Only the Senate is in session this week, returning at 3 p.m. today (Monday, July 27) with a vote at 5:30 p.m. in relation to the nomination of Jay Clayton — U.S. Attorney for the Southern District of New York who served as chairman of the Securities and Exchange Commission during the first Trump administration — to be Director of National Intelligence. Last week, Majority Leader John Thune (R-SD) took a procedural step toward consideration of the SEED Act of 2025 (H.R. 5334), Ways and Means Committee member Rep. Jimmy Panetta's (D-CA) bill to allow early-childhood educators to deduct classroom expenses from their taxable income. The House approved the bill by unanimous consent on April 27.

The House is scheduled to be out of session until August 31. There will be services at the Capitol on Tuesday, July 28, for the late Senator Lindsey Graham (R-SC), then funeral services in South Carolina on Wednesday. Much of the committee work in the Senate is being pushed to Thursday.

The Senate outlook is unclear for the House-passed FY2027 budget resolution (H. Con. Res. 113), which provides for a $95 billion GOP-only Reconciliation 3.0 bill focused on defense funding and with some voter ID and farm aid provisions (but no instructions for tax provisions). Leader Thune said July 23 he does not currently have 50 votes for the House-passed budget blueprint. Thune also said he would hold the budget resolution in case reconciliation is needed to avoid a government shutdown when current funding expires September 30.

Last week, the House passed a continuing resolution (CR) that extends government funding through December 4. Senator Thune intends to hold a vote on a CR to fund regular operations of the federal government before the Senate leaves for the August recess in the coming weeks, but Senators are working on a version that differs from the House-passed measure. Thune reportedly wants a different set of budget anomalies than those in the House CR and a shot at bipartisan negotiation with Democrats.

A CR from September 30 until later in the year would be typical during a midterm election year, but this year's regular appropriations process has been complicated by the President's call for increased defense funding and Democrats' insistence on a commensurate increase in non-defense spending. The Senate Appropriations Committee typically operates on a bipartisan basis on government funding, but that cooperation so far hasn't materialized this year, raising concerns about another shutdown.

Senator Thune's approach may be facing some resistance from members. On CBS's "Face the Nation" July 26, Senator John N. Kennedy (R-LA) praised Thune generally but said, "I think he's just being too cautious. He wants to spend the rest of our time talking with Senator Schumer about shutting down [the] government."

And while reconciliation plans have been received only tepidly by Senate Republicans, some are expressing some resolve to act, including on the voter ID provisions. Asked about the optics of a Republican-only policy to change how elections are run so close to an election, Senator Kennedy cited the importance for "both sides to have credibility" in elections. "In our elections, we need to do two things and only two things:

1. You have to prove you are who you say you are in order to register to vote and to vote; and
2. however you decide to vote, that's up to the states … "

On Fox Sunday Morning Futures, Senator Ron Johnson (R-WI), who took over the Budget Committee chairmanship following the passing of Senator Graham, said, "America is expecting us to govern, and we're going to have to recognize Democrats will not help us do it, and we're going to have to do things on our own. That's why we're talking about a Reconciliation 3.0, which will not be easy to do. It's going to be a very small needle to thread." He said some Senators will demand the package is paid for, while the House passed a resolution that "pays for nothing." He noted that defense supplementals typically are not offset.

In the run-up to House passage of the budget resolution that provides for reconciliation, House Budget Committee Chairman Jodey Arrington (R-TX) had long wanted spending-cut offsets, but they were ultimately excluded, at least in part because lawmakers anticipated difficulty in getting the measure through the Senate. Senator Johnson said Chairman Arrington "would love to have us at least pay for the agriculture part of that." But if you provide instructions to the Agriculture Committee, "then all of a sudden you reopen up the reforms we did with [the Supplemental Nutrition Assistance Program (SNAP)], which actually have worked pretty well."

Senator Johnson has long expressed concerns about spending levels, including ahead of the 2025 OBBBA reconciliation bill. Recognizing the political realities of opening up reconciliation to other issues, he said, "If you want to do things like Medicaid and Medicare, you have to instruct [the Finance Committee]. That opens up all those things, and I think there's a great fear on our side that, if we open up those committees, there will be amendments that we just might lose, and we can roll back what meager reforms [we] did. By the way, yes, we were falsely accused of slashing Medicaid, right? Cutting it to the bone."

A Semafor report this morning, "Everyone wants something from Thune," noted challenges facing Senate Republicans in the two weeks before their scheduled August recess. "Republican Sens. Mike Lee of Utah and Rick Scott of Florida say they will object to recess if the chamber doesn't pass the SAVE America voter ID bill. The motion to adjourn could be approved by a simple majority, but it's rare to have a roll-call vote for that," the report said. "A few blocks up Pennsylvania Avenue, Trump wants Thune to approve the House-passed budget before recess."

Schedule — The Senate HELP Committee will hold an executive session on Thursday, July 30 at 9:45 a.m. to consider nominations for Labor Secretary, Assistant Secretary for Preparedness and Response for the Department of Health and Human Services, and legislation including the Emergency Savings Enhancement Act (S. 3333) and Railroad Retirement Board Stability Act (S. 4965). 

There have been reports that the Senate Finance Committee could hold a markup to consider a bipartisan tax administration package reflecting the Taxpayer Assistance and Service Act introduced by Chairman Mike Crapo (R-ID) and Ranking Member Ron Wyden (D-OR) in February. It was previously reported, weeks ago, that the markup was on hold due to Democratic members' insistence on offering an amendment related to the IRS immunity deal.

Trade — There have of course been numerous stories and opinion pieces regarding the President's July 20 proclamations imposing additional duties under Section 338 of the Tariff Act of 1930 on a range of Canadian goods imported into the U.S.; and final Section 301 tariffs on imports from 60 trading partners following investigations into whether their economies maintain and effectively enforce prohibitions on imports produced with forced labor, with additional duties of 10% or 12.5% on imports.

A July 23 Bloomberg Government story, "US Sets New Forced-Labor Duties as Trump Resurrects Tariff Wall," said, "One senior administration official rejected the idea that Trump was imposing the new tariffs purely as a replacement to the earlier duties that were struck down, but also said the president would use all the tools at his disposal and won't allow his trade policy to be undermined by a court decision." The story continued: "Blake Harden, a trade expert with the consultancy Ernst & Young, said Trump isn't finished with tariffs or disrupting the status quo. 'There's still a lot of uncertainty hanging out there. We still have the opportunity for a lot of tariffs this year,' she said. 'Prior to this week there was sort of just a bit of a lull and maybe it felt like there was more certainty than there is. There's this thing I keep telling folks: There's a lot to come still as we get into this year.'"

A July 25 AP story, "Small businesses file lawsuits against Trump's new sweeping tariffs," said, "Two lawsuits filed by small businesses are challenging Trump's sweeping tariffs announced Thursday that impose double-digit levies on 60 trading partners." The story said, "Both lawsuits argue that the government didn't adequately establish its case against each specific economy or spell how the tariffs will eliminate the specified practice they are being levied for, as required by Section 301."

An editorial in the weekend Wall Street Journal, "Trump Tariffs, More Tariffs, and More," said, "This week Mr. Trump dusted off this provision from the 1930 Smoot-Hawley Act to hit Canada with 50% tariffs on hundreds of goods … No President has used it before … The U.S. is now in a needless trade war with its second-largest trading partner." The editorial further stated, "Imagine how strong the economy would be without the tariffs and their uncertainty for business. Americans remain unhappy about the economy, and higher prices are a big reason. They know that tariffs are adding to their pain even if they don't see the cost as a line-item on a bill. Republicans could pay the price in November."

Elections — Former state Senate President Troy Jackson was formally selected as the Democratic candidate to challenge longtime incumbent Senator Susan Collins (R-ME). On CBS's "Face the Nation," Senator Bernie Sanders (I-VT), who knows Jackson, said: "He's a working-class guy. He's from the working class. He is very articulate. I think he stands an excellent chance to win. The problem that he has and the problem that we have in Michigan and Minnesota right now, we have candidates Abdul El-Sayed and Peggy Flanagan, is that the oligarchs, the billionaire class, are throwing unbelievable amounts of money into these campaigns to protect the establishment candidates."

He was referring to moderate-versus-progressive dynamics in multiple races this year, including the upcoming August Senate primaries for open seats in Michigan and Minnesota, on August 4 and 11 respectively. Some progressive candidates have disavowed or declined to back current Senate Democratic leadership.