Washington Weekly: Temporary Shutdown

The Senate worked on passing the remaining fiscal year 2026 government spending bills, and today will likely pass a package of five of the spending bills along with a two-week funding extension for the Department of Homeland Security (see below). The House was out of session.

The Senate will confirm Trump administration nominees. The House will vote on the Senate-passed five bill government spending package and the short-term Department of Homeland Security extension. It will also vote on resolutions to hold former President Bill Clinton and former Secretary of State Hillary Clinton in contempt of Congress for defying subpoenas from the House Oversight Committee.

Temporary Shutdown.

Entering this week, Congress had passed six of 12 funding bills. The remaining six bills, which collectively represent more than three-quarters of overall discretionary spending, had been passed by the House and awaited action this week in the Senate. With the recent tragic events in Minneapolis, Senate Democrats were unwilling to support a government funding package that included spending for the Department of Homeland Security (DHS) without reforms of immigration enforcement operations. Yesterday, the Senate voted against moving ahead with the government funding package. Eight Republicans joined all Democrats in the 55-45 vote, but they generally did so out of concerns about overall spending rather than concerns about immigration enforcement. Senate Democrats and the Trump administration have had active bipartisan discussions on charting a way forward. They have reached a deal that would separate out DHS spending from the other remaining funding bills. DHS would be funded for two weeks while lawmakers work on a longer term solution. Given today’s deadline for a government shutdown and the need for the House to pass whatever agreement comes out of the Senate, there will be a temporary partial government shutdown.

Immigration.

The recent tragic events in Minneapolis have prompted concerns from Democrats and some Republicans over the Trump administration’s immigration enforcement activities. As part of the aforementioned negotiations on government funding, Democrats are seeking restrictions on immigration enforcement operations, including requiring greater coordination with local and state police and ending immigration sweeps. They also want immigration enforcement authorities to obtain warrants before entering homes, wear body cameras and stop wearing masks. Some Republicans have voiced concerns about the Trump administration’s handling of immigration enforcement and called for hearings and/or an independent investigation into the events in Minneapolis. The growing consensus for changes to the enforcement actions is a far cry from comprehensive immigration reform, but it's the closest thing we've seen to bipartisanship on immigration in years.

China Disconnect.

One area where there is significant bipartisan consensus in Congress is on having the US take a tough line with China (particularly on the development of advanced technologies). One bipartisan bill (called the GAIN AI Act) would restrict exports of advanced artificial intelligence (AI) chips to certain countries (including China) by requiring companies to prioritize sales in the US over foreign-owned entities. Last week, a House committee overwhelmingly passed a bill called the AI OVERWATCH Act. That bill would require Congressional approval for the sale of advanced AI chips to US adversaries (also including China), applying a similar oversight structure to the one already in place for the sale of weapons. With a foreign policy built around spheres of influence rather than shared values, the Trump administration perceives China differently than many in Congress. Additionally, China’s dominance in the mining and processing of rare earth metals, which are critical for many key technologies, gives it leverage. Reflecting that, the administration has sought to keep the peace and has loosened export controls on the sale of certain advanced AI chips. Notably, the administration put pressure on Congress to remove the GAIN AI Act from last year’s defense authorization bill. There will continue to be a disconnect on China between the Trump administration and Congress.

Tax Season.

Tax season officially kicked off on Monday with the IRS beginning to accept tax returns. One variable this tax season is the potential impact of a partial government shutdown (one of the outstanding government funding bills covers funding for the IRS). A shutdown could delay the payment of tax refunds in the coming weeks and months. It also could impact its ability to conduct audits at a time when the IRS has already conducted fewer audits. There also have been questions about IRS’s use of AI. The IRS has been notoriously slow to adopt new technology, and we are skeptical of the IRS using AI to a great extent in 2026. President Trump and Republicans will be touting larger refunds this tax season to try to convince voters that they benefited from the “One Big Beautiful Bill.”

TikTok’s Integration.

In 2024, Congress passed a bipartisan law requiring the Chinese company ByteDance to divest its ownership of TikTok in the US. While the requirement technically went into effect over a year ago (January 19, 2025), the Trump administration granted several stays of execution to provide more time for a new US owner to materialize. The law was rooted in longstanding national security concerns over ByteDance’s control. Last week, ByteDance finalized the deal for a joint venture (with a majority ownership by US entities) to take ownership of the US portion of TikTok. Oracle (itself an investor in the joint venture) will store the US data and the joint venture will retrain and test the algorithm using US user data as an input. However, particularly with ByteDance retaining a 19.9% stake in the new entity, the House Select Committee on China has raised questions about whether this new venture does enough to ensure that American data is secure and that China won’t have any influence on the algorithm. TikTok crossed an important milestone last week, but the matter is far from settled.

Congressional Stock Trading Ban?

Momentum continues to build for Congress to rein in stock trading by lawmakers, but there is no agreement on the details. At the end of last year, there was growing support for a discharge petition filed by Rep. Anna Paulina Luna (R-FL) that would force a vote on a bill to prohibit Members of Congress, their spouses and dependent children from owning individual stocks, commodities, futures and several other financial instruments. However, this effort faced pushback from Republican leadership. Rep. Bryan Steil (R-WI) proposed an alternative with more limited restrictions. For example, a ban on buying individual stocks would grandfather lawmakers’ existing holdings. While this effort was meant as a compromise to appease rank-and-file Members of both parties, it’s already facing pushback. Many senior Republicans oppose changes to the current policy, while some Democrats believe the bill doesn’t go far enough. With no clear path to resolving these differences and a short election year legislative calendar, a final agreement remains unlikely, though the issue will continue to resonate as a political one.

Border Chief in the Hotseat, Again.

Another response to events in Minneapolis from many Democrats has been calls for the impeachment of US Secretary of Homeland Security Kristi Noem. Rep. Robin Kelly (D-IL) introduced articles of impeachment for Noem several weeks ago. While the effort wasn’t at the forefront initially, over 75% of House Democrats have now joined as co-sponsors. This effort is primarily symbolic since no Republicans have backed it. And even if Noem were to be impeached, it’s virtually assured she would not be convicted in the Senate. Nevertheless, it’s somewhat of a rarity for a cabinet official to face serious impeachment threats. In fact, only two cabinet secretaries have ever been impeached and neither was convicted. Ironically, one of them was Noem’s predecessor, US Secretary of Homeland Security Alejandro Mayorkas (the other was US Secretary of War William Belknap in 1876). Efforts to impeach Noem likely will fall short, but that doesn’t mean she is safe (Republicans are weary of her tenure and it’s possible that she could be fired or forced to resign).

Au Revoir.

The United States’ withdrawal from the Paris Climate Agreement, announced last year but officially completed this week, marks a sharp departure from the Biden administration’s climate agenda. The White House has touted this as a victory for taxpayers, arguing that the agreement wasted taxpayer money and prevented natural growth within the US. Critics of the withdrawal point towards the administration’s decision as yet another wedge between the US and the rest of the world. Additionally, while the withdrawal from the Paris Climate Agreement generates most of the headlines, the administration is also orchestrating a withdrawal from the UN Framework Convention on Climate Change, a 1992 treaty that served as the cornerstone for the Paris Agreement and is a global pillar for addressing climate change. Climate policy hasn’t grabbed many headlines recently, but the Trump administration continues to effectively implement its goals.

Independents on the Rise.

In a new Gallup poll this month, a record 45% of voters said that they now identify as independents, a striking marker of the public’s growing frustration with both major parties. Yet, most of these voters still aren’t willing to break with the two‑party system when it counts. While 62% of voters say there is a need for a third party, only 15% say they are very likely to vote for a third‑party or independent candidate. That gap underscores a long‑standing dynamic. Voters may like the idea of going outside the two-party system, but few are willing to cast a ballot for someone without a major‑party label. The latest findings are a clear indication of this Catch-22. Voters may desire other choices, but they aren’t willing to risk giving the opposition party an advantage.