Washington Weekly: Iran Agreement

The Senate confirmed Trump administration nominees and advanced an affordable housing package (see below). The House was out of session.

The Senate will consider Trump administration nominees. The House may consider the National Defense Authorization Act (NDAA) and legislation funding national security and energy and water development agencies and programs. Both chambers will try to pass the housing package.

Iran Agreement.

Following weeks of off-again and on-again diplomatic efforts, the uneasy status quo in the Iran conflict has yielded to an agreement to not only extend the ceasefire, but also to open up commercial traffic in the Strait of Hormuz. The 14-point plan leaves questions regarding key details. The US provides limited sanctions relief for Iran. While Iran nominally commits to not create nuclear weapons, the deal punts many thorny and contentious issues regarding Iran’s nuclear capabilities to future negotiations. This will happen over a 60-day period, with a goal of finalizing an agreement after that time. The agreement also reportedly includes other potential economic benefits for Iran (further sanctions relief, a $300 billion reconstruction fund that is to be sourced through private investment), but the administration emphasizes that these only will be conditioned on an agreement on the nuclear issues. Congress, which likely would need to review and vote on any nuclear deal, to say nothing about the cost of the conflict, is agitating for more details on the agreement. While an important breakthrough, this agreement marks really the beginning rather than the end of the process to try to end the war and address Iran’s nuclear capabilities.

Road to Housing.

There has been broad interest in Congress on legislation to promote the development of greater housing supply. However, there have been different views of the scope and details of such a bill, with the Senate and the House having volleyed competing bills over the past few months. In March, the Senate passed its bill in an 89 to 10 vote. Instead of just taking up the Senate product, the House developed its own version that passed by a 396 to 13 margin. The House had varied concerns with the Senate bill, but a key one was a provision pushed by President Trump that would ban institutional investors (generally defined as entities that own and control more than 350 houses) from buying additional single-family homes. With many housing groups having voiced concerns about the provision’s potential impact on the development of homes to rent, the House package waters down this provision. This week, leaders in both the Senate and House announced agreement on a final version, which will pave the way for passage in the Senate and the House next week. The housing bill is a rare bipartisan victory on a significant issue in the current Congress.

FISA Fight.

Congress continued to grapple with the reauthorization of Section 702 of the Foreign Intelligence Surveillance Act (FISA), which expired last week amid concerns about the leadership of acting Director of National Intelligence (DNI) Bill Pulte. Following President Trump’s announcement last Friday to nominate Jay Clayton as DNI Director, Senate Republicans had been working towards quickly confirming him by the end of the week, in large part as a means of trying to unlock a bipartisan deal on FISA reauthorization. However, President Trump threw a few wrenches in those plans. The President on Wednesday called for Clayton’s confirmation hearing to be canceled because he wants the Senate to also confirm James McDonald as the US Attorney for the Southern District of New York (Clayton’s current post). President Trump also said that he would not sign a FISA extension unless the SAVE America Act is attached. This controversial bill requires proof of citizenship in voting. The requirements are a non-starter for Democrats and even some Republicans. President Trump’s actions this week add another layer of complexity to an issue that was already facing a difficult path through Congress.

Bipartisan Permitting Push.

Senators Tom Cotton (R-AR) and Catherine Cortez Masto (D-NV) introduced a bipartisan bill aimed at accelerating major energy projects by cutting through regulatory “red tape” that often leaves developments mired in years of federal permitting and legal delays. The measure underscores a continuing bipartisan effort to enact long-sought permitting reforms amid widespread frustration over slow energy infrastructure build-out and ongoing debate over how to balance faster approvals with environmental and other safeguards. What sets this bill apart from other permitting reform efforts is that it would ban future administrations from revoking permits or issuing stop work orders. If enacted, the bill would give both Republican and Democratic administrations a valuable tool to ensure their energy projects don’t stop when they leave office. However, passing it this Congress is a tall order given the limited legislative days left.

Sports Tax?

Some lawmakers have become frustrated with some professional sports teams pitting communities against each other as a means to get special benefits when building a new stadium. Rep. Brendan Boyle (D-PA) is working on a bill to prevent professional sports teams from relocating across state lines. He may have a sympathetic ear with Rep. Jason Smith (R-MO), the chairman of the House tax writing committee. He has criticized the potential move of the Kansas City Chiefs from Missouri to Kansas for a new domed stadium. While we await details of Rep. Boyle’s proposal, we are skeptical of it moving through Congress. Bear in mind that the Senate rejected a provision in the House-passed tax bill last year that was aimed at the ability of NFL teams to write off intangible assets. While there likely will be more public shaming of professional sports teams that relocate, we don’t envision a new tax on sports teams that relocate.

College Sports.

In other sports news, lawmakers in both chambers have been working on legislation aimed at creating a national framework for college athletics following the introduction of name, image, and likeness (NIL) compensation. A Senate Committee held a markup this week on a bipartisan bill that would establish federal NIL standards and replace the current patchwork of state laws governing college athletics. The Senate bill would preempt conflicting state NIL laws, establish transfer and eligibility standards, and provide academic, scholarship, and medical protections for athletes. There is a similar bill in the House that takes a narrower approach focused on establishing a national NIL framework and providing limited antitrust protections for the NCAA. President Trump has also pushed for reforms to college athletics, signing an executive order in April that called for changes to athlete eligibility, transfers, NIL compensation, and revenue-sharing arrangements with several provisions and recommendations due by August 1. While lawmakers continue to push for NIL legislation, a final compromise and limited floor time could complicate efforts to enact any final legislation this year.

Funding Standoff.

Congress is already facing early concerns about a potential funding showdown ahead of the September 30 government funding deadline as negotiations over fiscal year 2027 spending levels have stalled in the Senate. Senate appropriators have yet to agree on topline spending levels, with negotiations between Senate Appropriations Chair Susan Collins (R-ME) and Vice Chair Patty Murray (D-WA) at a standstill over defense and non-defense funding priorities. The impasse has delayed committee markups and fueled finger pointing from both parties, raising concerns of another possible government shutdown this fall. While Congress could ultimately rely on a short-term continuing resolution to avert a funding lapse, lawmakers face a compressed legislative calendar ahead of the November midterm elections and limited time to advance all 12 appropriations bills. As a result, major funding decisions could be deferred until a post-election lame-duck session, where appropriations would compete with a growing list of year-end legislative priorities.

Dark Money and Primary Elections.

Recent House primaries are highlighting how newly formed outside groups spend millions to influence outcomes while leaving little trace of their origins. Several super PACs have emerged across multiple competitive districts, investing heavily in primaries to ensure “their” candidate advances to the general election, which is often a much easier election. Unlike traditional outside spending, however, these groups are operating with an unusually high level of anonymity, using newly created entities, generic mailing addresses, and limited disclosure trails that make it difficult to determine who is funding or directing their efforts. Money in politics is certainly not a new phenomenon, but the heavy spending in often quiet primaries is a new dynamic as the candidates there rarely raise significant sums of money on their own. As outside spending becomes more sophisticated and less transparent, elections are becoming increasingly difficult for voters to follow and only increase voters’ frustrations with politics and politicians.