Washington Weekly: Appropriations Danger Zone

The Senate confirmed Trump administration nominees. The House passed bills to address foreign funding in US schools and to reduce regulatory burdens on small businesses.

The Senate will hold votes on expiring healthcare subsidies and will approve a large package of Trump administration nominees. The House will work on a package of capital formation bills and the National Defense Authorization Act.

Appropriations Danger Zone.

With the expiration of government funding on January 30, it would behoove Congress to make progress before the end of the year in passing the nine remaining appropriations bills. In the Senate, there is interest in advancing a package of five spending bills, including the larger and more contentious ones (particularly Defense and Labor-Health). However, that effort quickly stalled when Republican fiscal hawks raised concerns about overall spending levels and certain provisions. This does not bode well for finding a bipartisan compromise that can pass the Senate. In the House, Republican leaders would like to pass a smaller package of less-controversial bills, but they are unlikely to have votes this month if the Senate doesn’t. Instead, Congress seems poised largely to punt efforts on government funding to January and spend the remaining two weeks on Trump administration nominees and the must-pass defense bill (see below). Congress will have only three weeks in January to pass reconciled versions of the remaining appropriations bills. Given that this is very difficult, much of the government may need to have its funding extended under existing levels through a continuing resolution. In the new year, Congress can look forward to another ugly fight over government funding with potentially renewed threats of a government shutdown.

Healthcare Impasse.

As part of a bipartisan agreement to end the government shutdown last month, Senate Majority Leader John Thune (R-SD) promised Senate Democrats a vote on health care subsidies in December. With the Affordable Care Act (ACA) subsidies set to expire at the end of the year, those votes will happen next week. Instead of votes on a bipartisan agreement, there will be ones on competing partisan measures. Democrats will push for a three-year extension of the subsidies, while Republicans likely will have an alternative featuring direct payments to health savings accounts instead of tax subsidies. Neither will come close to the 60-vote procedural threshold to end debate and advance a bill in the Senate. There will continue to be bipartisan discussions on the issue, but those are unlikely to yield a viable compromise. Instead, the issue is poised to be a predominant one in the midterm elections, with lots of partisan finger-pointing on the significant increases in health insurance costs that millions of Americans are facing.

Final Year End Item: Defense Bill.

There is one outstanding item that Congress needs to pass before the end of the year, the annual National Defense Authorization Act (NDAA). With each chamber having passed its version of the NDAA, there have been active discussions on reconciling differences. The Trump administration had been pushing for a controversial provision that would preempt state laws setting artificial intelligence (AI) standards, but that was dropped. Proposals to restrict exports of advanced AI chips to China and establish a new export regime for advanced US semiconductors also are being left out of the final package, although it will include some restrictions on products sold to China that have security implications. Lawmakers try to attach their top priorities to the bill since it is a must-pass bill (one big remaining question is whether the final package will include a Senate bill on housing), but the vast majority of non-germane items are excluded. An overarching issue is the topline level of spending given that the Senate bill would authorize more than $30 billion more spending than the House bill’s level of $882 billion. A final version of the bill is expected today or early next week. While the NDAA may receive less bipartisan support than in the past, Congress will close out its work on the package over the next two weeks.

Congress Reclaims Some Power.

Lawmakers are turning up the heat on Defense Secretary Pete Hegseth over recent US strikes on a suspected drug-running boat, demanding answers on the legal basis for the operation. On a bipartisan basis, committees in both chambers have requested classified briefings and floated proposals to tighten reporting requirements for military actions conducted without explicit congressional authorization. While presidents of both parties have leaned heavily on broad interpretations of executive authority in matters of national security, the scrutiny of Secretary Hegseth signals a growing appetite by Congress to reassert its constitutional role in war powers. It’s a small step, but another sign that Congress is slowly clawing back authority ceded to the executive branch over decades.

December Docket.

The Supreme Court will hear oral arguments on a variety of cases, including one involving the Trump administration’s efforts to remake independent agencies and another on a major campaign finance dispute. The former involves President Trump’s attempt to fire a member of the Federal Trade Commission (FTC). In a case from 1935 that also formed the basis for protections of officials at other agencies, the Supreme Court determined that the president can only fire FTC commissioners for cause. Several justices have signaled openness to overturning the long-standing precedent, arguing that these restrictions could be a possible infringement on the president’s authority over the executive branch. In the other case, the court will consider whether to strike down federal restrictions on political parties’ spending in coordination with their candidates. Federal law enables donors to contribute more to a political party than to any individual candidate. The campaign arms of Senate and House Republicans argue that the limits on coordination are not consistent with First Amendment free speech protections. Defenders warn that removing these limitations would allow for the circumvention of campaign finance limits. And in a major development yesterday, the Supreme Court issued an expedited ruling that overturns a recent federal court decision that had struck down Texas’ new congressional map, which will allow Texas to use its redrawn map in 2026 and beyond. While much focus is rightly on the Supreme Court’s ultimate decision on the reciprocal tariffs, there are other rulings that could have significant impact.

Congressional Stock Trading?

There is a revamped effort in Congress around the long-debated issue of stock trading by lawmakers. While this issue has arisen before, there’s now a growing set of bipartisan bills aimed at limiting, or banning, Members of Congress from trading stock. Rep. Anna Paulina Luna (R-FL) this week filed a discharge petition to force a vote on her bill to ban Members of Congress, their spouses and dependent children from owning stocks, commodities, futures and several financial instruments. The petition would need 218 signatures to force a vote. It’s the same type of petition that was used to force a vote on the release of the Epstein documents. House Speaker Mike Johnson (R-LA) is not supportive of the effort, indicating that members should be able to own individual stocks and other financial instruments. With competing proposals of various stringency, any final action in the near term is unlikely, but the desire to make changes is clear.

Congress and College Sports.

House Republicans are pushing for passage of a bill that regulates how college athletes can earn money. The bill, the SCORE Act, would put in place regulations in response to the introduction of the name, image, and likeness (NIL) compensation. The bill would bar student-athletes from being considered employees under labor law and grant an antitrust exemption to intercollegiate sports officials. While a few House Democrats are in favor of the bill, most House Democrats oppose it. They believe it does not offer enough protections for students and gives too much power to the NCAA. The House was scheduled to vote on the bill this week, but Republican leadership pulled the vote when there weren’t enough votes to pass it. There is only a three-vote margin for Republicans, and a few Republicans have come out and opposed the bill. If Republican leadership can muster enough votes to pass it, the bill will be brought back to the floor for a vote. However, its path in the Senate is more uncertain given Democratic opposition and the need to clear the 60-vote threshold to overcome a filibuster. While the bill is still in play in the House, it has some obstacles to clear before crossing the goal line.

Special Election Signals.

Former Tennessee General Services Commissioner Matt Van Epps (R) won Tuesday’s special election by nine points. It was a clear Republican victory, but one that masks troubling signs for the GOP. The district voted for Trump by 22 points in 2024, meaning Democrats clawed back 13 points despite running a progressive candidate that faced a GOP ad blitz. While special elections are always outliers, the turnout matched midterm levels, making it clear this wasn’t just a low turnout election. Democrats argue that if they can replicate this overperformance in the 35 GOP-held seats won by 13 points or less last cycle, they will be favored to win the House next year. Moral victories don’t win seats, but Democrats saw positive signs in Tuesday’s results, while Republicans know they have their work cut out for them between now and November.