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Weekly Washington Policy Pulse: War Powers, Iran Defense, Warsh Nod (April 13, 2026)
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is your weekly Washington Policy Pulse on the Balance of Power podcast. I'm Joe Matthew. Every Monday, Bloomberg Intelligence senior policy analyst and friend of the show, Nathan Dean shares his weekly call on upcoming catalysts in the nation's capital. Listen for the most recent and relevant policy research from our team at Bloomberg Intelligence. Now with today's installment, here's Nathan Dean.
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Good afternoon everybody. My name is Nathan Dean. I'm a Senior Policy Analyst with Bloomberg Intelligence here in the Washington, D.C. bureau. I want to say welcome to the Washington Policy Pulse. We also want to give a special shout out to those of you who are coming to us via the Balance of Power podcast. We always appreciate you listening. Now today we're going to do something a little bit different. Every Monday morning I come in, I read the news, I read the Bloomberg terminals, I attend a couple of calls internally here and I come up with a list of what it is that we are going to talk about in the Washington Policy Pulse. But this week, our friends over at Bloomberg Government actually released their spring 2026 Capitol Hill watch. They put pretty much everything that I was going to talk about into a nice actual PowerPoint presentation. So I'm going to go ahead and share my screen and we're going to go ahead and just show you that presentation. We'll just walk through it just to talk a little bit about what's going to happen here for the rest of Washington or for the rest of the months and go from there. So you should be seeing the, you should be seeing here we go, the Bloomberg Government Hill Watch. And let's go ahead and jump right into it. So all this is available on the Bloomberg terminal. Even if you don't have a Bloomberg Government subscription as a terminal subscriber, you do get offering to Begov via bgovgo. But as of right now, you can see that The Republicans have 53 to 47 in the Senate. We have two to independents. The caucus with the Democrats over in the house side, it's 217 to 214 with one independent who caucuses with the Republicans. That's actually gonna be 218 fairly soon because of the special election that was held in Georgia for former Representative Marjorie Taylor Greene's seat. So the Republicans right now, if everybody were to show up, only have a one person margin in the House that's gonna quickly go to two. But as you can see here, the balance of power is extremely thin. This is important to keep in mind when we talk about war power resolutions and also reconciliation. Now, you know, I'm not going to talk about our 2026 midterm outlook. I actually have my notes coming out on the elections tomorrow. So we'll stay tuned and we'll have that conversation next week. But you can see here is that, you know, the margin of the House is extremely thin, which is why when you look at the predicting markets, the Democrats have a decent shot of taking the House. Here's the congressional calendar. Now look, you don't need to see all the specifics here, but if you look at the month of August and you look at the month of Octo, you will see that Congress is not here during midterm years. Congress is largely gone in October because they're out campaigning. Look, I've said this before on the call and I'll say it again every day they're here in Washington for all 435 members of the House and for one third of the Senate. For every day they're here in Washington, it's a day that somebody back home is campaigning against them. And so as you look at this calendar, you can say, yes, look, we've got people here in April, we've got people here in May, we've got people here in June or July. But for those of you who have seen Project Hail Mary, it is time go. This is where the alien tries to say it's go time. But it says time go. This is time go. Because this is going to quickly run by and this is going to quickly fly by. And per my point earlier, you know, come June, come July, if the Republicans are looking at the midterm elections and they're saying, look, you know, the prediction markets are saying it's about an 88%, 90% chance that the Republicans are going to take the House here. They want to be back in their districts. They want to be talking about the issues. They don't want to be here debating. So April, May, June, July, I would actually argue that late bank May holiday for the use of the in the UK Or Memorial Day for here in the United States. That is actually the date in which most of this needs to be wrapped up by becomes June or July. Yes, things will get done, but you have things like America's 250 celebration, you have other things going on. It's going to be very difficult to get legislation done at that point. Couple key days to watch. April 20th, the FISA section 2702 surveillance authorities expire. You're hearing a lot of debate in this in the House at the moment. The House Republicans want to do an 18 month extension to this. A lot of privacy concerns, not all that much interesting from an investment point of view. We're not covering it just because we don't really see much of the way going on here. But you know, July 1, the deadline for the first mandatory joint review of the USMCA deal. Holly Frum is actually updating her note. It's out on the terminal right now, so can send this to you. But if you want our views of what's going on in the usmca, Holly's putting out an update for tomorrow. I would also point you to our Bloomberg Economics Research. We already have a whole host of stuff out there reviewing what's going to happen with the USMCA deal. It's not on here. But you know, I would also say April 21, for those of you in the defense sector, this is where we're actually going to get a little bit more insight on the budget request from that $1.5 trillion budget and how it actually details a little bit lower or a little bit more granular in terms of which project, which contractors, in which ones are going to be more exposed to that budget request. Section 122 tariffs expire without congressional approval July 24. As a reminder, you know, President Trump lost the ability to use IPA tariffs, so he converted everything over to a Section 122 tariff. It's a 10% tariff right now. They can go up to 15%. Remember how Commerce Secretary Howard Lutnick and the U.S. trade Representative, Secretary Greer said, sorry, U.S. trade Representative Jameson Greer said multiple times that they're going to 15% within a couple days. That hasn't happened. That expires on July 24th. Now we have a note on the terminal out already that essentially says, I don't think President Trump is going to get to that date because I think, and this is going to be right around that Memorial Day period. All these section 232s and section 338 tariffs can be converted. So right now there's investigations going on. So look around for that late May, because I think President Trump is just chomping at the bit to be able to use threats of tariffs. Notice how I didn't say actual tariffs, but he wants to use threats of tariffs. So that if you're looking at tariff headline risk, looking for that late May date, and then September 30th is the fiscal year ends, this is where you're going to need a continuing resolution or we have a government shutdown. I'll talk about DHS funding in a second. But if you're in the farm bill space, in the farming sector space, the farm bill has to be extended. National Flood Insurance Program has to be extended. The Holloway Authorization bill expires. So if you're looking at infrastructure that has to be extended, most of that is going to be a continuing resolution or a one year kick of the can. So nothing exciting right now. Call me again in September. We can talk about that. We got the midterms in November and then we have the National Defense Authorization Bill. This is a target deadline for the end of this year. Again, there'll be a lame duck period. So I wouldn't expect much fireworks going on in that session. So let's talk about reconciliation. So here's where we're at. So you can see the Bloomberg government has located the first bill and then the second bill. So there are many, many different ideas about what's going to go into a reconciliation bill. The current thinking is this for the first bill that the GOP would weigh, the first bill would be solely to fund the Department of Homeland Security, ice, Border Patrol, Customs and Border Patrol, et cetera, that it would solely be focused on the dhs. Now, from a reinvestment point of view, that doesn't excite us all that much. There's not much in DHS appropriations. You know, there's some minor stuff out there, but large speaking, it doesn't excite us and it doesn't excite us from the idea of increasing the deficit all that much. The total price point for that package is probably around 80 to $100 billion, maybe a little bit more than that. But you know, that is if they can move forward now. Right now, President Trump has said he wants all this done by June 1st. And this was as a reminder, reconciliation is a majority vote in the House majority vote in the Senate. Now, if they can keep it tight, if they can keep it small, and I've already said this on the terminal, that if they keep this tight and specific, they can probably get this done. They being the Republicans, they can avoid the filibuster. But every lobbyist in this town and every policymaker in this town is going, huh, I want to see if I can attach something to this bill. Yes, you said it was going to be a Department of Homeland Security bill, but I've got this Obamacare change, but I've got this tax change. That's what's going on right now because of bill number two. So if you presume that you can get the first bill done by June 1, that takes care of reconciliation for this fiscal year, Bill 2 would have to come between September 30th and January 3rd. So either right before the election or it would have to come during the lame duck period. Now, Bill 2 is where they're talking about the Save America Act. This is where the $350 billion worth of reconciliation spending for the Department of Defense. This is on top of the supplemental issue. Remember how I talked about it? There's a supplemental pack out there somewhere between 80 to 200 billion. This is in addition to that. That's a separate issue. I can talk about that later. But they're talking about health care. And the problem with the second bill is can you get all the Republicans, plus all the Republicans in the House to get on board with this when you're either right before the election or you're in the lame duck period? Very difficult. But also just as a reminder, the House Freedom Caucus does not like this package because if you go the first bill, the odds of a second bill drop dramatically. And I actually don't think a second bill under this plan can pass because I just don't think it would be small enough. I mean, if they were to do specifically defense, maybe. But you know, they're talking about and one of the ways that they're talking about getting the Save America act through past the Byrd rule, as a reminder, under the Byrd rule, things can only impact the budget as part of reconciliation. And so the Save America act, for example, probably violates the Byrd rule. Senator Mike Lee has already said this, but they're talking about potentially giving federal grants to states as a potential workaround that potentially could fly. And if you need more information on reconciliation, I actually did an interview with our senior editor at Bloomberg Government, Carl Evers Hillstrom, last week to do the ins and outs of reconciliation. So we go into the bird rule a little bit more. I could also just chat about it. I can do pretty much the same thing myself, so just give me a call. But the idea here for reconciliation is first bill, feasible, not all that exciting for us in the investment space. Second bill, little bit more exciting, but very difficult odds to get past. So the voting overhauls, I just talked about it. There's not really much of an investment point of view here, so I'm not going to discuss it all that much. But then we got the affordability agenda. So, you know, there's a lot of bills out there. There's a lot of noise out there about, you know, trying to drive affordability advance in the midterm elections, because we would argue that this is the number one for voters going into the midterm elections, and a lot of focus, rightfully so, is on geopolitical issues instead. Representative Mike Lawler from New York said, even just this past weekend, we gotta get back to affordability. So there are a bunch of bills in here that we've looked at, but a lot of these are just the way I would describe them is they are interesting and they certainly have impacts, but do they dramatically change things? We would argue not all that much. So this bipartisan housing bill that they're talking about in the Senate is a perfect example. We've talked about this in the past. You know, Jeff Langbaum, our senior REITS analyst and I, we've looked at this bill and if the bill were to pass, yes, you would cut some costs off of lowering mortgages and so forth like that, but you're also going to kill the build the rent community sector. And so there's ins and outs here that are certainly interesting. Oil prices. You know, our energy team loves to say this all the time. I'll go to our energy team will be like, look, we got this great bill that's going on. They're going to do this. And our energy team looks and says, look, energy is a geopolitical story about infrastructure and supply and demand. What the United States can do can certainly help in certain specific areas for affordability in terms of consumer impact, but it doesn't change the energy apparatus all that much. Again, we'll keep an eye on this. There's going to be a lot of discussion on this, but again, not all that much. Now, appropriations, this is where the DHS funding comes into play. Now, if this scenario with the reconciliation bill moves forward, that funds appropriations through the rest of this year. So that means that through September 30th we don't have a shutdown threat. We don't have anything else yet. But there is this idea of an Iranian supplemental. So the White House has signaled that it could request $200 billion in supplemental funds for fiscal 2020, year 2026 for the war with Iran. The Wall Street Journal came out last week and said that $200 billion level is actually down to around 80 billion. So Bloomberg News has not reported on that. So we're just still saying 80 to 200 billion. Because look, if you're going to go for an ask, you go high. That's my opinion is if you're going to go to Congress and say, look, I want this funds go high and then let them actually put it back down. But the story that we are saying for this Iranian supplemental bill is two things. One, look for the funds to be tied to munitions and counter drone technology, anti missile counter drone technology that favors Lockheed Martin, RTX in Northrop Grumman, the non supplemental, the annual appropriations defense portion of spending is for things tied to new fighter programs. Boeing, you know, Lockheed Martin, you know, so it's like, so you know, when you look at defense contracting, and this is what I've had conversations with our analysts Willy and Wayne Sanders on, is that when you look at the appropriations and you look at the contracting, think of it this way, are these funds going to be in year one or year two of hitting the income statement or are these funds going to be hitting years 3, 4, 5, 6 or 7? And so when it comes to munitions and counter drone technology, that can actually be spent up really quickly. And there's a lot of smaller companies in this space that Wayne Sanders had just put a note out last week. There's a lot of smaller companies in this space that could be interesting looking at. So if you need a copy of that note, please just let me know. But the long story short is, is that, you know, will they be able to get an appropriations, remember there's 12 appropriations bills. Will they be able to get all 12 of them passed by September 30th? Most likely not. They may be able to get a handful of them done, but more likely than probably going to see a kick of the can come September 30th. But I don't think you're going to see a shutdown fight just because it would be very bad politics for a party to shut down. But again, you know, anything can happen. But I would just say at this point, I don't think you're going to see a shutdown come September 30th. Transportation. This is the highway authorization bill. I haven't looked at it all that much. I'm going to start my policy watches on this a little bit later in the month. So I'm going to save that for a further discussion just because we haven't looked at it all that much. Technology. Our analyst Matt Shettenholm has been looking at this quite a bit. You know, this stems from, I think everybody's look, look, there's two things for technology. One is AI and the other one is data centers. When it comes to AI, the White House released its plan. It's a three page plan. Matt looked at it and was like, he actually read it and I think about eight minutes. And so that gives you the idea of how in depth the discussions are AI at the moment. But keep idea for 2027 and 2028 because things are going to continue and the ball is just going to continue to roll here. So part that in your 2027, 2028 thing. And when it comes to data centers, most of this is actually being driven by the states. We're not seeing anti data center legislation right now. It's being driven at the states. For example, there's a small town north of Milwaukee, Wisconsin called Port Washington, Wisconsin. It's a lovely town, actually been there once. It's right on the lake, very beautiful. They just passed a referendum last week that actually prohibits data centers from coming in. And as a result, that was the first referendum that I've been able to find at the local level. And we're starting to see a lot more of that pop up just in the Virginia election last year. I can say for my own personal benefit or benefit, my own personal interactions, that we started seeing anti data center ads because just west of Dulles Airport, you go out there and it's just nothing but data centers and most of my children's birthday party places. And as a result, you know, Loudoun county, which is the county just west of Dulles, has said, we're off, we're done, no more data centers. So you're starting to see anti data center ads pick up. So again, this is not a 2026 issue. This is a 2027 issue. Now, crypto today is the day that the crypto bill needs to start moving. You know, Senate Banking Committee has said that they want to do a markup by the end of this month. I am still at a 6% chance of passage. That is slightly out of consensus. If you look at the Kalshi contract, if you look at the polymarket contract I'm a little bit more in line with here. But again, the reason why I think a crypto bill passes is because at the end of the day, the Democrats are most likely going to take the House of Representatives this fall. And if I'm a crypto advocate or if I'm a crypto bill like Coinbase or Platform like Coinbase or Robinhood, I want to pass a bill now. I don't want to have ambiguity, go beyond the rest of this year. And I especially don't want to deal with the House Financial Services Committee that is chaired by Maxine Waters, because unless Clarity act passes, and I've said this multiple times, unless the Clarity act passes, everything the SEC is doing right now, everything the CFTC is doing right now is providing clarity up until 2028. And if a Democratic president wins and they put somebody like Gary Gensler back in charge, the entire party stops and it goes back to where it was, where you get ambiguity. You don't have clarity. It goes to the courts and it's messy and it's exp. Prediction markets. Real quickly on the prediction markets, there are going to be rulemakings later this year. But you see where it says that bipartisan House and Senate bills, most of that's being driven by Utah. Remember I mentioned before that there's some weird, you know, presidential aspects. There's some weird politics at play with this one. Put this in your 2027, 2028 bucket. It's a brewing risk, this idea that, you know, what constitutes gambling versus what constitutes, you know, permissible event contracts, what constitutes, you know, contracts that can be listed tied to war, assassination attempt. I'm hearing bipartisan inquiries. Inquiries. That's the best way of saying they don't want to work on it right now. But there are bipartisan lawmakers who are looking at us and saying, you know, I, I just, I. I got a question here, I got a question here. So put that in your 2027 bucket. Infrastructure, really, again, and federal permitting, these are stuff that's going on. Our energy team's looking at this quite a bit. You know, if you have questions on this, just let me know. I'm not covering this specifically, but I may jump into it a little bit later. And then finally, defense. We've talked about it, we've mentioned pretty much everything you need to know for defense and then other priorities. You know, things like the Farm bill, farm aid. You know, I think the farm bill is going to have a kick of the can the farm aid, they're talking about $20 billion tied to reconciliation. You know, if it's under reconciliation, two point or the second bill, then obviously that may struggle. But again, there's some other stuff that we're tracking. So I'm going to stop sharing my screen. I know that was a lot, but, you know, I really wanted to take you through this. There's just three other things to keep in mind for this week. Four things, actually. One is we're going to have a war powers resolution attempt by the Democrats both in the Senate and the House. This is just a symbolic measure. It's not going to pass. Even if it were to pass, President Trump would veto it. You're not going to get the 2/3 majority. But it's a symbolic measure to try and stir bipartisan angst with the President Trump's strategy. Right now, the Pew Senator for Research just put out a poll that 61% of Americans are not comfortable with President Trump's strategy at Iran. And this is the Democratic way of trying to actually foster that again to the forefront. You're also going to see the House potentially take up an effort this week to expel two House lawmakers. This is Representative Swallow from California, who just dropped out of the California governor race, and Representative Gonzalez from Texas, both due to assault allegations. I actually think this may actually pass. Obviously there's no investment point on this, but it would require two thirds majority. For what it's worth. The last lawmaker to be expelled from the House was Representative, former representative Santos from 2023. Prior to that, it didn't happen in 2002. So look for that. But again, if they do it, it's a like for like one for one, one Dem, one Republican. So it doesn't really change things all that much. Last two things. One, it's IMF week this week here in Washington. So watch out for those rolling. Those rolling. I was going to say motorcades, they like to jam up the streets. There are a lot of speeches happening. A lot of policymakers are going to be of speeches. If you need figure, if you need to figure out how to use the terminal to track that, whether it's through our friends at Bloomberg Economics, Bloomberg Television is bringing in a lot of folks this week. Just let me know, I'll help you work through that. And then finally, we got some questions on the Kevin Warsh hearing. The Kevin Warsh hearing was supposed to be this week. Just last week it was reported it had been punted. Probably just a week for one. It sounds like Kevin Morse just didn't have his paperwork submitted in the right time. I think they came in like five hours late or something like that. It wasn't a hiccup over any type of like, you know, nomination threats or anything like that. It was just, honestly, I think the paperwork just came in five hours late, so they couldn't actually put the hearing out this week. Look for the hearing to come out next week. And just as a reminder, we don't see any issues with Kevin Warsh's nomination other than Senator Thom Tillis saying that he's going to have that hold on there until the DOA jail investigation. So again, look to Elliot Stein's note that says that if nothing moves by May 15th, there's a possibility for Acting Chair Steven Myron. And also look to our Chief Reich strategist Ira Jersey for what the FOMC implications of that will be. With that, I'm going to say thank you again. Apologies for a little bit longer, but I wanted to really, it's time go like the Alien and Project Hail Mary said. So anyway, wish you a great week. Take care. We'll talk soon.
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Our thanks to Nathan Dean, Bloomberg Intelligence Senior Policy Analyst, bringing you the latest installment of his weekly Washington Policy Poll. For more from BI or to join this call live each week, you can email nathan@ndeanloomberg.net that's n d e a noomberg.net come back to the podcast later today for the latest edition of Balance of Power.
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