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The Senate confirmed several Trump administration nominees. The House was out of session.

The Senate will continue to confirm Trump administration nominees and vote on a House-passed $9.4 billion rescissions package (see below). The House will vote on bills to regulate digital assets and cryptocurrencies (see below) and plans to vote on the fiscal year 2026 defense authorization bill.

New Tariff Deadline.

The 90-day pause for the imposition of “reciprocal” tariffs came and went this week, with the Trump administration implementing another pause until August 1. For months, the Trump administration has been conducting negotiations with dozens of trading partners with the goal of bilateral agreements, but it only has tentative agreements at this point with the UK, Vietnam and China. The Trump administration sent letters to various trading partners that threatened higher tariffs if deals weren’t reached by August 1. The ongoing negotiations cover a host of complex issues, not just tariff levels, but also discussions about non-tariff barriers, commitments to purchase US goods or make investments in US, and China-related provisions (for example, the reported agreement with Vietnam has a much higher tariff rate on exports with some content from China). Any one negotiation, particularly over such a tight time period, is challenging, never mind across dozens of countries with their own unique domestic political and economic considerations. Further complicating discussions are the looming threat of sectoral tariffs, with President Trump announcing a 50% tariff on copper and a 200% tariff rate on pharmaceuticals. While the latter likely will come down, there also are ongoing investigations for other products (notably semiconductors), with still others likely to be launched. With the significant challenges to reaching deals by August 1, there may be further delay in the deadline for countries where discussions have been active, though the Trump administration also may try to show its seriousness by imposing higher tariffs on others.

What’s Next?

With the “One Big Beautiful Bill” now signed into law, Congress is turning its attention to other priorities. The Senate has a hard deadline of July 18 to pass a $9.4 billion recissions package already passed by the House. The bill would roll back spending for public broadcasting and global health programs. While some Senate Republicans have expressed concerns about some of these cuts, we expect the rescissions package to pass. Both chambers also will work on passing 12 government funding bills before the end of the current fiscal year on September 30. Congress likely will miss this deadline again and need to pass another continuing resolution to avert a government shutdown. It also must pass the annual defense authorization package, which authorizes funding for specific programs and sets policy for the Pentagon. The House plans to vote on its version of the bill next week. Congress will be busy over the remaining six months of the year with plenty of must-pass bills before entering into an election year.

Second and Third Reconciliation Bill?

House Speaker Mike Johnson (R-LA) has said at different times that there might be follow-up reconciliation bill(s), potentially one in the fall and a third in the spring of 2026. He has not indicated what kind of policies would be pursued in such an effort. There are limitations on what can be included in a reconciliation bill. Generally speaking, it can change tax laws, spend money and cut spending, all of which can be very impactful. Reconciliation bills are a heavy lift and as a result usually only happen every few years (10 have passed into law over the past 25 years). Given the immense challenges, we are skeptical of the prospects of additional reconciliation bills.

Crypto Week.

The House Republican leadership has dubbed next week as “crypto week.” The House will pass a bipartisan bill (the GENIUS Act) passed by the Senate last month to establish a regulatory framework for stablecoins (digital assets issued by private entities but backed by other assets including fiat currencies like the dollar). The House also will separately pass the CLARITY Act, a market structure bill that would set rules for the trading of digital assets and delineate regulatory authority between the SEC (securities) and the CFTC (commodities). House Republican leaders were interested in combining the stablecoin bill with the market structure bill, but the separation of the two will allow the GENIUS Act to be quickly signed into law by President Trump. Meanwhile, Senate committees are actively working on their version of the market structure legislation. The market structure bill is a more complex and contentious undertaking, particularly with Democrats’ concerns about potential conflicts from the Trump family’s crypto ventures. While the GENIUS Act is on a pathway to become law, the market structure bill will face challenges in getting the needed bipartisan support to hurdle the 60-vote threshold applicable to most legislation the Senate.

Russia Sanctions.

Despite ongoing efforts by the US at negotiations with Russia on ending the war in Ukraine, there has been little progress. President Trump has grown frustrated with this apparent foot-dragging. This week he announced the reversal of a pause on weapons shipments to Ukraine that had been authorized by Defense Secretary Pete Hegseth. This was the second reversal of a pause on weapons shipments to Ukraine (the other was in February). In Congress, there is a bipartisan Senate bill (now with 85 cosponsors) that would step up already high sanctions on Russia. There is interest in advancing the bill as a means of strengthening the administration’s negotiating position with Russia. Republican leaders have expressed support for the effort, but they only will bring the bill up for a vote if it also has support from the Trump administration. With that in mind, there have been efforts to modify the bill to give the administration greater flexibility on the implementation of sanctions. If President Trump signs off, Congress could pass a big Russia sanctions bill before August.

The Sun Sets Early.

The reconciliation bill took aim at the wind and solar industries by drastically shortening the timeline to qualify for key tax credits and imposing tough new foreign sourcing rules. Developers now have until the end of 2027 for projects to be in service in order to earn incentives that were previously guaranteed well into the next decade under the Inflation Reduction Act. The bill preserves credits for emerging technologies like battery storage and carbon capture, but it hits the solar and wind renewable energy industries hard. Meanwhile, the law imposes expanded "foreign entity of concern" restrictions that deny credits to projects with Chinese-linked components, significantly complicating procurement and investment plans. Consumers aren’t spared either as the clean energy credits for electric vehicles (EVs), solar panels and home energy upgrades will sunset by year’s end (and earlier in the case of EV credits). While industry groups scramble to fast-track projects, the political winds now blow against the renewables sector, with long-term consequences for both developers and consumers.

Fair Betting.

One overlooked provision in the reconciliation bill is now getting sharp pushback from lawmakers and the gaming industry alike. The new law includes a cap on the amount that gamblers can deduct in annual losses at 90%, even if they break even or post a net loss. This marks a break from decades of precedent where 100% of losses could be written off against winnings. It also makes it possible that a gambler could be on the hook for taxes even without being profitable. Rep. Dina Titus (D-NV), whose district includes part of Las Vegas, has introduced the FAIR BET Act to undo the change. Her Senate counterpart, Senator Catherine Cortez Masto (D-NV), plans to try and repeal the provision in the Senate via unanimous consent. Big legislative packages often include provisions that initially are overlooked but then draw ire. This provision is the first of many parts of the reconciliation bill that will be tweaked either via legislation or regulatory implementation over the coming years.

America Party.

Elon Musk’s formal launch of the “America Party” marks his next step in the political arena after his very public fallout with President Trump earlier this summer. The move comes as polls consistently show broad public appetite for a viable third-party alternative. However, Musk is unlikely to be a standard bearer who can break up the current political duopoly. While his anti-establishment brand has appeal, he remains one of the most polarizing figures in the country. He has single digit favorability among Democrats and plummeting favorability with Republicans after his fallout with Trump. Additionally, the overlap between voters who like Musk but dislike Trump is miniscule. His high-profile effort will generate headlines and has financial support, but the structural and electoral barriers facing third parties remain steep. If the America Party gains traction at all, its most likely outcome is to siphon votes from disaffected Trump Republicans, not reshape the political map.