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3.50-3.75%
Interest Rates
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This Week in DC
The House and Senate are in before recessing for the remainder of 2025.
The House convened Monday and considered 20 pieces of legislation including S. 222, Whole Milk for Healthy Kids Act of 2025. For Tuesday and the balance of the week the chamber will consider nine bills and may take up additional resolutions. Committee activity for the week includes: the Small Business Committee holds a hearing Tuesday on the SBA disaster assistance program and the Homeland Security Committee holds a hearing Wednesday on the future of cybersecurity.
The Senate convened Monday and on Tuesday resumes consideration of the National Defense Authorization Act (see story below). Committee activity for the week includes a Joint Economic Committee hearing Wednesday on realigning health care incentives.
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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.
- The U.S. Department of Agriculture (USDA) revised the question and answer set published on October 31 related to Section 10108 of OBBBA, which makes changes to immigrant eligibility for the Supplemental Nutrition Assistance Program (SNAP). The updated set provides additional information.
- The Internal Revenue Service (IRS) issued a revenue procedure allowing states, including the District of Columbia, to make an advance election to participate in a new tax credit for calendar year 2027. The new tax credit is for contributions to Scholarship Granting Organizations (SGOs) that serve elementary and secondary school students from low- and middle-income families. The revenue procedure provides that a state may choose to be a covered state for calendar year 2027 before it provides the IRS with a list of the SGOs located in the state.
- The Internal Revenue Service (IRS) issued a notice providing guidance on new tax benefits for Health Savings Account (HSA) participants under OBBBA. The changes expand HSA eligibility.
- The Department of Education (ED) concluded the first week of its negotiated rulemaking committee where negotiators reached consensus to create the federal government’s new Workforce Pell Grant program as outlined in OBBBA. Beginning in July 2026, students enrolled in short-term credential programs will have access to federal funds. ED will begin drafting a notice of proposed rulemaking to effectuate the committee’s consensus decision.
- The Congressional Research Service (CRS) published a report examining the work requirements for Medicaid and the Supplemental Nutrition Assistance Program (SNAP) following enactment of OBBBA.
Federal Court Rules for States Challenging OBBBA SNAP Changes for Immigrants
According to media reports, on Monday a federal judge ordered the administration to extend a deadline for states to implement new immigration-related eligibility restrictions for the Supplemental Nutrition Assistance Program (SNAP) as authorized by the One Big Beautiful Bill Act (OBBBA). The judge issued an injunction requiring the U.S. Department of Agriculture to extend the expiration date of a grace period for the states to comply with the new restrictions from November 1 to April 9. This press clip includes additional information.
House Advances Secure Rural Schools Reauthorization Act, Sends to President
Last week the House voted to approve S. 356, the Secure Rural Schools Authorization Act of 2025. The bill extends payments made to states and counties containing federal land through fiscal year 2026, provides for payments for fiscal years 2024 and 2025, and extends the authority of counties to initiate projects using the funds through fiscal year 2028. The bill now goes to the President.
Judge Rules in Favor of BRIC Funding
According to media reports, last week a federal judge ruled the administration cannot terminate the Building Resilient Infrastructure Communities (BRIC) grant program or redistribute its money for other purposes. A group of 22 states and the District of Columbia sued over the cancelled grants this summer. Per this press clip, the judge found the Federal Emergency Management Agency’s (FEMA) actions were “unlawful since Congress appropriated the money specifically for the grants.”
CMS Issues Guidance on the Basic Health Program Federal Funding Methodology for Program Year 2026
Last week the Centers for Medicare and Medicaid Services (CMS) released an informational bulletin on the federal funding methodology for program year 2026 for the Basic Health Program (BHP). CMS has determined that the agency does not need to update the overall payment methodology for 2026 and will continue to use the methodology published in the 2023 BHP Final Rule, as modified by the 2026 Payment Notice. This methodology will continue to be in effect until CMS publishes a different methodology. The bulletin also specifies the final values for the factors needed to calculate the federal BHP payment rates for 2026.
CMS Publishes 2026 SSI, Spousal Impoverishment Standards
Last week the Centers for Medicare and Medicaid Services (CMS) provided an update on the 2026 Supplemental Security Income (SSI) and Spousal Impoverishment Standards, as well as the 2026 resource standards for the Medicare Savings Program groups. Certain Medicaid income and resource standards are adjusted beginning each January in accordance with changes in the SSI federal benefit rate (FBR) and the Consumer Price Index (CPI).
ACF Sends Letter to States on Diversion of Social Security Payments
On Thursday the Administration for Children and Families (ACF) sent letters to 39 governors related to earned Social Security survivor benefits. According to ACF, state child welfare agencies often intercept federal benefits intended for a child in foster care, such as Social Security survivor benefits earned through a deceased parent’s lifetime contributions, to reimburse costs. ACF has notified all 39 governors who allow this practice and aims to work with states to end the practice, instead conserving the funds for the foster youth’s unmet needs.
EPA Unveils New Clean Air Act Resource Related to Data Centers, AI Facilities
Last week the Environmental Protection Agency’s (EPA) Office of Air and Radiation launched the Clean Air Act Resources for Data Centers webpage. The new webpage is intended to provide data center developers, local communities, and Tribes with a central location for Clean Air Act-related resources. The new resources, looking exclusively through the lens of the Clean Air Act (CAA), provide state and private sector partners with regulatory information, guidance, and technical tools that can assist with modeling, air quality permitting, and regulatory interpretations relevant for data centers and AI facility development.
Education Announces Mental Health Grants, Literacy Awards
The Department of Education (ED) recently made two funding announcements. First, ED announced more than $208 million in new grant awards for the Mental Health Service Professional Demonstration and School-Based Mental Health programs. The new awards are going to a total of 65 recipients, including 33 that serve rural communities. These awards come after the department non-continued more than 200 school-based mental health and provider grants earlier this year; some of the non-continuation decisions have been set aside due to continued litigation. Second, the department announced $256 million in new Education Innovation and Research (EIR) grants to improve literacy nationwide. The grants were made using three of the Secretary’s grantmaking priorities: strengthening evidence-based literacy instruction, expanding education choice, and returning education to the states. Ten of the 24 new awards went to state education agencies.
DOT Announces $1.5 Billion in BUILD Funding
On Monday the Department of Transportation (DOT) announced a notice of funding opportunity through Better Utilizing Investments to Leverage Development (BUILD) grants for fiscal year 2026 that makes $1.5 billion available for infrastructure projects. The merit criteria of BUILD grants will prioritize increasing safety measures, expanding transportation options for American families, beautifying transportation infrastructure, improving roadway capacity, facilitating tourism, and supporting U.S. energy dominance. Applications are due by February 24, 2026.
President Signs Executive Order on State AI Laws
On Thursday the President signed an executive order entitled “Ensuring a National Policy Framework for Artificial Intelligence (AI).” The order directs the Attorney General, within 30 days, to establish an AI Litigation Task Force to challenge unconstitutional, preempted, or otherwise unlawful state AI laws that harm innovation. The order also directs the Secretary of Commerce to publish an evaluation of state AI laws that conflict with national AI policy priorities and requires that states with onerous AI laws are ineligible for non-deployment funds under the Broadband Equity Access and Deployment (BEAD) program. The order calls for the development of a national AI legislative framework that would preempt state AI laws that stifle innovation. A fact sheet on the order can be found here.
House Passes NDAA, Sends to Senate
On Wednesday the House voted 312-112 to approve S. 1071, the National Defense Authorization Act for Fiscal Year 2026. The bill authorizes $900.6 billion in spending, though the funds must be provided separately in appropriations bills. The compromise legislation includes a 3.8 percent pay raise for military personnel. A bill summary can be found here. The legislation now moves to the Senate and the President indicated he would sign the bill in its current form.
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