Good morning, friends:
Congress is returning from its annual August recess and, as usual, several items are demanding their attention by the end of the year. Below we preview what will dominate Congress’ attention immediately upon return and throughout the remaining four months of the year.
Fiscal Year 2026 Appropriations: Congress needs to reach a funding agreement to keep the government open past September 30. This will most likely be completed by a short-term continuing resolution while the two parties continue to negotiate Fiscal Year 2026 Appropriations bills.
Looming over these negotiations will be last Friday’s White House announcement of another rescissions package cancelling $4.9 billion in foreign assistance. If Congress does not approve the rescissions package before the end of the fiscal year on September 30, President Trump will unilaterally cancel the funding, using a controversial tactic called “pocket rescissions.” Lawmakers in both parties have derided this approach as infringing on Congress’ funding prerogatives, though Russ Vought, Director of the Office of Management and Budget, has repeatedly defended the use of pocket rescissions as a right of the Executive Branch. This announcement will almost certainly disrupt appropriations negotiations and significantly increase the possibility of a government shutdown at the end of September.
If a bipartisan agreement on a short-term continuing resolution is reached, Congress would have more time to reach a deal on Fiscal Year 2026 Appropriations, either as a new funding agreement or a full-year continuing resolution.
National Defense Authorization Act (NDAA): The Pentagon’s policy bill is consistently passed by Congress each year and sets authorized funding levels and policy updates for the Department of Defense. Since it is considered must-pass legislation, it also becomes a legislative "catch-all” vehicle at the end of each year for non-defense policy items. As the NDAA process progresses, we will keep you updated on potential legislative additions to this package.
Technology Policy: The Trump administration has ushered in a new era for tech policy, and we expect the topic to remain a dominant issue the rest of this year and into 2026. Earlier this year, the Trump administration released its comprehensive AI Action Plan and several AI executive orders. Congress may seek to enact its own AI regulation, even if it is not as comprehensive as was discussed during the last Congress. The “AI Group of Four” — Senators Mike Rounds (R-SD), Todd Young (R-IN), Chuck Schumer (D-NY), and Martin Heinrich (D-NM) — held several AI Insight Forums last Congress and hope to advance AI-related priorities this fall. Other provisions may include measures to protect children on or from the internet, such as the Kids Online Safety Act, championed by Senators Marsha Blackburn (R-TN) and Richard Blumenthal (D-CT).
Data privacy may again be in the mix as the House Energy and Commerce Committee has formed a Data Privacy Working Group. Industry experts continue to stress the need for data privacy legislation before any comprehensive AI regulation can be put in place. In all likelihood, however, federal data privacy legislation may continue to remain elusive due to policy differences, especially related to federal preemption.
Congressman Andrew Garbarino (R-NY), new chairman of the House Homeland Security Committee, and Senator Rand Paul (R-KY), chairman of the Senate Homeland Security and Governmental Affairs Committee, have committed to reauthorizing The Cybersecurity Information Sharing Act, which promotes information sharing between the private and public sectors, before it expires at the end of September.
Healthcare Package: Another possibility for this fall is a health package addressing several outstanding healthcare priorities that lawmakers will attempt to address, potentially in a stand-alone healthcare-focused package. Senator Bill Cassidy (R-LA), a member of the Senate Finance Committee, which has jurisdiction over Medicare, is hoping to include a bipartisan bill that addresses Medicare Advantage fraud. Other options include 340B reform, an issue of particular interest to Senators Cassidy and Majority Leader John Thune (R-SD), pharmacy benefit management reform, and efforts to protect Medicare provisions that were slashed under the One Big Beautiful Bill Act enacted earlier this year.
State Department Authorization: With the dismantling of the U.S. Agency for International Development and the significant restructuring of the Department of State, House Foreign Affairs Chairman Brian Mast (R-FL-21) has committed to putting a State Department Reauthorization on the House floor in September to reflect the dramatic changes in the U.S. government’s foreign policy agencies. The House’s proposal will likely face fierce opposition from the minority side of the Senate Foreign Relations Committee, which has opposed the administration’s changes to the agencies, as well as the deep cuts to U.S. foreign assistance.
Senate Confirmation of Nominees (Including Tennessee Valley Authority Board Members): Although Senate Majority Leader Thune has confirmed many of President Trump’s nominees at a record pace, he is under pressure from President Trump to change the Senate rules or recess appointments to speed up the confirmation process in response to Democrats’ unprecedented efforts to slow-roll the confirmation process by refusing to let nominees move under unanimous consent. Before adjourning for the August recess, President Trump, Senate Majority Leader Thune, and Senate Minority Leader Schumer failed to reach an agreement to confirm many of President Trump’s nominees in exchange for releasing federal funding for the NIH and foreign assistance. September could see a dramatic escalation of this feud, especially if Thune exercises the “nuclear option” (changing the Senate rules to require a simple majority) to confirm nominees. Such action would likely reverberate through Congress, and could jeopardize funding negotiations.
The Tennessee Valley Authority’s 9-member board of directors has been operating without a quorum since April after the President fired two of its members. Since that time, the White House has sent three additional TVA board nominees for Senate confirmation, although they have yet to see a formal confirmation hearing. It’s likely that the hearing process takes place this fall, followed by a push to have these nominees confirmed by the end of the calendar year.
Our team will follow all of these items closely and will send updates throughout the remainder of the year, especially as developments relate to your policy priorities. In the meantime, if you have any questions or would like to discuss opportunities for engagement, please let us know how we can be helpful.
Sincerely,
The Bridge Team