July Washington D.C. Preview

Quick Fix — Republican leadership still has July 4 circled as the deadline for passing their policy megabill. — President Donald Trump and trade negotiators are rushing to wrap up any and all trade deals by the self-imposed July 9 deadline. — Several major education and labor provisions in the megabill were tossed out by the Senate parliamentarian.

Agriculture — Two big bills: Congressional Republicans are pushing through two pieces of legislation that will have significant effects on the agriculture sector: the “big, beautiful” reconciliation package and the annual funding bill.   Republican leadership still has July 4 circled as the deadline for passing their policy megabill, which includes a major overhaul of the Supplemental Nutrition Assistance Program (SNAP) — the nation’s largest food aid program, which assists over 40 million Americans.   The GOP's plan would push some SNAP costs onto states for the first time. But Democratic governors are warning that would be a significant hit on their budgets and could lead to welfare cuts.   Meanwhile, the fiscal year 2026 agriculture funding bill, which advanced out of the House Appropriations Committee in June, would reduce USDA’s and FDA’s budgets by 4 percent. The bill, which is headed to a full floor vote, would also cut funding for an initiative that helps families purchase fruits and vegetables, and slash money for conservation programs for farmers.   — Looking ahead on trade: Trump’s “Liberation Day” tariffs go into effect on July 8. The Trump administration’s singular trade deal — an agreement with the U.K. in May — was cheered by U.S. beef and ethanol producers. But many agriculture groups worry that other countries will retaliate against Trump’s tariffs by placing major levies on U.S. agricultural exports.   — A farm labor announcement: Agriculture Secretary Brooke Rollins said to expect more details regarding a farm labor solution in the coming days, as immigration raids on farms and at meatpacking sites send a shiver through the ag workforce. Rollins and Labor Secretary Lori Chavez-DeRemer have been collaborating on a reform of the H-2A visa program, which allows migrant laborers to enter the country and perform seasonal agriculture work.   — Dietary Guidelines for Americans: Health and Human Services Secretary Robert F. Kennedy Jr. says the updated dietary guidelines, which are the government’s official nutrition recommendations, will be released “before August.” HHS and USDA work together to update the guidance every five years. — Samuel Benson

Trade — Trade deals TBD: President Trump and his top trade negotiators are rushing to wrap up trade deals — any trade deals — ahead of a self-imposed July 9 date when Trump’s double-digit “reciprocal” tariffs are scheduled to take effect on roughly 60 trading partners.   The White House is eager to demonstrate progress in its talks with multiple countries, after initially promising “90 deals in 90 days” when Trump first suspended the tariffs in April. Thus far, the U.S. has reached a preliminary agreement to lower those tariffs with just one country: the United Kingdom.   Trump and his top lieutenants continue to promise a series of deals with other major trading partners will be announced in the coming days.   At the same time, top administration officials have made clear they are open to extending the deadline for countries they consider to be “negotiating in good faith.”   "You don't blow up a deal that's in process, and making really good faith, sincere, authentic progress, by dropping a tariff bomb on it," White House Council of Economic Advisers Chair Stephen Miran said in an interview on Yahoo Finance's "Opening Bid” on June 26. "You do that when you're at an impasse and you're not making any progress."   Trump on Friday told reporters, "We can do whatever we want. We could extend it, we could make it shorter. I'd like to make it shorter. I'd like to just send letters out to everybody: 'Congratulations, you're paying 25 percent.'" — Emily Cadei

Health Care — In Congress: The Republican megabill heads to the Senate where its Medicaid and Affordable Care Act provisions are causing headaches for some key players. Sens. Josh Hawley (R-Mo.) and Susan Collins (R-Maine) have expressed reservations about cutting benefits to low-income families. At the same time, fiscal hawks, including Sens. Ron Johnson (R-Wis.) and Rand Paul (R-Ky.), are likely to balk at any change that raises the cost of the bill without significant offsets.   The House’s proposed Medicaid overhaul would result in roughly 8 million people losing coverage, according to the Congressional Budget Office. There are also new limits on how states can finance their Medicaid program, which is paid for with a mix of state and federal dollars. The policies are projected to deliver $800 billion or more in savings over the next decade.   — States, providers and insurers are on edge, worried that the legislation, should it become law, would leave them holding a multibillion dollar bag of problems.   States would likely see their uninsured rates spike, leading to a need to prop up hospitals, especially those that serve a disproportionate share of low-income patients. And the proposed crackdown on provider taxes could force states to cut benefits, raise taxes or cut other programs from their budget.   The GOP plan could also mean 3 million fewer enrollees in Obamacare, partly because of new rules around auto-enrollment and shortened re-enrollment windows. There is also a provision that penalizes insurers if they offer abortion as a benefit even in states where they are legally required to do so. That means insurers that participate in the Obamacare marketplace might be forced to rerate their plans with little time before open enrollment begins.   — In the court: The Supreme Court is expected to rule on a pair of health-related cases that could have sweeping impacts on health insurance and abortion access. The justices will decide whether recommendations from the U.S. Preventive Services Task Force are valid even though their members are not confirmed by the Senate or chosen by a Senate-confirmed agency head. Should the justices decide that the task force is invalid, insurers would no longer be required to cover services including depression screenings and HIV-prevention drugs without cost-sharing.   The high court will also decide whether South Carolina can exclude Planned Parenthood from the state’s Medicaid program. A decision in the state’s favor would likely allow other conservative states to expel reproductive and sexual health clinics from their Medicaid programs — shrinking the already narrow network of providers available to low-income patients. The Republican megabill also prohibits Medicaid from funding Planned Parenthood — including in states that have prohibited abortion, though it is not certain whether that provision will survive the Senate. — Pro Health Care Team

Financial Services — Fed-meets: The Federal Reserve will debate the level of interest rates at its next policy meeting on July 29-30. Chair Jerome Powell, who has been under relentless pressure from Trump to cut rates, has suggested the central bank is likely to keep borrowing costs where they are as he monitors the fallout from the president’s tariffs. But two board members — Christopher Waller and Michelle Bowman — have suggested they would be open to lowering rates. A key data point heading into their discussion: the Consumer Price Index measuring inflation in June, which will be released on July 15. If price increases stay muted months after the implementation of the tariffs, it could strengthen the case for lowering rates.   — Softer-data: There are signs that the surprisingly rosy string of economic data that has boosted Trump could soon wane. The rush to get ahead of the president’s tariffs contributed to negative growth during the first quarter of the year. Non-farm payroll gains have slowed, and new unemployment claims have ticked upward. We’ll get more clarity on the latter when the Labor Department reports jobs data for June on Thursday.   — Crypto-bills: Congressional Republicans are expected to take steps to advance their landmark cryptocurrency bills in July. In the House, lawmakers are expected to vote on a pair of measures as soon as the week of July 7, though it could slip to later in the month. However, there remains uncertainty over what exactly House GOP leaders will put on the floor. Senate Republicans and Trump are calling on the House to send a clean Senate-passed stablecoin bill that would create new rules for dollar-pegged digital tokens to the president’s desk. But House   Republicans are considering whether to change the legislation to reconcile it with their own stablecoin bill (which would mean sending it back over to the Senate). And some Republicans want to package the stablecoin measure with a broader crypto market structure overhaul.   The House Financial Services Committee is also set to hold a two-day markup to advance legislation on July 22-23, though it remains unclear what bills they will vote on.   — CFTC-pick: Watch for lawmakers to try to push ahead with confirming Trump’s pick to lead the Commodity Futures Trading Commission, Brian Quintenz, in the coming weeks. The former CFTC commissioner appeared in front of the Senate Agriculture Committee last month. Quintenz would be taking over an agency that is at the heart of a major policy fight playing out on Capitol Hill over the regulation of cryptocurrency markets. — Mark McQuillan

Tax — Much of the tax world will be focused on Republicans’ sweeping tax package in Congress. As of this writing, it is before the Senate, still being negotiated. No doubt, observers will be preoccupied with figuring out what exactly lawmakers have agreed to. Beyond the legislation, they will be looking to the Treasury Department to fill out the details of the plan, in the form of regulations.   — And speaking of waiting, many are anxious to see what becomes of negotiations between the Trump administration and other developed countries over the fate of an international tax accord negotiated by the Biden administration and the OECD, not to mention a slew of digital service taxes around the world. Treasury Secretary Scott Bessent surprised many when he asked lawmakers to drop a so-called revenge tax from the tax package in Congress, because Bessent said it was no longer necessary given his negotiations with other countries. Many will be eager to see how those deliberations pan out. G7 nations have agreed to exempt the US from a global 15 percent minimum tax on the world’s biggest components, but that’s only one part of the regime.   — Over at the IRS, Billy Long has been sworn in as head of the agency. He's an unorthodox pick for the agency, and many will be watching to see what he has in mind for the agency, which has been reeling under a wave of staff cuts fomented by DOGE. — Brian Faler

Employment and Immigration — Pension Drama: Senate Republicans' megabill no longer includes provisions to restructure federal employees' pension plans or bill unions for time spent on organizing activities.   Lawmakers removed their proposed civil service overhaul after the Senate parliamentarian determined those provisions violated reconciliation rules.   The House is expected to take up the megabill again as soon as Wednesday morning. Representatives will need to reconcile their version — which includes provisions to create a separate at-will designation for federal employees — with the Senate's.   — Nominations update: Senate HELP Republicans made substantial progress in working through the nominee backlog for the Department of Labor. The committee advanced Trump’s picks to lead DOL’s Employee Benefits Security Administration, Wage and Hour Division, Occupational Safety and Health Administration, Mine Safety and Health Administration and the Employment and Training Administration.   All of them still need to receive a floor vote. Their confirmations would better position DOL to push through Labor Secretary Lori Chavez-DeRemer’s deregulatory agenda.   — DOL’s proposed rules: Speaking of that deregulatory agenda, the Labor Department submitted dozens of proposed rules Monday, including one that would roll back a Biden-era policy that extended additional rights to migrant farm workers.   Another rule seeks to wipe away the remnants of the Biden administration’s attempt to impose workplace safety standards against Covid-19 in hospitals and other health care settings. — Lawrence Ukenye

Education — Tossed out: Several major education provisions in Trump’s “big, beautiful bill” were tossed out by the Senate parliamentarian ahead of the July 4 timeline to send the legislation to his desk. The House and Senate plans included major overhauls to federal student aid programs, but the parliamentarian ruled against proposals like expanding the Pell Grant to workforce programs, removing federal student aid eligibility for some immigrants who are not citizens, establishing only two student loan repayment plans, and blocking loan payments made while in dental internships or medical residencies from qualifying for public service loan forgiveness.   — An eye on Title IX: The Energy Department’s direct final rules on Title IX, the federal education law that bars sex-based discrimination, are slated to take effect on July 15. The agency is seeking to rescind key civil rights protections that oversee sports participation and sex discrimination protections for students in education programs. The change would no longer require schools to allow students of the opposite sex from trying out for a non-contact sports team if their school does not have one for their sex. In education programs, schools would no longer be required to take “remedial action” or “affirmative action” to assist students in overcoming the effects of sex discrimination they’ve faced.   — Another key date: The House appropriations subcommittee that oversees education spending will markup the Labor-HHS-Education bill for fiscal 2026 on July 21, with the full committee expected to consider the bill on July 24. — Bianca Quilantan

Defense — Defense policy push: July isn't just crunch time for Republicans to pass the megabill. It's also when defense leaders on Capitol Hill are looking to tee up their annual must-pass defense policy bill.   The House Armed Services Committee tentatively plans to hold a markup on its version of the National Defense Authorization Act on July 15. Armed Services Chair Mike Rogers (R-Ala.) has held back action on his defense bill until Republicans complete work on their reconciliation megabill, which would grant $150 billion more to the Pentagon. Lawmakers have also been waiting for the Trump administration to deliver a full 2026 budget request, which was only released last week.

The Senate Armed Services Committee hasn't yet publicly set a date to consider its own version of the NDAA, but may look to do so in the coming weeks.   While defense leaders opted to wait for more certainty on the Pentagon budget and efforts to hike defense spending through reconciliation, committee action on the NDAA this late in the year is a risky bet. There may not be time for the full House or Senate to consider their respective defense bills before Congress leaves for its extended August recess. Any further delays in committee consideration could push those markups into September when Congress returns. — Connor O'Brien

Health Care — Telehealth: The Senate’s version of the megabill would permanently allow high deductible health plan members to get telehealth visits for free, even if they haven’t hit their minimum out of pocket spend, and still qualify for tax-advantaged health savings plans. Roughly half of Americans were on a high deductible health plan in 2024, according to the Bureau of Labor Statistics.   The policy was temporarily enacted as part of the 2020 Coronavirus Aid, Relief, and Economic Security Act, but ended with the public health emergency. After getting extended for 2023, it lapsed at the end of last year.   — Orphan drug exemption: The Senate’s parliamentarian reversed a ruling that language expanding Medicare’s drug-price negotiation exemption for orphan drugs to include medicines that treat multiple rare diseases violated the Byrd rule. The decision means the policy, sought by the pharmaceutical industry, remains in the underlying GOP reconciliation package being debated by the Senate.   The provision would exempt more drugs from Medicare drug price negotiations. That’s a win for drugmakers, which argue the policy would incentivize research for rare conditions.   The Congressional Budget Office previously estimated the policy, as written in the House-passed megabill, would cost nearly $5 billion over 10 years. — Pro Health Care Team

Transportation — Reconciliation: The Senate appears ready not to go along with creating a new fee on electric vehicles and hybrid vehicles to help capture their use of federal roadways. (Currently, drivers pay for road upkeep through a tax on gasoline.) Senators had stripped the fees out of the measure, which will have to be reconciled with a version already passed in the House that did have the fees.   — And it appears that Transportation Secretary Sean Duffy will not get more money for his "brand new air traffic control system" — the Senate appears poised to endorse the House-passed bill, which set the effort at about $12.8 bilion. — Kathyrn Wolfe

Technology — A permanent shift: Talks remain fluid on the Senate Finance Committee’s portion of the megabill, but Republicans on the panel insist companies should have the permanent ability to immediately write off research and development expenses. That’s been a top ask from the tech industry.   Companies since 2022 have been forced to spread out writing off domestic R&D expenses over five years — a change made in the 2017 GOP tax bill. As written, foreign R&D costs would still be amortized over 15 years.   — Big beautiful spectrum: The reconciliation bill is moving ahead with a sprawling deal to free up wireless spectrum for the private sector.   The Senate GOP plan garnered buy-in from both Senate Commerce and Armed Services leaders, smoothing over Pentagon objections that threatened to trip up the provision. That plan exempts some key military and intelligence airwaves, which can be used for radar and other devices, from auction.   The deal would reauthorize the Federal Communications Commission’s spectrum auction authority for 10 years and raise an estimated $85 billion in revenue.   Wireless carriers are thrilled, viewing the added bandwidth as a boost for their 5G and 6G ambitions.   Not all are happy, however, and lingering tensions could eventually create challenges. Democrats have blasted the GOP approach for not using auction revenue to pay for priorities like broadband affordability and upgrading the nation’s 911 tech. Senate Commerce ranking member Maria Cantwell (D-Wash.) worries that some of the anticipated spectrum auctions could disrupt other industries, like aviation.   Wi-Fi advocates also fear the plan unduly favors cellphone giants, and are petitioning lawmakers to include protections for a key band of Wi-Fi spectrum. The House version of the reconciliation included such a Wi-Fi safeguard.   — AI plan in the works: The Trump administration’s AI Action Plan is due July 26, and we expect the plan to be on track for timely delivery. We will also find out if the GOP’s 10-year moratorium prohibiting states from enforcing their own AI laws makes it into the funding bill.   The AI Action Plan is expected to address federal agency coordination, funding priorities for AI R&D, workforce training, standards development and avenues for partnering with the tech industry to speed up AI development.   The future of the state AI regulations moratorium is less certain. While numerous state lawmakers and a small contingent of Congressional Republicans oppose the measure — arguing it strips states of their authority to respond to rapidly evolving AI risks — its passage through the Senate parliamentarian indicates that Republican leadership is willing to adjust the moratorium to qualify for inclusion in the reconciliation package. Whether the final version survives the reconciliation process, however, may hinge on a handful of swing votes in the Senate — including Sens. Josh Hawley (R-Mo.), Marsha Blackburn (R-Tenn.) and Kevin Cramer (R-N.D.) — and the House, where Rep. Marjorie Taylor Greene (R-Ga.) has been a vocal opponent. — Anthony Adragna, John Hendel and Mohar Chatterjee

Cybersecurity — As July kicks off, Congress is rushing to finish drafting key must-pass bills before leaving for the summer recess. At the same time, multiple top federal cybersecurity positions remain unfilled as threats to U.S. critical infrastructure grow larger.   Among the top priorities for Congress involving cybersecurity in both the House and Senate will be finishing up the process of drafting and introducing both the annual appropriations bills — which include funding for key cyber agencies and offices — and the introduction of each chamber’s version of the 2026 National Defense Authorization Act. The NDAA typically includes key provisions on cyber defense activities and is the main vehicle used at the end of each year to pass bipartisan cyberprovisions.   — On the funding efforts, the House Appropriations Committee at the end of June approved the 2026 Homeland Security Appropriations bill, which includes funding for the Cybersecurity and Infrastructure Security Agency. Expect the Senate DHS funding bill and others to be a focus of debate in July.   In addition to the legislative priorities, the Senate Homeland Security and Governmental Affairs Committee has not yet approved the nominations of Sean Plankey to lead CISA and Sean Cairncross to serve as the national cyber director — with both roles viewed as key positions for federal cyber leadership. While Cairncross is likely to sail through the Senate once approved by the committee, Sen. Ron Wyden (D-Ore.) continues his hold on Plankey’s nomination, effectively blocking it from a vote.   — The roles are even more critical given the rising cyber risks to U.S. critical systems tied to Iran following recent strikes on Iranian nuclear facilities. Expect U.S. networks to stay on high alert throughout July. — Maggie Miller