Policy Week in Review - Reconciliation 3.0 Whip Count and the U.S. Reimposes a Blockade on Iran

In This Edition: 

• Analysis on Reconciliation 3.0 and the Senate whip count.

• The U.S. reimposes its blockade on Iran and the Strait of Hormuz.

• The Senate held a number of high-priority confirmation hearings this week. 

• The legislative calendar shifts amid more House gridlock.

• Pentagon officials are exploring military options in Cuba.

• President Trump signs EOs adjusting federal land designations.

Reconciliation 3.0 and the Senate Whip Count

Yesterday, the House Republican Budget Committee advanced a budget resolution that will kick off the third reconciliation process of the 119th Congress. The Committee voted 20-14 to approve the budget which is scheduled to be on the House floor next week. 

Moving reconciliation in the Senate before the midterms is shaping up to be a big hurdle. The budget reconciliation process requires two Senate votes — one to pass the budget and one to pass the bill. Both votes open Republicans to politically difficult amendments during the “vote-a-rama” process. On top of that, several Senators have openly opposed President Trump in recent policy fights. 

Republicans need a simple majority and can only lose three Senators. Here are nine Senators to watch as leaders deliberate whether to consider budget reconciliation before midterms: 

• Senate Majority Leader John Thune (R-SD) already expressed concerns that budget reconciliation will subject vulnerable Senators to tough votes and called it “risky.” 

• Senator Bill Cassidy (R-LA) lost his primary to a candidate endorsed by President Trump and is now calling for reconciliation spending to be offset. 

• Senator Susan Collins (R-ME) might be looking to break away from Trump on a signature bill as she faces reelection in a bluer state. 

• Senator John Cornyn (R-TX) was ousted in a Texas primary with President Trump endorsed his opponent and is publicly criticizing the President's AG nominee. 

• Senator Ron Johnson (R-WI), who is expected to take over the helm of the Senate Budget Committee, may insist on adding offsets to the House version.

• Senator Mitch McConnell (R-KY) is still absent while recovering and his vote will likely be needed. 

• Senator Lisa Murkowski (R-AK) was the deciding vote in favor of Reconciliation 1.0 for tax cuts last year but voted against Reconciliation 2.0 for Department of Homeland Security funding. 

• Senator Rand Paul (R-KY) voted against reconciliation for tax cuts and opposes deficit spending. 

• Senator Thom Tillis (R-NC) is retiring and is currently threatening to proactively fight reconciliation legislation with SAVE America Act components.

As a reminder, we released an initial analysis of the bill’s chances in Congress yesterday. We believe that by keeping the scope of the reconciliation budget narrowly focused on funding for the conflict in Iran, farmers, and voting reform, the House Budget Committee is crafting a bill that has a credible chance to pass in the House. The Senate will probably use reconciliation at some point, however, may want to wait until after the midterms. 

Below are the House budget’s spending instructions.  

U.S. Reimposes Blockade As Iran Ramps Up Attacks

The United States this week reimposed a naval blockade of Iranian ports in response to Iranian attacks on civilian commercial vessels moving through the Strait of Hormuz. The ships had been using a U.S.-backed route near Oman that was outside the shipping lanes controlled by Iran. Following Iranian aggression, the U.S. carried out a series of strikes on “command centers, air defense sites, missile and drone capabilities, and coastal surveillance facilities to further degrade Iran's ability to threaten innocent mariners crewing commercial vessels transiting the Strait of Hormuz.”

Tehran has also continued to target U.S. allies in the region, including:

• Launching drones and missiles at an air base in Jordan.

• Launching drones and missiles at Ali Al Salem Air Base in Kuwait.



• Launching an attack on Bahrain, which hosts a U.S. naval base.

Along with its military strikes, Iran has also escalated its threats in recent days, vowing that if President Trump were to target Iranian infrastructure, then Tehran would destroy “all infrastructure throughout the region,” which “will be crushed” in “such a way that no trace of it will remain.”

In response, President Trump has been weighing options for expanding U.S. military operations in Iran, including expanding airstrikes in the country, seizing Kharg Island and other strategic points along the Strait of Hormuz, and bombing the subterranean nuclear-linked complex at Pickaxe Mountain. In an interview this week, however, Vice President JD Vance stressed that any military strikes would be intended to force Iran back into negotiations: “We’re not just going to bomb and bomb and bomb. We’re going to try to use our military force as one of the many tools that we have to solve the problem.”

Senate Confirmation Hearings for Key Federal Agencies Held This Week

This week, the Senate held several confirmation hearings for high-level administration officials, including:

Todd Blanche to serve as Attorney General, replacing Pam Bondi, who was removed in April. Blanche has been serving as acting attorney general since then. His nomination has been subject to scrutiny from both sides of the aisle over the Department of Justice’s release of the Epstein files and the proposed anti-weaponization fund. Two key Republican senators on the Senate Judiciary Committee, which will need to approve his nomination to send it to the floor, remain undecided on how they will vote, specifically over concerns about the anti-weaponization fund: Senators Tillis and Cornyn. If even one of them chooses to vote against the nomination, it would stall in committee.

Jay Clayton to serve as Director of National Intelligence (DNI), replacing acting DNI Bill Pulte (who replaced ousted DNI Tulsi Gabbard in June). Clayton’s nomination is high-stakes because Democrats have aligned his confirmation with the reauthorization of the Foreign Intelligence Surveillance Act (FISA), which expired last month. While Clayton is likely to be confirmed, Democratic concerns about his inability to answer who won the 2020 election during his hearing, will likely continue to delay reauthorization of FISA.

Dr. Erica Schwartz to serve as Director of the Centers for Disease Control and Prevention (CDC). Dr. Schwartz would be the first permanent director of the CDC since the exit of Susan Monarez last August. Senator Cassidy, who lost his primary to a Trump-backed challenger earlier this year, pushed Dr. Schwartz on her ability to stand up to “crazy stupid things being said that undermine faith in immunization.” 

Updating the Legislative Calendar

With ongoing gridlock on the House floor, congressional action may be limited in the coming weeks. On Thursday, House leadership was forced to pull a veterans benefits bill from the House floor after a group of three Republicans (Max Miller of Ohio, Anna Paulina Luna of Florida, and Jeff Van Drew of New Jersey) prepared to vote against a procedural motion moving the bill forward, raising concerns about decreasing benefits for one group of veterans in order to increase benefits for another. 

However, there are a few legislative efforts that have gained traction in recent days, particular with the death of Senator Graham. And updated view of the legislative calendar is below:

Legislative Priorities for Before August Recess

• Bipartisan Russian sanctions legislation

• Budget resolution with reconciliation instructions

• Reconciliation 3.0, including SAVE America Act funding, supplemental defense spending, and aid for farmers

• Veteran benefit legislation (Take Care of America’s Veterans Act)

Legislative Priorities for Next 60-Days

• The Railway Safety Act

• Confirmations for Attorney General, CDC, DNI, and Secretary of Labor

• Crypto and stablecoin regulatory structures (CLARITY Act)

“Must Pass” Legislative Priorities 

• A continuing resolution to fund the government past the midterm elections

• Highway Trust Fund Reauthorization

• Farm Bill Reauthorization

• Export-Import Bank Reauthorization 

• National Defense Authorization Act

Pentagon Officials Explore Military Options for Cuba

On Monday, President Trump told reporters that the U.S. was investigating whether Iran was storing drones in Cuba. According to the President, “If they do have that, and they might very well have that, we'll take care of it in short order. We're not going to allow that to happen.” These remarks came just a day after United Nations Ambassador Mike Waltz called Cuba a national security threat, in part because of the presence of Russian and Chinese operatives: “The Cuban regime is not only a threat to its own people, it’s a national security threat, and this administration’s not going to stand for it any longer.”

Additionally, amidst an ongoing push for political and economic reforms in Cuba by the U.S., senior Pentagon officials are reportedly considering a range of military options for possible action. Those discussions have been described as “concept-of-operations briefing to discuss early-stage military planning options for select missions that could be carried out.” Even with military options being considered, Secretary of State Marco Rubio has emphasized that the President prefers a diplomatic solution with Cuba, adding “The President's preference is always a negotiated agreement that's peaceful… That remains our preference with Cuba. I'm just being honest with you. You know, the likelihood of that happening, given who we're dealing with right now, is not high.”

President Trump Signs Environmental Orders

This week, President Trump signed three presidential actions to reduce environmental regulatory burdens. 

Regulatory Relief for Certain Stationary Sources to Promote American Chemical Manufacturing Security: The President signed a proclamation granting two years of regulatory relief from Biden-era regulations that applied to certain chemical manufacturers, producing chemicals used to produce semiconductors, medical device sterilization, advanced manufacturing, and national defense systems. 

Modifying the Grand Staircase-Escalante National Monument: The president signed a proclamation reducing the size of Grand Staircase-Escalante National Monument from 1.87 million to 181,500 acres.

Bears Ears National Monument:  The president signed a proclamation reducing the size of Bears Ears National Monument from 1.36 million to 121,100 acres. The White House said the proclamation would end “the overreach and abuse of the Antiquities Act.”