I. Work on the Hill
The traditional summer lull on Capitol Hill in August 2025 belied significant shifts under the surface of federal policymaking. One month after the landmark One Big Beautiful Bill Act (H.R. 1) was signed into law, Washington has been adapting to the new legislative reality, even as Congress was essentially in recess. With lawmakers back in their districts, much of the action migrated to federal agencies, courts, and behind-the-scenes preparations for the fall session. The broad scope of H.R. 1, encompassing tax cuts, regulatory rollbacks, and benefit reforms, continued to set the policy backdrop. But August’s narrative extended beyond that single law, touching transportation, labor, finance, education, and more, as the government’s gears turned in anticipation of a busy autumn.t.
Legislative Pause and Preparations
In the weeks following the bill’s enactment, members of Congress have introduced targeted legislation in response to specific provisions. On July 30th, 2025, House Democrats Greg Landsman, RaulOn Capitol Hill, significant legislative activity largely paused during the August recess, yet groundwork was being laid for upcoming debates. Congressional leaders used the break to plot strategy for the FY2026 budget and appropriations, given the new fiscal landscape shaped by H.R.1. Before adjourning, the Senate Appropriations Committee advanced several spending bills on a bipartisan basis in some cases quietly rebuffing parts of the administration’s agenda (for example, senators rejected a White House proposal to consolidate K‑12 education funding into a single block grant). Both chambers face a late-September deadline to fund the government, and discussions on a possible continuing resolution have already begun. Meanwhile, a few lawmakers introduced targeted measures to push back on H.R.1’s more controversial provisions. One example is the Protect Our Hospitals Act (H.R. 4807), unveiled at the end of July by House Democrats to reverse the new law’s limits on Medicaid provider taxes. That bill, along with other nascent proposals on issues like nutrition assistance and environmental funding, remained parked until Congress’s return. In public statements through August, Democratic leaders in the minority continued to criticize the ruling party’s policy shifts, raising concerns about potential cuts to the safety net and rollbacks of climate programs. Still, they lacked the votes to force formal oversight hearings during the recess. Instead, they leaned on outside scrutiny, notably the Government Accountability Office’s late-July finding that HHS had violated federal law by freezing certain Head Start funds, which continued to reverberate in August, highlighting questions of executive overreach in budget execution. House and Senate committees signaled they will scrutinize H.R.1’s implementation in the fall, from the law’s healthcare impacts to its tax expenditures, even as Republican majorities remain broadly supportive of the package’s goals.
Economic and Fiscal Landscape
August brought a mix of encouraging economic news and cautionary fiscal analysis. Small businesses reported rising optimism about the economy, buoyed by regulatory relief and fresh tax breaks. A CNBC/SurveyMonkey confidence survey showed nearly half of small business owners now rate the national economy as “excellent or good,” up from only 30% earlier in the year. Likewise, significantly fewer owners expect government policy to hurt their operations, reflecting relief from burdensome rules and the new tax cuts (such as the elimination of federal tax on overtime pay and tips). Administration officials touted these trends as validation of their pro-growth agenda. However, August also underscored long-term fiscal questions. At month’s end, the Congressional Budget Office and others updated their budget projections to account for H.R.1 and recent trade policies. Thanks to a raft of new tariffs imposed by the administration, the highest import levies in a century, the Treasury is seeing a revenue windfall that is unexpectedly helping to offset the cost of H.R.1’s tax cuts. In fact, S&P Global Ratings noted that “meaningful tariff revenue” is expected to counteract the weaker fiscal outcomes that would otherwise result from the recent legislation. Both S&P and Fitch affirmed America’s AA+ credit rating in late August, citing the deficit-reducing effect of these tariffs. The improved near-term outlook even prompted one major forecaster to predict that the annual deficit could temporarily dip to post-pandemic lows next year. However, not all indicators were rosy. Fitch Ratings, while holding the line on the U.S. rating, pointedly warned that “the U.S. has not taken meaningful action to address its large fiscal deficits [and] rising debt burden.” Fitch projects that federal debt held by the public will surge to approximately 127% of GDP by 2027, up from 114% as of the end of last year. Private analysts echoed those concerns the nonpartisan Committee for a Responsible Federal Budget estimated that cumulative deficits over the next decade will run about $900 billion higher than previously forecast, given the combination of tax cuts and new spending in H.R.1. In bond markets, investors kept a wary eye on these debt metrics U.S. credit default swap prices imply a much lower “A” rating in the long run suggesting that underlying anxieties about debt sustainability linger despite the summer’s upbeat economic data. In short, August presented a complex financial picture, characterized by robust short-term growth and confidence, alongside significant long-term fiscal risks.
Transportation and Infrastructure
In the transportation arena, federal policy developments continued even during the congressional recess. The U.S. Department of Transportation made headlines by canceling a long-stalled high-speed rail project at the very start of the month, the proposed Washington–Baltimore maglev train. Citing unworkable community and environmental impacts, USDOT pulled the plug on this 20-year project on August 1st. The decision underscored the administration’s approach to infrastructure, even as it reallocates attention to highways and freight. Indeed, freight rail was another August focus; the Surface Transportation Board commenced review of a major railroad merger after Union Pacific’s $85 billion bid to acquire Norfolk Southern, a deal that would create the first actual coast-to-coast freight carrier. This pending merger, the first of its scale in decades, has raised questions about competition and supply chain resilience.
Meanwhile, oversight of infrastructure spending ramped up. A new GAO report, released in mid-August, urged the USDOT to improve transparency regarding the status of funds from the 2021 infrastructure law and to better assess risks as those projects move forward. With hundreds of billions of dollars from the bipartisan 2021 package still in the pipeline, auditors pressed the department to ensure the efficient use of resources. State transportation agencies also got a boost in mid-August, when the Federal Highway Administration approved a $3.9 billion low-interest TIFIA loan for Georgia to build express lanes on SR 400, one of the largest infrastructure financings of the year, aimed at easing Atlanta’s notorious congestion. Looking ahead, Congress is quietly laying the groundwork for the next considerable infrastructure debate. Policy experts and committee staff have already begun discussions on the upcoming surface transportation reauthorization, as the current highway and transit funding law is set to expire in 2026. By late August, think tanks were calling on lawmakers to craft a new long-term mobility vision, one that addresses the Highway Trust Fund’s revenue shortfalls, embraces emerging technologies like vehicle electrification, and further streamlines project permitting. These early reauthorization conversations indicate that even in a month with few public hearings, transportation policy remains a priority, with a focus on sustaining investment while increasing efficiency.
Executive Branch Actions
With Congress away, President Trump and federal agencies seized the moment to advance regulatory changes mandated or enabled by H.R.1. Tax authorities, for instance, spent August translating the law’s tax provisions into practice. The Treasury Department and the IRS continued drafting rules for H.R. 1’s array of tax updates, including guidance on the new income exclusions for overtime pay and tipped wages, as well as technical regulations to implement the extension of the 2017 individual tax rates beyond their scheduled sunset. (Notably, the Social Security Administration had to clarify a misunderstanding that arose in early publicity about H.R.1’s “senior deduction.” The new law provides an additional deduction for seniors to offset Social Security benefit taxes, but does not eliminate those taxes outright. Updated communications in August aimed to dispel the confusion around this deduction and explain how retirees can claim the relief.)
On the regulatory reform front, multiple executive orders took effect. Energy and trade policy saw particularly high-profile moves. H.R.1’s rollback of renewable energy incentives was accelerated by an Executive Order issued in July. By August 7th, the Department of the Interior was already reviewing its renewable energy leasing rules to align with the law’s “all-of-the-above” energy strategy. At the very end of the month, a significant trade change kicked in earlier than initially planned. On August 29th, the administration formally ended the de minimis tariff exemption that had allowed duty-free import of low-value packages. This policy change, implemented via a July 30th executive order, shuts down a long-exploited loophole in customs law that officials argued was being used to smuggle fentanyl and counterfeit goods. As of August 29, no foreign shipments valued under $800 can enter the U.S. duty-free. The White House has cast this as a national security win and a revenue generator. However, businesses that rely on small-package imports have raised concerns about higher costs and increased paperwork ahead.
Another significant executive action came on August 7th, when President Trump signed an order targeting “politicized or unlawful debanking.” This Fair Banking executive order directs federal regulators to ensure banks cannot deny services to customers purely for political or religious reasons. It was an unprecedented response to claims that banks have “de-platformed” specific industries and individuals (for example, firearm businesses or individuals with controversial views) due to social pressure. The order gave agencies like the Federal Reserve, OCC, and FDIC 180 days to scrub any guidance that encourages banks to weigh “reputation risk” in ways that could lead to viewpoint-based account closures. The administration issued an order directing regulators to limit the use of reputation risk in account closures from banking supervision. The administration aims to protect lawful businesses from being cut off by financial providers. Critics of the move argue that it may tie regulators’ hands in managing legitimate risks and could force banks to serve entities involved in disinformation or discrimination. Regardless, the policy reflects a broader theme of August, the executive branch steering policy across the board from trade and energy to finance, largely unchecked by a Congress on recess.
Federal agencies also pressed forward with labor and employment policy shifts in line with the administration’s deregulatory priorities. Notably, the Department of Labor (DOL) exercised its enforcement discretion to halt a central labor regulation introduced during the Biden administration. In early May, DOL announced it would no longer enforce the stricter independent-contractor definition promulgated in 2024. By August, that stance was being codified into a formal rulemaking; the Trump DOL is reverting to a more business-friendly standard that makes it easier to classify workers as independent contractors. This move has significant implications for the gig economy and small entrepreneurs, who faced the prospect of being reclassified as employees under the previous rule. Employers cheered the change, saying it reduces legal uncertainty and gig-economy costs, while labor advocates worry it will erode wage and benefit protections for millions of workers. At the same time, the National Labor Relations Board remained hamstrung by vacancies, a situation carried over from a tumultuous July in which President Trump fired an outspoken Democratic Board member. In August, the President’s two nominees to fill the NLRB’s empty seats awaited Senate confirmation, a step needed to restore a quorum and resume decisions.
Labor policy continued to advance in other ways. The administration targeted organized labor in the federal workforce and in college athletics. Over the summer, President Trump issued an executive order instructing DOL and the NLRB to clarify that college athletes are students, not employees, pushing back against efforts to unionize athletic programs. In a victory for the White House, a federal appellate court on August 1st allowed a separate Trump order limiting collective bargaining in security agencies to proceed (reversing a lower court’s injunction).
These actions underscore the administration’s alignment with employers and management, from curbing union influence in government agencies to blunting the expansion of employee status in new sectors. Democrats and labor groups vocally criticized these moves, but without congressional control, their options were mostly limited to public appeals. They have promised to focus on worker rights and union issues in oversight hearings later this year, setting up a potential clash of priorities as Congress reconvenes.
Healthcare and Benefits Policy
August also clarified the unfolding effects of H.R. 1 on healthcare and social programs, alongside separate developments in health policy. Federal and state officials began working on changes to Medicaid and nutrition assistance while early litigation was advancing. The Department of Health and Human Services spent much of the month in consultations with state Medicaid agencies to plan for nationwide work requirements that are set to begin in 2027. Under these requirements, many adults aged 19 to 64 must document at least 80 hours of work per month to qualify, or they may be eligible for exemptions. HHS faces a June 2026 deadline to issue detailed rules and has indicated that an interim final rule by that date will outline verification processes and exemptions. States are being offered technical assistance and a fifty-billion-dollar Rural Health Transformation Fund to support implementation.
State officials raised concerns about administrative workload and costs associated with verifying work activity for large enrollee populations. The Congressional Budget Office projected that provisions in H.R. 1 could lead to 11.8 million people losing Medicaid or Affordable Care Act coverage by 2034, with an additional five million potentially losing coverage due to policies outside H.R. 1, such as the expiration of temporary ACA subsidies. HHS has signaled it may use the statutory flexibility that allows states additional time, potentially until 2028, if they demonstrate reasonable faith efforts to comply. A federal district court issued a preliminary injunction on July 28th, pausing enforcement of a provision affecting Medicaid reimbursement for specific providers that offer reproductive health services. The Department of Justice indicated it will appeal, positioning the case for further review this fall. Advocacy organizations also raised concerns about changes to nutrition assistance. H.R. 1 expands work requirements for SNAP recipients and requires states to assume a share of benefit costs. Analysts from nonpartisan research groups cautioned that these shifts could increase food insecurity and strain state budgets during economic downturns. Lawmakers from rural and urban districts have taken an interest, and food assistance provisions may become candidates for legislative amendments or additional lawsuits.
Beyond H.R. 1, other health policy actions drew attention in August, including state challenges to a new rule for the Affordable Care Act marketplaces. In mid-July, a coalition of twenty states, led by Democratic attorneys general, filed suit to block the implementation of a rule finalized by the Centers for Medicare and Medicaid Services in June. The rule shortens open enrollment peri
ods, adds a five-dollar monthly fee for specific marketplace plans, and modifies the list of essential health benefits that require coverage. HHS states that these changes aim to reduce improper subsidized enrollments and lower premiums by improving eligibility integrity. The suing states argue that the rule could create confusion for consumers and lead to coverage losses for as many as 1.8 million people, a figure the administration acknowledged as a possible outcome. They contend that the rule could shift costs to state systems. This litigation exemplifies the current federal-state dynamic in health policy, where states are both implementing congressional mandates and contesting federal regulatory actions. The outcome will shape ACA coverage and further define the scope of administrative authority in setting access and eligibility rules.
Education and Workforce Development
On education policy, August was comparatively quiet at the federal level, but it foreshadowed debates to come. With a new school year beginning, state and local leaders monitored federal funding levels and policy direction. The administration’s budget plan proposes an estimated $12 billion reduction to Department of Education programs in fiscal year 2026, including those for K-12 education. Congress has not enacted these reductions, and advocacy groups mobilized during the recess to defend programs such as Title I and services for English learners. One proposal would eliminate dedicated federal support for English language acquisition, with the administration asserting that states are better equipped to handle these services. Education experts and civil rights organizations have warned that such a shift could negatively impact immigrant and bilingual students. By late August, several lawmakers and school system leaders announced plans to seek restoration during the appropriations process. Reports in education media also noted reviews of federal grants in teacher training, science and mathematics, and student mental health. Department officials said the reviews are intended to align awards with current priorities, while critics view them as early cancellations of previously announced initiatives. Concerns about community school and afterschool grants prompted interest from both parties in obtaining additional clarity before fall markups.
Comprehensive education legislation was not a focus in August, although House committees signaled interest in school choice and parental involvement proposals when the session resumes, pending a closely divided Senate. In the interim, the Department of Education issued guidance on the use of artificial intelligence in kindergarten through grade twelve settings, encouraging best practices for educational tools while emphasizing privacy and bias safeguards. The Department also proposed adding a priority in grant competitions for projects that integrate science, technology, engineering, and mathematics with career and technical education as part of a broader workforce effort. These administrative steps indicate that modernization efforts are moving forward even as budget discussions continue. Overall, school districts face uncertainty as they plan for the coming year, including the possibility of funding constraints if the spending limits and rescissions in H.R. 1 take full effect.
Small Business and Financial Sector Climate
For small businesses and entrepreneurs, August brought a mix of optimism and caution. On the one hand, as noted, surveys have shown an improvement in confidence, thanks in part to H.R. 1’s permanent tax relief for small firms, such as the expanded 23% deduction for pass-through business income and the return of full immediate expensing for equipment investments. These tax changes have been long-sought by small business advocates, and their enactment is seen as encouraging expansion and new startups. Additionally, the administration’s broader deregulatory stance from labor rules to environmental permits tends to reduce compliance costs for small enterprises. It’s no surprise that nearly 60% of small business owners approved of the President’s job performance by late summer, a marked uptick that included rising support even among independent and Democratic-identifying owners. However, not all signals were positive. Small businesses that rely on global supply chains or federal contracts faced fundamental uncertainties.
Trade policy is a significant concern, given the sharp rise in tariffs (part of the administration’s aggressive trade posture), and many importing businesses have struggled with higher input prices and volatile logistics. A leading small business association warned in August that “tariff uncertainty” and shifting trade rules were making it hard for firms to plan. The abrupt end of de minimis duty exemptions is one example beneficial to domestic manufacturers but a potential headache for e-commerce retailers and artisans who source materials overseas. Similarly, companies that do business with the federal government are navigating a changing landscape. H.R.1’s enactment and subsequent budget tightening led some agencies to pause or reassess contract awards over the summer. In interviews, small government contractors reported that funding delays and potential rescissions have created an unpredictable environment, where even awarded contracts might be put on hold. As one small business owner put it, “we rely on stable rules and predictable funding, and right now, both are in flux.”
This sentiment was echoed across sectors. While entrepreneurs welcome tax cuts and streamlined regulations, they are wary of sudden policy swings, such as new tariffs, halted grants, or looming government shutdowns that could disrupt cash flows with little warning. In the financial sector more broadly, August illustrated the administration’s hands-on approach to aligning finance with its political priorities. Along with the anti-“debanking” order mentioned earlier, regulators were directed to ease up on certain oversight areas. For instance, the CFPB (Consumer Financial Protection Bureau) is undergoing budget cuts under H.R.1 (its Federal Reserve funding draw is being halved, per the new law), a change that industry welcomed, but consumer advocates decried as weakening a watchdog. Banking agencies also began reviewing rules on bank capital and ESG (environmental, social, governance) investing, consistent with the administration’s skepticism of finance. Enforcement data showed a notable decline in financial industry penalties in 2025, which observers attribute to the more lenient regulatory stance under the Trump administration. Still, Wall Street has not been entirely complacent; credit markets are pricing in longer-term risks, and the Fed’s Jackson Hole symposium in late August featured cautious tones about inflationary pressures that could re-emerge from fiscal stimulus. Fed Chair Jerome Powell (who remains in place) hinted that the central bank is prepared to raise rates further if needed to counter any overheating, a reminder that the interplay between fiscal expansion and monetary policy will be delicate in the coming months.
Rescissions and Spending
A late-August development was a presidential budget action. On August 29th, President Trump announced what the White House termed a “pocket rescission package,” invoking the Impoundment Control Act to identify approximately $5 billion in unobligated funds for cancellation while Congress was out of session. The administration described this as the first use of such an approach in fifty years. Under the statute, a rescission proposal is transmitted to Congress, and a 45-day clock begins when Congress is in continuous session. The White House has framed the action to mean that if Congress does not act within that window, the identified funds would be canceled. Several legal analysts read the law differently and argue that funds must be released absent explicit congressional approval.
In this instance, the proposal targets unspent balances in State Department and foreign assistance accounts, including international development projects, specific climate programs, and contributions to specified United Nations entities. The White House cited examples it views as lower priority, including climate resilience projects in Central America and democracy promotion efforts in Africa. It characterized some grants as “woke, weaponized, and wasteful.” Supporters describe the step as concentrating resources and aligning spending with current policy priorities. Critics, including Democratic leaders, contend that the move circumvents Congress’s power of the purse and affects programs that received bipartisan appropriations. Unless Congress reconvenes and acts to restore or otherwise address the identified funds, the administration’s action will remain in place under its interpretation of the Impoundment Control Act. At the same time, the legal questions continue to be examined.
This episode sets up a potential fall debate. Some members are preparing legislation to restore the funds or adjust the President’s rescission authority, while others favor additional reductions using the same process. Viewed alongside H.R.1, the package reflects an effort to align foreign assistance with domestic budget priorities. Programs in areas such as development, global health, and multilateral initiatives are likely to receive further review through rescissions or appropriations riders. Supporters see a clearer fiscal focus and program consolidation. Critics emphasize the need to safeguard Congress’s power of the purse and maintain long-standing commitments.
Outlook
As August concluded, the federal policy landscape remained fluid, with active executive branch implementation, emerging litigation, and preparation for a full September agenda on Capitol Hill. When Congress returns, members will reconcile the President’s budget proposals with committee and chamber priorities as the fiscal year 2026 deadline approaches. Debates are expected over the balance between defense and domestic accounts, as well as whether to accept, modify, or reject proposed reductions in areas such as education and foreign assistance. Implementation of the One Big Beautiful Bill Act will enter a new phase, with committees likely to examine the economic effects of tax changes, agency plans for benefits administration, and potential technical amendments. Party differences remain pronounced. Republican members generally emphasize growth, tax, and regulatory objectives, while Democratic members stress access to services and environmental protection. Within the majority, some members have underscored concerns about deficit and debt, and may seek additional spending restraint or a different pace for tax provisions in light of recent fiscal analyses.
Trade and industrial policy will also shape intra-party and cross-party discussions. These priorities will inform fall floor strategy and committee oversight. Democratic members are expected to use hearings, letters, and litigation to review implementation choices and program impacts, while majority committees focus on execution, timelines, and agency accountability.
In August, the growing influence of cooperation between national and local governments on policy became evident. Many provisions in H.R. 1 require close coordination between the federal and state levels, from verifying work activity for benefits to updating state information systems and adjusting education budgets. The multistate lawsuit challenging an HHS marketplace rule, along with technical questions raised by state officials, illustrates that states will act as partners, implementers, or challengers depending on the subject. The administration has begun technical briefings with governors’ offices and state agencies to support rollout, and those engagements will expand in the months ahead. Some states may pilot elements that align with their policy preferences, while others may seek waivers, adjustments, or judicial review. This variation could produce uneven outcomes and prompt further congressional consideration.
In sum, August 2025 functioned as a transitional month. Floor activity was limited, yet policy development and execution continued across transportation, labor, finance, taxation, small business, education, and benefits. Actions taken over the summer set up a consequential autumn as committees resume hearings, agencies advance rulemaking and guidance, and states adapt to new statutory requirements. The pace of federal activity has quickened, and the coming months will be defined by coordination, oversight, and practical adjustments across institutions and affected sectors. For planning purposes, this report highlights those quieter movements within the broader federal policy environment as agencies shift from legislative reaction to structured implementation. Areas where timing or substance remains uncertain, allowing organizations to prepare for operational changes once dates and details are confirmed.
- August Highlights
Tuesday, August 5th, 2025
Centers for Medicare & Medicaid Services (CMS), Center for Consumer Information and Insurance Oversight (CCIIO)
Jacob Ackerman, Senior Advisor, Oversight Group, and members of the CCIIO Team
Lobbyit joined a meeting with Jacob Ackerman and members of the CMS/CCIIO Oversight Group on behalf of the National Employers Association (NEA) to discuss short-term, limited-duration insurance (STLDI) and related federal regulatory activity. The discussion centered on the current federal framework governing STLDI plans, and CCIIO staff clarified that while they were able to offer technical insights on the program and its regulatory treatment, they could not take a formal position on H.R. 379, the Healthcare Freedom and Choice Act, or comment on pending legislation.
Lobbyit reiterated NEA’s support for H.R. 379 and highlighted the role that STLDI plans continue to play in helping working Americans maintain affordable coverage during gaps in employment or eligibility for group plans. The meeting provided an opportunity to explain how NEA members use these plans to meet short-term coverage needs and to raise concerns about the impact of regulatory limits on duration, renewability, and market availability.
While CCIIO did not offer formal feedback on NEA’s policy position, the team was attentive and acknowledged the importance of understanding how employers and transitional workers interact with STLDI plans in real-world scenarios. The meeting helped lay the groundwork for future engagement and ensured that CMS staff are aware of NEA’s perspective as ongoing rulemaking and policy shifts are considered within the Department. NEA is currently compiling written examples of how employers have used STLDI plans to support workforce needs, demonstrating how employees have benefited from short-term coverage. Once this information is finalized, Lobbyit will follow up with Jacob Ackerman and the CMS/CCIIO team to share those examples in a more detailed and constructive manner.
II. Federal Workforce and Labor Regulation Outlook
On August 1st, 2025, President Trump dismissed Dr. Erika McEntarfer as Commissioner of the Bureau of Labor Statistics following the release of a monthly employment report that showed weaker job growth and downward revisions. Dr. McEntarfer was confirmed in 2024 to a four-year term. She was replaced on an acting basis by Deputy Commissioner William Wiatrowski. The statute envisions a fixed term for the BLS Commissioner, and the use of removal authority has prompted discussion about the balance between executive control and the independence of the statistical agency. For employers, the immediate considerations are practical. Market and planning models that rely on BLS series may face increased scrutiny, and companies submitting workforce data under federal programs should expect closer attention to documentation and methods. Congress may consider proposals to adjust governance or independence provisions for statistical agencies, which could affect reporting frameworks over time.
Late in August, the administration moved on federal labor relations and related personnel policy. An executive order signed on August 28th removed collective bargaining rights for specific units in specified agencies that the administration described as being related to national security. Supporters cite operational efficiency and mission requirements as factors in their decision. Unions and labor advocates objected, indicating that they will pursue litigation. The order is likely to be tested in court while agencies and bargaining units assess implementation.
The Department of Labor used August to outline workforce priorities with an emphasis on artificial intelligence. On August 26th, the Employment and Training Administration issued guidance to states on using Workforce Innovation and Opportunity Act funds to expand AI literacy and training through public workforce systems. The guidance encourages state boards and grantees to integrate AI competencies, referencing federal resources that can support reskilling. The DOL also continued its routine OSHA collaborations, announcing local partnerships and safety recognition activities aimed at preventing injuries in various sectors, including construction. These reflect the department’s ongoing mix of compliance assistance and enforcement.
Policy debate continued around possible OSHA rule changes and broader regulatory adjustments. Employer-side commentators highlighted proposals to modify or withdraw specific requirements, while labor and safety advocates cautioned against changes they view as reducing protections. Observers noted a significant number of initiatives identified for review at OSHA and at the Mine Safety and Health Administration. Many of these items will proceed through the notice-and-comment process, and participants are closely monitoring dockets and timelines.
Federal Announcement on Short-Term Plan Enforcement
Another significant development concerned the regulation of short-term, limited-duration insurance by federal agencies. In particular, HHS and the Department of the Treasury announced that they are reconsidering the regulatory definition of STLDI. On August 7th, 2025, HHS, Labor, and Treasury announced that they will not prioritize enforcing the 2024 rule, which limits short-term, limited-duration plans to an initial 3 months and a total of 4 months, including renewals. They will also pause enforcement of the related notice requirement while initiating new rulemaking. HHS also stated that it will not consider a state as failing to enforce federal law if the state adopts the same approach. The 2024 rule still applies to policies sold on or after September 1st, 2024, so this is enforcement discretion rather than a formal change. In states that allow longer terms, some insurers may offer longer policies if state law permits and they are comfortable with the potential legal risks associated with rulemaking. State limits or bans still control, so availability beyond 4 months will vary by state and by insurer.
Additionally, the agencies signaled they will pursue formal rulemaking and open a public comment period on STLDI. States are already taking different approaches. For example, Iowa has indicated that carriers may follow state rules under the federal non-enforcement posture, while other states may continue to require adherence to the four-month federal definition. This is a moving target worth monitoring in the months ahead.
Federal litigation also shaped the environment in August. The United States Court of Appeals for the Fifth Circuit issued a ruling concluding that the structure of the National Labor Relations Board is likely unconstitutional due to the removal protections afforded to its members. The decision has implications for the Board’s authority, for pending unfair labor practice and representation matters, and for parties that rely on Board processes. While further review is anticipated, employers and unions face uncertainty about forum strategy and the status of decisions issued during the litigation period. The NLRB continued routine case processing in August while addressing legal questions.
The administration also addressed commercial motor vehicle safety enforcement. Guidance issued in August instructed states and motor carriers that drivers who do not meet the English language proficiency requirement can be placed out of service. The administration signaled that certain federal transportation funds could be contingent upon the enforcement of Federal Motor Carrier Safety Administration regulations. States, industry groups, and worker advocates raised concerns about the potential effects on driver availability, labor supply, and civil rights claims tied to language-based enforcement. For employers, the practical steps include tracking how state agencies implement the guidance, reviewing testing, communication, and record-keeping practices, and preparing for administrative appeals or legal challenges as needed.
Trade policy remained a significant factor through the summer. The administration advanced a broad tariff strategy that commentators have labeled Tariff 2.0. Central elements include a 10 percent tariff applied to imports from all countries, as authorized by the White House under the International Emergency Economic Powers Act. The approach has different effects across the economy. Firms that depend on imported inputs report higher costs for materials such as metals and electronics components. Analysts have warned that a broad tariff could add to consumer prices if costs are passed through, a dynamic that monetary policymakers are monitoring as they evaluate inflation risks. At the same time, import competing industries report improved market conditions and new orders, and the administration points to exemptions or relief for companies that establish production in the United States. Some foreign manufacturers have announced or accelerated plans to develop facilities in the United States that will directly serve the local market.
Looking ahead, several trends merit attention. Courts will address challenges involving agency structure and removal protections. FMCSA language proficiency enforcement will transition from guidance to state-level implementation. OSHA and DOL items will continue through rulemaking and guidance, with active participation from employer groups and labor organizations. Appropriations decisions for the coming fiscal year will shape resources and timelines at the labor and transportation agencies. For employers, the near-term environment is characterized by regulatory uncertainty, ongoing legal proceedings, and a continued need to align compliance programs with evolving federal and state expectations.
III. Monthly Wrap Up and Next Steps
In short, the month of August paved the way for significant developments despite the Congressional recess limiting the advancement of primary legislation. On the regulatory side, several issues are worth watching, particularly formal rulemaking by the Departments of Labor, Treasury, and Health and Human Services on limits or regulations surrounding STLDI, which could present a fruitful opportunity to shape the enforcement of future policies. In addition, legislative debate over appropriations, notably as September marks the end of the government fiscal year, may shed light on more certainty for employers.
Although progress may be slow, given that Congress will be preoccupied with budget debates over the next month, one path forward that may bear fruit centers around H.R. 379, a bill introduced earlier this year to nullify existing rulings that place limits on STLDI length. Although this debate may unfold within federal agencies in the coming months, legislative action is certainly an avenue worth considering in tandem. Lobbyit plans to set meetings with the offices of Sen. Bill Cassidy (R-LA), Sen. Tim Scott (R-SC), and/or a follow-up meeting with Sen. Ashley Moody’s (R-FL) office to discuss introducing the Senate equivalent of this bill, affording it bicameral momentum as we approach the new fiscal year. Through informed and forward-looking federal engagement, Lobbyit aims to ensure NEA is positioned to help shape a policy climate that supports the long-term success of American businesses.
National Employers Association