Policy Week in Review - Congress Approves Long-Awaited Legislation
Updated: Jun 4
Key Takeaways
Congress approved a number of bills this week that have been pending for months.
The President signed DHS funding (without ICE or CBP) after a 76-day shutdown.
Both chambers passed a budget that will separately give $70 - $80 billion to ICE and CBP through reconciliation and without any reforms outlined by Democrats.
The House passed a $488 billion, five-year Farm Bill reauthorization.
Republicans still have a long and expensive “to-do list” this year (table below).
President Trump said that negotiations with Iran will not be face-to-face.
Gas prices are still a major concern for vulnerable Republicans.
Even with news of a new Iran proposal, gas is up 50% since February.
Kevin Warsh’s nomination moved through committee with a May confirmation likely.
USTR and the White House must make a plan on USMCA reauthorization.
Major Legislative Action This Week
Speaker Mike Johnson (R-LA) scored a major win by passing a procedural rule that allowed the House to debate all four of the week’s major bills. The rule limited debate time on all the bills and blocked all amendments that could have derailed support for each piece of legislation. Conservatives initially objected to the lack of opportunity to amend the four bills. President Trump strongly supported passage, and the House eventually voted to consider the bills 216-210. Below is a closer look at the major legislation that the House passed this week.
Reconciliation 2.0 Funding ICE and CBP
On Thursday, House Republicans approved a unified budget resolution 215-211. The Senate passed the same budget last week by a vote of 50-48. The resolution will provide fast track authority to pass spending for Immigration and Customs Enforcement (ICE) as well as Customs and Border Patrol (CBP) with a simple Senate majority rather than requiring 60 votes.
The budget contained reconciliation instructions for both the Judiciary and Homeland Security Committees to draft legislation that will increase the deficit by up to $70 billion. This means the forthcoming spending bills could include a combined total of up to $140 billion, but Republicans say the funding for ICE and CBP will be in the neighborhood of $70 - $80 billion.
DHS Shutdown Finally Ends
Another key goal of Republicans this week was funding the non-immigration programs within the Department of Homeland Security (DHS). Funding for the department was broken into different tranches when the Senate approved partial DHS spending on March 27, 2026. The bill included money for the following agencies:
Federal Emergency Management Agency (FEMA)
Transportation Security Administration (TSA)
United States Coast Guard
United States Secret Service
Pressure has been growing to move funding for these operations in the wake of last weekend’s shooting at the White House Correspondents’ Dinner. That pressure culminated in a voice vote passing the Senate bill funding the remainder of DHS Thursday, ending the longest government shutdown in history.
Foreign Intelligence Surveillance Act (FISA) 45-Day Extension
Both chambers approved a 45-day extension of U.S. surveillance authorities that were set to expire yesterday, allowing lawmakers more time to negotiate reforms. FISA gives the U.S. government legal authority to gather information on foreign targets overseas. Many lawmakers expressed concerns that FISA has been used to target Americans’ data by FBI personnel (as described in findings from the DOJ Inspector General last year), including communications that should have been subject to a warrant. The House passed the Senate bill by a vote of 261-111.
Farm Bill Passes in the House
The last time a new “Farm Bill” – including the authorization of all national farm support programs and SNAP – passed Congress was in 2018. Agriculture programs function under an extension set to expire on September 30. The House took the first step toward updating farm policy by approving the 2026 Farm Bill by a vote of 224-200.
The House passed an amendment to remove language offering legal protections for domestic herbicide and fertilizers that have been approved by the Environmental Protection Agency (EPA). The amendment is a setback for the brand Roundup and other herbicides that use glyphosate. Those companies could still score a major win in the Supreme Court soon.
The bill now heads to the Senate. The fact that 14 House Democrats voted for the bill suggests there may be a bipartisan path to a Farm Bill this year. Any version in the Senate will require 60-votes so there is still a long way to go.
Next Up for Congress – Reconciliation 3.0
To obtain the votes necessary to pass a budget resolution this week, Republican leaders in both the House and Senate provided assurances to Members that they will advance partisan priorities through another reconciliation bill this year. That process will start when lawmakers return to Washington on May 12, 2026.
While the specific policies that will be included in the next budget reconciliation package are still subject to deliberation, some top priorities have been identified. Below is a non-exhaustive list of what Republicans could include when they return to Washington:
Supplemental funding for defense.
Spending for states to enact voter ID policies (the SAVE America Act).
Targeting fraud in mandatory federal programs to derive savings.
Health care policy based on President Trump’s recent framework.
Encouraging states to dissolve “sanctuary city” status.
Blocking federal funding for Planned Parenthood.
Applying work requirements to all means-tested programs.
Permitting reform for energy projects (the SPEED Act).
Withhold state funds due to fraud or improper payments.
Big questions about Reconciliation 3.0 remain. The largest unknown is whether conservatives will demand that higher spending be offset with cuts. If there are too many reductions to safety-net programs – even if it is to address fraud – moderates could withhold their votes.
Given close margins in Congress and the difficulty of cutting government spending during an election year, Reconciliation 3.0 will be a tough legislative lift. After watching how long it took to pass Reconciliation 2.0, some Hill observers are skeptical that the GOP will be able to come together. Republicans will begin the process when they return in May.
The Potential Cost of Remaining 2026 Legislative Priorities
After an active week on Capitol Hill, Congress will return from recess on May 12, 2026. The White House and Republicans are signaling their intention to push an aggressive legislative agenda this year with a heavy price tag. Below we’ve estimated the costs associated with some of the GOP’s stated legislative goals for the rest of the year.
President Trump Warns Iran to “Get Smart Soon”
On Wednesday, President Trump warned that Iran “better get smart soon” and sign a non-nuclear deal. The stern message follows an unserious proposal by Iran to reopen the Strait of Hormuz in exchange for an end to both the war and to the U.S. blockade on Iran - with discussions about its nuclear program to follow at a later date. President Trump quickly rejected the offer and said that he would maintain the U.S. naval blockade of Iran’s ports until a satisfactory deal is reached on Iran’s nuclear program, which includes stockpiles of highly enriched uranium. Secretary of State Marco Rubio echoed that sentiment, saying, “We have to ensure that any deal that is made, any agreement that is made, is one that definitively prevents them from sprinting towards a nuclear weapon at any point.”
The President signaled that talks with Iran would continue but ruled out sending the United States delegation back to Islamabad. Meanwhile, U.S. Central Command is reportedly planning a “short and powerful” wave of strikes on Iran in the event that the regime remains unwilling to reach a deal, though President Trump appears to prefer maintaining the naval blockade as leverage for the time being.
On Friday morning, oil prices dipped with reports that Iran sent a new proposal to U.S. negotiators. The price of gas is weighing heavily on vulnerable Republicans in Congress who are running for re-election in November. They are hopeful that a deal to re-open the Strait will come soon.
USMCA Review Nears
The United States-Mexico-Canada Agreement (USMCA) is currently under a mandatory six-year review. The review process is being conducted separately with both Mexico and Canada. The deadline for the three parties to decide to extend the agreement is July 1, 2026, although it seems increasingly unlikely that this will be the case. The President’s trade policy and rhetoric, particularly as it relates to Canada and Mexico, suggests that he personally wants renegotiation of some kind.
Should one or more parties choose not to extend the agreement for the full 16 years, a joint review will occur annually through 2036 (it will not automatically end the agreement). Should one or more parties choose to withdraw, the withdrawal will be effective in six months and remain in force for any remaining parties. We’ll have more on the fate of USMCA in the coming days, including whether stock market strength makes it more likely that Trump would withdraw from the agreement.
Warsh Nomination Moves Forward While the Fed Keeps Rates Steady
The Federal Reserve voted on Wednesday to keep interest rates steady with all voting to maintain the current interest rate except Stephen Miran, who again supported a lowering of interest rates. However, three members of the committee chose not to align with the “inclusion of an easing bias in the statement at this time.”
Current Fed Chair Jerome Powell also told reporters that he would stay at the Fed after his term as chair ends on May 15, 2026, preventing President Trump from nominating another pick. Powell can remain at the Fed until January 31, 2028, although he didn’t confirm if he would stay for the full remainder of his term.
Also on Wednesday, the Senate Banking Committee voted 13-11 to advance Kevin Warsh’s nomination to take over as Chair when Powell’s term ends. Warsh is expected to be confirmed by the full Senate soon with full Republican support.
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