Washington Weekly: The Senate’s Two-Week Sprint

The Senate confirmed a number of Trump administration nominees, including Jay Clayton to serve as Director of National Intelligence (see below). The House was out of session.

The Senate will confirm a large package of Trump administration nominees and may pass a government funding extension into December (see below) and a Russia sanctions package (see below). The House will be out of session.

The Senate’s Two-Week Sprint.

While the House is out until September, the Senate remains in session to try to complete remaining business this week and next. There were memorial services this week for late Senator Lindsey Graham (R-SC) as the Senate works on a Russia sanctions bill he championed. Another priority has been nominations. The Senate this week approved Jay Clayton to serve as the Director of National Intelligence while its consideration of Todd Blanche to be Attorney General has faced challenges. Meanwhile, the challenges of getting bipartisan agreement on a crypto market structure bill have put that legislation on the backburner. The White House continues to pressure Senate Majority Leader John Thune (R-SD) to advance a budget resolution for a $95 billion reconciliation package, but there is limited appetite from Senate Republicans. There is ongoing work to try to reach a bipartisan deal to extend funding for federal agencies past the September 30 deadline into December. Congress will face a lot of unfinished business with limited time when it returns in September.

Senate Nominations.

The Senate this week confirmed Jay Clayton on a party-line vote (51-47) to be the Director of National Intelligence. There is hope that the approval of Clayton will provide a basis to renew bipartisan negotiations around reauthorizing an important intelligence gathering authority that expired in June (concerns from Democrats about Trump’s choice for the acting Director of National Intelligence had shut down these talks). Meanwhile, a committee vote on acting Attorney General Todd Blanche’s nomination needed to be postponed as Senators John Cornyn (R-TX) and Thom Tillis (R-NC) withheld their support. They want formal written plans from the Justice Department to kill a $1.8 billion government weaponization fund and tighten up Trump’s audit immunity deal before they would commit to voting for Blanche. This acrimonious situation underscores the level of friction between President Trump and Senate Republicans even as they continue with last-ditch efforts to try find a path forward.

Reconciliation 3.0.

The White House pushed hard this week for Senate Republicans to take up a House-passed budget resolution that would tee up a $95 billion reconciliation package that includes funding for defense, farm aid, and voting restrictions. However, many Senate Republicans had a variety of concerns with the package. Some Senate Republican defense hawks want higher levels of defense spending than the current $73 billion in the House version. On the other hand, fiscal hawks are not keen on the package since it does not include any pay measures to offset the cost of it. There also is concern about trying to include certain voter ID measures from the SAVE Act for both process and substantive reasons. More broadly, many Republicans are not keen on facing an onslaught of tough Democratic amendments before the midterm elections. Despite pressure from the White House, Senate Leader Thune does not plan to take up the bill at this point given the lack of votes. The likelihood of a third reconciliation package passing before the midterm elections is low, but expect the topic to be revived in the lame duck period.

Government Funding.

A bipartisan group of senators are working on a continuing resolution (CR) to keep the government funded into December. Senate Appropriations Committee Chair Susan Collins (R-ME) and Vice Chair Patty Murry (D-WA) have cited productive negotiations. They hope to pass a CR by the end of next week. Current government funding expires at the end of the fiscal year on September 30, five weeks before the midterm elections. The House last week passed a CR that would fund the government through December 4. The Senate is making changes to the House bill to address concerns from Senate Democrats about spending deviations by the Trump administration from appropriated amounts. Democrats also have concerns about the lack of constraints on immigration enforcement funding. The House CR doesn't include funding for immigration enforcement (Republicans separately funded this in a partisan budget reconciliation package that passed in June), but it allows the administration to transfer additional funds to these operations. While negotiations in the Senate are moving in a positive direction, there are still major issues that need to be resolved in order to pass the Senate next week.

Russia Sanctions.

The Senate this week worked on advancing a bipartisan Russia sanctions bill sponsored by the late Senator Lindsey Graham (R-SC) and Senator Richard Blumenthal (D-CT). The legislation would target senior Russian leaders and a wide range of entities helping Russia evade existing sanctions. It also would impose up to 100% tariffs on the top five countries purchasing Russian oil (likely impacting China, India, the United Arab Emirates, Turkey, and Singapore). The current tariff proposal significantly pares back an earlier version of the bill, but there remain misgivings from some senators about giving the Trump administration additional tariff authorities. The bill has overwhelmingly cleared procedural votes, and the Senate is looking to pass it before it goes out on recess next week. The House has its own competing bill on Russia sanctions that would require new sanctions and export control authorities on Russia and would authorize new spending to arm Ukraine. However, that bill has not gained traction in the Senate or with President Trump. The Senate’s Russia sanctions bill is likely to become law, though it remains to be seen whether the House will prioritize the bill when it gets back in September.

Mega-Retirement Accounts.

Senator Ron Wyden (D-OR) and Rep. Richard Neal (D-MA) are the democratic leads of the tax-writing committees. Last week they unveiled a bill that would force those with retirement accounts over $10 million to take distributions. The bill also would prohibit further contributions to these accounts. These lawmakers are concerned by new data showing that more than 32,000 individuals hold more than $10 million in tax-sheltered accounts. This isn’t a new idea. Over a decade ago, President Obama proposed capping tax-preferred retirement accounts at $3 million. This legislation will not advance in the near-term, but we are interested to see if it gains currency among more Democrats.

Kids’ Online Safety and AI.

The Senate Commerce Committee, led by Senator Ted Cruz (R-TX), plans to hold a markup next week on a package consisting of several bipartisan bills aimed at kids’ online safety. The Kids Online Safety Act (KOSA) would require online platforms to implement tools and safeguards to protect users under the age of 17. Another bill (the CHATBOT Act) would implement family accounts that parents can manage for users under 13 who interact with chatbots. Senator Cruz and Senator Marsha Blackburn (R-TN) have been working with the Trump administration on pairing these online safety bills with broader AI measures, but they were unable to receive a full endorsement for the package from President Trump. Given lingering disagreements on broader AI proposals (including one to address catastrophic risks from AI and another to preempt state laws), Senator Cruz has split up the markups. Six bills on kids’ online safety will be considered by the committee next week, while other AI measures will be considered by the committee in September. It isn't clear if there's time left this Congress to advance these measures, but the bipartisan interest indicates that how children’s online safety (and broader AI issues) will continue to be a focus in Washington.

2028 Calendar.

Last week, a Democratic party committee voted on a 2028 primary calendar that will put South Carolina first, followed by Nevada, New Hampshire, New Mexico, and Michigan. The calendar is a clear sequencing choice that does more than reorder states. It reshapes how candidates in a wide-open field build momentum and attract money and attention before the race reaches a broader national audience. The earliest contests will be where candidates are tested, with weaker campaigns being weeded out. Later states often play an important role in consolidating support behind the candidate who looks most capable of assembling the party’s governing coalition. By elevating South Carolina and Nevada, Democrats are signaling that states with Black, Latino, and working-class constituencies should have greater influence in choosing the nominee. The design, however, still has a significant unresolved issue with New Hampshire since it has a state law requiring it to be the first primary in the nation. If New Hampshire moves ahead of the current calendar, there will be questions about whether major candidates treat that vote as legitimate by competing there. The Democratic party has put a marker down, but the calendar’s real power will depend on whether candidates, voters, and state officials all accept the same rules once the 2028 race begins.