The U.S. Departments of Health and Human Services and Education significantly reduced their workforce following a Supreme Court ruling that permitted the Trump Administration to proceed with its restructuring plans as litigation continues.
The U.S. Department of Health and Human Services has reduced its staff by about 25% as it tries to consolidate its 28 divisions into 15 and reduce its 10 regional offices to 5.
A limited primary injunction restricted layoffs in specific agencies, including the Centers for Disease Control and Prevention, the Food and Drug Administration’s Center for Tobacco Products, the Office of Head Start, and the Office of the Assistant Secretary for Planning and Evaluation.
Additionally, the Supreme Court overruled a lower court and permitted the Department of Education to proceed with its plans to terminate as many as 1,400 employees, nearly a third of its workforce.
President Trump Signs an Executive Order Addressing Homelessness
On July 24, President Trump signed an executive order, Ending Crime and Disorder on America’s Streets, redirecting federal funding to provide unhoused individuals suffering from serious mental illness or addiction with assisted outpatient treatment and care from treatment centers and similar facilities. The order redirects federal resources toward programs treating substance use. It also enables state and local governments‘ to implement “maximally flexible civil commitment, institutional treatment, and ‘step-down’ treatment standards that allow for the appropriate commitment” of unhoused individuals who are a danger to themselves or others.
Recipients of federal housing and homelessness assistance who engage in illegal practices or practice harm reduction and safe consumption efforts may have their funding frozen. The order encourages all actions, to the greatest extent permitted by law, to end support for housing first policies that deprioritize accountability and fail to promote treatment, recovery, and self-sufficiency.
The order permits recipients of federal funding for homelessness assistance to collect health-related information that the Secretary of Housing and Urban Development determines is necessary and effective to operate programs successfully. The data may then be shared with law enforcement authorities to provide appropriate care or to connect individuals with public health resources. Additionally, the order prioritizes funding for the expansion of drug and mental health courts.
Senate Appropriations Committee Approves Transportation-HUD Bills
The Senate Appropriations Committee voted 27 to 1 to approve the Fiscal Year 2026 Transportation, Housing and Urban Development, and Related Agencies Appropriations Act.
The bill significantly increases funding for rental assistance programs, including through a $1.3 billion increase for tenant-based Section 8 vouchers compared to fiscal year 2025. The bill also appropriates $30 million for new incremental vouchers available to youth within, and those aging out of, the foster care system.
The bill provides $4.5 billion for Homeless Assistance Grants, a $479 million increase above fiscal year 2025. Key allocations include $100 million toward new, permanent supportive housing, $107 million for new investments to address youth homelessness, and $52 million for new supports for survivors of domestic violence.
For further information, the U.S. Senate Committee on Appropriations published a summary of key provisions within the bill.
https://www.appropriations.senate.gov/imo/media/doc/fy26_thud_senate_bill_summary.pdf
HHS Issues Guidance Regarding DEI Initiatives to SSBG, CCDBG, and CBG Recipients
The Office of Community Services (OCS) strongly encourages all recipients of entitlement awards funded by Title XX of the Social Security Act to review all Intended Use Plans, pre-expenditure reports, and expenditures and services under these programs, including those made by subrecipients or contractors. Recipients are advised to ensure that they do not support diversity, equity, and inclusion (DEI) initiatives or any other initiatives that discriminate on the basis of race, color, religion, sex, national origin, or any other protected characteristic.
Likewise, the Office of Child Care (OCC) strongly encouraged all recipients of formula awards funded by the Child Care and Development Block Grant (CCDBG) Act to review all plans, services, strategies, and expenditures under these programs, including those made by subrecipients or contractors.
OCC and OCS recommend recipients take prompt action to conduct reviews for compliance with all applicable laws. Individuals are strongly encouraged to review budgets, budget justification narratives, program goals, and other materials to ensure that federal funds are not used for unlawful DEI initiatives. Expenditures found to be out of compliance with federal law may be subject to enforcement in accordance with applicable law and the terms and conditions of the award.
Congress Rescinds Public Broadcasting and Foreign Aid
Congress recently passed H.R. 4, the Rescissions Act of 2025. The bill rescinds $9 billion in previously appropriated funds, including approximately $1.1 billion for the Corporation for Public Broadcasting and $8 billion in foreign aid.
The House passed the bill by a vote of 216 to 213, and the Senate, 51 to 48.
Congressional leaders stressed the importance of public radio in offering cultural, informational, and educational programming. They also highlighted its unique ability to provide individuals with access to vital emergency alerting and reporting in times of crisis.
Moreover, the reductions in foreign aid directly impact the receipt of emergency shelter, water, health care, and family reunification for refugees and countries experiencing natural disasters and conflicts.
CMS Works to Reduce Duplicate Enrollment in Medicaid/ACA Exchange Plans
The Centers for Medicare & Medicaid Services (CMS) is partnering with states to reduce duplicate enrollments through three key initiatives.
For Individuals Enrolled in Two or More Medicaid Programs, CMS will request that states verify eligibility.
For Individuals Enrolled in Medicaid or CHIP and a Subsidized Federally Facilitated Exchange (FFE) Plan, CMS will request that individuals disenroll from Medicaid or CHIP if no longer eligible, end their subsidy (with the option to end their coverage), or notify the Exchange that the data match is incorrect. After 30 days, the FFE will end the subsidy for individuals who still appear to be enrolled in both Medicaid or CHIP and an Exchange plan with a subsidy.
For Individuals Enrolled in Medicaid or CHIP and a Subsidized State-Based Exchange (SBE) Plan, CMS will provide SBEs with a list of individuals who are potentially enrolled in the state’s Medicaid or CHIP and a subsidized Exchange plan and ask SBEs to determine whether these individuals are dually enrolled, and if so, to implement a process, similar to the federal Exchange, to recheck eligibility. CMS will work with states to prevent individuals from losing coverage inappropriately.
U.S. Department of Education Issues a Dear Colleague Letter Regarding H.R. 1 Implementation
The U.S. Department of Education recently issued a Dear Colleague Letter outlining amendments to the Higher Education Act of 1965 through H.R. 1 that were enacted immediately.
- Changes to Income Based Repayment (IBR) Plans: Borrowers no longer need to have a partial financial hardship to qualify for enrollment in an income-based repayment.
- Parent PLUS Loan Repayment Options: Borrowers with a consolidation loan that repaid a Parent PLUS Loan can now enroll in an IBR plan.
- Public Service Loan Forgiveness: Payments made under the newly created Repayment Assistance Plan (RAP) are eligible for the Public Service Loan Forgiveness (PSLF) program if all other eligibility criteria are met.
- Borrower Defense to Repayment Regulations: The Biden Administration’s Borrower Defense to Repayment regulations are delayed for loans that originated before July 1, 2035. The regulations established a new federal standard and process for deciding whether borrowers have a legal basis to discharge their federal Direct Loans.
- Closed School Loan Discharge Regulations: The Biden Administration’s Closed School Loan Discharge regulations are delayed for any loans that originated before July 1, 2035. The regulations expanded access to automatic discharges and clarified the circumstances when borrowers who reenroll in a comparable program are not eligible for a discharge.
Additionally, the letter provided notice that the Department is currently developing a schedule of loan reductions for part-time students. Reductions in the annual loan limit required by H.R. 1 will be made in proportion to the degree to which the student is not enrolled full-time, rounded to the nearest percentage point. Public comments will open later this year.
CMS Restricts Workforce and Multiyear Eligibility Waivers
The Centers for Medicare & Medicaid Services (CMS) recently issued two letters to states detailing that the agency does not anticipate approving new or extending existing section 1115 demonstration authorities, which expand continuous eligibility. CMS also stated that it does not anticipate approving new or extending existing Medicaid-funded workforce initiatives for training or employment-related activities.
CMS highlighted the importance of the policy change to preserve these vital programs for the most vulnerable Americans by removing costly initiatives that are estimated to require more than a billion dollar investment.
HUD Terminates PAVE Task Force
The U.S. Department of Housing and Urban Development (HUD) and the Office of Information and Regulatory Affairs (OIRA) announced the termination of the Property Appraisal and Valuation Equity (PAVE) task force. The decision aligns with a recently issued executive order, Ending Radical and Wasteful Government DEI Programs and Preferencing.
The task force was established to address systemic biases in the home appraisal process, particularly in the evaluation of properties in Black and Hispanic neighborhoods. However, HUD determined that by reducing the regulatory hurdles that lenders, appraisers, and other program participants face, the Federal Housing Administration will be better able to serve American homebuyers and homeowners.
House Judiciary Subcommittee Examines Nonprofit Misuse of Federal Funds
On July 15, the House Judiciary Subcommittee on Oversight held a hearing entitled, “How Leftist Nonprofit Networks Exploit Federal Tax Dollars to Advance a Radical Agenda.” Witnesses and representatives discussed the exploitation of federal tax dollars by nonprofits. They alleged nonprofits leveraged federal grants from the U.S. Agency for International Development and the Justice Department to fund causes fundamentally opposed to the national interests of Americans.
Witnesses emphasized the importance of transparency, highlighting the substantial amount of federal funding received. They also detailed ideological perspectives espoused by nonprofits and the promotion of initiatives misaligned with the consensus of American citizens. Witnesses offered the examples of universities, museums, public broadcasters, and USAID as key institutions.
Certain representatives highlighted the critical role of nonprofits in serving vulnerable populations, including by confronting transnational crime and supporting victims of trafficking and sexual abuse. The minority witness also highlighted the selection process and ongoing monitoring for nongovernment organizations that request and receive federal funding for programs such as law enforcement training, victim/witness assistance, and rule of law programming in countries professionalizing their criminal justice response.
Homeland Security Committee Considers Nonprofit Involvement in Immigration Challenges Through the Biden Administration
On July 16, the House Homeland Security Committee held a hearing entitled “An Inside Job: How NGOs Facilitated the Biden Border Crisis.” Representatives and witnesses discussed the vulnerability of unaccompanied minors to trafficking, exploitation, and forced labor. They stressed inadequate border security, frequency of falsified records, and a broad failure to aid and monitor unaccompanied minors properly.
Witnesses and several representatives alleged that non-government organizations misused federal funds to aid in and incentivize illegal immigration. They recommended oversight to ensure proper stewardship of federal funds and promote clear, continuous communication with local governments. Specifically, witnesses recommended a complete forensic audit of all Office of Refugee Resettlement contracts exceeding $100 million, mandated transparent public disclosures, and independent federal oversight.
Certain representatives stressed the harm of funding reductions and pauses. They highlighted the essential role of non-profits as non-political entities in serving vulnerable and marginalized communities. Representatives additionally raised concerns about the practices of U.S. Immigration and Customs Enforcement, including their detainment of American citizens, agents’ failure to identify themselves in arrests, and conditions of detention centers.
Senate Subcommittee Discusses Educational Choice and Literacy
On July 23, the Senate Committee on Health, Education, Labor, and Pensions’ Subcommittee on Education and the American Family held a hearing to discuss educational choice and literacy. The hearing centered family empowerment, the challenges the education system faces, and the need to support students in achieving academic success.
Certain senators and the Vice President of the Board of Education for the San Diego Unified School District expressed concern in response to the increasing privatization of K-12 education. They jointly stressed the importance of investments in evidence-based strategies and support for students with the highest needs, including those with disabilities.
Sector Updates from the Judiciary
Federal Court Upholds State Restriction of Chemical Abortions
The U.S. Court of Appeals for the Fourth Circuit determined that West Virginia is permitted to restrict access to the abortion-inducing drug, Mifepristone. The verdict isthe first federal appeals court’s ruling that Mifepristone may be subject to state restrictions prohibiting its use.
The Court of Appeals held that Congress did not specifically indicate that the U.S. Food and Drug Administration had exclusive regulatory power over the medication. Additionally, the majority stressed states’ historic and sovereign right to protect the health and safety of their citizens.
Court Pauses a Mississippi Education Law Prohibiting DEI Programs and Curriculum
The U.S. District Court for the Southern District of Mississippi temporarily blocked HB 1193, a Mississippi law that prohibits the state’s public schools and universities from teaching “divisive concepts,” determining it likely violates the First Amendment. The law also prohibits the establishment or maintenance of diversity, equity, and inclusion (DEI) offices, programs, trainings, or activities.
Judge Wingate determined that the law’s restrictions are excessively broad, and its vague language may be construed for arbitrary enforcement, fostering a risk that protected speech would be silenced. He also emphasized the harm that plaintiffs would experience through the threat of funding withdrawals and the pace and breadth of programmatic shutdowns.
The temporary restraining order will remain in effect until the court rules on the plaintiffs’ motion for a preliminary injunction. If the preliminary injunction is successful, the law will not be enforced while litigation is occurring.
Federal Appeals Court Upholds Constitutionality of Birthright Citizenship
The 9th U.S. Circuit Court of Appeals determined that a recently issued executive order, Protecting the Meaning and Value of American Citizenship, is unconstitutional. The order denies citizenship to any individual born in the U.S. if they do not have at least one parent with permanent legal status.
The court affirmed the necessity of a nationwide preliminary injunction issued by a lower court. The majority cited the executive order’s violation of the Citizenship Clause of the Constitution, precedent from previous litigation, and decades of Executive Branch practice. U.S. Circuit Judge Bumatay dissented, arguing that the states lacked a legal right to bring the lawsuit.
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H.R. 1 is expected to have profound and lasting effects on the social service sector. Among the most consequential changes are deep funding cuts to Medicaid, along with new, burdensome requirements that make it more difficult for people to enroll, re-enroll, and maintain coverage. According to an analysis from the Congressional Budget Office, these changes are projected to result in the loss of Medicaid coverage for 16 million individuals by 2034.
The bill also imposes new eligibility requirements for the Supplemental Nutrition Assistance Program (SNAP) and ties state funding to administrative error rates, which is expected to further restrict access. Information from the Congressional Budget Office estimates 3 million individuals will lose access to SNAP as a result.
Medicaid and SNAP are foundational to our nation’s safety net, protecting the health and well-being of millions. Reduced funding and access will directly harm individuals and families, while placing an unsustainable burden on the social service organizations that support them.
For further information, Social Current has published a brief overview, highlighting the most impactful provisions of the bill; a detailed summary, which details expected impacts to the sector; and the recording of the July 10 webinar about the bill.
Loans Enrolled in the SAVE Plan Will Begin Accruing Interest Aug. 1
The U.S. Department of Education recently announced that interest accrual for borrowers with loans in the Saving on a Valuable Education (SAVE) Plan will restart August 1.
The Department announced that it will begin direct outreach July 10 to the nearly 7.7 million borrowers enrolled in the SAVE Plan, with instructions on how to move to a legal repayment plan and begin making qualifying payments.
The announcement arrives as student loan policies are expected to change rapidly due to H.R. 1, the federal budget bill. H.R. 1 phases out Pay as You Earn (PAYE), Saving on a Valuable Education (SAVE), and the Income-Contingent Repayment (ICR) Plan. Borrowers will need to choose either the Repayment Assistance Plan, a new income-based plan, or the amended Income-Based Repayment Plan between July 2026 and July 2028.
Social Current’s detailed summary of H.R. 1 offers key information regarding the Repayment Assistance Plan and the amended Income-Based Repayment Plan.
Expected Changes to Public Student Loan Forgiveness Eligibility
The U.S. Department of Education recently concluded its negotiated rulemaking session to ensure employers involved with the Public Service Loan Forgiveness Program are not engaging in activities with a substantial illegal purpose.
The Department made 15 substantive changes to the regulatory language according to feedback from the committee. Although the Department has not publicly released the changes, it will now draft a Notice of Proposed Rulemaking in the Federal Register for public comment, which is expected to be released before November 1.
HHS and the Department of Agriculture Amend Program Eligibility for Immigrants Lacking Permanent Legal Status
The U.S. Department of Health and Human Services rescinded a 1998 interpretation of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA).
The Department claimed the act improperly allowed immigrants lacking permanent legal status to access certain social service programs. HHS’ revised policy will take effect immediately upon publication in the Federal Register.
Key programs that will be formally classified as federal public benefits and have restricted eligibility include:
- Certified Community Behavioral Health Clinics
- Community Mental Health Services Block Grant
- Community Services Block Grant
- Head Start
- Mental Health and Substance Use Disorder Treatment, Prevention, and Recovery Support Services Programs administered by the SAMHSA
- Projects for Assistance in Transition from Homelessness Grant Program
- Substance Use Prevention, Treatment, and Recovery Services Block Grant
- Title IV-E Educational and Training Voucher Program
- Title IV-E Kinship Guardianship Assistance Program
- Title IV-E Prevention Services Program
The Department of Health and Human Services has published a complete list of programs.
The departments of Education and Labor have issued similar notices.
Similarly, the Department of Agriculture released the following programs to be formally classified as federal public benefits and restrict eligibility:
- The Supplemental Nutrition Assistance Program
- Food Distribution Program on Indian Reservations
- The Emergency Food Assistance Program
- Commodity Supplemental Food Program
- Special Supplemental Nutrition Program for Women, Infants, and Children
- WIC Farmers’ Market Nutrition Programs
- Senior Farmers’ Market Nutrition Programs
- National School Lunch Program
- School Breakfast Program
- Child and Adult Care Food Program
- Fresh Fruit and Vegetable Program
- Special Milk Program
- Summer Food Service Program
- Summer EBT
- Disaster Assistance
ACF Opens State Applications for Redesigned Welfare Pilot Programs
The Administration for Children and Families released a request for applications for the Temporary Assistance for Needy Families pilot.
The pilot will choose up to five states to test innovative approaches aimed at promoting work and reducing government dependency. According to ACF, the redesigned pilot reflects the Trump Administration’s commitment to “reshaping welfare programs to encourage employment, personal responsibility, and strong families.”
The application will allow states to propose alternative performance measures that prioritize employment outcomes, earnings progression, and reduced reliance on Temporary Assistance for Needy Families (TANF), Medicaid, and Supplemental Nutrition Assistance Program (SNAP) benefits — rather than the current work participation rates.
The pilot program will operate for six years, with the first year dedicated to establishing baseline data and negotiating performance targets. Applications are due August 15, 2025. The pilot program for the selected states will begin on October 1, 2025.
Children’s Bureau Issues Updated Guidance
The Children’s Bureau stressed the importance of complying with the executive order, Ending Illegal Discrimination and Restoring Merit-based Opportunity, through recently issued guidance. The Bureau strongly encouraged all recipients of entitlement or formula awards funded by titles IV-B or IV-E of the Social Security Act or the Child Abuse Prevention and Treatment Act to review all plans, services, strategies, and expenditures under these programs, including those made by subrecipients or contractors, to ensure that they do not support diversity, equity, and inclusion initiatives or any other initiatives that discriminate on the basis of race, color, religion, sex, national origin, or another protected characteristic.
Senate Agriculture Committee Approves Appropriations Bill
On July 10, the Senate Agriculture Committee unanimously passed its agriculture appropriations bill, the Fiscal Year 2026 Agriculture, Rural Development, Food and Drug Administration (FDA), and Related Agencies Appropriations Act. The bill contains notable changes from the previously passed House version, increasing funding for the Women, Infants, and Children (WIC) Program by $603 million and the Commodity Supplemental Food Program (CSFP) by $36 million. It maintains the full Cash Value Benefit for fruits and vegetables. The bill also fully funds all mandatory nutrition programs for fiscal year 2026, including SNAP, School Lunch Program, School Breakfast Program, and Summer EBT.
The Senate Agriculture Committee also allocated $1.715 billion for rental assistance, an increase of $73 million over fiscal year 2025. It also continues rural housing preservation efforts, including the decoupling pilot program, multifamily housing technical assistance, and preservation financing.
For further information, Vice Chair Patty Murray (D-Wash.) issued a summary of key provisions within the bill.
Sector Updates from the Judiciary
Supreme Court Upholds Agency Workforce Reductions
The Supreme Court lifted a lower-court order that temporarily prevented the Trump Administration from laying off tens of thousands of federal workers.
The nation’s largest union of federal workers, the American Federation of Government Employees, filed the lawsuit alongside 11 nonprofit organizations and 6 local governments.
The plaintiffs alleged that in issuing the executive order, Implementing the President’s “Department of Government Efficiency” Workforce Optimization Initiative, the Trump administration circumvented congressional approval for its reorganization plans.
Solicitor General Sauer claimed that the president does not require special permission from Congress to exercise the essential presidential power of overseeing federal agencies. He additionally highlighted the directive to agencies to ensure that they do not eliminate any of the functions that statutes passed by Congress require.
In issuing their verdict, the justices determined that the administration is allowed to launch reorganizations as litigation continues. However, they maintained that the ruling does not speak to the legality of any agency plans for restructuring or shrinking the workforce.
Affected agencies include, but are not limited to, the Departments of Agriculture, Energy, Health and Human Services, and Veterans Affairs, as well as the IRS, Small Business Administration, and Environmental Protection Agency.
The district court will now determine the legality of the layoffs.
The decision follows the United States District Court of the Northern District of California’s verdict, temporarily preventing the reductions in force from occurring. US District Judge Illston maintained agencies would not be able to perform the tasks mandated by Congress if the reductions in force continued.
The decision also arrived shortly after a US District Court for the District of Rhode Island stopped mass firings and restructuring at the US Department of Health and Human Services from proceeding. Judge DuBose determined the proposed cuts violate the Administrative Procedure Act as they are arbitrary, capricious, and unsupported by the evidence. The court also upheld the irreparable harm the plaintiffs are expected to experience as they will not be able to continue offering federally funded health programs. The order paused 40 reduction in force actions underway at 17 agencies.
Federal Court Upholds Birthright Citizenship
The U.S. District Court for the District of New Hampshire blocked the enforcement of an executive order prohibiting birthright citizenship. Judge LaPlante issued a preliminary injunction nationwide and certified a class action lawsuit, including all children who will be affected.
The executive order limits birthright citizenship to individuals with at least one parent who is a U.S. citizen or permanent resident. The order also denies citizenship to children whose mothers are temporarily in the U.S., including those visiting under the Visa Waiver Program or as tourists. Students and individuals whose fathers are not citizens or lawful permanent residents would be excluded as well.
HHS Ordered to Restore Data Removed Due to “Gender Ideology” Executive Order
The U.S. District Court for the District of Columbia ordered the Department of Health and Human Services to restore webpages and datasets that were removed in response to the executive order, Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.
Doctors for America filed the lawsuit, maintaining that providers relied on the data and websites to perform routine patient care tasks. They highlighted the expanse of data removed, including information about prescribing HIV medication and contraception and caring for patients with opioid dependency.
Doctors for America alleged that, in removing essential documents, the government had failed to provide adequate reason or notice. Judge Bates affirmed the decision to remove documents failed to consider the impact on physicians and neglected to follow the procedures that Congress has prescribed, ordering the data be restored.
Federal Court Upholds DOGE’s Access to Labor and Health and Human Services Data
The U.S. District Court for the District of Columbia permitted the Department of Government Efficiency (DOGE) to retain access to computer systems and data at the Labor and Health and Human Services Departments.
Unions and nonprofits previously issued a lawsuit due to DOGE’s lack of legal authority in accessing the data and their violation of the Administrative Procedure Act. However, Judge Bates determined that the plaintiffs failed to show the required harm for a preliminary injunction. The court cited a lack of evidence that personnel will imminently misuse or publicly disclose sensitive information.
Litigation on Our Radar
IRS Seeks Non-Enforcement of the Johnson Amendment
The IRS recently responded to a lawsuit filed by two Texas churches and an association of Christian broadcasters that sought a broad exemption to the Johnson Amendment. The plaintiffs requested that they would be able to endorse candidates to their members while maintaining their tax exempt status, maintaining that nonprofit nonpartisanship violates the First Amendment right to free speech.
If successful, the request would overrule a longstanding protection for nonprofits. The Johnson Amendment states that charitable nonprofits, foundations, and religious organizations that maintain a 501(c)(3) status may “not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”
In response to the lawsuit, the IRS wrote that if a house of worship endorsed a candidate to its congregants, the IRS would view that not as campaigning but as a private matter. The IRS and the plaintiffs asked the federal judge to stop the Johnson Amendment from being enforced against the parties filing the lawsuit.
The IRS’ statement signals a dangerous precedent. If the Johnson Amendment is not fully enforced, its legal and cultural authority could erode—along with the nonpartisan foundation of our sector. While the case centers on religious organizations, the implications may extend far beyond houses of worship. Weakening the Amendment could open the door to widespread politicization of nonprofit work.
Social Current remains resolute in advocating for the full enforcement of the Johnson Amendment. For further information, we have recently issued a statement, stressing the amendment’s importance for the nonprofit sector and warning of the harm a weakened version would have.
16 States File a Lawsuit to Restore Mental Health Grants
A coalition of 16 states filed a lawsuit against the Department of Education after approximately $1 billion in federal mental health funding was abruptly discontinued.
The withdrawal of funds is expected to cause the dismissal of school-based mental health employees, defund scholarships for college students preparing to serve as mental health professionals in K-12 schools, and eliminate critical mental health services offered by schools.
The state attorneys general argue that discontinuing the multi-year grants violates federal law and regulations. They are requesting that the funding be restored immediately.
Cities Challenge CMS Rule Expected to Significantly Reduce Coverage
The cities of Baltimore, Chicago and Columbus, Ohio, along with a coalition of health care professionals and small businesses, filed a lawsuit against the recently issued Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability Final Rule.
The rule is intended to address waste, fraud, and abuse in the Patient Protection and Affordable Care Act (ACA) eligibility and enrollment systems alongside rising “improper enrollment and health care costs,” according to CMS. HHS maintains the rule closes loopholes, strengthens oversight, and ensures taxpayer subsidies go to individuals who are truly eligible.
The lawsuit stresses the barriers the rule would create in accessing affordable insurance coverage, leading to an increased population of underinsured and uninsured Americans. The plaintiffs cite the harm expected to follow maximum annual cost-sharing limitations and stricter income-verification measures required by the rule. They also highlighted the hardships expected to follow the required premium increases for exchange plans, which would reach up to $714 per year for an average family, as well as the shortened enrollment period, which would be reduced by two weeks.
The plaintiffs warn that the rule will cause at least 1.8M Americans to lose ACA coverage and result in higher premiums and out-of-pocket costs.
The plaintiffs are requesting that the rule be blocked before it takes effect on August 25 due to its violation of the Administrative Procedure Act.
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On Monday, July 7, the IRS responded to a lawsuit in which two Texas churches and an association of Christian broadcasters sued the IRS to create a broad exemption to the Johnson Amendment.
The request would overrule a longstanding protection for nonprofits that has remained the federal tax code since 1954. The Johnson Amendment details that charitable nonprofits, foundations, and religious organization that maintain a 501(c)(3) status may “not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”
The Johnson Amendment is a cornerstone of protection for our sector. It ensures that nonprofits remain focused on missions, not politics, and it preserves the public’s trust by preventing charitable organizations from becoming engaged in political campaigns. Any erosion of the amendment signals a potentially dangerous precedent that undermines the nonpartisan foundation of the sector. While this case centers on religious organizations, the implications may extend beyond houses of worship and could open the door to widespread politicization of nonprofit work.
Social Current opposes any attempt to repeal or weaken the Johnson Amendment. We affirm that the amendment offers essential protections to our sector by safeguarding our integrity and upholding public trust.
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August Recess, a monthlong period when Congress adjourns and members return to their home states, is an important opportunity for you to to meet and reconnect with your representatives, showcase your organization’s impact, and advocate for critical issues.
In-person meetings allow representatives to hear your story directly and to understand the challenges your organization is facing.
2025 Dates
- House of Representatives: July 25-Sept. 1
- Senate: Aug. 4-Sept. 1
Advantages of Scheduling During August Recess
- Accessibility: Without Congressional hearings and competing responsibilities, representatives can focus their time within their district.
- Influence: Meeting directly with representatives is a critical opportunity for representatives to hear your message firsthand. Your voice and passion are critical context for your community’s strengths and challenges, as well as the impact of your organization’s services.
Benefits of Site Visits
Site visits are one of the most impactful ways to engage representatives while they are to their home districts. Inviting your member of Congress to tour your organization allows them to directly witness the impact of your organization and learn from the individuals you serve.
- By encouraging representatives to engage in your programs, as possible, they are able to witness how your services impact community members, which facilitates informed decision making. A strong understanding of lived experience is essential to developing responsive and effective policies that are grounded in a community’s unique needs.
- In creating a forum for dialogue and questions, site visits can help you build solid foundations for lasting relationships, where your organization works alongside your elected officials to address the challenges experienced by your community.
Tips for Planning a Site Visit
Developing Your Ask
- As you determine whether an invitation to a site visit, organizational event, or community roundtable would best suit your organization’s needs, consider what a successful meeting means for your organization. We recommend considering the following goals:
- A representative gaining an enhanced understanding of the populations you work with and the challenges they experience
- A representative introducing or co-sponsoring a bill
- A representative offering support for regulatory changes
- Once you determine the hallmarks of a successful meeting, craft a direct ask, detailing specific opportunities for your representatives to engage and address the issue.
Preparing for Impactful Meetings
- Tell your story and share your why:
- What brought you to this work with this organization?
- What are the stakes for your community?
- What would happen without your work?
- Focus on the current impact of the issue and the cost of failing to act.
- Center your organization’s impact.
After Your Meeting
- Follow up within 24 hours. Send an email thanking the representative and their staff for their time. Consider including supplemental data and reference materials.
- Begin to consider future opportunities for outreach and engagement. Consistent and regular communication facilitates strong relationships and partnerships in addressing the challenges faced by your community.
Considering Local Media Engagement
- Increase Visibility: Local news remains a trusted source of information for communities. Publications offer an essential source of visibility for your organization’s efforts and the issues you work to address.
- Take Back Your Narrative: By collaborating with reporters or publishing op-eds, local media affords critical opportunities for you to frame your narrative and define the issue in your terms.
- Inspire Community Action: Stories may spark interest among community members to become involved in your organization’s advocacy, growing support, and capacity to address critical issues.
Download this article as a PDF tip sheet.
Additional Resources from Social Current
Download Social Current’s Policy, Advocacy, and Communications Toolkits for further information and guidance to support your advocacy.
Social Current offers customizable government affairs and advocacy consulting. We can collaborate with you to develop your advocacy strategy, train staff, mobilize your communities, and more.
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On July 4, President Trump signed into law H.R. 1, the federal budget bill.
This sweeping legislation includes provisions that will have profound and lasting effects on the social service sector. Among the most consequential changes are deep funding cuts to Medicaid, along with new, burdensome requirements that make it more difficult for individuals to enroll, re-enroll, and maintain coverage. According to an analysis from the Congressional Budget Office, these changes are projected to result in the loss of Medicaid coverage for 16 million individuals by 2034.
The bill also imposes eligibility requirements for the Supplemental Nutrition Assistance Program (SNAP) and ties state funding to administrative error rates, which is expected to further restrict access. Information from The Congressional Budget Office estimates 3 million individuals will lose access to SNAP as a result.
Medicaid and SNAP are foundational to our nation’s safety net, protecting the health and well-being of millions. Reduced funding and access will directly harm individuals and families, while placing an unsustainable burden on the social service organizations that support them.
Resources from Social Current
- Essentials of H.R. 1: This two-page overview highlights implications for the sector.
- H.R. 1 Detailed Summary: This detailed summary delves into the bill’s provisions related to Medicaid, SNAP, student loans, immigration, nonprofit tax implications and tax credits.
- Webinar Recording: This webinar, held July 10, reviewed the federal budget and its impact on the social sector, as well as outlined advocacy opportunities.
Social Current remains steadfast in partnering through the bill’s implementation to ensure the needs of our communities are represented. We will continue to work alongside our network to support bold, sustained advocacy, collectively leveraging our strength to safeguard a strong and resilient social sector.
To stay informed about federal policy and advocacy opportunities through Social Current, join our grassroots advocacy network and subscribe to the Policy & Advocacy Radar newsletter.
In a vote of 51-49, the Senate voted to proceed with a key procedural step to advance H.R.1, often referred to as the One Big Beautiful Bill Act. The bill contains critical provisions expected to significantly reduce access to Supplemental Nutrition Assistance Program (SNAP), Medicare, and the Earned Income Tax Credit by decreasing funding and increasing eligibility verification requirements. To review the changes expected to significantly impact the social service sector, read Social Current’s issue summary.
Following extended debate during the weekend, the Senate began hosting a series of votes this morning, at 9 a.m. ET, through a process that allows an unlimited number of amendments to be brought to the floor. Senators plan to offer amendments that would impact a broad array of issues, including SNAP, Medicaid, and rural hospitals.
After voting on amendments, the Senate will vote on the final bill. If the bill passes, the Senate and House will then work collaboratively to unify their versions of the bill, ensuring a singular, identical bill is agreed upon by both chambers.
As the House and Senate deliberate, it is important to make your voice heard. Social Current has created a sample message to send to your representatives. Take action today!
Children’s Bureau Outlines Implementation of the Supporting America’s Children and Families Act
The Administration for Children and Families has released an information memorandum detailing implementation of the Supporting America’s Children and Families Act, signed into law Jan. 4, 2025. The legislation includes major updates relevant for the social service sector.
For the first time in over 15 years, the bill fully reauthorizes Title IV-B child welfare programs, providing resources to states, tribes, and territories for family preservation, child safety, and support for foster youth through fiscal year 2029. It also aims to address workforce challenges, prevent unnecessary separations, and expand funding and flexibility afforded to tribes.
View Social Current’s one-pager for a summary of the Supporting America’s Children and Families Act and its impact on the social sector.
Key provisions will take effect Oct. 1, 2025.
CMS Finalizes Rule Impacting ACA Enrollment and Eligibility
The Centers for Medicare and Medicaid Services (CMS) has finalized a rule that significantly alters eligibility and enrollment under the Affordable Care Act (ACA), with major implications for access and affordability.
Effective Aug. 25, 2025, the rule eliminates the monthly special enrollment period for individuals with projected household incomes at or below 150% of the federal poverty level. It also standardizes the Annual Open Enrollment Period starting with the 2027 plan year.
In addition, the rule excludes Deferred Action for Childhood Arrivals (DACA) recipients from eligibility and enrollment in ACA Exchange coverage and Basic Health Program (BHP) coverage in States that elect to operate a BHP.
CMS estimates that between 725,000 and 1.8 million people will lose coverage in 2026 as a result of the final rule.
For further information, CMS released a fact sheet outlining the finalized policies.
House Committee Reviews Policies and Priorities of the Department of Education
TThe House Committee on Education and Workforce held a hearing to examine the Department of Education’s current policies and future direction. Lawmakers affirmed their commitment to a thriving education system and a workforce prepared to succeed. They raised concerns about the student loans crisis and called for stronger federal protections for borrowers.
Education Secretary McMahon testified on the Department’s efforts to eliminate federal bureaucracy, reduce waste, and empower states, parents, and educators. She underscored the importance of accountability, safe learning environments, and effective higher education. Key priorities included addressing the student loan debt crisis, simplifying repayment programs, and expanding access to workforce PELL grants.
Committee members expressed concern for the Department’s oversight of federal grants, training, legal compliance, funding for magnet schools and special education, and future support for programs such as the Perkins Grant Program.
House Committee Weighs Solutions to Child Care Accessibility Crisis
The House Subcommittee on Early Childhood, Elementary, and Secondary Education held a hearing to address the rising cost of child care, which has become unaffordable for countless families amid increasing living expenses. Ranking Member Suzanne Bonamici (D-Ore.) cited an estimated $122 billion in annual lost earnings and productivity that child care challenges for parents and caregivers in the workforce cost the economy.
Lawmakers emphasized the need for innovative, sustainable approaches to strengthen the child care sector. Chairman Kevin Kiley (R-Ca) encouraged public private partnerships while Bonamici raised concerns about communities lacking access to resources needed to implement such solutions equitably.
Witnesses underscored the essential role of accessible child care for families, similarly boosting workforce participation, business productivity, and promoting long-term economic mobility. They also emphasized the need for flexibility and choice to reflect the diverse needs of communities and working parents.
House Subcommittee Discusses Services Available to Youth Exiting Foster Care
The House Ways and Means Committee’s Work and Welfare Subcommittee, recently held the hearing, “Aging Out is Not a Plan: Reimagining Futures for Foster Youth.” Chairman Darin LaHood (R-Ill.) and Ranking Member Danny Davis (D-Ill.) affirmed the committee’s bipartisan commitment to supporting children and improving outcomes for families. They discussed the Foster Care Independence Act of 1999 and services offered by the John H. Chafee Foster Care Independence Program, including independent living services and Education and Training Vouchers.
Committee members and witnesses stressed the challenges youth face after exiting the foster care system, highlighting challenges accessing mental health care, housing, and higher education. They referred to a recent report from the Government Accountability Office, which details states’ underutilization of Chafee funds, likely due to administrative barriers and red tape that complicate states’ ability to draw down funds. The challenges are compounded by the fragmented and disconnected nature of services, leaving youth to navigate a complex web of services.
In sharing their experiences, witnesses detailed similar barriers to accessing needed services. They also stressed the transformative power of family, peer connections, and community to support youth in achieving their dreams and goals, while maintaining their health and well-being. Additional recommendations included increasing funding limits for allowed yearly education costs alongside rising costs of attendance. Additionally, witnesses recommended expanding the definition of qualified education and training programs for Education and Training Voucher (ETV) funds to include programs in the trade and technical career pathways.
Committee members stressed their commitment to working collaboratively to improve Chafee to provide better support and help youth achieve their full potential, and they thanked individuals who have received foster care services for sharing their experiences, wisdom, and expertise.
Sector Updates from the Judiciary
Supreme Court Upholds U.S. Preventive Services Task Force
The Supreme Court upheld the structure of the U.S. Preventive Services Task Force, a section of the U.S. Department of Health and Human Services, which sets no-cost coverage for preventive services. Following the Affordable Care Act, health insurers and group health plans are required to provide the recommended preventive services without copayments, deductibles, or additional cost-sharing charges for patients.
A lawsuit was filed alleging the task force members were unconstitutionally appointed; however, a 6-3 majority affirmed the appointments were consistent with the Constitution’s Appointments Clause.
The ruling safeguards access to preventive care for an estimated 40 million individuals, according to a study conducted by Stanford University’s Stanford Prevention Policy Modeling Lab.
Supreme Court Restricts Federal Judges’ Authority to Grant Nationwide Injunctions
In a lawsuit regarding the legality of President Trump’s executive order prohibiting birthright citizenship, the Supreme Court answered an essential larger question of the legality of issuing nationwide injunctions.
The conservative majority determined that the ability to grant federal injunctions lies beyond the authority of lower courts. Writing for the majority, Justice Barrett asserted the role of federal courts is not to “exercise general oversight of the Executive Branch; they resolve cases and controversies consistent with the authority Congress has given them.”
Litigation determining the legality of birthright citizenship will continue as the Supreme Court remained silent on its constitutionality. In the interim, the decision’s impact extends to more than 40 nationwide injunctions affecting key issues, including federal funding freezes. However, it remains silent on an additional pathway for individuals and organizations to seek relief against harmful federal orders: class action lawsuits.
Supreme Court Upholds Tennessee Ban on Gender-Affirming Care for Youth
The U.S. Supreme Court has upheld a Tennessee law banning the use of puberty blockers and hormone therapy for transgender minors, ruling that it does not violate the Constitution’s equal protection clause. The decision, split along ideological lines, allows the law to remain in effect.
In the majority opinion, the justices stated that because the law does not breach constitutional protections, policy decisions on the matter should be left to “the people, their elected representatives, and the democratic process.” They also noted that the law does not make distinctions based on sex, but instead prohibits providers from administering certain treatments to minors regardless of gender.
Tennessee is one of 27 states that have enacted laws restricting or banning gender-affirming care for youth. Many of these laws face ongoing legal challenges, including in Arkansas and Montana, where courts have struck down similar measures.
The decision also follows a recent Supreme Court ruling that requires schools to offer children and parents the opportunity to opt out from public school lessons utilizing LGBTQ-themed storybooks.
Supreme Court Sends New York Abortion Coverage Mandate Back for Review
The U.S. Supreme Court has ordered the New York Court of Appeals to reconsider a ruling that requires employer health insurance plans to cover medically necessary abortion services. The mandate was codified into state law in 2022.
The decision to remand the case follows a recent Supreme Court ruling that Wisconsin violated the rights of Catholic-affiliated charitable organizations by denying them a state unemployment tax exemption—an outcome that may influence how religious exemptions are considered in similar cases.
Supreme Court Limits Medicaid Beneficiaries’ Right to Sue Over Provider Choice
In a decision split along ideological lines, the U.S. Supreme Court ruled that Medicaid beneficiaries cannot sue to challenge a state’s decision to exclude a health care provider from the program. The case centered on South Carolina’s move to bar Planned Parenthood from its Medicaid program due to the organization’s provision of abortion services.
The lawsuit was brought by Julie Edwards, a patient who had received care from Planned Parenthood and sought to continue receiving all reproductive and gynecological services there.
Writing for the majority, Justice Neil Gorsuch stated that the Medicaid Act does not clearly establish a private right of action allowing individuals to sue states for access to “any qualified provider.”
The ruling overturns a lower court decision from the 4th U.S. Circuit Court of Appeals, which had found that the Medicaid Act created enforceable rights under federal civil rights law and had previously blocked South Carolina from excluding Planned Parenthood.
The decision is expected to have significant implications for health care access. By limiting the ability of Medicaid recipients to challenge provider exclusions, it narrows recourse when states cut off funding for organizations like Planned Parenthood—even for services unrelated to abortion.
Federal Court Strikes Down Reproductive Health Care Privacy Rule
A federal judge in the Northern District of Texas has invalidated a U.S. Department of Health and Human Services (HHS) rule aimed at strengthening privacy protections for reproductive health care. The court ruled that HHS exceeded its legal authority in issuing the 2024 HIPAA Rule to Support Reproductive Health Care Privacy. The rule prohibited HIPAA-covered entities from using or disclosing protected health information for purposes such as criminal investigations related to the lawful provision or receipt of reproductive health care.
Key provisions of the rule included:
- Broadly defining “reproductive health care” to include services such as abortion, gender-affirming care, IVF, STD screenings, maternity care, contraception, vasectomies, and mammograms.
- Barring the use or disclosure of protected health information if it would support prohibited activities like investigations into lawful care.
- Establishing safeguards to prevent misuse of requested reproductive health information.
The court found the rule unlawfully restricted state public health laws and improperly redefined terms such as “person” and “public health.” While most of the rule has been blocked nationwide, limited protections for substance use disorder treatment records remain intact.
Supreme Court Blocks Rule Requiring Advance Notice for Deportations
The U.S. Supreme Court has upheld a Trump-era policy allowing the federal government to deport individuals to third countries, even if those are not their countries of origin. The decision overturns a lower court ruling that had required the government to give individuals at risk of deportation 10 days’ notice and the opportunity to argue that they could face persecution or torture.
The Court found that the lower court’s mandate overstepped judicial authority and interfered with presidential discretion and foreign diplomacy.
Federal Court Orders Reinstatement of Education Department Civil Rights Staff
A federal judge has ordered the reinstatement of employees fired from the U.S. Department of Education’s Office for Civil Rights (OCR), issuing a preliminary injunction effective June 19. The ruling halts a March directive from the Trump administration that closed seven of OCR’s 12 regional offices and cut half of its 550-person staff.
The lawsuit was filed by the Massachusetts-based Victims Rights Law Center on behalf of two students, arguing that the reduction in staff created a severe resource gap that harmed students facing sexual, racial, and disability discrimination.
U.S. District Judge Myong J. Joun found that the plaintiffs experienced harm due to delayed investigations, which directly affected their ability to access education.
Federal Judge Blocks AmeriCorps from Revoking Previously Awarded EDI Funds
A federal judge in the Northern District of California has ruled that AmeriCorps cannot rescind or suspend grant funding based on compliance with executive orders tied to equity, diversity, inclusion (EDI); gender, or climate policy. The decision prevents the agency from enforcing a Feb. 13 directive requiring all grant activities to align with executive orders from the Trump administration as a condition of funding.
The ruling came after AmeriCorps attempted to revoke $650,000 in previously awarded funding from the San Francisco Unified School District, targeting programs that incorporate EDI practices. U.S. District Judge Edward M. Chen found the district faced irreparable harm if the funding were withdrawn.
The decision replaces an earlier temporary restraining order issued in March and affirms prior rulings that determined conditions tied to anti-EDI and related executive orders are likely too vague to be legally enforceable.
While litigation continues, AmeriCorps is barred from freezing, terminating, or altering any existing grant funds awarded to the district for EDI-related programs.
New York Court of Appeals Affirms Resentencing Rights for Domestic Violence Survivors
The New York Court of Appeals has upheld the authority of appellate courts to resentence incarcerated individuals under the Domestic Violence Survivors Justice Act (DVSJA), a state law allowing courts to consider the impact of domestic abuse when determining criminal sentences.
In a split decision, the court ruled that the Albany-based Third Appellate Department acted within its authority when it reduced the sentence of a domestic violence survivor. The appellate court’s decision overruled a trial court judge who had previously denied the resentencing request under the DVSJA.
The ruling reinforces the role of higher courts in ensuring that survivors of domestic violence receive fair consideration during sentencing.
Subscribe to the Policy and Advocacy Radar to receive our biweekly policy roundup, which includes commentary on issues in Social Current’s federal policy agenda, opportunities to take action, and curated news and opportunities.
The Senate Health, Education, Labor, and Pensions Committee released draft legislative text to amend the appropriations bill. If passed, the provisions would significantly impact student loan borrowers.
The Senate’s proposal includes:
- Revoking federal financial aid from college programs that can’t prove their graduates are earning more income than they would have without a degree
- Ending the ability to defer debt payments when borrowers experience economic hardship and unemployment
- Eliminating the Saving on a Valuable Education, or SAVE, program and the Grad PLUS loan program
U.S. Senate Committee on Agriculture, Nutrition, and Forestry additionally proposed changes that are expected to significantly limit access to nutrition programs.
- Removing a provision that would have exempted veterans, individuals experiencing homelessness, and those under the age of 24 who aged out of foster care at age 18 from work requirements to receive SNAP benefits
- Reducing matching funds offered to state agencies according to SNAP Quality Control Payment Error Rates
- Eliminating the National Education and Obesity Prevention Grant Program once FY25 funding is fulfilled
As the Senate deliberates, it is important to make your voice heard. Social Current has created an issue summary and a sample message to send to your senators. Take action today!
U.S. Department of Health and Human Services Reconstitutes the Advisory Committee for Immunization Practices
On June 9, the U.S. Department of Health and Human Services announced the removal of all 17 sitting members of the Advisory Committee for Immunization Practices (ACIP). ACIP makes recommendations on the safety, efficacy, and clinical need of vaccines to the Centers for Disease Control and Prevention.
The members will be replaced with individuals currently under the Department’s consideration. The Secretary affirmed the importance of ensuring that government scientific activities are informed by the most credible, reliable, and impartial scientific evidence available.
Congressional Advisers Release Recommendations to Improve Access to Care for Children and Adults with Special Health Care Needs
The Medicaid and CHIP Payment and Access Commission issued their June 2025 report, outlining the following recommendations,
- Require states to identify ways to transition minors with special health care needs to adult care to prevent the loss of Medicaid benefits when they age out of CHIP
- Require state Medicaid and Title V agencies to mutually define the roles and responsibilities of the agencies in supporting the transitions from pediatric to adult care
- Ensure children maintain appropriate access to residential behavioral health treatment services
The Commission also highlighted barriers to accessing appropriate residential treatment, including limited availability of information, a lack of uniformity in assessing children’s need for residential behavioral health care, and workforce shortages. They further emphasized the harm caused by social stigma, limited provider availability, and prior authorization hurdles.
House Committee on Homeland Security Investigates NGOs Offering Migrant Assistance
The House Committee on Homeland Security Chairman Mark Green (R-Tenn.) and Subcommittee on Oversight, Investigations, and Accountability Chairman Josh Brecheen (R-Okla.) launched an investigation of more than 200 non-governmental organizations that provided services or support to migrants during the Biden-Harris Administration.
The investigation was created to examine whether NGOs used federal funds to facilitate illegal immigration. The named organizations have been asked to complete a survey regarding the government grants, contracts, and disbursements they received. They’ve been asked to detail what material assistance they’ve offered, including through transportation, housing, and shelter services. They must also answer whether the organizations have sued the federal government or filed supporting documents against the U.S. government.
House Committee on Oversight Hosts Hearing Regarding NGOs
On June 4, the Delivering on Government Efficiency Subcommittee of the House Committee on Oversight and Government Reform held a hearing titled, “Public Funds, Private Agendas: NGOs Gone Wild.”
Subcommittee Chair Marjorie Taylor Greene (R-Ga.) opened the hearing by maintaining that Democratic elected officials and appointees work closely with non-governmental organizations to advance a political agenda outside the will of Americans. Republican congressmembers and majority witnesses affirmed allegations of fraud and abuse of federal funds.
Ranking Member Melanie Stansbury (D-Minn.) raised concerns for nonprofits, especially due to ongoing funding freezes, and the resulting challenges communities are facing. Democratic representatives shared similar concerns and, alongside the minority witness, Diane Yentel, the president and CEO of the National Council of Nonprofits, detailed the role of nonprofits and essential benefits they offer to their communities and the country as a whole.
Sector Updates from the Judiciary
U.S. Supreme Court Upholds Religious Tax Exemption
The U.S. Supreme Court unanimously ruled that, according to the First Amendment, it is unconstitutional to impose a denominational preference by differentiating between religions because of theological differences.
The verdict follows a ruling from the Wisconsin Supreme Court that upheld Catholic Charities’ denial of an exemption from the state’s unemployment tax program. The Wisconsin Supreme Court determined that because the organization is not operated primarily for religious purposes within the state’s legal definition because it does not proselytize or limit their services to Catholics. The U.S. Supreme Court determined Catholic-affiliated charities were wrongly denied a religious exemption from having to pay into the state’s unemployment tax program.
U.S. Supreme Court Unifies Standard for Students with Disabilities to Prove Discrimination
The U.S. Supreme Court unanimously rejected requiring a higher burden of proof to demonstrate that students with disabilities have experienced discrimination. Previously, lawsuits required families to prove that the school system acted in bad faith or with gross misjudgment. The ruling is expected to facilitate children and their families’ ability to seek relief.
Federal Court Denies Request to Halt Further Actions to Close the Institute of Museum and Library Services
The U.S. District Court for the District of Columbia responded to a lawsuit brought by the American Library Association and the American Federation of State, County and Municipal Employees to stop the closure of the Institute of Museum and Library Services. U.S. District Judge Leon denied the Association’s request to halt further actions from the Trump Administration to close IMLS, maintaining the case should be heard in a separate court specifically for contractual claims.
However, a separate order, following a lawsuit brought by several states, that prohibits the government from closing the Museum and Library Services Institute remains in place.
On Thursday, May 22, the U.S. House of Representatives passed a sweeping budget bill, H.R.1, with 215 Representatives voting in favor and 214 against. The bill will significantly impact core health, nutrition, and anti-poverty programs and strain the nonprofit sector’s ability to respond.
What’s At Risk
- Medicaid and Children’s Health Insurance Program (CHIP): The bill imposes frequent eligibility checks, tedious documentation, and work requirements that could cause many eligible individuals to lose coverage.
- Supplemental Nutrition Assistance Program (SNAP): Added work requirements and reduced state flexibility could strip food assistance from millions, including older adults and veterans.
- Earned Income Tax Credit (EITC): New verification hurdles impose burdensome documentation requirements that may prevent low-income working families from accessing the tax credit.
- Student Loans: The bill imposes unnecessary barriers to entering higher education by adding caps total loan amounts, eliminating key deferments, and limiting forbearance eligibility.
Contact your Senators to oppose these harmful provisions.
CMS Issues a Dear Colleague Letter Informing States of Increased Federal Oversight of Medicaid Expenditures
To comply with the executive order, “Ending Taxpayer Subsidization of Open Borders,” the U.S. Centers for Medicare & Medicaid Services announced increased financial oversight of Medicaid funding. States found to be improperly allocating funds to noncitizens will be subject to recoupment of the federal share.
CMS included focused reviews of Medicaid expenditures reported by states on the quarterly CMS-64 and in-depth financial management reviews as potential oversight initiatives. The agency encouraged states to review their policies, internal controls, public assistance cost allocation plans, and IT systems to ensure that they are claiming medical assistance and administrative expenditures in accordance with federal law.
The Department of Education Announces Additional Funding for the Charter Schools Program
The Department of Education announced an increase in the Charter Schools Program (CSP) funding by $60 million for FY 2025, raising the program’s total budget to $500 million. Secretary McMahon additionally announced a new grant opportunity through CSP, the Model Development and Dissemination Grant Program. This program aims to showcase and share strategies that are helping charter schools across the country innovate and succeed.
The Department has also released Notices Inviting Applications for five additional 2025 competitions under the CSP, including the State Entities, State Facilities Incentive Grants, Credit Enhancement, Charter Management Organizations, and Charter School Developers programs.
U.S. Senate Committee on Health, Labor, and Pensions Holds a Hearing on the State of Higher Education
Senators stressed the importance of higher education and the need for a highly educated workforce to respond to rapidly evolving technology and a competitive global economy. Witnesses and senators highlighted critical barriers, including growing unaffordability, and resulting challenges, including rising shortages of critical health professionals. Alongside members, the Executive Director of the Student Borrower Protection Center warned of the imminent financial crisis student loan borrowers are expected to experience through administrative policies, including forced collections against borrowers in default.
Witnesses and senators affirmed the need for comprehensive reform and innovation. They highlighted declining trust in institutions of higher education and discussed the unique role that faith-based institutions, historically-Black colleges and universities, and community colleges hold. They encouraged increasing access, affordability, and accountability, including by expanding PELL grants and safeguarding student loan borrowing protections.
Updates from the Judiciary
Federal Judge Blocks Executive Order to Dismantle the Department of Education
The United States District Court for the District of Massachusetts issued a preliminary injunction to stop an executive order that directed the Department of Education to facilitate the Department’s closure. U.S. District Judge Myong Joun additionally ordered the Department of Education to reinstate employees terminated as part of the March 11 layoff announcement.
Several advocacy groups and the Somerville and Easthampton school districts filed the lawsuit, maintaining the layoffs amounted to an illegal shutdown of the Education Department. The plaintiffs claimed the Department would not be able to fulfil the responsibilities required by Congress, including their duties to support special education, distribute financial aid, and enforce civil rights laws.
Judge Joun affirmed the layoffs would cause irreparable harm as schools would face financial uncertainty and delay, impeded access to vital knowledge on which students and educators rely, and loss of essential services for the most vulnerable student populations.
Supreme Court Holds Oral Arguments to Determine the Constitutionality of Ending Birthright Citizenship
On May 15, the Supreme Court held oral arguments to determine the constitutionality of President Trump’s executive order ending birthright citizenship.
While three U.S. District Courts blocked the injunction nationwide, the former Acting Solicitor General Sarah Harris requested that the Supreme Court Justices limit the scope of district court rulings to the individuals who brought the lawsuits forward.
The Trump Administration, alongside several members of Congress, argue that the Constitution does not grant lower-level federal courts the power to issue universal injunctions to stop an executive order from being implemented nationwide. Rather, district court judges can only issue a judgement regarding the rights of the specific individuals who filed the lawsuit. The Supreme Court’s ruling holds the potential to significantly impact judges’ response to executive orders.
The Supreme Court is expected to issue its verdict by the end of June.
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On May 22, the House narrowly passed H.R. 1, a massive reconciliation bill that would reshape federal investments in health, nutrition, and anti-poverty programs—undermining access to basic supports and placing significant new burdens on the nonprofit sector.
While advocacy helped remove some of the most extreme threats—like language targeting 501(c)(3) status—serious risks remain, and the bill now moves to the Senate for consideration.
We need your voice in this next phase. Contact your senators today and urge them to:
- Protect streamlined Medicaid and CHIP access
- Preserve state flexibility in SNAP
- Reject barriers to EITC access and student loan repayment
- Safeguard nonprofit capacity to meet growing need
These changes aren’t just technical. They would destabilize the safety net and increase demand on community-based organizations—while shrinking the tools and resources needed to meet that demand.
Social Current has created resources to help you understand what’s at stake and take action:
- Read our issue summary below or view as a PDF
- Contact your senators with our sample message
Key Concerns
1. Medicaid Access at Risk
The bill maintains provisions that significantly increase administrative barriers to Medicaid and CHIP, including more frequent eligibility redeterminations and new verification requirements.
These changes could cause eligible individuals—especially children, older adults, and people with disabilities—to lose coverage due to paperwork issues or flawed data flags. Additionally, the bill requires states to establish community engagement requirements for certain Medicaid enrollees. It authorizes the Secretary of the U.S. Department of Health and Human Services to penalize non-compliant states by withholding federal funds.
Why It Matters
As coverage gaps widen and support systems are reduced, human services providers will face increased demand from clients needing assistance with re-enrollment and appeals processes. At the same time, if people lose Medicaid coverage, providers may see a direct impact on reimbursement for critical services. This double strain will divert already limited staff capacity from core functions such as behavioral health, trauma recovery, and crisis response.
2. Hunger and Hardship Through SNAP Restrictions
The bill expands work requirements for SNAP recipients and significantly limits states’ ability to waive them—even during periods of high unemployment. According to the Center on Budget and Policy Priorities, the work requirements jeopardize benefits for nearly 11 million people, about 1 in 4 SNAP participants.
The bill also imposes an expiration date on exemptions for veterans, former foster youth, and individuals experiencing homelessness. It shifts program costs to states and requires more frequent eligibility redeterminations.
Why It Matters
These changes will increase hunger and instability for people who are already facing significant barriers. Nonprofits will see higher demand for emergency food, housing, and employment support, with fewer federal resources to meet that need.
3. Burdensome Requirements in Accessing the Earned Income Tax Credit
The bill requires taxpayers to apply for an Earned Income Tax Credit (EITC) certificate for each child claimed beginning in tax year 2028. It establishes fines for reckless, false, and fraudulent statements, increases audits of EITC recipients, and strengthens eligibility verifications. Individuals with repeated incidents may be barred from claiming the credit for two years with evidence of reckless disregard or ten years in the case of fraud. Claims without a certificate may be denied, delayed, or refunds reduced.
Why It Matters
Low-income taxpayers, especially working families and single parents, may face higher risks of audits, even for minor filing errors. Accidental income, relationship, or residency mismatches can trigger audits or refund holds.
Precertification may discourage taxpayers from claiming the credit due to burdensome time and paperwork requirements, while system challenges may lead to needless claim denials. It also raises confusion and uncertainty about whether the child was to be claimed by multiple taxpayers.
4. Student Loan Limits and Changes to Loan Terms
The bill restricts the amount of loans students are eligible to borrow for undergraduate, graduate, and professional programs. It establishes a lifetime limit to the total amount students are able to borrow regardless of amounts repaid, forgiven, canceled, or discharged on a loan. Additionally, the bill prohibits unemployment and economic hardship deferments for loans disbursed on or after July 1, 2025. It would limit the term of forbearance allowed to nine months over two years.
Why It Matters
Countless professionals within the social service sector rely on student loans to afford their education. Financial barriers may prevent individuals from completing their degrees and entering careers in the nonprofit sector. Borrowing limits introduce significant challenges to individuals seeking to advance their education and are expected to exacerbate ongoing staffing shortages the mental health field experiences.
Next Steps: Senate Deliberation
Now that the House has passed H.R. 1, the bill moves to the Senate for consideration. While Republicans hold a 53-47 majority, the bill faces potential revisions due to divergent views within the party. Some Republican Senators have expressed concerns over the bill’s impact on Medicaid and other social programs, indicating that amendments may be proposed to address these issues.
Take Action Now
We need your voice in this next phase.
Social Current’s online campaign makes it easy: Contact your senators.
To stay informed about federal policy changes and receive information about action opportunities, subscribe to our biweekly policy newsletter and join the grassroots advocacy network.
Congress is moving quickly on a sweeping reconciliation bill that would severely impact the human services sector and the communities we serve. The bill still includes major provisions that would:
- Force more people off Medicaid by adding red tape and frequent eligibility checks
- Expand SNAP work requirements and limit states’ flexibility to respond to hunger and hardship
- Increase tax burdens and compliance costs for nonprofit organizations and their staff, including penalties on modest benefits and operational revenue
These changes are not just technical—they threaten the stability of the safety net and the capacity of nonprofits to meet rising demand.
Social Current has created resources to help you understand what’s at stake and take action:
- Read our issue summary below or view as a PDF
- Contact your representative with our sample message
House Reconciliation Issue Summary
Overview
Congress is considering a sweeping reconciliation bill that threatens access to basic health, nutrition, and social services—and undermines the nonprofit sector’s ability to respond. While advocacy efforts have succeeded in removing some of the most extreme proposals, serious risks remain.
Key Concerns
- Medicaid Access at Risk: The bill maintains provisions that would significantly increase administrative barriers to Medicaid and CHIP, including more frequent eligibility redeterminations and new verification requirements. These changes would cause eligible individuals—especially children, older adults, and people with disabilities—to lose coverage simply because of paperwork issues or flawed data flags.
Why It Matters: As coverage gaps widen and support systems are reduced, human service providers will face increased demand from clients who need help navigating re-enrollment and appeals processes. This will divert limited staff capacity away from their core services—such as behavioral health, trauma recovery, and crisis response. - Hunger and Hardship Through SNAP Restrictions: The bill expands work requirements for SNAP recipients and significantly limits states’ ability to waive them—even during periods of high unemployment. According to research and policy analysts at the Center on Budget and Policy Priorities, the work requirements jeopardize benefits for nearly 11 million people, about 1 in 4 SNAP participants.
The bill also imposes an expiration date on exemptions for veterans, former foster youth, and individuals experiencing homelessness. It significantly shifts program costs to states and requires states to conduct more frequent eligibility redeterminations.
Why It Matters: These changes will increase hunger and instability for people already facing significant barriers. Nonprofits will see higher demand for emergency food, housing, and employment support, with fewer federal resources to meet that need. - Burdensome Requirements in Accessing the Earned Income Tax Credit: The bill requires taxpayers to apply for an Earned Income Tax Credit certificate for each child claimed beginning in tax year 2028. It establishes fines for reckless, false, and fraudulent statements, while increasing audits of EITC recipients and strengthening eligibility verifications. Individuals with repeated incidents may be barred from claiming the credit for two years with evidence of reckless disregard, or ten years in the case of fraud. Claims without a certificate may be denied, delayed, or the refunds may be reduced.
Why It Matters: Low-income taxpayers, especially working families and single parents, may face higher risks of audits, even for minor filing errors. Accidental mismatches in income, relationship, or residency can trigger audits or refund holds.
Precertification may also discourage taxpayers from claiming the credit due to burdensome time and paperwork requirements, while system challenges may lead to needless claim denials. It also raises confusion and uncertainty if the child were to be claimed by multiple taxpayers.
View and print the issue summary as a PDF.
Take Action
We urge Congress to:
- Protect streamlined Medicaid and CHIP enrollment processes
- Preserve state flexibility in SNAP administration
- Reject provisions that make it harder for nonprofits to serve their communities
Contact Your Lawmakers Today
Social Current’s online campaign makes it easy to contact your members of Congress and urge them to oppose these harmful provisions. Take action now.
To stay informed about federal policy changes and receive information about action opportunities, subscribe to our biweekly policy newsletter and join the grassroots advocacy network.