Shutdown Week Five, a War With Iran, and $4.5 Billion in Court-Ordered Grants

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Executive Summary

The DHS shutdown enters Week Five with no deal in sight, a confirmation hearing that cannot resolve the funding impasse, and a war with Iran that has now killed eleven U.S. servicemembers and paralyzed global oil transit through the Strait of Hormuz. Senate Republicans scheduled Markwayne Mullin's confirmation hearing for March 18, but the Senate failed another cloture vote this week 51-45, meaning DHS remains shuttered even as the nominee prepares to testify. TSA officers are now missing full paychecks, callouts have spiked to 6%, over 300 officers have quit, and airports from JFK to New Orleans are reporting multi-hour security lines. A federal judge ordered FEMA to comply with a December ruling and begin restoring $4.5 billion in BRIC disaster mitigation grants that the agency illegally cancelled, while simultaneously acknowledging FEMA's compliance is hampered by the very shutdown and staffing cuts it is operating under. On the energy front, DOE announced two major actions on March 12: a $1.9 billion SPARK funding opportunity for grid reconductoring and advanced transmission upgrades, and the UPRISE initiative targeting 5 GW of additional nuclear capacity by 2029 through reactor uprates and restarts. The Portal North Bridge opened its first track on March 16, replacing the 116-year-old swing bridge on the Northeast Corridor -- a $1.8 billion milestone for the Gateway Program even as $15 billion in Hudson Tunnel funding remains frozen. NCDOT expanded the community engagement period for the $4.3 billion I-77 South Express Lanes P3, pushing the draft RFP to late June and delaying procurement further amid local opposition. Municipal bond issuance is tracking toward another record year at $600 billion, driven by infrastructure needs and the replacement of frozen federal funding. For borrowers dependent on federal cash flow, Week Five of this shutdown -- with a leaderless DHS, unpaid workforce, active war, and courts ordering agencies to spend money they cannot access -- is not a policy problem. It is a capital crisis.

Fema And Dhs

DHS Shutdown Enters Week Five: No Deal, No Paychecks, No End in Sight

The Department of Homeland Security shutdown -- triggered by the February 13 funding lapse -- is now approaching its fifth week. The Senate failed another cloture vote on Thursday, March 12, falling short 51-45, with only Senator Fetterman (D-PA) crossing party lines. Democrats offered a bill funding all of DHS except ICE and CBP; Republicans blocked it. Senator Patty Murray (D-WA) stated Democrats "are not going to write a blank check for rogue agencies." Republican leadership continues to insist on full-department funding.

The human cost is accelerating. TSA officers are now missing their first complete paychecks of the shutdown. Unscheduled absences have spiked to 6%, and over 300 TSA officers have resigned since the shutdown began. Airports in New Orleans, JFK, DFW, and SFO are reporting multi-hour security lines. Denver International Airport is soliciting grocery and gas gift card donations for unpaid TSA workers. DHS reactivated Global Entry on March 11 after a 17-day suspension that affected 18 million annual users, but TSA PreCheck lanes continue to be evaluated on a case-by-case basis due to staffing constraints.

Mullin Confirmation Hearing Set for March 18 -- But It Cannot End the Shutdown

Senate Homeland Security Committee Chair Rand Paul scheduled Markwayne Mullin's confirmation hearing for Wednesday, March 18 at 9:30 a.m. in the Dirksen Building. Mullin, Trump's pick to replace the fired Kristi Noem, must clear committee and then a full Senate vote. But even if confirmed swiftly, a new secretary cannot end the shutdown -- that requires an appropriations bill the Senate cannot pass. Noem departs March 31; if Mullin is not confirmed by then, the DHS Deputy Secretary becomes acting head.

Federal Court Orders FEMA to Restore $4.5 Billion in BRIC Grants

U.S. District Judge Richard Stearns on March 6 issued an enforcement order requiring FEMA to comply with his December 11 ruling declaring the termination of the Building Resilient Infrastructure and Communities (BRIC) program illegal. The order requires FEMA to: make pre-disaster mitigation funds available as required by statute, communicate the status of current BRIC projects to states, file status reports with the court, and issue a FY2024 Notice of Funding Opportunity within 21 days. Nearly 2,000 projects totaling approximately $4.5 billion nationwide were affected by the April 2025 cancellation. In Massachusetts alone, $90 million in grants for 18 communities were revoked. Judge Stearns acknowledged that delays are partly "attributed to staffing shortages resulting from layoffs and the current budgetary freeze" during the shutdown -- a paradox where the court is ordering an unfunded, understaffed agency to distribute billions it may not have operational capacity to process.

FEMA Reform Report in Limbo; DRF Still Below $5 Billion

A long-awaited report on the future of FEMA, ordered by President Trump and originally due in December, faces a March 25 deadline that may not be met due to the shutdown, according to co-author Kevin Guthrie, Florida's top emergency management official. The Disaster Relief Fund remains below $5 billion with no replenishment path while DHS remains shuttered. The DHS appropriations bill includes $26 billion for the DRF, but passage requires ending the shutdown. Hurricane season begins June 1 -- now 11 weeks away.

Iran War Escalates: 6,000 Targets Struck, Seven U.S. Dead, Oil Transit Paralyzed

The U.S.-Israeli military operation against Iran, launched February 28, has expanded dramatically in its second week. CENTCOM reported on March 12 that the U.S. military has struck 6,000 targets inside Iran, destroyed or damaged over 90 Iranian vessels including 60+ ships and 30 mine-laying craft, and neutralized what Israel claims is 80% of Iran's defense systems. Seven U.S. servicemembers have been killed -- six at Camp Arifjan, Kuwait, and four crew aboard a KC-135 refueling tanker that crashed in western Iraq on March 12. Over 140 U.S. servicemembers have been wounded. Defense Secretary Hegseth called March 11 "the most intense day of strikes" and vowed to continue until Iran is "completely and unequivocally vanquished." Iran's IRGC warned it would not allow "one litre of oil" to leave the region, and the conflict has expanded to Lebanon (Israeli strikes on central Beirut targeting Hezbollah) and the Gulf (Iranian drone attacks on Saudi Arabia, Kuwait, and near Qatar). Global oil markets remain in turmoil as Strait of Hormuz transit stays severely disrupted. This security environment directly impacts DHS operations: the agency responsible for domestic counterterrorism and cybersecurity is simultaneously unfunded and leaderless during an active war with a state sponsor of terrorism.

WEXMAC TITUS: DHS Awards $427 Million for Two Detention Facility Conversions -- Legal Challenge Filed

Despite the shutdown, DHS awarded two major contracts on March 6 through the Worldwide Expeditionary Multiple Award Contract (WEXMAC TITUS) vehicle -- a Navy expeditionary contracting mechanism originally designed for military logistics, disaster response, and pandemic operations that is now being used to fast-track ICE detention facility construction. The first award, valued at $113 million with options extending to $641.8 million over three years, covers renovation of an 825,000-square-foot warehouse in Williamsport, Maryland that DHS purchased for $102.4 million in January. The facility is designed to hold 1,500 detainees and provide full wraparound services including medical care, food, security, and transportation. The second award, valued at $313.4 million with options through February 2029, covers a 418,000-square-foot warehouse in Surprise, Arizona that DHS purchased for $70 million, also designed for 1,500-person capacity.

The WEXMAC TITUS contracting vehicle allows ICE to bypass the traditional competitive bidding process -- contractors are pre-qualified, and ICE can issue task orders without starting procurement over. The vehicle's ceiling was raised from $10 billion to $55 billion in January 2026, and 135 contractors are now on the WEXMAC TITUS roster. A third planned facility in Merrimack, New Hampshire was cancelled in late February after opposition from Governor Kelly Ayotte and local officials who cited PFAS contamination concerns at the proposed site.

The Maryland facility faces a pending legal challenge. Maryland Attorney General Anthony Brown filed suit in U.S. District Court in Baltimore arguing that DHS's purchase of the Williamsport warehouse violated the National Environmental Policy Act. The federal government is proceeding with construction despite the litigation. For contractors and subcontractors in the WEXMAC TITUS pipeline, these awards represent significant near-term revenue -- but the legal uncertainty around the Maryland facility and the political volatility around detention expansion mean that contract performance timelines and payment schedules carry risk that must be priced accordingly.

Build America Bureau And Usdot

Portal North Bridge Opens First Track -- 116-Year-Old Swing Bridge Replaced

NJ TRANSIT and Amtrak celebrated a major milestone on March 12 with a ceremonial first train ride over the new Portal North Bridge in Kearny, NJ. One track officially enters passenger service on Monday, March 16, replacing the 116-year-old Portal swing bridge that has been the single largest source of delays on the Northeast Corridor. The new $1.8 billion fixed-span bridge rises 50 feet over the Hackensack River, doubling height clearance and eliminating openings for marine traffic that disrupted rail service. Train speeds increase from 60 mph to the 90 mph corridor limit. The second track cutover is scheduled for October 2026, and the old bridge will be dismantled in 2027. Portal North Bridge is a critical component of the broader Gateway Program, which will eventually double rail capacity between Newark and New York.

Gateway Tunnel: Construction Active But GDC Warns of Two-to-Three Month Runway

Construction on the $16 billion Hudson Tunnel Project continues using approximately $235 million released under court order, with nearly 1,000 jobs restored. Active work includes tunnel boring machine assembly at Tonnelle Avenue (first TBM components onsite, second TBM shipped from factory), riverbed stabilization, and Hudson Yards concrete casing construction where workers have poured over 11,000 cubic yards of concrete. However, GDC CEO Tom Prendergast warned the restart could be temporary: "We will have no choice but to stop work again if the federal government does not continue to disburse the funds that are committed to the project." Two major procurement contracts -- the Hudson River Tunnel and NJ Surface Alignment packages -- remain on hold until GDC regains access to all $15 billion in paused federal grants and loans.

IIJA Reauthorization: September 30 Deadline Drives State Planning

The IIJA surface transportation authorization expires September 30, 2026. The House T&I Committee has identified reauthorization as its top priority for the 119th Congress, and states including California have published consensus reauthorization principles. The Build America Bureau's TIFIA/RRIF pipeline report for March 2026 shows $19.97 billion in draft letters of interest across dozens of projects in transit, rail, highway, TOD, and airport sectors. Reauthorization timing is critical for P3 sponsors seeking TIFIA credit assistance -- uncertainty about post-September program levels could stall procurement timelines.

Usda And Rural Development

Farm Bill Heads to House Floor Before Easter -- Senate Timeline Unclear

The House Agriculture Committee advanced H.R. 7567, the Farm, Food, and National Security Act of 2026, on March 5 by a bipartisan vote of 34-17 after more than 20 hours of markup. Seven Democrats crossed over: Costa (CA), Davids (KS), Davis (NC), Vasquez (NM), Gray (CA), McDonald Rivet (MI), and Riley (NY). House leadership is targeting a floor vote before Easter recess. Key infrastructure provisions remain intact:

• REAP loan guarantee maximum increased to $50 million, with USDA required to consider economic impacts in application scoring.

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• Agricultural cooperatives with fewer than 2,500 employees added as eligible REAP applicants.

• Rural broadband: ReConnect integration, minimum speeds raised from 25/3 Mbps to 50/25 Mbps, and USDA must consider broadband affordability -- not just availability -- when determining "unserved" areas.

• Farm ownership loans increased to $1.75 million, operating loans to $3 million.

• Forest management authorities extended through 2031, including Good Neighbor Authority expansion to special districts and tribes.

• Restricts USDA from funding solar on prime farmland, with exceptions for small projects under 5 acres.

Senate Agriculture Committee Chairman John Boozman (R-AR) has committed to securing 60 Senate votes but has not released a Senate draft. The 2018 Farm Bill extension expires September 30, 2026 -- the same deadline as surface transportation reauthorization, creating a dual policy cliff that affects both rural and transportation infrastructure borrowers.

USDA Middle-Mile Broadband Reauthorization Introduced

Bipartisan legislation introduced by Senators Slotkin (D-MI) and Hyde-Smith (R-MS) would reauthorize the USDA's middle-mile broadband program for five years (2026-2031), allowing rural providers to connect more affordably to high-capacity internet backbones. Companion legislation has been introduced in the House. USDA's ReConnect Program has invested $5.54 billion to date across five rounds of funding.

P3 And Infrastructure Finance

I-77 South: NCDOT Delays RFP to Late June Amid Local Opposition

NCDOT announced March 2 that it is expanding the community engagement period for the $4.3 billion I-77 South Express Lanes P3 and will issue the first draft Request for Proposals in late June 2026 -- a delay from the originally planned March 13 release. The 11-mile project from I-277 to the South Carolina state line is one of the largest transportation investments in North Carolina history. Sustain Charlotte and a coalition of neighborhood associations had urged a nine-month pause, citing the lack of independent alternatives analysis and the fact that shortlisted proposers may receive payments of up to $12.5 million each for preparing proposals. Project design is only 10-15% complete; construction is not expected until the early 2030s. Unlike I-77 North, toll rate caps will be established.

VfM Guidance Reshaping Active P3 Pipeline

The Build America Bureau's Value for Money guidance, effective since March 3, continues to reshape every active P3 procurement seeking federal credit assistance. Every P3 project seeking TIFIA or RRIF, regardless of size, must complete VfM analysis prior to deciding to advance as a P3. The two-stage framework -- initial analysis pre-procurement (Stage 1) and detailed analysis pre-commercial close (Stage 2) -- adds a mandatory analytical layer that will slow sponsors who have not already begun the process. Public disclosure of VfM results and concession terms is mandatory. PennDOT continues to evaluate four unsolicited P3 proposals, including Cintra's $5 billion I-76 Schuylkill Expressway Managed Lanes project. The Riverside County Transportation Commission is advancing a $700 million I-15 Express Lanes Southern Extension in California.

Municipal And Utility Finance

Municipal Issuance Tracking $600 Billion for 2026

After record $580 billion issuance in 2025, major underwriters including Goldman Sachs and J.P. Morgan project $600 billion or more in 2026. SIFMA data through February shows $75.6 billion YTD, roughly flat with 2025 pace (-3.2% Y/Y). Drivers include rising infrastructure costs, replacement of frozen federal funding, and over $100 billion in voter-approved bond referendums from 2025. Credit conditions remain broadly favorable: Neuberger Berman projects "generally favorable credit conditions" and notes fundamentals are "solid" across both general obligation and revenue bonds. The substitution effect is real -- as federal grant programs stall under the DHS shutdown and broader funding freezes, municipalities are turning to the bond market to finance projects that were supposed to be federally funded.

Doe And Energy Infrastructure

DOE Launches $1.9 Billion SPARK Grid Upgrade Program

DOE's Office of Electricity on March 12 announced an approximately $1.9 billion funding opportunity -- renamed SPARK (Speed to Power through Accelerated Reconductoring and other Key Advanced Transmission Technology Upgrades) -- to catalyze grid infrastructure investments. Funded through the IIJA's Grid Resilience and Innovation Partnerships (GRIP) program (authorized at $10.5 billion over five years), SPARK targets states, tribes, electric utilities, and other eligible recipients seeking to meet electricity demand growth and resource adequacy requirements while reducing consumer costs. The timing is significant: this is the largest single-round GRIP deployment to date, and it directly addresses the grid bottleneck that limits both data center expansion and renewable interconnection.

UPRISE Initiative Targets 5 GW of Nuclear Capacity by 2029

Also on March 12, DOE's Office of Nuclear Energy launched UPRISE (Utility Power Reactor Incremental Scaling Effort), targeting 2.5 GW of additional nuclear capacity by 2027 and 5 GW by 2029 through reactor uprates, restarts, and efficiency optimization. The NRC's pipeline shows approximately 30 planned uprates through 2030 -- including 18 extended power uprates, 10 MUR uprates, and 2 stretch uprates -- representing roughly 2.5 GWe of potential new capacity. Applications peak in 2027-2028. Key restart candidates include: Palisades Nuclear Plant (Michigan, $1.52B DOE loan, targeting 2026 restart), Crane Clean Energy Center (Pennsylvania, $1B DOE loan, 2027 target under Microsoft PPA), and Duane Arnold (Iowa, NextEra/Google 25-year PPA, 2029 target). Deputy Assistant Secretary Rian Bahran told POWER Magazine that DOE's engagement adds "more than a gigawatt by 2027" beyond what industry would accomplish alone.

Southern Company $26.54 Billion Loan Deployment Underway

Southern Company's historic $26.54 billion DOE loan package -- closed February 25 -- continues to be the benchmark for the new federal energy lending landscape. The approximately 30-year loans to Georgia Power ($22.4B) and Alabama Power ($4.1B) will finance 5 GW of new gas generation, 6.3 GW of nuclear uprates and license renewals, 1 GW of hydropower modernization, battery storage, and over 1,300 miles of transmission. Disbursements are contingent on meeting conditions and could occur through September 2033.

What This Means For Borrowers

1. The DHS shutdown is now a workforce crisis on top of a funding crisis. Week Five means TSA officers quitting, FEMA staff unable to process grants a court has ordered released, and an agency consumed by a war it cannot adequately support because its cybersecurity teams are furloughed. Every entity dependent on FEMA PA, DHS grants, or federal disaster reimbursements faces processing timelines measured in quarters -- at best. Bridge capital against documented receivables is the only viable liquidity path for contractors and municipalities waiting on DHS money.
2. The BRIC court order creates a new class of receivable -- court-mandated federal grants that FEMA must distribute but may lack operational capacity to process. Nearly $4.5 billion in BRIC grants are now legally required to flow to states and communities. The 21-day NOFO deadline means FY2024 BRIC applications should reopen by late March. For communities with approved BRIC projects, this creates a documented, court-ordered receivable that is ideal collateral for bridge financing. But do not expect fast disbursement -- FEMA itself acknowledged the staffing shortages and budget freeze are hampering compliance.
3. DOE is the most active federal lender in America right now -- and it is accelerating. The $26.54 billion Southern Company loan, the $1.9 billion SPARK grid program, and the UPRISE nuclear initiative all landed in a two-week window. The pipeline will grow. Energy infrastructure developers who frame projects around gas, nuclear, grid reliability, and transmission will have access to historically cheap federal capital. The lending thesis is clear: baseload generation, grid hardening, and nuclear.
4. The I-77 South delay signals the political reality of large P3 procurements. A $4.3 billion toll lane project with only 10-15% design completion, local opposition, and a VfM analysis requirement is not moving fast. Sponsors across the P3 pipeline -- PennDOT I-76, Riverside I-15, and others -- should expect similar engagement requirements and timeline extensions. The VfM guidance adds an analytical layer that rewards early preparation. Private activity bond capacity approaching the $30 billion federal cap makes PAB allocation a strategic constraint across all managed lane deals.
5. Two policy cliffs converge September 30: Farm Bill and IIJA reauthorization. Both the Farm Bill and the surface transportation authorization expire on the same day. REAP expansion to $50 million, broadband speed upgrades, rural water reauthorization, and increased farm loan limits all depend on the Farm Bill. TIFIA, RRIF, and formula funding levels reset with reauthorization. Nearly $20 billion in TIFIA/RRIF letters of interest are in the pipeline. Infrastructure borrowers in both rural and transportation sectors should position capital now -- the dual expiration creates maximum uncertainty for projects dependent on federal program continuity.