Congress left for a two-week recess without resolving its defense bill fight, and the Supreme Court closed its term with two more major rulings. As always, we skip the commentary and go straight to the opinions, vote records, and filings themselves, because that's the only way to know what the government actually did, as opposed to what people are saying it did. We start with the ruling reshaping how the 2026 midterms get funded.
The Overview
A rule pairing the House defense bill with the SAVE America Act, President Trump's voter ID and citizenship-proof push, failed on the floor for a second consecutive week.
A second House vote on ending U.S. involvement in hostilities tied to Israel's military campaign against Hezbollah in Lebanon failed by a wider margin than the first attempt in June.
The House also passed a sweeping children's online safety and privacy bill and sent it to the Senate.
The Supreme Court ruled that birthright citizenship stands and that states may bar transgender athletes from girls' school sports.
For the Record: The Supreme Court Frees Political Parties to Coordinate Spending
On June 30, the Supreme Court struck down the federal cap on how much a political party can spend when it works directly with its own candidates' campaigns, a limit that has applied only to parties, not to super PACs or other outside groups, since the 1970s. The 6-3 ruling in National Republican Senatorial Committee v. FEC holds that the cap, which topped out at $4,071,800 for a Senate race and $32,392,200 for a presidential race depending on the state, violates the First Amendment. It took effect immediately, covering the 2026 midterms already underway.
Two things did not change: the $3,500 base limit on what a donor can give a candidate directly, and the disclosure rules requiring parties to publicly report where their money goes.
The case began in 2022, when the National Republican Senatorial Committee, joined by then-Senate candidate J.D. Vance, sued the FEC. By the time it reached the Court, Vance was Vice President and the federal government had already sided with the plaintiffs, leaving the Court to appoint an outside lawyer just to defend the old rule. The Democratic National Committee and its Senate and House counterparts stepped in instead, defending caps that help both parties equally now that both are gone.
Justice Brett Kavanaugh's majority opinion held that two safeguards already on the books, rules against "earmarking" donations to a specific candidate and public disclosure, do the anti-corruption job the cap used to do. Justice Elena Kagan's dissent, joined by Justices Sotomayor and Jackson, traces the cap to the Watergate-era campaign finance overhaul and warns a donor capped at giving a candidate $7,000 directly can now route roughly half a million dollars to that candidate through a party instead.
Why it matters: this is the new money rule for every competitive House and Senate race this decade, and the agency that would normally issue guidance on it, the FEC, has lacked a quorum since 2025 and cannot act.
Want the full breakdown? The Deep Reason explains why this cap only ever applied to political parties, not super PACs, what it means for the nine Senate races both parties call battlegrounds, and the Nixon-era scandal that created the cap. Read it here →
Political Weather Report
What's Loud: A rule needed to bring the fiscal year 2027 defense policy bill to the floor failed for a second consecutive week, 198-224, after 14 Republicans joined all Democrats present in voting no. The rule would have paired the defense bill with the SAVE America Act, the voter ID and proof-of-citizenship bill the White House lists as a top priority, for Senate consideration.
What's Missing: A resolution before recess. Members opposing the rule wanted SAVE Act language written directly into the defense bill's text, not attached through a separate procedural pairing; the Speaker's office had offered the pairing as a way to advance both measures together.
What Matters: This is the second consecutive week a SAVE Act vehicle has stalled on the House floor, the same pressure campaign behind an unrelated housing bill still unsigned on this week's Watch List. The House returns July 13 with a $1.1 trillion authorization bill still stalled, regardless of where individual members stand on the SAVE Act itself.
What's Happening
Congress:
The House passed the KIDS Act, 267-117, folding an updated Kids Online Safety Act and a modernized children's privacy law into one bill requiring safety defaults for users under 17. It now goes to the Senate.
The House rejected, 189-235, a second War Powers resolution from Rep. Rashida Tlaib directing the removal of U.S. forces from hostilities tied to Israel's campaign against Hezbollah in Lebanon. Tlaib says the U.S. is providing intelligence and coordinating strikes with Israel; House Democratic leadership says no U.S. troops are in combat there. Twenty-two Democrats voted no this time, more than joined Republicans against her first attempt in June.
The House passed, 420-0, a resolution directing the Ethics Committee to compile and publicly release, within 60 days, records on monetary settlements tied to sexual harassment claims against members.
White House/Executive:
An interim final rule from the Justice and Homeland Security Departments took effect July 1, authorizing certified state, local, tribal, and territorial police to counter drone threats over public events and infrastructure under the SAFER SKIES Act.
Courts:
The Supreme Court ruled 6-3 in Trump v. Barbara that children born in the U.S. to parents here illegally or on temporary visas are citizens at birth under the Fourteenth Amendment, rejecting the executive order issued on the administration's first day in office in January 2025. Chief Justice Roberts wrote the majority.
Separately, the Court ruled 6-3 in West Virginia v. B.P.J. that states may bar transgender girls from girls' school sports teams without violating the Equal Protection Clause. Justice Kavanaugh wrote for the majority. Why this matters: both rulings closed the Court's term the same two days as the campaign-finance ruling above, settling questions litigated for over a year.
Worth Your Attention
President Trump declared an emergency and suspended duties on phosphate fertilizer imports from Morocco for up to eight months, citing supply disruptions and insufficient domestic production ahead of fall planting.
The U.S. marks 250 years of independence on July 4, the same week it hosts Belgium in the World Cup's round of 16 in Seattle, its first knockout-round match as a tournament host.
Watch List
July 4: Federal agencies must show initial results from the White House's "America by Design" initiative, timed to the 250th anniversary of independence.
~July 6: The 21st Century ROAD to Housing Act becomes law by statute if the President takes no action, as the bill's 10-day signing window closes. Trump canceled a planned signing ceremony for the bill in June, saying he would withhold his signature until Congress passes the SAVE Act.
July 14: The Senate is scheduled to vote on confirming Matthew Schwartz to the Second Circuit Court of Appeals, after invoking cloture 52-45.
July 15: The next quarterly FEC filing deadline arrives, the first disclosure window since the Supreme Court freed party committees to coordinate without limits.
Gov Math
9: the number of 2026 Senate races independent trackers like Ballotpedia call genuine battlegrounds, the seats where this week's ruling on party coordinated spending will be put to the test first.
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