Congressional Update
President Trump made waves on both sides of Pennsylvania Avenue last week as his Administration continues enacting its second-term agenda at full speed.
On Tuesday, President Trump addressed a Joint Meeting of Congress to outline his early accomplishments and his legislative priorities, including on the border, social issues, taxes, tariffs, and other issues. Trump’s speech, the longest in modern history, was met with applause from Republicans and at times provoked jeers and protests from Democrats. On trade, President Trump emphasized tariffs as a key tool in his economic strategy, calling them a “beautiful word” that would “make America rich again” and protect American jobs. President Trump’s remarks were the first of many statements on tariff actions by the President and cabinet officials this week as the White House continues to propose and modify tariffs on goods from Canada and Mexico, prompting confusion among policymakers and financial markets.
On tax policy, President Trump reiterated support for congressional action on several tax proposals from his presidential campaign, including making his 2017 tax law permanent and restoring full expensing, allowing businesses to immediately deduct the full cost of certain business investments, retroactive to January 20, 2025. Trump urged Congress to address expiring tax cuts prior to the end of 2025 and challenged congressional Democrats to support extending expiring tax cuts for individuals. Next week, House Republicans will begin drafting key provisions of their much-anticipated tax bill in two closed-door meetings on Monday and Wednesday.
Before acting on President Trump’s legislative agenda, however, Congress must avert a pending government shutdown and pass a Continuing Resolution (CR) before March 14. House Republicans are expected to release the text of a stopgap funding measure over the weekend prior to a series of votes on the CR next week. It is unclear whether House Republicans can advance the stopgap bill without the support of Democrats. Several conservative House Republicans and defense hawks have threatened to withhold support for a CR. However, several Democrats may cross party lines to avoid a government shutdown despite broader Democratic concerns over the Department of Government Efficiency (DOGE) and the Trump agenda. A CR will also require the support of several Senate Democrats for final passage.
Meanwhile, legal challenges to several Trump Administration actions and orders continue. On Thursday, the Government Accountability Office (GAO), a congressional agency, ruled that Congress cannot use the Congressional Review Act (CRA) to overturn Clean Air Act waivers granted to California by the Biden Administration, setting up a potential legal challenge. The Trump Administration has maintained that Congress can utilize the CRA to overturn the Biden-era waivers, which allow California to implement stringent pollution requirements. In addition, on Thursday a federal judge in Rhode Island blocked the Trump Administration from freezing federal grants and loans in two dozen states in response to a lawsuit filed by Democratic Attorneys General.
