The Washington brief

• With lawmakers in the House and Senate adjourned for the August recess, several major priorities remain for their return, including the fiscal year (FY) 2027 National Defense Authorization Act (NDAA), government funding, cryptocurrency market structure, healthcare policy, and sanctions legislation.
• The most pressing issue is funding the government, which lapses at fiscal year-end on September 30th. The NDAA and CLARITY Act face procedural and political hurdles despite remaining key priorities for leadership.
• Bipartisan activity continues in select areas, including 340B reform, insulin affordability, and expanded Russia and Iran sanctions, though each faces policy trade-offs and potential House-Senate negotiations.
• Recent redistricting and primary results underscore the political backdrop shaping the fall calendar, as members balance legislative deadlines with an intensifying midterm campaign environment.

Our Take

The House passed the $1.15 trillion FY2027 NDAA in July largely on party lines. The Senate must still pass its own version before the two chambers can reconcile differences and send a final package to President Trump for signature. However, Senate consideration has stalled following a failed cloture vote, which prevented the chamber from formally advancing to floor debate.

The legislation faces several political headwinds, including Democratic concerns regarding U.S. military operations in Iran and broader disagreements over defense spending levels. In addition, some Republican senators have expressed skepticism toward the proposed funding approach, citing political risks ahead of the midterm elections and a perceived lack of sufficient justification from the Pentagon. Notably, the NDAA has historically been one of the least contentious bills in Congress and has been enacted annually for more than six decades. As a must-pass measure, it has traditionally attracted broad bipartisan support from both sides of the aisle.

The Senate passed a bipartisan continuing resolution on Saturday, August 8 to fund the government through December 11, shifting pressure back to the House to prevent a government shutdown by the September 30th fiscal year-end deadline. The measure would generally maintain current funding levels. The House has already passed its own stopgap funding bill, which would extend government funding through December 4, setting up negotiations between the two chambers when Congress returns.

The Senate bill also sets the stage for a major funding fight later this year over the Trump Administration’s proposal to give political appointees authority over federal grant approvals. The legislation temporarily blocks implementation of the plan, drawing support from lawmakers in both parties who argue it would politicize the federal grantmaking process, while administration allies have vowed to revisit the issue in December. The measure also delays implementation of a ban on intoxicating hemp products and includes Democratic-backed language preventing additional funding for Immigration and Customs Enforcement (ICE) and Border Patrol agencies during the stopgap period, a provision that could face resistance in the House.

The CLARITY Act would establish a regulatory framework for the cryptocurrency and digital asset industry. September is likely the CLARITY Act’s best opportunity for advancement. Majority Leader Thune officially filed a cloture vote, setting up a procedural vote when the Senate returns on September 14. If supporters need Democratic votes, substantive and technical revisions related to illicit finance and ethics standards could provide the most practical path forward. In addition, a growing number of lawmakers are raising concerns that the bill could encourage deposit flight from the traditional banking system unless language intended to ban interest payments on stablecoins is tightened to prevent evasion.

Reports suggest the Senate Republican conference does not unanimously support the bill in its current form. For the bill to pass the Senate, it would need significantly more than the seven Democratic votes required to overcome a filibuster, likely closer to a dozen, given ongoing scrutiny of cryptocurrency policy and industry political spending.

A bipartisan group of senators has introduced legislation to reform the 340B Drug Pricing Program, which requires pharmaceutical manufacturers to provide discounted drugs to certain hospitals and healthcare providers that serve low-income and underserved populations. The proposal is the product of years of work by the Senate's 340B bipartisan working group.

The legislation seeks to increase transparency and accountability through new reporting requirements while preserving the program's core mission of supporting vulnerable patients and safety-net providers. The proposal would also end the administration’s controversial 340B rebate model, which had faced significant criticism from 340B providers. The proposal comes amid increasing scrutiny from lawmakers, pharmaceutical manufacturers, and hospitals regarding whether 340B discounts are being passed on to patients. While supporters argue the legislation would strengthen oversight and preserve the program’s mission, critics contend the reforms do not go far enough to address longstanding concerns about program transparency and accountability.

Additionally, a bipartisan Senate effort to cap insulin costs for Americans with private insurance is gaining momentum after receiving a 15-8 vote in the Senate Health, Education, Labor, and Pensions (HELP) Committee as an amendment to separate legislation. The proposal would extend the existing $35 monthly insulin cap available to Medicare beneficiaries to commercially insured patients and establish a pilot program in 10 states to reduce costs for uninsured individuals. Chairman Bill Cassidy (R-LA) has expressed optimism that the measure will advance, potentially creating a pathway for inclusion in a broader healthcare package later this year.

The Senate overwhelmingly passed bipartisan legislation to expand U.S. sanctions authorities targeting Russia and extend key sanctions on Iran, reflecting broad support for increasing economic pressure on Moscow more than four years after its invasion of Ukraine. Originally championed by the late Sen. Lindsey Graham (R-SC) and advanced by his successor, Sen. Darline Graham (R-SC), the bill has been narrowed to secure White House support. Rather than mandating sanctions, the legislation grants the president broad discretion to impose penalties, significantly expanding executive authority over their use. The measure authorizes tariffs of up to 100% on major purchasers of Russian energy and countries facilitating sanctions evasion, as well as a 500% tariff on Russian imports, with both authorities lasting five years.

The bill also extends the Iran Sanctions Act through 2031, preserving U.S. authority to impose secondary sanctions on foreign firms conducting certain business with Iran. Supporters argue the legislation addresses gaps that have allowed Russia to continue exporting energy despite existing Western sanctions, while preserving flexibility to respond to global energy market disruptions. Critics, including Sen. Rand Paul (R-KY) and some Democrats, contend the bill grants the administration expansive tariff powers affecting major trading partners such as China and India and question whether the authorities will be used. Having passed the Senate, the legislation now heads to the House for consideration.

Missouri voting rights advocates have sued Secretary of State Denny Hoskins (R-MO) after he rejected a ballot referendum aimed at blocking the state's new congressional map from taking effect for the 2026 midterms. The map, which redraws Rep. Emanuel Cleaver's (D-MO) Kansas City-based district to include more conservative areas, is viewed as giving Republicans a strong opportunity to gain a House seat. The legal challenge will determine whether voters can weigh in on the redistricting plan and could have significant implications for Cleaver's reelection prospects.

Michigan’s closely watched Democratic Senate primary ended with progressive Abdul El-Sayed defeating Rep. Haley Stevens (D-MI), setting up a November matchup against former Rep. Mike Rogers for the open seat of retiring Sen. Gary Peters (D-MI). El-Sayed’s victory marks a win for the Democratic Party’s progressive wing and a setback for establishment Democrats, who largely backed Stevens, although the race proved much tighter than polling had suggested.

The Democratic Party’s progressive wing continues to gain influence, and Michigan’s Senate primary suggests that momentum is extending beyond traditionally liberal strongholds. Following Abdul El-Sayed’s victory, Democratic leaders and donors may find it harder to dismiss progressive victories as isolated events confined to safely Democratic districts in places like New York City.

Conversely, in the Wisconsin Democratic primary, David Crowley’s victory over progressive candidate Francesca Hong marked a big win for establishment Democrats, reinforcing the party leadership’s influence over candidate selection and campaign resources. The result suggested that moderate voters remained a decisive force in the state’s primary electorate and could shape the party’s strategy heading into the general election.

Tennessee's primary elections produced several notable results that will help shape the state's political landscape heading into November. In Tennessee's newly redrawn 9th Congressional District, Republican state Sen. Brent Taylor and Democratic state Rep. Justin J. Pearson secured their respective nominations and will face off in one of the state's most closely watched House contests.

The race has garnered national attention following Tennessee's recent redistricting. Another major outcome came in the 5th Congressional District, where former Tennessee Commissioner of Agriculture Dr. Charlie Hatcher defeated Rep. Andy Ogles (R-TN) in one of the evening's most surprising primary upsets. At the statewide level, Sen. Marsha Blackburn (R-TN) won the Republican nomination for governor and will face Democrat Jerri Green in November, while Marquita Bradshaw secured the Democratic nomination for U.S. Senate.

Bottom line

Congress returns from August recess facing a packed agenda, with government funding and the FY2027 NDAA at the top of the list. Lawmakers must reconcile competing stopgap spending bills before the September 30 funding deadline, while the NDAA remains stalled in the Senate despite its history of bipartisan support. The Senate is also expected to take up the CLARITY Act, as bipartisan healthcare reforms and expanded Russia and Iran sanctions continue to advance. All of this will unfold against an increasingly political backdrop as redistricting battles and midterm campaigns intensify.