Only the Senate is in session this week, convening at 3 p.m. today (Monday, June 15) with a vote on a judicial nomination at 5:30 p.m. Senate Finance Committee plans to consider a bipartisan tax administration package as soon as this week are on hold for now, according to press reports. Sunday political talk show interviews with Senators largely focused on foreign policy and the now-expired Foreign Intelligence Surveillance Act (FISA) Section 702 surveillance authorization, after a temporary 45-day patch ran out June 12. The G7 Summit begins in France today.

On Tuesday, June 16 (10 a.m.), the Senate Budget Committee is holding a hearing to consider the nomination of Hal Duncan to be Deputy Director of the Office of Management and Budget.

The House is scheduled to be out this week. It's unclear whether there may be any progress toward a Reconciliation 3.0 bill anchored by defense funding, which President Trump very directly called for last week. A third reconciliation bill, which some members envision could include affordability proposals possibly offset with provisions to combat waste/fraud/abuse in federal safety net programs, has been discussed by House Republican leaders and committee chairs but more coolly received in the Senate.

Politico reported that House Budget Committee Chairman Jodey Arrington (R-TX) "has been circulating a menu of options for how to pay for the next package" and "one of the ideas would crack down on 'fraud' within the Supplemental Security Income program, which provides cash assistance to Americans who are low-income, elderly or disabled."

Asked on Fox Sunday Morning Futures whether he supports a $1.5 trillion defense budget in 2027, as the President has requested, Senate Majority Leader John Thune (R-SD) said, "I support it conceptually. As a practical matter, we can't get there that fast, but we do need to move in that direction." Key Senate moderates Susan Collins (R-ME) and Lisa Murkowski (R-AK) are among those skeptical of a third reconciliation bill.

The latest Reconciliation 2.0 law, the Secure America Act (S. 2), to fund the Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) agencies separately from the rest of the Department of Homeland Security, and the prospect of defense funding in a Reconciliation 3.0 bill mark a shift to using the budget reconciliation process as a means of providing funding for various federal departments and agencies. The regular appropriations process itself is currently bogged down ahead of the September 30 expiration of government funding, though Congress has often considered a continuing resolution (CR) to extend funding until later in the year during a midterm election year.

Politico Inside Congress reported, in "Lawmakers worry a shutdown is inevitable," that "Members of both parties say the odds of another federal funding lapse are unimproved, if not heightened, by the GOP's choice to fund ICE and Border Patrol for three years without buy-in from Democrats — even though they no longer have to fight about one of the thorniest policy issues confronting Congress." The story said Senate Democratic leader Chuck Schumer (D-NY) could instruct members to oppose even a temporary funding patch and cited Senate Appropriations Committee Ranking Member Patty Murray (D-WA) as saying the go-it-alone strategy of Republicans is not "helpful" and, "It makes it very difficult for us moving forward."

Senate Appropriations Committee Chairman Collins last week canceled markups of FY27 spending bills amid a dispute with Ranking Member Murray over the lack of topline spending levels. Murray has argued that a scaled-up defense request for $1.5 trillion, more than 40% above last year's levels, requires a commensurate increase in non-defense spending.

A story in the Sunday's Washington Post, "Congress has lost its grip on funding the government," said, "The breakdown in bipartisan budgeting every year threatens public programs that millions of Americans rely on and further endangers the government's long-term fiscal health." The report said of enactment of the ICE/CBP bill and Trump's demand for a follow-on bill with defense funding, "This week's events underscore a breakdown in the government funding process. The appropriations committees, once among the most coveted assignments in Congress, are sidelined, as lawmakers turn to reconciliation to bypass the traditional bipartisan process. The shift could impart greater consequences for government funding, if the pattern continues."

The dynamics of government funding will likely impact prospects for attaching items reflecting unfinished business in Congress that are sometimes added to large spending bills, and could include tax, health, and trade items. Punchbowl News reported this morning: "Party leaders on Capitol Hill are preparing to take advantage of any opportunity to address crucial deadlines and get some priority policies done in the lame duck. Some GOP committee chairs are now preparing for this possibility. The goal would be to attach several widely backed provisions to any must-pass legislative vehicle, such as a spending package, before the end of December. Still, this is all dependent on Congress finding a path forward on FY2027 funding … "

Trade — A June 14 Punchbowl story, "Trump's USMCA talk: a bluff or threat?," reported on Senate Finance Committee Republican members' reaction to President Trump's comments to reporters at the White House on June 10 that he is "not looking to renew" the U.S.-Mexico-Canada-Agreement (USMCA). The agreement, which does not expire until 2036, is set for joint review on July 1 and is eligible for 16-year early renewal.

Referring to Canada and Mexico, the President said, "We don't need their cars, we don't need their lumber, we don't need their energy, we don't need anything that they have … They need everything that we have, and they have to treat us better." Notably, the President did not say whether he would withdraw the US from the agreement before its expiration. There will likely be months of negotiations over USMCA provisions, and the agreement is likely to undergo rolling annual reviews.

The report cited Senator Bill Cassidy (R-LA) as saying that threatening to not renew the deal is "the sort of thing the president says to shake up — to break up inertia." Senator Ron Johnson (R-WI) said that he thinks "trade agreements with Canada and the United States are good things for free and fair trade, but renewing USMCA is up to the president." Senator Chuck Grassley (R-IA) said that USMCA should be extended "unquestionably," calling it "a no-brainer," adding that the President may tweak parts of the agreement.

Energy tax — A 45ZCF-GREET (June 2026) user manual, associated with the Clean Fuels Production Credit (IRC Section 45Z), describes how the 45ZCF-GREET model characterizes life cycle greenhouse gas emissions of approved transportation fuel production pathways and provides instructions on how the model should be used. The Department of Energy (DOE) developed the GREET (Greenhouse Gases, Regulated Emissions, and Energy use in Technologies) life cycle analysis to assess the environmental impacts associated with technologies, fuels, products and energy systems across various stages of the supply chain.

Federal Reserve — The Fed holds its regular interest rate-setting meeting this week, with an announcement and press conference set for Wednesday. Notably, this will be Kevin Warsh's first rates meeting as Chairman. Analysts have projected that the Fed will take no action on rates at the session. Reuters last week reported that nearly 70% of economists polled (72 of 102) forecast that the key interest rate would stay in its current 3.50%-3.75% range for the rest of 2026.

Elections — Asked on NBC's "Meet the Press" about the midterm prospects for Senate Republicans, Senator James Lankford (R-OK) said, "What happened with inflation? We're talking about 4% inflation now, which is too high. But under the Biden administration, it was 9% inflation with the open borders and what was happening with the crime that was happening. I think Americans, when they look side by side, they will see the dramatic difference."

There continue to be press stories about the most competitive Senate races, including:

• Alaska — former Rep. Mary Peltola (D-AK) is among challengers to incumbent Dan Sullivan (R-AK)
• Georgia — June 16 Republican primary runoff between Rep. Mike Collins (R-GA) and former football coach Derek Dooley to decide who challenges Senator Jon Ossoff (D-GA)
• Iowa — in the race to succeed retiring Senator Joni Ernst (R-IA), Rep. Ashley Hinson (R-IA) v. State Rep. Josh Turek (D)
• Maine — Senator Susan Collins (R) v. Graham Platner (D)
• Michigan — in the race to succeed retiring Senator Gary Peters (D-MI), an August 4 primary between Rep. Haley Stevens (D-MI), former public health official Abdul El-Sayed and state Sen. Mallory McMorrow (D) decides who will likely face former Rep. Mike Rogers (R-MI)
• Minnesota — in the race to succeed retiring Senator Tina Smith (D-MN), an August 11 primary between Democrats Lt. Gov. Peggy Flanagan (D) and Rep. Angie Craig (D-MN) and between Republican candidates
• North Carolina — in the race to succeed retiring Senator Thom Tillis (R-NC), former governor Roy Cooper (D) v. Michael Whatley
• Ohio — Senator Jon Husted (R-OH) v. former Senator Sherrod Brown (D-OH)
• Texas — in the race to succeed John Cornyn (R-TX) (who was defeated in the GOP primary), state Attorney General Ken Paxton (R) v. Rep. James Talarico (D)

President Trump June 14 endorsed Rep. Mike Collins in the Georgia primary, saying in a social media post, "It is my Great Honor to endorse 'MAGA' Mike Collins, a Highly Respected Congressman who has been with me from the very beginning, and is running for the United States Senate in Georgia … " Dooley is trailing Rep. Collins but has the endorsement of Gov. Brian Kemp (R).

A story in the June 9 Washington Post said the immigration crackdown in Minnesota is a major factor in the Democratic primary there, boosting progressive Lt. Gov. Flanagan while turning Rep. Craig's "past support for Republican-led immigration enforcement legislation into one of the central liabilities of her campaign." The story said Rep. Craig "argues that Flanagan doesn't have the demonstrated ability to win over independent and Republican voters" in the race. "Minnesota is a purple blue state," she said. "We could lose if we're not careful."