Two alternative proposals to ease health care access were rejected as enhanced tax premium credits offered through the Affordable Care Act near their expiration at the end of the year.

The enhanced premium tax credits, first introduced in 2021, increased Affordable Care Act eligibility to individuals with an income above 400% of the federal poverty guidelines. As a result, an additional 13 million Americans were able to gain access to health insurance through the Affordable Care Act.

One proposal temporarily extended the credits, while a second authorized federal contributions to a health savings account for individuals enrolled in high-deductible plans. Both received 51 votes, although a total of 60 votes is required to secure their passage.

The House of Representatives has since released legislation intended to address rising healthcare costs by reducing premiums and increasing healthcare options. The bill is expected to be brought to a vote this week; however, it does not extend enhanced premium tax credits.

The expiration of the enhanced premium tax credits presents a critical and pressing concern as the Congressional Budget Office estimates that nearly 4 million people will lose their insurance over the next decade if the credits expire.   

ACF Urges Immediate Action to Protect Earned Social Security Survivor Benefits of Youth in Care 

The Administration for Children and Families (ACF) issued letters to 39 governors urging immediate action to address a common practice of state child welfare agencies diverting earned Social Security survivor benefits from youth in foster care. State agencies often direct children’s federal benefits to reimburse the costs associated with foster care.  

ACF and the Social Security Administration announced their commitment to offering resources and technical assistance to ensure federal benefits are reserved to support children as they transition out of state care. 

HHS Announces AI Strategy 

On Dec. 4, the U.S. Department of Health and Human Services (HHS) released its AI Strategy. The document outlines five pillars to leverage artificial intelligence to empower the agency’s workforce, enhance efficiency, and guide innovation toward improving patient-focused outcomes. 

The pillars underlying the HHS AI Strategy include,  

1. Ensuring Governance and Risk Management for Public Trust  
2. Designing Infrastructure and Platforms for User Needs 
3. Promoting Workforce Development and Burden Reduction for Efficiency  
4. Fostering Health Research and Reproducibility through Gold‑Standard Science 
5. Enabling Care and Public Health Delivery Modernization for Better Outcomes  

HHS’ announcement arrived shortly before a recently issued executive order intended to create a national policy framework for artificial intelligence. The directive aims to protect children and safeguard communities while preventing censorship and respecting copyrights. The national standard addresses conflicting state regulations to facilitate the innovation of artificial intelligence.

Department of Education Announces More than $208 Million in Mental Health Grants 

On Dec. 11, the Department of Education announced more than $208 million in new grant awards for the Mental Health Service Professional Demonstration and School-Based Mental Health programs. The awards are directed to 65 recipients and aim to sustain the provision of intensive mental health services following the life of the grant.  

The grants center rural areas to better address shortages and empower states to implement unique solutions to their school-based mental health needs. Specifically, the awards will support programs that increase the number of credentialed school psychologists and support provider recruitment and retention through bonuses, stipends, and community support. 

The introduction of the grants follows the sudden cancellation of school-based mental health and provider grants issued to 223 grant recipients. The Trump administration issued notices in April, determining grantees’ projects were inconsistent with the federal government’s priorities. Nevertheless, 49 grantees are expected to continue receiving funding due to a federal order that determined the termination notices are likely invalid because of the absence of individualized reasoning for stopping an in-progress grant. 

CMS Issues Information Bulletin Reviewing Community Engagement Requirements Created by H.R. 1 

On Dec. 8, the Center for Medicare and Medicaid Services (CMS) released an informational bulletin to provide an overview of the Medicaid-related community engagement requirements created by H.R. 1. 

Community engagement requirements will begin Jan. 1, 2027, although states may implement requirements sooner. Accordingly, all individuals between 19 and 64 will be required to work, volunteer, or remain enrolled in an educational program for at least 80 hours per month to qualify for Medicaid eligibility, unless they otherwise qualify for an exemption.  

Beneficiary outreach will begin in alignment with the state’s implementation timeline. Specifically, states will need to offer notice of community engagement requirements and the consequences of non-compliance to beneficiaries at least three months to the number of months a state requires an applicable individual to demonstrate community engagement at application. Accordingly, if a state requires applicants to demonstrate one month of community engagement at the time of application, the state would be required to begin outreach no later than September 2026 for implementation on Jan. 1, 2027.  

Additionally, the bulletin outlines the renewal process, requirements to verify community engagement, and procedures for non-compliance. 

For further information, CMS issued a bulletin in November highlighting key reforms for Medicaid and the Children’s Health Insurance Program following H.R. 1. 

Bipartisan Philanthropy Caucus Reestablished to Increase Charitable Giving in Local Communities 

On Dec. 2, Congressmen Danny K. Davis (D-IL) and Blake Moore (R-UT) reinstated the bipartisan Philanthropy Caucus to highlight and enhance the impact of nonprofit work and philanthropic giving in local communities. 

The bipartisan Congressional Philanthropy Caucus aims to highlight and enhance the impact that the nonprofit sector and philanthropic giving have on local communities, including through public–private partnerships that empower and drive local impact. Additionally, the Caucus supports policies that expand tax incentives for charitable giving and protect the ability of foundations, individuals, and businesses to give back. The Caucus also seeks to inform and advance a deeper understanding of the contributions, work, and role of foundations in communities across the country for Members of Congress and their staff.  

Department of Education Proposes Settlement with Missouri to End SAVE Plan 

On Dec. 9, the Department of Education announced a proposed joint settlement agreement with the state of Missouri to end the Saving on a Valuable Education (SAVE) Plan. 

The SAVE Plan was created during the Biden administration as an income-driven repayment program to offer lower monthly payments set at 10% of an individual’s discretionary income. It also delivered student loan forgiveness for individuals whose undergraduate loans had not been repaid after 20 years and for individuals whose graduate loans had not been repaid after 25 years. 

The SAVE Plan has been paused since February due to ongoing litigation. The proposed settlement agreement would prevent any new borrowers from enrolling, deny any pending applications, and transition all current enrollees to alternate repayment plans.  

If the proposed settlement is approved by the court, more than 7.6 million borrowers will be affected and face the potential of a sudden increase in student loan payments as the cost of living and health care rapidly rises.

HUD Withdraws Notice of Funding Opportunity for the Continuum of Care Program

The Department of Housing and Urban Development temporarily revoked proposed changes to the Continuum of Care program amid pending litigation.  

The decision follows two lawsuits, one issued by a coalition of attorneys general and governors and a second by a coalition of local governments and non-profit organizations. The plaintiffs challenge the drastic reduction of permitted funding for permanent housing, which was reduced to 30%.

Currently, the Continuum of Care program allocates 87% of funding to toward permanent housing. The updated notice of funding required the majority of the funds to be directed to temporary transitional housing assistance with conditional work or service requirements.

Accordingly, the original deadlines and requirements issued by the notice of funding agreement are no longer in effect. The delay raises key concerns that funding will be released before current grants expire in January 2026.

Sector Updates from the Judiciary 

Federal Grant Funding Reinstated for the Institute of Museum and Library Services 

On Nov. 21, 2025, the U.S. District Court for the District of Rhode Island granted a permanent injunction against an executive order that would dismantle the Institute of Museum and Library Services, the Minority Business Development Agency, the Federal Mediation and Conciliation Service, and the U.S. Interagency Council on Homelessness.  

The verdict safeguards essential federal agencies and the vital services they provide nationwide, including by protecting access to homelessness prevention efforts and basic library services, like internet access in rural areas. 

Supreme Court to Hear Legality of Birthright Citizenship Executive Order  

The Supreme Court has agreed to review the legality of an executive order restricting birthright citizenship. The executive order clarifies that children born in the United States to parents without American citizenship and those born to parents whose presence is lawful but temporary are not guaranteed birthright citizenship. Lower courts have consistently determined the executive order is unconstitutional and prevented its enforcement.  

The Supreme Court’s verdict will hold immense consequences. In addition to the Constitutional right to citizenship, the verdict will impact the scope, extent, and balance of presidential and judicial authority. 

Enhanced premium tax credits offered through the Affordable Care Act will expire Jan. 1, 2026.

The credits were first introduced in 2021 and later extended by the Inflation Reduction Act. By increasing eligibility to those with an income above 400% of the federal poverty guidelines, an additional 13 million Americans were able to gain access to health insurance through the Affordable Care Act.

However, as the cost of living rapidly rises and Medicaid eligibility narrows following H.R. 1, drastic increases in health care costs present critical challenges for Americans nationwide. The Congressional Budget Office estimates that nearly 4 million people will lose their insurance over the next decade if the credits expire.

The Senate is expected to vote as soon as Dec. 9 on a health care proposal, although the exact provisions are not yet clear.

ACF Announces Initiative to Increase Availability of Foster Homes 

On Nov. 25, the Administration for Children and Families (ACF) announced a Home for Every Child, a national initiative intended to match the ratio of foster homes to the number of children in the foster care system.

According to ACF, approximately 57 licensed foster homes are available nationwide for every 100 children entering the foster care system. Without sufficient, safe homes, children face significant uncertainty and safety risks.

The initiative aims to increase the availability of safe homes through diligent recruitment that prioritizes kin and improves the retention of existing caregivers. Additionally, it centers prevention to reduce entries into foster care and accelerates pathways to permanency.

A Home for Every Child will empower state agencies with broad latitude, flexibility, and technical support to reimagine community-specific interventions. ACF will also eliminate bureaucratic barriers, streamline foster family licensing, support kinship caregivers, and encourage faith-based partnerships to expand the network of caring families.

LIHEAP Funding Released 

On Nov. 28, the National Energy Assistance Directors Association announced that approximately $3.6 billion in delayed funding for the Low Income Home Energy Assistance Program (LIHEAP) was released to states and tribes.

In 2024, the LIHEAP allocated $4.1 billion, which secured essential heating assistance for 5 million households, according to the Administration for Children and Families.

Department of Education Announces Six Agency Partnerships to Return Education to the States 

On Nov. 18, the U.S. Department of Education announced six interagency agreements with four agencies to ensure the efficient delivery of funded programs and activities, while increasing state authority in education. 

Alongside a partnership to increase the efficiency of the Fulbright-Hays grant and another to evaluate whether the standards of accreditation for foreign medical schools are comparable with the standards for medical schools in the U.S., the partnerships include, 

• Elementary and Secondary Education Partnership with the Departments of Education and Labor: The partnership aims to empower parents and states, promote innovation, and deliver program improvements in pursuit of better outcomes for students in elementary and secondary education. For further information, the Department of Education has published a fact sheet. 

• Postsecondary Education Partnership with the Departments of Education and Labor: The partnership aims to better coordinate postsecondary education and workforce development programs. The grants are designed to aid students in obtaining the credentials and career training they need to prosper and contribute to the American economy, as well as provide institutions of higher education with resources to support innovative strategies for learning and workforce advancement. For further information, the Department of Education has published a fact sheet. 

• Indian Education Partnership with the Departments of Education and Interior: The partnership aims to enhance Indian education programs, refocus efforts to better serve Native youth and adults across the nation, and streamline operations. For further information, the Department of Education has published a fact sheet. 

• Child Care Access Means Parents in School Partnership with the Departments of Education and Health and Human Services: The partnership aims to improve on-campus child care support for parents enrolled in college. For further information, the Department of Education has published a fact sheet. 

Children’s Bureau Issues Memo Notifying the Designated Placements Rule is No Longer Effective 

On Nov. 19, the Administration for Children and Families issued an information memorandum to inform state and tribal title IV-B/IV-E agencies that Designated Placement Requirements Under Titles IV-E and IV-B for LGBTQI+ Children is vacated effective June 13, 2025. The decision follows a court order determining the 2024 rule exceeds federal authority and is contrary to law. 

The rule had required state and tribal title IV-E and IV-B agencies to ensure that placements for all children are free from harassment, mistreatment, and abuse. Agencies would be required to implement specific processes and requirements to ensure that children in foster care who identify as LGBTQI+ would be placed with foster care providers who were trained to meet their specific needs related to their sexual orientation and gender identity and who would facilitate access to age-appropriate services to support their health and well-being. 

ACF Withdraws Certain Child Welfare Policy Manual Questions Following Amended Interpretation of Federal Public Benefit 

On Nov. 24, the Administration for Children and Families (ACF) announced the withdrawal of Child Welfare Policy Manual (CWPM) 8.4B Question and Answer #13 (title IV-E), CWPM Section 2.1, Question and Answer #3 (CAPTA), CWPM Section 7.1, Question and Answer #3 (title IV-B), and Information Memorandum 98-04. 

ACF affirmed that services provided under title IV-B, other than foster care, and the Child Abuse Prevention and Treatment Act programs do not qualify as federal public benefits subject to the citizen and qualified alien restrictions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.  

Due to the amended regulations, families may experience significant challenges in receiving vital services, including those intended to prevent child abuse, due to their immigration status. 

HUD Announces Significant Changes to Key Housing Grant Program 

On Nov. 13, the Department of Housing and Urban Development announced notice of funding opportunities for fiscal year 2025 Continuum of Care and Youth Homeless Demonstration Program grants. 

The grants contain key changes, including significantly increasing the reliance on Merit Review scores and project ranking to award Continuum of Care (CoC) grants. Additionally, funds will be increasingly directed toward transitional housing that requires employment and addiction treatment. Meanwhile, a maximum of 30% of CoC’s Annual Renewal Demand will fund Permanent Housing projects. 

Senator Wyden Outlines Policy and Oversight Priorities in Letter to ACF Assistant Secretary  

Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) stressed the potential of recent policies to endanger children’s well-being and the importance of corresponding action in a recent letter to the Assistant Secretary of the Administration for Children and Families.  

The outlined policy and oversight priorities include community-based care for all children, including those within the custody of the Office of Refugee Resettlement (ORR). Additionally, Senator Wyden emphasized the importance of ensuring LGBTQI+ youth within the child welfare system reside in safe and affirming homes. He detailed the importance of the timely receipt of congressionally appropriated funding for all Head Start programs and the need to strengthen support for kinship caregivers. 

Work & Welfare Subcommittee Holds Hearing to Discuss Leveraging Innovation and Technology to Help America’s Foster Youth Succeed 

On Nov. 18, the United States House Committee on Ways and Means subcommittee, Work and Welfare, held a hearing to review and reform the John H. Chafee Foster Care Program for Successful Transition to Adulthood. 

Members highlighted the gravity of the challenges that youth in foster care face alongside the challenges state welfare systems face in responding. Chairman LaHood (R-Ill.) detailed the importance of modernizing states’ child welfare systems and expanding the use of technology, including through case management tools. 

Witnesses detailed the role of artificial intelligence in relieving administrative burden, the importance of relational health and community support, and the need to center the voices of youth with lived experience.  

HHS Publishes Peer-Reviewed Study, Treatment for Pediatric Gender Dysphoria: Review of Evidence and Best Practices 

The U.S. Department of Health and Human Services recently published Treatment for Pediatric Gender Dysphoria: Review of Evidence and Best Practices. The report is not a clinical practice guideline, and it does not issue legislative or policy recommendations. The Office of the Assistant Secretary for Health concluded that puberty blockers, cross-sex hormones, and surgical procedures are significant, long term, and too often ignored or inadequately tracked.  

The findings stand in stark contrast to the guidance and recommendations of multiple major medical organizations, including the American Academy of Pediatrics, American College of Obstetrics and Gynecology, the American Psychological Association, and the Endocrine Society, hold for gender-affirming care.

CMS Announces Significant Cost Savings for Medications Treating Cancer and Chronic Disease 

On Nov. 25, the Centers for Medicare & Medicaid Services (CMS) announced 15 negotiated medications used to treat cancer, diabetes, asthma, and other chronic illnesses. According to CMS, the medications were used by approximately 5.3 million people with Medicare Part D coverage between Jan. 1, 2024, and Dec. 31, 2024. 

The adjusted Maximum Fair Prices are expected to generate significant cost savings for Medicare and its beneficiaries. 

DHS Publishes a Proposed Rule to Rescind Public Charge Ground of Inadmissibility Regulations

On Nov. 19, the Department of Homeland Security (DHS) released a notice of proposed rulemaking to rescind the 2022 public charge ground of inadmissibility regulations.

The 2022 rule amended and clarified the criteria guiding DHS to determine whether a noncitizen can be admitted to the United States. The criteria were also utilized to determine whether a noncitizen who is legally in the country should be able to change their immigration status to become a permanent resident according to the Immigration and Nationality Act.

Additionally, the rule narrowed the types of public benefits that may be considered when determining whether an individual is, or is likely to become, a “public charge” to cash benefits and Medicaid long-term care. The term “public charge” was first integrated within federal immigration law in 1882. It has consistently been interpreted by courts and administrative agencies to refer to noncitizens who rely primarily on the government for support. Public charge is only used for applications for visas or green cards, rather than applications for citizenship.

The recent proposed rule alleges that previous provisions restrict DHS officers’ ability to make public charge inadmissibility determinations that are consistent with the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA).

Following the removal of critical provisions of the 2022 final rule, DHS intends to formulate appropriate policy and interpretive tools that will guide officers in making individualized, fact-specific public charge inadmissibility determinations, according to a totality of the individuals’ circumstances.

Comments must be submitted on or before Dec. 19, 2025.

Sector Updates from the Judiciary  

Federal Court Orders the Reinstatement of Policy for Special Immigrant Juvenile Status Youth 

The U.S. District Court for the Eastern District of New York ordered the United States Citizenship and Immigration Services (USCIS) to reinstate a policy that automatically considers applicants for Special Immigrant Juvenile Status (SIJS) for Deferred Action. The court also ordered that USCIS resume considering employment authorization applications for SIJS Deferred Action recipients. 

The status of Special Immigrant Juvenile is reserved for youth immigrants who have been abused or neglected by at least one parent and apply before turning 21. The designation offers protection against deportation as youth wait for visas, while opening a pathway to obtaining a work permit and permanent residency. However, caps restrict the number of available visas to SIJ recipients each year, often leading youth to spend years awaiting a decision. 

The court’s decision allows the policy to remain in place as litigation continues. 

On Nov. 12, President Trump signed funding legislation, ending a 43-day government shutdown that caused profound and ongoing harm to the social sector and the communities we serve.  

The legislation extends government funding through Jan. 30, including for Medicare telehealth flexibilities and family-to-family health information centers. The bill is also accompanied by three appropriations bills that fund military construction and the Department of Veterans Affairs, the Department of Agriculture and the Food and Drug Administration, and operations for the Legislative Branch through Sept. 30, the end of the fiscal year.  

Through funding negotiations, the Senate agreed to hold a vote to extend the Affordable Care Act’s enhanced premium subsidies, although the credit’s extension is not guaranteed. Millions of Americans are facing marked premium increases that threaten their ability to access essential care. 

Through the appropriations legislation, funding and benefits through the Supplemental Nutrition Assistance Program (SNAP) have resumed following critical delays. However, delays in vital grant and contract disbursements continue to be expected, exacerbating the immense financial strain the nonprofit sector is facing. The challenges reverberate across Head Start centers as organizations that failed to receive funding due to the shutdown face the potential of weeks-long delays in accessing funding.  

Funding Agreement Safeguards Essential Nutrition Programs 

The Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Fiscal Year 2026 Appropriations Bill was enacted Nov. 12, safeguarding funding for essential nutrition programs through Sept. 30. 

The bill authorizes, 

• $8.2 billion for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), a $603 million increase over fiscal year 2025. WIC serves more than 7 million women and infants nationwide, offering essential nutrition support that has reduced infant mortality, premature births, and low birth rates, while increasing access to prenatal care and supporting children’s cognitive development. 
• $460 million to fund the Commodity Supplemental Food Program (CSFP), a $35 million increase over fiscal year 2025. CSFP supports more than 700,000 low-income older Americans in accessing essential nutrients, offering essential health benefits while reducing food insecurity. 
• Full funding for mandatory nutrition programs for fiscal year 2026, including SNAP, the School Lunch Program, the School Breakfast Program, and Summer EBT, alongside funding for the multi-year SNAP contingency fund. 
• $1.715 billion for rental assistance, a $73 million increase over fiscal year 2025, to ensure Americans living in rural areas have access to safe and affordable housing 
• Continued funding for rural housing preservation provisions, such as the decoupling pilot program, multifamily housing technical assistance, and preservation financing 

The bill was passed alongside the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, which secures essential funding for veterans’ health care, benefits, and housing. For further information regarding the The Military Construction, Veterans Affairs (VA), and Related Agencies Appropriations bill’s provisions, the Senate Appropriations Committee published the following brief. 

President Trump Signs an Executive Order to Support Youth in Foster Care 

On Nov. 13, President Trump signed an executive order that aims to support educational success, occupational advancement, and financial literacy and self-sufficiency for individuals within and transitioning out of foster care. 

The order takes action to modernize state child-welfare information systems by expanding states’ use of technological solutions and improving the collection, publication, utility, and transparency of state-level child-welfare data. 

It also centers partnerships with agencies, academic institutions, and nonprofit entities to increase access to housing, education, employment, healthcare, and mentoring services for youth who are in or are transitioning out of the foster care system. 

Additionally, it orders the Department of Health and Human Services to“address State and local policies and practices that prohibit participation in federally-funded child-welfare programs by qualified individuals or organizations because of their religious beliefs or moral convictions.” 

CMS Announces Medicaid Pilot to Lower Prescription Drug Spending  

The Centers for Medicare & Medicaid Services (CMS) has designed a pilot program to lower prescription drug spending in Medicaid, improve health outcomes by increasing access to critical medications, and strengthen the Medicaid program overall. 

State Medicaid programs that choose to participate in the Generating Cost Reductions for U.S. (GENEROUS) Medicaid Model will be able to purchase drugs included in the pilot at prices aligned with those paid in select countries, increasing access to fairer, more competitive pricing.  

The model will launch in 2026. CMS will negotiate with participating manufacturers for lower prices, while states adopting the model are instructed to implement uniform, transparent coverage criteria to ensure predictable access across participating states. 

Sector Updates from the Judiciary 

Federal Court Pauses Colorado Law Requiring Social Media Warnings for Minors 

The U.S. District Court for the District of Colorado paused HB24-1136, a Colorado law that required social media companies to warn minors regarding the potential harms of their platforms. The law ordered companies to issue warnings that would appear every 30 minutes once youth spent at least an hour on a social network in a 24-hour period. The message would remind users of social media’s potential impact on their developing brains and potential impacts ontheir mental and physical health.  

U.S. District Court Judge William J. Martínez cited First Amendment concerns and noted the value of incentivizing, rather than compelling, social media companies to offer disclosures. 

CMS Announces Next Steps for Rural Health Transformation Program 

The Rural Health Transformation Program was created by H.R. 1 to strengthen sustainable access to health care across rural America, including through workforce development and innovative care models. 

Following the closure of the application period, the Centers for Medicare & Medicaid Services (CMS) will now review states’ submissions to ensure completeness and compliance. States meeting the requirements will receive baseline funding, or 50% of available program funds, distributed equally among approved states.  

The remaining funds will be distributed following a rigorous, data-driven merit review led by federal and non-federal rural health experts and overseen by senior federal review directors. The process will assess each state’s proposed initiatives and alignment with program goals. 

Awardees will be announced by Dec. 31, with funding distributed over five years beginning in federal fiscal year 2026. As states begin implementation, program officers from CMS’s Office of Rural Health Transformation will provide technical assistance and ongoing support to help states design, launch, and sustain initiatives that best serve their rural communities. 

Litigation on Our Radar 

Federal Court Upholds Nationwide Injunction of Executive Order DEI 

On Oct. 30, the U.S. District Court for the Northern District of Illinois denied the federal government’s motion to narrow and temporarily pause a preliminary injunction issued April 14. The injunction temporarily prevented the Department of Labor from enforcing a provision within the executive order, Ending Illegal Discrimination and Restoring Merit-Based Opportunity. As a result, DOL grantees and contractors will not have to certify that they do not operate programs that promote diversity, equity, and inclusion to receive federal funds. 

The court maintained that the injunction is needed to provide complete relief to the plaintiffs and to safeguard free speech and conduct rights enumerated through the First Amendment. 

Appeals Court Considers Legality of Preventing Planned Parenthood from Accessing Medicaid Funding 

Following the passage of H.R. 1, Planned Parenthood filed a lawsuit to prevent the enforcement of a provision preventing organizations that provide abortions and receive more than $800,000 a year in Medicaid reimbursements in 2023 from accessing Medicaid funding. 

On Nov. 12, the U.S. Court of Appeals for the First Circuit held arguments after temporarily pausing a lower court’s decision and allowing the law to take effect while litigation continues. The order reversed the verdict issued by the U.S. District Court for the District of Massachusetts, which prevented the rule from going into effect. The district court determined that the provision likely violates the Constitution by specifically excluding Planned Parenthood’s health centers due to their status as abortion providers.  

The Justice Department urged continued enforcement of the rule, noting that the Department of Health and Human Services does not intend to interpret the law to violate the First Amendment, although the guidance required to implement the provision remains pending. 

Recently, Planned Parenthood issued a report detailing the impact of lost Medicaid reimbursements and Title X funds, which led nearly 50 health centers to close since the beginning of 2025 due to insufficient funding. 

The report also arrives as seven states, including California, Colorado, Massachusetts, New Jersey, New Mexico, New York, and Washington, have directed state funds to compensate for lost federal Medicaid reimbursements. 

A Series of Lawsuits Are Filed Against OpenAI, Alleging Psychological Harm 

Seven lawsuits were filed in the California Superior Court against the creator of ChatGPT, OpenAI Inc. The litigation centers wrongful death, product liability, consumer protection, and negligence claims, maintaining that ChatGPT contributed to multiple suicides and psychological injuries by prematurely releasing its GPT-4o model. 

The plaintiffs argue OpenAI engineered GTP-4o to maximize user engagement through features, like memory, simulated empathy, and overly agreeable responses. The design led plaintiffs to become emotionally reliant on the technology, replacing human connection, increasing isolation, reinforcing delusions, fueling addiction, and increasing the risk of suicide. 

The date the lawsuits were filed coincided with OpenAI’s introduction of its “Teen Safety Blueprint”, to identify users younger than 18 and increase the accessibility of safety features.   

HHS Provides Federal Court with Workforce Reduction Data    

In response to a court order following litigation regarding mass reductions-in-force issued during the government shutdown, the US Department of Health and Human Services outlined affected agencies and affected employees. 

Approximately 1,760 employees received termination notices, although several were unintentional and resulted from data discrepancies and processing errors. The lawsuit and a provision within the recent continuing resolution have since paused the layoffs.  

The U.S. District Court for the Northern District of California’s verdict protects 807 employees across the Centers for Disease Control and Prevention (CDC), the Administration for Strategic Preparedness and Response, and the Substance Abuse and Mental Health Services Administration. The order does not extend to several employees within the CDC’s Immediate Office of the Director and the Health Resources and Services Administration’s Maternal & Child Health Bureau. 

Funding for the federal government lapsed Oct. 1, leaving agencies to rely on limited contingency funding to maintain essential services. However, as the shutdown stretches into November, remaining funding becomes increasingly strained and essential benefits endangered.

The challenges communities are facing continue to grow exponentially. 140 Head Start programs across 41 states and Puerto Rico, serving 65,152 children, are now operating without their annual federal funding. Providers are facing imminent financial challenges that directly threaten the sustainability of their programs and foster instability for children during critical periods of development.

Enrollment for the Affordable Care Act Marketplace opened Nov. 1, a month before Affordable Care Act enhanced premium tax credits are set to expire. The credits have enabled more than 13 million Americans to enroll in the Affordable Care Act Marketplace by increasing the affordability of health insurance. Nearly 5 million individuals are expected to lose health insurance coverage in 2026 if the credits expire. 

Nonprofits similarly face substantial challenges in responding to the significant concerns communities are facing as federal grant and contract funding remains paused.

For further information regarding the shutdown’s impact, Social Current has published a brief outlining the rapid expected loss of key healthcare, housing, child care, and nutrition programs. 

Write to your representatives to share how the shutdown is impacting your community.

CFP Publishes Rule Reinterpreting the Fair Credit Reporting Act 

The Consumer Financial Protection Bureau published an interpretive rule clarifying that the Fair Credit Reporting Act reflects national standards for the credit reporting system. Accordingly, states do not have the authority to restrict medical debts from credit reports. 

The rule follows the passage of legislation across more than a dozen states that have attempted to prevent medical debt from affecting consumers’ credit. It is expected to exacerbate challenges individuals face in accessing credit, especially as health insurance premiums are expected to rise beyond affordable levels.  

According to the Consumer Financial Bureau, an estimated 100 million Americans owe over $220 billion in medical debt. 

Department of Education Announces Final Rule Regarding Student Loan Forgiveness 

On Sept. 30, the U.S. Department of Education released a final rule, which amends the definition of illegal activity capable of preventing organizations from offering public student loan forgiveness.

Employees of organizations that participate in or support the following would be deemed ineligible, 

• Aiding and abetting violations of federal immigration laws
• Supporting terrorism or engaging in violence for the purpose of obstructing or influencing federal policy
• Engaging in the chemical and surgical castration or mutilation of children in violation of federal or state law
• Engaging in the trafficking of children to another state for purposes of emancipation from their lawful parents in violation of federal or state law
• Engaging in a pattern of aiding and abetting illegal discrimination

The rule is effective July 1, 2026.

FDA Announces Nine Voucher Recipients for the Commissioner’s National Priority Voucher (CNPV) Pilot Program 

On Oct. 16, the U.S. Food and Drug Administration (FDA) announced nine voucher recipients under the new Commissioner’s National Priority Voucher (CNPV) pilot program. The program accelerates the standard review process  to 1 to 2 months. Previously, the original process ranged from 10 to 12 months. 

Each medication was selected for its significant potential to address a major national priority. The FDA cited its capacity to address unmet medical needs, reduce downstream health care utilization, address a public health crisis, boost domestic manufacturing, and improve medication affordability with Most Favored Nation pricing.    

The medications selected include,  

• Pergoveris for infertility 
• Teplizumab for Type I diabetes 
• Cytisinicline for nicotine vaping addiction 
• DB-OTO for deafness 
• Cenegermin-bkbj for blindness 
• RMC-6236 for pancreatic cancer 
• Bitopertin for porphyria 
• Ketamine for domestic manufacturing of a critical drug for general anesthesia  
• Augmentin XR for domestic manufacturing of a common antibiotic 

Sector Updates from the Judiciary 

Federal Court Orders that SNAP Benefits Continue through the Shutdown

The United States District Court for the District of Rhode Island ordered the Trump Administration to authorize funding for the Supplemental Nutrition Assistance Program (SNAP) through a designated emergency fund. The fund is insufficient to fully cover benefits for the entire month of November, but it serves as an essential stopgap to preserve nutrition assistance for more than 40 million Americans.

U.S. District Judge John McConnell ordered the Department of Agriculture to distribute the emergency funds as soon as possible.

A similar verdict was issued by the United States District Court for the District of Massachusetts. The court ordered that the USDA decide and report by Monday, Nov. 3 if the agency can provide reduced benefits through contingency funds or full benefits through additional funds.

Federal Court Issues Preliminary Injunction Against Reductions in Force 

Following a temporary restraining order, the US District Court for the Northern District of California issued a preliminary injunction against mass reductions in force.  The notices were sent to an estimated 4,100 agency staff across six agencies during the ongoing government shutdown, approximately 1,100 to 1,200 of whom were employed by the US Department of Health and Human Services.    

The injunction will pause any existing layoff notices and prohibit new terminations, although it does not extend to notices issued before the lapse in federal appropriations.  

Appeals Court Upholds Injunction Against Iowa Immigration Law 

The U.S. Court of Appeals for the Eighth Circuit upheld an injunction, preventing the enforcement of a recently passed state law, SF 2340. The law authorizes law enforcement to file criminal charges against individuals with outstanding deportation orders or who had previously been denied entry to the U.S. Accordingly, individuals who later gained lawful status may be prosecuted under the law. 

The verdict affirms immigration enforcement is the federal government’s, rather than state governments’, Constitutional responsibility. The longstanding precedent promotes consistency, safeguarding against a potential patchwork of contradictory laws should states enact conflicting immigration laws. 

Federal Court Prohibits Retroactive Asylum Fees 

The US District Court for the District of Maryland temporarily paused policies that would have enabled the Departments of Justice and Homeland Security to impose asylum fees retroactively. 

The district court determined the polices issued by the US Citizenship and Immigration Services (USCIS) and the Executive Office for Immigration Review (EOIR) would have caused irreparable harm to immigrant applicants. However, Judge Gallagher stated that she would consider a motion to reinstate the fees once USCIS and EOIR have enacted uniform policies that grant asylum applicants fair notice of fee deadlines, payment instructions, and explanations of the consequences for nonpayment. 

The lawsuit was filed by the Asylum Seeker Advocacy Project (ASAP) following the passage of H.R.1, which mandated application fees for asylum applications beginning in July 2026. ASAP argued the agencies violated the Administrative Procedure Act by demanding payments from asylum applicants who filed claims before the law took effect. 

Federal Court Vacates Rule Prohibiting Transgender Bias in Health Care 

The US District Court for the Southern District of Mississippi recently vacated a federal administrative rule intended to protect patients from gender-identity discrimination. The rule included sexual orientation and gender identity as protected characteristics for programs such as Medicaid, Medicare, the Affordable Care Act, and other programs receiving federal funding. It also aimed to preserve access to gender affirming care for transgender patients based on Title IX, which prohibits discrimination on the basis of sex for recipients of federal dollars. 

A coalition of 15 states successfully challenged the rule as the court concluded that the Department of Health and Human Services “exceeded its authority by implementing regulations redefining sex discrimination and prohibiting gender identity discrimination.” 

The order applies to all states, rendering it ineffective. However, the verdict is not expected to cause disruptions as it was paused before it could take effect. 

The federal government has paused all non-essential operations since Oct. 1 after failing to pass legislation to extend funding. Negotiations have primarily focused on extending Affordable Care Act (ACA) premium tax credits before the next ACA Marketplace open enrollment period, which begins Nov. 1.

Enhanced premium tax credits lower the percentage of income ACA Marketplace enrollees pay for coverage. According to Kaiser Family Foundation (KFF) estimates, if these credits expire, enrollees’ out-of-pocket costs would more than double.

Concerns about health care accessibility and affordability continue to grow alongside the ongoing effects of the government shutdown. Lapses in federal funding pose substantial challenges to nonprofits’ financial stability and to communities’ access to essential health and human services.

Funding for Community Health Centers and Temporary Assistance for Needy Families (TANF) expired Sept. 30, along with Medicare telehealth flexibilities. Meanwhile, vouchers for Head Start, the Child Care and Development Block Grant, and Title IV-B are frozen until the government resumes its required funding levels.

The impact continues to widen, with an estimated $28 billion in funding–reserved for more than 200 initiatives–now frozen or canceled across more than 100 Congressional districts.

Organizations that have received federal grants and contracts are encouraged to review the contingency plans of relevant agencies, along with their own grant and contract agreements. It is also critical to carefully document any missed reimbursements, delayed approvals, and paused monitoring. Finally, maintaining communication with congressional representatives remains essential to ensuring they understand the specific challenges your organization and community are facing. 

FNS Issues Guidance for the Implementation of H.R. 1 ABAWD Waivers

On Oct. 3, the Food and Nutrition Service issued guidance to all Supplemental Nutrition Assistance Program (SNAP) state agencies regarding the implementation of Sections 10102(b) and (c) of H.R. 1. The updated statute requires that areas must now have unemployment rates above 10% to qualify for time limit waivers for Able-Bodied Adults Without Dependents (ABAWDs).

The guidance also introduces a special ABAWD waiver criterion and a new type of exemption for individuals residing in Alaska and Hawaii. Under H.R. 1, the Secretary of Agriculture now holds the authority to approve waiver requests for areas of Alaska and Hawaii with unemployment rates at least 150% above the national unemployment rate. The authority is effective immediately and does not expire.

CMS Aims to Redefine States’ Ability to Direct Federal Funding to Emergency Medicaid Coverage for Immigrants 

The Centers for Medicare & Medicaid Services (CMS) recently issued a letter to state Medicaid directors announcing that the agency will interpret an emergency Medicaid provision of the Social Security Act to apply only to payments for direct medical care.

Following the passage of the Emergency Medical Treatment and Labor Act of 1986, all immigrants, regardless of legal status, became eligible for federally subsidized coverage in the event of a serious medical emergency.

While states are permitted to contract with insurers or managed care organizations to cover a broad range of services for beneficiaries at a fixed per-member per-month payment rate, CMS expressed concern over how some states have structured emergency care coverage and the resulting volume of requests for reimbursement.

As a result, CMS intends to limit the emergency Medicaid provision to apply only to payments for care and services necessary for the treatment of an emergency medical condition for individuals without legal status who are ineligible for full Medicaid benefits. This interpretation would exclude Medicaid managed care payments made on behalf of these individuals.

FNS Warns States Full SNAP Funding Cannot Continue Through November

On Oct. 10, the U.S. Department of Agriculture’s Food and Nutrition Service (FNS) notified regional and state SNAP directors that full November SNAP benefits cannot be issued without congressional action to pass appropriations legislation.

SNAP supports more than 40 million individuals nationwide, ensuring consistent access to nutritious food. A lapse in funding would have catastrophic impacts on families already facing food insecurity.

In response, Minnesota’s Department of Children, Youth, and Families has instructed counties and Tribal Nations not to approve new SNAP applications after Oct. 15 in anticipation of potential funding disruptions.

Sector Updates from the Judiciary

Federal Court Determines 501(c)(4) Exemption and Political Activity Standard Unconstitutional

In 2013, the Internal Revenue Service (IRS) denied the organization Freedom Path’s application for 501(c)(4) tax-exempt status after determining the organization had engaged in excessive political activity.

Under current law, 501(c)(4) organizations are required to “primarily” engage in activities that promote social welfare, while all other activities, including political activity, must remain secondary. However, clear limits do not currently exist. Previous rulings have suggested that exceeding roughly 15% of total activities may constitute excessive political involvement, though this threshold is not formally codified.

Further complicating compliance, the IRS applies a “facts and circumstances” test–a non-exhaustive list of 11 factors used to assess whether advocacy communications cross a line into a prohibited political campaign intervention. The test includes six illustrative scenarios, but lacks explicit definitions, leading to concerns about inherent arbitrary and inconsistent enforcement of the 501(c)(4) political activity standards.

Freedom Path subsequently filed a lawsuit, and the U.S. District Court for the District of Columbia ruled that the IRS guidance is unconstitutionally vague.  The court could not determine whether the organization was entitled to tax-exempt status as a result. Both the organization and the IRS have been ordered to propose new standards for 501(c)(4) tax-exempt eligibility and permissible political activity. While the ruling applies exclusively to Freedom Path, the resulting guidance from the IRS will offer clarity across the sector regarding the extent and nature of allowable political engagement for 501(c)(4) social welfare organizations.

Federal Court Temporarily Pauses Mass Reductions in Force

The U.S. District Court for the Northern District of California issued a temporary restraining order against the most recent series of mass reductions in force, finding they are likely “illegal and in excess of authority.”

The order follows the dismissal of more than 4,100 federal employees across nearly six agencies, approximately 1,100 to 1,200 of whom were employed by the U.S. Department of Health and Human Services (HHS).

An estimated 100 to 150 federal employees were dismissed from the Substance Abuse and Mental Health Services Administration (SAMHSA), following a reduction of nearly half of the agency’s workforce in April. Reductions primarily occurred within the Center for Mental Health Services, the Center for Substance Abuse Treatment, the Center for Substance Abuse Prevention, and the Office of Communications.

The U.S. Department of Housing and Urban Development (HUD) similarly distributed mass layoff notices. Reductions were concentrated within the Office of Fair Housing and Equal Opportunity, which investigates claims of discrimination and abuse. Nearly 100 equal opportunity specialists who investigate fair housing complaints received reduction-in-force notices at field offices nationwide. The entirety of HUD’s Denver and San Francisco regional offices—overseeing 13 states combined—also received notices. Additional reductions extended to five other regional offices’ fair housing staff, as well as the division responsible for distributing and administering block grants for affordable housing and community development.

Appeals Court Upholds Abortion Access in Missouri

The Western District Court of Appeals upheld a lower court’s decision pausing enforcement of Missouri state laws restricting access to abortion.

The decision follows the passage of Amendment 3, a constitutional amendment that overturned a near-total abortion ban and protected access to reproductive health care.

The court emphasized the irreparable harm caused by denying abortion care and issued a temporary injunction blocking several restrictive regulations. While the injunction remains in place, patients will not be required to attend two visits at least 72 hours apart before obtaining an abortion, and clinics will not be required to be licensed as ambulatory surgical centers.

Federal Courts Rule Against Grant Conditions

The U.S. District Court for the District of Rhode Island issued a preliminary injunction against the U.S. Department of Housing and Urban Development (HUD), prohibiting the agency from requiring any recipients or subrecipients among the plaintiffs to agree to new conditions.

Domestic violence victim aid organizations filed the lawsuit following HUD’s attempts to condition federal grant funding in ways that would restrict diversity, equity, and inclusion (DEI) efforts. Under the temporary restraining order, HUD and HHS are also barred from requiring grantees to certify that they will not use funds to promote elective abortions or “gender ideology.”

The ruling came shortly after the U.S. District Court for the District of Columbia granted a request from Planned Parenthood affiliates to vacate HHS guidance issued in July. That guidance required grant recipients to revise programming to recognize more than two sexes and to avoid violating parents’ religious beliefs.

This decision also follows the Trump administration’s prior pause on requirements for $1.3 billion in grants, which mandated that states assist federal immigration enforcement to qualify for Victims of Crime Act funding. The release of these conditions follows a multi-state lawsuit alleging that the requirements were unconstitutional and unrelated to the purpose of the grants.

North Dakota Upholds Law Prohibiting Gender-Affirming Care for Minors

The North Dakota District Court upheld a state law prohibiting gender-affirming care for minors. District Judge Jackson Lofgren cited concerns “regarding the capacity of minors to understand and appreciate the long-term consequences” of such care.

House Bill 1254 classifies a health care provider’s decision to prescribe or administer hormone treatments or puberty blockers to a transgender minor as a misdemeanor, and performing gender-affirming surgery on a minor as a felony.

Approximately half of all U.S. states have enacted similar bans on gender-affirming care for minors.

Federal Court Permits Enforcement of ACA Marketplace Changes

The U.S. District Court for the District of Massachusetts denied a coalition of states’ request to temporarily block the Centers for Medicare & Medicaid Services (CMS) rule RIN 0938-AV61.

The rule introduces significant changes, including:

• Repealing the monthly special enrollment period for individuals with projected household incomes at or below 150% of the federal poverty level.
• Standardizing the annual open enrollment period beginning with the 2027 plan year.
• Excluding Deferred Action for Childhood Arrivals (DACA) recipients from eligibility for ACA Exchange coverage and Basic Health Program (BHP) coverage in states operating a BHP.

Collectively, these changes are expected to restrict marketplace eligibility and affordability under the Affordable Care Act. CMS estimates that between 725,000 and 1.8 million people will lose coverage in 2026 due to the final rule.

The lawsuit alleges that the rule is arbitrary and capricious, exceeding the agency’s authority and violating the Administrative Procedure Act. Plaintiffs challenge provisions that shorten enrollment periods, introduce a monthly $5 marketplace user fee, and exclude transgender health care from the list of essential health benefits subject to mandatory coverage.

Nevertheless, the court determined that states’ concerns regarding enrollment losses and fees were premature, allowing the rule to remain in effect while litigation continues.

Litigation on Our Radar

Supreme Court Hears Arguments on State Law Prohibiting Conversion Therapy for Minors

On Oct. 7, the Supreme Court heard arguments in a case challenging Colorado’s law prohibiting conversion therapy for minors.

Licensed counselor Kaley Chiles filed the lawsuit, arguing the law violates free speech protections. The Colorado law prohibits licensed mental health professionals from providing treatment intended to change a minor’s sexual orientation or gender identity.

Lawmakers passed the measure in response to growing evidence linking conversion therapy to increased depression, anxiety, and suicide risk. The ban aligns with guidance from leading medical organizations, including the American Medical Association, American Psychological Association, and American Academy of Pediatrics.

Justice Samuel Alito questioned whether the law constitutes “viewpoint discrimination,” while Justice Ketanji Brown Jackson asked why medical professionals would receive differing constitutional protections based on treatment type. The case follows the Court’s recent decision to uphold a state law banning gender-affirming care for minors.

The Tenth Circuit previously upheld Colorado’s law, determining it regulates conduct rather than speech. If the Supreme Court finds that it infringes on speech, it will be subject to strict scrutiny—the highest level of judicial review. A decision is expected in summer 2025 and could affect similar laws in 27 states.

Supreme Court Considers Major Aspects of the Voting Rights Act

On Oct. 15, the Supreme Court heard arguments in a case alleging that Louisiana violated the Constitution’s Equal Protection Clause by creating a second majority-Black congressional district that relied too heavily on race.

The case raises the question of whether the Constitution permits the intentional creation of majority-minority districts to ensure minority voters can elect candidates of their choice. Previous courts have found such districts may be required under Section 2 of the Voting Rights Act, which prohibits election rules that discriminate based on race.

Justice Brett Kavanaugh questioned whether race-based remedies under the Voting Rights Act remain justified six decades after its passage, emphasizing the need for eventual limits.

The ruling is expected to have major implications for congressional map drawing in Louisiana and several other states, potentially reshaping minority representation nationwide.

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The U.S. Department of Health and Human Services (HHS) recently announced a multifaceted approach to address rising rates of autism spectrum disorder (ASD). Components of this plan include: 

Authorizing Treatment with Leucovorin: The Food and Drug Administration (FDA) has published a Federal Register notice outlining a label update for leucovorin for cerebral folate deficiency, which has been associated with autism. As a result, state Medicaid programs will be able to cover leucovorin for the indication of ASD. Additionally, the National Institutes of Health (NIH) will launch confirmatory trials and new research into the impact of leucovorin, including safety studies.   

Initiating a Safety Label Change for Acetaminophen: Due to conflicting literature and a lack of clear causal evidence between acetaminophen use during pregnancy and adverse neurodevelopmental outcomes, HHS aims to encourage clinicians to exercise their best judgment. The FDA will accordingly partner with manufacturers to update labeling and drive new research to safeguard mothers, children, and families. HHS will also launch a nationwide public service campaign to inform families and protect public health.   

Increasing Research Investment: NIH announced the recipients of the Autism Data Science Initiative (ADSI), funding 13 projects to transform autism research. ADSI integrates large-scale biological, clinical, and behavioral data using an exposomics approach, which examines environmental, nutritional, medical, and social factors in conjunction with genetics. 

Head Start Releases Information Memorandum Clarifying Policy Guidance for Vacant Slots  

The Administration for Children and Families released an information memorandum to all Head Start recipients, including Head Start Preschool, Early Head Start, Early Head Start-Child Care Partnerships, Collaboration Offices, and National Centers. 

The memorandum clarifies when Head Start programs should consider a child’s slot vacant after prolonged absences, emphasizes the importance of regular attendance, and provides strategies for programs to enhance access and participation for children and families. 

Head Start Releases Information Memorandum Regarding the Monitoring Process for FY 2026 

The Administration for Children and Families released an information memorandum to all Head Start grant recipients. Aligned with the Improving Head Start for School Readiness Act of 2007, the Office of Head Start is required to monitor programs to ensure they meet quality and compliance standards. The information memorandum outlines the monitoring process for fiscal year 2026, including updates to review formats and the schedule for reviews during a grant period. 

Key updates to monitoring reviews include streamlining and clarifying review questions, reducing the total number of questions from 449 in FY25 to 203 for FY26, and shortening on-site review days from 5 days to 3 or 3.5 days. The changes focus reviews on the most critical elements for child safety and program integrity, as well as reviewing for compliance with all applicable state statutes and regulations for licensing. The updates are designed to strengthen systems early in the grant cycle, support fiscal integrity, and enable more on-site visits sooner in the process, ensuring a strong organizational foundation is established early in the grant cycle.   

Centers for Medicare & Medicaid Services Outline Guidance for Third Round of Medicare Price Negotiations 

On Sept. 30, the Centers for Medicare & Medicaid Services issued final guidance that details requirements and parameters for the third cycle of negotiations and the first cycle of renegotiations for the Medicare Drug Price Negotiation Program, which will occur in 2026 and may result in negotiated maximum fair prices (MFPs) that would be effective in 2028. 

Federal Funding Lapses Without Further Appropriations Legislation 

The government has paused all non-essential operations as of Oct. 1st without continuing resolution or appropriations legislation to extend funding. 

While a continuing resolution that would fund the government at previous levels through November 21, H.R. 5371, was passed by the House of Representatives, it has failed to meet the required 60-vote threshold to pass the Senate. Central disagreements centered the extension of health care tax credits and language regulating recissions.  

Government shutdowns hold far reaching effects for the human service sector and the communities we serve. While mandatory benefits, such as Social Security, continue, reimbursements for key social service programs risk being delayed. 

States face a greater burden to stabilize funding if reimbursements are delayed. The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) presents a critical challenge as it is currently funded by a contingency fund, but funding is not expected to sustain states for more than a few weeks. States may independently implement funding to safeguard the program and seek reimbursement once a continuing resolution is passed, but not all states are able to afford the cost. 

Additionally, vouchers for Head Start, the Child Care and Development Block Grant, and Title IV-B are frozen until the government resumes its required funding levels. 

USDA Terminates Future Household Food Security Reports 

The U.S. Department of Agriculture issued a press release notifying that future Household Food Security Reports would be terminated. The Household Food Security Report provides annual data from national food insecurity surveys to offer insight into the ability of low-income households to access adequate nutrition. 

HHS Publishes Notice of Proposed Rulemaking for Head Start Program Performance Standards 

The U.S. Department of Health and Human Services issued a notice of proposed rulemaking to propose new provisions to the Head Start Program Performance Standards. The standards aim to increase pay and support the Head Start workforce, improve the overall quality of Head Start program services, and strengthen mental health support. 

Sector Updates from the Judiciary  

Federal Court Rejects Conditions Placed on Disaster Funding 

The U.S. District Court for the District of Rhode Island permanently blocked the enforcement of conditions placed on emergency preparedness funds. Judge William Smith determined that the sudden requirements that grant recipients certify that they do not “operate any program that benefits illegal immigrants or incentivizes illegal immigration” and promises to “honor requests for cooperation” in immigration enforcement are illegal. 

The verdict grants summary judgment to the plaintiff states, including Illinois, California, and New York.  

The decision also arrived shortly after the U.S. District Court for the Northern District of California issued a preliminary injunction to prevent conditions from being placed on grant funds  The order stated that the funds cannot be used to further goals related to racial preferences, the denial of “the sex binary in humans or the notion that sex is a chosen or mutable characteristic,” illegal immigration, or other “anti-American values.” 

Reduction-In-Force Remain Paused for Certain HHS Subagencies 

The injunction against further reductions in force for the Centers for Disease Control and Prevention, the Office of Head Start and regional employees, the Center for Tobacco Products, and the HHS assistant secretary for planning and evaluation’s Division of Data and Technical Analysis will remain in place. The U.S. Court of Appeals for the First Circuit upheld the lower court’s preliminary injunction preventing further reductions in force as litigation continues. 

Shortly after, the First Circuit permitted the Department of Education to resume a planned reduction in force for its Office for Civil Rights, following a July Supreme Court order. The Supreme Court decision allowed the Department of Education to proceed with mass staff reductions. 

Appeals Court Warns Mandatory Implicit Bias Training May Give Rise to a Race-Based Hostile Work Environment 

The U.S. Court of Appeals for the Second Circuit determined that mandatory implicit bias trainings are not inherently illegal. However, the court warned that the trainings may give rise to a race-based hostile work environment claim if the training discusses a particular race “with a constant drumbeat of essentialist, deterministic, and negative language.” 

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 Administration for Children and Families (ACF) released a strategic alignment initiative to foster a coordinated approach across agency programs. The approach is designed to enable ACF to concentrate funding on proven interventions, addressing complex human services challenges holistically, and achieving measurable results for children and families in communities throughout America. 

Additionally, ACF agencies are directed to evaluate funding allocations through the lens of their strategic objectives to ensure funding decisions that reflect their core priorities. ACF emphasized the importance of promoting quality early learning environments and improved child outcomes, promoting work and self-sufficiency, supporting family formation, ensuring efficient use of taxpayer dollars, and emphasizing personal responsibility. 

To determine whether grant programs align with ACF’s core priorities, the agency will develop and implement a value alignment assessment, prioritizing programs that demonstrably support: 

• Work as a pathway to self-sufficiency 
• Marriage and family formation 
• Biological definitions of sex 
• Compliance with immigration laws 
• Efficient use of taxpayer dollars 

Aligned with recent executive orders, the Administration for Children and Families will not fund programs that promote diversity, equity, and inclusion or advance gender ideologies. Additionally, ACF will not support safe consumption sites or harm reduction activities. 

The Make America Healthy Again Commission Releases the Make Our Children Healthy Again Strategy 

On September 9, the Make America Healthy Again Commission released the Make Our Children Healthy Again Strategy. The recommendations encompass more than 120 initiatives to end childhood chronic disease, including advancing research, increasing public awareness, and strengthening private-sector collaboration.  

Key areas of focus include: 

• Expanding NIH and agency research of chronic disease prevention, nutrition and metabolic health, food quality, environmental exposures, autism, gut microbiome, precision agriculture, rural and tribal health, vaccine injury, and mental health. 

• Reforming dietary guidelines, including by raising infant formula standards, improving food served in schools, hospitals, and to veterans, and reforming Medicaid quality metrics to measure health outcomes. 

• Reforming and deregulating key processes, including support for mobile grocery and processing units, modernizing FDA drug and device approval, and accelerating EPA approvals for innovative agricultural products. 

• Increasing public awareness and education by launching school-based nutrition and fitness campaigns, Surgeon General initiatives on screen time, prioritizing pediatric mental health, and expanding access to reliable nutrition and health information for parents. 

• Promoting private sector collaboration through soil health and land stewardship, community-led initiatives, and scaling innovative solutions to address root causes of chronic disease. 

Social Security and Work & Welfare Subcommittees Hold Hearing to Remove Barriers to Work and Support Opportunity for People with Disabilities 

The Social Security and Work & Welfare Subcommittees held a hearing to discuss Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Representatives and witnesses stressed the challenges people with disabilities face in pursuing careers, especially due to asset limits. They also discussed barriers to accessing return-to-work programs, opportunities to improve transitions, and challenges with administrative processes, particularly regarding overpayments.  

Witnesses highlighted the benefit of ABLE savings accounts that allow people with disabilities to keep benefits that support their health and independence while pursuing their careers. They also stressed the importance of trained benefits counselors to advise on complex rules governing related work programs, including Ticket to Work. 

Witnesses proposed encouraging and funding the collaborative model between employers and community-based employment agencies that provide expertise for career development and on-the-job training. They also recommended simplifying the Workforce Opportunity Tax Credit process and resuming previous investments in data and evidence to identify opportunities for program improvement.   

Senate Committee on Health, Education, Labor, and Pensions Holds Hearing on the State of K-12 Education 

The U.S. Senate Committee on Health, Education, Labor, and Pensions held a hearing regarding the state of K-12 education following the recent release of the National Assessment of Educational Progress (NAEP) results. Often referred to as the nation’s report card, the assessment found significant decreases for eighth graders in science and twelfth graders in mathematics and reading. The results were the first published by NAEP since the beginning of the COVID-19 pandemic. 

Witnesses shared the ongoing challenges the pandemic presents as students work to recover key progress. However, they also noted pre-existing trends that were exacerbated by the rapid changes in learning formats marked stress, and profound mental health challenges countless students experienced during the pandemic. The witnesses discussed the disparate impact that contributed to a widening achievement distribution among the highest and lowest performing students. 

Witnesses and senators emphasized the importance of supporting school districts and their teachers while bolstering data collection and research. They expressed concern for the rise of smartphones, social media, and artificial intelligence. Witnesses also recommended researching chronic absenteeism and pathways to increase student engagement. They jointly encouraged a collaborative approach that partners families, educators, higher education institutions, businesses and industry leaders, policy makers, and community stakeholders to ensure students have the skills, confidence, and experiences needed to thrive in their classrooms as well as a workforce and economy increasingly shaped by science, technology, engineering, and mathematics. 

GAO Determines DHS Impounded Funding Appropriated to Serve Migrants  

On September 15, the Government Accountability Office (GAO) released a report detailing that the Department of Homeland Security (DHS) violated federal appropriations law. GAO found that in withholding funding for local governments and nonprofits to provide services for migrants, the agency violated the Impoundment Control Act. 

The report specifically mentioned funding toward the Emergency Food and Shelter Program (EFSP), Shelter and Services Program (SSP), and Building Resilient Infrastructure and Communities Program. 

CMS and SAMHSA Issue Joint Guidance for Crisis Services 

The Centers for Medicare & Medicaid Services (CMS) and the Substance Abuse and Mental Health Services Administration (SAMHSA) issued joint guidance to states on the continuum of crisis services. The document is intended to serve as a guide for states and stakeholders regarding effective practices in crisis services as well as the federal authorities for states to finance and enhance the availability of crisis response services in Medicaid and CHIP. The guidance highlights effective strategies for crisis response services, describes specific Medicaid and CHIP authorities and flexibilities to support the full continuum of crisis services, and provides an overview of strategies for measuring and monitoring crisis response services. 

Office of Planning, Research, & Evaluation Publishes BASE Methodological Guide 

The Administration for Children and Families’ Office of Planning, Research & Evaluation published a methodological guide, entitled Estimating the Costs of Implementing Workforce Development Strategies in Child Care and Early Education. 

The report was published through the Building and Sustaining the Child Care and Early Education Workforce (BASE) project. The project aims to increase knowledge and understanding of the factors that drive staff member turnover in the child care and early education (CCEE) workforce and to build evidence about current initiatives to recruit, advance, and retain a stable and qualified CCEE workforce.  

The brief describes how to inventory the resources required to implement a workforce development strategy and estimate the associated costs using the ingredients method—a widely adopted, mixed-methods approach tailored to education settings. It aims to help users understand key methodological considerations involved in cost study design and ensure accurate cost estimates to support effective decision-making and avoid unintended consequences. 

Proclamation Issued, Temporarily Reforming the H-1B Visa Program 

On September 19, President Trump issued a proclamation restricting immigration for individuals to pursue specialty occupations through the H-1B program, unless their petition is accompanied by a $100,000 payment. The proclamation directs the Secretary of State to issue guidance to prevent misuse of B visas by beneficiaries of approved H-1B petitions that have an employment start date prior to October 1, 2026. 

Notably, the proclamation does not extend to any previously issued H-1B visas or any petitions submitted prior to 12:01 a.m. EDT on September 21, 2025. Unless renewed, the restriction will expire 12 months following the date of the proclamation’s enactment. It also does not change any payments or fees required to be submitted in connection with any H-1B renewals. 

Sector Updates from the Judiciary 

Appeals Court Upholds Denial of Federal Medicaid Funding to Planned Parenthood 

The U.S. Court of Appeals for the First Circuit permitted the Department of Health and Human Services to withhold Medicaid reimbursements to Planned Parenthood following a provision within the recently passed tax and budget bill, H.R. 1. The provision temporarily prevents Medicaid from reimbursing health care centers that offer abortion care and received more than $800,000 from Medicaid in 2023. The appeals court affirmed that the section does not violate the U.S. Constitution. 

Previously, the U.S. District Court for the District of Massachusetts issued a preliminary injunction, temporarily pausing the provision’s enforcement as litigation continued. U.S. District Judge Talwani determined that the law likely violates the Constitution by specifically excluding Planned Parenthood’s health centers due to their status as abortion providers. 

Federal Courts Pause Policy Requiring Immigration Status Verification for Certain Public Services 

Federal judges in Washington and Rhode Island temporarily prevented a policy recently issued by the Departments of Education and Health and Human Services from taking effect. The policy required Head Start, certain public health programs, and adult education and career training programs to verify the immigration status of their participants.  

The judges emphasized the lack of clear guidance and the potential chilling effect on eligible individuals who lack documentation or fear enforcement. Judge Mary McElroy, for the U.S. District Court for the District of Rhode Island, additionally shared the challenges Head Start providers will likely experience in complying with the requirements. She emphasized the resulting financial challenges resulting from decreased enrollment. Similarly, Judge Ricardo Martinez for the Western District of Washington shared the immediate harm families will experience through childhood education loss, disability support, dual language instruction, and stable learning environments, leading to long-term harm to child development. 

A nationwide preliminary injunction is in place to temporarily prevent the directive’s enforcement against any health clinic, adult education, or Head Start agency, program provider, student, or family participant.  

Supreme Court Upholds Order Requiring South Carolina School District to Allow a Transgender Student to Use Restrooms Consistent with Their Gender Identity 

The U.S. Supreme Court denied a request issued by South Carolina to pause a federal appeals court injunction that permitted a 9th-grade transgender student to use school restrooms consistent with their gender identity as the student’s lawsuit progresses. 

The student had filed the lawsuit to challenge a state law requiring students to use the bathroom aligned with their sex assigned at birth. The provision was introduced through South Carolina’s 2024 budget bill and renewed for their 2025-26 state budget. 

Although South Carolina’s circuit and appeals courts upheld the student’s right to use the bathroom aligned with their gender identity, the state petitioned the Supreme Court to prevent the student from using a bathroom that does not correspond with their sex assigned at birth. 

The Supreme Court noted that its decision exclusively followed the standard procedure for obtaining emergency relief. 

Appeals Court Resumes Enforcement of Texas Election Law 

The Fifth Circuit Court of Appeals overturned a district court’s decision, allowing key provisions of a Texas election law to proceed. SB1 regulates how individuals can assist voters in casting ballots.  

 Although a lower court found certain provisions could deter individuals from assisting disabled voters, the 5th Circuit upheld the disclosure provisions. The provisions require people assisting voters to disclose personal information, including their name, address, relationship to the voter, and whether they received compensation. The 5th Circuit ruled the law does not prohibit states from restricting who may assist voters if they’re paid. 

The court also upheld the amended oath provision, which requires individuals to swear under penalty of perjury that they did not pressure the voter, that the voter was eligible for assistance, and that they will not influence the vote. 

Supreme Court Pauses Los Angeles Restrictions Regulating Immigration Stops  

The Supreme Court temporarily paused an order issued by the U.S. District Judge Maame Ewusi-Mensah Frimpong. The decision barred agents in the Central District of California from making immigration stops without reasonable suspicion that the person being stopped is in the United States illegally.  

Judge Frimpong maintained that reasonable suspicion cannot rest solely on any combination of four factors: “apparent race or ethnicity,” speaking in Spanish or accented English, being present at a location where undocumented immigrants are known to gather, and working at specific jobs, such as landscaping or construction. 

The lawsuit was filed following immigration-related raids, which petitioners argued violated the Fourth Amendment’s prohibition on unreasonable searches and seizures. The plaintiffs maintained that reasonable suspicion must be grounded in “specific articulable facts,” rather than “broad profiles which cast suspicion on entire categories of people.” 

Although the U.S. Court of Appeals for the 9th Circuit largely upheld the order as litigation continued, the U.S. Solicitor General sought relief from the Supreme Court, contending the ruling strains law enforcement. 

The Supreme Court, by a 6-3 majority, affirmed that federal immigration officers can briefly detain and interrogate individuals regarding the legality of their status. The ruling permitted officers to rely on a “totality of circumstances” standard for reasonable suspicion, using all of the officer’s knowledge and observations at the time of the stop.  

US Court of Appeals Upholds Injunction Against Further Reduction-in-Force Workforce Notices 

The U.S. Court of Appeals for the First Circuit upheld a preliminary injunction, preventing the Department of Health and Human Services from issuing further reductions in force. The verdict follows an injunction issued by the U.S. District Court for the District of Rhode Island that applies to the Centers for Disease Control and Prevention, the Office of Head Start and regional employees, the Center for Tobacco Products, and the HHS Assistant Secretary for Planning and Evaluation’s Division of Data and Technical Analysis. 

The reductions-in-force will continue to remain paused as litigation continues. 

Federal Court Pauses Funding Restrictions for HUD Grantees 

The U.S. District Court for the District of Rhode Island issued a temporary restraining order to prevent the Department of Housing and Urban Development from imposing conditions on $75 million of grant funding through the Continuum of Care Builds program, which is allocated to build housing for unhoused individuals.  

The lawsuit was filed by a coalition of nonprofits that alleged funding became conditioned to prevent jurisdictions from supporting sanctuary protections, harm reduction practices, or inclusive policies for transgender people. 

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September through November is the official season for Voter Education. Mark these dates on your calendar, learn why supporting voter registration is crucial to sustaining a healthy democracy, and gain tools to lead these efforts in your community.

National Voter Registration Day: Sept. 16, 2025

National Voter Registration Day is a nonpartisan civic holiday. The mission of this day is to support democracy by creating awareness of voter registration opportunities and ensure all eligible Americans are registered to vote and ready for their next election. Since its inception in 2012, National Voter Registration Day has helped more than 6 million people register to vote.

Millions of Americans are unable to vote each year because of financial barriers, limited access to transportation, and difficulty registering to vote. The voter registration process can be complex, and for those who have moved, changed their name, or are registering for the first time, it’s often a source of confusion and anxiety. National Voter Registration Day seeks to address these issues by providing a single, coordinated day of action. It brings together a diverse coalition of thousands of organizations, including community-based organizations, corporations, and libraries, for a nationwide effort to register voters and educate the public on election information.

National Voter Education Week: Oct. 6-10, 2025

National Voter Education Week (NVEW) is an annual, nonpartisan campaign held during the first full week of October. It’s a concerted, open-source effort by a coalition of organizations to provide voters with information and tools so they can confidently participate in elections.

The main purpose of NVEW is to bridge the gap between registering to vote and casting a ballot. Many eligible voters are registered but face barriers or have questions about the voting process. Organizations can address these issues during NVEW by helping voters find their poling locations, locate candidate information, and make an election day plan.

Why It’s Crucial for the Social Sector to Participate

For community-based organizations, participating in voter education activities is a natural extension of their mission. These organizations are often among the most trusted institutions in their communities and are uniquely positioned to reach people who might be missed by traditional political campaigns.

Here’s why it’s so important:

• Empowering Communities: Social sector organizations serve a wide range of communities, including those who are often systemically disenfranchised or have historically low voter turnout. By helping people register and learn more about their ballot, organizations empower them to use their voice and participate in decisions that directly affect their lives. This aligns with many missions focused on community empowerment, community development, and civic engagement.
• Building Civic Infrastructure: Voting is a foundational component of a healthy democracy. Nonprofits that engage in this work are not just helping individuals; they are building a stronger, more representative civic infrastructure for the entire community. This work is nonpartisan and helps ensure that the registered voting population better reflects the entire population.
• Leveraging Trust and Reach: Social sector organizations hold strong community ties and work closely with marginalized and underrepresented populations through their regular services and programs. By integrating voter registration and education into their daily activities, community-based organizations can alleviate barriers by offering accessible resources, through a trusted and local source.

How Your Organization Can Support Voter Registration

Nonprofits can participate in National Voter Registration Day in many ways, from small-scale efforts to large, coordinated events. The key is to remain nonpartisan and make voter registration as easy as possible. The IRS explicitly allows 501(c)(3) organizations to conduct nonpartisan voter registration drives.

Here are some examples of how to can get involved:

• Host a Voter Registration Drive: Set up a table with voter registration forms and a computer or tablet for online registration. This can be done at your organization’s site, at a community event, or a public space like a library or a farmers market.
• Integrate Voter Engagement into Existing Services: Staff can ask clients if they’re registered to vote, offer to help them check their status, and register on the spot.
• Use Digital and Social Media: Use your social media channels to share information. Provide links to online registration portals, key deadlines, and eligibility requirements.
• Educate and Inform: In addition to registering voters; share the impact of voting; trusted sources to find nonpartisan candidate information; and different voting options like mail-in ballots or early voting. Create spaces for dialogue and questions.

By participating, organizations can play a vital role in strengthening democracy and empowering the people they serve.

Voter Registration Resources

Whether you want to launch a campaign or just provide some print or digital resources, there are numerous resources to help you participate in this year’s voter education activities.

Toolkits and Guides:

• Strategies for Mobilizing Voters: Social Current and Nonprofit VOTE partnered to create a toolkit for nonprofit community-based organizations. Inside, you will find strategies to engage with candidates for office and voters as well as materials to assist in planning and implementing the activities the toolkit shares.

• Staying Nonpartisan: Permissible Election Activities Checklist: All nonprofits are allowed to participate in voter registration and engagement; however, understanding key limits and ensuring nonpartisanship is essential to upholding the responsibilities of maintaining a nonprofit tax status. Nonprofit VOTE created a comprehensive guide to ease determining which activities are allowed and which are prohibited.

• Voting In Your State: Differences between state laws can spark confusion. For state-specific information on elections, including how to register to vote online and in-person and voter identification requirements, visit Nonprofit VOTE’s state specific guides.

Trusted Voter Support Organizations:

• National Voter Registration Day: Register to vote, find National Voter Education toolkits, guides, checklists, and more.
• U.S. Elections Assistance Commission: Find trusted election information, register to vote, and materials for election officials.
• BallotPedia Elections Calendar: See what elections are coming up and find nonpartisan information about who is on the ballot.
• The Civics Center: Focused on registering young voters, you can find information on pre-registration for those turning 18 and resources for supporting young voters.

Social Current Solutions

Government Affairs and Advocacy

Social Current offers training, tools, and consultation to help community-based organizations navigate the complexities of government relations, mobilize their communities, and influence legislation. Learn more about our Government Affairs and Advocacy solutions.

Knowledge and Insights Center Resources

Business, Media, & Research Databases
From thousands of premium journals to the latest social sector news and media, Social Current Impact Partners and KIC subscribers have access to a wealth of evidence-based resources to support them in addressing any leadership challenge.

About the Knowledge and Insights Center
Social Current’s Knowledge and Insights Center equips social sector professionals with the research and resources they need to stay current on trends, implement best practices, and improve their organizations. It specializes in vetting information sources and systematizing information so that it is easy to understand. Gain access to the Knowledge and Insights Center by becoming a Social Current Impact Partner or purchasing access.

On Sept. 2, by a vote of 11 to 7, the House of Representatives Labor, Health and Human Services, Education, and Related Agencies appropriations subcommittee approved the 2026 Labor, Health and Human Services, Education, and Related Agencies Appropriations Act. The bill allocates significant funding toward:

• Certain programs offered through the Department of Health and Human Services, including the Low-Income Home Energy Assistance Program and Home and Community Based Supportive Services
• The Department of Health and Human Services (HHS) to invest in prevention and innovation programs for rural communities, telehealth resources for chronic care, and nutrition services
• Substance use treatment, prevention, and long-term recovery
• Safeguarding the safety and well-being of unaccompanied children under the custody of the Office of Refugee Resettlement through improved sponsor vetting, interagency data sharing, welfare checks, and reporting requirements
• Youth and young adult suicide prevention and mental health treatment
• Certain programs offered through the Department of Education, including those for special education and charter schools

Notable funding decreases include:

• The elimination of Transitional and Medical Services and the Refugee Support Services programs
• Title I grants by $5.2 million, a reduction of 27%
• The elimination of Preschool Development Grants

Additionally, Child Care and Development Block Grants and Head Start will be funded at equal levels to fiscal year 2025. Behavioral health programs focused on criminal and juvenile justice and homelessness prevention will also be streamlined.

For additional information, the Appropriations Committee issued a summary of the bill’s main provisions.

Executive Branch Rescinds Foreign Aid Funding

The White House Budget Office advanced a proposal to rescind $4.9 billion in funding allocated to the State Department and the U.S. Agency for International Development (USAID).

Typically, Congress would be offered 45 days to process the request. However, the proposal was advanced while Congress members had returned to their districts for August recess and with fewer than 45 days until the fiscal year ends.

The Government Accountability Office has previously determined that the maneuver, often referred to as a “pocket recission,” is illegal as it attempts to bypass Congress’ constitutional power to approve a budget and appropriate funds. Pocket recissions have also been criticized by Congress members who similarly claim that it is a violation of congressional authority.

CMS Issues Guidance to Expand Access to Affordable Catastrophic Health Coverage

The Centers for Medicare and Medicaid Services (CMS) issued guidance intended to expand access to catastrophic health coverage. The guidance also aims to streamline access for people who are ineligible for advance payments of the premium tax credit or cost-sharing reductions.

Catastrophic plans are designed to protect consumers from very high medical costs in the event of serious illness or injury and generally have lower monthly premiums as a result. They also offer full access to preventive services without cost-sharing requirements. The guidance aims to improve healthcare access as health insurance premiums are expected to rise significantly for the 2026 plan year.

CMS Issues Final Rule to Expand Access to Prescription Drug Information by Certain Medicare Beneficiaries

The Centers for Medicare and Medicaid Services (CMS) issued a final rule, effective Oct. 1, intended to enhance transparency for patients and providers participating in Medicare Advantage, Medicaid Managed Care, Medicare Part D, Health Insurance Marketplace, and commercial plans. Specifically, the rule aims to improve access to prescription drug information for physicians and patients to ease the identification of the most appropriate and cost-effective treatments. Through deregulatory actions, the rule will enable Medicare recipients to compare drug prices, view their out-of-pocket costs, and access information on prior authorization requirements.

Sector Updates from the Judiciary  

Federal Court Issues Temporary Restraining Order to Prevent Agencies from Enforcing Grant Conditions

The U.S. District Court for the Northern District of California issued a temporary restraining order, preventing agencies, including the Departments of Housing and Urban Development, Transportation, and Health and Human Services, from conditioning congressionally approved grant funding.

States and counties filed the lawsuits alleging that the Trump administration imposed “vague and unauthorized conditions” on grant funds, which violated the Separation of Powers doctrine, the Spending Clause, the Fifth and Tenth Amendments, and the Administrative Procedure Act. Specifically, grantees were required, “to certify that they prohibit diversity, equity, and inclusion programs, prohibit the promotion of gender ideology and elective abortion, and promote federal immigration enforcement efforts.”

Judge Seeborg determined that the plaintiffs are likely to suffer irreparable harm by requiring grantees to certify compliance with “likely unconstitutional conditions or [surrender] key federal grant funding.” The judge also emphasized the potential harm to communities, as plaintiffs require clarity about their budgets and programmatic capacities to deliver public services.

Education Department Reaches Agreement to Release Frozen Education Funding

Beginning the week of July 28, the U.S. Department of Education will begin releasing funding for the current federal and education fiscal year for the following programs:

• Title I-C, ESEA: Migrant Student Education
• Title II-A, ESEA: Supporting Effective Instruction State Grants
• Title III-A, ESEA: English Language Acquisition
• Title IV-A, ESEA: Student Support and Academic Enrichment State Grants
• Title II, WIOA: Adult Basic and Literacy Education State Grants (including English Literacy and Civics Education State Grants)

The decision to release frozen federal funding stems from an agreement the federal government made with 24 states and the District of Columbia. The U.S. Department of Education agreed to release any remaining funds between Oct. 1-3 to resolve a previously filed lawsuit. The lawsuit was filed following a notice sent to state-level school departments nationwide from federal officials, detailing that the above education funding was being returned to the federal government.

Federal Judge Declines to Reinstate Funding for a Maine Reproductive Health Care Provider

The U.S. District Court for the District of Maine permitted the U.S. Department of Health and Human Services to proceed in halting Medicaid payments to Maine Family Planning, a network of 18 clinics that operate across the state.

The loss of funding follows the passage of H.R. 1, the recent budget bill, which prohibited Medicaid funding for organizations primarily engaged in family planning services that have received more than $800,000 from Medicaid in 2023.

Maine Family Planning filed the lawsuit, alleging the withdrawal of Medicaid payments would cause the organization and its clients irreparable harm. Maine Family Planning stressed that Medicaid dollars are not directed toward its abortion services, but toward primary care services. The loss of funding would prevent the clinics from offering cervical cancer screenings, contraception, and primary care to low-income residents.

Judge Walker determined that Maine Family Planning failed to demonstrate the irreparable harm cited and further affirmed Congress’ right to “withhold federal funds and otherwise disassociate from conduct that is not enshrined” as a constitutional right.

Payments to Maine Family Planning will not resume, as litigation continues.

Federal Court Temporarily Pauses State Law Prohibiting DEI Initiatives in Schools

The U.S. District Court of New Hampshire issued a two-week temporary restraining order against a portion of a New Hampshire state law prohibiting diversity, equity, and inclusion (DEI) programs within local school districts. As a result of the verdict, certain school districts will not have to report any contracts or activities involving DEI initiatives until Sep. 18.

The requirement was issued through HB2, the state’s budget package. It prohibits any DEI initiatives in schools and public agencies that seek to improve outcomes for individuals who are grouped by age, sex, gender identity, race, or disability. Schools are required to report to the New Hampshire Department of Education any DEI-related programs and contracts they provided, detailing if any were funded through state allocations. Districts that failed to comply would be subject to financial penalties.

Judge McCafferty issued the temporary restraining order because of the harm school districts would face if they violate the law, even unknowingly. Additionally, the judge maintained that the state failed to demonstrate that it has the authority to withhold funding if schools fail to comply with the law’s deadline to report to the state’s Department of Education.

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U.S. Attorney General Pam Bondi recently issued guidance to educational institutions, state and local governments, and public and private employers reiterating the Trump administration’s January directive that all programs, policies, and activities must comply with existing federal anti-discrimination laws. 

The memorandum details that federal funding recipients may be liable for discrimination and funding revocations if they knowingly fund the unlawful practices of contractors, grantees, and other third parties. 

To minimize the legal risk of violating federal anti-discrimination laws and having federal grant funding revoked, the Department of Justice recommended the following, 

1. Ensure inclusive access to all workplace programs, activities, and resources.  
2. Document legitimate rationales to demonstrate that decisions are unrelated to protected characteristics. 
3. Avoid exclusionary training programs and ensure trainings are open to all.  
4. Include nondiscrimination clauses in contracts and specify that federal funds cannot be used for programs that discriminate.  
5. Monitor third parties that receive federal funds to ensure ongoing compliance. 
6. Establish clear anti-retaliation procedures and create safe reporting mechanisms and include these policies in employee handbooks and program guidelines. 

HHS Revives Task Force on Safer Childhood Vaccines 

The U.S. Department of Health and Human Services (HHS) announced the reinstatement of the Task Force on Safer Childhood Vaccines, a federal panel created by Congress to improve the safety, quality, and oversight of vaccines administered to children in the U.S. 

The taskforce will issue regular recommendations regarding the development, promotion, and refinement of childhood vaccines that result in fewer and less severe adverse reactions than those vaccines currently on the market. Recommendations will also center improvements in vaccine development, production, distribution, and adverse reaction reporting. HHS will transmit its first formal report to Congress within two years, with updates every two years thereafter. 

CMS Begins Oversight Process to Verify the Citizenship of Medicaid and CHIP Recipients 

The Centers for Medicare & Medicaid Services (CMS) initiated an oversight initiative to ensure that enrollees in Medicaid and the Children’s Health Insurance Program (CHIP) are U.S. citizens, U.S. nationals, or have a satisfactory immigration status.  

CMS is providing states with monthly enrollment reports, identifying individuals whose citizenship or immigration status could not be confirmed through federal databases, including the Department of Homeland Security’s Systematic Alien Verification for Entitlements (SAVE) program. States are then responsible for verifying individuals’ citizenship or immigration status and requesting additional documentation if needed. CMS has authorized states to take actions when necessary, including adjusting coverage or enforcing non-citizen eligibility rules.  

CMS began issuing the first set of reports on Aug. 19 and expects all states to have received a report within a month.  

Sector Updates from the Judiciary  

Supreme Court Temporarily Approves Grant Terminations  
Supreme Court narrowly agreed to allow the National Institutes of Health (NIH) to terminate $783 million in grants connected to diversity, equity, and inclusion (DEI) initiatives by a vote of 5 to 4. The court also upheld a lower court’s ruling, which blocked internal NIH guidance documents barring funding for research that does not align with the agency’s policy priorities. Specifically, the guidance prohibited funding for research connected to DEI, gender identity, vaccine hesitancy, COVID, and climate change. 

NIH’s grants were terminated following these executive orders: 

• Ending Radical and Wasteful Government DEI Programs and Preferencing  
• Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government 
• Ending Illegal Discrimination and Restoring Merit-Based Opportunity 

States, advocacy organizations, and researchers filed lawsuits in response, maintaining that terminating grants violates the Constitution and the Administrative Procedure Act. The District Court for the District of Massachusetts ordered the reinstatement of the grants, citing a lack of reasoned decision-making to explain the cancellations.   

However, the Supreme Court ruled that the district court lacked the authority to order the reinstatement of specific grants. The court majority opinion stated that the federal government would face “irreparable harm” if it paid the money for the grants and then was unable to recover the funds before the litigation was resolved. 

Appeals Court Upholds Significant Reductions in Foreign Aid 
The U.S. Court of Appeals for the D.C. Circuit overturned a lower court ruling after a district court determined that the Trump administration cannot suspend grants that do not comply with the president’s priorities. The appeals court determined that the nonprofit that issued the lawsuit lacked standing as they were unable to demonstrate a sufficient connection to and harm from the administration’s actions. The justices maintained that only the head of the Government Accountability Office (GAO) has the authority to file the lawsuit according to the Impoundment Control Act. 

The decision lifted a lower court’s order that had required the administration to continue processing foreign aid payments with funds Congress had budgeted. However, the judges clarified that their decision does not address the question of whether pausing foreign aid violates the U.S. Constitution by infringing on the spending power of Congress. 

Although the GAO has determined impoundment has occurred in several instances, the agency has not yet filed litigation. Recently, the GAO issued a report determining that the U.S. Department of Health and Human Services’ significant reductions in the rate of disbursement for Head Start funding constituted impoundment. Additionally, the GAO found that the National Institutes of Health’s cancellation of grants and withholding of funds violated the Impoundment Control Act of 1974. Nevertheless, the reports are nonbinding without a court order compelling the agency to release funds.  

Federal Court Prohibits HHS from Sharing Medicaid Data for Immigration Enforcement Purposes 
The U.S. District Court for the Northern District of California prohibited the Department of Homeland Security and the U.S. Department of Health and Human Services from sharing Medicaid data from the plaintiff states for immigration purposes as litigation continues. The plaintiff states include California, Arizona, Delaware, Illinois, and Maine. 

Federal Court Denies Injunction Against Alabama Law Banning DEI Programs in Public Schools  
Students and faculty filed a lawsuit against the governor of Alabama and the University of Alabama’s trustees, maintaining that a recently passed state law violates their freedom of speech by placing viewpoint-based restrictions on what can be taught in classes. S. 129 prohibits public colleges from funding or sponsoring diversity, equity, and inclusion programs.  

S. 129 defines diversity, equity, and inclusion initiatives as programs, training, or other events where attendance is based on “race, sex, gender identity, ethnicity, national origin, or sexual orientation.”  Additionally, the law prohibits public colleges from requiring students to affirm or adhere to a list of so-called divisive concepts. One example is that fault, blame, or bias should be assigned to a person based on their race or sex, or that any person should acknowledge a sense of guilt, complicity, or a need to apologize because of their race, sex, or national origin. Another is that people are “inherently racist, sexist, or oppressive, whether consciously or subconsciously,” based on their personal characteristics.  

Faculty members stated that they were unsure of how to comply with the law and stressed its potential to limit instruction on other topics, like eugenics. Nevertheless, U.S. District Judge David Proctor determined that the law does not prohibit the teaching of divisive concepts, especially because of the exemptions S. 129 names. The court determined that the plaintiffs had not met the legal burden required to issue a preliminary injunction.  

District Court Determines Florida Law Restricting Pronouns Constitutes Discrimination 
U.S. District Judge Mark Walker determined H.B. 1069, a 2023 Florida law that requires teachers to use pronouns that align with their sex assigned at birth, violates federal civil rights law. Failure to comply may result in disciplinary action, which may include suspension or termination of employment.  

Further action is paused until the 11th U.S. Circuit Court of Appeals considers a lawsuit alleging a Title VII violation against a transgender employee of a Georgia sheriff’s office, Lange v. Houston County. 

District Court Extends Preliminary Injunction Against Grant Funding Conditions  
Judge Barbara J. Rothstein recently expanded a previous preliminary injunction, preventing the Trump administration from imposing funding conditions on $12 billion of grant funding. The grants were disbursed to thirty-one cities with the intention of addressing homelessness and transit infrastructure.  

The verdict temporarily prevents nearly a dozen federal agencies from enforcing new rules that would have required cities to align with elements of the Trump administration’s policy agenda to receive funding. 

Federal Court Blocks ACA Religious Exemptions to Coverage for Contraception 
The US District Court for the Eastern District of Pennsylvania determined that the Trump administration cannot enforce religious and moral exemptions to an Affordable Care Act rule that requires all employer health plans to cover contraception and related services at no cost to employees. District Judge Wendy Beetlestone maintained that the rules were arbitrary, inconsistent, and an overreach of the agency’s authority. 

The rules, issued in 2018, enabled essentially all for-profit or nonprofit employers and insurers to exempt themselves from following the birth control mandate on moral and religious grounds. 

Federal Court Upholds the Constitutionality of the Medicare Drug Price Negotiation Program 
The U.S. 2nd Circuit Court of Appeals upheld a lower court ruling, determining that a pharmaceutical company could not demonstrate that Medicare drug price negotiations had caused irreparable harm. The court also upheld that the program did not violate federal law, including the Medicare Act or the Administrative Procedures Act. 

The Western District of Texas issued a similar verdict, affirming that participation is voluntary and therefore the company’s constitutional right to due process was not violated. Likewise, the Sixth Circuit Court of Appeals held that the plaintiffs lacked standing to pursue their challenge against the negotiation program in Ohio.  

The Medicare Drug Price Negotiation Program was established by the Inflation Reduction Act of 2022. The law empowers Medicare to use its considerable bargaining power to obtain lower prices for certain medicines, significantly expanding access to treatment options. 

Appeals Court Upholds Arkansas Law Banning Youth Transgender Care  
The 8th U.S. Circuit Court of Appeals upheld the Save Adolescents From Experimentation (SAFE) Act, Act 626, an Arkansas law barring doctors from providing gender-affirming care, including puberty blockers, hormones, and surgery to transgender minors. 

The decision reverses a lower court ruling and cites a similar verdict issued by the U.S. Supreme Court, which held that Tennessee’s similar law did not discriminate based on sex or transgender status. The Tennessee law, SB1, banned puberty blockers and hormone therapy for transgender teenagers.

The Circuit Court also determined the Arkansas law did not violate parents’ due process rights afforded by the Fourteenth Amendment. The judges cited a lack of historical support entitling parents to obtain medical treatment for their children that a state legislature deems inappropriate. 

Federal Court Partially Blocks Mississippi Law Restricting DEI in Practices in Public Schools 
The United States District Court for the Southern District of Mississippi blocked the implementation of certain provisions of House Bill 1193, a Mississippi state law that would have prohibited diversity, equity, and inclusion (DEI) practices in public schools.  

Specifically, the bill requires public schools to prohibit the discussion of “divisive concepts” related to race, sex, gender identity, sexual orientation, and national origin. It also requires schools to prohibit programs, courses, or offices that promote DEI, endorse divisive concepts, or ban diversity training requirements. 

However, U.S. District Judge Henry Wingate determined that the law is unconstitutionally vague, fails to treat speech in a viewpoint-neutral manner, and holds the potential to chill expression and academic freedom. As litigation continues, neither of the previously mentioned sections can be enforced. 

Nevertheless, the preliminary injunction is limited to certain provisions of the law. Schools must uphold sections of the law that prohibit preferential treatment based on race, sex, color, or national origin. Additionally, schools cannot penalize students or staff for their refusal to embrace DEI concepts. 

Federal Court Invalidates the Department of Education’s Title VI Guidance 
The U.S. District Court for the District of Maryland determined that the Education Department’s recent guidance prohibiting educational institutions from engaging with DEI initiatives was unlawful.   

The lawsuit was filed in response to guidance issued by the Department of Education. A memorandum issued Feb. 14 and a certification issued April 3 ordered schools and universities to end all “race-based decision-making” and warned of the loss of federal funding for organizations that failed to comply. 

U.S. District Judge Stephanie Gallagher determined that the memorandum and directive did not follow administrative procedure.  Judge Gallagher also ruled that the guidance violated constitutional rights by placing viewpoint-based restrictions on classroom speech. 

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