Good morning and welcome to White House Watch. Let’s dive into:

• Republicans’ impending grip on Washington

• The anti-woke Pentagon pick

• A shocking attorney-general choice

Donald Trump took a victory lap through Washington yesterday, meeting Joe Biden and relishing Republicans’ impending grip on power.

The president-elect’s hold on Washington is complete. Last night Republican lawmakers secured a majority in the House, giving them control of both chambers of Congress. With loyal allies in the House and Senate, Trump will have a firmer grasp on Congress than in his first term and latitude to push through his legislative priorities. [free to read]. 

A top aim will be renewing and expanding the sweeping tax reforms Trump enacted during his first term. He also wants to curb regulation, overhaul healthcare, carry out “mass deportations” of undocumented migrants and slap huge tariffs on imported goods.

Yesterday, the president-elect gave Speaker of the House Mike Johnson a ringing endorsement, calling for the fierce Trump ally to keep his gavel should the chamber be called for Republicans.

But this doesn’t mean it will be completely smooth sailing for Trump.

Republicans chose South Dakota senator John Thune to be the Senate majority leader, setting him up as a potential check on Trump’s agenda. This was a rebuke to Trump allies, including Elon Musk, who pushed for Florida senator Rick Scott to get the job. 

Thune is viewed as more of an “establishment” Republican. He and Trump have had a frosty relationship in the past, though the senator said that “this Republican team is united behind President Trump’s agenda”.

Even though Johnson has won an internal Republican nod to keep the speakership, holding on to the gavel is not guaranteed. He faces election by the full House, and many of his potential detractors saw this closed-door election as a soft vote, with real negotiations to take place between now and January 3, Florida representative Anna Paulina Luna told reporters. 

As Trump plucks House Republicans for executive branch roles, he also threatens Johnson’s margins.

And Democrats, along with a handful of moderate Republicans, could still throw up roadblocks by exerting leverage in narrow but meaningful ways. Most legislation needs to pass the Senate with 60 votes. Since Republicans hold 53 seats, Democrats could block some of Trump’s legislative goals.

Transitional times: the latest headlines

What we’re hearing

As Trump stacks his national security team with hardliners and loyalists, his pick for secretary of defence is particularly eyebrow-raising [free to read].

Pete Hegseth, a military veteran, has built a lucrative career as a Fox News personality by blaming wokeness for US blunders in Iraq and Afghanistan.

In his rightwing broadcasts, he’s outlined a vision for the US military that closely aligns with Trump’s view of the country: an intrepid fighting force that has been reduced to impotency by trying to be more inclusive.

His nomination has prompted a backlash in the US. Paul Rieckhoff, founder of Independent Veterans of America, which helps politically independent veterans run for office, said:

He is unqualified, and he is the most overtly and extreme political nominee we’ve ever seen. This is a bomb thrower.

Former Trump administration officials who have liked the president-elect’s other picks for top national security jobs have been dismayed by his Pentagon choice, with one telling the FT that the decision was “crazy”. And some Republican senators — who will need to confirm Hegseth’s appointment — don’t seem completely convinced by his nomination.

His selection has also shocked the US’s European allies. He’s “a total clown show”, said John Foreman, former UK defence attaché in Moscow. “The guy seems interested in fighting culture wars within the Department of Defense and purging enemies.”

Hegseth’s view of the military can be boiled down to a line in his book, titled The War on Warriors: Behind the Betrayal of the Men Who Keep Us Free, where he warns that “red-blooded American men will have to save” the liberal elite’s “candy asses”.

Team 47: who’s made the cut

Controversial Florida congressman Matt Gaetz, who resigned last night, has been tapped to be attorney-general.

Trump has nominated former congresswoman Tulsi Gabbard, who is known for her pro-Russia views, to be director of national intelligence.

John Ratcliffe, who was DNI during Trump’s first term, has been selected as CIA director.

Trump has chosen Elon Musk and Vivek Ramaswamy to lead a “department of government efficiency” to slash government rules, bureaucracy and spending.

Ex-Arkansas governor Mike Huckabee will be the US ambassador to Israel, while investor Steve Witkoff will be Trump’s special Middle East envoy, choices celebrated by the Israeli right.

Wall Street investors Scott Bessent and Howard Lutnick are the leading contenders to be Treasury secretary.

Viewpoints

OVER a quarter of a million households have had their benefit payments stopped after failing to act on a key deadline.

New government figures show 318,834 (up from 284,660 reported in August) benefits claimants have lost out by not moving to Universal Credit within an important three-month window.

Two million people on legacy benefits are gradually moving to Universal Credit under a process known as managed migration.

Universal Credit was set up to replace legacy benefits and kicked off in November 2022 after a successful pilot in July 2019.

As part of the process, eligible households on legacy benefits, including tax credits, are sent “migration notices” in the post which tell them how to make the move to Universal Credit as it’s not automatic.

Households must apply for Universal Credit within three months of receiving their managed migration letter.

Failing to do this can result in benefits being stopped.

Between July 2022 and September 30, 2024, the Department for Work and Pensions (DWP) sent almost 1.4 million migration notices.

However, according to the DWP’s latest figures, 318,834 individuals lost their benefits after failing to act on migration notices received between July 2022 and June 2024.

Some 883,944 individuals have since made successful claims for Universal Credit, and another 166,594 are still in the process of transitioning.

Ayla Ozmen, director of policy and campaigns at Z2K, said: “We’re concerned to see that more people have had vital benefit payments stopped as part of the government’s plan to move people on to Universal Credit.

“The government now looks to have moved all disabled people on to Universal Credit by March 2026, and we are worried that more people may miss the deadline and have their benefits stopped, with potentially disastrous results.

“The government needs to ensure that appropriate safeguards are put in place to stop disabled people being left with nothing to live on.”

Experts have previously warned that managed migration poses a risk to vulnerable people who face losing money.

Top bosses at charities, including Mind, The Trussell Trust, Turn2Us and the Money and Mental Health Policy Institute, said in 2022 that around 700,000 with mental health problems, learning disabilities, and dementia could struggle to engage with the process.

More than 20 organisations have called on the government to halt managed migration to fix flaws in the system that could cause those at risk to fall through.

MANAGED MIGRATION PROGRESS

In January, the government announced the number of migration notices it plans to send out in the coming financial year.

Before this date, the focus was sending migration notices to households claiming tax credits only.

However, 110,000 income support claimants and a further 120,000 claiming tax credits with housing benefit started receiving their letters in April.

Over 100,000 housing benefit-only claimants were contacted in June.

More than 90,000 people claiming employment and support allowance (ESA) along with child tax credits started being asked to switch in July.

Meanwhile, 20,000 claimants on jobseekers allowance (JSA) were contacted in September.

The Sun previously reported that, in August, those claiming tax credits who are over state pension age will be asked to apply for either Universal Credit or pension credit.

It was initially planned that those claiming income-related ESA alone would not be moved until 2028.

However, the DWP brought forward plans to move these households to Universal Credit by the end of 2025.

Since September 2024, 800,000 households have begun receiving letters explaining how to move from ESA to Universal Credit.

HELP CLAIMING UNIVERSAL CREDIT

As well as benefit calculators, anyone moving from tax credits to Universal Credit can find help in a number of ways.

You can visit your local Jobcentre by searching at find-your-nearest-jobcentre.dwp.gov.uk/.

There’s also a free service called Help to Claim from Citizen’s Advice:

• England: 0800 144 8 444
• Scotland: 0800 023 2581
• Wales: 08000 241 220

You can also get help online from advisers at citizensadvice.org.uk/about-us/contact-us/contact-us/help-to-claim/.

AN up-and-coming seaside town is set to get a huge new adventure park as part of a multi-million renovation.

The new playground will be part of the Newhaven Fort, which is currently closed.

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The park will be a “a celebration of Victorian innovation” which mirrors the fort’s history.

There will be a large tubular slide attached to a Victorian “dirigible” – a blimp like structure.

A steam crane-inspired lookout tower, with a secret entrance for kids.

The sheltered play area is called Ardagh’s workshop, named after the Fort’s original architect, Lieutenant John Charles Ardagh.

There will also be accessible play features such as “sound play, sensory items, interactive speaking tubes and an accessible trampoline and roundabout”.

CAP.CO has an impressive track record, having created outdoor play spaces at numerous heritage sites including Windsor Great Park, Blenheim Palace and the National Maritime Museum.

It has been created by adventure play specialists CAP.CO, who have also worked on projects and Blenheim Palace and Windsor Great Park.

designer and ‘Professor of Play’ Jono Burgess said they wanted the design to “reflect the history and character of the fort”.

They added: “Since the Fort was built in the Victorian era, we wanted to celebrate the ingenuity and inventive spirit of the 1800s.

“Our goal is to design and build an inclusive adventure playground which kids will want to return to again and again to challenge themselves, make new friends and have fun.”

Newhaven Fort will reopen in February 2025, following a £7.5million restoration.

The fort was the largest defence network built in Sussex in the 19th century, built due to the threat of Napoleon the Third.

Along with the playground there will be new interactive exhibitions and a refurbished Battery Observation Post with views out to sea.

The seaside town has revealed plans to become a more popular staycation destination.

Near to Brighton and Eastbourne, Newhaven’s only beach could reopen.

West Beach closed back in 2008 due to safety concerns but hopes to reopen soon.

There are also 15 huge murals across Newhaven as part of the June Look Again Supergraphics Festival.

Newhaven was even nearly home to the UK’s largest waterpark but these plans were scrapped.

Corinne Day, programme director at Newhaven Enterprise Zone (NEZ), said: “Having an updated town centre is just one of the factors that will build on its success as we look to transform Newhaven into a major contributor to the Sussex economy by 2030.”

Sussex was recently named one of the best places to visit in 2025.

And here’s West Sussex’s best kept secret, according to locals.

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China has borrowed almost as cheaply as the US after returning to the global dollar bond market for the first time in three years.

Investors placed nearly $40bn of orders to buy $2bn of bonds issued by China’s finance ministry on Thursday at yields only marginally above equivalent US Treasuries.

The sale took place in Saudi Arabia — a break with a tradition of issuing bonds in Hong Kong — in a sign of Beijing’s push for closer financial links with the oil-rich kingdom. Chinese, US and other global banks arranged the sale.

The issuance “illustrat[es] the confidence of market-oriented investors in Chinese sovereign credit”, said Zhang Xing, head of fixed income in the investment banking department at China International Capital Corp — one of the bookrunning banks.

Zhang added that bidders for the issuance included 400 international investors including “central banks, sovereign wealth funds, insurance companies, asset managers, funds and banks”.

The $1.25bn of three-year debt was sold at 4.274 per cent — just 0.01 percentage points higher than Treasury equivalents. Yields on the $750mn of five-year bonds were 0.03 points higher than Treasuries. These represent the tightest spreads for any Chinese sovereign dollar issuance in the past 30 years, according to Bloomberg data.

Yields on the debt fell further, to around 0.25 percentage points below US borrowing costs, as the new bonds began to be traded on Thursday.

“Such negative spreads could be due to particularly strong demand for high-quality USD credits but limited supply from high-grade China issuers,” said Xiaojia Zhi, head of Asia research at Crédit Agricole — another bookrunner.

Beijing’s older US dollar bonds have already traded below US Treasuries this year, partly due to demand from Chinese investors looking to park dollars they hold offshore. Chinese investors enjoy tax-free interest payments on the country’s government bonds.

“There is a huge demand imbalance [for investment grade sovereign dollar bonds],” said Ju Wang, head of FX and rates for greater China at BNP Paribas, who said historically much of the demand for Chinese sovereign dollar bonds came from domestic investors.

Given the gap in interest rates between the US and China, reflected in lower yields in China’s domestic bond market, Chinese companies “choose to keep money in dollars”, added Wang.

A yield roughly in line with Treasuries, which are considered the international risk-free rate, may also help other Chinese dollar bond issuers that rely on the country’s sovereigns as a benchmark.

At close to 20 times the amount on offer, demand for the Chinese bonds was far ahead of typical emerging market US dollar debt sales, reflecting the relative rarity of international issues by Beijing, a top-rated issuer.

South Africa, for example, was 2.5 times subscribed on a $3.5bn sale this week.

However, some analysts cautioned that $2bn was not a major bond issuance for the world’s second-largest economy.

“This is a symbolic issuance, as the majority of dollar issuance happens in Hong Kong,” said Peiqian Liu, Asia economist in Fidelity’s global macro and strategic asset allocation team, who said the deal “sends more of a signal of their broadening of the scope of financial co-operation globally”.

Beijing does not raise much dollar-denominated sovereign debt and its trillions of dollars of foreign exchange reserves and deep domestic bond market mean that it is not a large part of its government funding.

However, international bond issuances are an important way of providing access to global investors to buy the country’s sovereign debt, as well as setting a benchmark for other issuers.