Policy Week in Review - Senate DHS Funding Deal Faces Weekend Votes in the House, Iran and U.S. Negotiate, and Congress' Growing "To-Do" List

DHS Funding Deal Passes Senate and Heads to the House  

Early this morning, the Senate passed a deal to reopen most of the Department of Homeland Security (DHS). The partial DHS appropriations bill was approved by a unanimous consent agreement and without a roll call vote. The bill excluded FY 2026 funding for Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP).

In order to pass the bill, Republicans agreed to remove $5.4 billion in ICE funding and $18 billion in funding for CBP. While there were no further reforms to either agency, leaving both without 2026 funding for the immediate future was enough to allow Democrats to move the bill. Both subagencies would still receive funding from the roughly $170 billion in appropriations included in the One Big Beautiful Bill Act (OB3). 

The bill moved back to the House where it faced unexpected resistance this morning. Speaker Johnson has said that he wants to fund all of DHS with a 60-day extension. The new House proposal might be meant to appease conservatives in a chamber with narrow voting margins. In any event, the House GOP won’t pivot to the Senate position until a vote is taken. It is likely that the House will remain in town through the weekend to consider the bill. 

Should the bill be signed by President Trump, it will immediately and retroactively restore funding to the Transportation Security Administration (TSA), Secret Service, the Coast Guard, and Federal Emergency Management Agency (FEMA).

Republicans have proposed addressing ICE and CBP funding in future reconciliation efforts. As we’ve noted before, passing a reconciliation bill will be difficult and is highly unlikely, leaving future funding for these two agencies in question.

Negotiations Between the U.S. and Iran Continue

As passage through the Strait of Hormuz continues to be a flashpoint in the ongoing conflict with Iran, reports indicate that President Trump and intermediaries from Egypt, Turkey, Saudi Arabia, and Pakistan are working to find a diplomatic solution to end hostilities. Although the situation remains fluid and both sides remain far apart on any potential agreement, President Trump indicated that high-level talks with Iran had at least resulted in “points of major agreement.” 

As part of the negotiations, the United States sent Iran a 15-point plan to reach a ceasefire, an offer Tehran immediately rejected. Iran’s demands include assurances it:

• Will not face any future U.S. or allied military action

• Receives broad sanctions relief

• Is compensated financially for the war

• A new payment system for transit through the Strait of Hormuz

• Sees U.S. military forces removed from bases in the Middle East

Meanwhile, 22 nations - including the U.K., France, Germany, Italy, the Netherlands, Japan, South Korea, and the United Arab Emirates - have indicated that they are willing to help secure safe passage for commercial traffic for the Strait of Hormuz. Signatories to the joint statement have expressed deep concern about the escalating conflict and called on Iran to cease its threats immediately, the laying of mines, drone and missile attacks, and other attempts to block the Strait to “unarmed commercial vessels in the Gulf, attacks on civilian infrastructure including oil and gas installations, and the de facto closure of the Strait of Hormuz by Iranian forces.,” calling it a serious threat to international peace and security. 

Congress’ Growing “To-Do” List

After this week, the House and Senate are both set to take a two-week break for the annual Easter Recess. Congress will return in April with a number of priorities on the agenda. Traditionally, lawmaking on Capitol Hill slows ahead of midterm elections. This year, the legislative docket keeps growing. 

Here’s a quick look at the big pieces of legislation that will animate Washington from April through the midterm elections in November. 

Reconciliation 2.0: House and Senate Republicans have agreed to work together on a budget reconciliation package after Easter. Staff will work over the upcoming recess to determine the specific policies that will be included. What we know now is that it

will include boosting military funding, funding for ICE and CBP, and anti-fraud enforcement in mandatory federal benefit programs.

War Funding Supplemental: It is clear that Democrats will not be willing to help pass a spending bill to supplement the cost of Operation Epic Fury in Iran.That spending will be part of reconciliation. The total amount is unknown, but estimates range from $50 billion to $200 billion. 

FISA Reauthorization: President Trump called for an 18-month extension of surveillance authority under the Foreign Intelligence Surveillance Act (FISA), which is set to expire on April 20. A few dozen conservatives in the House are opposed, meaning that reauthorization may require Democratic support or a short-term solution. 

SAVE America Act: Congress is punting on the President’s top legislative priority until after the Easter Recess by decoupling the bill from DHS funding. The voting reform legislation would require documentary proof of U.S. citizenship to register for federal elections and photo ID to vote Republican leadership may look to move it potentially as

part of reconciliation by using federal dollars to incentivize states to enact the changes themselves. Conservatives are dubious of the strategy. 

CLARITY Act: Earlier this year, the House passed legislation to clarify which agencies regulate digital assets known as stablecoins that are pegged to the U.S. dollar. The Senate stalled over whether stablecoin issuers could offer rewards/yields on stablecoin balances to entice depositors.A bipartisan proposal circulated Monday which

would block such rewards in an effort to appease banks who worry it would siphon deposits from traditional accounts.

Farm Bill: The conflict in Iran and the blockade in the Strait of Hormuz has

resulted in an increase in driven up fertilizer prices and highlighted the dependence of American farmers on global supply chains. That reality, combined with the desire to help farmers in an election year, could break a logjam and unlock the first new Farm Bill since 2018. 

Housing Program Reform and Affordability: Each chamber of Congress has passed a different version of legislation meant to streamline federal housing assistance programs and encourage home sales. House leaders want a conference committee to resolve differences, such as the Senate’s ban on purchases by investors owning 350 or more homes.

Highway Funding: Congress passes multiyear authorizations for federal highway programs, and the most recent authorization will expire on September 30, 2026. House Transportation and Infrastructure Committee Chair Sam Graves (R-MO) said passing the reauthorization on time is a priority, and has targeted spring for the release of draft text. Historically, Congress often needed short-term extensions when reauthorizing transportation programs.

Not all of the bills above are considered “must-pass.” Some have bipartisan support while others are strictly Republican priorities. Each of these bills does, however, have a major constituency of support in Congress or the White House.