Legislative Update: Congress Ends Record Shutdown but Faces Renewed Funding Battles

Congress Ends Record Shutdown but Faces Renewed Funding Battles

President Donald Trump ended the 43-day partial government shutdown in the late evening on November 12 by signing a short-term spending measure  (H.R. 5371) that funds federal agencies through January 30. He used the signing moment to again call for ending the Senate filibuster, arguing it is the only way to avoid future shutdowns. The House had cleared the bill earlier that day on a 222–209 vote, with two Republicans opposing it and six Democrats crossing the aisle to support passage. The measure includes a three-bill “minibus” of full-year funding for the Department of Agriculture and the FDA, the Department of Veterans Affairs, and the Legislative Branch. It also reverses thousands of layoffs pursued during the shutdown, and halts further mass layoffs through January.

The vote followed the Senate’s approval of the funding measure two days earlier, on November 10, by a 60–40 vote. Eight Democrats crossed party lines to support the bill, despite the absence of an extension of enhanced Affordable Care Act subsidies, which had been their top demand. Senate Democrats who backed the measure said they were persuaded by Senate Majority Leader John Thune’s commitment to hold a vote next month on the expiring tax credits.

The measure keeps the government open for 11 more weeks, giving Congress additional time to negotiate the remaining fiscal 2026 appropriations bills. The legislative process, however, was complicated by a last-minute controversy over a Senate provision discovered only after the bill was finalized. The provision would entitle senators to a minimum payout of $500,000 if federal investigators accessed their phone records without notice, retroactively benefiting at least 10 senators involved in earlier inquiries. The clause angered House Republicans, prompting Speaker Mike Johnson (R-LA) to pledge separate legislation to repeal it, rather than risk delaying the shutdown’s end by reopening the bill.

Looking ahead, significant hurdles remain. Congressional leaders have yet to agree on overall discretionary spending limits for the current fiscal year, a foundational step to advancing the remaining annual appropriations bills. Trust between the parties is strained, with Democrats warning that the Trump administration’s efforts to freeze or claw back previously enacted funds undermine the negotiating process. The Senate plans to move quickly on a second tranche of appropriations bills—including Defense, Labor-HHS-Education, Commerce-Justice-Science, and Transportation-HUD—when it returns next week.

A further complication involves the Commerce-Justice-Science bill, which was previously removed from a summer minibus due to a standoff over the administration’s plan to keep the FBI headquarters in Washington rather than move it to Greenbelt, Maryland. Key negotiators, Sens. Chris Van Hollen (D-MD) and Subcommittee Chairman Jerry Moran (R-KS), indicated that discussions have become more constructive, with both suggesting that a resolution is within reach. Even so, a final agreement on the FBI issue remains essential before the bill can move forward.

Vinyl Institute Submits USMCA Comments Urging Fair and Predictable Trade Under the USMCA

The Vinyl Institute (VI) submitted comments to the Office of the U.S. Trade Representative as part of the Administration’s request for input on the operation of the U.S.–Mexico–Canada Agreement (USMCA). In our submission, VI highlights the significant benefits the agreement has delivered to North American manufacturing, particularly to the U.S. vinyl industry. Since the USMCA entered into force, U.S. PVC exports to Canada and Mexico have grown substantially, supported by the agreement’s tariff-free market access and its stable, rules-based framework. These gains underscore the importance of preserving predictable trade conditions that enable U.S. producers to expand exports, strengthen supply-chain resilience, and support the more than 1.5 million U.S. jobs connected to plastics and vinyl manufacturing.

In the comments, the VI also underscores the need to maintain fair and reciprocal trade rules as the Administration evaluates potential policy shifts, including the use of tariff tools outside the USMCA framework. While we share the national goal of strengthening American manufacturing, recent retaliatory measures by foreign governments have created uncertainty and raised compliance costs for U.S. vinyl producers. Structural challenges such as Canada’s proposed Plastics Registry, misaligned building codes, and foreign tariffs on U.S. petrochemical exports further threaten the level playing field that the USMCA was designed to secure. These trends highlight the need for renewed attention to enforcement, regulatory coordination, and preventing environmental or technical measures from becoming disguised trade barriers.

To ensure the USMCA continues to deliver strong and predictable outcomes, VI’s filing recommends a targeted set of actions: reaffirming the agreement’s tariff-free commitments; working with Canada to withdraw the Plastics Registry; conditioning access to U.S. natural gas and ethane on reciprocal tariff removal for U.S. petrochemical exports; and creating a cross-border mechanism to harmonize U.S. and Canadian building and plumbing codes. These practical steps would strengthen North American manufacturing, reduce retaliatory pressures, and ensure that U.S. vinyl producers can continue to compete and innovate across the region. VI looks forward to continued engagement with USTR throughout the review process as we work to preserve the benefits of the USMCA and advance a strong, competitive future for the vinyl industry.

Bipartisan Coalition Presses STB to Protect Competition in Proposed Union-Pacific-Norfolk Southern Merger

A bipartisan group of eighteen senators is urging the Surface Transportation Board (STB) to conduct a rigorous review of the proposed merger between Union Pacific Railroad and Norfolk Southern Railway, warning that the consolidation could significantly reshape the nation’s freight rail system. In a letter led by Sen. John Hoeven (R-ND) and Sen. Amy Klobuchar (D-MN), the lawmakers stressed that the merger would be the first major Class I consolidation considered under the STB’s post-2001 “Major Rail Consolidation Procedures,” which require regulators to determine whether a merger enhances—rather than simply preserves—competition. They emphasized that this precedent-setting review must thoroughly assess the implications for long-term market access and nationwide service reliability.

The senators highlighted the scale of the potential merger, noting that a combined Union Pacific–Norfolk Southern system would carry more than 40 percent of all U.S. freight rail traffic over a 50,000-mile network spanning 43 states. They warned that disruptions or reduced competition could have far-reaching consequences for agricultural shippers who already face limited rail options. Time-sensitive commodities could be delayed or spoiled, export opportunities could be missed, and producers’ access to global markets could be diminished, particularly during harvest seasons when transportation reliability is critical.

The bipartisan letter drew support from a wide range of senators representing agricultural, manufacturing, and energy-producing states, reflecting the broad economic stakes involved. Numerous industry groups, including the Vinyl Institute, endorsed the lawmakers’ call for heightened scrutiny. Together, they argue that the STB must ensure any consolidation does not compromise freight rail competition, service quality, or the economic vitality of the communities and industries that depend on reliable rail transportation.

Growing Bipartisan and Business Support Urging EPA to Preserve Greenhouse Gas Reporting

Bipartisan lawmakers, major industry groups, and environmental organizations are uniting in calls for the Environmental Protection Agency (EPA) to preserve the federal Greenhouse Gas Reporting Program (GHGRP), warning that dismantling the 15-year-old system would undermine critical economic, regulatory, and climate objectives. Sens. Sheldon Whitehouse (D-RI) and Kevin Cramer (R-ND) sent a letter to EPA Administrator Lee Zeldin and Treasury Secretary Scott Bessent urging them to maintain the program, emphasizing that it provides reliable, facility-level emissions data used by U.S. industries to demonstrate environmental performance and to safeguard more than $77 billion in planned carbon-capture investments. They cautioned that eliminating the program, despite the administration’s claims that it could save companies $2.4 billion over a decade, would jeopardize the data needed to claim federal incentives under Section 45Q, weakening the fast-growing carbon-capture, utilization, and storage sector.

Prominent business groups have echoed these concerns, making clear that the GHGRP underpins both commercial competitiveness as well as climate policy. The American Petroleum Institute (API) urged the EPA to reduce administrative burdens but keep the program intact, warning that repeal would complicate access to foreign markets that require verified emissions data and disrupt eligibility for federal credits tied to carbon sequestration, hydrogen, and clean fuels. API also noted that ending the program would likely raise costs for companies by prompting states and private entities to impose duplicative reporting mandates, creating a fragmented regulatory landscape.

Other business coalitions—including the Business Roundtable and the National Association of Manufacturers (NAM)—similarly cautioned that abrupt changes could saddle companies with inconsistent, globally disadvantageous reporting requirements. They argued that while refinements to the system are welcome, replacing mandatory reporting with a voluntary structure would erode transparency and predictability for firms that rely on standardized emissions data. Environmental groups also submitted comments underscoring the GHGRP’s importance to national climate accountability and cross-sector emissions tracking.

Supreme Court  Expected to Fast-Track Ruling on Trump’s IEEPA Tariffs

The Supreme Court appears poised to issue an unusually swift ruling on the legality of President Donald Trump’s tariffs imposed under the International Emergency Economic Powers Act (IEEPA), with observers suggesting a decision could arrive by the end of 2025 or early 2026. U.S. Trade Representative Jamieson Greer and several trade attorneys noted that the Court has already moved at remarkable speed—accepting the case just six days after the administration filed its petition and holding oral argument only two months later. Given this pace, it is expected that the justices will accelerate their deliberations as well, particularly because the outcome will determine the scope of presidential tariff authority in a high-stakes dispute involving tens of billions of dollars.

During oral argument, Justice Samuel Alito emphasized the financial and legal risks of prolonging uncertainty, warning that ongoing tariff collections could reach into the hundreds of billions if the Court delays and the administration responds to a loss by reimposing the same duties under different statutory authorities. Officials have floated potential fallback tools—including Section 232 national security tariffs, Section 301 tariffs for unfair trade practices, and Section 122 emergency balance-of-payments duties—raising the possibility of immediate relitigation if the Court does not resolve the underlying issues comprehensively. Alito pressed counsel on whether the Court should address alternative legal justifications now, rather than allow years of future challenges to unfold.

The argument also highlighted a dispute over whether Section 338 of the Tariff Act of 1930 could, on its own, justify the tariffs, a theory promoted by the America First Policy Institute but not by the administration. Industry plaintiffs countered that the argument is legally inapplicable because Section 338 applies only to most-favored-nation violations and is procedurally forfeited, as it was never raised in the lower courts. As the justices weigh a case with major implications for presidential trade authority, tariff enforcement, and global markets, trade experts widely expect the Court to continue its expedited handling and deliver a ruling well before the typical timeline for complex cases.

White House Prepares to Release New WOTUS Definition

The White House has completed its review of a major EPA proposal to redefine which waters fall under federal jurisdiction, clearing the way for the public release of a revised “waters of the United States” (WOTUS) rule. The Trump administration has made narrowing the scope of the Clean Water Act (CWA) a top policy priority, with EPA Administrator Lee Zeldin announcing earlier this year that the agency would again amend the definition for the fifth time in less than 15 years. The new proposal is expected to significantly scale back federal oversight of wetlands and small streams, particularly in response to the Supreme Court’s 2023 Sackett v. EPA decision, which limited the law’s reach over non-permanent waters.

Industry groups, including the National Mining Association, National Association of Home Builders, and American Farm Bureau Federation, have long pushed for a narrower definition that reduces permitting requirements and expands flexibility for landowners and developers. EPA officials say the forthcoming rule is intended to provide clarity and predictability for states and regulated industries while aligning federal policy with the Supreme Court’s direction. The administration has framed the effort as critical to supporting American energy production, agriculture, and business operations, arguing that a more streamlined definition will reduce regulatory uncertainty. The EPA and Army Corps of Engineers are finalizing the proposal, which is likely to face a contentious legal and regulatory battle once the rule is released.