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This Week in DC
The House is out while the Senate is in session.
The Senate convened Monday and on Tuesday will consider a discharge motion on war powers. Committee activity scheduled for the week includes a Health, Education, Labor, and Pensions Committee hearing on Tuesday on AI and the future of K-12 education and an Energy and Natural Resources hearing on Wednesday on the state of the U.S. territories.
The Federal Reserve’s Open Market Committee meets this week. Any action on interest rates will be announced on Wednesday.
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Reconciliation Resources
Following enactment of H.R. 1, the One Big Beautiful Bill Act (OBBBA), a number of resources have been released examining the legislation's impact and providing implementation guidance. Newly released resources are included below.
- KFF published an analysis that examines federal Medicaid spending through state directed payments. The analysis also looks at impacts to the payments from OBBBA provisions.
- The U.S. Department of Agriculture (USDA) released a set of questions and answers for Supplemental Nutrition Assistance Program (SNAP) provisions of OBBBA related to time limit changes. The questions and answers provide additional information on implementing Section 10102.
- The Treasury Department and Administration for Children and Families (ACF) announced a new initiative to make it easier for eligible foster youth to obtain access to a Trump Account. A child welfare agency of a state, territorial, or Tribal government that is the legal guardian of an eligible child with a Social Security Number, who does not already have an account, may elect to open an initial Trump Account for that child. The Internal Revenue Service will work with each state to provide guidance and ensure agencies have the necessary information. The initiative also provides flexibility for states to deposit federal survivor benefits into Trump Accounts. Additional documents from ACF, including Dear Colleague Letters and frequently asked questions, can be found here. One letter clarifies that states may deposit unobligated TANF funds into a Trump Account for children, including eligible foster youth.
- The Treasury Department previewed the forthcoming guidance for the implementation of the new federal scholarship tax credit enacted by OBBBA. Treasury expects to issue proposed regulations by the end of September, and the tax credit will launch in January 2027. A fact sheet can be found here.
- The U.S. Department of Agriculture (USDA) announced the opening of the fiscal year 2026 funding opportunity for the Research Facilities Act program, as authorized by OBBBA. This is a competitive funding opportunity that will support renovation, expansion, and construction projects that strengthen research capacity for the agricultural research enterprise. Applicants must provide a dollar-for-dollar non-federal cash match; applications are due by July 17.
- The Department of Education (ED) released a fact sheet on changes to student loan repayment following provisions enacted by OBBBA. Starting on July 1, borrowers with new student loans will have immediate access to these new plans (Repayment Assistance Plan and Tiered Standard Repayment Plan) and select benefits.
President Signs Immigration Enforcement Funding Bill
On Wednesday the President signed S.2, the Secure America Act, into law. The bill provides nearly $70 billion in funding to the Department of Homeland Security (DHS), U.S. Customs and Border Protection (CBP), and U.S. Immigration and Customs Enforcement (ICE) through fiscal year 2029 for immigration enforcement and related activities and was advanced using the reconciliation process.
USDA Announces $5 Million Available to Combat SNAP Fraud
On Monday the U.S. Department of Agriculture’s (USDA) Food and Nutrition Administration (formerly the Food and Nutrition Service) announced the availability of up to $5 million for states to implement proven tools to boost integrity and fight fraud in the Supplemental Nutrition Assistance Program (SNAP). The grants will support states in implementing the SNAP Fraud Framework, which outlines best practices for preventing, detecting, and responding to fraud committed by SNAP recipients. Applications are due by July 15. Additional information can be found here.
CFTC Proposes Framework for Prediction Markets
Last week the Commodity Futures Trading Commission (CFTC) published a notice of proposed rulemaking seeking public comment on proposed amendments to its rules concerning event contract derivatives (commonly referred to as prediction markets). The proposal would establish a structured framework for evaluating whether such contracts involve an activity that involves terrorism, assassination, war, gaming, or conduct that is unlawful under federal or state law and, if so, whether that contract is contrary to the public interest. The proposal would also define the term “gaming.” Comments are due by July 27.
Federal Judge Blocks Components of ACA Enrollment and Eligibility Rule
According to media reports, on Friday a federal judge ruled against portions of the Affordable Care Act (ACA) Marketplace Integrity and Affordability Rule following a lawsuit brought by three cities, a coalition of doctors, and an interest group representing small business owners. The ruling vacates the $5 automatic re-enrollment premium and the policy disqualifying people who fail to reconcile tax credits with their income from receiving subsidies. Other vacated policies include the elimination of guaranteed coverage for people who are overdue to pay their premiums, the imposition of higher income verification standards if exchanges find inconsistencies in tax data, stricter eligibility checks ahead of a special enrollment period, and changes to a formula used to sort ACA plans into different coverage tiers. The judge also vacated the creation of a shorter open enrollment period beginning next year.
CMS Announces Interim Actions on Medicaid Demonstration Budget Neutrality
Last Thursday the Centers for Medicare and Medicaid Services (CMS) issued new guidance for its plans to strengthen budget neutrality standards for Medicaid section 1115 demonstrations. The new guidance previews CMS’ plans to propose a rule that would ensure consistent oversight and clear budget neutrality requirements for proposed demonstration projects. Part of the One Big Beautiful Bill Act (OBBBA) requires the CMS Chief Actuary to certify that Medicaid section 1115 demonstrations are budget neutral; beginning January 1, 2027, CMS will not approve new demonstrations, demonstration renewals, or demonstration amendments unless the CMS Chief Actuary certifies that the demonstration project is not expected to increase federal spending compared to the state’s Medicaid program without the demonstration. CMS is publishing this guidance to provide states with early notice regarding the changes to budget neutrality that CMS intends to propose implementing. CMS expects to begin applying the approach described in the guidance to new demonstration, amendment, and renewal approvals until a final rule is effective.
CMS Finalizes Action on Accrediting Organizations
On Friday the Centers for Medicare and Medicaid Services (CMS) released a final rule entitled Strengthening Oversight of Accrediting Organizations (AO) and Preventing AO Conflicts of Interest. The rule is intended to ensure that the organizations responsible for the oversight of more than 9,000 health care providers and suppliers use Medicare standards and create greater consistency between State Survey Agencies (SAs) and AOs in their respective survey processes. The rule creates a new process for monitoring AO performance, establishes consistent standards, updates validation and performance systems, requires similar training across AO surveyors and SA surveyors, and reduces burden on SAs, AOs, and providers. A fact sheet can be found here.
FEMA Announces Funds for Recovery and Emergency Management Support
The Federal Emergency Management Agency (FEMA) recently made funding announcements related to disaster recovery and emergency management support. First, FEMA announced the approval of more than $1.1 billion in post-disaster funding for Public Assistance and Hazard Mitigation Grant Program projects. The approval represents funding for 452 disaster recovery and mitigation projects across the country. Second, the agency announced more than $420 million in two funding opportunities through the Emergency Management Performance Grant program ($337 million) and Emergency Operations Center Grant program ($83 million). The application for both grant programs opened June 15 and will close on July 15.
FEMA Announces Transition of CBRN Programs to Agency
On Thursday the Federal Emergency Management Agency (FEMA) announced the transfer of several chemical, biological, radiological, and nuclear (CBRN) readiness and detection programs from the Department of Homeland Security’s Countering Weapons of Mass Destruction Office. The programs are designed to help communities prepare for and respond to potential CBRN threats by providing intelligence, equipment, training, exercises, and other support. The programs and capabilities transitioning to FEMA include the Threat Intelligence team, BioWatch program, Securing the Cities program, Mobile Detection Deployment Program, ChemPREP program, Training and Exercises team, and Test and Evaluation team.
USDA Issues Program Integrity Guidance for Summer Food Service Program
Last week the U.S. Department of Agriculture (USDA) released a guidance memo entitled Ensuring Integrity in Non-Congregate Meal Service in the Summer Food Service Program (SFSP). The guidance is intended to support state agency efforts to combat fraud, waste, and abuse by further clarifying statutory, regulatory, and administrative requirements. Each attachment in the guidance emphasizes solutions for potential integrity concerns in the SFSP rural non-congregate meal service and provides information for developing state agency policies to prevent integrity issues and to better perform on-site monitoring. The guidance focuses on parent or guardian pick-up, site caps, site proximity, and home delivery.
EPA Proposes Changes to State Implementation Plans
Last week the Environmental Protection Agency (EPA) proposed revisions to portions of the prior administration’s January 2025 final rule, which required states to keep certain State Implementation Plan (SIP) requirements tied to an area’s prior ozone nonattainment classification under the National Ambient Air Quality Standards (NAAQS) even after an area had been reclassified. The agency is proposing that planning requirements are cumulative upon reclassification and do not need to be duplicated each time. Per the announcement, the proposed changes are consistent with the Clean Air Act that states an area can only be subject to a single classification at a given time. A fact sheet on the proposed changes can be found here.
HUD Announces $193 Million Available to Address Youth Homelessness
On Wednesday the Department of Housing and Urban Development (HUD) announced the availability of $193 million in funding for communities to prevent and address youth homelessness. The funding will be utilized for developing and implementing projects to increase the efficiency of youth homelessness response systems as well as creating Transitional Housing and Supportive Services projects focused on providing housing with wraparound services. The notice of funding opportunity combines two funding opportunities to emphasize the comprehensive approach needed to dramatically reduce youth homelessness; state governments are eligible applicants. Applications are due by August 10.
DOI Announces $461 Million for Parks and Outdoor Recreation
Last week the Department of the Interior (DOI) announced the distribution of more than $327 million in formula grants and $134 million in competitive grants from the Land and Water Conservation Fund (LWCF) to all 50 states, U.S. territories, and the District of Columbia. Per the announcement, the funds will be matched at least 1:1, for a total outdoor recreation investment of more than $900 million. The two competitive grant programs are the Outdoor Recreation Legacy Partnership Program ($125 million) and the Readiness and Recreation Initiative ($9 million). An apportionment table for the formula funding is included in the announcement.
DOL Releases Guidance on Requesting Trade Adjustment Assistance Funds
Last Thursday the Department of Labor (DOL) released Training and Employment Guidance Letter No. 01-25, Change 1. The change updates the letter to provide instructions for states to request fiscal year 2026 Trade Adjustment Assistance (TAA) Program funds. Program changes are outlined in the change, along with program requirements and submission instructions.
SAMHSA Announces $40 Million for Addiction, Mental Health Services
On Thursday the Substance Abuse and Mental Health Services Administration (SAMHSA) announced $40 million in funding opportunities for eight grant programs to prevent addiction, strengthen the behavioral health workforce, and support efforts to address mental illness and prevent suicide. The programs include the Behavioral Health and Community Safety Partnership Grants ($9.2 million); Screening, Brief Intervention, and Referral to Treatment program ($8 million); and Adult Suicide Prevention program ($1.9 million).
DOT Announces Funding for Infrastructure Via Two Programs
Last week the Department of Transportation (DOT) announced a $626.7 million investment in infrastructure with a priority for large-scale projects over $150 million. Per the announcement, for the first time, DOT is prioritizing projects that connect America’s roads with commercial spaceports to accelerate the growth of the aerospace sector. Infrastructure updates also include expanding truck parking, upgrading safety technology at railroad crossings, repairing highways or bridges to reduce congestion, strengthening marine highways, and modernizing highway infrastructure along the busiest freight corridors. The funds are available via the Nationally Significant Multimodal Freight and Highway projects (INFRA) program. There are two tracks with application deadlines in July. On Monday the department also announced an investment of $46.97 million through 45 grants across 27 states to build infrastructure projects with the help of public-private partnerships. Through the Innovative Finance and Asset Concession Program, states will have the resources to engage with businesses that can provide innovative financing solutions on local projects.
Fiscal Year 2027 Appropriations Update
The House continues to advance spending bills for fiscal year 2027 while the Senate delayed its first markup (originally scheduled for last week). To date, 11 of the 12 spending bills have been approved by the full House Appropriations Committee and two have been approved on the floor.
- Agriculture: Approved by the full House on a vote of 213-210. The bill provides a total discretionary allocation of $26.3 billion, a decrease of 1.4 percent from the current year. Committee Report, Minority Summary, Community Project Funding
- Interior-Environment: Approved by the full committee on a vote of 35-27. The bill provides a total discretionary allocation of $38.9 billion and fully funds the Payment in Lieu of Taxes (PILT) program. Majority Summary, Minority Summary, Community Project Funding
- Transportation-Housing and Urban Development: Approved by the full committee on a vote of 34-27. The bill provides a total discretionary allocation of $92.2 billion, a decrease of 10.4 percent from the current year. Majority Summary, Minority Summary, Community Project Funding
- Homeland Security: Approved by the full committee on a vote of 34-27. The bill provides a total discretionary allocation of $64.9 billion. Majority Summary, Minority Summary, Community Project Funding
- Labor-Health and Human Services-Education: Approved by full committee on a vote of 34-28. The bill provides a total discretionary allocation of $189.3 billion, a decrease of 3 percent from the current year. Majority Summary, Minority Summary, Community Project Funding
- Defense: Approved by the subcommittee. The bill provides approximately $1.07 trillion, including $204.1 billion for military personnel. Majority Summary, Minority Summary
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