Federal Update: U.S. Forest Service Distributes Secure Rural Schools Payments 

On February 20, the U.S. Forest Service announced it will distribute $182 million in retroactive payments under the Secure Rural Schools (SRS) program, delivering long-awaited relief to timber-dependent counties that rely on these funds to support schools, roads, and other essential services. In total, 28 California counties will receive nearly $30.9 million in Title I (roads and schools) and Title III (county projects) funding, along with more than $2.7 million in Title II funding for projects on federal lands. 

These payments follow overwhelming bipartisan passage of legislation in December that reauthorized SRS for three years. The law provides retroactive funding for FY 2024 and guaranteed payments for FY 2025 and FY 2026, restoring a critical revenue stream for rural counties nationwide. 

While Congress directed the Forest Service to issue the missed FY 2024 and FY 2025 payments within 45 days of enactment, USFS has indicated the FY 2025 payment will be delayed, with distributions now expected by April. Unless Congress acts again, the final SRS payments under current law are scheduled to be issued in spring 2027. 

HUD Moves to Block Families with Mixed Immigration Status from Housing Assistance 

Last week, the Department of Housing and Urban Development (HUD) released a proposed rule to prevent families with mixed immigration status from receiving certain federal housing assistance. Under current HUD regulations, mixed-status families – which include some members whose citizenship or immigration status makes them eligible to receive federal housing assistance as well as some members who are ineligible – can receive assistance on a pro-rated basis, calculated based on the percentage of eligible family members. The proposed rule seeks to end prorated assistance for these households, removing the option for ineligible family members to live with eligible family members. The proposed rule also imposes stricter requirements for HUD-assisted tenants, regardless of age, to verify their eligible immigration status.  

HUD estimates that around 24,000 households could lose the rental assistance under the proposed rule unless they stop living with ineligible family members. According to the Center on Budget and Policy Priorities, implementation of the regulation in California would subject nearly 820,000 U.S. citizens to new immigration verification requirements and result in an estimated 7,000 households losing their housing benefits.  

The proposed rule has a 60-day public comment period, with comments due April 21, 2026. 

DHS Shutdown Drags On as Negotiations Remain Stalled 

With the partial shutdown of the Department of Homeland Security (DHS) now approaching the two-week mark, there is still no clear path to reopening the agency. Talks between the White House and congressional leaders have continued behind the scenes, but recent proposal exchanges have failed to produce a breakthrough. Democrats remain focused on securing changes to federal enforcement operations, while Republicans say they are open to codifying certain recent administrative reforms but have rejected several of Democrats’ core demands. 

Both sides publicly describe the discussions as happening in good faith, though negotiators privately acknowledge progress has been limited. Senate Democrats have remained largely unified, while some Republicans are watching the first missed paychecks for DHS employees as a potential pressure point. Others suggest momentum could pick up following the President’s State of the Union address, though there is little indication so far that either party is prepared to significantly shift its position. 

The shutdown has drawn relatively limited public attention in part because roughly 90 percent of DHS workers – including staff at the Transportation Security Administration (TSA), the Coast Guard, and FEMA – are considered essential and continue working without pay. For its part, the administration has taken steps to increase visibility around the shutdown, briefly announcing suspensions to TSA Pre-Check and Global Entry before reversing course on TSA PreCheck, and signaling that FEMA will pause non-essential work. 

With both parties standing firm and limited external pressure so far, the standoff shows few signs of easing. Absent a compromise, DHS operations will remain constrained. 

Tariff Authority in Flux After Supreme Court Decision 

Last week, in a major ruling on presidential authority, the Supreme Court struck down sweeping tariffs imposed by President Trump, finding in a 6–3 decision that they exceeded the powers granted to the president under the International Emergency Economic Powers Act (IEEPA). The Court ruled that the administration could not use emergency authorities intended for foreign threats to impose broad, economy-wide import duties, effectively invalidating the tariff framework that had been put in place through executive action. 

In response, the administration pivoted to a separate and rarely used authority (Section 122 of the Trade Act of 1974), which allows temporary global tariffs for up to 150 days. President Trump also announced plans to raise the new worldwide tariff rate from 10 percent to the maximum 15 percent allowed under that statute. 

Any tariffs beyond that 150-day window would require congressional approval, putting Capitol Hill back at the center of the debate. Senate Democrats have already declared that they will not support extending the tariffs. Democrats also introduced legislation earlier today directing the administration to refund up to $175 billion collected under IEEPA and requiring refunds to be processed within 180 days. 

Officials at the Treasury Department have indicated that a lower court will ultimately decide whether refunds are required, but the bill reflects growing pressure from lawmakers to provide clarity for importers and consumers affected by the invalidated tariffs. 

President Trump Delivers State of the Union Address 

On February 24, President Trump delivered a wide-ranging and record-setting address to a joint session of Congress, delivering what is now considered the longest State of the Union in modern history. He framed the past year as a dramatic turnaround, pointing to lower inflation, rising incomes, record stock market gains, expanded domestic energy production, and deregulation. Throughout the speech, he emphasized tax relief, trade policy, and a newly announced “war on fraud” initiative aimed at rooting out waste across federal programs. Democrats, however, have questioned several of the administration’s economic claims and warned about the long-term fiscal impacts of recent tax and trade policies. 

A significant portion of the address focused on trade and tariffs. President Trump defended his tariff strategy as a key driver of domestic investment and manufacturing growth, arguing that tariff revenues have strengthened the U.S. negotiating position and could ultimately reduce reliance on income taxes. He also referenced the recent Supreme Court decision that limited aspects of his administration’s tariff authority. While describing the ruling as “unfortunate,” the President stated that alternative statutory authorities would allow his administration to maintain and potentially expand its trade policies without requiring additional congressional action. 

Foreign policy featured prominently as well. President Trump highlighted what he characterized as successful diplomatic and military actions, including ceasefire efforts in Gaza, ongoing negotiations aimed at ending the Russia-Ukraine conflict, and a military operation targeting Iran’s nuclear program. He reiterated that the United States would not allow Iran to obtain a nuclear weapon, while expressing a preference for diplomacy. The President also emphasized increased NATO defense spending commitments, a $1 trillion U.S. defense budget, and expanded efforts to combat drug cartels, which he designated as foreign terrorist organizations. He framed these actions as part of a broader “peace through strength” strategy. 

Immigration was another central focus of the address. President Trump asserted that the border is now secure and called on Congress to end “sanctuary city” policies, impose penalties on officials who block removals, and enact new voter ID and proof-of-citizenship requirements. He also proposed the “Dalilah law” to bar states from granting commercial driver’s licenses to undocumented immigrants, specifically referencing California in that context. 

He addressed health care and safety-net policy in broader terms, highlighting efforts to reduce prescription drug prices and promoting his proposed “Great Health Care Plan” as a cost-saving alternative to existing systems. He also stated that 2.4 million Americans have been lifted off “food stamps,” pointing to a decline in participation in the Supplemental Nutrition Assistance Program (SNAP/CalFresh). 

California was also mentioned in a more celebratory context. President Trump welcomed Team USA’s gold medal men’s hockey team into the chamber and highlighted Los Angeles as the host of the 2028 Summer Olympics, pledging the city would be ready and secure. 

In response to the address, Virginia Governor Abigail Spanberger delivered the Democratic rebuttal, focusing her comments on affordability and health care access. Senator Alex Padilla (D-CA) delivered the Spanish-language Democratic response, emphasizing cost-of-living concerns facing working families, defending access to health care and nutrition assistance programs, and underscoring the importance of voting rights and democratic institutions.