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DHS Shutdown | Day 38
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The Lobbyist Connection
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Shutdown leverage, tariff aftershocks, Iran pressure, and the new AI federalism fight
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This week’s issue tracks where Congress, the White House, the courts, and statehouses are converging — and where government affairs teams need to move faster than the headlines.
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Week of March 23, 2026
Deep Dive: Learning Resources, Inc. v. Trump
Author: Jay C. Taylor
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Top Lines
What matters first
- The DHS shutdown is no longer a Beltway abstraction. ICE officers are being deployed to major airports to support TSA operations as staffing gaps widen and spring-travel disruptions intensify. Reuters | AP
- Trump is raising the price of a shutdown deal. The President is now publicly linking any DHS reopening agreement to passage of the SAVE America Act, turning a funding fight into a voting-rights and election-administration showdown. Reuters | What’s in the bill
- The post-Learning Resources tariff pivot is underway. The Supreme Court closed off the most aggressive IEEPA tariff path; the administration is rebuilding pressure through Section 301 and Section 232 channels that are slower, more procedural, and far more comment-driven. SCOTUS opinion | SCOTUSblog | USTR
- The White House has opened a new federal-state collision on AI. Its new legislative framework urges Congress to preempt burdensome state AI laws while preserving narrow state authority over police powers, zoning, and state procurement. Framework PDF | White House
- Iran remains a live appropriations and oversight issue. Trump said the U.S. will postpone planned strikes on Iranian power infrastructure for five days amid talks, even as the Pentagon is seeking a major supplemental to restock munitions and sustain operations. Reuters | AP
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Deep Dive
The contract-market implications of Learning Resources, Inc. v. Trump
The Supreme Court’s February 20, 2026 ruling in Learning Resources, Inc. v. Trump has fundamentally altered the landscape for federal contractors, particularly those with complex international supply chains. The ruling does not end trade risk. It changes where that risk comes from, how quickly it can materialize, and which branch of government now matters most. Opinion | Case file
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Executive Summary: The Court clarified that the President’s authority to impose sweeping retaliatory tariffs is not an inherent executive power and requires specific, unambiguous congressional authorization. For the government affairs community and federal contractors, that creates both a new litigation shield and a fresh layer of political complexity.
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1. The end of “tariff by fiat”
The Court’s use of the major questions doctrine means trade actions with vast economic consequences cannot rest on vague delegations. For contractors, that makes sudden, mid-contract cost shocks tied to aggressive executive trade orders more vulnerable to injunctions, stays, and reversal. The practical consequence is not stability; it is a more contested and procedurally dense tariff environment.
2. Price adjustments, EPAs, and the “change of law” fight
Many federal contracts contain Economic Price Adjustment clauses or other pricing mechanisms tied to legal changes. The immediate compliance question is whether a tariff was lawfully in effect when pricing was submitted, revised, or invoiced. Contractors that already baked invalidated duties into pricing should expect closer review from contracting officers and audit teams. That does not automatically mean clawbacks. It does mean documentation discipline now matters more than ever.
3. The national-security pivot is real
The administration has already begun rebuilding leverage through statutory lanes that are less vulnerable than IEEPA for this purpose — especially Section 301 and potentially Section 232. USTR has now opened major Section 301 dockets, and Reuters has reported the White House is weighing additional Section 232 options. Excess-capacity dockets | Forced-labor dockets | Reuters on Section 232
4. Lobbying moves back to the Hill
Because the Court has reinforced that Congress controls tariff authority unless it clearly delegates otherwise, the center of gravity shifts from the West Wing back toward the House Ways and Means and Senate Finance Committees. For contractors seeking product exclusions, supply-chain accommodations, or sector relief, executive-branch access is no longer enough. The legislative strategy must now stand on its own.
5. Supply-chain resiliency now means statutory due diligence
The short-term effect may look like tariff relief in some lanes. The larger effect is volatility. Agencies are likely to lean harder on domestic-content enforcement, Buy American compliance, origin claims, and procurement-screening mechanisms to advance industrial policy goals by other means. The White House’s March 13 “Made in America” order points in exactly that direction. Fact sheet
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Key takeaway: The major-questions era has reached the trade desk. Federal contractors can no longer monitor only the headline or the presidential post. They need to audit the statutory basis beneath every trade-related action that can hit price, sourcing, compliance, or claims exposure.
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Legislation to Watch
The floor fights that matter this week
- DHS funding remains the central leverage point. Senate talks continue, but the White House has now tied any reopening deal to the SAVE America Act, raising the odds that homeland funding stays entangled with election law. Reuters
- Markwayne Mullin is on a fast track to lead DHS. The Senate voted 54-37 to limit debate, putting a final confirmation vote within reach as the department operates under shutdown pressure. Reuters | Senate schedule
- The House floor is moving sectoral, not symbolic, this week. The official agenda includes the American Water Stewardship Act, the Aviation Supply Chain Safety and Security Digitization Act, the Airport Regulatory Relief Act, the Recreational Drone Empowerment Act, and the Supersonic Aviation Modernization Act. That is a real signal for aviation, infrastructure, and industrial stakeholders. Text of bills for the week | House weekly schedule
- The Iran supplemental is not a side story. The Pentagon’s reported $200 billion request will force appropriators, budget hawks, and defense advocates to take positions on cost, scope, and replenishment. AP
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Regulatory Moves
Where the administrative state is moving faster than Congress
- USTR’s 16-economy excess-capacity investigations are open. Dockets opened March 17. Written comments and requests to testify are due April 15, and hearings start May 5. USTR notice
- USTR’s 60-economy forced-labor investigations are also moving. Comments and hearing requests are due April 15, with hearings beginning April 28. This is a major supply-chain and compliance docket for import-dependent companies. USTR notice
- “Made in America” enforcement is tightening. The White House says agencies overseeing government-wide acquisition contracts and schedules must review origin claims and refer violators for False Claims Act action where appropriate. White House
- FAR trade-agreements thresholds were updated effective March 13. This is technical, but not optional: threshold changes can alter clause applicability and sourcing assumptions. Federal Register
- The CAS Board wants a bigger waiver threshold. A March 20 proposed rule would raise the agency-head CAS waiver threshold to $100 million and make other program adjustments. Federal Register
- Cyber policy is still part of the procurement story. The White House’s March cyber strategy emphasizes lighter compliance structures and modernization of federal networks, which contractors should read as both a market signal and a coming requirements signal. Cyber strategy
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Legal Industry & Judiciary
Two cases every trade and compliance team should have on the screen
- The tariff litigation wave is growing. Twenty-four states have sued to stop the administration’s newer global tariffs imposed under Section 122, and Reuters reported refund exposure tied to earlier tariff litigation could reach roughly $182 billion. Reuters on the lawsuit | Reuters on refund estimates
- A federal court just struck down Treasury’s real-estate AML rule. The ruling vacated a beneficial-ownership reporting regime for all-cash residential real-estate deals, creating immediate compliance and appeal-watch questions for the property and title ecosystem. Reuters
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Supreme Court Watch
The March session starts with an election-law bombshell
The Court’s March sitting begins this week, and the first high-impact case for the political class is Watson v. Republican National Committee. The question is whether federal election-day statutes preempt state laws that count timely cast mail ballots received after Election Day. A decision could reshape procedures in more than a dozen states heading into the 2026 midterms. March calendar | Reuters | SCOTUSblog preview
Why it matters for this audience: election administration is now colliding with the SAVE America Act debate, the DHS shutdown fight, and the broader partisan effort to nationalize election rules before November.
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Statehouse Watch
The AI fight is not waiting for Congress
- New York: lawmakers and advocates are pushing to include online-safety protections in the FY27 budget, while the Senate’s internet-and-technology committee has advanced bills targeting unsafe AI chatbot features for minors and impersonation by AI tools. Budget pressure | Committee action
- Massachusetts: the 2025-2026 session remains one of the densest state AI dockets in the country, with live bills on disclosure, consumer protections, provenance, safety, and cybersecurity. H.81 | H.97 | H.90 | S.37 | S.49
- Oregon: lawmakers are moving beyond abstract AI ethics into operational governance. One enacted-track measure addresses AI companions and youth safety, while another would establish a statewide AI commission and strategic lead. SB 1546 | HB 4103 summary
Bottom line: Washington is asking Congress to preempt a state patchwork at the same moment states are actively building one. That is a lobbying map, not just a policy debate.
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Action Items
What professionals should do this week
- Audit tariff-sensitive contracts. Pull EPA, Changes in Law, country-of-origin, and domestic-content clauses now — before the next wave of Section 301 or Section 232 actions lands.
- Decide whether your organization needs a USTR filing. The April 15 deadline for written comments in both Section 301 tracks will arrive quickly, and the dockets are broad enough to matter far beyond traditional trade shops.
- Refresh shutdown contingency plans. Travel, grants, aviation, border, ports, and homeland-dependent operations now need current stakeholder messaging and escalation protocols.
- Coordinate federal and state AI positions. Companies that are asking Congress for uniformity should be ready to explain which state carve-outs they can live with — especially on children, fraud, procurement, and public-sector use.
- Track election-law exposure now. Between Watson and the SAVE America Act, election rules are becoming a central advocacy file, not a niche one.
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Calendar & Deadlines
Key dates
- March 23: Senate resumes consideration of Markwayne Mullin’s nomination. Schedule
- Week of March 23: House floor package on aviation, water, drone, and supersonic bills. Bills
- March 23-25: Supreme Court March sitting begins. Calendar
- March 26, 10:30 a.m. ET: FCC open meeting on robocalls, network modernization, debarment tools, and media-rule cleanup. FCC
- April 15: USTR written comments and hearing requests due for the new Section 301 dockets. Forced labor | Excess capacity
- April 28: Section 301 forced-labor hearings begin. USTR
- May 5: Section 301 excess-capacity hearings begin. USTR
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The Lobbyist Connection • Mobile-friendly Beehiiv HTML • Week of March 23, 2026
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