Congress is back in action, but can they keep it up?
Good morning, and welcome to a Wednesday edition of The Daily Punch. We've got some surprising developments to share with you today, straight from the halls of power in Washington.
Since the epic 43-day government shutdown ended, Congress has been working hard to regain its footing. And party leaders are determined to give them the space to do so.
Following the longest shutdown in history, congressional leaders are on the brink of an agreement on a full slate of FY2026 appropriations bills. But here's where it gets controversial: they're already three months into the fiscal year, and there's still a long way to go.
Speaker Mike Johnson and Senate Majority Leader John Thune made this their priority when they took office, promising a return to regular order. But with razor-thin margins, any group of discontented conservatives or moderates could sink a bill. It's a delicate balance, and one that House GOP leaders are still figuring out.
Despite the challenges, the House has already approved six bipartisan FY2026 funding bills, with two more expected today: National Security-State and Financial Services-General Government. The final spending package, which includes Labor-HHS, Defense, Transportation-HUD, and Homeland Security, will be a tough one, but the House is determined to get it done.
The Senate, on the other hand, has a more complex timeline. They're set to vote on a $180 billion Commerce-Justice-Science, Interior, and Energy and Water package this week, which passed the House with a huge margin of 397-28. Senators will then recess, leaving little time to pass the remaining funding packages before the January 30th deadline.
Thune has vowed to keep the recess intact, but with high-profile bipartisan trips planned, there's a real push to get things done before the end of the month.
Now, let's talk about the controversial funding for the Homeland Security Department. With President Trump's immigration crackdown and last week's tragic shooting in Minnesota, this issue is politically charged. Some Democrats are warning that they'll vote against any bill without new ICE restrictions and oversight, which could lead to a year-long CR, an outcome that appropriators are trying to avoid.
But there's a glimmer of hope. Leaders from both parties and appropriators are sounding optimistic about passing the DHS spending bill. Rep. Henry Cuellar, the top Democrat on the DHS subcommittee, believes negotiators are close to an agreement and hopes to release the text this weekend. House GOP leaders may even split the DHS vote from the other bills to ease the process.
"I feel cautiously optimistic," said House Appropriations Committee Chair Tom Cole. "It's all about belief; if you don't believe you can get there, you won't. I'm not expecting a CR."
This is a critical moment for appropriators to demonstrate their ability to pass bipartisan spending bills and assert congressional authority over the nation's finances. Cole emphasized that passing these bills is in the best interest of Congress as an institution.
And with the possibility of Democrats winning the House majority this fall, now is the time for the White House to cut deals. As House Appropriations Committee Ranking Member Rosa DeLauro put it, "This is what we do. We keep the government open."
In other news, Senate Minority Leader Chuck Schumer is celebrating his recruitment victory. With a complex plan in place, Schumer has successfully persuaded top-tier candidates to run for GOP-held seats, giving Democrats a clear path to winning back the Senate. But it's not without its challenges; Democrats still need to defend Michigan and Georgia, and there are contested primaries in Iowa and Texas.
Schumer remains confident, believing that the recruitment efforts, coupled with a more favorable political environment, will pay off. But it's a steep uphill climb to reclaim the majority.
"We're feeling great and we now have a clear, strong path to winning back the Senate," Schumer said. "A year ago, no one thought we could do that."
And finally, let's talk about the crypto wars. We're just one day away from the Senate Banking Committee's high-stakes markup, where the traditional financial system is being rearranged for the sake of crypto. The banking sector seems to have the upper hand in this crucial fight over stablecoin yield restrictions, but the bill is still unfinished, with dozens of amendments and key lawmakers withholding support.
Crypto exchanges, led by Coinbase, are seeking broad latitude to offer rewards for crypto usage, but bankers are warning of a potential "deposit flight" from the traditional financial system. The dynamics on the Banking Committee have shifted, with enough senators acknowledging the risk.
Industry allies are cautiously optimistic, but bank allies remain unsatisfied. The work on yield isn't done yet, and without lawmakers like Thom Tillis, Angela Alsobrooks, Katie Britt, and John Kennedy, the market structure legislation won't advance.
There are clear signs of discontent among the crypto faithful, with the Blockchain Association CEO releasing a statement chastising the "Big Banks" for their relentless pressure campaign. White House official Patrick Witt also threatened the banking industry with credit card swipe fee reform if they didn't take the deal on stablecoin rewards and yield.
These messages are a clear indication that the crypto side is feeling the heat. And while the Credit Card Competition Act may not be a real cudgel in these talks, crypto market structure legislation is heading straight to the floor, with a more precarious path for swipe fee reform and other credit card restrictions.
That's all for now. Stay tuned for more updates from The Daily Punch, where we bring you inside Capitol Hill, the White House, and Washington.
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