Weekly Update 10/05/2026

Weekly Update 10/05/2026 Capitol Advocacy Partners

Appropriations: 
Courts weigh challenges to $810 million funding cancellation: A federal judge has temporarily protected $56.1 million in Department of Housing and Urban Development (HUD) housing counseling funds from expiring as lawsuits challenge the administration's Sept. 25 proposed cancellation of $810 million in federal funding. The administration used a “pocket rescission”, a tactic in which the President proposes canceling funds less than 45 days before the end of the fiscal year, allowing the funds to lapse before Congress can act, a tactic the Government Accountability Office (GAO) concluded was unlawful on Sept. 29. Judge Jia Cobb paused…

Senate appropriators draft protections for research grant decisions: Senate appropriators from both parties are drafting language that could be added to the Labor, Health and Human Services, and Education spending bill to keep National Institutes of Health (NIH) grant decisions rooted in scientific review. Senate Appropriations Committee Chair Susan Collins (R-ME) and ranking member Patty Murray (D-WA) lead the effort, which follows the administration's decision to drop a planned…

Senate Budget chair blocks bill to reverse funding cancellation: Sen. Ron Johnson (R-WI), chair of the Senate Budget Committee, objected Sept. 30 to a bill from Sens. Jeff Merkley (D-OR) and Patty Murray (D-WA) that would have restored the $810 million and barred rescission requests sent less than 90 days before funds expire. Johnson said he supports the President doing "whatever it takes" to reduce federal spending. Several Republican appropriators, including Senate Appropriations Committee…

Rural homebuying funds set to lapse as lawmakers press for answers: Roughly $232 million for the Department of Agriculture's (USDA) Single Family Direct Home Loans program was set to expire at the end of the 2026 fiscal year (October 1) after USDA’s Rural Development agency spent just $518 million of the roughly $1 billion provided by Congress, according to Politico Pro. About $250 million of unspent funds will carry over to the next fiscal year, but the $232 million set to expire would help as many as 850 families get the financing they need to purchase homes, according to Sen. Patty Murray (D-WA). The program finances about…

Administration funds television ads with border security funds: Federal spending records show the administration is paying for television ads with funds Congress approved for border security upgrades, drug trafficking enforcement, and memorials for officers killed in the line of duty. On Sept. 19, OMB moved $20 million into a Department of Homeland Security (DHS) line for commemorative events by drawing on $6.7 billion the One Big Beautiful Bill Act provided to Customs and Border Protection…

President and Administration:

Senate confirms Sonderling as Secretary of Labor: Keith Sonderling, who has led the Department of Labor (DOL) on an acting basis since April, now holds the job permanently after the full Senate confirmed him 47 to 41 on Sept. 30 in a party line vote. He took over after former Secretary Lori Chavez-DeRemer stepped down amid an inspector general investigation into alleged misconduct by her and top aides. The President nominated Sonderling in June, and White House allies…

Judge blocks election conditions on FEMA counterterrorism grants: Cities and counties that sued over new strings on counterterrorism money won last week, as U.S. District Judge Amir H. Ali found the Federal Emergency Management Agency (FEMA) lacked authority to tie the grants to how local governments run elections. In June, FEMA said it would withhold 20% of the funding from states and local governments that did not agree to check voter citizenship through a federal database…

Treasury opens investment accounts for more than 60 million children: The Department of the Treasury announced on Oct. 1 that every child under 18 with a valid Social Security number now has a federal tax-deferred investment account, bringing enrollment above 60 million children. The accounts, formerly called Section 530A accounts and now called “Trump Accounts”, were created by the 2025 tax law known as the One Big Beautiful Bill Act. The announcement…

Education:

Treasury releases proposed rules for new federal scholarship tax credit: The federal scholarship tax credit, created under the 2025 tax law, will allow taxpayers beginning in 2027 to receive a dollar-for-dollar tax credit of up to $1,700 for contributions to scholarship-granting organizations (SGOs), which provide scholarships for eligible K-12 education expenses in participating states. Treasury and the IRS released proposed regulations Oct. 2 implementing…

Education Department awards fewer grants and restricts access to future funds: The Education Department is awarding far fewer competitive grants than it announced, including four literacy grants instead of 25 and roughly half of 30 planned teacher preparation grants. Some awards commit future years' funding upfront but bar grantees from using it until the department approves continuations, mirroring proposed rules that would allow cancellations…

Education Department restores 2020 Title IX rules: A final rule effective Sept. 29 formally replaces the previous administration's Title IX regulations, which federal courts had vacated, with the 2020 rules governing how schools respond to sexual misconduct reports. Those rules set a stricter definition of sexual harassment and give more…

Senate bill would pay states to keep phones out of classrooms: Sen. Mark Kelly (D-AZ) and Sen. Tom Cotton (R-AR) introduced bipartisan legislation last week to fund states that bar students from using phones, smartwatches, tablets, and similar devices for the full school day. States could spend the money on enforcement, including lockers, lockboxes, and storage…

California:

California funds coverage as federal changes drop lawfully present immigrants from Medicaid: About 148,000 Californians are expected to have lost Medicaid coverage after a provision of the One Big Beautiful Bill Act that ends eligibility for many immigrants with legal status, including refugees, asylees, and trafficking victims, took effect on Oct. 1. California is spending $365 million on a separate state program to keep them covered through July 2027, according to the California Department of Health Care Services. Across nine states and the District of Columbia, more than 281,000 immigrants are expected to lose coverage this month, suggesting a larger impact than the Congressional Budget Office (CBO) estimate of about 100,000 more uninsured by…

FEMA releases funds to keep Los Angeles wildfire case management running: The Federal Emergency Management Agency (FEMA) released $11 million on Sept. 30 to continue a disaster case management program serving nearly 6,000 Los Angeles residents recovering from last year's wildfires, on the day the program was set to shut down. FEMA had approved $13 million for the program but disbursed only $3 million, prompting California lawmakers and disaster response groups to press the agency for the remaining funds. Case managers help survivors handle insurance claims, loans, housing searches, and federal paperwork…