Policy Week in Review - Shut Down Averted, Iran Deal Talk, and Post-Primary Polling

In This Edition

• Senate Tees Up Bill to Fund the Government Through December 

• Six Senators Who Will Determine the Fate of Reconciliation 

• Early Michigan Polling Shows GOP Up After Tuesday Primary

• Deal to Reopen Strait of Hormuz Reportedly Getting Closer

• Russia Sanctions Bill Passes Senate and Has the Votes in the House

• Many Trump Nominees Move But Acting AG Blanche Stalled 

• Bipartisan Environmental Permitting Reform Will Wait Until September

• U.S. Reaches a Deal on Hamas Disarmament

• U.S. Jobs Dip in the Month of July for the First Time Since 2010

Senate Tees Up Bill to Eliminate the Shutdown Threat 

Democrats in the Senate agreed to support a stop-gap federal funding bill this week that keeps agencies open through December 11, 2026. After shutting down the government twice in the last calendar year, Democrats have apparently decided that another partisan disruption is unwise before the midterms. The continuing resolution (CR) passed the Senate this week and will almost certainly be approved in the House when it returns on August 31. 

Six Senators Who Will Determine the Fate of Reconciliation 

The Senate GOP also made tangible progress on Reconciliation 3.0 negotiations ahead of recess. Senate Budget Committee Chairman Ron Johnson (R-WI) announced this week that he has prepared a reconciliation budget draft to start the process. There is still a long way to go, but the fact the Senate has prepared a budget marks major progress. 

Senate Republicans need 50 votes to pass spending priorities using Reconciliation 3.0. That means Republicans can only lose three votes and face at least six unknowns: 

• Sen. Bill Cassidy (R-LA) is reportedly demanding that any spending be offset. 

• Sen. Susan Collins (R-ME) opposes a vote on reconciliation this week.  

• Sen. Lisa Murkowski (R-AK) opposes the SAVE Act and reconciliation. 

• Sen. Mitch McConnell (R-KY) is continuing his recovery from home. 

• Sen. Rand Paul (R-KY) is reportedly demanding that any spending be offset. 

• Sen. Thom Tillis (R-NC) said he is a “lean no” on the budget’s SAVE Act funding. 

The budget resolution would include instructions to support military efforts in Iran, provide aid to American farmers, and give states grant money to enact the SAVE America Act voter ID requirements. Senate Majority Leader John Thune (R-SD) said last week that he still did not have the votes for the SAVE Act. However, the budget resolution would reportedly provide authority to eleven different committees and give them flexibility to find a workable solution in September.

Early Michigan Polling Shows GOP Up After Tuesday Primary

When Democrats in Michigan elected Abdul El-Sayed as their nominee to run for the seat of retiring Sen. Gary Peters (D-MI) it emboldened Republicans hoping to flip the state from blue to red. El-Sayed is a progressive who beat established Democrat candidate Rep. Hayley Stevens by a slim margin. Now the first polls have come out in Michigan and show former Republican U.S. Representative Mike Rogers with a 46% - 43% lead over El-Sayed to kick off the race that could decide control of the Senate. 

Deal to Reopen Strait of Hormuz Could Come Soon

President Trump on Tuesday raised the possibility of a deal to reopen the Strait of Hormuz that could be announced as early as this week, telling reporters that “[i]t could happen. Tomorrow or the next day … A lot of progress has been made.” 

Reports indicate that Iran and Oman are nearing a 60-day bilateral agreement that would reopen the Strait with inbound ships entering using the route closest to Iran and outbound ships exiting near Oman. Under the terms of the deal, Iran would not be allowed to charge tolls or fees, which Iran has repeatedly demanded the authority to impose as part of its campaign to maintain control over the Strait. If successful, this deal would be the first step toward the U.S. and Iran returning to negotiations on a longer term deal that would address concerns such as Tehran’s nuclear program and funding of terror groups. 

This isn’t the first time that the President has suggested the conflict is in a dealmaking phase. In the past, the conflict has actually escalated. We believe that polls and the looming midterm election is weighing on the President. With polls showing growing unpopularity of the war with Iran, every day closer to the midterms further incentivizes the White House to find a deal. 

Russia Sanctions Bill Passes Senate and Has the Votes in the House

After securing unanimous consent to move forward with a broad, bipartisan sanctions bill on Russia, the Senate is expected to easily pass the measure before leaving town for recess. The legislation, named for the late Sen. Lindsey Graham (R-SC), empowers the U.S. Trade Representative (USTR) to impose tariffs of up to 100% on the top five countries purchasing Russian oil and gas. It also allows the President to put tariffs of up to 500% on any Russian goods. 

Some House Democrats have already expressed opposition to the bill because it gives President Trump enhanced tariff authority. The bill is bolstered by support from Ukraine and enough moderate Democrats to pass the bill when House members return in September.

Many Trump Nominees Move but Acting AG Blanche Stalled 

Ahead of August recess, the Senate moved a number of nominations, including a few high-profile nominees:

Attorney General: Acting Attorney General Todd Blanche secured the Senate Judiciary Committee’s approval earlier this week but his path forward is still unclear. The Committee voted 12-10 along party lines to advance the nomination. Sen. John Curtis (R-UT), who was previously undecided, announced on Wednesday that he would support Blanche’s nomination. Sens. Susan Collins (R-ME) and Lisa Murkowski (R-AK) have both said they will not support his nomination. Additionally, Sen. John Fetterman (D-PA), who has supported some of the President’s nominees, has said he will not support Blanche. Blanche needs just one more vote to get through the Senate - Sen. Bill Cassidy (R-LA).

Director of Centers for Disease Control and Prevention: Dr. Erica Schwartz received final Senate confirmation earlier this week by a 51-44 vote. Senator Tim Kaine (D-VA) joined all Republicans in supporting the nomination. 

The Senate is also on track to approve a large tranche of over 70 pending nominations before heading out of town. Keith Sonderling’s nomination to serve as Secretary of Labor is a high-profile appointment that also remains pending.

Bipartisan Permitting Reform Will Wait Until September

A bipartisan energy permitting overhaul will not be finalized before August recess despite the hope of negotiators. Senate Energy and Natural Resources Chair Mike Lee (R-UT) and Ranking Member Martin Heinrich (D-NM) in addition to Senate Environment and Public Works Chair Shelley Moore Capito (R-WV) and Ranking Member Sheldon Whitehouse (D-RI) are leading efforts to reach a bipartisan agreement on permitting reform. While there is agreement on the broad contours of a deal, there are still details to be worked out. 

The bill would streamline environmental reviews, place hard caps on how long reviews can take, and make reforms to the National Environmental Policy Act (NEPA) and Clean Water Act. Negotiators now hope to have a deal in September, when the Senate and House return.

Hamas Disarmament Deal

Late last week, President Trump announced that the Board of Peace had “reached a historic agreement for the complete disarmament of Hamas and all other armed groups in Gaza,” a critical piece of the 20-point Gaza peace plan unveiled last fall. The announcement was accompanied by a 15-point Roadmap for Completing the Implementation of President Trump’s Comprehensive Peace Plan in Gaza that would among other things: 

• All sides reaffirm their commitment to the peace plan.

• Secure the withdrawal of any Israeli presence from the Gaza Strip in phases.

• Cease Israeli and Hamas military operations in Gaza.

• Transfer civilian governance and security from Hamas to the National Committee for the Administration of Gaza (NCAG).

• Disarm Hamas and other military groups completely.

According to the President, the “agreement is a critical step towards Gaza finally being governed by a new Palestinian government that will work closely with the Board of Peace to help the Palestinian people. At the same time, Israel will have the security it deserves, with Gaza no longer used as a base for terror attacks.” Reflecting the complex nature of the situation, however, Israel this week expressed “serious security concerns” with the White House, arguing that intelligence assessments indicate that Hamas intended to rebuild its military instead of genuinely disarming. 

U.S. Jobs Dip in the Month of July for the First Time Since 2010

According to the Bureau of Labor Statistics (BLS), employment fell by 23,000 jobs in July. The drop could be another ominous indicator for Republicans heading into a midterm election that polls show will be defined by the economy. July is traditionally a month that the economy adds jobs. In fact, the U.S. has not shed jobs in the month of July since 2010.