NDFC - This Week in Congress
This Week in Congress
May 15, 2026
Both chambers of Congress returned this week for a two-week legislative session, taking up a wide range of measures. In the House, members voted on:
• Military and energy legislation: Military Construction Appropriations (H.R. 8469) and E-15 Year-Round Fuel legislation (H.R. 1346).
• Federal court oversight: A bill setting conditions for federal court appointments to supervise state or local governments (H.R. 8365).
• National Police Week measures: A series of resolutions and bills, including support for law enforcement (H. Con. Res. 96), memorializing officers killed in the line of duty (H. Res. 1252), the Keeping Violent Offenders Off Our Streets Act (H.R. 6260), the Cashless Bail Reporting Act (H.R. 5625), the Combatting Organized Retail Crime Act (H.R. 2853), and legislation requiring the DOJ to report on firearm background check denials (H.R. 2267) and share criminal records with state law enforcement agencies (H.R. 8352).
• Financial services legislation: The SMART Act (H.R. 4437) to loosen regulation of small banks and credit unions, the TRUST Act (H.R. 4478) to reduce regulator examination frequency for small FDIC-insured banks, and a Treasury mentorship program for small, rural, and minority-serving financial institutions (H.R. 3709).
• Other measures: Save Our Shrimpers Act (H.R. 2071), resolutions supporting anti-Semitism countermeasures (H. Res. 1251), urging the release of five Chinese political prisoners (H. Res. 1259), and an Iran War Powers resolution (H. Con. Res. 75) introduced by Rep. Gottheimer (D-NJ).
In the Senate, votes focused primarily on confirmations of Trump Administration Nominees, including Kevin Warsh for Chair of the Federal Reserve. This session underscores Congress’s focus on a broad mix of defense, law enforcement, financial regulation, and international policy issues as it works through a packed legislative agenda.
USDA Issues New Rules Affecting Dairy in Child Nutrition Programs and SNAP Retailers
The U.S. Department of Agriculture (USDA) has released two significant rules affecting dairy products in child nutrition programs and for retailers participating in the Supplemental Nutrition Assistance Program (SNAP).
Interim Final Rule on Whole and 2% Milk
The USDA has issued an interim final rule (IFR) extending the availability of whole and 2% milk to child nutrition programs. This clarification confirms that the expansion applies not only to the National School Lunch Program (NSLP) but also to the School Breakfast Program, Child and Adult Care Food Program, Special Milk Program, NSLP afterschool snacks, preschool meals under NSLP and SBP, and competitive foods under Smart Snacks. Key points:
• Flavored milk remains available, though the preamble encourages alignment with dietary guidelines recommending full-fat dairy and less added sugar. Challenges related to sugar limits may arise in upcoming school nutrition rulemaking.
• The USDA’s economic analysis projects no net change in revenue for the dairy sector, expecting a redistribution across industry subsectors. Independent analysis by the NMPF suggests a potential $60–230 million increase in revenue for dairy producers under realistic whole milk adoption scenarios.
• The IFR takes effect June 7.
Final Rule for SNAP Retailers
A separate final rule updates requirements for retailers accepting SNAP benefits, mandating a minimum number of staple food varieties, including dairy. Key changes affecting dairy include:
• Plant-based alternatives can count as separate varieties but only three may be included in the seven-item requirement, reducing incentives to offer these products.
• Butter and other fats (vegetable oil, lard) are considered accessory foods and do not count toward dairy variety requirements.
• Flavored and unflavored milk are now distinct varieties.
• Milk will not be split by mammal, so cow’s and goat’s milk are treated as the same variety.
• Shredded cheese and sour cream are now distinct dairy varieties counting toward requirements.
The rule becomes effective July 7. Together, these rulings provide clarity for both school nutrition programs and SNAP retailers, while offering potential economic benefits for dairy producers.
E15 Year-Round Sales Bill Set for House Floor
Earlier this year, Speaker Johnson (R-LA) pledged to give members from farm states a vote on legislation to allow year-round sales of E15 ethanol fuel. Initially, the provision was included in the farm bill, which the House passed before recess by a 224-200 vote.
However, opposition from Republicans representing oil-producing states forced Speaker Johnson to move the E15 language into a stand-alone bill, which is expected to come to the House floor this week. If the House approves the measure, Senate Majority Leader Thune (R-SD) has indicated he will attempt to combine the E15 legislation with the farm bill in the Senate.
This legislative cycle represents the furthest a farm bill has progressed since the last reauthorization in 2018, a notable milestone given that Congress typically passes a new farm bill every five to six years.
FY26 Appropriations Process Concludes – TSA Funded!
Just before last week’s recess, on the 76th day of the most recent partial government shutdown, the House agreed, by voice vote, to pass an appropriations bill to fund most Department of Homeland Security agencies and programs (excluding its immigration enforcement agencies) through the remainder of the current fiscal year. The Senate had already passed that measure twice. President Trump signed it into law on April 30.
Federal Court Strikes Down 10% International Tariffs
A federal court has invalidated the 10% international tariffs imposed by the Trump administration, following the Supreme Court’s earlier rejection of similar measures. In a 2-1 decision, the U.S. Court of International Trade ruled that the administration could not rely on trade deficit concerns or foreign investment levels to justify the tariffs under Section 122 of the Trade Act of 1974.
Reconciliation 2.0 Underway
On April 29, after holding the vote open for over five hours, House Republicans passed the Senate budget resolution along party lines, paving the way for the budget reconciliation process. Last week, the Senate Homeland Security and Judiciary Committees released bill text proposing $71.7 billion in spending over three years. Most of the funds would go to ICE ($38.2 billion) and Customs and Border Protection ($26 billion). The bills also allocate $5 billion to the Department of Homeland Security, $1.5 billion to the Department of Justice for investigative activities, and $1 billion to the Secret Service for security upgrades to the under-construction White House ballroom.
Unlike annual appropriations, these bills do not include restrictions on how the funds may be spent, leaving the current and next Congress with limited oversight. Both committees aim to mark up the bills on May 19, which will involve a detailed review of procedural rules (the “Byrd bath”) to ensure provisions comply with budgetary regulations. Most funding is unlikely to be challenged, though the ballroom security allocation could face objections under the Byrd rule and from moderate House Republicans concerned about political optics.
Once reported out of committee, the Senate Budget Committee will combine the bills into an omnibus package. Senate Majority Leader Thune (R-SD) hopes to bring the measure to the Senate floor next week, leaving a tight window for House approval before the June 1 presidential deadline.
Congress Approves Short-Term Extension of FISA Section 702
Before the congressional recess, the House passed a three-year extension of FISA Section 702 surveillance authorities. The bill included a controversial provision permanently banning the Federal Reserve from issuing a digital currency—a move aimed at securing votes from far-right members by attaching a long-standing priority as a “sweetener.”
However, the provision did not gain enough support in the Senate. Lawmakers rejected the House bill and instead approved a short-term 45-day extension of Section 702 to allow additional time for negotiations on a longer-term solution. The House quickly accepted the Senate’s measure by a 261-111 vote.
Bipartisan talks on the issue are ongoing, but with Congress facing a packed legislative calendar this month, lawmakers are unlikely to finalize a long-term deal until June. In the meantime, additional short-term extensions of FISA Section 702 may be required to ensure continuity of surveillance authorities.
FY 2027 Appropriations Moves Forward
The Chair of the House Appropriations Committee wants all 12 appropriations bills reported out by July 4. The House likely will pass a few of the bills before the elections – GOP leadership will bring the Military Construction appropriations bill to the floor this week. But the Senate is moving much more slowly, making it very likely that Congress will need to pass stop-gap funding to keep the government open after the current fiscal year ends on September 30.
Data Centers: The Next Political Hot Button
America’s data center boom is sparking a political firestorm. The U.S. now has more than 3,000 operational data centers, with 1,500 more in the pipeline—but local residents aren’t thrilled. Polls show strong opposition: 65% of voters in a Quinnipiac survey said no to new centers in their communities, and only about a third support them.
Lawmakers are responding fast. Nearly 700 state bills have been introduced on data centers, with 108 becoming law. Fourteen states are even debating moratoriums, including Maine, where Governor Mills recently vetoed a temporary halt to construction. Florida Governor DeSantis wants to give communities veto power over new projects, block taxpayer subsidies, and stop utilities from passing data-center energy costs to consumers. Energy concerns are driving legislation in 80 states bills—and a bipartisan federal proposal mirrors the same push.
The fight isn’t just in the legislature—it’s in advertising. Over $20 million has already been spent on ads mentioning data centers this election cycle. Meta alone plans to spend $65 million on pro-data-center campaigns this year.
As digital infrastructure expands, so does the controversy. Data centers are no longer just tech hubs—they’re political lightning rods.
