Congressional Update

Activity in DC last week was overshadowed by a looming possibility of a partial government shutdown, as both the House and Senate failed to agree on a short-term funding bill, leaving only days before the September 30 deadline. Last Friday, the House narrowly passed a continuing resolution (CR) to fund the government through November 20. To avoid a government shutdown, the Senate must pass the CR prior to government funding expiring at midnight on September 30. The House and Senate were on Recess this week, and the Senate is expected to consider the CR when they return to Session on Monday. Questions remain whether Senate Majority Leader John Thune (R-SD) can secure the seven Democratic votes to meet the 60-vote threshold to pass the CR.

Meanwhile, the Trump Administration is advancing broad spending cuts. DOE canceled $13 billion in clean energy funding and is reviewing $15 billion in Biden-era awards. Energy Secretary Chris Wright defended the move as relief from costly subsidies driving up electricity prices. DOE also plans to use emergency powers to keep aging fossil-fuel plants online, citing grid reliability and AI-driven power demand. Critics argue this raises consumer costs and overextends federal authority; Michigan is challenging the orders in court.

In preparation for a possible government shutdown, The White House Office of Management and Budget (OMB) ordered agencies to draft reduction-in-force (RIF) plans for permanent layoffs. This is a shift from past shutdowns when workers were furloughed and later recalled. Directed by OMB Director Russ Vought, the memo targets programs dependent on discretionary funds and not aligned with President Trump’s priorities, using the threat of job cuts to pressure Democrats in funding talks. Essential services would continue, but other positions could be permanently eliminated if funding lapses on October 1. Democrats called the move intimidation, while OMB said plans will be unnecessary if Congress passes a stopgap bill.

Meanwhile, President Trump announced a series of new tariff actions through posts on his Truth Social account, all of which we expect are being undertaken pursuant to Section 232 investigations announced earlier this year. The President specifically called out heavy trucks:

Effective October 1, the United States will impose a 25% tariff on all imports of heavy trucks. President Trump did not reference medium-duty trucks, medium- and heavy-duty truck parts, and their derivative products, which together with heavy-duty trucks were the subject of a Section 232 investigation launched earlier this year.