Washington: What to Watch Now
Congress returned to Washington following the Easter recess with the Department of Homeland Security (DHS) still shut down.
April 13 marked Day 58 of the shutdown, the longest shutdown of a government agency in history. Prior to the two-week Easter break, the Senate passed a measure funding DHS, excluding the departments of Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP), with the plan to fund both for three years through a separate "budget reconciliation" process that would have allowed Republicans to avoid a filibuster and pass the measure with a simple majority of 51 votes in Senate. The House rejected that approach and instead passed a bill temporarily funding the entire department until May 22 before leaving for Easter.
Over the break, House leaders reversed course and said the House would approve the Senate-passed bill as long as the Senate was making progress on the second bill to fund the immigration agencies. Senate Republicans hope to unveil that second bill later this week, but the parliamentary process to approve it is a time-consuming and bumpy one. The House is expected to wait at least a week before voting on the broader funding measure to keep pressure on the Senate, meaning the DHS shutdown is likely to last at least into next week.
The practical effect of the ongoing DHS shutdown has been minimized by President Donald Trump's decision last month to use available funds to issue paychecks to Transportation Security Administration agents, with the goal of alleviating the long security lines that have plagued some airports in recent months. On April 3, the president signed a memo authorizing the resumption of pay for all DHS employees. But the whole situation underscores how broken the annual appropriations process has become on Capitol Hill.
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Fight over war funding also looming in Congress
In addition to the ongoing tussle over DHS funding, it is widely expected that Congress will soon be asked to approve emergency funding for the war with Iran.
Last month, the Pentagon reportedly told the White House that it would need $200 billion in special funding to support the war effort. But reports this week indicate that the White House may ask Congress for $80-$100 billion in funding, a number that may be more palatable on Capitol Hill. Any funding request of that size is unlikely to get much, if any, support from Democrats, so Republicans may need to resort to the budget reconciliation process to get funding through on a party-line vote. But with polling showing the war unpopular with voters, even some Republicans may balk at that level of funding. It sets up a tricky negotiation process on Capitol Hill, with lawmakers from both sides eager to hear more from the White House about the goals of the war, if the current ceasefire will be extended, and what the exit plan is before agreeing to funding.
White House sends budget proposal to Congress
The budget process for the current fiscal year may remain unresolved with DHS still awaiting funding, but next year's process is already underway. On April 3, the White House released the president's budget proposal for fiscal year 2027, which starts on October 1. The plan includes a 42% increase in defense spending, to a record $1.5 trillion next year, and a 10% cut to non-defense spending.
This week, the administration will begin sending a parade of officials to testify on Capitol Hill about the specifics of the budget request. Secretary of Health and Human Services Robert F. Kennedy, Jr., and Secretary of Energy Chris Wright are slated to testify this week, with several more Cabinet officials set to do so over the remainder of this month.
The president's budget proposal is not something Congress votes on; it's more of an outline of the administration's priorities. Congress will develop its own budget and then will need to pass the 12 appropriations bills to fund every agency and program. But with the midterm elections looming this fall, the most likely outcome is passage of a temporary funding measure that puts off the big spending decisions until after the election.
Uncertainty around timing of Fed chair confirmation hearing
The Senate Banking Committee was reportedly set to hold a hearing April 16 on the nomination of Kevin Warsh to be the next chair of the Federal Reserve, but the hearing was postponed due to delays in getting Warsh's required paperwork submitted. That reportedly happened on April 13, making it likely the hearing will take place during the week of April 20.
Still uncertain is whether Warsh can be confirmed before current Fed Chair Jerome Powell's term ends on May 15. Even if the hearing is held next week, a vote on Warsh, who served as a Fed governor from 2006 to 2011, remains in limbo. Senator Thom Tillis (R-N.C.) has said that he will block any vote on Warsh until the criminal investigation into Powell is resolved. Powell is being investigated about whether he lied to Congress last year when testifying about the renovations of the Fed's Washington headquarters building, a case that is now tied up in the courts. Powell said last month he would stay on as temporary chair if Warsh is not confirmed before May 15.
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