Day 42: Senate Passes DHS Funding Before Dawn, Johnson Kills It by Lunch, and Congress Leaves Town

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Dhs Shutdown And Fema

The Senate passed legislation via voice vote at 2:20 a.m. Friday to fund DHS through September 30, excluding ICE and CBP (pre-funded at $75 billion through the "One Big Beautiful Bill Act"). Hours later, Johnson killed it on a private call with House Republicans and announced a competing 60-day CR funding all of DHS at current levels through May 22. The White House backed Johnson. Most senators have left for recess through April 13; Johnson suggested the Senate could clear the House CR by UC at a pro forma session Monday. Thune and Johnson texted in the final hours but Thune did not know how the House would respond. The tactical gulf between House and Senate GOP leadership is now open.

The shutdown is in its 42nd day. TSA callouts hit 11.14% nationally, with some airports at 40-50%. Over 480 officers have quit. Wait times exceed 4.5 hours. By Friday, TSA employees will have lost nearly $1 billion in combined wages. TSA has been shut down for 50% of the fiscal year (85 out of 170 days) counting last fall's 43-day shutdown. Trump ordered DHS on Thursday to pay approximately 50,000 TSA officers, with the administration saying paychecks could arrive Monday, but the legal mechanism is unclear and no appropriation backs it. The White House rejected Musk's offer to pay TSA salaries ($250 million), citing legal conflicts with his government contracts.

Mullin was confirmed 54-45 as DHS Secretary on March 23. His first test: a deadly collision at LaGuardia on March 23 when an Air Canada CRJ-900 struck an airport fire rescue truck, killing both pilots (Antoine Forest, Mackenzie Gunther). The NTSB found the truck lacked a transponder and a critical radio transmission was "stepped on" seconds before impact.

FEMA filed its court-ordered BRIC compliance plan on March 21 and opened the $1 billion NOFO for FY 2024-2025. Applications close July 23, 2026. Breakdown: $757 million nationally competitive (capped at $20 million per project), $112 million state/territory allocations, $56 million building code plus-ups, $50 million tribal set-aside, $25 million tribal building code. Only infrastructure and construction projects with a conceptual design are eligible; phased projects excluded; broad termination clauses give FEMA sole discretion to cancel awards. Trump extended the FEMA Review Council to May 29. The DRF remains below $5 billion.

The Iran war enters its fourth week. Trump extended the Strait of Hormuz deadline to April 6. Over 1,500 Iranians dead, 13 U.S. service members killed, nearly 1,100 dead in Lebanon from Israeli strikes on Hezbollah. Iran rejected a U.S. 15-point ceasefire proposal. The Pentagon is deploying 1,000 82nd Airborne paratroopers and 5,000+ Marines. DHS counterterrorism capabilities remain compromised during an active war with a state sponsor of terrorism.

Build America Bureau And Usdot

Gateway continues on a 2-3 month runway using $235 million in court-ordered funds. TBM assembly underway at North Bergen; second TBM components arriving in March. Hudson County Access Shaft slurry wall completed. The two largest procurements remain on hold until GDC accesses all $15 billion in paused grants and loans.

IIJA expires September 30, 2026. Granite Construction CEO confirmed reauthorization amounts being discussed are "significantly higher" than $1.2 trillion. The BAB pipeline shows approximately $20.79 billion in TIFIA/RRIF letters of interest.

Usda And Rural Development

The Farm Bill cleared committee 34-17 and heads to the House floor before Easter. The $390 billion, ten-year bill increases REAP loan guarantees to $50 million, raises broadband minimums to 50/25 Mbps, and increases farm ownership loans to $1.75 million. The 2018 extension expires September 30, the same deadline as IIJA. ReConnect FY 2026 funding stands at $90 million, more than double FY 2025.

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P3 And Infrastructure Finance

Georgia's SR-400 Express Lanes P3 closed at $4.7 billion construction cost and $3.8 billion upfront payment, a new managed lane benchmark. PennDOT evaluating Cintra's $5 billion I-76 Schuylkill Expressway Managed Lanes. The BAB's VfM guidance now requires every P3 seeking TIFIA/RRIF to complete a two-stage analysis. Private activity bond demand has nearly reached the $30 billion federal cap.

Doe And Energy Infrastructure

DOE's $1.9 billion SPARK grid program: concept papers due April 2, full applications May 20. Three topic areas: Grid Resilience ($427 million), Smart Grid ($614 million), Grid Innovation ($862 million).

Palisades restart stalled on unauthorized welding. NRC review targeting April 8. If rejected, replacing the reactor pressure vessel closure head could cost $750 million. The plant carries a $1.52 billion DOE loan. Crane Clean Energy Center ($1 billion DOE loan, Microsoft PPA) targets 2027. Duane Arnold (NextEra/Google PPA) targets 2029.

EDF restructured $83 billion in Biden-era loans, shifting $9.5 billion from wind/solar to gas and nuclear. EDF retains $289 billion in remaining authority. The Southern Company $26.54 billion loan sets the benchmark. The lending thesis: baseload generation, grid hardening, nuclear.

What This Means For Borrowers

1. The shutdown is not ending. Johnson killed the Senate deal and is pushing a 60-day CR through May 22. The Senate is on recess through April 13. Even if the CR clears next week, DHS will have been shuttered for six weeks and the restaffing lag adds weeks more. Trump's TSA pay order has no appropriation behind it. Assume continued delays. Bridge capital against documented receivables is the only reliable liquidity path.
2. BRIC is back, with $1 billion on the table and a July 23 deadline. Court-ordered, documented federal receivable class. New rules favor shovel-ready projects and give FEMA sole discretion to terminate. ABC can structure bridge financing against BRIC awards immediately.
3. The DRF is below $5 billion with hurricane season 66 days away. The 42-day shutdown created a massive processing backlog. Even with funding restored, the operational damage is done. Plan capital for extended FEMA delays through the summer.
4. DOE SPARK concept papers due April 2. Largest single-round GRIP deployment ever. $1.9 billion. The thesis: gas, nuclear, grid hardening. ABC provides bridge financing to energy developers positioning for DOE credit.
5. Three cliffs converge September 30: IIJA, Farm Bill, and FEMA's operational capacity. Nearly $21 billion in TIFIA/RRIF LOIs in the pipeline. A 60-day DHS CR through May 22 only adds to the calendar compression. Position capital now.