|
|
|
+1.5%
GDP (Advance Est)
Source
|
|
|
|
|
This Week in DC
The House is out while the Senate is in.
The Senate convened Monday and on Tuesday will resume consideration of the legislative vehicle for a continuing resolution (see story below). Committee activity scheduled for the week includes the Budget Committee holding a hearing Tuesday on the Medicaid program and the Finance Committee holding a hearing Wednesday on addressing Social Security solvency.
|
|
|
House Approves Funding CR, Senate Introduces Separate Version
Prior to leaving for their August recess, the House voted 220-205 to approve H.R. 9770, a continuing resolution (CR) to keep the federal government funded until December 4, 2026. The bill, intended to prevent a funding lapse after September 30, would also extend certain programs in their current form through the duration of the CR; a section-by-section overview can be found here.
Following the House vote, the White House sent to Congress a list of “anomalies”, programs it wants lawmakers to fund at boosted levels under a CR.
On Sunday the Senate introduced their own version of a CR, funding the federal government until December 11. The CR includes some of the administration’s anomalies, includes a basic funding extension for surface transportation programs, and prevents the administration from implementing the Office of Management and Budget’s (OMB) proposed grants rule through the duration of the CR. A section-by-section overview can be found here. On Monday night the Senate voted 89-4 to limit debate, a procedural step towards approval of the CR.
Senate Agriculture Committee Releases Farm Bill Text
On Friday, Senate Committee on Agriculture, Nutrition, and Forestry Chairman John Boozman (R-AR) released revised legislative text for the Agricultural Act of 2026, or Farm Bill 2.0. The updated bill includes new language authorizing year-round sales of E15 and delays the Supplemental Nutrition Assistance Program (SNAP) benefit cost share for states to fiscal year 2029 if the payment error rate is 6 percent or higher. For states with a payment error rate equal to or greater than 10 percent, they are required to pay a 20 percent cost share beginning in fiscal year 2031. The section-by-section overview can be found here and legislative text can be found here.
The committee will mark up the bill on Thursday at 9:30am ET.
OBBBA Implementation 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.
- Per media reports, a federal judge denied a motion in a lawsuit brought by a group of states against the Centers for Medicare and Medicaid Services (CMS) to pause the implementation of Medicaid work requirements. The lawsuit cited the January 1, 2027 implementation deadline and narrower definition of “medically frail.” The judge denied the motion without prejudice, meaning the court will continue to hear a full briefing on the merits of the case.
- The National Association of Medicaid Directors (NAMD) published their comments submitted on the Centers for Medicare and Medicaid Services (CMS) interim final rule related to work requirements. The comments focus on the operational, administrative, and implementation considerations identified by Medicaid agencies.
- KFF released an issue brief examining the Medicaid work requirement outreach requirements and highlights examples of outreach efforts shared by states.
- The Centers for Medicare and Medicaid Services (CMS) published a notice of proposed rulemaking to implement section 71115 of OBBBA, which establishes new indirect hold harmless thresholds for health-care related taxes (sometimes referred to as provider taxes) generally based on taxes that were enacted and imposed as of July 4, 2025. The CMS Office of the Actuary estimates that this rule will reduce federal government expenditures by $246 billion over the 10-year period from 2026 to 2035. Comments are due by September 21. An analysis of the proposed rule from State Health and Value Strategies can be found here.
- The Centers for Medicare and Medicaid Services (CMS) released a state implementation tool for implementing Section 71109 of OBBBA. The tool outlines critical tasks to accurately determine eligibility for full Medicaid and Children’s Health Insurance Program (CHIP) benefits, provide the appropriate scope of coverage, and properly claim federal financial participation for noncitizens.
- The Administration for Children and Families (ACF) announced the National Fostering the Future Accounts Advancement Center to provide technical assistance services to states, territories, and Tribes as they establish, contribute to, and maintain Fostering the Future Accounts. In coordination with the Treasury Department, ACF released a new frequently asked questions (FAQ) document to help establish and administer the accounts. The new FAQs include information on available funding sources, including federal funds and private contributions.
House Approves Third Reconciliation Resolution, Sends to Senate
On July 22 the House voted 216-214 to advance H Con Res 113, a fiscal year 2027 budget resolution, the first step in unlocking the reconciliation process for a third time. The resolution includes instructions to four House committees – Armed Services, Intelligence, Agriculture, and House Administration – directing them to draft legislation providing up to $73 billion for defense and intelligence funds, $12 billion in agricultural aid, and $10 bill for election security. The resolution as drafted allows for up to $95 billion in spending over ten years without any offsetting reductions. At this time, it is unclear if the Senate will vote on the budget resolution this week before leaving for a planned extended recess.
House Passes Fiscal Year 2027 NDAA
On July 22 the House voted 216-212 to approve H.R. 8800, the fiscal year 2027 National Defense Authorization Act (NDAA). The bill would raise servicemembers’ pay by 5 to 7 percent, improve housing and education for military families, and rebuild depleted stockpiles. More information on the legislation can be found here.
GAO Releases Report on Fraud Risks Across Federally Funded, State-Administered Programs
The U.S. Government Accountability Office (GAO) recently released a report entitled Combating Fraud: Managing Risks in Federally Funded, State-Administered Programs. The report looks at 20 programs including Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and disaster assistance, describing how each program is administered and discussing fraud risks in each program and how to mitigate them.
CMS Releases New State Toolkit on Applied Behavior Analysis
Today the Centers for Medicare and Medicaid Services (CMS) released the State Medicaid and Children’s Health Insurance Program (CHIP) Applied Behavior Analysis (ABA) Toolkit, a resource intended to help state agencies address growing concerns about increasing expenditures and inconsistent clinical practices in autism services. CMS data show that between 2021 and 2025, ABA spending in Medicaid and CHIP increased 421 percent. A checklist is included in the toolkit to help states assess whether their ABA policies support effective implementation, strong oversight, and responsible stewardship of Medicaid funds.
HRSA Announces Pilot Program for 340B Drug Rebates
On Friday the Health Resources and Services Administration (HRSA) announced the revised 340B Rebate Model Pilot Program, which is intended to provide qualifying drug manufacturers with a voluntary pathway to provide the 340B ceiling price to covered entities through rebates, rather than upfront discounts, for a limited set of covered outpatient drugs. The release notes the growth of the 340B Drug Pricing Program, which grew from $53.7 billion in 2022 to more than $100 billion in 2025. Under the revised pilot, participating manufacturers will provide rebates after validating eligible claims. Rebate plans for selected drugs during the applicable pricing periods will become effective on January 1, 2027. Additional information can be found here.
SAMHSA Awards $73.2 Million for Mental Health Treatment
On Friday the Substance Abuse and Mental Health Services Administration (SAMHSA) announced the award of $73.2 million in grants to strengthen children’s mental health services, suicide prevention programs, and to expand assisted outpatient treatment to those with serious mental illness. The funding was awarded through three programs: Children’s Mental Health Initiative ($44.3 million), Implement Zero Suicide in Health Systems ($17.6 million), and Assisted Outpatient Treatment ($11.2 million).
DOJ Issues Notice on ADA Integration Mandate
The Department of Justice (DOJ) recently posted a notice of clarification in the Federal Register related to the enforcement of the integration mandate of Title II of the Americans with Disabilities Act (ADA) and Olmstead v. L.C. (Olmstead guidance). The department notes it is issuing the document to clarify that previous guidance issued by the department in 2011 and 2020, along with similar guidance documents, are not enforceable. In addition, DOJ plans to revisit the Olmstead guidance in light of a Supreme Court decision to assess whether the guidance is consistent with the single best meaning of the relevant statutory text. The department will not rely upon the Olmstead guidance in its enforcement of Title II of the ADA. Last month DOJ also released a memorandum opinion related to the integration mandate.
USDA Rescinds Guidance Memo on SNAP Child Support Cooperation, Restores Prior Policy
The U.S. Department of Agriculture’s (USDA) Food and Nutrition Administration sent a memo to all Supplemental Nutrition Assistance Program (SNAP) state agencies on rescinding a prior memo related to cooperation with state child support agencies. In May 2019 the department published a memo encouraging states to opt to require custodial or non-custodial parents to cooperate with the state child support agency and disqualify individuals in arrears for child support from SNAP; a subsequent 2024 memo discouraged state agencies from selecting these child support policy options. USDA is now rescinding the 2024 memo and reissuing the 2019 memo.
FNA Releases SNAP E&T Budgeting Tools
The Food and Nutrition Administration (FNA) recently published planning and budgeting tools for the Supplemental Nutrition Assistance Program Employment and Training (SNAP E&T) program. The agency notes that state agencies can use these tools to analyze recent fiscal and program data to inform the development of state E&T budgets. The resources include the Annual Analysis Budget Tool, which can be used to calculate actual versus anticipated budget spending over a three-year period, and the Real-Time Analysis Budget Tool, which can be used to check-in on quarterly spending throughout the year. Each tool includes a version for both state-administered and county-administered programs. Previously, FNA released a cost allocation brief and infographic for SNAP E&T.
USDA Launches Farm to School State Formula Grants Dashboard
The U.S. Department of Agriculture (USDA) recently published the Farm to School State Formula Grants Dashboard. The department provided $60 million from the American Rescue Plan Act (ARPA) to improve food and agriculture supply chain resiliency for 54 state agencies that administer the National School Lunch Program. The dashboard explores successes implemented by each state and territory.
Education Announces Changes to Disparate Impact, CTE Regulations
The Department of Education (ED) recently announced two regulatory actions. First, the Office for Civil Rights (OCR) announced a final rule to eliminate the Methods of Administrations program (MOA) from the regulations implementing Title VI of the Civil Rights Act of 1964, which has imposed federal requirements on Career and Technical Education (CTE) programs. Established in 1979, the MOA program requires states to conduct compliance reviews to ensure CTE programs adhere to federal civil rights laws. The department will no longer mandate this oversight. Second, OCR announced it is rescinding several disparate-impact provisions from the department’s regulations implementing Title VI.
DOE Signs Memorandums of Agreement with Five States for Potential Nuclear Waste Storage
Last week the Department of Energy (DOE) announced the selection of Utah, Tennessee, Oklahoma, Louisiana, and Idaho as potential host states for Nuclear Lifecycle Innovation Campuses. This is a new effort to strengthen and modernize the nation’s full nuclear fuel cycle. Per the announcement, the department reviewed 28 applications from 26 states and selected these five initial contenders. The proposed campuses are designed to support activities across the full nuclear fuel lifecycle, including fuel fabrication, enrichment, reprocessing used nuclear fuel, and final disposition of used nuclear fuel.
EPA Announces $30 Million to Support Small Water Systems
The Environmental Protection Agency (EPA) recently announced $30 million in grant funding under the Real Water Technical Assistance Initiative. The funding will provide training and technical assistance to improve water quality in small and rural communities and support small water systems in their work to meet requirements of the Safe Drinking Water Act and Clean Water Act. Recipients are included in the announcement.
FEMA Approves $266 Million to States for Protection of Nonprofits, Houses of Worship
Last week the Federal Emergency Management Agency (FEMA) directed states and territories to begin awarding $266 million in fiscal year 2025 Nonprofit Security Grant Program funding to nearly 1,600 faith-based organizations and other nonprofits. The program provides funding for security enhancements, additional warning and alert systems, gates and lighting, and training programs for staff. For the fiscal year 2025 program, FEMA initially awarded the funds directly to State Administrative Agencies in September 2025 and the state agencies then managed their own competitive programs, generating more than 6,000 sub applications. FEMA staff reviewed these submissions and, earlier in July, shared the final list of approved subrecipients with state agencies.
HUD Announces Changes to Community Choice Demonstration
On Monday the Department of Housing and Urban Development (HUD) published a notice in the Federal Register related to the Community Choice Demonstration (CCD). The CCD was authorized by the Consolidated Appropriations Act, 2019 (P.L. 116-6) to provide voucher assistance and mobility-related services to families with children to encourage the families to move to lower-poverty areas, expand access to opportunity areas, and evaluate the effectiveness of the program’s strategies. The notice provides updates to CCD, cancels the treatment arm, revises the study enrollment timeline, and clarifies the recapture and reallocation of funding.
HUD Posts Funding Notice to Support Foster Youth Housing
Last week the Department of Housing and Urban Development (HUD) released a notice to provide guidance on the process public housing agencies (PHAs) must follow to request targeted vouchers under the Melania Trump Foster Youth to Independence Initiative (FYI), while also setting the operating requirements for FYI. Through this program, HUD provides housing choice vouchers for youth eligible under the Family Unification Program. Among other provisions, the notice amends the process by which PHAs may apply for $38.2 million in new incremental voucher assistance and removes the cap on the number of FYI vouchers that a PHA can request each federal fiscal year (subject to funding availability). HUD also published a Statement of Findings, reflecting feedback from foster youth, state and local officials, PHAs, and service providers who participated in roundtables across the country.
Interior Unveils Colorado River Basin Plan
On Friday the Department of the Interior’s (DOI) Bureau of Reclamation released the Final Environmental Impact Statement, which designates a preferred course of action for future management of Lake Powell and Lake Mead. The alternative establishes an adaptive decision framework to be used to develop operating guidelines designed to ensure reliable operations in the Colorado River Basin while maintaining flexibility to respond to changing conditions over a ten-year period through 2036. The framework also preserves the opportunity for the Basin to continue working towards consensus agreements.
DOL Releases Fiscal Year 2026 Funding Allotments for UI Reemployment Services
On Wednesday the Department of Labor (DOL) issued guidance providing guidelines for the fiscal year 2026 Unemployment Insurance (UI) Reemployment Services and Eligibility Assessment (RESEA) grants and to invite state workforce agencies to submit RESEA state plans. Fiscal year 2026 RESEA state plans must reflect and support the administration’s America’s Talent Strategy: Building the Workforce for the Golden Age initiative by developing approaches that assist all people to reenter and advance within the labor market. A table of base funding grant allocations by state and territory is included in the guidance.
DOT Announces Funding for Bus Modernization, Transit Infrastructure
Last week the Department of Transportation (DOT) made two funding announcements related to bus and transit operations. First, the Federal Transit Administration (FTA) announced the availability of $610 million to invest in the country’s bus service network. Applications under the Grants for Buses and Bus Facilities Infrastructure Programs are due by September 21. Second, FTA announced the investment of $22 million in innovative public transit projects that enhance safety, build new maintenance facilities, and improve scheduling systems for individuals with accessibility impairments. Applications are due either September 9 or September 28, based on the funding program.
|
|
|
|
|
