The Daily Brief - May 13, 2026
Possible settlement for Trump’s lawsuit against the IRS, China discusses covert weapons sale to Iran, Warsh confirmed as Fed chair, and more
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Justice Dept. Considering Settling Trump’s Suit Against IRS
The Justice Department is weighing whether to settle a $10 billion lawsuit President Trump filed against the IRS in January over the leak of his tax records. Trump, his sons Donald Jr. and Eric, and the Trump family business sued the IRS for at least $10 billion in January over the leak of their personal and business tax returns during Trump’s first term.
A former IRS contractor was convicted in 2024 of leaking the records to The New York Times and ProPublica and is serving five years in prison.
The New York Times reported that the Justice Dept. and the White House officials are discussing settlement options, including the IRS dropping any audits of Trump, his family members, or the Trump Organization. Settlement terms remain unclear at this time, and a deal could also involve a cash payment to the president.
The case has raised unusual legal questions because Trump oversees the IRS while suing it. US District Judge Kathleen Williams in Florida has questioned whether there is a genuine legal dispute between the two sides, since the DOJ represents the IRS in court while also serving under the president. For a court to decide a case, the parties typically must be adversaries.
Last month, the judge appointed six private attorneys to advise her on whether the lawsuit is legitimate, and she ordered Trump’s personal lawyers and Justice Department attorneys to file briefs by May 20 explaining whether they are genuinely opposing parties.
South Carolina Senate Defies Trump, Blocks Redistricting Push
The South Carolina Senate blocked an effort yesterday to redraw the state’s congressional map ahead of the 2026 midterms, defying President Trump.
Five Republicans joined all Democrats in voting against a resolution to extend the legislative session, which ends tomorrow, so lawmakers could take up a new map. The 29-17 vote fell two short of the two-thirds majority needed.
A state House committee had endorsed a map yesterday that could eliminate the state’s only Democratic-held seat, currently held by Rep. Jim Clyburn, the state’s only Black member of Congress. Earlier this week, Trump urged South Carolina senators to pass the proposal, saying he was watching closely.
The state primary is June 9, and early voting begins in two weeks.
Separately, the Missouri Supreme Court upheld yesterday a new map drawn by Republicans that could help the GOP win an additional seat in November. Republicans hold six of Missouri’s eight House seats.
Appeals Court Pauses Trump Payment to E. Jean Carroll — For Now
A federal appeals court ruled yesterday that President Trump does not have to immediately pay the $83 million defamation judgment awarded to writer E. Jean Carroll while he seeks Supreme Court review of his appeal. Carroll has won two civil cases against Trump in New York tied to her allegation that he sexually assaulted her in a dressing room in the mid-1990s and later defamed her by denying the claim.
A jury awarded her $5 million after finding Trump sexually abused her and defamed her, and a separate jury in January 2024 awarded her $83 million for defamatory statements Trump made in 2019 while serving as president. Trump has argued those statements were made in his official capacity and should be covered by presidential immunity.
Newsbreak
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Trump in China for State Visit Dominated by Iran War, Trade
President Trump arrived in China for a three-day state visit, his first since 2017.
Meanwhile, US intelligence has gathered information that Chinese companies and Iranian officials have discussed weapons transfers that would be routed through other countries to mask their origin. It is unclear how many arms, if any, have been shipped, or how much Chinese officials have approved in sales. Trump told reporters yesterday that Chinese President Xi Jinping had been “relatively good” on Iran. He also said he would have “a long talk” with Xi Jinping about the war with Iran, but that their meetings would focus primarily on trade.
China is the largest buyer of Iranian oil, and US officials want Beijing to pressure Iran to reopen the Strait of Hormuz and to accept a peace deal.
Beijing is expected to ask for lower tariffs, more semiconductors that are used to power artificial intelligence systems, and reduced US military support for Taiwan, which China claims as its territory.
The US delegation includes more than a dozen business executives, including Tesla’s Elon Musk, Apple’s Tim Cook and Nvidia’s Jensen Huang.
Kevin Warsh Confirmed as Fed Chair
Kevin Warsh is on track to become the next Federal Reserve chair after the Senate approved his nomination in a 54-45 vote today. He was confirmed to a 14-year term on the Fed’s Board of Governors yesterday. His swearing-in is expected after the Senate confirmation paperwork is signed by Trump.
Warsh, 56, a former Fed governor who served from 2006 to 2011, will replace Jerome Powell, whose term as Fed chair ends this week.
“Alligator Alcatraz” Detention Center to Close
The Florida immigration detention center known as “Alligator Alcatraz” will close as soon as next month, with its roughly 1,400 detainees moved elsewhere.
State officials notified vendors yesterday that the facility was shutting down, with the last detainees to leave by the start of June. It remains unclear where detainees will be transferred.
Detainees, their lawyers and families, and immigration advocates have reported unsanitary and inhumane conditions and difficulty accessing attorneys. State officials have denied those descriptions. Lawsuits over conditions and environmental impact remain pending.
The facility is being closed primarily due to the soaring cost of operating the facility.
Florida has spent more than $1 million a day to run the facility and is still awaiting $608 million it requested in federal reimbursement.
Trump Administration Freezes New Medicare Hospice Enrollments
The Trump administration imposed a six-month nationwide freeze today on new hospice and home health agencies signing up to receive Medicare payments, citing widespread fraud in the two categories.
The moratorium announced by the Centers for Medicare and Medicaid Services bars new providers from joining Medicare reimbursement programs, though existing agencies will continue operating and patients can still receive services.
CMS Administrator Dr. Mehmet Oz said the move is intended to stop fraudulent operators from entering the system while investigations continue. CMS recently suspended $70 million in payments to hundreds of hospices and home health agencies in the Los Angeles area over suspected fraud.
Re: the CMS home health and hospice freeze. The article states that 70 such entities were suspended recently in the LA area. Do we know if the fraud alleged is real?