HHS freezes $10 billion in child care funding for 5 Democratic states, alleging fraudulent programs

(WASHINGTON) — Additional American troops are being sent into the Middle East as the joint U.S.-Israeli war against Iran entered its third day Monday, with senior Pentagon officials warning that the death toll of American troops will likely rise as the conflict widens across the region.

Gen. Dan Caine, chairman of the Joint Chiefs of Staff, said at a Pentagon news briefing Monday that the war against Iran would not be swift and that more U.S. casualties should be expected. “We expect to take additional losses, and as always, we will work to minimize U.S. losses,” he said. 

The warning echoed a stark message from President Donald Trump, who on Sunday on his social media platform, offered condolences to the families of fallen service members and braced the public for a higher death toll. “Sadly, there will likely be more before it ends,” Trump said. “That’s the way it is.”

U.S. troops have been under sustained pressure from Iranian retaliation, including a strike targeting the U.S. Navy’s Fifth Fleet headquarters in Bahrain and attacks on American bases in Kuwait, which serve as key logistics hubs and staging grounds. 

So far, six U.S. troops have been killed in what sources tell ABC News was an Iranian strike on an American command center in Kuwait, and 18 service members have been wounded in the operation.

Trump mourned the American casualties again on Monday at a Medal of Honor ceremony at the White House.

“Today, we grieve for the four heroic American service members who have been killed in action and send our love and support to their families. In their memory, we continue this mission with ferocious, unyielding resolve to crush the threat this terrorist regime poses to the American people and a threat indeed it is.”

Meanwhile, three U.S. Air Force F-15E Strike Eagles were mistakenly shot down Sunday by Kuwait, a U.S. ally, U.S. Central Command confirmed Monday, adding that all six aircrew members ejected safely and are in stable condition. The U.S. aircraft were in “active combat” against Iranian aircraft, missiles and drones. 

Secretary of Defense Pete Hegseth said an invasion of Iran with ground forces, which would demand a much greater surge of combat power beyond what’s already deployed, hasn’t been ruled out. 

“We’ll go as far as we need to go to advance U.S. interests,” he told reporters.

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(WASHINGTON) — A group of Senate Democrats are demanding more information about Secretary of Defense Pete Hegseth’s finances and investments following a report — which the Pentagon demanded be retracted — that he may have tried to invest in defense stocks before the war in Iran began roughly five weeks ago.

“If this report is accurate, it would appear to represent an appalling effort to profit off of your knowledge of the President’s plans for war,” Democratic Sens. Elizabeth Warren, Richard Blumenthal, Tammy Duckworth, Jeff Merkley and Gary Peters wrote in a letter to Hegseth — and provided exclusively to ABC News — on Wednesday night. “This would be a profound conflict of interest and a potential violation of your federal ethics agreement — and betrayal of the nation paying the price for this war and the troops you are sending into harm’s way.”

The Financial Times reported earlier this week that a broker for Hegseth at Morgan Stanley contacted BlackRock — an equity fund — and tried to make a multimillion-dollar investment into a fund with defense stocks weeks before the Iran war.

The investment did not go ahead because it was not yet available for Morgan Stanley clients, the Financial Times reported — adding that it’s not clear whether Hegseth’s broker found another defense fund to invest in.

ABC News has not independently confirmed the Financial Times’ report.

When reached by ABC News, Morgan Stanley and BlackRock declined to comment on the Financial Times report

In a post on X on Monday, Pentagon chief spokesman Sean Parnell dismissed the report calling it “entirely false and fabricated” and demanded a retraction from the Financial Times.

Still, the Democratic senators, led by Armed Services Committee member Warren, said in their letter that if the report turns out to be accurate, it would be a “serious breach of the public’s trust” and in violation of the ethics agreement he signed ahead of his confirmation as secretary of defense.

“The American people deserve leaders they can trust to put national security ahead of their own financial self-interest,” the senators wrote to Hegseth.

Hegseth is prohibited, under the Department of Defense’s standards of conduct, from owning stock in 10 major industry-specific corporations including Lockheed Martin, Northrop Grumman, General Dynamics, Huntington Ingalls Industries, Boeing, RTX Corporation and L3Harris, which are part of the fund that the Financial Times article claims Hegseth’s broker attempted to purchase.

Hegseth does not have any major holdings in defense companies, according to his most recent financial disclosure reviewed by ABC News.

“Since this was a multi-million dollar investment in a sector-specific fund, your agreement appears to indicate that your broker would have needed your approval or that you did not intend to meet the commitments you made in your ethics agreement,” the senators wrote. 

The senators have asked Hegseth to respond to a number of questions about the Financial Times report.

They ask Hegseth to say whether he shared any information with his broker about pending military action or whether he directed his broker to invest in any defense related funds, including BlackRock as the Financial Times report suggests, ahead of the Iran war. They also ask what instructions Hegseth has given his broker to try to avoid conflict of interests and they ask for an accounting of defense stocks owned and sold by Hegseth and his wife.

In his statement, Parnell said that Hegseth and the Department of Defense “remain unwavering in their commitment to the highest standards of ethics and strict adherence to all applicable laws and regulations.”

The senators say that getting answers to their questions will help them to “understand where there may be gaps in current department practices and policies to prevent conflicts of interest.”

House Democrats are also looking into the allegations made about Hegseth in the Financial Times report. 

Rep. Robert Garcia, the top Democrat on the House Oversight Committee, announced Tuesday that he’d launch an investigation into the matter.

Republicans have not been publicly commenting on Financial Times report. ABC News has reached out to Senate Armed Services Committee Chairman Roger Wicker for comment about Democrats’ calls for an investigation, but did not receive a response.

ABC News’ Elizabeth Schulze and Lauren Peller contributed to this report.

Editor’s note: This story has been updated to reflect Sen. Jeff Merkley is one of the co-signers of the letter.

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(WASHINGTON) — Treasury Secretary Scott Bessent is not happy with the Justice Department’s criminal investigation into Federal Reserve Chairman Jerome Powell, multiple sources told ABC News, warning it creates an unnecessary distraction. 

Bessent conveyed those concerns directly to President Donald Trump in a call on Sunday, sources said.

Sources added Bessent was not advocating for Powell or questioning the investigation when he spoke to the president, but he did make clear his concerns.

Axios was the first to report the call. The White House has not responded to a request for comment. 

When ABC News reached out for comment about the Axios report, a Treasury Department spokesperson said, “There is zero daylight between Secretary Bessent and President Trump, and the ‘sources’ in this story do not speak for the Secretary.”

Powell announced the Justice Department probe in a rare video message on Sunday night. The news sparked backlash from former Federal Reserve and Treasury officials as well as current members of Congress, including several Republicans who typically support the administration’s actions.

The investigation is related to Powell’s testimony last June about the multiyear renovation of the central bank’s buildings in Washington. But Trump has made Powell a frequent target of his attacks and push to cut interest rates, and Powell said he believes the probe is politically motivated.

White House press secretary Karoline Leavitt on Monday said Trump has “every right” to criticize Powell’s leadership but said he didn’t direct the Justice Department to investigate.

This is a developing story. Please check back for updates.

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