Good afternoon! Congress returns from recess to a busy week. Congressional Republicans face a self-imposed June 1 deadline to pass a $72 billion budget reconciliation package to fund immigration enforcement. Funding for President Trump’s ballroom facility may also be included. The Senate will hold a confirmation vote on Kevin Warsh’s nomination to serve as Chairman of the Federal Reserve. The House will consider the first Fiscal Year 2027 (FY27) appropriations funding bill of the cycle, as well as consider an E15 biofuels bill. Over the weekend, the President dismissed Iran’s latest proposal to end the conflict. The president travels to Beijing on Thursday for a two-day summit with Chinese President Xi Jinping. Topics will include Iran, trade, semiconductors, and Taiwan.
WHITE HOUSE
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President Donald Trump on Sunday rejected Tehran’s counteroffer to his framework for ending the U.S.-Iran war, calling the offer unacceptable. The Trump administration’s proposal would have permitted Iranian shipping through the Strait of Hormuz in exchange for the U.S. lifting its blockade of Iranian ports and the commencement of nuclear talks. Iran’s counteroffer demanded sanctions relief, release of frozen assets, an end to the U.S. naval blockade, partial Iranian control over Hormuz traffic, and a halt to all regional fighting, including Israel’s campaign against Hezbollah in Lebanon. Tehran also offered to transfer highly enriched uranium to a third country and refused to dismantle its nuclear facilities. Earlier today, the president described the U.S. ceasefire as on “life support.”
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President Trump and Chinese leader Xi Jinping will hold a two-day summit in Beijing beginning Thursday, their first encounter since meeting last October in South Korea, where the two leaders paused an escalating trade war marked by triple-digit US tariffs on Chinese goods and Chinese threats to cut off global rare earth supplies. Treasury Secretary Scott Bessent will meet Chinese Vice Premier He Lifeng, Beijing’s lead economic policymaker, ahead of the summit.
- The administration’s Beijing agenda emphasizes Chinese purchases of Boeing aircraft, U.S. beef and soybeans, and the creation of joint boards of investment and trade to carve out non-security economic exchanges. Trump is also expected to press Xi to persuade Iran to reopen the Strait of Hormuz. Beijing’s priorities include tariffs, technology, and Taiwan’s independence. Xi will also focus on last year’s trade truce and loosening of U.S. export controls on advanced semiconductors.
SENATE
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The Senate Judiciary Committee meets Tuesday to advance its portion of a budget reconciliation package, which would provide roughly $72 billion in new spending for Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) through fiscal 2029. The Homeland Security & Governmental Affairs Committee is expected to consider its part of the legislation soon. The Judiciary Committee’s legislation would allocate $30.73 billion for hiring, paying, training, and equipping ICE personnel, while the Homeland Security Committee’s text would provide $32.5 billion in total, including $22.57 billion for CBP personnel. President Donald Trump has set a June 1 deadline for delivering the legislation to his desk. Republicans are moving the funding through reconciliation, which bypasses the Senate’s 60-vote filibuster threshold, provided the legislation meets budgetary requirements.
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The Senate is expected to hold a confirmation vote this week on Kevin Warsh to become Federal Reserve Chairman, with current Chair Jerome Powell’s term ending May 15. Powell has said he will remain as Chair until a successor is confirmed. Warsh, a former Federal Reserve governor and Bush administration economic adviser, advanced from the Senate Banking Committee on a party-line vote before recess.
- The Senate Banking Committee is scheduled to consider a long-awaited cryptocurrency regulatory bill on Thursday. Dubbed the Clarity Act, it would create a regulatory framework for cryptocurrencies. The bill would define when cryptocurrency tokens are securities or commodities, among other provisions.
HOUSE
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The FY2027 Military Construction-VA funding bill heads to the floor this week as the first FY27 spending measure to reach the full House. The legislation provides $157 billion in total discretionary funding for fiscal 2027, including $137 billion for the Department of Veterans Affairs, a $4 billion increase above current levels but $7 billion below the Trump administration’s budget request. Military construction accounts would receive $19.2 billion, roughly $9.4 billion below the White House request.
- Biofuels legislation is expected to come to the House floor this week. The legislation, H.R. 1346, would allow the year-round sale of E15 gasoline, a fuel blend containing 15 percent ethanol.
