What We're Tracking in DC
FY2027 Presidential Budget Request
Last Friday, the Trump Administration released the White House’s Fiscal Year 2027 (FY2027) President’s Budget Request. The budget request includes the Administration’s priorities for the next fiscal year. The FY2027 request proposes a 10% cut to non-defense spending, including cuts to the IRS, FEMA non-disaster grants, and global health and humanitarian assistance. The Administration also proposes increasing funding for initiatives such as a National Fraud Division under the Department of Justice (DOJ). Throughout the budget request, the Administration laid out efforts to limit federal government partnerships with nonprofits that are not aligned with the priorities of the Administration. Read our summary.
National Religious Broadcasters v. Bessent
On March 31, the U.S. District Court of the Eastern District of Texas issued a decision to dismiss all claims filed under the National Religious Broadcasters v. Bessent case. The case was filed by National Religious Broadcasters and several churches challenging the Johnson Amendment’s application to houses of worship.
The court had been considering a proposed settlement from the IRS that would only apply to the plaintiffs’ churches. The case was dismissed because the court found it lacked subject matter jurisdiction based on the Tax Anti-Injunction Act (AIA) and the Declaratory Judgement Act (DJA), which prohibit lawsuits filed for the purpose of enjoining the collection of a tax. The court held that the plaintiff’s First Amendment claims did not arise “separate and apart from” the tax that would be imposed if the IRS were to revoke the plaintiffs’ tax-exempt statuses for violation of the Johnson Amendment, and therefore the AIA and DJA applied to bar the court from hearing the case.
The plaintiffs have indicated that they plan to appeal the decision to the United States Court of Appeals for the Fifth Circuit. In response to the court’s decision, the IRS said that it will develop guidance regarding religious institutions and the Johnson Amendment.
Read more about the case and see our July statement.
Budget Reconciliation Outlook
Discussions continue as congressional leaders chart the path forward to pass funding for the Department of Homeland Security in two steps, which includes another budget reconciliation bill. Earlier this week, the House Freedom Caucus proposed fully funding DHS through reconciliation, offering a different path than what Senate Majority Leader John Thune (R-SD) and Speaker Mike Johnson (R-LA) had announced the week prior. President Trump has said he wants to sign the next reconciliation bill into law by June 1.
Executive Order on Elections
On March 25, President Trump issued an executive order titled, “Preserving and Protecting the Integrity of American Elections,” that requires the Department of Homeland Security to create and share a list of U.S. citizens with states ahead of elections; directs the Attorney General (AG) to prioritize investigation and prosecution of election-related violations; and requires the U.S. Postal Service to begin a rulemaking process on standards for mail-in voting.
The EO includes a provision directing the AG and the Secretary of the Treasury to enforce laws banning foreign nationals from contributing to U.S. elections. It also directs the AG and Treasury Secretary to prioritize enforcement of laws prohibiting organizations that have received federal funds from lobbying, citing 31 U.S.C. 1352. However, this statute does not prohibit recipients of federal funding from engaging in lobbying broadly; it merely prohibits the use of federal funds to lobby for the awarding, extension, renewal, or modification of any federal contracts, grants, loans, or cooperative agreements.
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