Policy Week in Review - August 21, 2026
Updated: Sep 24
In This Edition
The Senate Lays Out Plan for $150 Billion Reconciliation 3.0
Policy Implications as Republican Politicians Line Up to Ban Data Center Construction
Tuesday’s Primaries In Alaska, Florida, and Wyoming
President Trump Threatens Iran with Economic Warfare
President Pauses Canadian Tariffs as U.S. and Canada Negotiate
Trump Nominates White House Aide to FDA
The Senate Lays Out Plan for $150 Billion Reconciliation 3.0
Senate Budget Committee Chair Ron Johnson (R-WI) released a concurrent budget resolution for potential consideration in September. The resolution includes reconciliation instructions for eleven different Senate committees to write new spending legislation that could be passed in the Senate by a simple majority and bypass the 60-vote cloture threshold.
In total, the Senate resolution includes $150 billion in spending instructions compared to $95 billion in the House-passed budget resolution.
The Senate budget resolution seeks to use reconciliation to address the same major issues as the companion budget in the House, which includes using state grants to enact voter identification laws, securing supplemental funding for our military for the conflict in Iran, and providing financial relief to American farmers. Republicans in the Senate hope that including more committees in the process will increase the chances of passing Reconciliation 3.0 this fall. The more committees in play during the reconciliation process, the broader the resulting legislation can become.
For example, if policy components of the defense spending or voter integrity laws cross the jurisdiction of multiple committees, each will have an opportunity to write a section of the bill under the Senate's plan. The expanded scope could also mean a larger price tag for the bill, which is why the total deficit impact is higher than in the House version.
Republicans Join the Data Center Backlash in the Midterms
The controversy over the data center construction boom is becoming a top issue in the midterm elections. Voters overwhelmingly oppose the construction of new data centers and are throwing their support behind bans and moratoriums on new facilities.
Republicans who would traditionally embrace the investment, growth, and ability to get ahead of Chinese technology that data centers offer have been quickly pulled in the other direction by retail politics. The fact that many GOP candidates are dumping data centers shows the issue may play a big role in the midterm elections, and recent Republican backlash underscores the importance of this issue heading into November.
Republicans Jumping on the Data Center Ban Bandwagon
Here are just a few examples of prominent politicians who are now vocally opposed to date center construction and calling for moratoriums or outright bans.
Just yesterday, Michigan Republican Senate Candidate Mike Rogers (R-MI) called for a one-year moratorium on new AI data centers.
In Ohio, the National Republican Senatorial Committee (NRSC) wrote in a memo that data centers are playing a significant role in recent polling that shows Senator Jon Husted (R-OH) in a dead heat with former Senator Sherrod Brown (D-OH). The memo noted that Brown makes opposition to data centers a centerpiece of his campaign, and called data centers “the anchor hanging around Husted’s neck.” Brown has seemingly successfully tied Husted, who served as lieutenant governor before replacing Vice President JD Vance in the Senate, to the over 200 data centers in the state (the fifth highest in the country).
Vivek Ramaswamy, the Republican candidate for governor in the state, has also released an “Ohioans-First Data Center Pledge” calling for a moratorium on data centers in the state until legislation is passed.
In Texas, Governor Greg Abbott (R-TX) directed state audits of all data centers, with audit completion required before they can be connected to the Texas grid. The directive also requires that state agencies retain information about the extent to which data centers are receiving state and federal assistance, providing their own power, bringing their own water, and using measures to reduce impacts on neighboring property owners and communities. Abbott has said he wants any AI data center coming to Texas “to bring their own money, bring their own power, reuse their own water, and do it in a way that reduces the cost of electricity for residents across our state.”
Trump ally Representative Tom Tiffany (R-WI), who is running for governor in Wisconsin, has also come out against data centers in recent days, releasing campaign ads calling his opponent “Data Center David Crowley.”
In Pennsylvania, Democratic Governor Josh Shapiro signed an executive order to crack down on data centers after previously supporting them.
What Does This Mean for the Future of Data Center Development?
Data centers have lost the public debate. Data center and AI companies have failed to articulate a winning message in time, and voters have spoken. There may be time to reset the narrative, but not before the midterms.
Data centers have not identified a policy off-ramp. Data center companies are already talking about concessions and searching for policies to avoid outright moratoriums on construction. Profit sharing and dividends to residents are on the table.
Bans and restrictions will be at the local level for now: Cities and counties are at the forefront for bans on new construction in 2026. As anti-data center candidates are elected in the midterms, the 120th Congress and state legislatures in 2027 will be the battleground for far more sweeping data center restrictions that appear to be bipartisan. Statewide bans will be inevitable if concessions aren't reached.
Recap of Tuesday’s Primaries
The rise of the Democratic Socialist of America candidates could be the only thing that could keep Democrats from taking the House and Senate this November. This week, voters in Florida just voted to nominate a socialist in the state’s key Senate race. Despite internal fighting in the primaries, Democrats are still poised for a big win in the midterms according to Capitol Perspectives' Marc Short.
DSA Notches Another Win in Florida
State Representative Angie Nixon, a member of the Democratic Socialists of America (DSA) who had the backing of the progressive wing of House Democrats in the Democratic Senate primary, pulled off an upset against Alex Vindman, the more establishment Democratic candidate. Nixon will now face Senator Ashley Moody (R-FL), who was appointed to the seat in January 2025 to replace now-Secretary of State Marco Rubio. The general election is not expected to be competitive, but this is just the latest example of DSA candidates defeating establishment candidates and is indicative of a leftward swing among Democratic voters.
In other news, incumbent Representative Cory Mills (R-FL) lost his primary to former television news anchor Ryan Elijah. Republican Representative Byron Donalds won the Republican primary for governonr.
Peltola, Sullivan Advance to General Election in Alaska
The entrance of former Representative Mary Peltola as the Democratic candidate in the Alaska Senate race has put the state in play. Tuesday’s nonpartisan primary featured both leading contenders Peltola and sitting Senator Dan Sullivan (R-AK). Peltola won the preliminary vote, beating Sullivan 48% - 42.7%. The top four candidates will advance to the general election, but the contest is expected to remain a binary choice between Sullivan and Peltola.
Hageman, Gray, and Barlow Advance in Wyoming
In Wyoming, Trump-backed Republican Representative Harriet Hageman, who ousted former Representative Liz Cheney, easily won the Republican Senate primary in the state to replace retiring Senator Cynthia Lummis (R-WY). Chuck Gray won the Republican primary to replace Hageman in the U.S. House and is expected to easily win in November.
In the Republican gubernatorial primary, Megan Degenfelder lost the Republican primary to state Senator Eric Barlow.
President Trump Threatens Iran with Economic Warfare
On Wednesday, following Iranian recalcitrance in negotiating a peace deal, President Trump threatened Tehran with “Economic Warfare and Isolation on an unprecedented scale,” including “announcing that ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences.” More details are expected to emerge on Monday as Treasury Secretary Scott Bessent previewed his upcoming press conference, promising “the toughest sanctions in history” on Iran.
The Treasury Department on Thursday also increased sanctions on Iranian-backed terror group Hezbollah, including “re-designating Hizballah for service to the Iranian regime under the command of Iran’s Islamic Revolutionary Guard Corps-Qods Force.”
President Pauses Canadian Tariffs as U.S. and Canada Negotiate
This week President Trump paused additional tariffs on Canada by three days in order to give negotiators additional time to reach a trade deal. Originally set to take effect on August 19, the tariffs are now scheduled to take effect at 12:01 a.m. eastern time on August 22.
On Thursday, Canadian minister Dominic LeBlanc and Canadian chief trade negotiator Janice Charette once again met with U.S. Trade Representative Jamieson Greer to discuss a potential deal to avert the 50% tariffs. Items under discussion reportedly include:
The U.S. lowering tariffs on Canadian aluminum and steel from 50% to 25%.
A quota on Canadian steel exports that would qualify for the lower tariff rate.
The U.S. lowering tariffs on Canadian autos from 25% to 15%.
Canada ending the provincial boycott of American wine and spirits.
An official from the White House cautioned that an agreement is “being finalized” and any details that might emerge prior to an official announcement “should be regarded as speculation.”
Trump Nominates White House Aide to FDA
On Wednesday, President Trump nominated Deputy Director of the Domestic Policy Council Heidi Overton to head the Food and Drug Administration (FDA). The President said in a Truth Social post that Overton would work to deliver “FASTER Cures, INCREASED American Innovation, MAJOR Clinical Trial Reforms, LOWER Drug Prices, and even more MAHA WINS!”
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