Congressional Affairs Quarterly Update: Q1 Review and Q2 Outlook

Both Chambers of Congress left Washington for a two-week recess with the government partially shuttered, an ever-evolving conflict in Iran, and a tariff regime in legal limbo. The Supreme Court’s landmark IEEPA decision stripped the White House of its primary tariff authority, forcing a scramble across Sections 122, 232, and 301 to devise and implement policies to replace the IEEPA tariffs before Section 122 tariffs expire in July. A restructured Section 232 metals regime was implemented on April 9, repealing about one-quarter of the originally granted inclusions. Meanwhile, despite the longest partial shutdown in American history, President Donald Trump issued a presidential memorandum to pay TSA agents, and midterm politics are beginning to warp every calculation on Capitol Hill.

DHS Shutdown: Longest Partial Shutdown in US History

The Department of Homeland Security has been unfunded since February 14, 2026, making this the longest partial government shutdown in US history at 54 days, as of the time of writing. The impasse centers on immigration enforcement funding: Democrats refuse to fund US Immigration and Customs Enforcement (ICE) without operational reforms, following the fatal shooting of two Americans in Minnesota, while House Republicans insist on full Department of Homeland Security (DHS) funding with voter-ID provisions attached.

On March 27, the Senate passed a bipartisan bill (voice vote) funding all of DHS except ICE and parts of US Customs and Border Protection (CBP). Speaker Mike Johnson rejected it, instead passing a 60-day continuing resolution (213-203) funding the entire department through May 22. Senate Minority Leader Chuck Schumer declared the House CR “dead on arrival.” However, just before departing to their respective states, Senators confirmed Markwayne Mullin, their former colleague, to lead the DHS.

On April 1, Senate Leader John Thune and Speaker Johnson announced a two-track strategy: pass the Senate’s bipartisan bill funding all of DHS except for ICE and CBP, then use budget reconciliation—which requires only a simple majority—to fund immigration enforcement separately. On April 5, the Senate passed the first-track bill 100-0 during a rare weekend pro forma session. The House convened on April 6 and April 9 for other pro forma sessions; however, the House is not expected to return until April 14.

TSA agents began receiving retroactive paychecks the week of April 6 by using existing funds from the One Big Beautiful Bill Act. As such, wait times at airports have started to improve. The President indicated on April 3 that he plans to issue a broader presidential action to pay all DHS employees, though no timeline or funding source was specified.

Geopolitical Issues Before Congress

Following President Trump’s authorization of strikes on Iran (Operation Epic Fury) that killed Supreme Leader Ali Khamenei, Congress attempted to reassert war powers. The Senate rejected a Kaine-Paul war powers resolution 47-53 on March 4; a parallel House resolution (Khanna-Massie) also failed on March 5. Democrats continue to press for classified briefings and an AUMF debate. Escalation risks remain elevated as Iran has launched retaliatory strikes on US bases in the Gulf.

FY2026 defense appropriations include $400M in Ukraine security assistance and $200M for the Baltic Security Initiative. China’s role as Russia’s primary economic and military backer remains a focal point; Beijing supplies 89% of Russia’s microchips and provides drone components and designs. New START expired in February with no successor treaty, removing all legally binding nuclear arms limits between the United States and Russia.

Greenland / NATO: The FY2026 defense bill contained no prohibition on using force against a NATO ally despite Trump’s ongoing push to acquire Greenland. Congress affirmed 'ironclad' NATO support in the bill's explanatory statement but imposed no binding constraints.

Trade Policy: IEEPA, Section 122, 232, and 301 Tariffs

On February 20, the Supreme Court ruled 6-3 in Learning Resources v. Trump that IEEPA does not authorize tariffs, invalidating the reciprocal and country-specific tariffs imposed since April 2025. Chief Justice Roberts held that the power to “regulate” importation does not include the power to tax. Estimated IEEPA duties collected exceed $160-200 billion; refund procedures remain unresolved.

Hours after the ruling, President Trump invoked Section 122 of the Trade Act of 1974, imposing a temporary global import tariff of 10%. While the President subsequently announced plans to increase the tariff to 15%, that increase has not actually been implemented. The Sec. 122 tariff can run through July 24, 2026 (the 150-day statutory maximum). The tariff exempts USMCA-qualifying goods, products already covered by Section 232, CAFTA-DR textiles, and approximately 1,100 product codes that had previously been exempt from the IEEPA tariffs. The trade-weighted average US tariff rate stands at approximately 13.0%.

Steel and aluminum tariffs remain at 50% for all countries (25% for the United Kingdom). All prior country exemptions, TRQs, and general approved exclusions were revoked March 12, 2025. Over 400 additional derivative product codes were added in August 2025. An importer lawsuit challenging CBP’s duty calculation methodology is pending at the Court of International Trade. However, on April 2, the Administration announced several changes to the operation of the Sec. 232 tariffs for steel, aluminum and copper. These changes included suspending the tariff inclusion process, simplifying the methodology for calculating the tariff rate imposed on derivative products and revoking about 100 of the 400 originally granted inclusions.

On March 12, USTR announced new Section 301 investigations targeting 16 trade partners (including China, the European Union, Mexico, Japan, India, South Korea, Vietnam, Thailand, and Taiwan) for “structural excess capacity” in manufacturing. The investigations aim to replace IEEPA tariffs with permanent Section 301 duties by late July. The public comment period runs March 17 through April 15; hearings are scheduled for May 5. Existing China Section 301 tariffs (Lists 1-4A, 7.5% - 25%) remain in force, with 178 product exclusions extended through November 10, 2026.

Q2 2026 Forecast

• DHS Shutdown Resolution: Unlikely to come before mid-April at the earliest. The divergent House CR and Senate partial-funding bill create a protracted stalemate. Watch for reconciliation talks to fund ICE/CBP separately.
• Section 122 Expiration (July 24): The Administration’s critical deadline. Treasury Secretary Scott Bessent has expressed confidence that Section 301 and Section 232 actions will restore tariff revenue to IEEPA levels by then. Expect expedited 301 proceedings and possible new Section 232 investigations on autos, copper, and lumber.
• USMCA Joint Review (July 1): The mandatory six-year review will be a major focus of trade policy in 2026 and into 2027. USTR is weighing a renegotiation covering automotive rules of origin, China provisions, and energy market access. Failure to agree on extension triggers annual reviews and a 2036 sunset countdown.