Senate is in session this week
Welcome back to the Golden Apple. The Senate is in session this week, but the House has canceled votes after staying in D.C. last week to pass the reconciliation package. Although the tax package has largely defined the first half of the year, House and Senate leaders have a list of other priorities to tackle, and will be lining those up in short order.
Banking and Financial Services Updates
Senate Banking Committee Examines Crypto Market Structure: In a hearing on Wednesday, Chairman Tim Scott and the Banking Committee Members will hear from industry executives on the construction of digital asset market structure. The House of Representatives has its own market structure bill, the CLARITY Act, but the Senate has published its own principles for market structure and is expected to release text for original legislation the day after the hearing.
“Crypto Week” Named in the House: With votes cancelled this week, Financial Services Chairman French Hill has named the week of July 14th “Crypto Week” in the House. The Chamber will take up the Senate-passed stablecoin legislation, the GENIUS Act, as well as their own market structure bill, the CLARITY Act. The CLARITY Act passed out of the Financial Services and Agriculture Committees with bipartisan support, though Democrats have since focused on executive conflicts of interest as an area that requires strengthening in the bill, meaning the bill may lose some Democratic votes on the floor.
Congressional Updates
Reconciliation Package Signed into Law: On July 4th, right on schedule, President Trump signed his “Big Beautiful Bill” into law. This followed a tense week as the legislation made its way through the Senate and subsequently back through the House of Representatives. The Senate-passed version incorporated some significant changes, both as a result of policy differences between the chambers, as well as Byrd Rule compliance requirements. Despite initial opposition from the Freedom Caucus members over deficit increases, the Senate-passed version was advanced with no changes just one day before the July 4th deadline. Key personal and business tax provisions in the bill include:
Marginal Tax Rates: Extends the 2017 lower tax rates for individuals beginning in 2026
Standard Deduction: Beginning in tax year 2025, increases the standard deduction to $15,85- for individual filers and $31,500 for joint filers.
SALT Deduction: Increases the SALT cap to $40,000 for households with incomes under $500,000. This cap is increased by 1% through 2029, after which it is permanently reduced back down to $10,000.
Child Tax Credit: Increases the child tax credit by $200 in tax year 2025 and indexes it to inflation.
Tip Deduction: Employees can claim a deduction for qualified tips for tax years 2025 through 2029, capped at $25,000. The deduction would phase out for income over $150,000 for individuals and $300,000 for joint filers.
Overtime Deduction: Employees can deduct overtime compensation for tax years 2025-2028, excluding qualified tips and capped at $12,500 for individuals and $25,000 for joint filers.
Chip Manufacturing: Increases the credit for advanced manufacturers to 35% from 25%.
Opportunity Zones: Modifies and makes permanent the Opportunity Zones Program. Low-Income communities are defined as census tracts not exceeding 70% of the state’s median income, or with a poverty rate of at least 20% and median family income not exceeding 125% of the states median family income. The bill provides a 30% step-up in basis for OZs in rural areas held for at least 5 years, and 10% for non-rural zones.
Low-Income Housing Credit: Makes permanent a 12% increase to the 9% low-income housing tax credit’s ceiling on annual state allocations beginning in tax year 2026.
Trump Accounts: Creates tax-advantaged “Trump Accounts” that can be created on behalf of individuals under 18 with a SSN. Funds in the account would be distributed after the beneficiary turns 18 and would not be included as gross income. Annual contributions would be capped at $5,000, adjusted annual for inflation, with employer contributions allowed annually at $2,500. The measure also creates a pilot program providing a one-time tax refund of $1,000 for qualified contributions to the account of an eligible child, including U.S. citizens born between January 1, 2025 and January 1, 2029.
International Money Transfers: Imposes a new 1% excuse tax on all remittance transfers sent from an individual in the US to a recipient in a foreign country. Financial institutions providing remittance services would be required to collect the tax and transmit the revenue to the Treasury Department on a quarterly basis. Transfers sent from a qualified financial institution or from a US-issued debit or credit card are exempt.
‘De Minimis’ Exemption: Repeals the de minimis privilege, which allows commercial merchandise entering the US valued under $800 to be exempt from tariffs. This repeal is already in place for China and Hong Kong via executive order, and will be in place world wide effective July 1, 2027.
Weekly Political Synopsis from Jim Ellis
SENATE
Georgia: A new Cygnal polling firm study finds Sen. Jon Ossoff (D) leading all his prospective Republican opponents beyond the polling margin of error. According to the Cygnal poll (6/16-19; 610 GA likely general election voters; online and text), Sen. Ossoff would lead state Agriculture Commissioner John King (R), 50-40%, former college football coach Derek Dooley (R) 50-41%, and US Rep. Buddy Carter (R-Pooler/Savannah), 49-42%. The Georgia Senate race is expected to be one of the most competitive in the nation.
Michigan: While US Rep. Bill Huizenga (R-Holland) readies an announcement to enter the open Michigan US Senate race, a Fabrizio Lee & Associates poll conducted for the First Principles Digital organization (6/17-9; 600 MI likely Republican primary voters; live interview & text) finds former US Representative and 2024 US Senate nominee Mike Rogers holding a substantial GOP primary lead.
According to the Fabrizio Lee results, Mr. Rogers would lead Rep. Huizenga 48-20% among likely Republican primary voters. The Michigan primary will not occur until August 4, 2026.
North Carolina: In a surprise announcement while tensions were rising over passing the “One Big Beautiful Bill” in the Senate, North Carolina’s two-term incumbent Thom Tillis (R) who had already announced for re-election, abruptly declared over the weekend that he will not run in 2026.
North Carolina was already going to host one of the most competitive races in the country considering its history of often posting close election results. It was also clear that Sen. Tillis was the top incumbent Republican target. Sen. Tillis’ retirement will change the North Carolina and national political situation for both parties, and this open Senate race will be one of the 2026 election cycle’s key focal points.
Democrats are looking toward former Gov. Roy Cooper as their preferred candidate. Lt. Gov. Rachel Hunt, daughter of former four-term Gov. Jim Hunt (D), is another possibility. For the Republicans, all eyes are on presidential daughter-in-law Lara Trump who hails from the state though currently living in Florida.
Texas: As has been expected, former Congressman and 2024 US Senate nominee Colin Allred (D), pledging to be a better candidate, announced that he will enter the 2026 US Senate race. While most eyes are on the budding Republican primary between Sen. John Cornyn and Attorney General Ken Paxton, the Democrats, too, may see an intra-party squabble.
In addition to Mr. Allred, former Congressman, ex-presidential and US Senate candidate Beto O’Rourke, and US Rep. Joaquin Castro (D-San Antonio) continue to say that they are considering entering the Senate race.
HOUSE
IA-2: Former US Attorney Kevin Techau (D) announced that he is ending his quest to oppose US Rep. Ashley Hinson (R-Marion/Cedar Falls), citing a lack of fundraising support. At this point, Rep. Hinson is unopposed for re-election to a fourth term.
MI-7: It appears Democrats will have a competitive primary with the winner advancing to challenge freshman Rep. Tom Barrett (R-Charlotte/Lansing). Last week, former US Ambassador to Ukraine Bridget Brink (D) announced her candidacy. This week, retired Navy SEAL Matt Massdam also joined the Democratic nomination contest. The 7th District, known for its close election results, is expected to again gain national attention in the 2026 election.
NE-2: Five-term Nebraska US Rep. Don Bacon (R-Papillion/Omaha) this week announced that he will not seek re-election in 2026, a development that many political observers expected.
The Cornhusker State’s 2nd District has attracted a great deal of attention in the last two presidential election years. Like Maine, Nebraska apportions its electoral votes meaning that each congressional district – the state has three – casts its own vote as opposed to the winner-take-all process that the other 48 states utilize. In both 2020 and 2024, NE-2 voted for the Democratic nominee against President Trump, thus awarding one of Nebraska’s five electoral votes to the opposite party’s national candidate.
Democrats will make a major push here. The early leading candidate is state Sen. John J. Cavanaugh, IV (D-Omaha), the son of former Congressman John J. Cavanaugh, III who served in the House from 1977-1981. On the Republican side, Douglas County Sheriff, a top GOP recruitment target, said he will not run. Omaha City Councilman Brinker Harding immediately declared his candidacy upon Rep. Bacon’s retirement announcement.
NH-1: Though former Portsmouth City Councilmember Stefany Shaheen (D), daughter of retiring US Senator Jeanne Shaheen (D-NH), appears to be the leading candidate in the open 1st District seat, another Democratic candidate entered the race this week.
Attorney and National Guard soldier Christian Urrutia declared his candidacy, becoming the fifth Democrat to do so. This will be a competitive open race, but the Democrats begin with the advantage. Incumbent US Rep. Chris Pappas (D-Manchester) is running for the Senate.
PA-3: After battling the after-effects from a stroke that kept him from participating in congressional action for better than half a year, five-term US Rep. Dwight Evans (D-Philadelphia) announced that he will retire at the end of the current Congress.
Mr. Evans was elected to his federal post in 2016 after serving 36 years in the Pennsylvania House of Representatives. With a 3rd District voter registration of 77.8% Democratic and 10.0% Republican, a crowded Dem primary is expected and will decide Rep. Evans’ successor. Next year’s Keystone State primary is scheduled for May 19th.
SD-AL: Four-term at-large South Dakota US Rep. Dusty Johnson (R-Mitchell) announced that he will enter the 2026 Governor’s race next year, a move that had been expected. The South Dakota Republican primary will be interesting in that Rep. Johnson is likely headed for a match against the now-sitting Republican Governor, Larry Rhoden. Once then-Governor Kristi Noem resigned to become US Homeland Security Secretary, Mr. Rhoden, then the state’s Lt. Governor, ascended into the state’s chief executive position.
While he has not yet formally announced his candidacy, it is expected that Gov. Rhoden will soon declare his official candidacy. Also in the race is state House Speaker Jon Hansen (R-Dell Rapids) and wealthy conservative businessman Toby Doeden.
The South Dakota Republican primary, scheduled for June 2nd, will very likely decide the state’s next Governor. The last time Democrats claimed the South Dakota Governorship was in the 1974 election. South Dakota is a runoff state. If no primary candidate receives at least 35% of the vote, a secondary election will be held. For next year, the runoff date, if necessary, will be July 28th.
TN-7: Though US Rep. Mark Green (R-Clarksburg) has yet to officially resign, a third Republican has announced his candidacy to replace the outgoing member. State Rep. Jay Reedy (R-Erin) declared his candidacy this week. He joins ex-gubernatorial cabinet member Matt Van Epps and Montgomery County Commissioner Jason Knight in the developing special Republican primary.
VA-11: Local northern Virginia Democratic and Republican parties hosted their “firehouse primaries” that produced special general election candidates to replace the late US Representative Gerry Connolly (D-Fairfax) who passed away in March.
For the Democrats who dominate Virginia’s 11th Congressional District, Fairfax County Supervisor James Walkinshaw who received the Connolly family’s endorsement and had served for 11 years as Rep. Connolly’s chief of staff, was easily nominated in the primary capturing 60% of the vote. State Delegate Irene Shin (D-Herndon) was a distant second with 14.3% while state Senator Stella Pekarsky (D-Centreville) attracted 13.4 percent.
On the Republican side, former FBI agent and Iraq War veteran Stewart Whitson was the plurality “firehouse primary” winner, though GOP turnout, as expected within this overwhelmingly Democratic district, was only a fraction of their political rivals’. According to the Fairfax County Local News site, 37,624 voters participated in the Democratic firehouse primary as opposed to the Republicans’ 2,601 ballots cast per the Inside NOVA news site report.
GOVERNOR
Iowa: State House Speaker Pat Grassley (R-New Hartford), grandson of venerable US Senator Chuck Grassley (R), announced that he will seek re-election to the state House and not pursue a gubernatorial candidacy. The leading Republican open seat gubernatorial candidate is US Rep. Randy Feenstra (R-Hull/Sioux City), but he faces opposition from state Sen. Mike Bousselot (R-Ankeny), state Rep. Eddie Andrews (R-Des Moines) and former state Rep. Brad Sherman.
New York: The Siena College Research Institute conducted one of their regular New York statewide polls (6/23-26; 800 NY registered voters; live interview) and found Gov. Kathy Hochul (D) in an improved political position. In the hypothetical general election, she would defeat US Rep. Elise Stefanik (D-Schuylerville), 47-24%, and tops Lt. Gov. Antonio Delgado and US Rep. Ritchie Torres (D-Bronx) 49-12-10% in the Democratic primary.
While her ballot test shows improvement, Gov. Hochul’s favorability index is still an upside-down 42:47% favorable to unfavorable and by a margin of 37-50%, the respondents believe New York is headed down the wrong track.
STATE AND LOCAL
New York City: The Honan Strategy Group conducted a post-primary survey of New York City likely voters (6/26-27; 817 NYC likely mayoral general election voters; text to web) testing new Democratic nominee Zohran Mamdani against both Mayor Eric Adams (I) and former Governor Andrew Cuomo running as a minor third party nominee.
The ballot test results project a tie between Messrs. Mamdani and Cuomo with each attracting 39% support as compared to just 13% for Mayor Adams and 7% for Republican nominee Curtis Sliwa. In terms of personal favorability, Mr. Cuomo posts a 56:43% favorable image, Mamdani upside-down at 40:48%, and Adams faring poorly with a 23:66% positive to negative image.
Though they became unnecessary, the Ranked Choice Voting results were released during the week and found Mr. Mamdani reaching the 56% support mark.