ADVOCACY & POLICY UPDATE - July 28, 2025

ED Releases Withheld Funding; Administration Unveils AI Action Plan

Appropriations

On Thursday, July 24, the Senate Appropriations Committee approved two additional FY26 spending bills: Transportation-HUD and Interior-Environment. These join four others – Military Construction–VA, Agriculture–FDA, Legislative Branch, and Commerce–Justice–Science – that await floor action. On Thursday, July 31, Senate appropriators plan to mark up both the Defense and Labor-HHS-Education spending bills. Senate leaders are working to assemble a multi-bill funding package, or “minibus,” ahead of the August recess. A procedural vote to begin debate could come as early as Tuesday. Senate Appropriations Chair Susan Collins (ME) indicated that a four-bill package is likely to move forward, potentially using the House-passed Military Construction–VA bill as the legislative vehicle. However, unanimous consent is needed to add additional bills, and some senators have raised objections. 

As government funding is set to expire on September 30, Congress faces growing pressure to reach a bipartisan agreement and avoid a shutdown. Senate Democrats are prioritizing bipartisan negotiations and urging Republicans to avoid influence from the Trump administration, while holding back on confrontational procedural tactics. They are considering supporting the initial procedural vote to begin debate on the minibus but have not committed to final passage. Senate and House Democratic leadership continues to work together as the September 30 deadline approaches.

In the House, Democratic Leader Hakeem Jeffries (NY) reiterated opposition to partisan spending measures but expressed a willingness to engage in bipartisan talks. House Democrats, led by House Appropriations Committee Ranking Member Rosa DeLauro (CT), are seeking compromise but have not seen much progress. Only two bills — Defense and Military Construction–VA — have passed the House, both with minimal Democratic support.

Meanwhile, ongoing White House efforts to rescind previously approved federal spending have raised bipartisan concerns. Two weeks ago, congressional Republicans approved a $9 billion rescissions package requested by the administration, targeting foreign aid and public broadcasting. More proposals are expected, which could further complicate appropriations talks. Some lawmakers are particularly concerned about potential unilateral rescissions from the Department of Education. The administration has already withheld previously approved education funds following an executive order to dismantle the department. On Thursday, July 24, Senator Jeff Merkley (OR) proposed an amendment to the Transportation-HUD bill requiring that any rescission go through the standard appropriations process. The amendment narrowly failed, 15–14.

Under the 1974 Impoundment Control Act, the administration can propose rescissions and withhold funds for 45 days while Congress considers the request. If Congress does not act, the funds must be released. However, the administration argues that submitting a request within the final 45 days of the fiscal year would prevent the funds from being spent — even without congressional approval. Critics, citing a 2018 Government Accountability Office opinion, contend this approach is unlawful.

Democratic leaders are working to maintain caucus unity and warn that further rescissions could undermine bipartisan progress and increase the risk of a government shutdown.

Click here to access a link to the Senate Appropriations Labor-HHS-Education hearing.

Department of Education

On Friday, July 25, 2025, the U.S. Department of Education announced the full release of over $5 billion in previously withheld federal education funding. 

Specifically, the release includes: 

• $1.3 billion for after-school and summer programming.

• $2 billion for teacher professional development and class size reduction.

• $1 billion for academic enrichment grants.

• $890 million for English language learners.

• $376 million for migrant worker education.

• $715 million for adult literacy programs.

This followed a partial release earlier in the month, when $1.3 billion for after-school and summer learning programs was distributed.

The funding had been paused earlier in July by the Trump administration, which initiated a review of nearly $7 billion in education grants. The hold affected multiple programs and created uncertainty for school districts and adult education providers. The Office of Management and Budget (OMB) authorized the release after completing its review. As part of the release, the administration established new conditions to ensure that funds are not used for activities that conflict with federal policy priorities.

The decision came amid growing bipartisan pressure from Congress and legal action by a coalition of 24 states and the District of Columbia. State leaders raised concerns about the delay’s impact on education services, particularly for vulnerable populations. While the funding has now been released, litigation challenging the original hold remains active, with state officials continuing to evaluate the broader implications.

In a related development, the Supreme Court allowed an interagency agreement between the Departments of Education and Labor to proceed. This agreement transfers day-to-day administration of Perkins and WIOA Title II adult education programs to the Department of Labor, while the Department of Education retains policy authority and oversight. The shift is intended to improve coordination between education and workforce systems.

Artificial Intelligence Executive Order

On Wednesday, July 23, President Donald Trump released Winning the AI Race: America’s AI Action Plan, a national strategy to accelerate artificial intelligence (AI) development and deployment. The 23-page plan outlines policy recommendations across AI innovation, education, workforce development, infrastructure, and federal procurement and is accompanied by three executive orders (EOs) focused on promoting AI exports, streamlining permits for data centers, and requiring federally funded AI systems to be politically neutral. It also builds upon several past orders, including the April 2025 EOs “Advancing Artificial Intelligence Education for American Youth” and “Preparing Americans for High-Paying Skilled Trade Jobs of the Future.” The plan aims to build on these EOs by expanding AI literacy and skill development, continuously assessing AI’s impact on the labor market, and piloting innovative programs to retrain workers for AI-driven economic changes.

The action plan encourages employers to invest in AI-related training and reskilling and directs the Office of Management and Budget (OMB) to work with federal agencies to assess whether state-level AI regulations could undermine federally funded initiatives. Federal agencies may reduce or withhold funding from states with AI regulations seen as too restrictive or disruptive to federal programs. The Federal Communications Commission (FCC) is also tasked with reviewing whether state AI laws interfere with its statutory responsibilities under the 1934 Communications Act.

The Departments of Labor (DOL), Education (ED), Commerce (DOC), and National Science Foundation (NSF) are instructed to prioritize AI-related skills development in education and workforce funding programs. These include integrating AI strategies into career and technical education (CTE), workforce training, apprenticeships, and other federally supported initiatives. It also calls for the establishment of an AI Workforce Research Hub within DOL to lead ongoing federal efforts in evaluating AI’s labor market impact. The Hub would collaborate with DOL’s Bureau of Labor Statistics (BLS) and DOC to provide regular analyses, scenario planning, and actionable insights to inform workforce and education policies.

The plan calls for the use of available DOL discretionary funds to support rapid retraining for workers displaced by AI, provide guidance to states on identifying affected workers and using Rapid Response funds to upskill workers at risk of future displacement. Through DOL and DOC, pilot programs led by states and workforce organizations under existing federal laws would test scalable retraining and upskilling strategies.

To support AI infrastructure, the plan highlights the need for skilled workers in occupations such as electricians and HVAC technicians. Federal agencies are tasked with identifying key roles, developing national skills frameworks, and expanding education and apprenticeship pipelines. DOL and DOC will lead a national effort to define workforce needs and guide credential development. These efforts are to be supported by the Departments of Energy and Education, as well as the National Science Foundation, in partnership with state and local governments.

Early exposure to AI infrastructure careers is to be expanded through middle and high school programs, pre-apprenticeships, and updated career and technical education curricula. Apprenticeships in critical roles are to be expanded and streamlined, and national laboratories will provide more hands-on training opportunities in partnership with community and technical colleges.

The plan follows an unsuccessful congressional effort to enact a 10-year moratorium on state AI regulations, which was removed from the One Big Beautiful Bill Act (OBBA) after Senate opposition. Critics argue the new plan effectively revives that approach by discouraging state-level oversight.

On Wednesday, July 23, more than 140 organizations — including unions, tech workers, educators, artists, and advocacy groups — sent a letter opposing provisions that limit state authority over AI. They attribute the federal push for preemption to influence from major technology companies and warn it could block efforts to address AI risks at the state level.

The plan and executive orders aim to position the U.S. as a global AI leader through deregulation, infrastructure expansion, and strategic exports. Supporters describe the approach as innovation-driven while opponents raise concerns about weakened safeguards, reduced accountability, and the exclusion of state-level policymaking.

Click here to access the White House press release on the action plan.

Click here to access the Administration’s AI website.

Click here to access the letter in opposition to the action plan.

Department of Labor/Job Corps

On Friday, July 25, U.S. District Judge Dabney Friedrich issued a preliminary injunction preventing the Department of Labor from indefinitely suspending operations at Job Corps centers. The court found that DOL’s plan violated both the Administrative Procedure Act and the Workforce Innovation and Opportunity Act, siding with a group of Job Corps enrollees who challenged the move. The ruling emphasized that DOL cannot circumvent legal requirements by labeling closures as a “pause.” This decision follows a narrower injunction issued by a federal judge in Manhattan earlier in the week, and it notably avoids recent Supreme Court limitations on nationwide injunctions by grounding the ruling in procedural law. The Department has not commented on the decision.

Separately, the U.S. Department of Labor (DOL) is proposing to revise or eliminate over 60 workplace regulations it deems outdated. The plan would affect rules on minimum wage, exposure to hazardous substances, and safety standards in sectors such as construction and mining. If implemented, it could also reduce the federal government’s ability to penalize employers in cases of worker injuries or fatalities. The initiative is being described as a broad effort to streamline regulations.

Trump Nominees

On Thursday, July 24, the Senate Health, Education, Labor, and Pensions (HELP) Committee advanced several of President Trump’s nominees. These included David Castillo for Chief Financial Officer at the Department of Labor; Brittany Panuccio for the Equal Employment Opportunity Commission; Jonathan Snare for the Occupational Safety and Health Review Commission; David Barker for Assistant Secretary for Postsecondary Education; and Mary Christina Riley for Assistant Secretary for Legislation and Congressional Affairs at the Department of Education.

In a vote of 56-40, the Senate confirmed Paul Dabbar as the Deputy Secretary of the U.S. Chamber of Commerce. In this role, he will serve as the Department’s’ Chief Operating Officer (COO), overseeing daily operations, a $11.4 billion annual budget, 12 operating units, and 47,000 employees.

Click here to access a video of the Senate HELP hearing.

Transformation to Competitive Integrated Employment Act

On Thursday, July 24, House Education and the Workforce Committee Ranking Member Bobby Scott (VA), Committee Member Pete Sessions (TX), and Senators Chris Van Hollen (MD) and Steve Daines (MT) introduced the bipartisan, bicameral Transformation to Competitive Integrated Employment Act. The bill would phase out the use of subminimum wages for workers with disabilities and support their transition into competitive, integrated employment. It creates competitive grants for states and service providers to shift away from 14(c) certificate-based employment models. States receiving grants must engage key stakeholders and may be eligible for increased funding for supported employment services. 

The legislation also ends the issuance of new 14(c) certificates and phases out existing ones over five years, requiring all workers to be paid at least the federal minimum wage. A federally funded technical assistance center will support transitions, and both states and providers will be required to report on outcomes, wage data, and compliance.

Click here to access the press release, full bill text, fact sheet, and section-by-section summary.