Earlier this month, President Donald Trump released his fiscal 2027 budget. Like all presidential budgets, it serves primarily as a signal of priorities to Congress. But even as a signal, this one is notable for its scope and direction.
The proposal combines significant spending restraint with targeted investments in core federal responsibilities, building on nearly $2 trillion in savings while maintaining funding for border security, immigration enforcement, and law enforcement, and calling for a major reinvestment in national defense. It scales back programs the administration views as outside the federal government’s proper role, including environmental justice initiatives, climate subsidies, and diversity and gender programs, while reducing non-defense discretionary spending by roughly 10%.
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The budget reflects a broader governing philosophy: Refocus federal spending on core national functions while rolling back programs tied to ideological or expansive interpretations of federal authority.
HOW CONGRESS CAN CLAW BACK ITS OVERSIGHT POWER
That matters. But it also raises a deeper question: Will any of it last? Budgets are inherently transient. Appropriations shift with political winds. Programs cut today can be revived tomorrow, often with little more than a change in administration or congressional majority.
Washington has proven this repeatedly — entire policy agendas have been dismantled and rebuilt within a single election cycle. If policymakers want reforms that endure, they must address the mechanisms that allow federal power to expand in the first place.
One of the most consequential yet least discussed mechanisms is how federal “guidance,” a largely unseen force beneath the surface of policymaking, shapes outcomes far beyond public view.
Federal agencies routinely issue guidance documents such as memos, FAQs, “Dear Colleague” letters, and policy statements to interpret statutes and regulations. Officially, they are nonbinding and carry no force of law. But in practice, they often function as law.
As the federal government has acknowledged, guidance can have “coercive effects.” State officials, regulated entities, and private actors frequently comply not because they are legally required to, but because failing to do so risks investigations, litigation, or the loss of federal funding.
Over time, this has created a shadow regulatory system, one that allows agencies to expand policy without Congress and without the safeguards built into the administrative process.
During the Biden administration, the Justice Department under Attorney General Merrick Garland issued guidance warning states that certain election audits could trigger federal enforcement. Environmental regulators similarly issued guidance to steer state permitting decisions through “environmental justice” frameworks never adopted through formal rulemaking. The Equal Employment Opportunity Commission pressed employers on pronouns, bathrooms, and dress codes, while the Department of Health and Human Services promoted coverage of transgender operations, and the DOJ warned states that their policies could violate federal law.
In each case, the pattern is the same: policy is announced informally, enforcement follows, and what is labeled “guidance” begins to operate as binding law. This is where Congress has a rare opportunity to act.
Under the Congressional Review Act, Congress can overturn agency rules by a simple majority vote. More importantly, once a rule is disapproved, the agency is barred from issuing a “substantially similar” rule in the future, making the CRA one of the few tools in Washington that produces durable reform. There is an immediate opportunity to use it.
In January 2025, just three days before President Donald Trump returned to office, the Biden Justice Department finalized a rule allowing agencies to use guidance as a basis for enforcement actions. That rule rescinded earlier safeguards and opened the door for agencies to treat guidance as a substitute for law.
That rule was never submitted to Congress. Under the CRA, that means the review window never started. Congress retains full authority to disapprove it today.
Doing so would not simply repeal a technical rule. It would shut down the legal pathway that allows agencies to convert informal guidance into a de facto enforcement tool.
The debate in Washington often centers on what government funds. The Trump budget stakes out a clear position, prioritizing defense, security, and core functions while cutting programs tied to more expansive or ideological agendas. But the more important question is how government exercises power.
CONGRESS CAN RECLAIM POWER BY FIXING CONGRESSIONAL REVIEW ACT
Without structural reform, the same agencies that administer today’s programs will retain the ability to shape policy through informal guidance tomorrow, regardless of who occupies the White House. The Congressional Review Act offers a path beyond temporary spending fights, establishing lasting guardrails on how federal power is used.
Cutting funding can change policy for a year. Structural reform can change it for a generation.
Jennifer Butler is a Senior Policy Advisor at State Policy Network’s Center for Practical Federalism.
