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▪ Dems looking back and ahead

▪ Trump dealt blow by Supreme Court

▪ President links tariffs with GDP growth

▪ Hemp industry gets a lifeline

© The Associated Press | Julia Demaree Nikhinson

The Democratic Party is wrestling over whether it should look in the rearview mirror or keep its eyes on the horizon.

After a crushing 2024 presidential election and with a busy 2026 midterm cycle underway, the party might have to do a little bit of both.

The internal debate is playing out as the party considers its first moves in the new year, which is set to begin with a key government funding deadline.

While Congress remains out for the holiday break, lawmakers will soon return to Capitol Hill with another potential government shutdown looming. Funding for most of the federal government will expire on Jan. 30 if Republicans, Democrats and President Trump can’t come to an agreement on a stopgap measure or a longer-term deal.

The soon-to-expire Affordable Care Act (ACA) enhanced subsidies remain a major sticking point in both chambers, and moderates in the House recently met with a bipartisan group of senators to brainstorm how to push an extension of the tax credits across the finish line.

But Senate Democrats are nonetheless raising the possibility of another shutdown. A potential deal to fund a broad swath of the federal government fell through just before the holiday recess after Sens. John Hickenlooper and Michael Bennet, two Colorado Democrats, objected to the Trump administration’s threat to dismantle a leading government-funded center for atmospheric and climate research in Boulder, Colo.

▪ The Hill: Democrats renew government shutdown threat as tensions flare with Trump.

▪ Politico: ‘We wasted a lot of time’: The next shutdown deadline will be here sooner than you think.

The late January deadline will mark only the beginning of a crucial year for Democrats, with the party hoping to clinch the House and possibly the Senate in next fall's midterm elections at the midway point of Trump’s second term.

Some Democrats are arguing that a postmortem on the 2024 defeats is needed before the party moves on. Activist and former Democratic National Committee (DNC) Vice Chair David Hogg recently slammed the party for choosing not to release an analysis of what happened in 2024.

“They are spiking an autopsy of the election that gave us Trump 2.0. If party leaders won’t take the steps required to rebuild ourselves into a winning coalition, we will take it into our own hands,” Hogg said in a post on the social platform X, arguing more “young, progressive candidates” need to be elected.

The intraparty debate is simmering as 2025 comes to a close. Some want to stay on the offensive and keep the public focus on Trump and his policies, while others want to understand what went wrong last year before charting a path forward, The Hill’s Alexander Bolton reports.

“I think our focus ought to be on 2026. Looking backward at this point may serve no purpose at all, just create more division,” Sen. Richard Blumenthal (D-Conn.) told Bolton.

One top Democratic strategist told The Hill’s Amie Parnes, however, that the party “loves to gloss things over.”

▪ The Hill: Democrats second-guess DNC decision to end autopsy of losses to Trump, GOP.

▪ Reuters: Democrats shelve report on 2024 loss to Trump, eye midterm comeback.

Former Vice President Kamala Harris — who was at the center of the 2024 election losses — recently said Democrats must look inward and wondered aloud whether the party is “really listening to the people.”

“In some ways, we are very much stuck in the past, and so we’re not speaking in a way that sounds authentic or relatable or just relevant,” Harris told former DNC Chair Jaime Harrison on his podcast.

Some Democrats argue the party has already rebounded from the bruising 2024 election, with Democratic candidates finding success this year by focusing on economic issues, such as affordability, and largely downplaying culturally divisive issues, such as immigration; diversity, equity and inclusion; police reform; and transgender rights.

How several Democratic primaries play out in early 2026 could provide hints for how the party and its voters want to move forward.

In Maine, moderate Democratic Gov. Janet Mills is going up against Graham Platner, an oyster farmer who has been endorsed by Sen. Bernie Sanders (I-Vt.) and has faced backlash for controversial past Reddit posts. The pair are battling for a chance to unseat longtime incumbent Sen. Susan Collins (R).

In Texas, Rep. Jasmine Crockett leads a field of Democrats that includes state Rep. James Talarico as the party looks to take on Sen. John Cornyn (R), who is also facing primary challengers. Crockett’s entrance into the race has divided her party, with some criticizing her polarizing approach to politics and others arguing she has name recognition and grassroots energy, The Hill’s Julia Mueller recently reported.

Other key battleground primaries for Democrats will occur in Michigan and Minnesota.

Programming note: Morning Report is taking a break Thursday for Christmas. In the meantime, sign up for The Hill's Tipsheet to get the day's top headlines. We'll be back in your inboxes Friday.

© The Associated Press | Gerry Broome

HIGH COURT HANDS TRUMP MAJOR LOSS: The Supreme Court on Tuesday ruled that Trump may not deploy National Guard troops to Chicago amid his push to patrol multiple Democratic-led cities.

After more than two months of consideration, the court, in an apparent 6-3 decision, declined to pause a district court judge’s ruling temporarily halting the National Guard troops from being federalized and deployed in Illinois, The Hill’s Ella Lee reports.

“At this preliminary stage, the Government has failed to identify a source of authority that would allow the military to execute the laws in Illinois,” the unsigned order reads.

This is the first time the court has ruled on the president’s use of National Guard troops domestically.

The court explained that to justify mobilizing the National Guard, a president must be unable to execute laws with the regular forces of the U.S. military, Lee reports. That would require “exceptional” circumstances because of the Posse Comitatus Act, a law that generally bans federal troops from acting as civilian law enforcement.

Trump has sent the National Guard to major cities including Chicago, Portland, Los Angeles and Washington, D.C., prompting challenges that could be affected by Tuesday’s decision.

Justice Brett Kavanaugh sided with the majority but wrote in a separate opinion that he would have ruled more narrowly.

Justice Samuel Alito argued in a dissenting opinion joined by Justice Clarence Thomas that the high court “unnecessarily and unwisely departed from standard practice” in the case by explaining its reasoning more fully.

And Justice Neil Gorsuch, in another opinion, listed a series of “sensitive and gravely consequential” questions he has about the roles the National Guard and military may play in domestic law enforcement — but said he’s not yet comfortable answering any of them.

▪ SCOTUSblog: Supreme Court rejects Trump’s effort to deploy National Guard in Illinois

TRUMP LINKS TARIFFS WITH GROWTH: The president took to Truth Social on Tuesday to tout new data showing a robust expansion of the U.S. economy after months of facing headwinds over affordability concerns.

“The TARIFFS are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED…AND THEY WILL ONLY GET BETTER!” Trump wrote on his social media platform.

He was referring to the news that the American economy grew at a surprisingly strong 4.3 percent annual rate in the third quarter, the most rapid expansion in two years, according to The Associated Press.

Gross domestic product (GDP) grew at a rate of 3.8 percent during the second quarter, and economists surveyed by the data firm FactSet had forecast growth of just 3 percent for the period of July through September.

▪ NPR: The U.S. economy grew robustly as Americans continued to spend.

The full effect of the president’s sweeping tariffs on the growth statistics last quarter is unclear, but Trump and his allies were quick to make the connection on Tuesday.

“This is what the Trump economy delivers,” Commerce Secretary Howard Lutnick wrote on X. “These are Tariffs at work.”

The Supreme Court is still considering the legality of Trump's tariffs.

SASSE DIAGNOSED WITH CANCER: Former Sen. Ben Sasse (R-Neb.) announced Tuesday he has been diagnosed with Stage 4 pancreatic cancer, writing in a lengthy social media post that “it’s a death sentence.”

“Death is a wicked thief, and the bastard pursues us all,” Sasse, also the former president of the University of Florida, wrote on X. “I’ll have more to say. I’m not going down without a fight.”

The former two-term senator quickly received an outpouring of support, including from Rep. Mike Flood (R-Neb.), who described Sasse’s words as a “remarkable response to a devastating diagnosis.”

“I’m sorry Ben,” added Rep. Jared Moskowitz (D-Fla.) in response to Sasse’s statement. “My dad had the same diagnosis. It was a death sentence. It humbles you quickly. We got 18 months together, and then silence. You wouldn’t wish this on your worst enemy.”

Sasse retired from the Senate in 2023, having grown frustrated in his final years in office, The Hill’s Al Weaver writes. After a brief stint at the helm of the University of Florida, Sasse left that post because of the health of his wife, Melissa, in light of a “recent epilepsy diagnosis and a new batch of memory issues.”

DOJ DEFENDS TRUMP OVER EPSTEIN FILES: After the Department of Justice (DOJ) released thousands more files related to convicted sex offender Jeffrey Epstein early this week, the department said one document, in which Trump was named, is a “fake” after it briefly caused a stir online.

A postcard depicted Epstein as writing to former sports doctor Larry Nassar — who was convicted of sexually abusing underage gymnasts — stating that Trump loved “young” girls. The letter, which was previously flagged for the FBI, portrayed Epstein writing to Nassar while they were both in prison.

The letter was postmarked three days after Epstein’s death in 2019 and was postmarked in Virginia. Epstein was held in New York.

“The FBI has confirmed this alleged letter from Jeffrey Epstein to Larry Nassar is FAKE,” the DOJ wrote on X.

Beyond the letter, the latest batch of documents includes ample references to the president and his relationship with Epstein after Trump was mentioned sparingly in the first release of files last week. The documents continue to have ample redactions.

In one email from 2020, an unidentified Manhattan assistant U.S. attorney alerted the recipient that new flight records “reflect that Donald Trump traveled on Epstein’s private jet many more times than previously has been reported (or that we were aware), including during the period we would expect to charge in a [Ghislaine] Maxwell case.”

▪ The Hill: Trump says New York Times a ‘serious threat’ to national security after Epstein piece.

▪ NBC News: Justice Department releases most significant batch of Epstein files yet, including some that mention Trump.

The DOJ had previously warned in a statement early Tuesday that the latest tranche of documents contains “untrue and sensationalist claims made against President Trump that were submitted to the FBI right before the 2020 election.”

VA BANS ABORTIONS: The Trump administration has quietly banned the Department of Veterans Affairs (VA) from providing abortion services to veterans and their dependents, including those who become pregnant as a result of rape or incest.

A DOJ memo issued on Dec. 18 had concluded the VA may not provide abortion services under any provision of the law, essentially seeking to revoke a Biden administration policy that allowed abortions for those who became pregnant as a result of rape or incest, or if a pregnancy endangered the “life and health” of the person seeking an abortion. 

▪ News From The States: Trump administration officially ends veteran abortion access.

▪ The Washington Times: Trump administration rolls back Biden-era policy that put VA in abortion business.

According to screenshots shared with The Hill of an internal VA memo dated Monday and sent to the leaders of the department's 18 regional integrated service networks, the agency “must comply” with last week’s memo and that “effective immediately,” the VA will no longer provide abortions or abortion counseling, The Hill’s Nathaniel Weixel reports.

Abortion rights advocates slammed the new policy.

“Veterans risked their lives to defend our safety and freedom – and now the Trump Administration is taking away theirs,” Nancy Northup, president and CEO of the Center for Reproductive Rights, said in a statement.

© The Associated Press | Steve Karnowski

HELP FOR HEMP: Hemp businesses and advocates have been scrambling to salvage their industry since November, when a provision in the spending bill that halted the record-breaking government shutdown closed a loophole that had allowed hemp products to be sold with little regulation.

But with Trump’s recent order rescheduling marijuana and allowing Medicare to cover cannabidiol (CBD) treatment, the industry has been thrown a lifeline, The Hill’s Nathaniel Weixel reports.

Trump’s order, released last week, calls for Congress to work with the administration to update the law to keep certain hemp-derived CBD products available “while preserving the Congress’s intent to restrict the sale of products that pose serious health risks.”

The move followed intense lobbying from the industry after the spending bill passed with language classifying any hemp-derived product containing more than 0.4 milligrams of THC as cannabis, which is still illegal at the federal level, though Trump rescheduled it as a Schedule III drug.

CBD is a nonpsychoactive compound found in hemp and cannabis.

Jonathan Miller, general counsel for the U.S. Hemp Roundtable, said he considers Trump’s order a “direct rebuke” to the language in the spending bill, Weixel reports. 

"In terms of where the political discussion is going to go, it is definitely a lifeline and definitely gives us a whole lot more leverage to ensure that what Congress does in the next 11 months is going to be favorable for the industry,” Miller said.

Hemp was legalized in the 2018 farm bill, with the intent that it could be used in agriculture and textiles. But the law’s broad definition and lack of federal regulation created a loophole that allowed companies to extract high levels of THC — the psychoactive compound responsible for getting users high.

The language that was added to the spending bill, which was blasted by Sen. Rand Paul (R-Ky.) over fears it would be disastrous for the hemp industry, allows for a one-year period before the ban takes effect.

Thomas Winstanley, executive vice president and general manager at Edibles.com, said it was refreshing to hear a president acknowledge that cannabis and CBD could have health benefits and are not inherently dangerous substances, Weixel reports. 

“I think what is being signaled is that there are these two categories, cannabis and hemp, are very intrinsically related to one another ... they need to have some concurrent path to regulation,” Winstanley said.

In a fact sheet, the White House said hemp-derived cannabinoid products “have potential to improve patient symptoms for common ailments and are frequently used by Americans.”

Winstanley and others in the industry said they felt whiplash, as the White House seemed to contradict the hemp ban Congress wrote into the funding bill. 

And although some see Trump’s move as a contradiction, Chris Lindsey, vice president for state policy and advocacy at the American Trade Association for Cannabis and Hemp, said Trump was endorsing a tight legislative fix for true CBD companies, “not just some of the companies out there that are basically operating as if they're marijuana companies.”

▪ Louisville Business First: Rand Paul cuts ribbon at Cornbread Hemp amid industry crisis.

▪ San Antonio Current: Texas hemp business leaders applaud Trump's executive order rescheduling cannabis.

© The Associated Press | Nam Y. Huh

RECORD-BREAKING HOLIDAY TRAVEL: The Transportation Security Administration (TSA) is gearing up for what could be the busiest end-of-year travel season in American history, just weeks after a record-setting, single-day screening of 3.13 million people on the Sunday following Thanksgiving.

TSA said in a press release that it is fully staffed and is ready to screen a projected 44.3 million travelers from Friday, Dec. 19, through Sunday, Jan. 4, The Hill’s Max Rego reports. The agency expects the busiest day of travel to be Sunday, Dec. 28 — with roughly 2.86 million people projected to fly — followed by Dec. 19, 20, 21, 27 and 29.

Last year, the agency screened nearly 39 million passengers during the two-week holiday season, calling it the agency’s “busiest end of year holiday travel period ever.”

And now, just a day before Christmas, the TSA is instructing passengers to arrive at the airport early and give themselves plenty of time for parking, checking in and making their way through security. 

The agency also said on its website to bring a valid ID and pack smart before heading to the airport.

▪ CNET: Don't Fly Without a Real ID in 2026, Unless You Want to Pay $45 Extra.

▪ ABC News: Holiday travel forecast: When to fly, drive this Christmas and New Year's.

© The Associated Press | Carolyn Kaster

And finally … Merry Christmas from the Winter White House.

Trump plans to spend another Christmas at Mar-a-Lago, the president’s home and resort in Palm Beach, Fla. Spending the holidays there is familiar for him, as he has spent most Christmases while president at the resort with his family, except notably in 2018, when he chose to stay in Washington, D.C., during a government shutdown.

But it wasn’t Trump who set the first sights on the Palm Beach mansion as a winter retreat for the nation’s chief executive.

Constructed from 1923-1927, Mar-a-Lago (“Sea-to-Lake”) was named because of its location between the Atlantic Ocean and the Lake Worth Lagoon, which is part of the Intracoastal Waterway, according to Britannica.

It was originally the estate of Marjorie Merriweather Post and was placed on the National Register of Historic Places in 1972. Upon Post’s death in 1973, it was bequeathed to the U.S. government in hopes it would be used as a presidential and diplomatic retreat, according to Britannica. But, because of high costs, it was given back to the Post Foundation in 1983.

Trump, then a real estate mogul, bought the property in 1985 and used it as a private residence until 1995, when it opened as a club.

Since the president’s first term in office, the Winter White House (a name Trump himself chose) has played host to dozens of high-profile meetings with business leaders, politicians, heads of state and others the president has conducted business with. He made it his primary residence in 2019 and lived there full time during former President Biden's term.

This visit marks his 20th to the South Florida estate since he began his second term on Jan. 20, according to The Palm Beach Post.

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