to pass the GENIUS Act and, after a short discussion, they have all agreed to vote tomorrow morning in favor of the Rule," Trump posted on his Truth Social account.

A federal judge on Wednesday delayed making a ruling on whether Kilmar Ábrego García should be released from jail as he awaits trial, multiple outlets reported.

The big picture: The legal U.S. resident, who spent nearly three months in an El Salvador mega-prison before being returned to a Tennessee jail, is awaiting trial on human smuggling charges to which he has pleaded not guilty.

Driving the news: U.S. District Judge Waverly Crenshaw Jr. reportedly said during a hearing Wednesday that he plans to making a ruling next week on the Trump administration's case against Ábrego García.

• The administration has indicated it will deport Ábrego García if he's released pending trial.

Catch up quick: A federal judge ordered Ábrego García's release from prison last month, but another judge then ruled he should remain in jail for now over concerns from his legal team that he could be deported if freed while awaiting trial.

• The administration has accused Ábrego García of being a criminal and a member of the MS-13 gang, which his attorneys have denied.

Go deeper: Ábrego García alleges "severe beatings," torture in El Salvador prison

Some Senate candidates aren't hitting the fundraising circuit as if their political lives depend on it.

Why it matters: Most battleground senators facing reelection this cycle put up seven-figure fundraising numbers last quarter. It's a testament to the power of incumbency, indicating their own desire to stay in office.

• But Sen. Joni Ernst (R-Iowa) raised $723K this quarter, compared to $1.1 million during the same period six years ago.
• Former Rep. Mike Rogers, the GOP's preferred candidate in Michigan, raised $1.5 million, much of it through his joint fundraising committee. The figure is unlikely to scare Rep. Bill Huizenga (R-Mich.) out of a contested primary.

By the numbers: The Democrats' most endangered incumbent, Sen. Jon Ossoff (D-Ga.), had another impressive quarter, raising $10 million. That leaves him with $15.5 million cash on hand.

• Sen. Susan Collins of Maine, the only GOP senator from a state Democrats won in the presidential election last year, raised $2.4 million. She has $5.25 million cash on hand.

Zoom in: Sen. John Cornyn, facing a GOP primary challenge from Texas Attorney General Ken Paxton, raised $3.9 million for the quarter, although more than $3 million of that was to his joint fundraising committee.

• Paxton raised $2.9 million for the quarter and has $2.5 million cash on hand.
• Sen. Bill Cassidy (R-La.), who also faces a primary challenger, raised $2.1 million and has more than $9 million cash on hand.

What we're hearing: Ernst is telling colleagues she'll make a decision to run for reelection this fall.

• If she doesn't run, GOP strategists expect Rep. Ashley Hinson (R-Iowa) to jump in.
• Hinson raised $850,000 for the quarter and has $2.8 million cash on hand — funds she can transfer from her House race to a potential Senate one.
• Ernst campaign manager Bryan Kraber told us in a statement: "Instead of fundraising trips and meeting with millionaires, Senator Ernst has been hard at work advancing President Trump's agenda and delivering a tax break for hardworking Iowans."

Go deeper: Rogers, who struggled with fundraising in his 2024 loss to Sen. Elissa Slotkin (D-Mich.), does have some outside support from a super PAC this cycle. The Great Lakes Conservative Fund raised more than $5 million to support his candidacy, according to The Hill.

• His quarterly numbers this year are double the amount he raised in the first quarter after he announced in 2023.
• "I'm in this fight for Michigan, and we're going to win it for Michigan," Rogers said when he announced his Q2 numbers.

The Senate is plowing ahead Wednesday evening on $9 billion in cuts to PBS, NPR and foreign aid, threats from Democrats be damned.

Why it matters: Democratic leaders — and some high-level Republicans — say budget rescissions undermine the trust they need to pass the annual bipartisan spending deals.

• Senate Minority Leader Chuck Schumer (D-N.Y.) has warned Republicans they'll be left to figure out a potential government shutdown on their own if they keep the partisan cuts coming.
• But GOP leaders insist they aren't worried.

Between the lines: Democrats have a "valid concern" about making spending deals just to be undone through rescissions, Sen. Mike Rounds (R-S.D.) told reporters Wednesday.

• "We've actually shared with folks from the administration that the bigger challenge for them is — appropriations take 60 votes," Rounds said.

The other side: Majority Leader John Thune (R-S.D.) told Axios he didn't think the appropriations would be any more difficult because of the rescissions package.

• "I think we can have a bipartisan process," he said, pointing to the appropriations bills that have already been voted out of committee with Democratic support.
• He said the Senate could even start voting on appropriations bills or the National Defense Authorization Act as early as before the August recess.
• "I think our first markup went well. The second one was mixed, but we've reported bills out of committee. I expect we're going to report more tomorrow," Senate Appropriations Chair Susan Collins (R-Maine) said on whether rescissions will complicate her job.

The simple math: Government spending bills require 60 votes to advance in the Senate.

• But rescission packages — which cut specific spending from a budget — can be passed with a simple majority, as they're set to tonight.
• "This is beyond a bait-and-switch — it is a bait and poison-to-kill," Schumer said earlier this month.

The bottom line: Votes on rescission packages originating from the White House are rare.

• It hasn't been done successfully since 1999.

Mainstream Senate Democrats are starting to echo their party's base, which has soured on supporting Israel.

Zoom in: Sen. Elissa Slotkin (D-Mich.), a moderate Democrat from a swing state, this week slammed the Israeli government for the lack of humanitarian aid in Gaza and violence by Israeli settlers in the West Bank.

• "There are times when, to me, it doesn't look like [Prime Minister Benjamin Netanyahu] is prioritizing the hostage situation," Sen. Tim Kaine (D-Va.) told Axios. "Certainly, there's times when it looks like Hamas does not want a deal."
• "I think it's way overdue to have Democratic members of Congress speak up and speak out about the humanitarian disaster in Gaza," Sen. Chris Van Hollen (D-Md.), another moderate who has criticized Israel since the start of the war, told Axios on Wednesday.

The big picture: The comments are part of a significant shift in tone toward Netanyahu from the center of the Democratic Party.

• Slotkin's post on X this week addressed the killing of an American by Israeli settlers in the West Bank and slammed Netanyahu for a lack of accountability.
• Slotkin, a former CIA analyst who spent time in Iraq, told Axios on Wednesday she has heard "lots of negative feedback" about her post following a "very rough weekend in the Middle East."
• "I say strong things about Iran and how I'm glad that their nuclear capability has been put back, and I also hear a negative response to that," Slotkin said. "So I just try and objectively call balls and strikes."

The other side: Sen. John Fetterman (D-Pa.) has emerged as one of the strongest pro-Israel voices in the party.

• Fetterman offered his full support of President Trump's decision to attack Iran last month, saying the U.S. commitment to Israel must be "absolute."

The bottom line: Progressive Sen. Bernie Sanders (I-Vt.) told Axios that lawmakers are starting to understand "this is not just a moral issue, it's a political issue."

• Van Hollen, a leading Senate Democratic voice against the Netanyahu government, told Axios he's happy to have more Democrats speak up.
• "We've seen a pattern of impunity from the Netanyahu government — no accountability for these killings — and we've seen a pattern of indifference from the U.S. government," Van Hollen said. "I'm glad more people seem to be paying attention."