Senate Republicans Break With President Trump Over $1.8 Billion Fund

0:00This is a new era of American innovation. Google is offering free AI training to U.S. small businesses with the Google AI Professional Certificate, so they can start using AI to get more done. Find out more at grow.google.com.

0:18Ken Thomas:SpaceX officially filed for an IPO yesterday, and tonight it has a test flight for a new version of its Starship rocket that's central to its future business. The company really needs it to start blasting off upgraded Starlink satellites and to start flying orbital data centers that it could use for its artificial intelligence ambitions. None of that is possible without Starship. Plus, Senate Republicans are pushing back against President Trump over his$1.8 billion, quote, anti-weaponization fund. Are you losing control of the Senate, Senate Republicans? I don't know. I really don't know. I can tell you I only do what's right.

0:57Ken Thomas:And a French court finds Air France and Airbus guilty in a plane crash that killed more than 200 people, the country's worst ever aviation disaster. It's Thursday, May 21st. I'm Alex Oseleff for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

1:23Ken Thomas:President Trump and the GOP-controlled Senate are on a collision course. A growing number of senators have publicly criticized the administration's controversial, quote, anti-weaponization fund. Senate Majority Leader John Thune said lawmakers had, quote, very legitimate questions about the fund, while North Carolina Senator Tom Tillis had some choicer words. If that payout pot for punk's fund is in, there's no way I'm voting for it. Those frustrations are now spilling out into the Senate's agenda. For more, I'm joined now by WSJ national political reporter Ken Thomas in Washington. Ken, I know that Republican senators were aiming to pass this$70 billion multi-year package for immigration and customs enforcement and Border Patrol this week.

2:05Ken Thomas:Seems like that has now been pushed. What's going on there? This plan has really gone off the rails. There's been frustration mounting on Capitol Hill among congressional Republicans, and we're really starting to see it spill out into the open. Many Republicans object to the Trump administration's creation of a$1.8 billion fund to compensate people who claim to have been victims of weaponization by the federal government. There are fears on Capitol Hill that this could lead to the compensation of people who were prosecuted in the January 6, 2021 attack on the Capitol. And some of President Trump's endorsements have angered Republicans, right?

2:45Ken Thomas:In Louisiana, Senator Bill Cassidy lost his primary after Trump endorsed Julia Letlow, and Trump is opposing Senator John Cornyn's reelection in Texas. — Trump's decision to endorse Texas Attorney General Ken Paxton over Senator Cornyn has really rubbed people the wrong way in the Senate. Cornyn is really well-liked among Senate Republicans. He led the Senate campaign arm for a period. And so many of these Senate Republicans feel like Trump has really just cut John Cornyn loose. And Bill Cassidy, again, is someone who has been a good member within the Senate Republican caucus. Many members there see him as a thoughtful senator.

3:29And these endorsement decisions by Trump has really had a negative effect on relationships between the Senate and the White House.

3:38Ken Thomas:Ken, this feels like a pretty dramatic shift for this Congress that has been pretty closely staying in line behind President Trump up to this point. What does this mean for President Trump's agenda ahead of the midterms? Some former White House officials I've spoken with say that they think the legislative agenda may just be at a standstill, that we really may not see much more progress on Capitol Hill until after the November elections. So much of what Congress does is based on vibes and based on relationships with the White House. And that seems to have broken down this week. That was WSJ national political reporter Ken Thomas.

4:18Ken Thomas:Thanks so much, Ken. Thanks.

4:22Ken Thomas:President Trump has delayed an executive order that would have given the government more oversight over AI. The president told reporters in the Oval Office today that he didn't want to do anything that would slow the U.S. down in its AI competition with China. We're leading China. We're leading everybody. And I don't want to do anything that's going to get in the way of that lead. We have a very substantial on AI. It's causing tremendous good, and it's also bringing in a lot of jobs. Meanwhile, in California, Governor Gavin Newsom did sign an executive order on AI. It aims to study how artificial intelligence affects employment, and he wants to explore ways to help workers who are displaced by the technology.

5:02Ken Thomas:Silicon Valley companies have been cutting thousands of jobs as AI transforms their operations. Newsom, a Democrat, is seen as a potential 2028 presidential candidate. Coming up, why investors focusing on dividends have been missing out on the AI boom. That's after the break.

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6:00Ken Thomas:A day after officially kicking off its IPO process, SpaceX is planning to launch a new version of its Starship rocket, the V3. Starship is bigger and more powerful than any rocket ever built, and it's central to Elon Musk's vision for SpaceX's future. The company wants Starship to fly thousands of times a year, deploying satellites and other cargo. But the rocket program has faced technical setbacks and consumed$15 billion in investment. The V3 is scheduled to take off this evening from Texas. Micah Maidenberg covers space for the journal and is here now with more. Micah, why is Starship so central to SpaceX's growth plans?

6:37Starship is sort of the thread that runs through a lot of what SpaceX is planning to do in the near term. The company really needs it to start blasting off upgraded Starlink satellites and to start flying orbital data centers that it could use for its artificial intelligence ambitions. None of that is possible without Starship.

7:00Ken Thomas:For the past three years that the Starship program has been operational, the track record has been kind of mixed. Some tests have gone according to plan and other ones have ended in explosions. Not ideal. How does this model try to improve on those previous versions? SpaceX has what they call sort of this iterative model to hardware development where they are open to failure and say that's the price of learning. The V3 is meant to kind of lock in some of that learning. A lot of us are going to be watching the debut of upgraded Raptor engines. These are supposed to have more power. SpaceX is also going to be launching from a new launch pad.

7:38That's not technically, of course, part of the rocket, but it's a really critical piece of the overall infrastructure that this version of Starship needs.

7:46Ken Thomas:As I mentioned, this launch comes just a day after would-be investors finally saw under the hood of some of SpaceX's financials. What are investors hoping to see from this launch? Progress. You know, the company said yesterday in this IPO prospectus that it spent$3 billion alone last year on Starship. That's a lot of money for a rocket that poses a lot of challenges, but also offers a lot of potential opportunities. And investors want to see this vehicle getting closer to just regular flights and real operations. That was WSJ reporter Micah Maidenberg. Thanks, Micah. Thank you.

8:29Ken Thomas:Turning now to one of the worst aviation disasters this century, a French court today found that Airbus and Air France were guilty of involuntary manslaughter for a 2009 crash over the Atlantic that killed 228 passengers and crew. The court sided with prosecutors who argued that negligence by the plane maker and the airline contributed to the crash. Each company was fined about$260 ,000. That's France's maximum penalty for corporate manslaughter. Air France and Airbus said they would file appeals with France's highest court, citing earlier rulings that acquitted them. Walmart today reported strong sales growth in its most recent quarter.

9:07Ken Thomas:Revenue rose more than 7 percent to$177.8 billion. But Walmart CFO John David Rainey told analysts on today's earnings call that lower income customers were sending warning signs, especially at the company's gas stations. We have a large fuel business, and we see that in the most recent period, the number of gallons that customers fill up with when they come to our fuel stations fell below 10 for the first time since 2022. That's an indication of stress. The company noted that rising fuel prices could actually be an opportunity if it draws more shoppers to its stores seeking bargains. For now, Walmart plans to keep prices low to grab market share, but the company could lift prices later.

9:49Ken Thomas:Walmart largely left its financial expectations unchanged for the rest of the year, a disappointment for some investors. Its stock closed down more than 7 percent. And in the housing market, the latest mortgage data is more bad news for the spring selling season. Freddie Mac said today that the average rate on a 30-year fixed mortgage rose to 6.51 percent this week, from 6.36 percent last week. That's the highest level since August. Rising mortgage rates and high home prices are keeping would-be buyers out of the market.

10:23Ken Thomas:In market trading, the Dow led gains in the indexes today. It rose 0.6 percent and closed at a record. Tech stocks were mixed, with NVIDIA dropping 1.8 percent despite its strong results after the market closed yesterday. In Asian trading, Japan's SoftBank surged nearly 20 percent. on the news that OpenAI, one of its key investments, is preparing to file for an IPO very soon. It's been a difficult time for investors who focus on dividends. WSJ senior markets columnist James McIntosh cracked the data on the S &P 500 companies and found that investors who want the safety of dividend stocks are missing out on the market rally.

11:00The aspect I was looking at was the highest quality dividend. So this is companies that have managed to not only pay a dividend every year for 25 years, but have increased it every year as well. They've become known as the dividend aristocrats, which is a S &P index. So the idea here is that you're buying safe, high quality companies that are sure to be able to pay their dividend. They're not sexy big names, but they are big names. So people like Coca-Cola, which I don't think investors have thought was sexy for, well, since the days of Cherry Coke. ExxonMobil is another one. The dividend aristocrats had been doing brilliantly for years and years and years.

11:40And it beat the S &P 500 right up until about three years ago. And since then, it's been terrible. It's having its worst three-year period since the dot-com bubble when dividend investing also went out of fashion. And the reason is the same, which is that a whole bunch of companies that don't pay dividends are doing incredibly well.

12:00Ken Thomas:James says tech companies that don't pay dividends are attracting investors instead in this AI boom era. Mostly it's that you're missing out rather than that you're doing badly because of it. They're supposed to be slow and steady companies. If you bought them, you know, you haven't lost money, but you've just missed out on this great big boom that's underway. So you're probably not feeling very excited about your portfolio and probably a bit jealous of the guys who picked some of the AI stocks and have made big money. And that's what's news for this Thursday afternoon. Today's show was produced by Danny Lewis and Alexis Moore with supervising producer Tali Arbel.

12:39Ken Thomas:I'm Alex Oseleff for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

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