Quick Fix— Democrats want to discuss the end-of-September deadline to fund the government, but the Republican caucus doesn't have a plan that unifies their party.
— Senate and House lawmakers return today ready to plunge into debate on their respective NDAA bills.
— The Fed will make its interest-rate decision in mid-September. Fed Chair Jerome Powell had signaled that the central bank is likely to cut interest rates for the first time since December. |
Agriculture— Skinny farm bill: After Republicans included $60 billion of farm-focused investments in their “One Big Beautiful Bill,” lawmakers are hoping to come to the table to pass a “skinny” version of a traditional five-year farm bill with crucial policies for agriculture, nutrition, energy, rural development and more.
House Agriculture Chair G.T. Thompson (R-Pa.) said he was aiming to mark up and advance a farm bill out of committee in September, though that timeline is still up in the air.
The package will include fewer of Democrats’ red lines that stalled negotiations last year, given that Republicans already passed major cuts and rollbacks to nutrition and conservation spending in their megalaw.
Still, some points of contention remain, including a potential fix to state-level animal rights law like California’s Proposition 12, how to address the hemp regulatory loophole that was created in the 2018 farm bill and any language related to pesticide use and liability.
— Make way for MAHA: The Trump administration’s “Make America Healthy Again” Commission is looking to finalize a list of policy recommendations that MAHA leaders say will help overhaul the U.S. food supply and decrease diet-related illness and disease, especially in children.
The panel’s draft recommendations avoided a crackdown on commonly used pesticides, assuaging agriculture lobbyists’ fears. They also listed some food policy changes that Health and Human Services Secretary Robert F. Kennedy Jr. had already publicly promised to make, like changing the Food and Drug Administration’s “generally recognized as safe” classification and investigating certain food additives and ingredients.
— Grim reaping: Farmers and agriculture groups that have been patient with Trump’s tariff rollout are feeling extra heat as producers of top U.S. agricultural exports prepare for record-high harvests. Unless the Trump administration can deliver new trade opportunities it has promised, farmers could be left with too much supply and too little return for their commodities like soy, corn and grains. — Grace Yarrow |
Trade— Tariff Negotiations: After months of delays, Trump imposed his threatened “reciprocal” tariffs on dozens of countries in early August. The trade haggling, however, is not over.
The Trump administration continues to negotiate with leading trade partners including the European Union, Japan and South Korea on final details of the preliminary agreements they reached at the end of July. As part of those agreements, the administration set tariff rates at 15 percent, including on key sectors like autos. But Trump has moved slowly to cut the 25 percent tariff on car exports from those countries, to their frustration.
— In the details: The administration completed a joint statement with the EU to enshrine details of their broader trade agreement, but has yet to unveil similar statements with Japan and South Korea. The EU on Thursday proposed new legislation to eliminate tariffs on U.S. industrial goods, a precondition for Trump to drop tariffs on European cars
The administration also extended the deadline for talks on a comprehensive trade deal with China — from Aug. 12 to Nov. 10. The Chinese government’s top trade negotiator, Li Chenggang, was in both Ottawa and Washington last week for talks.
Negotiations are also ongoing with Canada, which Trump hit with a 35 percent tariff earlier this month, and are likely to bleed into the 2026 review of the U.S.-Mexico-Canada Agreement that Trump negotiated in his first term. — Ari Hawkins, Camille Gjis, Antonia Zimmerman, Zi-Ann Lum |
Transportation— Progress: In the waning days of August, DOT Secretary Sean Duffy announced that his agency had finally opened solicitations for what the department is calling an “integrator” contract. The idea is to have one company that will manage the administration’s ambitious vision to completely rebuild the nation’s air traffic control systems before President Donald Trump leaves office. This could include telecommunications upgrades, radar replacements and even facilities consolidation among others. Solicitations are due by Sept. 21.
— Gridlock: But the end of September seems less rosy when considering the state of Congress as a potential government shutdown threat looms by month’s end. Democrats have been pressing for meetings, but the Republican caucus is divided on the best path forward. Senate GOP leaders have floated a short-term patch, but much remains unclear. — Kathryn A. Wolfe |
Defense— Defense bills ready for action: The House and Senate return from their lengthy summer recesses today ready to plunge into debate on their defense policy bills.
The Senate will take a procedural vote to advance its version of the National Defense Authorization Act. Republicans will need Democrats’ support to clear the initial hurdle, making this vote an early sign of any bipartisan support. Passage of the bill will hinge on whether both parties strike a deal to vote on amendments. Resistance from just a few senators has tanked efforts to pass the bill in past years, a roadblock Senate Majority Leader John Thune and Armed Services Chair Roger Wicker are trying to avoid.
House lawmakers, meanwhile, will go to work next week on their own defense policy bill. Lawmakers already have filed hundreds of amendments. The House Rules Committee will sift through those proposals ahead of floor debate.
— DC crackdown: Trump’s decision to call up the DC National Guard and federalize the city’s police force could weigh heavily on the NDAA deliberations. Washington, D.C., Del. Eleanor Holmes Norton and Maryland Sen. Chris Van Hollen plan to introduce legislation to undercut Trump by granting the city control over its Guard and police. They’re hoping to insert the measure into the defense bill. But the proposal is likely a non-starter for Republicans, who could block it from even receiving a vote. — Connor O’Brien |
Financial Services— Fed meeting: The Federal Reserve's interest rate-setting meeting this month is poised to be one of the most eventful in modern history. Chair Jerome Powell signaled that the central bank is likely to cut interest rates for the first time since December, citing fears of a weakening job market. The Trump administration is angling for the Senate to confirm White House chief economist Stephen Miran to an open seat on the Fed board by the time of the meeting, giving the president a particularly sympathetic voice on the central bank. And Trump has moved to fire board member Lisa Cook, who has filed a lawsuit to keep her job, and it is unclear whether she will participate in the meeting.
— Economy: The economy is at a critical inflection point. Recent labor market data suggests that employers have slowed down hiring and many economists anticipate that economic growth will diminish as Trump’s tariffs stifle trade. Recent consumer price data indicates that the new levies on imports have started to push up prices. If September's economic reports reflect higher inflation and weaker employment, the economy could soon encounter stagflation — a politically toxic combination of low growth and higher prices.
— Congressional agenda: The Senate Banking Committee is expected to hold Miran’s Fed board nomination this week. The Senate also takes up the National Defense Authorization Act, with more than 600 intended amendments, including several on banking, the CDFI Fund, cryptocurrency, the FDIC and small business. And Senate Republicans hope to advance a crypto market structure bill.
The House Financial Services Committee will hold hearings on the Financial Crimes Enforcement Network, the banking sector funding access, terrorism risk insurance, Fed independence, financial threats and artificial intelligence in the financial system.
— CFPB moves to curtail its authority: The Trump administration set deadlines later this month for the financial industry and public to weigh in on proposals that would rein in the Consumer Financial Protection Bureau’s oversight. Trump appointees and congressional Republicans have already pared back the bureau’s operations and reduced its funding. But the latest proposals would further narrow the CFPB’s powers to oversee parts of the financial sector.
— CFTC: Wall Street is hoping to learn the fate of Trump’s nominee to lead the Commodity Futures Trading Commission. Brian Quintenz, a former commissioner at the agency, appeared to be on a glidepath toward confirmation as the top U.S. derivatives regulator earlier this year. But the White House delayed a procedural vote on his nomination following 11th-hour concerns from cryptocurrency billionaires Tyler and Cameron Winklevoss. Now, with crypto legislation front of mind for many on Capitol Hill, some lobbyists expect that filling the CFTC’s top seat will take priority. — Victoria Guida, Sam Sutton, Katherine Hapgood and Michael Stratford |
Tax— Fine print: The tax world’s focus in Washington has shifted to the administration, with many now eager to see what Treasury has in mind when it comes to filling in the details of Republicans’ new tax law.
The agency needs to churn out a slew of guidance and it’s beginning by focusing on provisions that take effect this year, so that people can claim them on their returns in the spring. That includes new breaks for seniors, auto-loan interest, tips and overtime.
But it’s not just the regulatory guidance people are looking for. The administration needs to pick a new head of the IRS after pushing out Billy Long, who is now nominated to be ambassador to Iceland. Treasury Secretary Scott Bessent is serving as acting commissioner in the interim, even though there’s supposed to be a clear distinction between the more policy-oriented Treasury and the studiously neutral tax administrators at the IRS.
— Rehires: Meantime, Donald Korb, who was chief counsel at the IRS during the George W. Bush administration, is waiting for the Senate Finance Committee to take up his nomination for a second go-around as the department’s top lawyer. At the same time, the agency wants to bring back some of the employees it had pushed out as part of the waves of DOGE-led staff cuts. And looming above it all is next year’s filing season, when many will be watching closely to see what all the turmoil and budget cutting at the agency means when millions file their returns.
It’s worth still keeping an eye on Congress for signs that lawmakers might be willing to move a bipartisan tax package at the end of the year. The odds appear long at the moment, but a bipartisan push to rescind new restrictions on new gambling-loss deductions — which could leave some gamblers owing taxes even when they don’t make any money — could potentially prompt lawmakers to act. — Brian Faler |
Energy— Congress digs into energy approps and permitting: As soon as it returns after Labor Day, the House is set to take up its Energy and Water spending bill, which would make deep cuts to renewable energy programs at DOE in favor of nuclear energy and other GOP priorities. But Republicans will need to temper the bill to gain the support of Democrats in the Senate, where appropriators have yet to introduce their Energy-Water bill amid intra-GOP disagreement over toplines. |
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The larger energy fight looming on the horizon is another push for permitting reform, which House GOP leaders have indicated will be at the top of their agenda this fall. There’s already a new bipartisan proposal on the table, but Democrats could be loath to back the new effort amid the Trump administration’s recent crackdown on wind and solar projects.
Congress is also facing deadlines on Sept. 30 and Oct. 6 to reauthorize the Defense Production Act and Development Finance Corporation, respectively. Both parties have utilized those tools to back energy and critical minerals projects at home and abroad.
The Senate is also considering the nominations of Laura Swett and David LaCerte to the Federal Regulatory Energy Regulatory Commission and Ho Nieh to the Nuclear Regulatory Commission as the Trump administration moves to exert control over those independent agencies. — James Bikales |
Employment and Immigration— BLS shakeup: Economists have grown increasingly concerned about potential problems with the quality and reliability of data from the Bureau of Labor Statistics in the wake of Trump's firing of Commissioner Erika McEntarfer after a weak monthly jobs report.
E.J. Antoni, the Heritage Foundation economist Trump tapped to replace McEntarfer, has done little to assuage those concerns, and he alarmed some experts by proposing a shift to quarterly reports.
Trump and Republicans seized on the agency’s data revisions during the Biden administration in calling for changes, despite concerns that changing the timing of those closely watched figures could negatively affect businesses’ ability to make informed decisions.
Antoni’s path to confirmation could be complicated by questions from Senate HELP Committee members and other lawmakers about his plans for ensuring BLS economic releases are free of political bias and the views he has expressed as a fixture on conservative talk shows and podcasts.
— Workforce development: The Trump administration’s vision for workforce development is coming into clearer focus with the Labor Department’s unveiling new plans for training workers.
DOL is partnering with the departments of Commerce and Education to strengthen federal workforce development efforts as Labor Secretary Lori Chavez-DeRemer stresses the administration’s goal of having 1 million active apprentices.
The three departments plan to collaborate in developing plans to train workers in artificial intelligence and loosen existing standards for job training programs.
— Reg watch: Industry and labor groups are filing comment letters on a batch of rules that DOL released in July, taking opposite positions on a proposal to ease financial disclosure requirements for unions.
Business groups argue that the department’s attempt to update revenue reporting requirements to account for inflation will reduce transparency in how unions manage members’ finances. Labor organizations have sided with the Trump administration in contending that the fix is much-needed. — Lawrence Ukenye |
Education— Funding: The biggest agenda item on education issues as lawmakers return to Washington this week is spending. Republicans in both chambers are advancing bills with higher funding levels for education programs than Trump is requesting for fiscal 2026 just as the legislative sprint to the end of the fiscal year may end up in a government shutdown. There’s also a lot of attention on what remaining fiscal 2025 money the administration may — or may not — spend before Oct. 1.
— Appro. bills: Congress is all but certain to consider a stopgap funding measure, but both chambers are advancing individual spending bills. The House Appropriations Committee is expected to unveil and mark up the bill to fund the Education Department for fiscal 2026 early this month, having delayed consideration of the Labor-HHS-Education bill until after Labor Day. House Republicans have proposed funding the departments of Education, Labor, Health and Human Services and related agencies at over $184 billion. In the upper chamber, Senate Majority Leader John Thune has said he is considering bringing the Labor-H bill to the floor packaged with the Defense Department spending bill, after the Appropriations Committee advanced a bipartisan bill to fund education programs before lawmakers left town.
— Grant disbursement: Whether the Trump administration will dole out grant funding for Hispanic-serving institutions remains to be seen after the Justice Department said it would not defend the program in court. Advocates say the roughly $350 million appropriated for fiscal 2025 hasn’t yet been sent out to colleges who are competing for the funds. There is also concern about what the DOJ’s move could mean for the future of the program, especially as lawmakers begin shaping their latest appropriations bills.
— Return to work? Dozens of laid-off employees from the Education Department’s Office for Civil Rights were on track to return to work in September after being placed on administrative leave as part of a department reduction-in-force plan. But they and their colleagues have continued to receive their salaries and benefits at a cost of nearly $1 million per week.
Plans to reinstate the civil rights workers stem from a lawsuit filed before a Massachusetts federal judge by an organization for survivors of sexual violence, parents and children with civil rights cases pending before the department. But the Trump administration is contesting the judge’s order to reinstate the workers. It’s now up to the U.S. Court of Appeals for the 1st Circuit to decide whether the department must stick to the court-ordered return-to-work plan, or if the Trump administration presses the Supreme Court to weigh in and let the civil rights layoffs take hold.
— Student loan collections: The Education Department said it would begin wage garnishment on defaulted student loan borrowers late this summer, when it first announced it would resume collection. But the agency has not yet posted a specific date. The Federal Student Aid website provides an even more vague timeline, stating garnishment would start “later in 2025.” About 5.3 million borrowers were in default at the end of the third quarter in 2025. — Mackenzie Wilkes, Rebecca Carballo, Bianca Quilantan, Juan Perez |
Health Care— The extenders: Lawmakers are under pressure to pass several health extenders, chief among them for so-called telehealth flexibilities — easing of telehealth rules during the pandemic — and funding for community health centers. It’s possible that other health-related items could be included in an extenders package to offset the cost, including price transparency reforms for pharmacy benefit managers.
But congressional Democrats are still angry that a similar package was jettisoned by House GOP leaders last year after objections from Trump and his DOGE leader, billionaire Elon Musk.
— ACA Subsidies: The thorniest potential extender is for the enhanced subsidies for the Affordable Care Act that are scheduled to expire at year’s end. Democrats will want to include them in any bipartisan talks. Republicans aren’t showing their cards, but they are considering the political ramifications of allowing the subsidies to expire. They are under heavy pressure from health industry groups, from hospitals to insurers, to extend them.
Right now, it’s unclear whether Republicans will pursue another partisan continuing resolution to keep the government open after Sept. 30 in the absence of a broader deal with Democrats on fiscal 2026 spending. Senate Democrats helped pass a CR in March despite criticism from progressives. Senate Minority Leader Chuck Schumer took a major hit from his left, which will oppose any repeat. — Health Care Pro |
Technology— GOVERNMENT CONTINUES TO GRAPPLE WITH AI: A handful of senators will try to push forward different standards to regulate AI companies once Congress returns. Among them, Sen. Ted Cruz (R-Texas.) wants to grant tech companies regulatory waivers as they experiment with AI, and Sen. Josh Hawley (R-Mo.) wants tech companies to face legal liability for violating copyright protections when training their AI models. Any regulations will come as the AI industry beefs up its presence in D.C.
Meanwhile, prompted by the Trump White House’s AI Action Plan, federal agencies are pulling out all stops to ensure AI adoption in the government. Companies like OpenAI and Anthropic are already pricing their models at $1 per agency for the first year, in a bid to get their technology embedded first.
— ATTENTION PIVOTS ON $42B BROADBAND PROGRAM: States and territories have until Sept. 4 to submit their applications to get a piece of the $42.45 billion Broadband Equity, Access and Deployment program. All eyes will then shift to the Commerce Department, which will either approve the requests or press for changes.
This is the latest chapter in a long saga for BEAD, which contains money from the 2021 infrastructure law. Commerce Secretary Howard Lutnick set off this reapplication process in June when he unveiled new rules aimed at shedding certain Biden administration requirements around climate resiliency and affordability, among other issues. The revamp was also meant to boost cost effectiveness and required states to hold another bidding round with internet service providers — a change that could mean more money flowing to novel technologies like satellite (including the Starlink service run by Elon Musk).
Some states are already proposing far greater shares of money going to satellite, but Starlink has complained some are not adopting enough satellite services. It’ll be up to Lutnick and others at the department to decide what passes muster. Lutnick wants to get money out to states by the end of the year. |
Cybersecurity— Pending Cyber Bills: Returning from August recess, Congress will need to address several major cyber policy measures as it works to renew key pieces of legislation and approve the fiscal 2026 appropriations before the Sept. 30 deadline.
Lawmakers are prioritizing the renewal of the 2015 Cybersecurity Information Sharing Act, a foundational law that facilitates cyber threat sharing between the private sector and the federal government. While there has been no significant opposition on the Hill to keeping the law in force, Senate Homeland Security Chair Rand Paul (R-Ky.) vowed not to approve a renewal unless new language is added to block the Cybersecurity and Infrastructure Security Agency from conducting work to counter online disinformation.
Other lawmakers have argued in favor of passing a 10-year extension of the existing bill language to ensure there is no lapse in the critical threat-sharing authorities it provides. They are concerned that including any changes will slow down the bill’s passage.
The State and Local Cybersecurity Grant Program is also due to expire at the end of the month. The law has given states and localities $1 billion over multiple years to boost cybersecurity at often underfunded government offices. Paul may try to attach the clause ending disinformation work at CISA to the bill as part of its reauthorization, which could slow down the process.
Congress is also racing to approve appropriations packages for the 2026 financial year, which includes funds for CISA, the Pentagon’s cyber efforts, the State Department and many other cyber-focused agencies. Trump’s original proposed budget for CISA would slash almost $500 million as compared to the agency’s most recent budget, but lawmakers in the House have proposed a much smaller cut.
— Outstanding Appointments: Two key cyber policy nominations are still pending in the Senate: Katie Sutton to serve as assistant secretary of Defense for cyber policy and Sean Plankey to lead the Cybersecurity and Infrastructure Security Agency.
While Sutton’s nomination is likely to sail through the Senate in the coming weeks, Plankey’s nomination is currently blocked from a vote by Sen. Ron Wyden (D-Ore.) until CISA makes public a report on U.S. telecommunications vulnerabilities. Before leaving for recess, the Senate unanimously approved a bill backed by Wyden that would force CISA to release the report. The timing for when the House will take up the measure is unclear. — Maggie Miller  |
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