Fall Forecast: Shutdown, CLARITY Act, Russia Sanctions, and (maybe) a Tax Bill​

Summary

• The House passed a spending bill to fund the government through December 11.
• Most legislative business will be completed before the November midterms.
• Congress may consider political messaging bills or inconsequential items in September.
• Controversial legislation such as the CLARITY Act or a Russia sanctions bill might be voted on in September but is unlikely to pass.
• The current continuing resolution maintains spending at FY2026 levels.
• Congress is expected to increase the defense budget annually & may submit a supplemental request to restock weapons used in Iran.
• A Democratic House takeover could result in a modest defense budget increase.
• The National Defense Authorization Act may include unrelated items like the Credit Card Competition Act.
• Congress might consider a bipartisan tax bill in December focused on tax administration & trade-related items.
• A potential tax bill could address double taxation issues for Taiwan Semiconductor Manufacturing Company (TSM) regarding its Arizona expansion.
• The probability of a government shutdown in December is estimated at around 30%.
• The likelihood of passing a tax bill is greater than 50% but remains uncertain.