Trump Transition Live Updates: Trump Has Second Thoughts on Treasury Pick

The new Treasury secretary will be asked to oversee many of Mr. Trump’s populist economic policies. The slowdown on a selection for the important role interrupts what had been a flurry of nominations that were announced shortly after his election victory.

Separately, Mr. Trump told his transition team that he would stand by his pick for defense secretary, the former Fox News personality Pete Hegseth, even after news of an allegation that Mr. Hegseth had sexually assaulted a woman in an interaction he maintained was consensual.

The transition team received a memo last week from a person claiming to be a friend of a woman who said she was raped by Mr. Hegseth in 2017 and describing the circumstances. The allegations in the memo, obtained by The New York Times, could not be independently verified.

Mr. Hegseth’s lawyer acknowledged that his client had paid the woman who had accused him of sexual assault in 2017 as part of a settlement agreement with a confidentiality clause.

Mr. Trump’s choice of Mr. Hegseth, who has no government experience, to lead the Pentagon brought criticism from many in Washington. He is one of several picks who more establishment political figures are resisting.

Mr. Trump still has a number of high-level positions to fill, including the heads of the Commerce, Labor and Transportation departments.

Here’s what else to know:

• Biden in Brazil: President Biden visited Manaus, Brazil, on Sunday and promised new financial help to protect the Amazon, making one final push to combat climate change before Mr. Trump returns to the White House next year.

• F.C.C. pick: Mr. Trump chose Brendan Carr to be chairman of the Federal Communications Commission. Mr. Carr is a veteran Republican regulator who has publicly agreed with the incoming administration’s promises to slash regulation, go after Big Tech and punish television networks for perceived political bias.

• Confirmation battle: Matt Gaetz, Mr. Trump’s pick for attorney general, will need the votes of senators he has scorned if he wants to be confirmed.

• Billionaires behind the scenes: The business executives who invested millions of dollars in Mr. Trump’s candidacy now stand to profit from his policies. They anticipate a more business-friendly atmosphere, including the firing of Biden-era regulators.

Mr. Trump’s early transition moves amount to a generational stress test for the system. If Republicans bow to his demand to recess the Senate so that he can install appointees without confirmation, it would rewrite the balance of power established by the founders more than two centuries ago. And if he gets his way on selections for some of the most important posts in government, he would put in place loyalists intent on blowing up the very departments they would lead.

He has chosen a bomb-throwing backbench congressman who has spent his career attacking fellow Republicans and fending off sex-and-drugs allegations to run the same Justice Department that investigated him, though it did not charge him, on suspicion of trafficking underage girls. He has chosen a conspiracy theorist with no medical training who disparages the foundations of conventional health care to run the Department of Health and Human Services.

He has chosen a weekend morning television host with a history of defending convicted war criminals while sporting a Christian Crusader tattoo that has been adopted as a symbol by the far right to run the most powerful armed forces in the history of the world. He has chosen a former congresswoman who has defended Middle East dictators and echoed positions favored by Russia to oversee the nation’s intelligence agencies.

Nine years after Mr. Trump began upsetting political norms, it may be easy to underestimate just how extraordinary all of this is. In the past, none of those selections would have passed muster in Washington, where a failure to pay employment taxes for a nanny used to be enough to disqualify a cabinet nominee. Mr. Trump, by contrast, has bulled past the old red lines, opting for nominees who are so provocative that even fellow Republicans wondered whether he is trolling them.

Now Mr. McCarthy is long gone, Mr. Gaetz is the president-elect’s choice to run the Justice Department, and Mr. Johnson is doing what Mr. McCarthy never would — intervening to try to make sure the damaging material on Mr. Gaetz never sees the light of day.

It is a fitting coda to two years of tumult in the Republican-led House, disorder that was exacerbated by bad blood among individual members.

The chaos has been driven by big-picture political dynamics: a polarized Congress where compromise is a lost art, a G.O.P. split between center-leaning conservatives and the hard right, and a too-small majority that gave outsize power to rebels like Mr. Gaetz.

But that public drama was also fueled at least in part by more personal and petty feuds, chief among them the one between Mr. Gaetz and Mr. McCarthy over the ethics inquiry.

Their epic rivalry became emblematic of the party’s deeper problems. Personal vendettas and shifting alliances became as important to its players as any ideology or policy win. Over the past two years in Congress, governing often took a back seat to intraparty feuding.

Mr. McCarthy has long claimed that Mr. Gaetz tried to block his ascension to the speakership, and then patiently plotted his downfall because of his refusal to quash the investigation.

“I’ll give you the truth why I’m not speaker,” Mr. McCarthy said in April during an appearance at Georgetown University. “It’s because one person, a member of Congress, wanted me to stop an ethics complaint because he slept with a 17-year-old.”

Mr. Gaetz, for his part, has claimed that the yearslong inquiry into his conduct was a smear campaign driven by Mr. McCarthy and his allies.

“It seems that the Ethics Committee’s interest in me waxes and wanes based on my relationship with the speaker,” he said last year.

Mr. Gaetz insisted his opposition to Mr. McCarthy was driven by principles about wasteful government spending and a devotion to single-subject spending bills. But the fight stayed nasty and personal long after most people had moved on. And Mr. Gaetz never targeted Mr. Johnson when the current speaker pushed through the same kinds of catchall spending bills that Mr. McCarthy had passed.

Mr. Carr, 45, was the author of a chapter on the F.C.C. in the conservative Project 2025 planning document, in which he argued that the agency should also regulate the largest tech companies, such as Apple, Meta, Google and Microsoft.

“The censorship cartel must be dismantled,” Mr. Carr said last week in a post on X.

Mr. Carr could drastically reshape the independent agency, expanding its mandate and wielding it as a political weapon for the right, telecommunications attorneys and analysts said. They predicted Mr. Carr would test the legal limits of the agency’s power by pushing to oversee companies like Meta and Google, setting up a fierce battle with Silicon Valley.

Mr. Carr has “proposed to do a lot of things he has no jurisdiction to do and in other cases he’s blatantly misreading the rules,” said Jessica Gonzalez, co-chief executive of the nonpartisan public interest group Free Press.

“Commissioner Carr is a warrior for free speech, and has fought against the regulatory lawfare that has stifled Americans’ freedoms, and held back our economy,” Mr. Trump said in a statement.

Mr. Carr didn’t immediately respond to a request for comment.

Mr. Carr won’t have free rein to make changes. The Federal Trade Commission and the Department of Justice have taken on the biggest roles in regulating tech, primarily through antitrust lawsuits and policing violations of consumer protection law.

Congress oversees the F.C.C.’s budget, and it would likely take new legislation to expand the agency’s regulatory oversight over companies like Google and Meta, which are not defined as communications services, legal experts said. The commission under the Trump administration would comprise three Republicans and two Democrats.

The F.C.C. is also prohibited from punishing television and radio stations for editorial decisions, except for uses of obscenities and violations of children’s television rules.

Still, Mr. Carr could use the bully pulpit of the agency to pressure companies, the experts added. He could also threaten to block mergers or investigate regulatory failures, which can result in fines or the loss of licenses.

“Brendan is by far the most talented politician on the commission right now,” said Blair Levin, a former chief of staff for the F.C.C. and policy adviser for the New Street investment research firm. “But the real question is what can he actually do with the authorities the F.C.C. has now.”

Mr. Carr, a career telecommunications attorney, received a law degree from the Catholic University in Washington. He joined the F.C.C. as a legal adviser in 2012 and became general counsel five years later.

In 2017, Mr. Trump appointed him to one of the Republican seats on the commission. Mr. Carr focused on promoting high-speed wireless internet, which was still getting rolled out in rural areas. He also supported the Republican chairman Ajit Pai’s rollback of regulations like net neutrality, which categorized internet service providers as utilities for regulation purposes. The F.C.C. under Democratic control reinstated the rules earlier this year, and they are currently being challenged in court.

“When the transition is complete, the F.C.C. will have an important role to play reining in Big Tech, ensuring that broadcasters operate in the public interest, and unleashing economic growth while advancing our national security interests and supporting law enforcement,” Mr. Carr said in a statement after the election.

Mr. Carr has also aligned himself with Elon Musk, the billionaire entrepreneur who is a close ally of the president-elect.

Mr. Musk’s Starlink satellite internet provider received an $885 million grant in late 2020 from the F.C.C.’s Rural Digital Opportunity Fund, which gives internet service providers funding to bring high-speed internet to rural homes and businesses.

But the Democratic-led F.C.C. revoked that grant in 2022 because Starlink failed to meet speed requirements and couldn’t prove it would serve enough unconnected rural homes, according to the F.C.C.

Mr. Carr vociferously opposed the decision, saying in a statement that the Biden administration had targeted Mr. Musk.

“In my view, it amounted to nothing more than regulatory lawfare against one of the left’s top targets: Mr. Musk,” Mr. Carr wrote in an opinion piece in The Wall Street Journal published last month.

Maggie Haberman contributed reporting.

Officials at the time said they hoped that Saudi Arabia, the Arab world’s most influential country in geopolitics, would eventually also sign and recognize Israel — a goal that President Biden also pursued without success.

President-elect Donald J. Trump’s Middle East agenda remains unclear, but what is certain is that he will inherit a geopolitical landscape in the Middle East that is significantly different compared with that of four years ago.

Alliances have shifted, and priorities have changed. Age-old tensions have deepened in some places and thawed in others, while the Hamas attacks in Israel on Oct. 7, 2023, and the subsequent war in Gaza, could convulse the region for years.

Last week, Mr. Trump appointed Steven Witkoff, a real estate magnate and campaign donor, as his special envoy to the Middle East. Mr. Witkoff, a staunch defender of Israel, was in attendance when Israel’s prime minister, Benjamin Netanyahu, addressed Congress in July. The president-elect’s choice for secretary of state, Senator Marco Rubio of Florida, and for U.S. ambassador to Israel, Mike Huckabee, have also offered unwavering support for Israel’s war in Gaza.

It has long been a mantra of Mr. Trump’s that in foreign affairs, as in business, he can “make a deal.” For many countries in the Middle East, transactional foreign policy is a way of life, and even last week Elon Musk, the billionaire businessman and Trump adviser, met privately with Iran’s ambassador to the United Nations.

But compared to four years ago, the space for any deal has shrunk for numerous reasons.

“If the Trump 2.0 people think they can just pick up where they left off in 2020, they are completely misreading the situation,” said Kristian Ulrichsen, a Middle East expert at Rice University’s Baker Institute for Public Policy. “That will become very apparent very quickly.”

Palestinians can no longer be sidelined.

Palestinians were mostly sidelined when Jared Kushner, Mr. Trump’s son-in-law, led the White House effort to normalize relations between Israel and Arab states during the last administration.

The Arab states made no demands for concrete steps toward a Palestinian state as a prerequisite for a diplomatic pact with Israel. As a result, Mr. Netanyahu gave up almost nothing to achieve a signature diplomatic victory — several of Israel’s historical adversaries officially recognized its right to exist.

The Biden administration pursued a similar strategy in 2023 during an effort to achieve a diplomatic pact between Israel and Saudi Arabia, but the Oct. 7 attacks and war in Gaza upended any prospects for a deal. In short, Saudi Arabia’s price for a deal went up, given the domestic furor in the kingdom and in other Arab countries over the bloodshed in Gaza. Mohammed bin Salman, the Saudi crown prince, has said publicly that Israel must commit to a Palestinian state before Saudi Arabia recognizes Israel.

“The kingdom will not cease its tireless efforts to establish an independent Palestinian state with East Jerusalem as its capital, and we affirm that the kingdom will not establish diplomatic relations with Israel without one,” the crown prince said in a public speech to his advisers in September.

There is always the possibility that Prince Mohammed softens his demand, or drops it for the right price. This is a leader who, during negotiations before the Oct. 7 attacks, told American officials that a state for the Palestinians was not a high priority for him, and there is little question among Middle East experts that the Saudi crown prince sees Western investment in the kingdom as one of his main priorities toward his goal of modernizing Saudi Arabia’s economy.

But in the current environment, such a move would bring greater risk to his standing both in the kingdom and across the Arab world.

Israel’s ultraright government is unlikely to bargain.

The Saudis may now want more out of a deal with Israel, but Israel is now willing to give less.

Since Mr. Trump was last in office, Mr. Netanyahu returned to power leading the most right-wing government in the nation’s history. Ultranationalist ministers in the governing coalition have spent the past two years calling for more Israeli settlements in the West Bank and stoking settler violence against Palestinians there. Since the Oct. 7 attacks, politicians like Bezalel Smotrich, the finance minister, and Itamar Ben-Gvir, the national security minister, have publicly advocated pushing Palestinians out of the Gaza Strip and reclaiming the territory for Israelis.

To keep his coalition government together, and to delay elections that might bring his defeat as well as his reckoning over the Oct. 7 attacks, Mr. Netanyahu is beholden to Israel’s far right. As a result, he is in no position to make any meaningful concessions to Palestinians as part of any grand bargain in the Middle East.

Indeed, Mr. Smotrich boasted publicly last week that the election of Mr. Trump paved the way for the opposite to take place. Next year, he said, Israel will take back the West Bank and bring “sovereignty” for Jews there.

The Middle East is realigning, without the U.S. and Israel.

The last Trump administration viewed deals between Israel and the Arab states as part of a long-term strategy against Iran, which for years has waged bloody proxy wars for regional supremacy with Gulf Arab nations like Saudi Arabia and the United Arab Emirates.

But relations between Iran and the Gulf States are now thawing. Over the past year, Iranian diplomats have met directly with officials from Saudi Arabia, the U.A.E. and other Gulf nations. Last month, Iran’s foreign minister traveled to several Gulf countries with the goal, according to Iranian state media, of stopping Israel’s “crimes” in Gaza and Lebanon.

It is, at best, a tenuous détente. But for these Arab states, it is one born partly from pragmatism — a realization that the United States has for years been trying to disengage from the Middle East, at least militarily.

Saudi officials use one episode from the last Trump administration to reinforce this point: Iran’s 2019 drone and missile attacks on Aramco oil facilities deep inside the kingdom. After the attacks, the White House chose not to retaliate.

For its part, Saudi Arabia might push the next Trump administration to make a formal defense pact, which would commit the United States to defending the kingdom if it comes under attack. Chip Usher, a former top Middle East analyst, said that the Saudis would be happy to have “a foot in both camps.” They could have “rapprochement with Iran, even if it’s half sincere, even as they vigorously pursue security commitments with the United States.”

A defense pact would require ratification by two-thirds of the U.S. Senate, a high bar that is unlikely to be reached if the Saudis don’t also agree to formally recognize Israel as part of the deal.

So the Saudis and other Gulf countries are likely to continue to hedge their bets. “Gulf leaders are making their calculations looking 10 to 15 years forward about how U.S. disengagement might change the balance of power,” Mr. Ulrichsen said.

“That is the reality that the Trump team is going to have to live with.”