This is the last planned week in session for the House until September, when Congress is set to return from the August recess with a government funding deadline on September 30 right around the corner, and the appropriations process is just now getting off the ground. The Senate — which is slated to be in session an additional week, through August 1 — is set to begin consideration this week of a Military Construction-Veterans Affairs appropriations bill, one of four that has cleared the Appropriatons Committee. (Agriculture, Legislative Branch, and Commerce-Justice-Science are the others, with the latter controversial because of funding for a new FBI headquarters.)

Roll Call reported last week that Appropriations Chair Susan Collins (R-ME), "said the Senate has received the House-passed Military Construction-VA bill, 'so we don't have the vehicle problem that we frequently have,'" because appropriations bills traditionally begin in the House. The report said, "If the chamber can get the 60 votes needed to end debate and bring the measure to the floor, it could be amended with the text of not only the Senate version but other committee-reported draft bills as well."

House appropriators, meanwhile, last night released the Fiscal Year 2026 bill for the Financial Services and General Government Subcommittee that proposes reducing Treasury Department spending by about 20% from the Fiscal Year 2025 enacted level. The bill cuts the IRS's funding by 23% from FY25 levels, or $2.8 billion, and prohibits the IRS from targeting individuals or groups for exercising their First Amendment rights or ideological beliefs. The agency would also be blocked from using funds to develop a free electronic return-filing service option without prior congressional approval. The Federal Trade Commission, General Services Administration, Office of Personnel Management and Securities and Exchange Commission would all see cuts from the previous year's funding.

Since enactment of the "One Big, Beautiful Bill Act" (Public Law No. 119-21), there has been speculation about a potential follow-on bill addressing outstanding tax and health issues, Medicaid and other changes cut out of the just-enacted bill to meet reconciliation rules, OBBBA technical corrections, tax extenders like extension of the Work Opportunity Tax Credit (WOTC), and possible retirement items.

There are at least two paths Republicans could take to address additional priorities: another reconciliation bill in the fall — with the enactment of OBBBA (using the FY25 budget resolution), they can now turn to the FY26 budget resolution as the vehicle for a second reconciliation bill — or bipartisan legislation that could potentially be attached to a year-end appropriations bill. Congress will almost certainly need to enact a temporary continuing resolution to extend government funding beyond September 30 — given that the appropriations process is not far along — and a year-end funding measure could follow.

The Senate and House last week passed a $9 billion rescissions package, and the potential for additional stringent action on spending propelled by the Administration is drawing warnings from Democrats about their willingness to cooperate on government funding.

"I want to warn my colleagues once again: If you keep going down this path, you are going to further undermine our bipartisan process," said Senator Patty Murray of Washington, the top Democrat on the Appropriations Committee, in a July 20 New York Times story. "The more bridges you burn, the fewer paths you leave to get things done." The Congressional Memo column reported on Russell Vought, director of the Office of Management and Budget, as flaring partisan tensions with comments last week "that there needed to be less bipartisanship around federal spending — not a sentiment typically heard on Capitol Hill … [and] that spending levels set by Congress were an advisory ceiling, not a floor."

Semafor said this morning: "Congress' ailing bipartisan spending process faces a key test Tuesday as the Senate votes to break a filibuster on the veterans affairs and military construction spending bill. Hanging over it is Trump's rescissions package, viewed by Democrats as a party-line maneuver to undo bipartisan spending agreements that has made them wary of cutting future deals."

Regarding prospects for policy priorities, Punchbowl News reported last night: "This year is a weird, complicated one for any sort of bipartisan 'extenders'-based negotiation. Republicans just wrapped up a $4.5 trillion tax package that took most of the expiring tax policies for the year off the board. The government funding process is a tinderbox. But key lawmakers still have ideas brewing about what they'd like to move by December. The question is if there's any pathway." There are tax items members would like to address but the report noted there is probably more talk about health items, and there are also expiring trade preference programs.

Trade - Congress may be planning to leave for the summer by August 1, but that date could bring new action in Washington because it is the new deadline the President has set as the end date for suspension of additional country-specific tariff rates on countries with which the US has large trade deficits and trade barriers. The President began sending letters to nations July 7 and some deals have been in the works.

"The president figured out the right answer and sent letters to these countries, said, this is going to fix the trade deficit. This will go a long way to fixing the trade deficit. And that's gotten these countries to the table. And they're going to open their markets, or they're going to pay the tariff," Commerce Secretary Howard Lutnick said on Face the Nation Sunday. "And if they open their markets, the opportunity for Americans to export, to grow their business, farmers, ranchers, fishermen — the next two weeks are going to be weeks for the record books. President Trump is going to deliver for the American people."

Companies and governments are preparing for eventualities. The Washington Post reported July 20, "Major U.S. corporations and trading partners are scrambling to adapt to a new global economy, even as President Donald Trump mulls the imposition of historic tariffs in less than two weeks." The story said, "If the exact dimensions of the new U.S. tariff regime are unsettled, the outlines have become clear. Taxes on U.S. imports will likely stay much higher than they have been for several decades. And the American role in the global economy is undergoing a profound change, with consequences for the rest of the world."

The Wall Street Journal reported last night, "EU member states are pressing the bloc's executive body to prepare new and potent measures to hit back against U.S. companies, beyond retaliatory tariffs on goods, if a deal can't be reached by the Aug. 1 deadline set by Trump."

Congress — The House is back in session today (Monday, July 21) with votes this evening on bills under the jurisdiction of the Veterans' Affairs Committee, Oversight and Government Reform Committee, Natural Resources Committee, and Financial Services Committee. The House this week may also consider legislation related to disapproval of various Bureau of Land Management (BLM) rules, immigration enforcement, and other matters. Thursday, July 24 is the chamber's last scheduled session day before the August recess.

The Senate is also in today with a procedural vote at 5:30 p.m. related to the nomination of Terrance Cole to be Administrator of Drug Enforcement.

On Tuesday, July 22 at 10:15 a.m., the Senate Finance Committee will hold a hearing to consider the nominations of Jonathan McKernan to be Treasury Under Secretary of Domestic Finance and Alex Adams to be Assistant Secretary for Family Support, Department of Health and Human Services. The hearing is to be preceded by an executive session to vote (if the Committee has a quorum) on the nominations of Joseph Barloon to be a Deputy United States Trade Representative (Geneva Office), and Brian Morrissey, Jr., to be General Counsel for the Department of the Treasury.

Also on July 22, the Ways and Means Committee is holding a Joint Health and Oversight Subcommittee Hearing on Medicare Advantage: Past Lessons, Present Insights, Future Opportunities. Ways and Means is also holding two OBBBA-related field hearings July 25-26, in Las Vegas, NV, and at the Ronald Reagan Presidential Library in Simi Valley, CA.