February Washington D.C. Preview

Quick Fix — The president’s suite of executive orders broadly aims to boost fossil fuel production and curb support for renewable energy technologies and climate-related funding.   — February could be an extraordinarily busy month for tax policy — or not, depending on whether Republicans can agree on topline figures for their entire legislative agenda on border, energy and taxes.   — Republican lawmakers are debating multiple ways to trim food assistance — among other federal spending cuts — as they seek to find pay-fors for a bill that can pass through Congress despite Republicans’ razor-thin majorities.

Agriculture — Reconciliation: Republican lawmakers are debating multiple ways to trim food assistance — among other federal spending cuts — as they seek to find pay-fors for a bill that can pass through Congress despite Republicans’ razor-thin majorities. What’s ultimately in the reconciliation package, which can pass via a party-line vote, will have major repercussions for the bipartisan coalition needed to pass a farm bill before the end of September.   — Freeze fallout: Although the White House walked back its across-the-board spending freeze, the Trump administration is still targeting certain buckets of federal spending, including climate and conservation spending as well as diversity, equity and inclusion programs. Federal employees are reeling from a barrage of executive orders reshaping their daily work, and some could decide to take the proposed buyout by the Feb. 6 deadline.   — Cabinet picks: Brooke Rollins, Trump’s pick to lead the Department of Agriculture, will likely sail through a Senate confirmation vote in February, though it’s not yet scheduled. At the helm of USDA, lawmakers hope she can steady the ship despite Trump’s threats of tariffs, which could devastate American farmers. At her confirmation hearing, she expressed openness to using government payments to assist farmers if they become the victims of Trump’s trade war.   — The RFK Jr. factor: The Senate Finance Committee is set to vote on Robert F. Kennedy Jr.’s recommendation for confirmation as HHS secretary Tuesday. A controversial pick, lawmakers sought but didn’t get assurance during his two confirmation hearings that he would not oppose seed oils and pesticides if confirmed. While many lawmakers see common ground with Kennedy on confronting America’s high rates of diet-related chronic diseases, Kennedy’s views on vaccines could tank his nomination. — Marcia Brown

Energy — Trump executive orders upend energy world: A sweeping combination of executive orders and the specter of a broader federal spending freeze has left the energy and climate world in a state of uncertainty just two weeks into the new Trump administration.   The president’s suite of executive orders broadly aims to boost fossil fuel production and curb support for renewable energy technologies and climate-related funding. And though his Office of Management and Budget quickly rescinded its memo calling for a wide-ranging freeze of all federal funding, his press secretary, Karoline Leavitt, emphasized the president’s executive orders remain in place — including those targeting funding from the Democrats’ Inflation Reduction Act and the bipartisan infrastructure law. The two laws are responsible for billions of dollars in federal infrastructure and energy funding being doled out to states and tribes across the country.   — His orders intend to increase fossil fuels by ending the previous administration’s pause on new liquefied natural gas exports, expediting energy permits in Alaska, calling for an end to California’s phase-out of gas-fired vehicles and rescinding the Biden White House’s limit on federal offshore acres available for oil and gas drilling. President Donald Trump also declared an “energy emergency” that could give the executive branch much wider latitude in its mission to boost U.S. energy production, though he has not yet clarified what specific powers or laws he might target under the declaration.   — And in a blow to clean energy, the orders call for immediately ceasing funds under the IRA and BIL; halting leasing, permitting and approvals for offshore wind projects; and specifically targeting electric vehicle infrastructure spending as part of his wider block on so-called Green New Deal spending. — Catherine Morehouse

Tax — Ready to rumble: February could be an extraordinarily busy month for tax policy — or not, depending on whether Republicans can agree on topline figures for their entire legislative agenda on border, energy and taxes.   House Speaker Mike Johnson has laid out an ambitious timeline for passing a budget resolution, which would unlock the expedited procedure known as reconciliation that would allow Republicans to bypass Democratic support for legislation in the Senate.   Johnson wants to finalize a resolution that would outline key spending targets for the various House committees by Feb. 10. He wants the resolution, in turn, to pass the House the week of Feb. 10 and the Senate the week of Feb. 27.   — Trump’s costly measures: To finalize budget instructions for the House Ways and Means Committee, the GOP conference faces the challenge of coming to some sort of understanding of how much they’re willing to spend on Trump’s costly tax policies — and how much of those tax policies can be offset by spending cuts elsewhere.   We already have an idea of the magnitude of the potential costs from a detailed reconciliation policy menu that leaked earlier in January. Trump’s “no tax on tips” would cost $106 billion over 10 years, while eliminating taxes on overtime work would cost $750 billion. Creating deductions for auto loans, which Trump has also called for, would cost $61 billion.   Trump reiterated at the annual GOP policy retreat in Doral, Florida, on Monday that he’d also like to eliminate taxes on Social Security, even though, per Senate rules, reconciliation provisions can’t recommend changes to the entitlement.   — How it could come down: It’s most likely that Republicans will find a way to “dial” Trump’s proposals so they don’t add quite as much red ink to budget reconciliation legislation. Still, it remains to be seen whether, even then, the GOP can find offsets for tax measures enough to satisfy deficit hawks like Reps. Thomas Massie (R-Ky.) and Chip Roy (R-Texas).   Roy has said any tax cut should be paired with corresponding spending cuts, while Massie has previously said that Republicans shouldn’t even be contemplating tax cut extensions given the soaring national debt.   Roy and other members of the House Freedom Caucus also assert that any expansion of the state and local tax deduction should be paid for. New York, New Jersey and California Republicans have indicated they need to lift the $10,000 cap on SALT to support the tax bill.   “Everything has a cost, so you want to lift the cap on SALT, then come show me how you’re gonna pay for that crap,” Roy said recently in an interview of efforts to expand the deduction. — Benjamin Guggenheim

Employment and Immigration — All eyes on Lori Chavez-DeRemer: The former House Republican from Oregon has made the rounds on Capitol Hill in recent weeks to sell lawmakers on her bid to lead the Department of Labor. Trump’s selection of Chavez-DeRemer sparked cautious optimism among Democrats and union leaders, while some Republicans raised concern about her past support for the PRO Act, a bill that would’ve bolstered collective bargaining rights for workers.   Her path to confirmation, however, seems far smoother than those of some of Trump’s other Cabinet picks. Senate HELP Chair Bill Cassidy (R-La.), who will oversee Chavez-DeRemer’s confirmation hearing, has told POLITICO that his concerns about her pro-union past have been assuaged.   — Agencies in limbo: Trump’s firings of Democrats Jocelyn Samuels and Charlotte Burrows of the Equal Employment Opportunity Commission and Gwynne Wilcox of the National Labor Relations Board have left both panels without the necessary quorum to conduct business.   The gaps will force a pause in the federal government’s work in overseeing unionization elections and combatting employment discrimination as Trump pursues sweeping changes to agencies through executive orders.   The ousters were paired with expected moves to fire the agencies’ general counsels, the EEOC’s Karla Gilbride and the NLRB’s Jennifer Abruzzo.   While Trump may look to stymie activity at the NLRB after the board’s pro-union bent under the Biden administration, he could move to fill vacancies on the EEOC to pursue his administration’s efforts at targeting DEI policies through reverse discrimination lawsuits. — Lawrence Ukenye

Financial Services — Trump’s economy: Wall Street rallied in the run-up to Trump’s inauguration on the belief that he would usher in an era of eased regulation, lower taxes and other pro-growth initiatives. But uncertainty about the president’s agenda has kept investors in a holding pattern as they await clarity on how his trade and immigration policies could ripple through the broader economy. One early indication could be in the January employment report, out Feb. 7, which will provide a look at how the administration’s mass deportation plans are affecting job creation in sectors where immigrants make up a high percentage of the workforce.   — Hearing, hearings, hearings: Senate Banking Chair Tim Scott’s (R-S.C.) policy agenda kicks off on Feb. 5 with a hearing on debanking, which Republicans say is the practice of banks or other financial institutions denying service to certain clients or industries for political reasons. Scott told reporters last month that the hearing would be the first of potentially others on the issue. House Financial Services Chair French Hill (R-Ark.) kicks off his ambitious agenda the same day with a hearing on community banking. February’s Financial Services hearings and roundtables will also cover debanking, crypto, wildfire insurance and China. Federal Reserve Chair Jerome Powell is expected to testify at a Feb. 12 monetary policy hearing.   — Legislation look-ahead: GOP lawmakers have introduced a number of financial services-related bills, although it’s unclear how much traction those will have. Some hot-ticket items include eliminating the Treasury Department’s Federal Insurance Office, limiting federal funding for immigrants and limiting funding and the jurisdiction of the Consumer Financial Protection Bureau.   — All eyes on Atkins: For weeks, Wall Street has been on the hunt for any hint of what Trump’s pick to run the SEC, Paul Atkins, will do as the agency’s next leader. It may finally get some answers soon. Lobbyists expect the Senate Banking Committee to hold a confirmation hearing as early as this month, giving the financial industry, investor advocates and the public a glimpse of the former SEC commissioner’s plans as chair.   Atkins is expected to bring a lighter-touch enforcement approach to the SEC’s efforts around climate disclosure. But the financial regulatory consultant has yet to reveal how he would take on other issues, including the cryptocurrency market, companies going public in the U.S., and how far he will go in unwinding former Chair Gary Gensler’s agenda. While Atkins is expected to sail through the Senate, Democrats will focus on his 15 years of advising a range of firms on regulatory policy and the potential conflicts it could present.   — Housing chief: The Senate is poised to vote this month to confirm Scott Turner, Trump’s nominee for Housing and Urban Development secretary. Turner — whose nomination cleared the Senate Banking Committee on a party-line vote last month — is expected to try to slash spending at the department and overhaul programs related to housing vouchers and homelessness. He offered few details on his plans during his confirmation hearing but told lawmakers that “HUD is failing at its most basic mission.” — Sam Sutton, Kate Hapgood, Declan Harty and Katy O'Donnell

Education — Awaiting McMahon: Trump’s nominee to run the Education Department is expected to face a Senate confirmation hearing this month — and she likely will have to answer questions on whether she thinks her agency-in-waiting should exist.   Linda McMahon, a billionaire Trump loyalist and former professional wrestling executive, will be tasked with carrying out presidential executive orders that seek to reshape American public education and root out what the administration describes as radial race and gender ideology embedded in classrooms and campuses.   If confirmed, McMahon will be part of a significant convening of domestic policy and law enforcement power meant to slash federal spending on offending programs, potentially prosecute noncompliant teachers and school administrators, and bolster support for private school voucher programs — all while investigating, and perhaps deporting, foreign students deemed sympathetic to Israel’s enemies.   An array of influential conservative political appointees already awaits McMahon at department headquarters. They may soon be asked to determine how they can put themselves out of a job to fulfill Trump’s campaign goal of closing the department.   — The Education Department may also have to reassess its borrower defense regulations, pending a decision from the Supreme Court.   The justices need to decide whether they will continue reviewing a case regarding a student debt forgiveness rule that made it easier for borrowers to have their loans forgiven if they’d been defrauded by their colleges. The Justice Department says the Education Department’s new leaders should assess former President Joe Biden’s updates to the borrower defense rule before proceeding with any briefings. — Juan Perez Jr. and Rebecca Carballo

Defense — Defense budget boost: Republican defense hawks are pushing for a significant boost to defense spending in an upcoming reconciliation package. GOP leaders haven't settled on a specific figure, but House Armed Services Chair Mike Rogers (R-Ala.) and Senate Armed Services Chair Roger Wicker (R-Miss.) are eyeing more than $100 billion in the deal.   Some Republicans have said they want to use reconciliation — which is expected to include tax cuts, border security and energy spending — to add up to $200 billion to the Pentagon budget over the next two years. But it’s unclear whether they can secure that figure.   They’ll indicate how big a defense spending increase they plan to pursue when the House and Senate Budget committees release budget resolutions needed to unlock reconciliation.   — Personnel playbook: With Defense Secretary Pete Hegseth on the job, senators will soon turn to filling other senior Pentagon roles. Trump’s pick for the Army’s top civilian, Dan Driscoll, testified at a confirmation hearing last week. Other picks could soon follow, including Stephen Feinberg for deputy defense secretary and John Phelan to oversee the Navy. — Connor O’Brien

Budget and Appropriations — Reconciliation action: House Republicans are under pressure this month to meet a series of self-imposed deadlines in their quest to enact Trump’s policy commitments along party lines by summer. The first step: unveiling a budget resolution to “unlock” the reconciliation power to sidestep the Senate filibuster. Republican leaders in the House have laid out a tentative — and ambitious — schedule for forging ahead on reconciliation. And most of the key dates are in February. That includes the goal of approving a budget resolution on the floor the week of Feb. 10. In the Senate, GOP leaders are waiting to see whether their House counterparts can rally enough support for those first steps. If not, the Senate is ready to deploy its own plan, which is not the “one big beautiful” reconciliation package House Republicans fancy but instead a slimmer bill that leaves tax policy for later action.

— Government funding negotiations: As the March 14 government shutdown deadline approaches, Congress’ top four appropriators are still trying to strike a “topline” agreement on overall totals for military and non-defense programs. If they can lock in that overarching deal, they can work to settle totals for the dozen individual bills to fund the government for the fiscal year that ends Sept. 30. Those funding negotiations are now complicated by Trump’s orders to freeze funding Congress previously enacted, along with the GOP’s separate goal of cutting spending for nondefense programs while increasing military funding through a party-line reconciliation bill. — Jennifer Scholtes

Health Care Congress is expected to make some big moves on health care in the next few months:   — The biggest is likely the contents of a major reconciliation package to fund several GOP priorities, such as extending the so-called Trump tax cuts and energy and border security funding. Lawmakers might rely partly on health care spending to pay for the package.   It’s unclear how lawmakers will use health care policy changes, but House leaders have hinted at changes to Medicaid, the health care program for low-income Americans. The changes include per-capita allotments to states for federal Medicaid dollars instead of the current open-ended entitlement program. Another potential reform is shaving the federal matching payment rate delivered to states. Johnson has floated getting a bill to Trump by April, but with a thin majority, it could be a difficult deadline to meet.   — In addition to Medicaid, other health policies could be used by lawmakers to generate savings. And those include reforms to pharmacy benefit managers — middlemen charged with negotiating drug prices on behalf of insurers — that scored savings but were not passed last year.   — Lawmakers also must fund the federal government by the end of March. The current continuing resolution includes several key health extenders like continuing telehealth flexibilities and staving off cuts to so-called safety-net hospitals. Congress will likely include these extenders in its next funding package, but the spending bill could serve as a vehicle for other reforms. — Pro Health Care Team

Technology — Privacy: Congress is unlikely to move on a national privacy law in 2025, putting all eyes on the states. Nineteen states have data privacy laws on the books, and eight states have bills in the works for 2025.   New York is poised to be the first state to pass major data privacy legislation this year. The state Legislature fast-tracked the Health Information Privacy Act in late January, sending the bill to Gov. Kathy Hochul, who has until Feb. 3 to sign it. It is unclear whether she will sign the bill, but the legislation was written to protect the data of people traveling to New York to seek an abortion, and Hochul has long backed abortion rights.   The bill is similar to Washington state’s My Health My Data Act, which protects people’s sensitive health data from being collected and sold without consent.   — Vermont will also revisit a data privacy law that was vetoed by Gov. Phil Scott last summer. Vermont Democrat Monique Priestley has said she will reintroduce the bill that offers the right to sue companies for data privacy violations. The law is being changed to apply only to companies making more than $25 million in revenue in a bid to make local businesses more receptive to it. Scott cited concerns from local businesses over the right to sue when he vetoed the legislation last June.   Lawmakers in Massachusetts introduced a flurry of privacy regulations in January. The six proposals include a bill modeled off the European Union’s data privacy regulations that has strict limits on how companies can collect and sell people’s data and an industry-friendly bill with more exemptions for financial and health-related data.   — Ticktock on TikTok: TikTok is in limbo after Trump suspended enforcement of the ban passed by Congress last year. Several lawmakers have offered bills that would give TikTok more time to complete a divestment or repeal the provision forcing the app’s sale or ban from app stores, but they have shown little interest in wading back into the legislative space in the immediate future.   Only a few corporate partners, including Oracle and Akamai Technologies, have resumed their services to the app after Trump called on companies to “not let TikTok stay dark.” But Google and Apple have yet to restore TikTok to their app stores, and it’s unclear how long the app can keep working without the ability to update.   — Trump, meanwhile, has touted “great interest in TikTok” from several companies and recently said Microsoft is in discussions to buy it; he has also said he’d want Oracle co-founder Larry Ellison or Elon Musk to own the company. Though Trump says he’d like to see a “bidding war,” ByteDance appears to have no intention to sell.   — Chips: Howard Lutnick is expected to be easily confirmed to head the Commerce Department, giving him oversight over the CHIPS and Science Act’s $50 billion in microchip manufacturing and research subsidies.   The program’s future seems safe after Lutnick applauded it as an “excellent down payment” during his confirmation hearing. But he also told lawmakers one of his first moves would be reviewing contracts that chipmakers negotiated and signed with the Biden administration.   Lutnick refused to commit to honoring final awards before combing over the Biden administration’s paperwork. At Sen. Ed Markey’s (D-Mass.) request, Lutnick did agree to “rigorously” enforce the terms of those agreements. That could include diversity, labor, childcare and other requirements that progressives secured — setting up a potential conflict with Republicans, including Senate Commerce Chair Ted Cruz (R-Texas) and Sen. Eric Schmitt (R-Miss.), who oppose them.   Cruz told Lutnick during his confirmation hearing that he shouldn’t be legally bound by previous conditions: “In my view, your obligation is to follow the law, not their extra legal policy addenda that were stuck onto those contracts.”   — Carr agenda takes shape at FCC: The next month will peel back the veil on Federal Communications Commission Chair Brendan Carr, who will hold the gavel for his first open meeting on Feb 27. Carr has indicated that the early focus may feature a lot of common ground with Democrats, such as moving to set up the AWS-3 spectrum auction authorized by Congress at the end of last year.   Carr has teased plans to scrutinize tech giants and broadcasters — potentially messy interests that could pull the FCC into the content wars. He revived a series of conservative complaints against media companies, some of which touched on election-related controversies, which alarmed his Democratic colleague Anna Gomez.   Carr faces some limits, however, given the FCC is divided 2-2 between Republicans and Democrats. Trump has said he will nominate Olivia Trusty, a longtime Senate staffer, to fill the open seat, and her Senate confirmation process will let senators drill down on the plans for the coming FCC majority. It’s unclear when her confirmation hearing might be scheduled, but that could happen in the coming weeks.   — Trump-era’s AI policy takes shape: Among Trump’s first actions in office was revoking Biden’s 2023 artificial intelligence executive order, with instructions to rescind all policies, directives, regulations, orders and actions that are “inconsistent with enhancing America’s leadership in AI.”   Trump is also pushing for ambitious AI infrastructure development, and on his second full day in office, hosted OpenAI CEO Sam Altman to announce up to $500 billion in private investment for the Stargate data center project.   — Alongside developing AI in the U.S., the Trump administration is considering imposing new export controls on the chips that power AI systems. China hawks in Congress are urging Trump to clamp down on some Nvidia chips as part of a review of the U.S. export regime that Trump ordered on his first day in office.   The legislative agenda on AI is still taking shape. Two AI bills likely to make a comeback are Sens. John Thune (R-S.D.) and Amy Klobuchar’s (D-Minn.) “light-touch” AI Research, Innovation, and Accountability Act and Sens. Todd Young (R-Ind.) and Maria Cantwell’s (D-Wash.) Future of AI Innovation Act. Both senators have said they want to reintroduce their bills this Congress.   In the states, a Texas Republican lawmaker was the latest to introduce a bill that applies to AI systems with a high risk of violating civil rights. That bill has already drawn criticism from tech advocates who say it will hinder AI progress. — Alfred Ng, Anthony Adragna, Christine Mui, John Hendel, Mohar Chatterjee