SBLC: Weekly Hill Update - September 2, 2025

SBLC: Weekly Hill Update - September 2, 2025

Both chambers return from their August recess today to tackle a busy few months, including a potential government shutdown, a fight over presidential nominations (and adjacent issues relating to the President’s authority to fire a Federal Reserve governor), a bipartisan procedural maneuver to release files relating to disgraced late-financier Jeffrey Epstein, work on the National Defense Authorization Act (NDAA), and potential end-of-year tax legislation.

Administration Rolls the Dice on a Pocket Recission: Last week, the White House notified Congress of the President’s intent to rescind $4.9 billion in funds appropriated for foreign aid.  The legality of this “pocket recission” is untested.  The move has outraged Democrats and raises concerns among some Republicans regarding executive branch encroachment on Congress’s power of the purse.  It complicates negotiations on appropriations and significantly increases the odds of a government shutdown at the end of the month.

Status of FY 2026 Funding: Before recessing, the Senate passed just three of the twelve appropriations bills – Agriculture, Legislative Branch, and Military Construction-Veterans’ Affairs (Mil Con).  The House passed only two –Defense,and Mil Con.  None of these bills havebeen enacted into law.  At least some Democratic votes will be necessary for any funding measure to pass the Senate.

Congress has a long way to go to fund the government past the end of the current fiscal year (September 30).  House and Senate Republicans have different preferences regarding topline budget numbers, and the party has yet to settle on a strategy going forward.  Democrats are under pressure from their base to fight Republicans on everything, but they must unite on feasible demands in exchange for their votes.  In the circumstances, the best-case path forward probably is passage of a short-term continuing resolution (CR) by the end of the month to continue funding at FY 2025 levels (actually, FY 2024 levels, since Congress has funded the government through current fiscal year on a CR) and allow more time for the parties to negotiate a longer-term solution.  The alternative to passing a CR is a government shut down.

One potential long-term resolution under discussion is to pass a CR to last for the duration of FY 2026 that also includes earmarks and perhaps some policy provisions to sweeten the deal.  At least some members of the more conservative Freedom Caucus support this plan – an unusual position since that group typically would not vote for a stop-gap funding measure and traditionally has opposed earmarks.  The approach would allow budget hawks to avoid a full-year package that would certainly incorporate higher spending levels, and the sweeteners might convince other members of the party, including moderate Republicans facing tough reelections next year, to support the approach.  

Confirmation of Trump Nominees: As previously noted, Democrats have refused to consent to expedited Senate consideration of any of President Trump’s nominees this year.  As a result, moving each nomination involves several preliminary process votes, a two-session-day waiting period after the Majority Leader files cloture, and up to two hours of debate before the chamber can move to a final vote on confirmation.  This has slowed the confirmation process.

Leader John Thune (R-SD) held the Senate in session into the weekend before the August recess, hoping to successfully negotiate with Democrats to bring a package of nominees to the floor for a group confirmation vote.  Reportedly, the parties thought they had a deal, but President Trump surprised them by refusing to support it.  

Republicans say they will consider a change to the rules governing the confirmation process in the coming weeks.  In July, Leader Thune floated a proposal, first offered by Sen. Amy Klobuchar (D-MN) in 2023 when she chaired the Rules Committee, that would allow the Majority Leader to combine up to 10 nominees from the same committee to be considered togetherfor a floor vote.  This special process would exclude certain positions, including circuit court judges, Supreme Court justices, and cabinet secretaries.  Other options under discussion include reducing the debate time for most nominees, or eliminating some of the currently required preliminary procedural votes.  

If the Republican conference supports a rule change, it could opt to pass it by a simple majority vote.  Override of a standing rule by a simple majority, rather than the usual two-thirds supermajority required to invoke cloture on a measure to amend the rules, is referred to as the “nuclear option.”  It is not clear whether Republicans would have the votes to change the rules in this way – some GOP members might prefer to preserve the chamber’s bipartisan traditions.

Changes at IRS and Treasury: In August, former IRS Commissioner Billy Long was ousted from that position after just 50 days heading the agency.  Treasury Secretary Scott Bessent took over as acting Commissioner – the seventh person to hold the position this year.  President Trump also fired Deputy Treasury Secretary Michael Faulkender, reportedly believing him too aligned with the policy positions of former-Treasury Secretary Steve Mnuchin, whom the President blames for recommending Jerome Powell to Chair the Federal Reserve.

House: The House plans to vote this week on four measures under a rule, including its Energy and Water appropriations bill (H.R. 4553), which would boost funding for nuclear energy and national security while slashing many clean energy programs, and three resolutions brought up under the Congressional Review Act to revoke Biden administration changes to Bureau of Land Management resource plans restricting mineral leases in Montana (H.J. Re. 104), North Dakota (H.J. Res. 105), and Alaska (H.J. Res. 106).  Those measures can pass by simple majority vote.

The schedule also includes 10 foreign affairs- and defense-related measures to be considered under suspension of the rules, requiring two-thirds majority support for passage.  That list includes a bill (H.R. 2635) requiring the State Department to prioritize policies and programs supporting the rights of Uyghurs and other minorities in China, and another bill (H.R. 2505) requiring the State and Commerce Departments to develop strategies to prevent the illegal export of microelectronic drone components to Iran.

The chamber also could vote later this week on whether or notto publicly release the Epstein files.  That measure is the subject of a discharge petition led by Reps. Thomas Massie (R-KY) and Ro Khanna (D-CA).  All House Democrats are expected to back the discharge petition, so if just six Republicans sign on leadership will have to bring it to the floor or tryto derail it with a procedural vote.

Senate: Senate leadership has scheduled a procedural vote on the FY 2026 NDAA.  Members have filed almost 700 amendments, and consideration should take a couple of weeks.  The bill could serve as a vehicle for passage of other legislation – likely candidates to be added via a managers amendment include a bipartisan bill that would expand deposit insurance for transaction accounts used by businesses; a proposal to mandate a 10-year statute of limitations for criminal and civil violations of certain Small Business Administration (SBA) programs; a measure to double the individual loan limit for SBA loan programs; and renewal of the Small Business Innovation and Research Technology Transfer programs.

Notable Committee Action:

Wednesday, September 3, 10:00 am

House Homeland Security Committee 

Markup of seven measures, including H.R. ____ (number not yet assigned), the Widespread Information Management for the Welfare of Infrastructure and Government Act (to extend for 10 years liability protections for companies that share information about cyber-attacks with the government)