Trump Says Hamas Will Disarm, Blanche Faces GOP Pushback, Economic Outlook

0:00Good morning. One year after an historic vote to eliminate all federal funding for public media, we want to say thank you for sticking with us and continuing to allow us to keep you informed. We take that trust seriously, and we're grateful. NPR exists because of people like you who believe the world is better with public media in it. We can't do this without you. If you haven't given to support public media this month, it's not too late. Visit donate.npr.org, and thank you for the support. President Trump claims to have reached a breakthrough in efforts to disarm Hamas. Hamas says today it will only give up its weapons if Israel withdraws from Gaza first.

0:40Israel says it wants the weapons gone first. I'm Leila Faudel, that's Michelle Martin, and this is Up First from NPR News. Trump floated the idea of temporarily withdrawing his nominee for attorney general until two Republicans pushing back leave office. What would that accomplish? And a new report from the Commerce Department shows that economic growth slowed in the second quarter. I'd say the U.S. economy is quite resilient and strong, but it's not balanced growth. What's contributing to these results? Stay with us. We've got news you need to start your day.

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2:11That's because Rippling AI is built on your live global workforce data, so it doesn't just uncover insights into your business, it uses them to take complex actions across your departments. Ready for AI that isn't all talk? Head to rippling.ai slash first and get an AI that turns insight into action. That's R-I-P-P-L-I-N-G dot A-I slash first. Sign up today. President Trump announced that his Board of Peace has reached a deal with the Palestinian militant group Hamas to completely disarm. Hamas is disputing that. And Israeli Prime Minister Benjamin Netanyahu has so far been silent. NPR White House correspondent Franco Ordonez is here with us in studio to bring us the latest.

2:54Good morning, Franco. Good morning, Michelle. So what are the details of what the president is claiming? Trump said last night that, quote, as disarmament is completed, Israeli forces will withdraw. He added that the International Stabilization Force will then work with a new Palestinian police force to take responsibility for Gaza. And in a statement, Trump's Board of Peace also said that it had agreed to a detailed plan with the help of mediators from Qatar, Turkey and Egypt. But the condition that Hamas will disarm was already a key part of the 20-point peace deal that the U.S. brokered nine months ago.

3:26And the execution of that part of the deal has been stuck, and the Israeli military has continued to push into Gaza. What are we hearing from the actual parties in the war, Israel and Hamas? Yeah, I mean, Michelle, like so many of these things, a lot comes down to the details and obviously the execution of those. The problem seems to be a disagreement over what comes first, whether it's Israel pulling out of Gaza or Hamas handing over their weapons. Now, the Board of Peace says, quote, withdrawal must move in lockstep with the decommissioning. But a senior Hamas official told NPR that they would only give up their weapons if Israel withdraws from Gaza first.

4:04Now, since the October peace deal, the Israeli military has really increased the amount of territory it occupies in Gaza. And in those nine months, almost 10 months since the ceasefire, Israeli attacks have killed more than 1 ,100 people in Gaza. Now, so far, Israel leader Benjamin Netanyahu has not commented on Trump's announcement. He did meet with Trump in Washington earlier this week, but there was no indication that this came up. Both sides really just put out very limited statements. And this is all coming as Trump and Israel, or the U.S. and Israel, are still involved in another war against Iran, which a new poll from AP finds most Americans, almost two-thirds, say is not worth it.

4:44So it's entirely reasonable, Franco, to ask about the political context of all this. So what is the politics of all this? Yeah, I mean, Trump could use a win on Gaza as the war in Iran shows no signs of ending. The U.S. and Tehran continue to trade more strikes in a widening war that now appears to have expanded into Egypt. Alex Conant, a veteran Republican strategist, says the Iran conflict is a ways from turning into one of those never-ending wars like the ones that have plagued past presidents. But he says if fighting continues and gas prices keep rising, there will be political consequences.

5:17If you look through history, every president who has entered a war in modern times that's gone longer than people expected, whether it was Vietnam or the war on terror and the Iraq war, it starts to weigh on them politically. Now, the midterms are still more than three months away, so there's still time to turn things around. But they're approaching fast and many Americans disapprove. As you noted, polls show many Americans say the war is not worth the fight. The expanding conflict is really just testing Trump's vow to ensure peace through strength versus a reality of a conflict that has lasted months longer than the president promised.

5:54That is. NPR White House correspondent Franco Ardenas. Franco, thank you. Thank you, Michelle.

6:06Todd Blanche's nomination for attorney general is in limbo. Blanche, as you will recall, had been the president's personal lawyer, and he's been serving as acting attorney general. Yeah, two Republican senators want guarantees about the Justice Department's deal with President Trump to end his IRS lawsuit. Instead of providing those assurances, Trump says he may temporarily withdraw Blanche's nomination until the two senators leave office. NPR Justice Correspondent Ryan Lucas, who's also here in our studios, he's covering this and he's with us now. Good morning to you, Ryan. Good morning. So people may remember that the Republican Majority Senate has been very compliant in confirming the president's nominees, even ones that they said they had serious concerns about.

6:47So why does this one seem to be in jeopardy? Well, look, the hubbub around Blanche, all centers around the settlement that Trump struck with the Justice Department to end his lawsuit against the IRS over his leaked tax returns. That deal, remember, included the creation of a nearly$1.8 billion anti-weaponization fund. Blanche says that's dead. There's also a related immunity deal for Trump, his family, businesses that shields them from IRS audits of past tax returns. That, Blanche says, is still in effect. Now, the pushback in the Senate right now is coming from two Republican senators, Texas's John Cornyn and Tom Tillis of North Carolina.

7:23They are both members of the Senate Judiciary Committee that has to vote on Blanche's nomination. And they want written guarantees from the Justice Department about this settlement, that the Anti-Weaponization Fund is indeed dead, and about the scope of the tax immunity deal. They want that before they will support Blanche. The two sides have been negotiating for days, but the senators say they still don't have the assurances they need to get to yes. And then yesterday, President Trump floated the idea of temporarily withdrawing Blanche's nomination. What would that accomplish? Well, look, either way, Blanche would be in charge of the Justice Department.

7:54Either he gets confirmed or he'll stay on as the acting attorney general. And to be clear, the White House hasn't actually withdrawn his nomination yet. But look, Trump's suggestion was that he could temporarily withdraw Blanche's nomination if Cornyn and Tillis don't back down. And Trump said he then could just put Blanche back up for the job once Tillis and Cornyn are out of office. And yes, both senators are leaving office at the end of the year, in no small part because of Trump. Trump has even crowed about that. He pointed out that he had refused to endorse either Cornyn or Tillis, and he said that he may have ended their political careers.

8:27Trump, in fact, endorsed Cornyn's primary challenger, which was a significant blow to Cornyn's ultimately unsuccessful re-election bid. But there is a risk to Trump's gambit here if he follows through. And that's because there's no guarantee that the Senate math is any better after the midterms. But Cornyn and Tillis, as I said, they are leaving office at the end of the year. And now we see them sticking to their demands on Blanche. Both sides, the Justice Department and the senators, say they are trying to work all of this out. Staying on the politics of this for a second, is this holdup just a blip or do we think it's something bigger?

9:01Well, look, I can't speak to the broader internal politics of the GOP, but focusing just on Blanche's nomination, he does have the support of the other 10 Republicans on the Senate Judiciary Committee. But there are a number of senators in the full Republican caucus that have similar concerns about this Trump-IRS deal as Cornyn and Tillis. Cornyn also had this to say to reporters yesterday about efforts to resolve all of this. If this were just between me and Todd Blanche, we would have worked this out. But apparently he's getting some pushback from higher-ups at the White House. I don't know who, but this doesn't need to be this hard.

9:38I think it's worth stressing here that Trump would rather at this point withdraw Blanche's nomination than provide guarantees about the tax immunity deal that benefits him, benefits his family and their businesses. That is the bottom line as of right now. That is. And here's Ryan Lucas. Ryan, thank you. Thank you.

10:02A new report from the Commerce Department suggests the economy has largely weathered the shock of higher energy prices caused by the war with Iran. The U.S.'s gross domestic product grew at an annual pace of 1.5 % during the spring quarter. That is slower growth than the economy saw earlier in the year. And here's Scott Horsey is on the line with us now. Good morning, Scott, to you. Good morning, Michelle. So what's driving this economic growth? As usual, consumer spending is the biggest engine in this economy, and Americans continued to spend pretty freely during the spring, even as gasoline prices were soaring.

10:37We also continue to see a lot of investment by big tech companies on data centers to power the artificial intelligence boom. Kathy Bustjancic is chief economist at the insurance and financial services company Nationwide. She says those are the pillars that are really propping up the economy at a time when we're seeing slower growth in other areas like exports or housing. I'd say the U.S. economy is quite resilient and strong, but it's not balanced growth. It's really heavily reliant on consumer spending and AI investment. Then you'd like to see a broadening out of activity across different sectors.

11:15The GDP number would have looked better had it not been for a big jump in imports during in the spring after President Trump's emergency tariffs were struck down by the Supreme Court. A lot of importers may have seen a window after that to bring in cargo. Remember, the D in GDP stands for domestic, so imports are a subtraction from that. How much is inflation weighing on that economic growth? It's not helping. You know, if consumers have to pay more for every gallon of gas, that leaves less money in their pockets to spend on everything else. And that's especially true for lower-income households.

11:46The war with Iran has caused higher inflation on average, and people's wages are not keeping up with those higher prices. So far, that has not forced most people to cut back on spending, but Bostjanczuk says it has pushed them to dip into savings or put more of their spending on the credit card. Now, there's some limit to the degree they can do that, but I think for a short period of time, probably continue to see the consumer spending at at least a solid pace in the third quarter. Some analysts say a lot of today's spending growth has been driven by upper-income families who are feeling pretty wealthy thanks to the booming stock market and rising home values.

12:23If there were to be a downturn in the stock market, though, that extra spending might dry up. Speaking about housing, though, the housing market has been in a slump. What effect is that having on GDP? Yeah, home sales are really anemic, and that is a drag on economic growth. Earlier this year, mortgage rates briefly dipped below 6%, and it looked as though we might start to see a modest recovery in the housing market. But Buzjancik says the war with Iran and rising inflation are now pushing mortgage rates in the wrong direction. Freddie Mac says the average cost of a 30-year home loan has now climbed to 6.66%.

12:59Not good news for the housing market, which essentially has been stalled for several years now. Imagine how strong the growth would be if we could get the housing market back on its feet. You know, whenever we talk about GDP, it's helpful to think, compared to what? compared to a recession when the economy is shrinking. A growth rate of 1.5 % looks pretty good, but it is slower growth than we had last year, and it's significantly slower than what we saw during most of the Biden administration. That is. NPR's Scott Horsley. Scott, thank you. You're welcome.

13:33And that's Up First for Friday, July 31st. I'm Michelle Martin. And I'm Leila Faldil. Today's episode of Up First was edited by Rebecca Metzler, Kate Bartlett, Anna Yukonanov, Raphael Nam, H.J. Mai, and Ali Schweitzer. It was produced by Ziad Butch and Nia Dumas. Our director is Christopher Thomas. We get engineering support from Nisha Hainas. Our technical director is Zach Coleman. And our executive producer is Jay Shaler. Join us again on Monday.

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