Federal Update: House Approves Comprehensive NEPA Reform Package 

Earlier today, the House voted 221 to 196 to advance legislation – the Standardizing Permitting and Expediting Economic Development (SPEED) Act – that would significantly reform the federal permitting process under the National Environmental Policy Act (NEPA). The bill garnered support from 11 Democrats, signaling modest but notable bipartisan concern that federal permitting timelines have become overly long and unpredictable, slowing the delivery of infrastructure projects and energy development. 

Among other things, the SPEED Act seeks to narrow and clarify how environmental reviews are conducted. It reinforces that NEPA is a procedural statute intended to inform federal decision-making, rather than prescribe outcomes. In addition, the bill would focus environmental reviews on impacts directly tied to a proposed project and reduce requirements to analyze speculative or indirect effects. It also encourages agencies to rely more heavily on existing environmental studies and prior reviews when possible. 

For project sponsors, including state and local governments, the legislation is designed to create greater certainty. It establishes clearer deadlines for federal agency decisions, requires concurrent rather than sequential permitting reviews, and limits when previously approved projects can be revisited. It also expands situations in which federally funded projects would not require a full NEPA review. 

In addition, the bill would change how courts handle NEPA challenges by tightening deadlines to file lawsuits, limiting who can bring a challenge, and reducing the types of remedies courts can impose. Supporters say these changes would reduce delays caused by litigation, while opponents warn they could limit public input and weaken environmental and community protections. 

While the House action this week represents the most substantial permitting reform effort of this Congress, the bill faces an uncertain path in the Senate. Similar bipartisan efforts in recent years, including a 2024 proposal led by Senator John Barrasso (R-WY) and former Senator Joe Manchin (I-WV), ultimately stalled over Democratic concerns about environmental safeguards and public participation. As a result, any Senate action on the SPEED Act is likely to depend on further negotiations as Congress continues broader discussions on permitting reform. 

House Narrowly Advances GOP Health Proposal as ACA Subsidies Set to Expire 

Earlier this week, the House voted along party lines to advance a GOP-led health care package. The measure – the Lower Health Care Premiums for All Americans Act (H.R. 6703) – would provide funding for cost-sharing reduction payments to help lower-income enrollees manage out-of-pocket expenses, but only for health plans that do not cover abortion. It also would expand association health plans, allowing small businesses to pool together to purchase insurance coverage. However, it should be noted that the legislation does not extend the enhanced Affordable Care Act (ACA) subsidies that are set to expire at the end of the year.  

According to the nonpartisan Congressional Budget Office (CBO), the bill would reduce federal spending by $35.6 billion over ten years but result in approximately 100,000 people losing health insurance coverage. 

While the measure was able to advance, the House vote highlighted growing divisions within the Republican conference over how to address rising health care costs. Speaker Mike Johnson’s (R-LA) decision to block a floor vote on legislation extending the enhanced ACA subsidies prompted a rare procedural move by several vulnerable House Republicans concerned about the political and policy implications. Four Republican lawmakers joined Democrats to complete a discharge petition that will force a House vote in early 2026 on a three-year extension of the enhanced subsidies. 

While the discharge petition ensures the House will revisit the issue after the subsidies expire, the path forward remains uncertain. A similar extension has already stalled in the Senate, and retroactively reinstating the subsidies would pose significant administrative challenges, including reprocessing millions of applications, reopening enrollment periods, and conducting outreach to individuals who dropped coverage due to higher costs. 

House Panel Unveils Bipartisan Housing Supply Proposal 

On December 17, the House Financial Services Committee overwhelmingly approved a bipartisan housing reform package – the Housing for the 21st Century Act – signaling strong, cross-party support for congressional action to increase housing supply. 

The committee’s action follows pushback from House Financial Services Committee leaders over the inclusion of the Senate’s bipartisan ROAD to Housing Act (S. 2651) in the Fiscal Year 2026 National Defense Authorization Act (NDAA). While Senate sponsors sought to advance housing provisions through the must-pass defense bill, House leaders objected to folding a broad housing package into the NDAA process, prompting the House to move forward with its own standalone approach. 

The Housing for the 21st Century Act was developed on a bipartisan basis and incorporates several policy concepts drawn from the Senate proposal. However, the House bill is narrower in scope, particularly with respect to proposed changes to the HOME Investment Partnerships Program and the Community Development Block Grant (CDBG) program. The House approach reflects a preference for more targeted supply-side reforms, rather than the broader programmatic updates included in the Senate measure. 

Despite these differences, both bills share a common objective in expanding housing supply by reducing regulatory barriers and modernizing federal housing programs. With strong committee approval now secured, the House bill positions lawmakers for potential House-Senate negotiations on a broader housing package, though the timing and prospects for bicameral agreement remain uncertain. 

Federal Judge Blocks FEMA From Terminating BRIC Program 

A federal judge in Massachusetts ruled last week that the administration cannot unilaterally terminate FEMA’s Building Resilient Infrastructure and Communities (BRIC) grant program. BRIC, which was established in 2020, provides competitive funding to states, tribes, territories, local governments, and special districts for hazard mitigation and disaster-resilience projects 

The decision follows a lawsuit filed by 22 states and the District of Columbia after FEMA announced earlier this year that it would cancel pending BRIC applications and return unobligated or rescinded funds to other disaster accounts or the U.S. Treasury. For their part, Trump administration officials have criticized the program as a “slush fund” for climate-related initiatives and argued that BRIC funding was being used for projects they view as outside FEMA’s core disaster response mission. 

The court order blocks FEMA from eliminating the program without congressional authorization. It’s unclear at this juncture whether the administration will appeal the decision. 

Trump Signs Executive Order on Cannabis Rescheduling 

Earlier today, President Trump signed an Executive Order (EO) directing federal agencies to expedite the reclassification of cannabis from Schedule I to Schedule III under the Controlled Substances Act. Specifically, the order calls on Attorney General Pam Bondi to accelerate completion of the rescheduling process, which would move the drug from the most restrictive category of controlled substances to Schedule III, placing it alongside substances such as anabolic steroids and certain codeine-based medications. A Schedule III designation would reduce regulatory barriers to research and allow state-licensed cannabis businesses to access standard federal tax deductions that are currently unavailable to entities associated with Schedule I substances. 

The Trump administration has emphasized that the action is focused on expanding medical and scientific research and does not legalize cannabis or alter federal criminal penalties related to recreational use. In addition to research-related changes, the EO directs agencies to explore new coverage models for medically recommended cannabis-derived products. 

It should be noted that the EO builds on a rescheduling process initiated during the Biden administration. That effort has since stalled at the Drug Enforcement Administration amid extended administrative review, litigation, and delay. The President’s directive is intended to move the process forward more quickly. 

The action has drawn opposition from some congressional Republicans. Earlier this week, a group of 22 GOP senators urged the President to keep cannabis classified as a Schedule I substance, arguing that the drug is highly addictive and that rescheduling could undermine broader public health and economic goals. 

Trump Issues Executive Order on National AI Standards 

On December 11, President Trump signed an Executive Order directing the federal government to pursue a national artificial intelligence (AI) policy and limit the impact of state-level AI regulations viewed as inconsistent with federal priorities. Specifically, the order directs the Justice Department to establish an AI Litigation Task Force to challenge state AI laws deemed unconstitutional, preempted, or otherwise unlawful. 

It also instructs the Department of Commerce to evaluate state AI laws and authorizes the withholding of certain non-deployment Broadband Equity Access and Deployment (BEAD) funds from states with laws found to conflict with national AI policy objectives. Federal agencies are further directed to consider whether the absence of similar state AI laws, or enforcement discretion for existing laws, should be a condition of certain discretionary grant programs. 

In addition, the order calls on the Federal Trade Commission and Federal Communications Commission to examine state AI requirements that may conflict with federal consumer protection standards and to consider establishing a federal reporting and disclosure framework for AI models. Finally, the EO calls for the development of a national AI legislative framework that would preempt State AI laws that stifle innovation. 

House Approves Bill Preserving Use of Aerial Fire Retardants 

Last week, the House approved legislation – the Forest Protection and Wildland Firefighter Safety Act – aimed at preserving the availability of aerial fire retardant during wildfire response efforts by clarifying existing exemptions for firefighting activities. The measure was included as part of a broader permitting reform package known as the PERMIT Act (H.R. 3898) and responds to a 2023 court ruling that concluded the U.S. Forest Service must obtain Clean Water Act permits for aerial fire retardant drops, raising concerns about potential delays and conflicting requirements for federal, state, local, and tribal firefighting agencies. 

The House action comes amid continued legal scrutiny of the Forest Service’s use of aerial fire retardant. In May, the Forest Service Employees for Environmental Ethics filed a new federal lawsuit alleging that the use of fire retardant containing heavy metals violates the Endangered Species Act. The lawsuit follows a 2024 University of Southern California study that found Phos-Chek, the most widely used fire retardant, contains elevated levels of metals, raising concerns about potential impacts to water quality and endangered species. 

While the House action reflects broader concerns from wildfire response agencies about maintaining access to key suppression tools as wildfire seasons grow longer and more severe, the PERMIT Act is unlikely to advance in the Senate, absent significant changes to attract broader bipartisan support.