The Washington brief

Executive summary

• The Trump Administration’s early efforts have centered on how the government functions, including efficiency, agency control, and more closely coordinating policies and priorities with the White House.
• Congress is currently negotiating funding bills for Fiscal Year 2025, which need to occur before March 14th to prevent a government shutdown. The next few weeks will be remarkably busy, with many outcomes from shutdown to last minute measures all very possible.
• Congress has also begun working on budget reconciliation, the longer procedural process needed for Republicans to pass their agenda given the narrowly divided Congress. We also expect Stablecoin legislation to advance this Congress given the need for structured regulatory framework within the industry.
• Most of President Trump’s cabinet and senior-level picks were quickly confirmed, including all the key positions. Five nominees are still pending in the Senate confirmation process, though we anticipate all will be confirmed. 

Our Take

Trump’s early efforts target the size of federal government

Department of Government Efficiency (DOGE)

DOGE is continuing its efforts to streamline the federal government, reduce government spending by eliminating certain jobs, deprioritizing certain government programs, and conducting extensive financial and technological reviews of certain agencies like the Consumer Financial Protection Bureau, USAID, the Department of Treasury, and the Internal Revenue Service. While stakeholders have expressed concerns about government functionality based on the potential cuts, so far, the outcry hasn’t slowed the Trump Administration. We expect the Trump Administration will continue to seek efficiencies through its DOGE effort and will continue to strategically message on its reduction efforts to help influence public opinion.

White House executive order on independent agencies

President Trump signed an executive order that aims to give his political appointees far-reaching control over government agencies that Congress established to operate with independence of the White House. Those independent agencies include the Consumer Financial Protection Bureau, the Securities and Exchange Commission, and the Federal Deposit Insurance Corporation. Trump's order exempts the Federal Reserve's (Fed) Board of Governors and policymaking Federal Open Market Committee to the extent of their monetary policy functions. Nonetheless, the Fed’s role in bank supervision will now be reviewed by certain White House officials.

This order calls for the listed agencies to submit any new regulations to the White House, set up White House Liaison offices, and regularly consult with and coordinate policies and priorities with the White House. The order also gives the president and attorney general the sole abilities to interpret laws for the executive branch. We expect there to be significant and ongoing pushback as this executive order meaningfully disrupts longstanding agency norms and legal precedent.

What’s Congress working on now?

Budget reconciliation process

On February 21st, the Senate adopted the non-binding budget blueprint designed to provide a framework for President Trump's immigration enforcement efforts, energy production policy and military spending. The House narrowly passed its own version of a budget blueprint a few days later on February 25th. These are the first steps of a longer procedural process called Budget Reconciliation, which is a work around the Senate’s 60-vote threshold needed to pass most legislation for the narrowly divided Congress.

Ultimately, it moves Congressional Republicans closer to establishing their tax and spending priorities and policies, including the extension of tax provisions enacted during Trump’s first term. The tax and spending packages will be tough to pass, but the House vote is an indication that Republicans can stick together when stakes are high. That said, it’s a multi-step process, and we expect several twists and turns along way.

Stablecoin

Stablecoin legislation is likely to advance this Congress. In the past couple of weeks, three influential lawmakers — Sen. Bill Hagerty (R-TN), Rep. French Hill (R-AR) and Rep. Maxine Waters (D-CA) — unveiled bills in their respective chambers of Congress. Each aims to provide a structured regulatory framework for the industry. On March 5th, the House Financial Services Committee will markup Rep. Hill’s bill, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act.

Relatedly, the issue of de-banking – refusing to open or involuntarily closing bank accounts – has become a primary concern as part of the stablecoin debate. Congressional Republicans believe that the crypto industry, along with several other “politically disfavored” industries and conservative individuals, were subjected to deliberate efforts by banks and their regulators to force them out of the mainstream banking system. Accordingly, there is ongoing debate on how Bank Secrecy Act/Anti-Money Laundering supervision can be reformed to ensure broad access to banking among law-abiding entities and individuals that may be “politically disfavored.”

What’s Next?

Government funding

Congress is currently negotiating Fiscal Year 2025 funding bills prior to the March 14th deadline preventing a government shutdown. We believe everything is on the table. Speaker Mike Johnson (R-LA) has left the door open to the idea of a stopgap bill, also known as a continuing resolution (CR), that would provide funding for as little as a month or possibly through the end of the fiscal year, which ends on September 30th.

Democrats have indicated they want assurances that DOGE will not interfere with new spending along with other concessions. Several Republicans have indicated they will never vote to fund the government through a CR. All and all, the next few weeks will be remarkably busy in Washington, with many outcomes from shutdown to last minute measures all very possible.

Trump’s Cabinet and senior team are quickly coming together

Of the cabinet and senior-level candidates nominated by President Trump, 16 were quickly confirmed, including all the key positions such as Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Defense Secretary Pete Hegseth.

There are five major cabinet positions with nominees still pending in the Senate confirmation process. Council of Economic Advisers Stephen Miran, Education Secretary Linda McMahon, Labor Secretary Lori Chavez-DeRemer, United States Ambassador to the United Nations Elise Stefanik, and Office of the Comptroller of the Currency Jonathan Gould. We expect that all will be confirmed.