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CALENDAR UPDATE: The Senate could leave to campaign as early as Wednesday; the House recessed in mid-September until after the election; the November 3 midterm elections are 5 weeks from tomorrow.
(1) FISCAL NEWS:
TRUMP AND OMB’s VOUGHT AGAIN USE ILLEGAL POCKET RESCISSIONS: Last Friday, the White House announced a pocket rescission of $810 million in funding for refugee services and other domestic programs. House and Senate Appropriators objected to the budget maneuver previously ruled illegal by the GAO.
WITHHOLDING OF APPROPRIATED FUNDS: Billions in FEMA (disaster recovery) funds for resilient infrastructure and communities remain unawarded; and (2) the Department of Energy cancelled 155 projects worth $9.1 billion.
MISUSE OF APPROPRIATED FUNDS: The White House has used public funds to pay for political ads to promote his record for the midterm elections. Since the 1950s, annual appropriations legislation — including the funding bill Trump signed in February — has included a ban on using federal funds for “publicity or propaganda purposes.” First ad; second ad; third ad.
FACT-CHECKING FRAUD CLAIMS: White House claim of finding $250 billion in fraud uses questionable numbers.
HAPPY (FISCAL) NEW YEAR! The Federal Government’s budget year begins this Thursday, October 1, 2026. In case you missed previous editions of TrillionsWeekly.com, Congress enacted a continuing resolution (“CR”) (HR 6500) providing funding through December 11, 2026—averting an October 1 shutdown this week. (The stopgap was necessary because Congress has passed none of the 12 FY 2027 appropriation bills.)
(2) TRUMP’S IRAN WAR – Day 213:
WAR CONTINUES - NO END IN SIGHT: Iran says it won’t soften demands as Trump rejects Hormuz offer; Iran-backed Houthis in Yemen say they attacked Saudi Capital Riyadh; Army identified 19th U.S. service member to die during the Iran war; Navy admits that 8 sailors assigned to the USS Abraham Lincoln strike group attempted suicide; and Trump again threatened to “annihilate” Iran in speech to UN.
SENATE REPUBLICANS VOTE TO KEEP THE WAR GOING: Last week, the Senate rejected a resolution to halt the Iran war. The 49-50 vote defeated a War Powers resolution, with all but four Republicans and one Democrat voting to continue the war.
REPLACING VITAL WEAPONS AFTER IRAN COULD BE SLOW: New York Times reports on the slow supply chain for complex weapons systems.
IRAQI KURDS SAY U.S. WITHDRAWAL FROM IRAQ LEAVES THEM OPEN TO ATTACK: Iraqi Kurdistan’s prime minister tells Financial Times that departure of American troops leaves them vulnerable to Iranian attack.
(3) ARTIFICAL INTELLIGENCE (“A.I.”):
NVIDIA SECURITY TECH: Nvidia debuts system designed to stop AI agents from going awry. (Keep in mind that Nvidia has an economic interest in not slowing down development of AI and data centers.)
THE REGULATION GAP WIDENS: The gap between technology and policymaking has gotten wider than ever with artificial intelligence, leaving a global policy vacuum as A.I. models rapidly advance.
U.S. AND RUSSIA REMOVED HUMAN OVERSIGHT FROM PACT: The two nations weakened a range of safeguards in a U.N. effort to try to regulate the use of lethal autonomous weaponry.
DATA CENTERS PUSHING UP ELECTRICITY RATES: Senate Leader Thune to keep Senate in session for another week to vote on House bill urging—but not requiring—states to have data centers pay for their own electricity.
ANTHROPIC LAW SUIT: Trump Administration’s blacklisting of Anthropic was legal, Judges rule.
CHIP SMUGGLING TO CHINA: Capitol Hill is scrambling to stifle chip smuggling to China.
WH WITHHOLDS NEW MODELS FROM TESTING: White House asks OpenAI and Anthropic to hold new models from UK testers until US review.
TRUMP SEEKS TO DISTRACT AND DEFLECT BY RENAMING AI: Trump says he’s renaming AI to ‘super intelligence.’ The change, which he said will be reflected on government documents, comes amid growing anxiety about artificial intelligence.
(4) MAJOR ECONOMIC, FED, TRADE, TAX NEWS:
BOND SELL-OFF CONTINUES: Last week the sell-off of Treasurys continued with yields on 10-year Treasury bonds hitting 5.19%; yields on 30-year bonds climbed to the highest level in more than two decades, the latest milestone in a global selloff driven by inflation fears and concern about government debt burdens; and Bloomberg writes that the bond market is on the brink of signaling that a series of Federal Reserve interest-rate hikes will start shifting the narrative toward the risk that the US economy stalls out.
FED INTEREST RATE HIKE IN OCTOBER? Bond traders are anticipating the Federal Reserve again raising interest rates at its October meeting.
FUEL PRICES: Big Agriculture and Big Oil are going head-to-head over a diesel export ban (promoted by some to lower U.S. diesel prices); and Bloomberg explains how a U.S. diesel export ban could actually increase diesel prices.
MORTGAGE RATES UP: Mortgage rates climbed for the 5th straight week, pushing the average rate on a 30-year home loan above 7%.
SOARING HOUSING PRICES: US housing crunch puts private equity in midterm campaign crosshairs.
US-CHINA TARIFFS: China, US pledge tariff cuts on $60 billion of goods including agriculture, toys, toasters.
POVERTY RATE AMONG SENIORS IS RISING: The economic squeeze is pushing up poverty rates for older adults.
WHERE’S THE BEEF? Trump officials weigh rolling back beef import plan as GOP midterm panic spreads; and ICE raids in beef country raise fears of higher prices, with cattle industry groups saying the Trump administration’s immigration enforcement actions were hurting operations.
CRYPTO: Senate Finance Chair Crapo may want to make changes to the House crypto tax bill.
STATE CONTROL OF THE ECONOMY: The Peterson Institute reports that state control of the US economy expanded sharply in 2025 under a Republican White House and Congress.
ECONOMIC GROWTH AND THE PUBLIC DEBT: Don’t count on growth to fix the debt, explains CRFB.
(5) HEALTH, CLIMATE AND ENVIRONMENTAL NEWS:
DEMOLITION OF AMERICA’S PREMIER PUBLIC HEALTH AGENCY, THE CDC: For decades, the Centers for Disease Control and Prevention was the undisputed global leader in public health... it was the primary source of guidance for prevention and treatment of diseases… the CDC is a skeleton of the powerhouse it was… As of May 2026, the C.D.C. had 30 percent fewer employees.
BATTLE OF HOSPITAL AI vs INSURER AI PUSHING MEDICAL COSTS HIGHER: By describing patients as having more complicated conditions and using AI to add a secondary diagnosis, like anemia or low sodium, the hospitals were paid an average of nearly $12,000 more per case.
POLITICIZING NIH HEALTH RESEARCH GRANTS: Early last week, the Administration had planned to put political appointees in charge of National Institutes of Health grants—despite the recent continuing resolution temporarily barring the politicization of federal grants. This prompted an immediate backlash from Democratic and Republican appropriators. By mid-week, the Administration appeared to be backing away from the plan.
NIH CUTS COST LIVES: NIH funding cuts delayed a promising childhood brain cancer trial. Patients lost time they didn’t have.
CLIMATE: Nepal’s climate-connected catastrophe is a warning to the rest of the world, prime minister tells UN; a federal judge has ruled that New York State’s law requiring fossil fuel companies to cover the costs of climate change is unconstitutional because it is pre-empted by the Federal Clean Air Act; the Associated Press reports that climate disasters are growing and so are cuts to programs to prepare for them; and NBC reports that the future of federal climate assessments remains murky after the Trump administration fired hundreds of scientists.
(6) POLITICAL, LEGAL, ETHICS, AND ELECTION NEWS:
SCOTUS RULES STATES CAN USE TRUMP’S VOTER DATABASE: Trump was handed a victory by the Supreme Court on Friday in his campaign to impose federal control over how Americans vote and tilt the playing field against likely Democratic voters. The Court, using its “shadow docket,” put their imprimatur on Trump’s use of a new federal database that includes Social Security information to vet American voters.
COURT REINSTATES OHIO VOTER LAW: Court reinstates Ohio law requiring proof of citizenship for voter registration. The 2-1 ruling comes a month after a lower court granted a preliminary injunction that blocked the voter ID law.
FBI, ICE AGENTS AT POLLS: Schumer, Jeffries sue to block federal agents at polls in November.
TRUMP VIOLATES FIRST AMENDMENT’S PRESS PROTECTIONS: Last Monday, the major TV networks halted video coverage of Trump after he banned CNN, MS NOW, and Politico from the White House the previous Friday; the three news outlets sued Trump; early Thursday, a federal judge ordered the ban temporarily lifted for two weeks while a longer-term order is considered and after hours of delay, the three were allowed back in the White House; on Friday, TV coverage resumed, but CNN continued to be excluded over the weekend.
(7) OTHER KEY U.S. DEVELOPMENTS:
DEPORTATION SURGE: A quiet ICE surge that unfolded ‘everywhere all at once’ this summer—a review of dozens of incidents caught on camera sheds new light on a largely invisible crackdown.
ICE DETENTION FACILITIES: ICE ordered to fix “squalid” conditions at a New York City detention facility; and GAO reports that ICE and other agencies have wasted tens of millions of dollars pursuing ill-conceived plans to rapidly increase detention capacity, and the total will likely rise due to ongoing mismanagement.
DEPARTMENT OF JUSTICE: The DOJ is “bleeding staff” as caseloads surge; the department scraps dozens of school desegregation cases; and says it won’t enforce a federal handgun ban for 18- to 20-year-olds.
SCARCE REFUGEE SPOTS AGAIN GO TO AFRIKANERS: The State Department informed congressional officials that the Trump administration is planning to allocate 17,500 refugee spots for fiscal year 2027, and that they will “primarily” go to white Afrikaners from South Africa, who President Trump has claimed are being oppressed.
(8) OTHER KEY GLOBAL DEVELOPMENTS:
US-CHINA SUMMIT: Last week’s Trump-Xi summit ended with little visible progress as well as concerns among some analysts that Xi is using Trump’s desire for additional meetings in November and December to delay approval of a U.S. $14 billion arms sale to Taiwan; and the U.S. Ambassador to China said Trump offered to sell arms to China, which the White House quickly walked back.
PARTNERS FOR MULTILATERALISM: Canada’s Prime Minister Carney is seeking to fill the void created by President Trump’s rejection of the post-WWII rules-based international order with a new type of multilateralism. “The alternative that Canada and many others are pursuing, is values-based realism, an approach that’s both principled and pragmatic.”
UKRAINE, RUSSIA, AND GERMANY: Germany urges US to allow Patriot missile production in Europe. Berlin wants to manufacture more interceptors to boost stocks as Ukraine struggles to secure enough air-defense systems; and a senior NATO commander warns Putin is becoming more cavalier and open to risk as Ukraine war drags on.
TRUMP SPEECH AT THE UN GENERAL ASSEMBLY: Fact checker.
(9) OTHER READS THAT MAY BE OF INTEREST:
The twilight of an autocratic age. These autocrats (Xi, Trump, Putin) may seem immovable. But their time is passing. – David Ignatius
It’s not too late to avoid the potential disasters of A.I. -- Covid-19 and 9/11 taught us how to prepare. – Thomas Friedman
Financing Nature: A Mid-Decade Update. From Isolated Progress to Implementation at Scale. - Paulson Institute, The Nature Conservancy, World Wildlife Fund
Ken Burns on Trump Authoritarianism: We will repair and restore but “can’t be complacent”
Visit our digital library of fiscal and public policy resources.
Speaking engagements and press interviews can be scheduled by calling: (301) 509-5688. Email comments, suggestions, and questions to: ckonigsberg@capitolpublicpolicy.com.
About the author: Charles S. Konigsberg J.D. served as Assistant Director, White House Office of Management and Budget; General Counsel at the U.S. Senate Finance Committee, where he had principal responsibility for managing federal budget and debt limit legislation; Minority Chief Counsel at the U.S. Senate Rules & Administration Committee where he advised the ranking member on budget, appropriations, trade, and tax legislation; Staff Attorney at the U.S. Senate Budget Committee where he had responsibility for federal fiscal law issues including the Impoundment Control Act and wrote the Senate’s first explanation of the congressional budget process; Director of Congressional Affairs at the Consumer Financial Protection Bureau and AmeriCorps; and Staff Director of the only national bipartisan budget task force to unanimously agree on a long-term debt stabilization plan. He is admitted to the U.S. Supreme Court Bar, the District of Columbia Bar, and the Ohio Bar and is the author of four books:
1. Trillions: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling, and Fiscal Law - 2024-2025 edition (Matthew Bender, 2024). Click here to purchase. The 2026-2027 edition of Trillions: A Primer will be released this November on Amazon.
2. Trillions: A Primer on the U.S. Debt Ceiling, Federal Spending, Taxes, and Fiscal Law - 2023-2024 Edition (Matthew Bender, 2023).
3. Independent Voters will Decide America’s Future in 2024 and Beyond (2024).
4. America’s Priorities: How the U.S. Government Raises and Spends $3 Trillion Per Year (2007).