March Washington DC Preview

Now that March is underway, lawmakers were finally gearing up to take on a series of long-running legislative fights. But the U.S. strike on Iran has suddenly thrown Congress's plans off track. POLITICO policy teams break down how Capitol Hill is figuring out its next moves. — Lawmakers briefed on the attacks against Iran have been told to expect weeks of continued military pressure.   — The fight over legislation between banks and crypto companies comes to a head this month.   — Some lawmakers are pessimistic that a bipartisan coalition can come together to pass a new farm bill. Agriculture — It’s farm bill groundhog day: House lawmakers are set to hold a markup of the bill the first week of March, but some are already casting doubt that the bipartisan coalition that has historically come together will pass the legislation.   Congress must pass an extension of the current legislation by the end of 2026 if they can’t agree on a new bill. Cuts to food aid spending and farm safety net provisions that are traditionally included in the farm bill were enacted as part of Republicans’ domestic tax and spending package last year.   USDA is rolling out $11 billion in ad hoc relief for farmers as part of the Farmer Bridge Assistance through a new application and filing system. Lawmakers have already talked about another assistance package sometime this year, but the specifics remain vague. — Bird flu: Avian influenza has ticked up in 2026, with more than 10 million birds culled in the first two months of this year, up from just 2 million in the preceding two months. Infections are especially acute in Pennsylvania and could spur renewed policy debate over a vaccine or other federal solution. The current national outbreak dates from 2022 and has forced the culling of nearly 200million birds.   — Regulatory affairs: Health Secretary Robert F. Kennedy Jr.’s long-heralded reform of the “generally recognized as safe” regulatory pathway for food ingredients could be released this spring, according to the Office of Management and Budget’s Unified Agenda. The FDA is also expected to release a study on heavy metals in infant formula this spring.   Beginning March 1, Colorado will become the ninth state to begin limiting foods SNAP participants can buy with federal aid as part of the Trump administration’s effort to cut junk food from the nation’s largest anti-hunger program.   USDA has also foreshadowed that additional information about the department’s reorganization is expected in the coming weeks. Agriculture Secretary Brooke Rollins said the plan is intended to bring departmental staff closer to the constituencies they serve, though the vast majority of USDA staff already work in offices outside the Capital Region.   — Pesticide fallout: The Make America Healthy Again movement is still seething over President Trump’s executive order boosting domestic production of glyphosate, a commonly used herbicide the MAHA movement has pushed to phase out. The move has threatened a key coalition that helped elect Trump in 2024 and could cause problems for down-ballot Republicans who hoped to rely on MAHA advocates for reelection support. MAHA is also gearing up to oppose language in the farm bill that would make it harder to sue pesticide manufacturers and vowed to mount primaries against lawmakers who vote for it.   — Tariffs: After the Supreme Court threw a wrench in the president’s tariffs, ag groups are looking for certainty — and not new tariffs. Any lawsuits against the new tariffs the president has imposed under Section 122 could also cause problems for the industry if it prompts any countries to back away from previously agreed-to deals. — Marcia Brown Trade — After SCOTUS rebuke, Trump pivots on tariffs: The Trump administration is scrambling to erect a new set of tariffs after the Supreme Court invalidated a large chunk of the duties the president imposed last year under a 1977 emergency law.   The 6-3 decision wiped out the 10 percent tariff President Trump imposed last April on nearly every country in the world, as well as specific, higher tariffs on some of the top U.S. trading partners including Canada, Mexico, China, the European Union, Japan and South Korea.   It represented a rare instance of the conservative-led court reining in Trump’s expansive use of executive power. Chief Justice John Roberts and Justices Amy Coney Barrett and Neil Gorsuch joined the court’s three liberals in the majority.   In response, the president signed a new executive order imposing a “temporary” 10 percent global tariff that went into effect on Feb. 24. Those tariffs, imposed under a different section of trade law, could also end up facing legal challenges.   And Section 122, as the statute is known, won’t allow the president the kind of flexibility wielded under the emergency powers law. By law, the tariff must be “nondiscriminatory,” meaning the U.S. can’t give breaks to certain trading partners and not others. It also only allows the president to impose the duty for 150 days, after which it must be approved by Congress.   — Agency actions: The U.S. trade representative and Commerce Department, meanwhile, are racing to complete new and existing trade investigations that could be used as the legal basis for tariff increases on specific countries and industries.   USTR Jamieson Greer has outlined plans for an aggressive set of Section 301 investigations to keep tariffs in place after Trump’s new Section 122 duties expire after 150 days on July 24.   The trade office, in a press release responding to the court’s ruling said it expects the investigations to cover “most major trading partners” and topics including “industrial excess capacity, forced labor, pharmaceutical pricing practices, discrimination against U.S. technology companies and digital goods and services, digital services taxes, ocean pollution, and practices related to the trade in seafood, rice, and other products.”   Commerce Undersecretary for International Trade William Kimmitt said last week that his agency is also considering a number of Section 232 investigations to protect industries it believes are important to national security, although Kimmitt denied that the investigations were related to the Supreme Court ruling.   Kimmitt also noted the Commerce Department still has several active 232 investigations.   Those include semiconductors, pharmaceuticals, critical minerals, polysilicon, wind turbines, medical products, unmanned aircraft systems and roboticsand industrial machinery. — Doug Palmer, Ari Hawkins, Emily Cadei Financial Services —  Crypto legislation: Senators are hoping to revive a push to pass landmark cryptocurrency legislation this month. The bill is stalled amid a dispute between the banking industry and crypto companies over whether digital asset exchanges should be allowed to pay yield to holders of stablecoins, which are tokens whose value is pegged to the U.S. dollar. The White House is mediating talks between the two industries in hopes of reaching a deal to unlock enough support to advance the bill.   — Housing bill: The Senate is also expected to vote on the highly anticipated, bipartisan ROAD to Housing Act, a comprehensive package aimed at tackling affordability and supply shortages, during the first half of March.   — Institutional investors: The House Financial Services Committee will hold a markup on March 4 that is likely to include a provision to curb the ability of institutional investors to purchase single-family homes, a proposal that has bipartisan support but is still at the discussion stage.   — Private markets: The Trump administration has made no secret of its desire to open up opaque private credit markets. Now, even as investors fret over the risks that lie within some parts of the business, the Labor Department is moving to do just that. It is expected in the coming weeks to release a long-awaited plan designed to empower investment managers for 401(k)s and other similar retirement products to invest in private equity, private credit and other alternative assets that, proponents say, are critical to preparing Americans for retirement. The Securities and Exchange Commission, meanwhile, will hold a roundtable on March 4 on private markets as it considers its own efforts to open them up.   — Corporate reports: Trump’s call for companies to report earnings semi-annually instead of quarterly could soon come to a head. SEC Chair Paul Atkins has said the Wall Street regulator is fast-tracking a proposal in response to Trump’s idea, potentially setting the stage for an early 2026 release that will unleash a lobbying war in Washington.   — Basel III: Starting this month, all anyone in the banking world will be talking about is Basel III, the international capital standards agreement, for which the U.S. is expected to submit its proposal this spring. The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. submittedtheir proposals to the Office of Management and Budget in February. Fed Vice Chair for Supervision Michelle Bowman started to tease some of the central bank’s proposals, announcing recently that mortgage-related assets will start to be treated differently in capital ratios. — Jasper Goodman, Katherine, Hapgood, Declan Harty, Aiden Reiter Tax — On the hot seat: Frank Bisignano, the CEO of the IRS, is slated to appear Wednesday before the House Ways and Means Committee, and it will likely be a contentious hearing.   It will be his first appearance before tax writers since the administration created the position for him, and Democrats will likely have lots of hostile questions on a range of issues: the agency’s data sharing with the Department of Homeland Security; the filing season; and the ongoing fallout from the huge cuts the administration has made to the agency’s workforce.   Republicans meanwhile will likely emphasize the big refunds many taxpayers are expected to see this filing season. Bisignano does double duty as head of the Social Security Administration and lawmakers will likely have plenty of questions on that too.   — Tax law moves: The tax world will also be keeping an eye on lawmakers for signs they might be able to move tax legislation this year. Expectations are low but Ways and Means Republicans hope to be able to at least unveil this year a discussion draft of proposed changes to how digital assets are taxed. And the heads of the tax committee would also love to be able to move a number of relatively minor bills aimed at improving tax administration. Last week, Senate Finance Chair Mike Crapo (R-Idaho) and ranking member Ron Wyden (D-Ore.) unveiled a long list of changes they’ve agreed to make.   Meantime, the Treasury Department continues to churn out regulations filling in the details of Republicans’ signature tax cuts. Many in the financial world are especially eager to learn more about how the new ‘Trump account’ investment program for children will work. — Brian Faler Employment and Immigration — Worker classification battle: The Labor Department proposed rolling back the Biden administration’s rule that sought to clarify the difference between employees and independent contractors.   DOL argued the standard makes it harder for employers to allow workers to remain independent — a view shared by companies with app-based businesses, which say their workers value the flexibility their platforms provide.   — Joint employer drama: The National Labor Relations Board, now controlled by Trump appointees, formally scrapped the Biden administration’s joint-employer test and finalized a new rule restoring language from its 2020 standard after a federal judge struck down the policy in 2024.   The move comes as House Republicans map out their own joint employer legislation aimed at supporting franchise groups, which they claim would suffer under the Biden-era proposal.   Rep. Nick LaLota (R-N.Y.) told POLITICO in an interview that he’s backing Rep. Kevin Hern’s (R-Okla.) American Franchise Act, sidestepping legislation backed by House Education and Workforce Chair Tim Walberg (R-Mich.) that failed to receive a vote on the House floor after a revolt from a small group of GOP lawmakers.   — Feds in flux: The Office of Personnel Management is continuing to advance the Trump administration’s effort to overhaul the civil service.   OPM unveiled a plan for the agency to assume the Merit Systems Protection Board’s role in handling federal employees’ appeals of their firings.   OPM Director Scott Kupor told POLITICO at a roundtable that the federal government was not at “maximum efficiency” and declined to rule out future reductions-in-force or RIFs.   The agency also proposed a rule that would cap the number of above-average ratings that employees could receive, arguing that grades are currently being inflated across the federal workforce. — Lawrence Ukenye Education — Education Department deconstruction: The Trump administration is expanding its efforts to break up the Education Department.   The agency’s work related to school shootings and student mental health programs will now shift to the Department of Health and Human Services, the administration announced last week. And the State Department will be tasked to help the Education Department manage how the federal government monitors the flow of billions of dollars in foreign gifts and contracts to higher education institutions.   These moves build on previous agreements announced last year to transfer education programs to other federal agencies. If completed, they will spread responsibility for administering tens of billions of dollars in school-related spending across the federal government.   — HHS's role: The latest moves, which are happening despite bipartisan congressional disapproval of Trump’s department breakup plan, were particularly notable because they involve Secretary Robert F. Kennedy Jr.'s agency in a new role managing the government’s response to school violence across the country.   But key questions remain about the administration’s plans for the Education Department’s multibillion-dollar programs for students with disabilities. RFK Jr.’s agency has been considered a potential landing spot for these programs, but the administration said nothing about its plans last week.   — Problems and resistance: The overall moves are intended to deliver on Trump’s often-touted promise to completely shutter the Education Department and serve as a test case to Congress that a unified education agency is no longer needed. Complaints about faulty implementation are growing as logistical and technical challenges emerge during the program-transition process.   Congressional leaders this year defied Trump’s proposals to slash the Education Department’s budget, including many of the programs affected by the latest transfer plans. Lawmakers added nonbinding language to the current year spending bill stating the department has “no authorities” to transfer its duties to other agencies. — Juan Perez Jr. Defense — Iran war in focus: The fallout from U.S. and Israeli strikes on Iran, which killed Supreme Leader Ayatollah Ali Khamenei, will take center stage.   Administration officials are fanning out to brief lawmakers and committee staff amid questions about how long the operations will last, the danger of an expanded war in the Middle East, the impact to U.S. military readiness and the long-term plan for Iran.   Lawmakers briefed on Operation Epic Fury have been told to expect weeks of continued military pressure, a shift from the quick-hit bombing the U.S. undertook last year against Iran's nuclear sites.   This week is also expected to see tense debate and votes in both the House and Senate to block further attacks against Iran unless authorized by Congress. Democrats unsuccessfully urged GOP leaders to reconvene early to hold war powers votes.   Those dual votes are likely to be long shots. Despite a handful of Republicans who have expressed concerns about President Donald Trump launching the massive operation without input from Congress, several Democrats have indicated they won't support reining in strikes against Iran.   — Strategic showdown: The Senate and House Armed Services Committees will take their first crack at the Trump administration's new defense strategy this week. Both panels will hear from Pentagon policy chief Elbridge Colby in sessions that will give lawmakers ample opportunity to air concerns with the administration’s shift in global priorities.   The blueprint — which will heavily inform the Pentagon’s upcoming budget, pegged at $1.5 trillion — prioritizes the U.S. homeland and the Western Hemisphere above other threats and regions. This is a significant shift from past Trump and Biden strategies that prioritized China as the top international challenge.   Many Republicans have supported Trump’s efforts in the U.S.’s backyard, including strikes against suspected drug boats and the capture of former Venezuela leader Nicholas Maduro. But China hawks have expressed concerns about those priorities supplanting a strategic goal of deterring Beijing.   Top Republicans, including Senate Armed Services Chair Roger Wicker and House Armed Services Chair Mike Rogers, have sounded alarms about administration moves that would reduce U.S. troops in Europe and minimize America’s commitment to NATO. The new strategy signals the administration’s view of the continent’s declining importance.   Colby’s defense of the strategy, and lawmakers’ response to the document, could signal shifts in Pentagon budget priorities. And the hearings may indicate how lawmakers seek to counter efforts by the administration they view as drastic. — Connor O'Brien Health Care — Shakeup at HHS: There’s new leadership at the Health and Human Services Department. Robert F. Kennedy Jr.’s top deputy, Jim O’Neill, departed in mid-February and General Counsel Mike Stuart is on the way out.   It’s part of a larger overhaul aimed at refocusing the department for the midterm elections on the most popular element of Kennedy’s Make America Healthy Again agenda, encouraging people to eat healthy food, and on price cuts President Trump has negotiated with drug companies.   Chris Klomp, deputy administrator of the Centers for Medicare and Medicaid Services, got a promotion amidst the changes. He’s now chief counselor in charge of overseeing all department operations. Klomp’s work on Trump’s push to lower drug prices has elevated his profile. He was a health tech executive and venture capitalist before joining the administration last year.   Kennedy also elevated Kyle Diamantas and Grace Graham to senior counselors for the Food and Drug Administration. They also retained their prior roles as deputy commissioner for human foods and deputy commissioner for policy, legislation and international affairs, respectively. John Brooks is now a senior counselor at CMS in addition to his job as chief policy and regulatory officer.   — Drug approvals: The FDA released draft guidance to help manufacturers of personalized therapies for rare diseases win agency approval in an area of drug development the agency is trying to cultivate.   But it comes amid a recent spate of complete response letters — essentially rejections of drug applications in their submitted form — that have raised questions about the agency’s flexibility under Commissioner Marty Makary’s leadership even as he touts efforts to make it easier for rare disease manufacturers to bring products to market.   The FDA has come under heavy criticism from pharmaceutical companies for a slowdown in novel drug approvals.   The new guidance seeks to emulate the agency’s experience green-lighting a bespoke gene-editing therapy for a newborn known as “Baby KJ”. The baby was born with a rare, life-threatening metabolic condition in which he couldn’t process ammonia out of his body.   The so-called plausible mechanism framework focuses on treatments targeting known abnormalities in cells, genes or molecules to correct the disease’s root cause. It aims to build on existing FDA guidance for rare disease drug development by describing when data collected on individualized therapies can sufficiently support marketing approval. Small population sizes for rare diseases have historically hindered drugmakers’ ability to support their applications with data from large randomized trials.   The agency is now taking comment on the draft guidance. — Health Care Pro Team Transportation — DHS shutdown hits some travelers: As the partial government shutdown continues for the Department of Homeland Security, travelers have been unable to utilize CBP’s Global Entry and breeze through clearance at U.S. ports of entry. DHS at first said TSA’s PreCheck program would also be sidelined but quickly reversed course following public outcry. Global Entry, however, remains shuttered — a decision that domestic travel groups and some Democrats have called illogical, wasteful, and “stupid.” Neither were halted during last fall’s shutdown.   Lawmakers have made little progress on ending the shutdown anytime soon, as a vote on Homeland Security funding failed again in the Senate in late February. Senate Majority Leader John Thune told reporters he’d support the White House if it figures out a way to pay TSA workers amid the ongoing shutdown — suggesting an agreement is far from the finish line. And if TSA agents start missing paychecks and then missing work, DHS Secretary Kristi Noem told CNN that PreCheck could be in the crosshairs again.   — ROTOR Act implodes in the House: In a surprise, the House failed in late February to pass the first major legislative response to last year’s deadly midair collision outside Reagan Washington National Airport. The ROTOR Act from Sen. Commerce Chair Ted Cruz was narrowly voted down, and now, top House lawmakers say they’ll instead take up Rep. Sam Graves’ (R-Mo.) competing ALERT Act.   There is now uncertainty on the path forward, as Cruz has vowed to continue to push his bill mandating ADS-B In technologies for aircraft that need ADS-B Out in busy airspace. The ALERT Act, meanwhile, does not mandate that advanced-location tracking technology for all aircraft, giving certain military aircraft more leeway to comply with proposed safety directives. A big wild card in the path forward is the Defense Department, which pulled its support for the ROTOR ACT just ahead of the vote, citing budgetary and national security concerns. Graves told POLITICO he intends to mark up the ALERT ACT in early March and said he’s willing to find a compromise solution between the bills.   — Gateway Project is back on (for now): Construction resumed in late February on the $16 billion Gateway tunnel project spanning New York and New Jersey, following months of uncertainty and a halt to construction earlier in the month. A federal court ordered the Trump administration to unfreeze federal funding for the passenger rail tunnel project that was being withheld since last year. Resuming construction paves the way for the nation’s largest infrastructure project, a win for both the New Jersey and New York Democrats who fought the Trump administration on the funding freeze. That said, the Trump administration continues to press its case in court and two major contracts — for the Hudson River Tunnel and New Jersey Surface Alignment — remain on hold. — Oriana Pawlyk Technology — AI deadline looms for agencies: March 11 is a key 90-day deadline by which certain federal agencies must comply with the artificial intelligence executive order President Trump signed in December, and it carries significant tasks for the Commerce and Justice Departments.   Many of these agency activities are intended to deter states from imposing their own laws on AI. Preempting those laws is a GOP priority that has so far fallen short on Capitol Hill.   — Directives on deck: Working with AI and Crypto Czar David Sacks and other senior White House officials, Commerce must publish an evaluation of “onerous” state AI laws, including those requiring AI models to alter “truthful” outputs or compel developers to disclose information in ways that violate the First Amendment.   The Justice Department is tasked with standing up an “AI Litigation Task Force,” where it will identify state AI laws that it believes unconstitutionally regulate interstate commerce, are preempted by existing federal regulations or otherwise at the attorney general’s discretion. Government lawyers are then expected to challenge them. Cybersecurity — Can Nick Anderson turn CISA’s ship around?: The Trump administration announced last week the sudden reassignment of CISA’s acting director, Madhu Gottumukkala. His replacement, the former head of the agency’s flagship cybersecurity division, Nick Anderson, is now at the helm.   A veteran of the first Trump administration’s cyber policy team, Anderson is well-regarded in the industry. It’s unlikely to be smooth sailing, however, given the ongoing staffing shortage at CISA, the delay in confirming a permanent director and the ongoing shutdown affecting CISA funding.   — How long will Congress play chicken with DHS?: Nearly two weeks have passed since many DHS staff got their last paycheck, and Republicans and Democrats seem no closer to striking a deal on immigration enforcement. That is going to present major hurdles for CISA.   Gottumukkala testified in February that the shutdown would hamper some of the agency’s proactive defense efforts, while stalling key policy projects, such as finalizing a landmark cyber incident reporting rule. The pay freeze for agency staff is not going to help the agency’s morale problem, either.   — Plankey: Senate Republicans have blocked President Trump’s pick to be the next CISA Director, Sean Plankey, for months now over political spats.   One obstacle to Plankey’s confirmation should dissolve in the first week of March, as DHS Secretary Kristi Noem is set to testify before the Senate Judiciary Committee. Panel member Sen. Thom Tillis (R-N.C.) had been blocking all DHS nominations until then. The second obstacle, from Sen. Rick Scott (R-Fla.), may stick around longer. But Rep. Andrew Garbarino (R-Fla.) in February moved to scrutinize the shipbuilding company at the center of Scott’s hold. — John Sakellariadis