Michele Steeb, CEO of Free Up Foundation and a guest on The Kim Monson Show on February 23, described the Housing First approach as a catastrophic failure. The federal numbers bear her out. HUD’s 2024 Annual Homeless Assessment Report counted 771,480 people experiencing homelessness, up from 549,928 in 2016. Chronic homelessness nearly doubled in that same period, rising from 77,486 to 152,585.

“Homelessness is up almost 35 percent across the country,” Steeb told the show’s guest hosts, Marshall Dawson and Cathy Russell. The actual figure from HUD is closer to 40 percent, and the chronic homelessness increase she placed at “almost 60 percent” is closer to 97 percent. The real numbers are worse than what she described.

How Housing First became the only game in town

Housing First, which provides permanent housing with no preconditions for sobriety or treatment, became the dominant federal approach through a series of policy changes beginning in 2009. The HEARTH Act restructured McKinney-Vento Homeless Assistance funding, and the Obama administration’s 2010 Opening Doors strategic plan declared that federal tools “should be informed by a Housing First approach.”

By 2013, HUD’s Continuum of Care funding competitions awarded bonus points to programs using the Housing First model, creating powerful financial incentives. Programs that required sobriety or treatment participation were at a severe competitive disadvantage. HUD directed approximately 74 percent of competitive grants to permanent supportive housing, according to the Heritage Foundation, while transitional housing beds fell from 211,000 in 2007 to 101,000 by 2018.

The Boston study that haunts the model

Steeb cited a Boston study in which “nearly half of the cohort was dead” and “only 30 percent were left in that housing.” The study she referenced, published in Medical Care in 2021, tracked 73 chronically homeless individuals placed in permanent supportive housing from Boston’s streets between 2005 and 2019.

The findings are stark. Over the 14-year study period, 45 percent of participants died, a mortality rate the study’s authors called “higher than expected,” with a probability of survival below 50 percent at five years. Housing retention stood at just 36 to 42.5 percent at the five-year mark, depending on the statistical method used. The cohort suffered from extreme rates of co-occurring medical, psychiatric, and substance use disorders.

The study’s authors did not conclude that Housing First had failed. They called for “more robust and flexible and long-term medical and social supports.” But the data point Steeb highlighted, that permanent housing without treatment yielded devastating mortality and retention rates, is supported by the study’s own numbers.

Denver’s $274 million lesson

Denver offers a real-time case study. The city spent $274 million on homelessness contracts between 2021 and 2024, according to a Denver Gazette investigation. Mayor Mike Johnston’s All In Mile High initiative spent $155 million between July 2023 and December 2024, $65 million more than originally disclosed, with over $100 million going to hotel purchases and leases.

The city claims success: unsheltered homelessness in Denver fell 45 percent between 2023 and 2025, large encampments dropped 98 percent, and Denver recorded its first winter with zero cold-weather exposure deaths.

But total homelessness in Denver rose 12 percent in the past year alone, from 6,539 to 7,327, and has roughly doubled since 2019, according to the Common Sense Institute. The city moved people from streets into shelters, but only 20 percent of people exiting homeless programming found permanent housing in 2023, the Denver Gazette reported. Statewide, Colorado’s homeless management information system shows approximately 5,000 new people entering the crisis system each month while only about 750 secure permanent housing.

A November 2024 city auditor report found that an estimated $150 million in shelter expenses from January 2022 through March 2024 was not specifically tracked. Over half of reviewed invoices were submitted late, 38 percent lacked proper documentation, and security failures at the former DoubleTree hotel shelter contributed to a double homicide in March 2024.

The accountability alternative

Meghan Shay, Executive Director of Step Denver, appeared on the same broadcast to present a contrasting model. Step Denver, formerly Step 13, operates on four principles: sobriety, work, accountability, and community. The program requires participation, not just housing.

Shay reported that 85 percent of alumni remain sober, 75 percent hold full-time tax-paying jobs, and 90 percent are independently housed at 12-month follow-up. An earlier Philanthropy Roundtable profile of the program reported 65 percent sustained sobriety, 76 percent employment, and 89 percent stable housing. Step Denver takes zero government funding, relying entirely on private donors including the Anschutz Foundation and the Daniels Fund. The 42-year-old program has expanded to Colorado Springs through Step Springs.

These are self-reported outcomes, not results from a randomized controlled trial, and Step Denver serves men who are willing to commit to sobriety, a different population than city programs that accept all comers. But the gap between Step Denver’s 90 percent housing rate and the city’s 20 percent permanent housing rate raises unavoidable questions about what accountability produces that unconditional housing does not.

The policy fight in court

President Trump signed an executive order on July 24, 2025, reversing the Housing First approach. The order directed HUD to require treatment participation as a condition for housing and shifted grant funding toward jurisdictions that enforce camping bans. A subsequent HUD funding notice would have capped permanent housing spending at 30 percent of Continuum of Care funds, down from approximately 90 percent.

A coalition of 20 states and a separate group of cities and nonprofits sued to block the changes. U.S. District Judge Mary McElroy granted a preliminary injunction on December 19, 2025, ordering HUD to reinstate the Biden-era funding rules. “The constant churn and chaos seems to be the point,” McElroy said from the bench. HUD reopened the Biden-era funding notice on January 9, 2026.

The injunction means Housing First remains the effective federal standard, even as the data Steeb cited, and Denver’s own experience, continue to accumulate against it.

“It’s not safe for people that are stewing in disease to be living outside and risking overall public safety, including their own,” Steeb said. “Individual transformation is absolutely 1,000 percent possible” when programs set expectations rather than enabling dysfunction.

The ruling in Learning Resources, Inc. v. Trump eliminates tariffs that had generated over $160 billion in revenue and were projected to bring in $1.4 trillion over the next decade, according to the Tax Foundation. Trump responded within 24 hours by imposing replacement tariffs under Section 122 of the Trade Act of 1974, a statute that has never previously been invoked and is capped at 15% for 150 days.

Marshall Dawson, guest hosting The Kim Monson Show on February 23, called the decision constitutionally significant while noting its practical limits. “I think it is very important that the Supreme Court ensures that we are getting things right and proper,” Dawson said on the broadcast. “This is not the only avenue that the president has for setting tariffs.”

The court’s reasoning

Roberts, writing for a majority that included Justices Sotomayor, Kagan, Gorsuch, Barrett, and Jackson, held that IEEPA’s text does not support the power the president claimed.

“Based on two words separated by 16 others in IEEPA, ‘regulate’ and ‘importation,’ the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words cannot bear such weight,” Roberts wrote.

The chief justice emphasized that IEEPA “contains no reference to tariffs or duties” and that “until now no President has read IEEPA to confer such power.” The government conceded that “the president has no inherent peacetime power to impose tariffs,” according to legal analysis from Perkins Coie.

Roberts grounded the decision in the Constitution’s assignment of taxing power to Congress under Article I, Section 8. In a portion of the opinion joined only by Justices Gorsuch and Barrett, Roberts applied the major questions doctrine, writing that delegating “the core congressional power of the purse” requires clear statutory language, especially when, as the government’s own brief argued, whether “we are a rich nation” or a “poor” one hangs in the balance.

Justice Kavanaugh dissented in a 63-page opinion joined by Justices Thomas and Alito. “The tariffs have generated vigorous policy debates” that “are not for the Federal Judiciary to resolve,” Kavanaugh wrote. Thomas filed a separate 18-page dissent emphasizing historical practice.

What the ruling eliminates

The decision voids all tariffs imposed under IEEPA authority. These include tariffs on Canada (up to 35%), Mexico (up to 25%), and China (up to 20%) issued in early 2025, the “Liberation Day” tariffs of April 2, 2025, targeting most trading partners at rates of 10% to 50%, and subsequent country-specific tariffs on Brazil and India, according to Perkins Coie.

The Tax Foundation estimated that the ruling “shields US taxpayers from that major tax increase and erases nearly three-fourths of the new tax revenue” the administration had projected. Importers have already paid an estimated $130 billion to $200 billion in IEEPA duties, according to Perkins Coie. The court did not address whether those duties must be refunded, leaving the question to lower courts. Kavanaugh warned the refund process is likely to be a “mess.”

Trump’s immediate pivot

Within 24 hours of the ruling, Trump signed three executive instruments: terminating IEEPA tariff collection, imposing a new tariff under Section 122 of the Trade Act of 1974, and maintaining the suspension of duty-free de minimis treatment, according to Perkins Coie.

Section 122 has never been used before. Designed to address balance-of-payments deficits, it carries statutory limits: a maximum rate of 15% and a maximum duration of 150 days, after which Congress must vote to continue the tariffs. Trump initially set the rate at 10% and shortly thereafter raised it to 15%. The tariffs took effect February 24.

U.S. Trade Representative Jamieson Greer announced new Section 301 investigations against “most major trading partners” on an “accelerated timeframe,” signaling the administration’s intent to rebuild its tariff regime through alternative legal channels.

What remains in place

The ruling affects only tariffs imposed under IEEPA. Several other tariff authorities remain fully operational.

Section 232 tariffs on steel, aluminum, copper, automobiles, auto parts, trucks, truck parts, and semiconductors continue in effect. The Tax Foundation projects these tariffs will generate $635 billion over the next decade and cost American households an average of $400 in 2026.

Section 301 tariffs on China from the first Trump administration also remain. With new Section 301 investigations announced, the administration has a pathway to reimpose country-specific tariffs, though the process requires formal USTR investigations rather than unilateral presidential action.

As Cathy Russell, co-hosting The Kim Monson Show alongside Dawson, observed, the decision narrows presidential trade authority without eliminating it.

Kevin Lundberg, a former state senator and board chairman of Protect Kids Colorado, said on The Kim Monson Show that more than 3,200 volunteers returned notarized petitions as part of the effort. Lundberg described the volunteer mobilization as the largest citizen-driven petition effort in Colorado history. Fewer than 10% of total signatures came from paid petition circulators, he said. Yvonne Paez guest hosted the Feb. 17 broadcast.

What Initiative 108 would change

Under current Colorado law, human trafficking of a minor for sexual servitude is classified as a class 2 felony under CRS 18-3-504. Because the offense is designated as a crime of violence, the sentencing range extends to 16 to 48 years in prison with five years of mandatory parole. Offenders are eligible for parole and eventual release.

Initiative 108, titled the “Children Are Not For Sale Act,” would elevate the offense to a class 1 felony, the most serious classification in Colorado. Since Colorado abolished the death penalty in 2020, the maximum sentence for a class 1 felony is life in prison without the possibility of parole or release.

The measure would also expand the legal definition of human trafficking to include any person who “knowingly trades anything of monetary value to buy or sell sexual activity with a minor,” according to the initiative’s filing with the Secretary of State.

Campaign details

Protect Kids Colorado launched its signature-gathering effort on Sept. 5, 2025, giving petitioners roughly six months to collect the required signatures. Lundberg said on The Kim Monson Show that the organization collected “almost a half million signatures” across three related initiatives, with approximately 170,000 submitted for Initiative 108 specifically.

The campaign relied overwhelmingly on volunteer labor, Lundberg said, with fewer than 10% of total signatures coming from paid circulators. The Rocky Mountain Voice reported in December 2025 that professional signature gatherers were hired to supplement the volunteer effort as the deadline approached.

Dr. Travis Morrell, a spokesperson for Protect Kids Colorado, described the trafficking initiative as the least disputed of the three measures the organization advanced, according to the Rocky Mountain Voice.

Broader context

Colorado ranked 10th nationally for the highest number of human trafficking reports as of 2023, according to the Common Sense Institute. The state’s position along two major interstate highways, I-70 and I-25, has been cited by the Colorado Catholic Conference as a factor contributing to trafficking activity.

At the state Capitol, a separate bipartisan effort is also targeting child sex trafficking penalties. Senate Bill 26-015, sponsored by Sen. Dylan Roberts (D-District 8) and Sen. Byron Pelton (R-District 1), would impose a mandatory minimum four-year prison sentence for offenses involving commercial sexual activity with a child. The bill advanced through the Senate Judiciary Committee on a 6-1 vote on Feb. 11.

“We know that human trafficking, particularly trafficking involving children, is a major problem in our state, and that’s what we’re seeking to change,” Sen. Roberts told Denver7. Sen. Pelton added: “This is not a partisan issue. This is about Colorado actually holding people accountable for purchasing children for sex, and making sure that the crime fits the punishment.” The two efforts address different aspects of the problem; Initiative 108 targets traffickers who buy and sell children, while SB26-015 focuses on mandatory minimums for solicitation and related offenses.

Organization and people

Protect Kids Colorado describes itself as “a broad coalition of parents, grandparents and concerned citizens coming together to protect kids and strengthen families in Colorado.” The organization, a federally registered 501(c)(4) advocacy group headquartered in Colorado Springs, is led by executive director Erin Lee, who co-founded the group. Lundberg serves as board chairman.

In addition to Initiative 108, Protect Kids Colorado advanced two other ballot measures: Initiative 109, which addresses girls’ and women’s sports designations, and Initiative 110, which would prohibit certain medical procedures on minors.

Next steps

The approximately 170,000 signatures now go to the Secretary of State’s office for verification. Initiative 108 requires 124,238 valid signatures from registered Colorado voters to qualify for the November 2026 ballot. That threshold represents 5% of the total votes cast for secretary of state in the November 2022 general election.

The District Heating Plant Sustainability Upgrade has been before the Capital Development Committee three times since FY 2023-24 but has never received full funding. The Governor’s Office of State Planning and Budgeting did not recommend the project for FY 2025-26.

The failure involved Boiler #2, installed in 1965. Boiler #3 dates to 1960. During the January 2024 incident, the longest stretch without steam occurred when temperatures were at or below zero, according to CSU’s capital budget request to the legislature.

CSU’s proposal would replace the aging Boiler #3 with an electric central heating and cooling system backed up by two low-emission boilers, shifting significant energy use from natural gas to electricity. Natural gas combustion currently accounts for 35% of CSU’s total greenhouse gas emissions, according to the capital budget request.

The university has already invested $20 million in its Moby GeoX geothermal exchange project, one of the largest geothermal energy exchanges west of the Mississippi. That system, completed ahead of schedule in 2020, replaced 60-year-old steam and cooling infrastructure at Moby Arena with 342 well holes bored 550 feet deep and 80 miles of underground pipes. CSU has committed to 100% renewable electricity by 2030.

Speed camera bill clears second reading

Meanwhile, a bill that would allow Colorado cities and counties to place speed cameras on interstate highways passed Second Reading in the House on February 19 after clearing committee on an 8-3 vote two days earlier.

HB 26-1071, sponsored by Rep. Tisha Mauro (D-Pueblo), Rep. Monica Duran, and Sen. Lisa Cutter, would amend current law that reserves interstate speed camera authority exclusively for the state. Under the existing framework established by SB 23-200, the Colorado Department of Transportation can operate automated vehicle identification systems on interstates, but local governments cannot.

The bill’s momentum follows CDOT’s Highway 119 pilot program in Boulder County, which achieved an approximately 80% reduction in speeding since launching in July 2025. The decrease occurred even before civil penalties of $75 per violation began on January 12, 2026, according to SkyHi News.

Wheat Ridge sought to install a speed camera on Interstate 70 between the Wadsworth Boulevard and 32nd Avenue exits in summer 2025 but was denied under the current prohibition, according to Carscoops. Wheat Ridge police cited crash investigations on I-70 as a significant resource drain. Since June 2025, the city’s two existing cameras on local streets have generated roughly $208,000 in revenue.

Mike Rawluk, who discussed both stories on The Kim Monson Show, urged listeners to pay attention to bills moving through the legislature. “These random bills, they mean a lot to our rights, and we need more people there at these things,” Rawluk said on The Kim Monson Show.

The December 2025 ruling, which applies to Xcel Energy, Black Hills Energy, and Atmos Energy, nearly doubles the previous 22 percent reduction mandate set for 2030. More than two-thirds of Colorado households rely on natural gas for winter heating.

What the plan requires

Senate Bill 21-264 requires investor-owned gas utilities serving more than 90,000 customers to submit clean heat plans to the PUC. The commission’s December decision set the 2035 target at 41 percent below 2015 emission levels, with compliance methods including energy efficiency upgrades, heat pump installation, pipeline leak prevention, and home insulation improvements.

The PUC deferred targets for 2040 through 2050 until December 2032, but the commission’s written decision states it is “reasonable to conclude” that Colorado’s statutory climate goals correspond to 100 percent emissions elimination from gas utilities by 2050.

The approved target exceeded what the governor’s own agencies requested. The Colorado Energy Office and Air Pollution Control Division recommended a 31 percent reduction; environmental groups pushed for 55 percent. The PUC landed at 41 percent.

Costs already mounting

Utilities have warned the transition will be expensive. Black Hills Energy estimated compliance with the earlier 22 percent target at approximately $397 million annually, according to the Denver Gazette. Xcel Energy projected costs exceeding $1 billion over five years for the 2030 targets alone, surpassing the statutory cost cap of 2.5 percent of annual gas bills, according to the Independence Institute.

For individual homeowners, residential electrification retrofits cost in excess of $20,000 per home before incentives, according to utility filings cited by the Independence Institute. Colorado offers up to $14,000 in rebates through the income-qualified HEAR program for households earning up to 150 percent of area median income, but the upfront cost remains significant for many households.

According to the Independence Institute’s analysis of a 2024 National Renewable Energy Laboratory study, approximately zero percent of Colorado households would see cost savings by switching from natural gas furnaces to cold-climate heat pumps, given that electricity costs more than four times as much per unit of energy delivered as natural gas in the state.

Pace of transition raises feasibility questions

Meeting the targets requires installing between 28,000 and 57,000 heat pumps annually through 2030, according to the Colorado Sun. The 2022 installation rate was 14 to 28 times lower than the required pace.

PUC Chairman Eric Blank has acknowledged the challenge. “The electric transition took 25 years. I am worried we are trying to jam too much into five years,” Blank told the Colorado Sun in June 2024. At a separate PUC meeting, Blank described the projected costs of the broader energy transition as “mind-boggling,” according to Complete Colorado.

The state’s Utility Consumer Advocate, Cindy Schonhaut, acknowledged affordability concerns, telling the Colorado Sun that “the problem is that bills are so high” for Colorado ratepayers.

Energy policy groups project larger costs ahead

Amy Oliver Cooke, president of Always On Energy Research and former executive vice president of the Independence Institute, told The Kim Monson Show on February 20 that energy transition modeling projects $620 billion in total costs for Colorado’s full energy transition, combining 100 percent renewable electricity by 2040 with complete residential heating electrification.

“Xcel Energy said that for natural gas customers, it’ll cost upwards of $20,000 to retrofit just your own home. And that’s before you’ve paid for their infrastructure costs,” Cooke said on the program.

Cooke warned that eliminating natural gas as a heating fuel would remove a critical backup during extreme weather. The Independence Institute’s modeling projected 26 hours of mid-winter blackouts under a fully electrified scenario. In December 2025, Xcel Energy preemptively cut power to thousands of Front Range customers ahead of high winds, according to Complete Colorado, illustrating existing grid vulnerability before the additional load from forced electrification.

What happens next

Xcel Energy, which serves approximately one million gas customers in Colorado, has characterized its approach as a “balanced, dual-fuel clean heat transition” emphasizing affordability, reliability, and customer choice, according to the Colorado Sun.

The PUC will revisit targets for 2040 through 2050 in December 2032. In the meantime, utilities must file updated compliance plans demonstrating how they will achieve the 41 percent reduction by 2035 within the 2.5 percent rate cap.

The special election was triggered after opponents collected more than 10,000 signatures challenging the ordinances, which the City Council approved in a series of late-night votes across September and October 2025. Mail-in ballots will be sent to all active registered voters beginning in mid-March.

What is on the ballot

The ballot contains four separate questions, each corresponding to an ordinance the council passed across multiple meetings in September and October 2025. Ordinance 2025-29, which replaced “single-family zoning,” passed 9-2 on September 22. The final zoning map vote on October 13 passed 8-3, with Councilmembers David Rein, Jacob LaBure, and Paula Nystrom dissenting.

Under Ordinance 2025-29, “residential dwellings” is a category that includes duplexes, triplexes, and townhomes alongside single-family homes. Ordinance 2025-27 eliminated parking minimums for residences in transit areas and affordable housing units. Ordinances 2025-28 and 2025-30 work in tandem with the other two to allow varied housing types citywide.

Together, the four ordinances represent Lakewood’s first major zoning overhaul since 2012. The nearly 400-page rewrite was split across four council meetings, some of which stretched past midnight, according to Colorado Politics.

A “yes” vote repeals the zoning changes. A “no” vote keeps them in place.

How the election came about

City Clerk Jay Robb confirmed the sufficiency of four referendum petitions on January 12, 2026. The petitions targeted Ordinances 2025-27, 2025-28, 2025-29, and 2025-30, which had taken effect on January 1. All four petitions carried at least 3,600 signatures, with three surpassing 4,000. More than 6,000 unique registered voters signed, well above the threshold of roughly 3,500 signatures (3% of Lakewood’s approximately 117,000 registered voters), according to the Denver Gazette.

On January 27, the council voted to place all four measures on an April 7 special election ballot.

The two sides

Karen Gordey, head of the Lakewood Citizens Alliance, which describes itself as “volunteer-led and community-funded” with “no paid political consultants or professional advocacy firms,” said the election is about restoring public input.

“Major land-use decisions should reflect informed public consent,” Gordey said, as reported by the Denver Gazette. “A special election provides the transparency and voter participation necessary for the community to decide the future of its neighborhoods and the city as a whole.”

Gordey also appeared on The Kim Monson Show on February 19, where she urged listeners to vote yes on April 7. “These are radical zoning changes that would allow high density in the entire city,” Gordey said on The Kim Monson Show. “And so we want to vote yes to repeal on April 7th.”

Opponents of the repeal, organized under the Make Lakewood Livable campaign, argue the reforms are necessary to address housing affordability. Sophia Mayott-Guerrero, a former councilmember who manages the campaign, told the Denver Gazette that “too many things, from making rent to ever owning a home, feel out of reach for most people in Colorado.”

Councilmember Paula Nystrom, who voted against the original ordinances, countered that the city has alternatives. “We have 40-plus underutilized properties in this city,” Nystrom said, according to Colorado Politics. “We do not need to go into all of these neighborhoods and change the character.”

Council takes a side

On February 10, the council passed a resolution 9-2 urging residents to vote no on all four ballot questions, effectively asking voters to preserve the zoning changes. Councilmembers LaBure and Nystrom dissented.

A city with a history of growth battles

The zoning debate is the latest chapter in Lakewood’s long-running tension over development. In 2019, voters approved a 1% annual cap on new housing construction with approximately 53% support. In 2023, the council voted 8-3 to add an expiration date to that cap, a move intended to bring the city into compliance with state law but which left growth policy in flux.

Lakewood, with a population of approximately 156,000, is the fifth-largest city in Colorado.

What to know

• Election date: April 7, 2026
• Ballots mailed: Mid-March 2026
• What is on the ballot: Four separate questions on four zoning ordinances
• A “yes” vote repeals the zoning changes (Lakewood Citizens Alliance position)
• A “no” vote keeps the zoning changes (Make Lakewood Livable / City Council majority position)

Polis submitted the opt-in paperwork on January 29, 2026, at a gathering of private and religious school choice advocates, making Colorado the only state with a Democratic governor to formally enroll. Twenty-seven states have now opted in, and all the others are led by Republican governors, according to Ballotpedia’s state participation tracker.

“I would be crazy not to,” Polis told the Colorado Sun in a November interview when he first signaled his intent. He later described the program as “free money” requiring zero state resources, comparing it favorably to Medicaid expansion, which required state matching funds.

The decision has drawn opposition from 16 education and advocacy organizations, sharp criticism from the Colorado Education Association, and a public rebuke from the leading Democratic candidate to succeed Polis. It has also drawn praise from school choice advocates who see Polis as one of the few Democrats willing to prioritize families over party orthodoxy on education.

How the Program Works

The Education Freedom Tax Credit offers a 100% nonrefundable federal tax credit for individual taxpayers who donate to Scholarship Granting Organizations, or SGOs. Donors can reduce their federal income tax liability dollar for dollar, up to $1,700 per taxpayer. The SGOs then distribute those funds as scholarships to eligible K-12 students.

The program has no aggregate cap on total annual credits and no sunset provision, making it a permanent feature of federal tax law. The Senate version removed the House’s proposed $5 billion annual limit, according to Education Week. Education Week estimated that if 5 million people donate $1,700 each, the program would channel more than $8 billion annually into education scholarships. If participation reaches 59 million taxpayers, the annual total could exceed $101 billion.

Eligible expenses follow Coverdell education savings account rules: tuition, tutoring, special needs services, educational technology, internet access, transportation, after-school programs, summer programs, and services for students with disabilities. Religious schools are expressly permitted. Student families must earn at or below 300% of area median income, which in practice means a family of four in Eagle County could earn up to $399,600 and still qualify, according to the Colorado Sun.

SGOs must be 501(c)(3) nonprofits but do not require state approval to participate. They need only comply with basic federal requirements and submit annual financial audits. Governors who opt in must submit lists of approved SGOs to the Treasury Department. The program is set to launch January 1, 2027.

Polis’s Education Record and Rationale

Polis’s decision is consistent with an education reform record that distinguishes him from most Democratic governors. He co-founded the New America School in 2004, a public charter high school system serving recent immigrants across metro Denver. In Congress, he authored bipartisan legislation to expand high-performing charter schools and served as ranking member on the early childhood and K-12 subcommittee. As governor, he implemented free, universal full-day kindergarten and preschool, expanded dual-language immersion programs, and created vocational pathways including phlebotomy and EMT certification.

“Really, it’s only our own creativity that can hold us back. Anything we can envision, this is a very powerful funding mechanism,” Polis said at the January 29 event.

His press secretary said the governor submitted the form “to officially signal Colorado’s intent to participate in the tax credit in order to give Colorado taxpayers new opportunities to invest in Colorado students at all school types,” according to Colorado Newsline.

Polis has also framed the decision as a matter of practical competition with other states. Jorge Elorza, CEO of Democrats for Education Reform (an organization whose stated mission is “to make Democrats the party of education innovation and equity”), argued the point directly: “If a state does not opt in, then by default, the first $1,700 in every single federal taxpayer’s taxes is going to leave your state,” he told The 74.

Polling data cited by supporters suggests broad public backing. A September 2025 DFER poll found 64% of voters support governors opting in, including 61% of Democrats. An EdChoice/Morning Consult survey found 65% of adults and 75% of parents support tax-credit scholarships, according to The 74.

Opposition From Teachers’ Unions and Advocacy Groups

The backlash within Democratic circles has been substantial. More than 15 education advocacy organizations urged Polis not to opt in, and a coalition of 16 groups led by Great Education Colorado (an organization whose stated mission is to “guarantee that public schools in every Colorado community are welcoming and adequately, equitably, and sustainably funded”) published an open letter calling on the governor to reject “Trump’s Federal Voucher Plan That Drains Public School Funding.”

Signatories included the Colorado Education Association, the Colorado Fiscal Institute, the Colorado PTA, the Bell Policy Center, Movimiento Poder, the Black Parent Network, and ten other organizations. “We cannot stand by while policies weaken our public schools. We have a moral responsibility…” the letter stated.

Kevin Vick, president of the Colorado Education Association (the state’s largest teachers’ union), has called school choice proposals “a Trojan Horse.” During the 2024 Amendment 80 campaign, Vick said proponents were “using the innocuous word of ‘choice’ as a vehicle for what opens the door clearly for a voucher scheme,” according to Colorado Pols. The CEA signed the coalition letter opposing the tax credit.

Sen. Bernie Sanders (I-Vermont) captured the national progressive critique during congressional debate: “We should not be creating a two-tier education system in America, private schools for the wealthy, and well-connected, and severely underfunded and under-resourced public schools for low-income, disabled and working class kids,” according to Chalkbeat.

Phil Weiser, the Democratic gubernatorial candidate and current Colorado attorney general, has publicly stated he would not support participation. “I will oppose any efforts to privatize our system of public education, such as introducing voucher programs,” Weiser said, as reported by Colorado Newsline. Because Polis’s term ends in January 2027, the same month the program launches, a new governor could reverse Colorado’s participation before a single scholarship is distributed.

Fraud Concerns and Accountability Gaps

Notably, Polis himself has acknowledged the program’s oversight vulnerabilities. In a letter to the federal government, he wrote: “Without careful consideration of how states select and monitor their eligible SGOs, this credit also has the potential to lead to fraud, waste, and abuse,” according to CPR News.

The Brookings Institution, a nonprofit research organization dedicated to “conducting in-depth, nonpartisan research to improve policy and governance,” published a detailed analysis identifying multiple fraud vectors. Wealthy donors could contribute appreciated securities to avoid capital gains taxes while receiving the full dollar-for-dollar credit. Brookings illustrated how a billionaire donating $2 million in stock originally purchased for $1 million could avoid approximately $285,000 in combined federal and state taxes while receiving the full $2 million credit. The analysis also flagged the potential for kickback schemes between SGO operators and service providers, given the absence of restrictions on amounts per recipient. Brookings characterized the program as opening “the door to waste, fraud, and abuse.”

Florida’s existing state-level scholarship program offers a cautionary example: an auditor’s report found the program paid for 30,000 students that the state cannot accurately track, according to CPR.

Kevin Welner of the National Education Policy Center cited research showing that Louisiana’s voucher program produced 0.4 standard deviation drops in math scores among participating students. He described the harms as “on par with COVID-19 and Hurricane Katrina,” according to the Colorado Sun.

Colorado Voters Have Rejected Similar Proposals Three Times

Polis’s decision arrives against a backdrop of repeated voter rejection of school choice and voucher measures in Colorado. Voters defeated Amendment 7, a voucher initiative, in 1992 by a margin of 66.8% to 33.2%. They rejected Amendment 17, an education tax credit proposal, in 1998 by 60.3% to 39.7%. Most recently, voters narrowly defeated Amendment 80 in November 2024, which would have established a constitutional right to school choice; the measure received 49.3% support but required 55% to pass, according to Ballotpedia.

The Colorado Supreme Court has also struck down legislatively enacted voucher programs twice. In 2004, the court invalidated the Colorado Opportunity Contract Pilot Program in a 4-3 decision, ruling it violated the state constitution’s local control provisions. In 2015, the court struck down the Douglas County Choice Scholarship Pilot Program for violating a state constitutional provision prohibiting state aid to religious institutions.

Critics argue that the federal tax credit effectively circumvents this pattern by routing funding through federal tax policy rather than state appropriations, placing it beyond the reach of the state constitution and ballot measures. Supporters counter that a federal tax credit is structurally distinct from a state-funded voucher, because the money flows from private donors, not government coffers.

The National Landscape

The partisan divide among governors is stark. Of the 27 states that have opted in, Colorado is the only one led by a Democratic governor. North Carolina Gov. Josh Stein (D) vetoed a legislative opt-in bill on August 6, 2025, but said he intended to opt the state in once the U.S. Department of the Treasury issues formal guidance, according to Ballotpedia. Democratic governors in New Mexico, Oregon, and Wisconsin have officially declined. Arizona Gov. Katie Hobbs (D) vetoed opt-in legislation on January 16, 2026, according to Ballotpedia.

Several large states remain undecided. Illinois Gov. JB Pritzker, Pennsylvania Gov. Josh Shapiro, and the governors of Michigan and California have made no formal announcements, according to The 74. Virginia presents a unique case: former Gov. Glenn Youngkin (R) opted the state in, and his successor, Gov. Abigail Spanberger (D), has not confirmed whether Virginia will remain enrolled, according to Ballotpedia.

The American Federation for Children, an organization that describes itself as seeking “to empower families, especially lower-income families, with the freedom to choose the best K-12 education for their children,” has been among the most vocal supporters. Its CEO, Tommy Schultz, said the legislation would give “the President an opportunity to fulfill his school choice campaign promise and send K-12 education back to the states,” according to AFC.

The Reason Foundation, a libertarian think tank that describes itself as advancing “a free society by developing, applying, and promoting libertarian principles,” offered qualified support. Its analysis praised the program for going “to impressive lengths to protect families and SGOs against burdensome regulations,” but cautioned that “there’s virtually no chance it will stay that way for long,” according to Reason.

The deadline for governors to notify the federal government is December 2026. With 36 gubernatorial elections scheduled for November of that year, the program’s reach could shift significantly depending on the outcomes.

HB26-1005, the Worker Protection Act, passed the House Business Affairs and Labor Committee on February 5 by an 8-5 party-line vote, according to Colorado Politics. The hearing lasted roughly three hours. The bill then advanced through the House Finance Committee on February 12 by a 10-1 vote and now awaits action in the House Appropriations Committee.

The bill would repeal a provision of Colorado’s 1943 Labor Peace Act that requires a second election, with a 75% supermajority or a majority of the entire bargaining unit (whichever is greater), before unions can negotiate mandatory dues agreements. Colorado’s two-election requirement for union security is unique among all states, according to KUNC.

Gov. Jared Polis vetoed the same legislation, then numbered SB25-005, in May 2025 after it passed the Senate 22-12 and the House by more than 20 votes. He told The Colorado Sun in January that he would veto the bill again if it arrives on his desk unchanged. “There’s nothing different, so I’m not quite sure why they’re doing it again,” Gov. Polis said.

A bill unchanged, a political landscape in motion

HB26-1005 contains no material changes from the version Gov. Polis vetoed, according to The Sum and Substance. The bill is sponsored by Rep. Javier Mabrey (D-Denver), Rep. Jennifer Bacon (D-Denver), Sen. Jessie Danielson, and Sen. Iman Jodeh, with dozens of additional cosponsors.

The governor’s spokesperson, Eric Maruyama, said Gov. Polis is “frustrated and surprised that the same piece of legislation could come forward,” according to the Colorado Times Recorder.

Yet sponsors say the policy case remains urgent. “The affordability crisis did not go away,” Rep. Mabrey told The Sum and Substance. “There aren’t other bills that are evidence-based that you could say would increase wages across the state.”

House Speaker Julie McCluskie (D-Dillon) expressed cautious optimism, telling Colorado Politics that she is “hearing a willingness to try again” from both business and labor partners, according to Colorado Politics.

The political dynamics have shifted in one notable respect: this is Gov. Polis’s final term, and 2026 is an election year. Administration sources have hinted he might reconsider if a genuine compromise emerges, according to The Sum and Substance. During the 2025 session, Gov. Polis was reportedly open to reducing the 75% threshold while keeping it above a simple majority, but a compromise was not reached before the session ended, according to The Colorado Sun.

Labor’s case: the second election as a delay tactic

Supporters argue the second election serves no purpose other than giving employers additional time to discourage union formation.

Rep. Mabrey told KOAA that “the second election provides employers an opportunity to intimidate, to union bust,” according to KOAA. Sen. Julie Gonzales (D-Denver), a co-sponsor of prior versions, told KUNC, “When workers decide to form a union, that decision ought to be respected every single time,” according to KUNC.

Workers who testified at the committee hearing offered firsthand accounts. Josh Reitze, an Alamo Drafthouse Cinema employee in Denver, told the committee that Alamo workers won their first union election in September 2024 but lost the second vote. Workers described lost momentum from attrition, and fellow employee Brennain Degenhardt reported not receiving a ballot, according to KOAA. “We deserve a say. We deserve a place in that conversation,” Reitze told the committee.

Kylie Anderson, a Starbucks barista and union member, testified that “this law does not protect freedom. It protects corporate power,” according to KUNC.

A worker covered by a union contract earns 10.2% more in wages than workers in the same industry with the same education, job title, and experience, according to the Colorado Fiscal Institute, a fiscal policy research organization. Colorado’s union membership rate of 7.7% falls 22% below the national average of 9.9%, according to the Economic Policy Institute, a research organization focused on the economics of low- and middle-income workers.

Under the federal National Labor Relations Act, no second election is required. Once workers vote by simple majority to form a union, they can immediately begin negotiating union security provisions. Colorado’s law imposes an additional state-level hurdle beyond what federal law requires.

Business opposition: protecting workers and competitiveness

Business groups have united against the bill, calling it a threat to both worker choice and the state’s economic competitiveness.

Stacey Campbell, representing the Colorado Chamber of Commerce, suggested the bill is “a solution in search of a problem” and questioned why advocates would not want all employees to vote on whether to pay union dues, according to CBS Colorado.

Michael Smith, state director of the National Federation of Independent Business (an organization that describes itself as “the voice of small business”), said in a statement that “for Main Street employers, who already have an onerous regulatory landscape to navigate, removing the second-vote requirement would make it more difficult to manage their workforce, control costs, and plan for the future,” according to NFIB.

J.J. Ament, president and CEO of the Denver Metro Chamber of Commerce, called it “reckless” to “unravel” the Labor Peace Act. The chamber cited data showing Colorado’s average annual employment growth rate of 1.5% between 2018 and 2023 was more than three times that of non-right-to-work states, according to the Denver Metro Chamber. The chamber also reported that Metro Denver EDC recruited over 2,500 jobs and secured $1.25 billion in capital investment in the past year.

Sonia Riggs, president and CEO of the Colorado Restaurant Association, told the committee that the bill “directly harms” workers by eliminating their voting rights. She reported that restaurant industry members who opposed the 2025 version faced “significant backlash,” including threats, harassment, and property damage. Someone “threw a rock through the window of one establishment during dinner service,” Riggs told the committee.

Rep. Chris Richardson (R-Elbert), who voted against the bill in committee, framed the second election as a free-association issue. “It’s the compelling of dues from other employees that takes the second vote,” Richardson told KOAA.
Fisher Phillips, a management-side labor and employment law firm, described the bill as among the most significant proposed legislation affecting Colorado employers, according to Fisher Phillips. Under current law, if the second election fails or is never held, union dues remain voluntary.

The ballot measure fallback

Labor groups are not relying solely on the legislature. Following the May 2025 veto, unions launched a parallel effort to bring a related measure directly to voters.

Initiative 43, filed March 7, 2025, and approved for signature circulation the following month, would require employers with more than eight employees to show “just cause” before firing or suspending a worker. The measure is backed by Colorado Worker Rights United, a coalition of approximately 80 unions, community organizations, and small businesses, including the Colorado AFL-CIO, SEIU Local 105, and UFCW Local 7, according to Colorado Newsline.

Organizers need at least 124,238 valid signatures from registered Colorado voters by August 3, 2026, to place the initiative on the November ballot, according to the Colorado Secretary of State.

Dennis Dougherty, executive director of the Colorado AFL-CIO, said after the 2025 veto: “While this veto is a setback, it’s not the end of the road.” He said working people would take the fight directly to the ballot in 2026, according to Colorado Newsline.

The Denver Metro Chamber has indicated it may pursue its own counter-ballot measures to protect the Labor Peace Act if unions proceed, according to the Denver Metro Chamber.

What happens next

The bill’s path forward remains uncertain. HB26-1005 is expected to pass the Democratic-controlled House and Senate, as it did in 2025. The principal question is whether Gov. Polis will veto it a second time or whether election-year dynamics and a viable compromise shift his calculus.

Preventing the Worker Protection Act from passing remains the top priority of business interests at the Capitol, according to The Colorado Sun. Colorado ranks as the sixth most-regulated state, and business groups cite the Labor Peace Act as one of the few factors that offset that disadvantage, according to The Sum and Substance.

The whiplash played out against a backdrop that makes the topic harder to laugh off than it once was: congressional hearings with sworn military testimony, a Pentagon office cataloging hundreds of unexplained sightings, and bipartisan legislation demanding the executive branch stop stonewalling lawmakers.

What Obama said

During a lightning-round segment on the Brian Tyler Cohen podcast, Obama was asked, “Are aliens real?”

“They’re real. But I haven’t seen them. And, they’re not being kept in Area 51,” Obama said. “There’s no underground facility, unless there’s this enormous conspiracy unless they hid it from the president of the United States.”

He also joked that his first question upon taking office was, “Where are the aliens?”

By Sunday night, the clip had gone viral, and Obama posted an Instagram clarification. “I was trying to stick with the spirit of the speed round, but since it’s gotten attention let me clarify,” he wrote. “Statistically, the universe is so vast that the odds are good there’s life out there. But the distances between solar systems are so great that the chances we’ve been visited by aliens is low, and I saw no evidence during my presidency that extraterrestrials have made contact with us.”

Obama has been here before

This is not the first time the 44th president has waded into the subject. In a 2021 appearance on “The Late Late Show with James Corden,” Obama said, “There is footage and records of objects in the skies that we don’t know exactly what they are. We can’t explain how they moved, their trajectory.”

That 2021 comment drew attention because it came from a former commander in chief acknowledging, even obliquely, that the U.S. government possesses evidence of phenomena it cannot explain.

What Congress is actually finding

While Obama’s remarks made headlines, a parallel and more consequential effort has been underway on Capitol Hill.

On September 9, 2025, the House Oversight Committee’s Task Force on the Declassification of Federal Secrets held its first UAP-focused hearing, titled “Restoring Public Trust Through UAP Transparency and Whistleblower Protection.” The witness list included something unprecedented: an active-duty Navy officer testifying publicly about unidentified phenomena.

Senior Chief Petty Officer Alexandro Wiggins, a 23-year Navy veteran serving aboard the USS Jackson, described a 2023 incident in which a self-luminous, Tic Tac-shaped object emerged from the ocean and linked with three similar objects. He reported high-speed acceleration with no sonic boom or conventional propulsion signatures.

“When crews and watchstanders observe objects that maneuver or accelerate in ways that does not match known profiles and do so near our ships and aircraft, that is first and foremost a safety issue,” Wiggins testified before the committee.

Air Force veteran Jeffrey Nuccetelli, who served 16 years, described encounters near Vandenberg Air Force Base between 2003 and 2005 involving objects he compared to “flying buildings” with unusual pulsing movements. “What we saw changed our lives,” Nuccetelli told lawmakers.

Another Air Force veteran, Dylan Borland, alleged a UAP experience at Langley Air Force Base in 2012 and claimed his career was “deliberately obstructed” after reporting it.

Rep. Eric Burlison (R-MO) released video footage during the hearing showing an MQ-9 Reaper drone firing a Hellfire missile at a high-speed orb off the coast of Yemen in October 2024. The object appeared to be hit but was not destroyed.

The numbers the Pentagon is reporting

The Defense Department’s All-domain Anomaly Resolution Office, known as AARO, released its annual report detailing 757 new UAP reports received between May 2023 and June 2024. An additional 272 were backdated incidents from 2021 and 2022, bringing the cumulative total to 1,652 reports as of October 2024.

Of those, 49 were resolved as balloons, birds, or unmanned aerial systems. Another 243 were recommended for closure as other prosaic objects. But 21 cases remain unexplained, particularly those involving video evidence, eyewitness testimony, and proximity to sensitive military sites.

The most common descriptions in the reports: unidentified lights and round, spherical, or orb-shaped objects.

Legislation and the transparency fight

Congress has moved beyond hearings. The Unidentified Anomalous Phenomena Disclosure Act, passed in 2023, created the framework for disclosure. In 2025, Rep. Burlison introduced the UAP Disclosure Act of 2025 as an amendment to the fiscal year 2026 National Defense Authorization Act, seeking to expand government transparency on UAP records.

The conferenced version of the FY2026 NDAA now requires the Pentagon to brief lawmakers on UAP intercept operations dating back to 2004 and directs AARO to account for security classification guides that may have been used to restrict the release of UAP imagery and data.

Retired Rear Admiral Tim Gallaudet framed the stakes in constitutional terms. “There is a national security need for more UAP transparency,” Gallaudet said. “In 2025, the U.S. will spend over $900 billion on national defense, yet we still have an incomplete understanding of what is in our airspace.”

Gallaudet went further: “The failure of the Executive Branch to share UAP information with Congress is an infringement on the legislative branch that undermines separation of powers and may be creating a constitutional crisis.”

UAP journalist George Knapp, who also testified at the September hearing, pointed to a different concern. “Documents from military and intelligence personnel behind closed doors admit that these are real, not fictitious, that they can fly in formation, they’re evasive, and they outperform any aircraft known to exist, including ours,” Knapp told lawmakers.

He alleged that UAP-related programs had been transferred to private contractors, limiting government oversight. “They’ve had it for so long that there’s nobody left inside government or very few who know where it is,” Knapp said.

The gap between the quip and the record

Obama’s weekend exchange illustrates a tension that has defined the UAP conversation for decades: public figures treat the subject as a punchline even as the government’s own records suggest something more serious.

The former president said aliens “are real” in a lightning round, then clarified he meant it statistically. Meanwhile, active-duty military officers are testifying under oath about objects emerging from the ocean, Congress is legislating disclosure deadlines, and the Pentagon’s own office has logged more than 1,600 reports, the vast majority of which remain unresolved.

The question is no longer whether unidentified objects exist in American airspace. The Pentagon has confirmed they do. The question is whether the government will tell the public what it knows about them.

SB26-005, sponsored by Sen. Mike Weissman (D-Aurora) and Sen. Julie Gonzales (D-Denver), cleared the Senate Judiciary Committee on a 5-2 party-line vote on February 2 and now awaits action by the Senate Appropriations Committee. Approximately 60 people signed up to testify during a hearing that lasted more than three hours, according to KOAA.

The bill creates a new cause of action for violations of federal constitutional rights occurring during civil immigration enforcement, including improper search and seizure, excessive force, due process violations, and wrongful death. It strips defendants of qualified immunity, sovereign immunity, and supremacy clause immunity “to the maximum extent permissible under the United States Constitution,” according to the bill text.

“The Constitution protects us all, and that, my friends, is the genesis of this bill,” Sen. Gonzales told the Senate Judiciary Committee.

Part of a broader legislative package

SB26-005 was introduced on the opening day of the 2026 session and is the centerpiece of a broader multi-bill Democratic legislative package announced in early February. The package also includes bills expanding restrictions on data sharing with federal immigration authorities and limiting ICE enforcement near sensitive locations, according to the Colorado Sun.

Democrats separately passed SJR26-006, a joint resolution expressing the legislature’s commitment to Coloradans navigating the immigration system and ensuring transparency in federal enforcement. The Senate voted 20-12 on February 2 and the House voted 40-20 on February 3, with the resolution adopted February 4. A separate bill in the package would restrict enforcement near courthouses, schools, health care facilities, and religious establishments, according to the Colorado Sun.

The legislative push follows a 318% increase in ICE arrests in Colorado. Federal agents arrested at least 3,522 people from January 20 to October 15, 2025, up from 843 during the same period in 2024, according to the Colorado Sun. The proportion of those arrested with prior criminal convictions dropped from 61% to 37% over the same period.

Two 37-year-olds, Alex Pretti and Renee Good, both with Colorado ties, were killed in Minneapolis in January 2026 amid the federal immigration crackdown, sparking national protests and accelerating state legislative responses, according to the Colorado Sun.

Supporters cite shrinking federal remedies

Proponents argue that existing legal remedies for constitutional violations by federal officers have effectively disappeared. Meagan Forbes, senior legislative counsel at the Institute for Justice (an organization that describes itself as “the national law firm for liberty”), testified that “no meaningful legal remedy exists in state or federal courts when a person’s constitutional rights are violated by federal officials,” according to Townhall.

That legal gap widened in 2022 when the U.S. Supreme Court ruled in Egbert v. Boule that Border Patrol agents are exempt from Bivens liability, the primary federal mechanism for suing federal officers who violate constitutional rights.

“There is no more American idea than equality under the law,” Sen. Weissman told CBS Colorado.

Colorado has precedent for eliminating qualified immunity. In 2020, the legislature passed SB 20-217, making Colorado the first state to legislatively strip qualified immunity protections from state and local law enforcement officers.

Opponents warn of constitutional clash

Republicans on the committee voted against the bill, with Sen. John Carson calling it a “political statement” and arguing that adequate legal remedies already exist, according to CBS Colorado. Sen. Lynda Zamora Wilson warned the bill would create a “chilling effect” on law enforcement, according to KOAA.

A Weld County opposition analysis raised concerns about the bill’s one-way attorney fee structure, which requires courts to award fees to prevailing plaintiffs under a broad “catalyst” standard while defendants can recover fees only if a claim is ruled frivolous. The analysis also flagged the bill’s broad scope, which targets “another person” who participated in enforcement “whether or not under color of law,” according to the Weld County analysis.

The Colorado Springs Gazette Editorial Board characterized the bill as part of a pattern of defiance, writing, “Really, how many times must Colorado’s political leaders remind our nation they have no respect for U.S. borders?”

The fiscal note estimates the legislation would cost $125,000 initially for anticipated federal legal challenges and $3.3 million annually for approximately 13 cases per year against state employees participating in federal immigration enforcement, starting in fiscal year 2026-27, according to Colorado Politics.

A national movement with legal hurdles

Colorado is not alone. Illinois became the first state to enact a similar law in December 2025 following an ICE enforcement surge in Chicago. The Trump administration sued to block the Illinois law on December 29, arguing it violates the Supremacy Clause and “chills the enforcement of federal law,” according to Capitol News Illinois. California’s Senate passed its own version, SB 747 (the “No Kings Act”), on a 30-10 vote. Maryland, New York, Rhode Island, and Virginia are considering comparable measures.

Colorado’s bill is reported to go further than Illinois’s law by broadening who can be sued, explicitly stripping multiple forms of immunity, and including the one-way attorney fee provision, according to multiple analyses.

Wyoming officials have rejected Colorado’s approach. State Sen. John Kolb (R-Rock Springs) called the bill “insane,” telling Cowboy State Daily, “You don’t go after the people who enforce the law.” Laramie County Sheriff Brian Kozak called it a “feel-good law,” according to the same report.

The bill’s path forward remains uncertain. Even if enacted, enforcement may prove difficult given federal sovereign immunity doctrines and the potential for federal officers to remove cases to federal court. The bill’s “to the maximum extent permissible” language acknowledges those constitutional limits while attempting to push them.

The seized devices contained more than 30,000 Post emails, confidential information from 1,169 sources across more than 120 government agencies, recordings of interviews, notes on story concepts, drafts of potential stories, and access to the newspaper’s content management system, according to the Washington Post. Investigators told Natanson she is not the target of the investigation.

The search has reignited a press freedom debate that spans multiple presidential administrations, from the Obama-era prosecution of journalist James Risen’s sources to the Trump first-term indictment of WikiLeaks founder Julian Assange. Press freedom groups say the case tests whether the Espionage Act, a law written in 1917 to prosecute spies during wartime, can be used against reporters who receive leaked information.

The underlying investigation

The FBI search stemmed from an investigation into Aurelio Luis Perez-Lugones, a Navy veteran and Pentagon contractor in Maryland. On January 9, federal prosecutors filed a criminal complaint charging Perez-Lugones with one count of unlawfully retaining classified national defense information under the Espionage Act. A grand jury indicted him on January 22 on five counts of unlawfully transmitting and one count of unlawfully retaining classified national defense information, according to court filings.

Prosecutors allege that in October 2025, Perez-Lugones took a screenshot of a classified intelligence report involving an unspecified foreign country, pasted it into a Microsoft Word document, and printed it out. Authorities found documents marked “SECRET,” including one in a lunchbox, when they searched his home and car. The government alleged electronic communications between Perez-Lugones and Natanson but did not observe any in-person meetings during nearly a month of surveillance.

FBI Special Agent Matthew Johnson revealed in the search warrant affidavit that agents had conducted physical surveillance of Natanson entering and exiting her home in the days before the raid.

Attorney General Pam Bondi alleged that Natanson was “obtaining and reporting classified and illegally leaked information from a Pentagon contractor” and stated the search was conducted at the Pentagon’s request. President Trump suggested the contractor leaked details about a U.S. military operation in Venezuela, though court filings do not establish that connection.

Natanson covers the federal workforce and the Trump administration’s overhaul of the federal government. In a December 2025 personal essay, she described herself as the “federal government whisperer,” detailing a year spent speaking to more than 1,000 federal workers affected by Trump and Elon Musk’s Department of Government Efficiency.

The administration’s case for the search

The government’s position rests on the principle that classified national defense information cannot be unlawfully disclosed without consequences, regardless of whether the recipient is a journalist. The Espionage Act, codified at 18 U.S.C. 793(e), makes it a crime to “willfully communicate” information relating to the national defense that the possessor has reason to believe could injure the United States or advantage a foreign nation. The law forbids “communicating, delivering, or transmitting” such information to unauthorized persons.

No journalist or newspaper has ever been successfully prosecuted for the publication of classified information. But the statute does not distinguish between spies, leakers, and reporters who receive leaked material. It does not even mention “classified information” by name; it applies to “national defense” information, a broader and less precise term.

Supporters of the search argue that obtaining classified material is a separate act from publishing it, and that neither reporters nor anyone else has a legal right to possess stolen classified documents. The search warrant targeted materials related to the Perez-Lugones investigation, and prosecutors say the search was a lawful step in a criminal investigation into unauthorized disclosure of classified information that endangered national security.

A law written for spies, applied to journalism

The Espionage Act of 1917 was enacted during World War I to combat foreign espionage. For most of its history, the law was rarely used against individuals who leaked information to the press. Between 1917 and 2009, only one person, Samuel Morison in 1985, was convicted under the Act for providing classified material to a news organization.

That changed under the Obama administration, which brought Espionage Act charges against eight people accused of leaking to the media, more than all previous administrations combined. The cases included Thomas Drake, an NSA whistleblower; Chelsea Manning, a military analyst sentenced to 35 years; Edward Snowden, the NSA contractor who revealed mass surveillance programs; and Jeffrey Sterling, a CIA officer convicted for leaking to New York Times reporter James Risen, according to the Freedom of the Press Foundation.

Risen waged a seven-year legal battle against the Bush and Obama administrations after they demanded he reveal his confidential sources for a story about a botched CIA operation in Iran. Risen refused to testify and was never jailed, but Sterling was convicted in 2015 and sentenced to three and a half years.

Under Trump’s first term, the Justice Department indicted WikiLeaks founder Julian Assange under the Espionage Act, the first time the law was used to target a media organization. Jameel Jaffer of the Knight First Amendment Institute at Columbia University noted that the charges against Assange “rely almost entirely on conduct that investigative journalists engage in every day,” according to his analysis. Assange reached a plea deal in June 2024, pleading guilty to violating the Espionage Act and being released for time served.

In 2010, the Obama-era Justice Department obtained a search warrant for Fox News reporter James Rosen’s private emails as part of a leak investigation, labeling him a “co-conspirator” in court filings. Attorney General Eric Holder later said he regretted the characterization. Rosen was never charged, but the case did not involve a physical search of the reporter’s home. Press freedom advocates say the Natanson case represents a significant escalation beyond even the Rosen precedent.

Federal safeguards that were rescinded or ignored

Two institutional safeguards that might have prevented the search were either removed or bypassed.

In April 2025, Attorney General Bondi rescinded Biden-era DOJ guidelines that had banned the Justice Department from pursuing reporters’ phone records and notes while investigating leakers. Those protections, implemented by Attorney General Merrick Garland in 2021 and 2022, were replaced with a policy that demands news media answer subpoenas and cooperate with court orders and search warrants when approved by the DOJ, reverting to a balancing test that weighs “protecting national security” against “safeguarding the essential role of the free press.”

The rescission came approximately eight months before the Natanson search.

The Privacy Protection Act of 1980, passed by Congress in response to the Supreme Court’s Zurcher v. Stanford Daily decision, forbids law enforcement from searching for and seizing journalists’ work product and documentary materials. The law permits a search warrant only if the targeted journalist is a suspect in a crime, and even then, not if the suspected crime consists of the “receipt, possession, communication, or withholding” of journalistic material.

The FBI’s affidavit seeking the Natanson warrant did not reference the Privacy Protection Act at all, according to the Freedom of the Press Foundation. Assistant U.S. Attorney Gordon Kromberg failed to disclose the PPA to the magistrate judge who approved the warrant. Since investigators told Natanson she is not accused of a crime, press freedom groups argue the PPA’s protections should have applied in full.

The Freedom of the Press Foundation, a nonprofit organization that describes itself as protecting and defending press freedom, filed a formal bar complaint with the Virginia State Bar against Kromberg, alleging he violated an ethical rule requiring lawyers to reveal relevant legal authority to the court, even when it undermines their arguments. The complaint called for “appropriate disciplinary action, up to and including disbarment.”

Press freedom groups respond across the political spectrum

The search prompted swift condemnation from press freedom organizations spanning the ideological spectrum.

Bruce D. Brown, president of the Reporters Committee for Freedom of the Press, an organization that describes itself as providing pro bono legal services and resources to and on behalf of journalists, called the search “a tremendous escalation in the administration’s intrusions into the independence of the press.” Physical searches of reporters’ devices, homes, and belongings are “some of the most invasive investigative steps law enforcement can take,” Brown said, according to the RCFP.

The Society of Professional Journalists, the nation’s largest professional journalism organization, stated: “This is not just about one reporter, one newsroom, or one investigation. A democracy does not grow stronger by intimidating the press. It grows weaker.”

The Committee to Protect Journalists, an independent nonprofit that describes itself as promoting press freedom worldwide, called the search “a blatant violation of journalistic protections,” according to Katherine Jacobsen, the organization’s U.S., Canada, and Caribbean program coordinator.

Reason magazine’s J.D. Tuccille argued from a libertarian perspective that the search represents “harassment of a journalist who annoyed powerful people” and that “the government doesn’t get to torment people who receive and publish information that’s inconvenient to the powers that be,” according to Reason.

A coalition of 31 press freedom and civil liberties organizations, including the Electronic Frontier Foundation, a nonprofit that describes itself as defending digital privacy, free speech, and innovation, issued a joint statement calling the search “exactly the kind of scenario our First Amendment was conceived to protect against,” according to Free Press.

Legal challenge and legislative proposals

The Washington Post filed two motions in the U.S. District Court for the Eastern District of Virginia seeking to block government review of Natanson’s materials and compel the return of her devices. The Post called the seizure an “unconstitutional prior restraint” that “chills speech, cripples reporting, and inflicts irreparable harm every day the government keeps its hands on protected materials,” according to the Post’s court filing.

U.S. Magistrate Judge William B. Porter granted a standstill order on January 21, ruling the government must preserve but must not review any seized materials. Oral arguments were scheduled for February 6.

Within hours of the search, the Reporters Committee for Freedom of the Press filed in federal court seeking to unseal the search warrant materials and later filed an amicus brief urging the court to order the return of Natanson’s devices.

On Capitol Hill, bipartisan proposals have stalled. The PRESS Act, a federal reporter’s shield law co-sponsored by Rep. Kevin Kiley (R-CA), Rep. Jamie Raskin (D-MD), Sen. Dick Durbin (D-IL), Sen. Lindsey Graham (R-SC), Sen. Mike Lee (R-UT), and Sen. Ron Wyden (D-OR), passed the House unanimously in January 2024 but was blocked in the Senate after Trump called on Republicans to “kill this bill.” The law would have barred the federal government from using subpoenas, search warrants, or other compulsory actions against journalists to force disclosure of confidential sources.

Rep. Rashida Tlaib (D-MI) has proposed the Daniel Ellsberg Press Freedom and Whistleblower Protection Act, which would require the government to prove specific intent to harm the United States, create an affirmative defense for public-interest revelations, and preclude use of the Espionage Act against journalists and publishers.

The chilling effect on sources and reporting

Georgetown Law Professor Steven Vladeck warned the government may be “using the excuse of a contractor investigation as a pretextual basis for trying to obtain the identities of Natanson’s sources inside the executive branch unrelated to the contractor’s alleged offenses,” according to The Fulcrum.

The practical scope of the seizure underscores that concern. The devices now in government hands contain years of professional communications, identities of 1,169 confidential sources, and story drafts, effectively giving federal investigators access to the working files of a reporter whose beat is the federal government itself.

Chip Gibbons, policy director of Defending Rights & Dissent, an organization that has advised members of Congress on reforming the Espionage Act, argued that the raid is “the product of decades of backsliding” on press freedom protections, tracing a line from the Obama-era leak prosecutions through the Assange indictment to the Natanson search, according to the Guardian.

House Judiciary Ranking Member Jamie Raskin (D-MD) and Oversight Ranking Member Robert Garcia (D-CA) demanded answers from FBI Director Kash Patel and AG Bondi, calling the search an attack on Natanson’s communications with whistleblowers.

The Washington Post editorial board called the search “an aggressive attack on the press freedom of all journalists,” according to The Hill. Post editor Matt Murray voiced support for Natanson in a note to staff, and the newspaper stated: “Anyone who believes the raid will deter reporters from doing their jobs is sorely mistaken.”

The drop is not an accident. State lawmakers in 2024 created and expanded targeted tax credits, including the Family Affordability Tax Credit and an expanded Earned Income Tax Credit, that draw from the same TABOR surplus pool. Those credits provided over $1.2 billion to qualifying taxpayers in 2024. The more money paid through targeted credits, the less remains for the general refund that goes to every filer.

Now Democratic lawmakers, backed by the Colorado Education Association, are considering asking voters in November to raise the TABOR spending cap by approximately $4.5 billion, the equivalent of the entire K-12 general fund budget. If approved, the legislature would gain permanent access to surplus revenue that currently must be refunded.

What TABOR requires and how the refund works

TABOR, formally Article X, Section 20 of the Colorado Constitution, was approved by voters in 1992 with 54% support. Written by Douglas Bruce after two failed attempts in 1988 and 1990, it limits annual growth in state revenue to the rate of inflation plus population growth. Any revenue collected above that cap must be refunded to taxpayers unless voters explicitly approve keeping it. Colorado is the only state with a constitutional TABOR; similar proposals have reached ballots in at least five other states and all were rejected.

The TABOR cap for 2025 allowed 3.7% revenue growth, calculated from 2.3% inflation plus 1.4% population growth. When actual collections exceed that cap, the surplus is returned through mechanisms set by the legislature: income tax rate reductions, sales tax refunds, or flat checks.

The Colorado Department of Revenue administers the refund process. In recent years, lawmakers have used several different refund mechanisms. In 2023, they sent flat $750 checks to every filer via SB22-233. In 2024, flat $800 checks went out through SB23B-003. For the 2024 tax year, SB24-228 restructured the refund into a temporary income tax rate reduction from 4.40% to 4.25% plus a six-tier, income-based sales tax refund ranging from $177 to $565 per single filer.

How the refund shrank from $800 to $20

The state controller certified a TABOR surplus of $296.1 million for fiscal year 2024-25, according to FOX31 Denver. After correcting for a $2.7 million overrefund from the prior year, the total available for refunds is $293.3 million.

That figure is dramatically smaller than the surpluses of the preceding three years, during which $8.5 billion was returned to taxpayers, according to the Colorado Fiscal Institute, a nonprofit whose stated mission is “to advance equity-focused fiscal and economic policies that support working families and dismantle structural barriers to shared wealth and power in Colorado.”

The 2026 refund will arrive as a modest income tax rate reduction from 4.40% to 4.36% plus a sales tax refund. Single filers will receive between $20 and $62 depending on income. Joint filers will receive between $40 and $124, as reported by CPR News. For a median earner making approximately $50,000, the refund works out to about $47, according to the Colorado Fiscal Institute.

By comparison, single filers received between $177 and $565 in the prior year.

Why the surplus disappeared

Two factors explain the decline: new tax credits consuming the surplus and reduced state revenue from federal tax changes.

The largest factor is the creation and expansion of targeted tax credits. In 2024, the legislature passed HB 24-1311, creating the Family Affordability Tax Credit, and HB 24-1134, expanding the state’s Earned Income Tax Credit to match 50% of the federal credit. Together, these credits provided over $1.2 billion to qualifying taxpayers in 2024, according to The Denver Post.

Because Colorado’s TABOR refund mechanism distributes the surplus, money paid through FATC and the expanded EITC reduces the pool available for general refunds. CPR News reported that these new credits are a primary reason refunds are shrinking.

The FATC provides up to $3,273 per child under age 6 and up to $2,455 per child ages 6 through 16 for families earning up to $85,000 (single) or $96,000 (joint). Nearly 300,000 filers qualified in 2024, receiving an average of $2,700. The expanded EITC reached over 330,000 filers at an average of $1,191.

The second factor is the federal budget bill known as H.R. 1, signed into law in 2025. Because Colorado’s tax code mirrors federal law, federal tax breaks for individuals and businesses reduced Colorado’s state revenue by an estimated $87 million, according to Colorado Politics. Gov. Polis blamed the federal bill for contributing to the revenue decline and warned of a tight fiscal outlook.

“This is a prudent proposal that reflects the current fiscal environment and the negative impacts that H.R. 1 imposes on Colorado while maintaining a budget reserve that will help insulate us from a heightened recession risk,” Gov. Polis said in January.

The combined effect is severe. For fiscal year 2025-26, revenue is projected to fall $308 million below the TABOR cap, according to the governor’s office. That means zero TABOR refunds for tax year 2026, the first time refunds have disappeared since the start of the pandemic.

The poverty reduction tradeoff

Democrats and advocates argue the targeted credits deliver far more impact than small flat refunds ever could.

Research from Washington University and Appalachian State University found that Colorado’s expanded tax credits cut child poverty by 40.5%, giving the state the lowest rate of childhood poverty in the nation, according to The Denver Post.

“It’s disappointing to know we’re in this situation, when these credits… did have such a tremendous impact on low-income Coloradans,” Rep. Emily Sirota told The Denver Post.

The math, from a progressive standpoint, favors targeted credits. A median-income single filer receives roughly $47 in a general TABOR refund. A qualifying family with two children under 6 could receive over $6,500 through the FATC alone. Proponents argue that concentrating the surplus on low- and middle-income families addresses housing affordability and childhood poverty more effectively than distributing small flat amounts to all filers.

But the credits face a sustainability problem. Starting with 2027 tax filings, the EITC match will be reduced from 50% to 25%, and the FATC will shut off entirely due to budget constraints, The Denver Post reported.

TABOR defenders say the surplus belongs to taxpayers

Supporters of TABOR argue the shrinking refund is exactly the problem the amendment was designed to prevent: government finding ways to keep money that belongs to the people who earned it.

Jon Caldara, president of the Independence Institute, an organization that describes itself as “an action tank” promoting individual freedom, economic freedom, and journalistic freedom, has been the most vocal critic of the tax credit approach.

“What would you do if you bought a $15 item with a $20 bill and the cashier refused to give you back your $5 change?” Caldara wrote. He argues that “the meteoric increase in targeted tax breaks over the past few years drains the TABOR surplus by redirecting the revenue towards narrower and narrower interests,” according to an Independence Institute analysis.

“TABOR’s real crime is not shrinking government, because it doesn’t. It’s reminding government who it works for,” Caldara wrote in Colorado Politics.

Caldara contends that despite claims TABOR constrains government, Colorado’s state government has expanded substantially since the amendment passed. He cites General Fund spending up 44%, non-General Fund revenues (fees) up 588%, and federal spending by the state up 278% since the early 1990s. State government employment has increased 189% compared to 61% for the private sector, he wrote, arguing that two-thirds of state government now operates outside democratic control through enterprise fees and other TABOR-exempt mechanisms.

The Independence Institute argues the surplus should instead be used to buy down the income tax rate for all taxpayers, providing broad relief rather than funding credits targeted at specific populations.

Sen. Byron Pelton (R-Sterling) echoed that view in the legislature. “I don’t mind tax credits… But doing a tax holiday where you don’t have to pay taxes at all? That just helps families across the state,” Sen. Pelton told The Colorado Sun.

The ballot measure to permanently raise the cap

The debate over shrinking refunds has escalated into a push to fundamentally alter TABOR’s spending limit.

Democratic lawmakers and the Colorado Education Association, a teachers union that represents nearly 40,000 educators, are advancing a ballot measure for November 2026 that would raise the TABOR spending cap by the entire K-12 general fund budget, approximately $4.5 billion, as reported by Chalkbeat Colorado and The Colorado Sun.

The measure would prioritize increasing education spending by at least 2% annually, approximately $90 million in the first year. Proponents point to an estimated $3.5 to $4.1 billion gap between current education spending and adequate funding levels.

“We need to see some advancement and some improvement in our funding. Otherwise, we’re just going to be floundering like we have in these last few years,” Kevin Vick, president of the CEA, told Chalkbeat Colorado.

Sen. Jeff Bridges (D-Greenwood Village), vice chair of the Joint Budget Committee and a lead sponsor, framed the measure as necessary for stability. “We are fighting every year to just keep what we’ve been able to accomplish. This allows us to not only do that, but to continue to invest in our schools,” Sen. Bridges told Chalkbeat Colorado.

Democrats hold wide legislative majorities and need only a simple majority to refer the measure to the ballot. CEA polling shows 2-to-1 voter support for forgoing TABOR rebates to fund education.

But the proposal could also complicate the very tax credit strategy Democrats have favored. The Colorado Sun reported that if lawmakers gain the ability to grow the general fund through a raised cap, it could become harder to pass individual tax credits, because lawmakers would face a choice between directing surplus to credits or to general fund priorities like smaller class sizes.

“In that situation, you have to choose. Do we want to choose to have a bunch of one-off tax credits? Or do we want smaller class sizes, better paid teachers and students that are ready for Colorado’s workforce?” Sen. Bridges told The Colorado Sun.

Republicans push back on the premise

Republican lawmakers reject the argument that Colorado has a revenue problem, contending the issue is spending growth.

“We’re not in a recession. It’s not like we have less revenues coming in,” Sen. Barbara Kirkmeyer (R-Weld) told Chalkbeat Colorado.

“It’s time for our colleagues across the aisle to quit placing blame on others, quit placing blame on TABOR, and to get down to work,” Sen. Kirkmeyer told The Colorado Sun.

Colorado voters have rejected previous attempts to alter TABOR’s refund structure. Proposition CC in 2019 would have allowed permanent retention of the surplus and failed 54% to 46%. Proposition HH in 2023 would have used the surplus for property tax relief and failed 60% to 40%. Those results suggest the electorate is skeptical of broad changes, though proponents note that voters have approved targeted uses of surplus revenue, including Proposition FF (school meals, 2022), Proposition 123 (affordable housing, 2022), and Proposition LL (school meal revenue retention, 2025).

The TABOR paradox: surplus and deficit at the same time

One of the most unusual features of Colorado’s fiscal situation is that the state can run a budget surplus and a budget deficit simultaneously.

“Colorado is running a budget deficit and a budget surplus at the same time,” the Colorado Fiscal Institute explained. The TABOR surplus exists because revenue exceeded the constitutional cap. The budget deficit exists because the cost of government services grows faster than the cap allows revenue to grow.

The TABOR cap permits revenue growth of approximately 3.7% per year. But spending on programs like Medicaid and the Child Health Plan Plus needed to increase by 6% to 7% each year, according to the Colorado Fiscal Institute. That structural gap means the state can collect more money than TABOR allows it to keep while still lacking the funds to maintain existing services.

For fiscal year 2025-26, the state faces an $850 million budget shortfall while simultaneously collecting revenue that in prior years would have generated a surplus. Over $1 billion was trimmed in the 2025 legislative session, and an August 2025 special session generated approximately $150 million by eliminating business tax breaks, according to The Colorado Sun.

The Bell Policy Center, a nonprofit research and advocacy organization that describes its mission as ensuring “economic mobility for every Coloradan”, argues TABOR is the most restrictive tax and spending limit in the nation and prevents the state from responding to changing economic conditions. The center notes that Colorado families earning under $156,000 annually pay a larger percentage of income in taxes than wealthier residents, in part because TABOR prohibits a graduated income tax.

What comes next

The 2026 legislative session includes several new tax credit proposals that would further draw from any future TABOR surplus: HB26-1048 (a back-to-school sales tax holiday), SB26-029 (income tax credit for health savings account contributions), HB26-1014 (a business tax credit for job creation), HB26-1015 (a tax credit for contributions to homelessness reduction projects), and HB26-1065 (a housing development near transit incentive), according to The Colorado Sun.

State economists project that TABOR refunds will return at modest levels in fiscal year 2026-27, with a projected surplus of $208.2 million generating refunds of roughly $47 to $300 per filer. Continued modest growth is expected in subsequent years.

But if voters approve the ballot measure to raise the TABOR cap, those future surpluses could be absorbed into the general fund rather than returned. The measure remains “in flux,” according to Chalkbeat Colorado, and its details could change significantly before it reaches voters.

A separate citizen-initiated measure from the Protect Colorado’s Future coalition, which includes the Bell Policy Center, would replace the flat income tax with a graduated structure, lowering taxes for 98% of Coloradans while raising rates on incomes above $500,000. Eight versions have been approved by the Title Board, though funding for signature collection remains unclear.

The fundamental question facing Colorado voters in November is whether TABOR’s refund mechanism should continue operating as designed, returning surplus revenue to the people who paid it, or whether the state’s structural budget constraints justify giving the legislature permanent access to that money.

The standoff pits two Republican priorities against each other: the administration’s desire to install its chosen Fed chair and its simultaneous pursuit of a criminal probe that the nominee’s own party allies say has no legitimate basis.

A probe rooted in a building renovation

The investigation traces back to June 25, 2025, when Chairman Powell testified before the Senate Banking Committee about a $2.5 billion renovation of the Marriner S. Eccles Federal Reserve Board Building in Washington. Under questioning, Powell denied that renovation plans included luxury features such as VIP dining rooms, special elevators, new marble installations, water features, and a roof terrace garden. The project’s cost had grown from an original estimate of $1.9 billion, according to CNN.

Rep. Anna Paulina Luna, R-Fla., formally referred Powell to the DOJ on July 19, 2025, alleging perjury and false statements. Luna claimed that official project documents submitted to the National Capital Planning Commission contradicted Powell’s testimony. The investigation was approved in November 2025 by Jeanine Pirro, U.S. Attorney for the District of Columbia, according to Fortune.

On January 9, 2026, the DOJ served grand jury subpoenas on Powell and other Fed officials. It was the first time in the Federal Reserve’s 113-year history that a sitting chairman faced potential prosecution from a presidential administration, according to PBS NewsHour. No criminal charges have been filed.

Powell’s defiant response

Two days after the subpoenas were served, Powell released a video statement on January 11 characterizing the probe as a pretext for political retaliation over interest rate decisions.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell said in the statement.

Powell framed the dispute as a test of central bank independence. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation,” he said.

Powell has stated he will not resign and that he intends to serve through the expiration of his chairmanship in May 2026. His term as a member of the Fed’s Board of Governors does not expire until January 31, 2028, meaning he could remain on the board as a governor even after his chairmanship ends.

The relationship between President Trump and Powell has been fraught for years. Trump appointed Powell as Fed chair in 2017, and the Senate confirmed him in early 2018 on a 22-1 Banking Committee vote. The relationship soured as the Fed raised interest rates, with Trump telling The Washington Post he was “not even a little bit happy” with his selection. In April 2025, Trump said Powell’s “termination cannot come fast enough,” according to CBS News. He later said he had “no intention” of firing Powell. In January 2026, Trump called Powell “that jerk” during a speech at the Detroit Economic Club, according to CNBC.

Tillis draws his line

The Warsh nomination arrived on January 30, 2026, and with it came an immediate obstacle. Sen. Thom Tillis, R-N.C., a member of the Senate Banking Committee who is not seeking reelection, announced the same day that he would block all Fed nominees until the investigation is resolved.

“I will oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved,” Tillis said in a statement.

“Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable,” he added.

Tillis’s position carries unusual weight because of the Senate Banking Committee’s composition. Republicans hold a 13-11 majority on the committee. With Tillis refusing to vote for any Fed nominee, the result is a 12-12 deadlock that prevents Warsh’s name from reaching the Senate floor for a full vote, according to CNBC.

Senate Majority Leader John Thune acknowledged the math when reporters asked whether Warsh could be confirmed without Tillis’s support. “Probably not,” Thune said.

Tillis is not alone. Sen. Lisa Murkowski, R-Alaska, backed his position after speaking with Powell directly. “After speaking with Chair Powell this morning, it’s clear the administration’s investigation is nothing more than an attempt at coercion,” Murkowski said in a statement.

Other Republicans have expressed concern without explicitly joining the blockade. Sen. Kevin Cramer, R-N.D., said Powell “is a bad Fed Chair who has been elusive with Congress” but added, “I do not believe however, he is a criminal. I hope this criminal investigation can be put to rest quickly along with the remainder of Jerome Powell’s term,” according to NBC News. Sen. Susan Collins, R-Maine, said she “believe[s] strongly in the independence of the Federal Reserve” and called the potential indictment “not something I ever would have expected.”

The off-ramp that wasn’t

The administration has attempted to find a resolution. Treasury Secretary Scott Bessent floated a proposal in early February to shift the Powell investigation from the DOJ to the Senate Banking Committee, effectively converting the criminal probe into a congressional oversight matter, according to CNBC.

Tillis rejected the offer.

“I have no intention of allowing any Fed board nominee to move forward out of committee and to be confirmed, until this matter is settled,” Tillis said in a Bloomberg TV interview on February 12. While he welcomed additional oversight of the renovation project, he maintained that the DOJ probe itself must be fully resolved before he would lift his hold. Tillis also said he would keep his block even if the DOJ agreed to drop the investigation in exchange for Powell leaving, according to CNBC.

Secretary Bessent has indicated he believes Banking Committee Republicans will proceed with a confirmation hearing for Warsh regardless of Tillis’s position. But a hearing without the votes to advance a nominee out of committee is largely symbolic.

Notably, Bessent himself expressed concern about the probe’s impact. He was reportedly “unhappy” with the decision to criminally investigate Powell, concerned it would negatively affect financial markets.

The renovation at the center of the dispute

Administration supporters argue the investigation concerns legitimate questions of government accountability, not monetary policy. The $2.5 billion headquarters renovation represents a $600 million cost overrun from the original $1.9 billion estimate. The DOJ probe alleges Powell’s testimony about the project’s features was inaccurate and that official project documents submitted to the National Capital Planning Commission contradicted his statements to the Senate.

Rep. Luna’s referral pointed to specific discrepancies between Powell’s denials and planning documents related to VIP dining rooms, premium marble, water features, and a roof terrace garden. Luna also claimed Powell falsely stated the Eccles Building “never had” a serious renovation, despite a major overhaul between 1999 and 2003.

No institution is above congressional oversight, and cost overruns on a $2.5 billion public project are a legitimate subject of inquiry. The question at the center of the standoff is whether a criminal investigation of a sitting Fed chair, approved by a presidential ally who heads the D.C. federal prosecutor’s office, is the appropriate vehicle for that oversight, or whether it serves a different purpose.

A bipartisan and global backlash

The probe triggered a response that crossed party lines and international borders. On January 12, a joint statement signed by former Fed chairs Alan Greenspan, Ben Bernanke, and Janet Yellen, along with former Treasury Secretaries Henry Paulson, Timothy Geithner, Robert Rubin, and Jacob Lew, called the investigation “an unprecedented attempt to use prosecutorial attacks to undermine” Fed independence, according to CNBC.

The former officials drew a sharp comparison. “This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly,” they wrote. “It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.”

The following day, an unprecedented joint statement from international central bank leaders declared “full solidarity” with Powell. Signatories included ECB President Christine Lagarde and Bank of England Governor Andrew Bailey, along with central bank chiefs from Brazil, Switzerland, Sweden, Denmark, South Korea, Australia, and Canada, according to the ECB. They affirmed that central bank independence is “a cornerstone of price, financial and economic stability.”

What Warsh would bring to the Fed

The nominee caught in the crossfire is Kevin Warsh, 55, a former Fed governor and Morgan Stanley investment banker who served as an economic aide in the George W. Bush administration. He was the youngest Fed governor in history when appointed at age 35, serving from 2006 to 2011 and playing a central role as the board’s liaison to financial markets during the 2008 financial crisis, according to CNBC.

Warsh currently serves as Shepard Family Distinguished Visiting Fellow at the Hoover Institution and lecturer at the Stanford Graduate School of Business.

Tillis has gone out of his way to note that his blockade is not about Warsh personally. He called Warsh a “qualified nominee with a deep understanding of monetary policy,” according to CNBC. Warsh holds a J.D. from Harvard Law School rather than a Ph.D. in economics, which is unusual for a Fed chair. “The Fed’s culture is Ph.D. economists on top,” noted Aaron Klein, speaking to PBS NewsHour. But supporters point to his direct experience at the Fed. “He’s not some outsider…he has been at the Fed,” said Mark Gertler, an economics professor at New York University.

Warsh has historically been considered a monetary policy hawk and a consistent opponent of quantitative easing. More recently, he argued in a November 2025 Wall Street Journal piece that the Fed should lower rates, driven by his view that productivity gains warranted greater easing.

What markets are signaling

Financial markets have reacted to both the investigation and the nomination uncertainty. When the probe became public in January, gold surged to a record near $4,630 per ounce on January 12 before stabilizing above $4,600. Stocks were more muted; the S&P 500 rose 0.16% and the Dow gained 0.17%, both reaching new all-time intraday highs on January 12.

The Warsh nomination day on January 30 told a different story. The Dow fell 519 points, or 1.06%. The S&P 500 dropped 0.78% and the Nasdaq fell 1%. Gold futures sank more than 11% and silver futures plunged more than 31%, while the dollar rallied and the Treasury curve steepened.

The divergent reactions capture the tension. The initial market read on the probe was that it would not change Fed policy. The nomination day sell-off reflected concerns about the broader uncertainty surrounding who will lead the Fed and when. Carsten Menke of Julius Baer noted that “increased interference with the Fed is a key bullish wildcard for precious metals in 2026.”

Goldman Sachs’ top economist said the probe would not alter Fed decisions, which will continue to be “based on employment and inflation,” according to Fortune.

The clock is ticking

The math of this standoff is unforgiving. Powell’s chairmanship expires in May. The Banking Committee is deadlocked 12-12 without Tillis. Even if the administration found a way to bypass the committee, four Republican no votes on the Senate floor would sink the nomination, assuming all Democrats vote against. Tillis and Murkowski already account for two.

Historical precedent offers limited guidance. The last time a Fed chair was replaced against his will was in 1948, when President Truman removed Marriner Eccles. Eccles continued serving as a governor until 1951. The Nixon-era pressure on Fed Chair Arthur Burns to adopt expansionary policy before the 1972 election led to high inflation and lasting economic damage. A University of Maryland study found that political pressure on the Fed at even half the level Nixon applied, sustained for six months, raises the U.S. price level by more than 8%.

The open questions are significant. If no successor is confirmed by May, succession mechanics become untested territory. Board members of independent agencies can only be removed “for cause” under the 1935 Supreme Court ruling in Humphrey’s Executor v. United States, which affirmed Congress’ authority to insulate independent agency leaders from presidential removal. The Federal Open Market Committee technically has the power to select its own chair.

The administration must decide whether the Warsh nomination or the Powell investigation is the higher priority. As currently structured, it cannot have both.

—

The looming deadline sets up a collision between national security officials who call Section 702 “simply indispensable and irreplaceable” and a bipartisan coalition of lawmakers and civil liberties groups who argue the law violates the Fourth Amendment by allowing warrantless searches of Americans’ private communications.

What Section 702 authorizes

Section 702, first enacted in 2008 after intelligence gaps identified in the aftermath of the September 11 attacks, allows the NSA to conduct electronic surveillance of non-U.S. persons reasonably believed to be located outside the United States. Rather than requiring individual warrants for each target, the Foreign Intelligence Surveillance Court (FISC) issues programmatic certifications authorizing surveillance categories for up to one year at a time.

The NSA collects communications from specific foreign targets, including messages routed through U.S. companies or stored on U.S. servers, with compelled assistance from American technology and telecommunications providers. Approximately 10,000 government personnel have authority to query the resulting database, according to a Congressional Research Service report.

When foreign targets communicate with Americans, those conversations are collected as well. The intelligence community calls this “incidental collection.” The constitutional controversy centers on what happens next: intelligence agencies can search that database using Americans’ names, phone numbers, and email addresses, all without a warrant. Critics call these “backdoor searches.”

Why the program is contentious

The FBI’s use of backdoor searches has been the central flashpoint in the debate.

Between 2020 and early 2022, FBI personnel conducted more than 278,000 searches that did not meet legal standards. The FISC characterized these as “persistent and widespread violations.” Targets of improper queries included 141 Black Lives Matter protesters, more than 19,000 donors to a congressional campaign, two members of Congress, journalists, and, in one instance, an analyst’s online dating app matches, according to declassified FISC opinions released in 2023.

In 2021 alone, the FBI conducted approximately 3.4 million warrantless searches of Section 702 data using U.S. person identifiers.

The scale of misuse triggered what George Croner of the Penn Center for Ethics and the Rule of Law described as “the most contentious debate over the renewal of Section 702 since its passage by Congress in 2008,” according to a Penn CERL analysis.

What changed in 2024

Congress reauthorized Section 702 through the Reforming Intelligence and Securing America Act (RISAA), signed into law April 20, 2024. The law imposed 14 major FBI querying restrictions, including supervisory and attorney approval for all U.S. person queries, mandatory Justice Department audits, annual training requirements, and Deputy Director approval for queries involving elected officials or media. Congress also mandated quarterly FBI reporting to intelligence and judiciary committees.

A warrant requirement amendment led by Rep. Andy Biggs (R-AZ) failed on a 212-212 tie. In the House, ties fail. The vote split 128 Republicans and 84 Democrats in favor against 86 Republicans and 126 Democrats opposed, illustrating the unusual political alignment that the debate produces: the pro-warrant coalition bridges the populist right and the progressive left.

House Speaker Mike Johnson shortened the reauthorization window from the typical five or more years to just two years, the shortest extension ever granted, specifically to secure enough Freedom Caucus votes by deferring the broader fight to a potential Trump administration, according to the Penn CERL analysis.

That two-year clock runs out on April 20, 2026.

Whether the reforms worked

By several measurable indicators, the 2024 reforms produced significant changes. FBI queries dropped approximately 90 percent, from roughly 57,000 in the 2022-2023 reporting period to roughly 5,500 in the 2023-2024 period, according to Lawfare. A March 2025 FISC opinion indicated that noncompliance is diminishing. An October 2025 Department of Justice Inspector General report confirmed that “the FBI is no longer engaging in the widespread noncompliant querying of U.S. persons that was pervasive just a few years ago,” according to the Brookings Institution.

Civil liberties organizations acknowledge the statistical improvement but argue it proves only that the FBI needed external constraints, not that the underlying structure is sound. The ACLU, which describes itself as working “to realize this promise of the United States Constitution for all,” stated: “Reauthorizing 702 without meaningful reforms would double down on a system that has seen repeated and systemic abuses.”

Elizabeth Goitein of the Brennan Center for Justice, which describes itself as “an independent, nonpartisan law and policy organization,” testified at both House and Senate hearings that “the law is failing to protect Americans from warrantless surveillance.”

The constitutional question

In December 2024, Judge LaShann DeArcy Hall of the U.S. District Court for the Eastern District of New York ruled that searches of Section 702 databases using U.S. person identifiers are protected by the Fourth Amendment and must be performed pursuant to a warrant or a recognized exception. The ruling, declassified January 21, 2025, was the first time a federal court found backdoor searches unconstitutional, according to the Electronic Frontier Foundation, a nonprofit that describes itself as “the leading nonprofit organization defending civil liberties in the digital world.”

The case, United States v. Hasbajrami, involved more than a decade of litigation. Agron Hasbajrami was arrested at JFK Airport in 2011 on charges of providing material support to terrorism. The government’s case relied partly on emails collected warrantlessly under Section 702 and then searched without a warrant.

The court found that even if the initial collection of communications between foreigners and Americans is lawful, the government cannot ordinarily rely on a “foreign intelligence exception” to the Fourth Amendment when subsequently searching those communications. A separate 2019 FISC opinion also found that certain FBI backdoor searches violated the Fourth Amendment.

What the intelligence community says it stands to lose

Intelligence officials describe Section 702 as one of the most powerful tools for detecting terrorist plots, foreign espionage, and cyberattacks.

In 2023, the FBI used Section 702 to disrupt a potentially imminent terrorist attack after identifying a subject who had researched specific critical infrastructure sites inside the United States. Iterative U.S. person queries helped investigators stay ahead of the plot, officials said. Section 702 has also been used to uncover kidnapping and assassination plots by foreign governments, reveal Iranian hackers’ research about a former senior U.S. official, and identify Chinese hackers’ intrusions into a network used by a key U.S. transportation hub.

The program has shifted from a primarily counterterrorism tool to one central to cybersecurity. A senior FBI adviser confirmed that approximately half of FBI Section 702 database searches now relate to investigating malicious state-sponsored cyberattacks. Deputy Attorney General Lisa Monaco stated that Section 702 contributed to a decline in ransomware victim payments to 34 percent and played an important role in the government’s response to the Colonial Pipeline cyberattack in 2021.

Glenn Gerstell, former NSA General Counsel, characterized 702 as “one of the most powerful tools” while acknowledging that “the political atmosphere on both Republicans’ and Democrats’ sides is very fraught.”

Intelligence officials argue that requiring prior court approval for U.S. person queries would “cripple the program’s effectiveness” by introducing delays that prevent timely responses to emerging threats.

Where the administration stands (and doesn’t)

The Trump administration has taken no public position on whether to renew, reform, or allow Section 702 to expire.

“We are three months from the expiration of Section 702 and the Trump administration, as best as I can discern, still has no official position on it. That is stunning,” Sen. Chris Coons (D-DE) said, as reported by The Intercept.

No administration officials attended the Senate Judiciary Committee hearing on January 28, 2026. A White House spokesperson said only that “the administration is having productive discussions” and declined further elaboration. Lt. Gen. Joshua Rudd, the nominee to serve as NSA director, declined to take a stance on warrant requirements at his confirmation hearing, stating he would “need to look into” the topic.

Director of National Intelligence Tulsi Gabbard broke with typical intelligence community positioning by stating that warrants “should generally be required before an agency undertakes a U.S. Person query of FISA Section 702 data, except in exigent circumstances, such as imminent threats to life or national security,” according to Nextgov/FCW.

On February 10, 2026, the White House convened a meeting to discuss Section 702 renewal. Attendees included President Trump, CIA Director John Ratcliffe, DNI Gabbard, Joint Chiefs Chairman Dan Caine, White House Chief of Staff Susie Wiles, Deputy Chief of Staff Stephen Miller, and Republican Reps. Jim Jordan (OH) and Rick Crawford (AR). No Democrats were invited.

President Trump has given contradictory signals on FISA. During the 2024 campaign, he called to “kill” FISA, referencing FBI investigations into his 2016 campaign and the Carter Page surveillance warrants. Yet his first administration ultimately allowed short-term reauthorizations. The contrast with the Biden administration is stark: Biden officials began publicly signaling support for reauthorization nearly 11 months before the previous sunset date, according to Lawfare.

What reform advocates are pushing for

A broad bipartisan coalition of civil society organizations has coalesced around four core demands: requiring warrants for U.S. person queries, closing the data broker loophole to prevent government circumvention of constitutional protections through commercial data purchases, strengthening FISC judicial review, and narrowing the expanded definition of “electronic communications service provider” that RISAA controversially broadened, according to EPIC, the Electronic Privacy Information Center, which describes itself as an organization that “focuses public attention on emerging privacy and civil liberties issues.”

In December 2025, a coalition organized by Defending Rights and Dissent, which describes itself as working “to protect the right of political expression,” sent a letter to House Judiciary Committee members outlining reform priorities ahead of the committee’s December 11 hearing. More than two dozen organizations co-signed.

The Center for Democracy and Technology, which describes itself as working “to advance civil rights and civil liberties in the digital age,” argues that a warrant rule with exceptions for consent, malware identification queries, and metadata queries would address the main areas where U.S. person queries have proven useful while protecting civil liberties, according to CDT.

The Reform Government Surveillance coalition, comprising major U.S. technology companies including Apple, Google, Microsoft, and Meta, published its own recommendations in December 2025. The industry group called for reducing data retention from five to three years, narrowing transparency reporting bands so companies can report FISA requests with greater granularity, sunsetting the expanded ECSP definition, and filling four vacancies on the Privacy and Civil Liberties Oversight Board, according to the coalition’s recommendations.

The bipartisan lineup pushing for warrants

On February 11, 2026, Senators Dick Durbin (D-IL) and Mike Lee (R-UT) announced they would reintroduce the SAFE Act, the Security and Freedom Enhancement Act, which would mandate warrant requirements for U.S. person queries and clarify language regarding which entities can be compelled to assist with surveillance, according to Nextgov/FCW.

“Section 702 is being used to conduct thousands of warrantless searches of Americans’ private communications. That’s unacceptable,” Sen. Durbin said. Sen. Lee added: “Americans should not have to fear warrantless spying from their own government.”

The bipartisan reform push draws from distinct but overlapping motivations. Republicans, particularly those aligned with the Freedom Caucus, are primarily animated by FBI misuse of FISA during the Carter Page surveillance and investigations of President Trump’s 2016 campaign. Democrats focus on documented FBI queries targeting BLM protesters, journalists, and the broader Fourth Amendment implications of mass warrantless surveillance.

The previous bipartisan Government Surveillance Reform Act was introduced by Senators Ron Wyden (D-OR) and Mike Lee (R-UT) alongside Representatives Warren Davidson (R-OH) and Zoe Lofgren (D-CA), with cosponsors spanning both parties and both chambers.

What happens next

Section 702 expires April 20, 2026. Congress has three possible paths forward.

First, lawmakers could pass a standalone reauthorization with reforms, most likely built around the SAFE Act framework. This is the route privacy advocates prefer but one that requires resolving the warrant question that deadlocked the House 212-212 in 2024.

Second, Congress could pursue a “clean extension” embedded within must-pass legislation like the National Defense Authorization Act, buying time while deferring the substantive debate. Rep. Jim Himes (D-CT) has assessed that reauthorization would be a “heavier lift” for Democrats despite compliance improvements, given broader distrust of Trump administration power assertions.

Third, if no action is taken, the authority lapses entirely. The U.S. government would lose its legal authority to compel technology companies and telecommunications providers to assist in targeting the communications of non-U.S. persons abroad for foreign intelligence purposes. The FBI has privately warned congressional staffers that such a lapse poses significant national security concerns.

No reauthorization bill has been introduced in the 119th Congress. The legislative calendar is tight, and the administration’s silence has left Congress without a clear signal about what kind of bill the White House would sign.

—

DOGE cut a net 242,000 federal positions between January and December 2025, a reduction exceeding 10% of the civilian workforce, according to the Cato Institute. The pace had not been seen since the military demobilizations following World War II and the Korean War. Yet federal outlays through the first 11 months of calendar year 2025 reached $7.6 trillion, roughly $248 billion higher than the same period in 2024.

The disconnect is structural, not incidental. Federal payroll accounts for approximately 10% of total spending. The remaining 90%, dominated by Social Security, Medicare, Medicaid, and interest on the national debt, runs on autopilot under mandatory spending laws that no executive action can alter. That arithmetic defined DOGE’s ceiling from the start; what it accomplished within those constraints is a matter of fierce debate.

The record: a historic downsizing

The raw numbers are striking by any historical measure. The federal workforce fell from 3.015 million employees in January 2025 to 2.744 million by November, according to Yahoo Finance, citing Brookings Hamilton Project data. Gross separations reached 271,000 over that period, with a net reduction of 242,000 after accounting for new hires.

Approximately 154,000 employees accepted a deferred resignation offer, according to the Office of Personnel Management. Nearly 60% of the total decline occurred in October, driven by a one-time civil service buyout. The reduction brought federal employment to levels not seen since late 2014, effectively reversing a decade of workforce growth in under 10 months.

Alex Nowrasteh, an analyst at the Cato Institute (a public policy research organization that describes its mission as promoting “individual liberty, limited government, free markets, and peace”), characterized it as “the largest peacetime workforce cut on record.”

The Department of Defense absorbed the largest raw number of reductions at 61,600 civilian positions, roughly 8% of its workforce. The IRS lost approximately 25% of its staff, prompting the agency’s inspector general to warn of likely disruptions to the 2026 tax filing season. The Department of Health and Human Services shrank from 82,000 to 62,000 full-time employees and closed half of its regional offices. The Social Security Administration planned a 12% staffing reduction and listed 47 field offices for closure, according to the Brookings Institution. USAID was effectively dismantled.

DOGE, initially led by Elon Musk, claimed $214 billion in slashed federal spending as of October 2025, according to the Washington Times. Musk departed after 130 days in May 2025, and the operation continued as a scaled-down, decentralized effort. It never approached the initial $2 trillion spending elimination goal. Analysts across the political spectrum found the claimed savings significantly overstated.

Why spending kept rising

The fiscal year 2025 budget tells the story of a structural mismatch. Total federal spending exceeded $7 trillion, a $301 billion increase over fiscal year 2024, according to Reason. The budget deficit reached $1.8 trillion, with DOGE contributing an estimated $8 billion in deficit reduction.

Eric Boehm, writing for Reason (a media organization dedicated to “free minds and free markets”), laid out the arithmetic. Mandatory entitlement programs increased by $245 billion. Interest on the national debt rose $80 billion. Pentagon spending grew by $38 billion. Veterans Affairs spending increased $41 billion. A 10% workforce cut, by the Cato Institute’s estimate, saves roughly $40 billion annually, a figure that is significant in isolation but modest against a $1.8 trillion deficit.

The Committee for a Responsible Federal Budget (a nonpartisan organization that describes itself as “committed to educating the public on issues with significant fiscal policy impact”) estimated that fiscal year 2026 discretionary appropriations total $1.653 trillion annualized, roughly $10 billion above fiscal year 2025 levels. Even with DOGE-enabled workforce savings, mandatory spending growth far outpaced any discretionary reductions.

Federal spending through November 2025 tracked closely with Congressional Budget Office projections, suggesting DOGE had no measurable impact on aggregate outlays. Tax collections did increase by $308 billion, nearly offsetting the spending growth, but those gains stemmed from economic activity rather than DOGE-driven policy.

The human toll: 350,000 displaced workers

More than 350,000 workers left the federal payroll during 2025, according to CNN. Many entered what the outplacement industry described as a brutally competitive job market. Employers announced only 507,647 planned hires in 2025, the lowest figure since 2010 and a 34% decline from 2024, according to Challenger, Gray & Christmas (a global outplacement and career transition firm).

DOGE-related actions were the leading reason for job cut announcements in 2025, accounting for 293,753 planned layoffs with an additional 20,976 attributed to downstream impacts on contractors and nonprofits, according to the Challenger report. The government sector saw a 703% surge in job cuts compared to 2024.

The geographic concentration of losses created regional economic stress. Virginia alone lost 23,900 federal jobs, wiping out six years of federal employment gains in 11 months, according to VPM, the Virginia Public Media outlet, citing Bureau of Labor Statistics data. Old Dominion University economists warned that the state was on the cusp of recession as of January 2026.

CNN documented individual cases of former workers accumulating tens of thousands of dollars in hospital costs after losing health coverage, relying on food stamps, seeking state utility assistance, and falling behind on mortgage payments. Highly specialized federal employees reported applying to dozens of positions without success months after separation, according to CNBC.

Some displaced workers found new roles through emerging placement programs. Civic Match, a nonprofit platform, connected nearly 200 former federal workers with local government jobs, with 40% placed in human resources or operational roles and 14% in public health or human services positions, according to Smart Cities Dive. The scale of displacement, however, far outpaced available support.

Service disruptions and contested costs

The workforce reductions produced measurable disruptions across multiple federal agencies. The Social Security Administration’s website crashed repeatedly in March, locking millions of users out of their accounts, according to the Washington Post. Research from the National Bureau of Economic Research found that SSA office closures lead to a 13% drop in disability benefit recipients in affected areas.

The National Institutes of Health absorbed $4 billion in funding cuts. Citizens for Responsibility and Ethics in Washington (an organization that describes itself as working to “build a government that is accountable, transparent and ethical”), estimated those cuts alone would eliminate $10 billion in economic activity. University of Maryland and University of Pennsylvania researchers estimated that health research cuts would cause $16 billion in annual economic losses and 68,000 jobs lost, according to CBS News.

The Partnership for Public Service estimated that DOGE actions cost taxpayers $135 billion when accounting for paid leave for tens of thousands of employees, rehiring mistakenly terminated workers, lost productivity, and related disruptions. That estimate did not include the cost of defending multiple lawsuits or lost IRS tax collections from the agency’s reduced enforcement capacity.

DOGE supporters counter that the cuts eliminated genuine waste, broke an entrenched culture of bureaucratic self-preservation, and created accountability mechanisms that did not previously exist. The Washington Times reported that DOGE inspired similar efficiency efforts in more than two dozen states, suggesting the initiative’s cultural impact may outlast its direct fiscal results.

The entitlement wall

The fundamental question DOGE’s first year exposed is not whether the federal workforce can be cut; it clearly can. The question is whether the political system will confront the mandatory spending programs that constitute roughly two-thirds of the federal budget.

Social Security, Medicare, and Medicaid combined for a $245 billion spending increase in fiscal year 2025 alone. Interest on the national debt added another $80 billion. These programs operate under permanent statutory authority. No executive order, no efficiency initiative, and no workforce reduction can alter their trajectory. Only Congress holds that power.

The Cato Institute’s assessment was direct: the only path to closing the deficit runs through Medicare, Social Security, Medicaid, and defense spending. Reason reached the same conclusion, noting that “cutting ‘silly government contracts and foreign aid’ won’t make a dent in the deficit.”

President Trump pledged during his campaign not to cut Social Security or Medicare. The administration has characterized entitlement reform as “a policy decision that belongs to voters” and Congress. Congress, for its part, possesses all the necessary authority but faces enormous electoral risk in reforming programs that serve tens of millions of Americans.

Some agencies have already begun rehiring workers and increasing spending after the initial DOGE push subsided, according to TIME. The FY2026 budget proposes further cuts but faces congressional resistance. Whether the 2026 midterm elections create political space for structural fiscal reform or punish the disruptions of the past year remains an open question.

DOGE demonstrated that the federal workforce is not untouchable. What it could not demonstrate is that touching it is sufficient.

—

For Colorado families earning the state’s median household income of roughly $97,000 and paying some of the highest housing costs in the nation, those added costs land on budgets that are already stretched. And the share borne by American consumers may be growing.

How much are tariffs costing households?

The headline estimate comes from the Tax Foundation, which projects the average household cost at $1,300 for 2026, up from $1,000 in 2025. The Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution, puts the figure higher at roughly $2,100 per household for the same period. The difference stems from modeling assumptions; both organizations are widely cited by policymakers of both parties.

These costs do not appear as a line item on a receipt. They are embedded in higher prices for goods across the economy, from appliances and clothing to building materials and vehicles. The Congressional Budget Office, the nonpartisan agency that provides official budget projections to Congress, estimates that tariffs have added 0.4 percentage points to annual inflation in both 2025 and 2026.

One factor that could dramatically change the picture: the U.S. Supreme Court is considering whether to overturn the administration’s use of emergency powers under the International Emergency Economic Powers Act to impose tariffs. If the court strikes down those IEEPA-based tariffs, the Tax Foundation estimates the per-household cost would drop to $400 and the weighted average rate would fall to 6.4%.

Who is actually paying?

The administration has argued that trade partners absorb much of the tariff cost through reduced profit margins. A February 12 study from the Federal Reserve Bank of New York tested that claim against the data and found the opposite: U.S. consumers and businesses paid nearly 90% of the $264 billion in tariff costs collected in 2025. Foreign exporters bore roughly 10%.

The breakdown shifted slightly over the year. From January through August 2025, 94% of costs fell on U.S. importers. By November, that share had eased to 86%, with foreign exporters absorbing 14%. The Fed researchers found that during the first eight months, foreign exporters “did not lower their prices at all.”

The cost burden also does not fall evenly across income levels. The Yale Budget Lab, a nonpartisan research center at Yale University, found that under the April reciprocal tariffs, households in the second-lowest income group lose 2.3% of disposable income, compared with 0.9% for the top income decile. That makes the tariff structure roughly 2.6 times more regressive than a flat tax.

Businesses have been absorbing a significant share of the cost so far. J.P. Morgan Research estimated that U.S. consumers paid about one-third of the tariff bill in 2025, with foreign exporters and U.S. businesses sharing the remaining two-thirds. Companies can absorb more than they could during the 2018-2019 tariff rounds because corporate profit margins are roughly 60% higher today. But J.P. Morgan warns that as margins compress later in 2026, consumers would begin paying a much larger share directly.

What products cost more?

Tariff rates vary sharply by product category. Penn Wharton Budget Model data from the University of Pennsylvania shows steel and aluminum facing the highest effective rate at 39.8%, followed by goods from China at 34.7%. Automotive imports carry a 15.3% effective rate; a 25% tariff on imported vehicles could add $2,500 to $20,000 to the price of a car depending on type and size.

Consumer goods seeing the sharpest price increases include:

Electronics. Prices on electronics and appliances could rise 30% to 40%, with laptops and smartphones facing potential increases of 40% to 50%, according to CNN Business tracking data. A new semiconductor tariff took effect January 15, 2026.

Clothing and footwear. Apparel prices are rising an estimated 17% under all current tariffs, according to the Yale Budget Lab. Leather goods such as shoes and handbags could see short-term increases of 23%, settling to 7% longer term.

Home appliances. Major appliance prices are rising more than twice as fast as overall inflation, according to the Brookings Institution. A basic refrigerator that cost $650 could now run closer to $776.

Furniture. Tariffs on kitchen cabinets, vanities, and upholstered wooden furniture were set to increase on January 1, 2026, with cabinets and vanities rising from 25% to 50% and upholstered furniture from 25% to 30%. However, President Trump signed a proclamation on December 31, 2025 delaying those increases to January 1, 2027; the current rate remains 25%, according to NAHB reporting on the delay and Brookings research on residential construction impacts.

The Colorado housing squeeze

For Colorado families, the sharpest intersection between tariff costs and daily life may be housing. The state ranks among the most expensive in the nation for housing costs, and tariffs on construction materials are making the problem worse.

Colorado’s effective tariff rate has increased sevenfold, from 3.0% to 21.0% since 2024, according to a Colorado State University Regional Economic Development Institute report. The 25% tariff on steel and aluminum, combined with a 10% tariff on softwood lumber, compounds costs for builders in a market where the Denver metro median home price already sits between $580,000 and $599,000.

The National Association of Home Builders, which describes its mission as striving “to protect the American Dream of housing opportunities for all,” reported in an April 2025 survey that tariffs have added an average of $10,900 per new home. Builder confidence has fallen below breakeven every month in 2025, with sentiment dropping into the high 30s by the fourth quarter.

The Brookings Institution estimates that tariffs add roughly $30 billion in total costs to residential construction investment nationwide, with approximately 90% of those costs falling on new home construction, including apartments. The national housing deficit already stands at 3.7 million to 4.9 million units.

The Colorado Office of State Planning and Budgeting had anticipated a 3.9% increase in housing permits for 2025 but revised the projection down to 0.5% after tariffs took effect. A projected 7.7% rebound for 2026 is now uncertain. Colorado regional press has reported an estimated 4,500 to 5,000 jobs at risk in metal-using sectors, especially construction.

What tariff supporters say

Supporters of the tariff strategy argue that short-term consumer costs are the price of achieving long-term strategic objectives.

The administration frames the tariffs as necessary to reshore manufacturing, reduce dependence on adversarial supply chains, and address persistent trade deficits it characterizes as a national security threat. Billions of dollars in reshoring investment announcements have followed the tariff actions. New Section 232 investigations have been launched into pharmaceuticals, rare earths, aircraft, drones, and robotics. Semiconductor fabrication plants are being built domestically under a combination of CHIPS Act incentives and tariff pressure.

On revenue, the tariffs collected $264 billion in 2025, a near-200% increase over the prior year, according to the Federal Reserve Bank of New York. The CBO projects that tariffs will reduce federal deficits by $3.0 trillion over the 2025-2035 period, including interest savings. That revenue is being used to offset tax cuts in the One Big Beautiful Bill Act reconciliation package.

The Coalition for Prosperous America, a pro-tariff organization, has disputed the Tax Foundation’s per-household figure as “economic malpractice,” arguing it ignores reshoring benefits, domestic production gains, and the strategic value of reducing dependence on China.

China’s share of U.S. imports has dropped from 15% to below 10%, a significant shift. However, the Fed study notes that much of that trade moved to Mexico and Vietnam rather than returning to U.S. production.

The trade-offs in sharper focus

Several data points complicate the reshoring narrative. Blue-collar manufacturing employment declined by 59,000 jobs in late 2025, the first such drop since the pandemic, according to the Tax Foundation. As of August 2025, 409,000 manufacturing positions remained unfilled, and projections suggest the industry may need 3.8 million new workers by 2033, with 1.9 million at risk of going unfilled.

The tax cut offset is also a moving target. The Tax Foundation had estimated that the One Big Beautiful Bill Act would increase average household returns by roughly $1,000. A $1,300 tariff cost risks offsetting “much of the economic benefits” of that tax package, Newsweek reported.

In Colorado specifically, 86% of businesses surveyed by CSU REDI reported tariffs as “challenges,” while 14% cited benefits. Business planning confidence collapsed from 8.7 out of 10 to 2.4 out of 10 after tariff implementation, according to the Governor’s Office tariff impact report. Colorado’s General Fund revenue is projected to come in $241 million to $448 million less than 2024 levels due to tariff-related economic effects.

Colorado agriculture faces a double squeeze. Input costs have surged since 2020: fertilizer up 37%, seed up 18%, fuel and oil up 32%, and labor up nearly 50%. At the same time, retaliatory tariffs from trading partners have pushed foreign buyers of Colorado wheat and beef to seek alternatives. San Luis Valley potato farmers are reporting production costs of $8 to $11 per hundredweight against returns of $5 to $6, resulting in losses of roughly $150,000 per crop circle, according to the CSU REDI report.

Not all the agricultural news is negative. A new trade agreement with Japan has opened a market for Colorado potatoes, demonstrating that some of the bilateral deals accompanying the tariff strategy can produce targeted gains.

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The Colorado AI Act, signed by Gov. Jared Polis in May 2024 as SB 24-205, was originally set to take effect February 1, 2026. After a special session collapsed in August 2025, lawmakers pushed the date to June 30, 2026 by passing SB 25B-004. The 2026 regular session is now the third attempt at getting the law right. The Colorado Attorney General’s Office has not initiated formal rulemaking, and a December 2025 executive order from President Trump explicitly names Colorado’s law as an example of excessive state regulation targeted for federal action.

What the Colorado AI Act requires

The law targets “high-risk” AI systems: predictive algorithms that make or substantially assist in making consequential decisions about individuals. Those decisions span eight domains, including employment, lending, housing, insurance, healthcare, education, government benefits, and legal services. The law does not cover generative AI tools like ChatGPT that create content rather than make decisions about people.

Companies that develop high-risk AI systems must document how those systems function, their limitations, known risks, and training data. They must notify the attorney general within 90 days if they discover algorithmic discrimination, according to Foster Graham Milstein & Calisher.

Companies that deploy those systems face additional obligations: implementing risk management programs aligned with the NIST AI Risk Management Framework or ISO/IEC 42001 standards, conducting annual impact assessments, disclosing AI involvement in decisions, providing plain-English explanations for adverse outcomes, and offering human review of AI decisions.

Violations carry penalties of up to $20,000 each, treated as deceptive trade practices. Enforcement authority rests exclusively with the Colorado Attorney General and district attorneys. There is no private right of action, meaning individual consumers cannot sue under the law.

The law does include safe harbor provisions. Organizations that meet specified compliance standards receive a rebuttable presumption of reasonable care and an affirmative defense against discrimination claims. A mandatory one-year cure period extends through June 30, 2027, giving companies time to fix violations discovered through their own compliance programs, according to Clark Hill PLC.

Why the law has been delayed twice

Gov. Polis signed the bill on May 17, 2024, but attached a letter expressing reservations about its complexity. The bill “creates a complex compliance regime for all developers and deployers of AI doing business in Colorado,” the governor wrote in his signing letter. He separately warned that state-level regulation “can have the effect to tamper innovation and deter competition in an open market.” He called for revisions before the law took effect and launched a 26-member task force in late 2024 that included lawmakers and lobbyists.

That effort did not produce a resolution. In August 2025, the legislature convened a special session with 27 bills, four targeting the AI Act. Proposals ranged from a comprehensive rewrite to total repeal. None succeeded.

A tentative compromise reached on a Sunday among consumer advocates, labor organizations, educators, and some technology representatives collapsed by Monday morning over liability standards for developers. Senate Majority Leader Robert Rodriguez, who co-sponsored the original bill, said the failure came down to one thing: “Big tech didn’t like the bill because they don’t like the liability,” he told the Colorado Sun. Rep. Brianna Titone, the other original sponsor, removed her name from the delay bill in protest, stating that “big tech companies do not want to come to the table.”

With negotiations dead, the legislature passed a simple date change by wide margins: 32-2 in the Senate and 48-14 in the House. The bill was, as Clark Hill described it, a “find-and-replace” that swapped every instance of “February 1, 2026” with “June 30, 2026.”

Loren Furman, president and CEO of the Colorado Chamber of Commerce, framed the delay as preferable to bad legislation, saying it meant “allowing Colorado businesses more time to work on the current AI law instead of pushing bad policy through a rushed special session process,” according to Clark Hill’s analysis.

In October 2025, Gov. Polis convened a second working group: 19 voting members and two non-voting members, according to Colorado Politics. Unlike the first group, this one excluded lawmakers and lobbyists and employed a professional facilitator. Only five members were retained from the original task force. Enforcement and liability allocation remain the central sticking points.

How Trump’s executive order targets Colorado

On December 11, 2025, President Trump signed an executive order titled “Ensuring a National Policy Framework for Artificial Intelligence” that takes a deregulatory approach and explicitly names the Colorado AI Act as an example of harmful state regulation that the federal government intends to challenge.

The order directs the Department of Justice to form an AI Litigation Task Force to pursue legal action against states with AI laws the administration considers inconsistent with American AI dominance. The Department of Commerce must identify “onerous” state AI regulations by approximately March 11, 2026. The order also threatens to withhold federal broadband funding, including the $42 billion BEAD program, from states with AI laws deemed burdensome.

The executive order frames Colorado’s anti-discrimination requirements as mandating that entities “embed ideological bias within AI models,” according to an analysis by Epstein Becker Green.

Legal analysts have noted significant limitations on the order’s reach. Executive orders cannot overturn existing state law without an act of Congress or a court ruling. Congress has repeatedly failed to pass federal preemption legislation for state AI laws. It also considered and rejected a proposed decade-long moratorium on state AI regulations, as reported by Governing. Governors in Colorado, California, and New York have issued statements indicating the order will not stop them from passing or enforcing their own AI statutes.

What businesses are supposed to do right now

The practical challenge for Colorado businesses is that they face a law that may take effect in four months but have received almost no guidance on how to comply.

The Colorado Attorney General’s Office published a pre-rulemaking considerations document in September 2024 and conducted a public comment period later that year. But formal notice-and-comment rulemaking has not begun. As of February 2026, the office has released no proposed rules, no sample forms, no compliance guidance, no impact assessment formats, and no definitions of “reasonable care.”

Legal advisors are telling companies to prepare anyway. Hudson Cook LLP advised rental housing and financial services firms to use the delay to secure developer documentation and finalize disclosure packages. Fisher Phillips identified 10 critical unanswered questions, including whether developers and deployers will remain equally liable and whether Colorado’s standards could become de facto national requirements for multistate employers.

The Common Sense Institute, a research organization that describes itself as “a non-partisan research organization dedicated to the protection and promotion of our economy,” projected significant economic consequences in its report “Unintended Costs: The Economic Impact of Colorado’s AI Policy.” Modeling a conservative 1% production cost increase across six impacted industries, the institute estimated approximately 40,000 job losses and over $4 billion in forgone GDP by 2030 among deployers in finance, housing, healthcare, education, insurance, and legal services. In the technology sector specifically, it projected up to 30,359 job losses and $5.5 billion in forgone GDP growth.

Consumer advocates counter that the cost of inaction is real. AI systems are already making consequential decisions about hiring, lending, and insurance for Colorado residents without oversight. The Center for Democracy and Technology has argued that each delay creates consumer vulnerability while liability questions remain unresolved. More than 70 AI-related laws passed in at least 27 states in 2025, and Illinois, California, and New York City have already implemented AI regulations in employment decisions while Colorado has delayed.

What happens next

Several deadlines are converging. The Department of Commerce must complete its review of “onerous” state AI regulations by approximately March 11, 2026. The Colorado AI Act is currently set to take effect June 30, 2026. The 2026 regular session is actively considering amendments, with priorities including refining AI definitions to align with federal and other state standards, shifting more regulatory focus to developers rather than deployers, and clarifying consumer appeal rights.

Researchers at the University of Denver have urged the state to pivot toward “incremental policymaking” rather than sweeping reform, arguing that regulations need to protect people without creating heavy burdens that deter deployment. “What Colorado does next will shape whether it becomes a model or a lesson,” the university’s analysis concluded.

The national landscape continues to evolve around Colorado. Illinois’s HB 3773 took effect January 1, 2026, and California finalized AI employment regulations in October 2025. Similar bills are advancing in Connecticut, New York, Rhode Island, and Washington. Colorado’s law, once the most ambitious in the country, now risks being overtaken by states that moved forward while Colorado continued to deliberate.

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The case, Learning Resources, Inc. v. Trump (consolidated with Trump v. V.O.S. Selections, Inc.), was argued over three hours on November 5, 2025. As of mid-February 2026, 103 days have passed without a decision, significantly exceeding the historical average for expedited cases. The next scheduled bench session is February 20, and the ruling is expected no later than the end of the Court’s term in June.

The financial stakes are staggering. IEEPA-based tariffs have generated $133.5 billion in revenue through mid-December 2025, accounting for 60% of all duties collected that year. Tariff revenue has soared more than 300% since the tariffs took effect. If the Court strikes them down, that entire sum could be subject to refund, affecting more than 34 million entries of goods and over 300,000 importers.

What IEEPA is and how it got here

President Jimmy Carter signed IEEPA into law on December 28, 1977. Congress enacted it to rein in executive emergency authority after committee investigations revealed the United States had been in a continuous state of emergency for over 40 years under the predecessor statute, the Trading with the Enemy Act of 1917. Congress passed the National Emergencies Act in 1976 and IEEPA in 1977 to impose new constraints.

IEEPA permits the president to declare a national emergency in response to threats originating outside the United States and then to “investigate, block, regulate, direct and compel, nullify, void, prevent, or prohibit” various economic transactions. The statute does not mention tariffs, duties, taxes, or revenue-raising. Since 1977, presidents have invoked IEEPA 77 times, exclusively for asset freezes, sanctions, and trade embargoes against hostile foreign actors such as Iran, North Korea, and designated terrorist organizations.

No president used IEEPA to impose tariffs until February 2025, when President Trump announced duties on Canada, Mexico, and China, citing national emergencies related to fentanyl trafficking and illegal immigration. On April 2, 2025, he announced additional “Liberation Day” reciprocal tariffs under the same authority: a 10% global baseline plus country-specific rates reaching up to 50%.

Who brought the case

The lead plaintiff, Learning Resources, Inc., is an Illinois-based educational toy manufacturer founded in 1984 by the Woldenberg family. CEO Rick Woldenberg, a third-generation family member, filed suit alongside sister company hand2mind, Inc., which supplies materials for Montessori and K-12 schools. The companies employ approximately 500 people in the United States. Additional parties include V.O.S. Selections, Inc., a wine importer, and multiple U.S. states including Oregon.

The case moved rapidly through the courts. The U.S. Court of International Trade ruled the tariffs unconstitutional in May 2025, holding that IEEPA does not authorize tariffs. The U.S. Court of Appeals for the Federal Circuit affirmed on August 29, 2025, ruling per curiam that President Trump exceeded his authority and that establishing tariffs is a power controlled only by Congress.

The constitutional question

Article I, Section 8 of the Constitution states that “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.” The Framers regarded this authority as “the most important of the authorities” held by the federal government. The case asks two questions: does IEEPA’s language authorizing the president to “regulate” importation include the power to impose tariffs, and if so, is that delegation of taxing power constitutional?

Challengers argue the answer to both is no. The Federal Circuit emphasized that Congress deliberately excluded tariff-specific language from IEEPA. Every genuine tariff delegation in federal law uses explicit terms such as “tariff,” “duty,” or “tax.” IEEPA contains none of them. After President Nixon imposed a 10% import surcharge in 1971, Congress responded by enacting Section 122 of the Trade Act of 1974, which granted narrow, time-limited tariff authority capped at 15% for 150 days, rather than expanding emergency powers.

The government counters that “regulate” is broad enough to include tariffs, citing United States v. Yoshida International, Inc. (1975), which held that the predecessor statute’s similar language included tariff authority. The government also invoked the “donut hole” argument: if IEEPA permits complete trade embargoes against Iran and North Korea, it would be illogical to exclude the lesser power to impose tariffs.

Oregon Solicitor General Benjamin Gutman offered a pointed rebuttal: embargoes block transactions entirely, while tariffs generate revenue and function as taxes. “It’s a different kind of pastry,” Gutman told the Court.

What the justices signaled at oral argument

A majority of justices expressed skepticism toward the government’s position during the November 5 argument, according to SCOTUSblog. The skeptics crossed ideological lines.

Chief Justice Roberts suggested that authorizing one person to “impose tariffs on any product from any country in any amount” constitutes a “major question” requiring explicit congressional authorization under West Virginia v. EPA (2022). Justice Gorsuch, a Trump appointee, warned against “a one-way ratchet toward gradual but continual accretion of power in the executive branch,” adding: “The power to reach into the pockets of the American people is just different,” according to Lawfare. Justice Barrett, also a Trump appointee, pressed for a single example where “regulate importation” has been used to impose tariffs and raised nondelegation concerns.

Justice Kagan highlighted that Congress deliberately removed powers from the Trading with the Enemy Act when drafting IEEPA. Justice Sotomayor emphasized the constitutional requirement that taxation pass both chambers. Justice Jackson questioned why “regulate” should be read broadly when Congress supplied specific terms like “investigate, block, direct and compel.”

Justice Alito appeared sympathetic to the administration’s position, according to SCOTUSblog. Justice Kavanaugh appeared sympathetic to the government’s argument but also questioned the scope of the claimed power. Justice Thomas explored the boundaries of the challengers’ position through hypotheticals.

What happens if the Court strikes down the tariffs

A ruling against the government would drop the average statutory tariff rate from 16.1% to 10.4%, according to J.P. Morgan Asset Management. More than 1,000 companies have already filed refund claims, and the Court of International Trade issued an administrative order in December staying all complaints pending the Supreme Court’s decision. The Tax Policy Center estimates a ruling would save the average household approximately $1,200 in 2026 and reduce taxes by $1.4 trillion over 10 years.

The practical impact, however, may be smaller than those figures suggest. The administration is expected to reimpose tariffs quickly under alternative authorities, most likely Section 122 of the Trade Act of 1974 (up to 15% for 150 days). Other options include Section 301 (targeting specific countries) and Section 232 (national security tariffs requiring a 270-day Commerce Department investigation). J.P. Morgan expects “probably very little impact on overall tariffs” due to swift replacement measures, though it notes “a relief rally is possible.”

U.S. Trade Representative Jamieson Greer told CNBC the Court is taking its time given the “enormous” stakes.

The arguments for upholding the tariffs

The administration argues that IEEPA has been used by presidents of both parties for nearly five decades, and that foreign policy emergencies are properly delegated to executive authority. Solicitor General Sauer contended that IEEPA provides sufficient boundaries through its emergency declaration requirement and congressional reporting provisions, and that Congress can reclaim delegated power through joint resolution, as it did with the 2023 coronavirus emergency termination. Supporters note the tariffs have generated an estimated $1.8 trillion in projected 10-year revenue and serve as a key tool for pressuring China on trade practices, fentanyl trafficking, and other national security concerns.

Why this case reaches beyond tariffs

The ruling will set a precedent for the scope of presidential emergency powers across all policy domains. Neal Katyal, arguing for the challengers, warned the Court: “We will never get this power back if the government wins this case.” Justice Barrett noted that Congress would need a veto-proof supermajority to override presidential tariffs, effectively making the delegation irrevocable.

The Brennan Center for Justice, an organization that describes itself as “an independent, nonpartisan law and policy organization,” argued in an amicus brief that both IEEPA and the National Emergencies Act were enacted specifically to rein in presidential emergency powers, not expand them.

The Senate weighed in on October 30, 2025, passing a 51-47 resolution opposing the global reciprocal tariffs. Republican Sens. McConnell, Paul, Collins, and Murkowski joined Democrats, signaling bipartisan concern. The National Constitution Center has compared the case to the biggest separation-of-powers controversy since Youngstown Sheet & Tube Co. v. Sawyer (1952), when the Court struck down President Truman’s seizure of steel mills during the Korean War.

Small and medium-sized businesses have borne a disproportionate share of the burden. The tariffs have been described as “sucking the life out of” small businesses because of the instability they create in supply chain planning, according to CNBC. Global ocean container volumes to the United States have fallen 14% year-over-year, and U.S. imports from China dropped 28% in 2025, according to shipping industry data.

The divide is not between parties. It is between Democrats who agree on climate goals but fundamentally disagree on whether mandates or incentives will achieve them. The outcome will shape whether Colorado competes for a share of what Wood Mackenzie estimated at 134 gigawatts of proposed data center capacity as of mid-2025, or watches that investment flow to neighboring states like Wyoming and Utah.

The mandates bill: SB26-102

SB26-102, introduced February 11 by Sen. Kipp (D-Fort Collins) and Rep. Brown (D-Louisville), takes a regulatory approach. Its formal title is the “Measure to Ensure Accountability for Large-Load Data Centers,” and it applies to new facilities exceeding 30 megawatts of peak load or multiple facilities exceeding 60 megawatts collectively.

The bill’s centerpiece is a requirement that large data center operators build or purchase renewable energy covering their full annual electricity consumption beginning January 1, 2031. The Colorado Public Utilities Commission would determine the highest percentage of hourly renewable matching that is “technically and economically feasible,” according to the bill text.

Additional provisions include 15-year minimum contracts with utilities for infrastructure costs, a prohibition on utilities offering economic development rates to data centers, mandatory community benefit agreements in disadvantaged areas, annual energy and water usage reporting, and diesel backup testing limited to fewer than 50 hours per year.

“We tried to learn from what other states have experienced and build upon that,” Sen. Kipp told Colorado Public Radio.

Fifty-four climate and environmental justice organizations signed a coalition letter backing the bill. “With energy bills and other household expenses at an all-time high, it’s imperative that data center companies pay their way,” the letter stated, according to CPR.

The incentives bill: HB26-1030

HB26-1030, introduced January 14 by House Majority Leader Duran (D-Jefferson County), Rep. Valdez (D-Denver), and Sen. Mullica, takes the opposite approach. Its full title is the “Colorado Data Center Workforce, Clean Energy, Grid Modernization, and Consumer and Environmental Protection Act.”

The bill would create a nine-member Colorado Data Center Development Authority within the Office of Economic Development and offer a 100% state sales and use tax exemption on qualified purchases for 20 years, extendable for an additional 10 years if certain job creation thresholds are met.

To qualify, data centers would need to invest a minimum of $250 million in infrastructure within five years, break ground within two years of certification, pay wages at least 110% of the average local wage, use closed-loop cooling or water recycling systems, and source 75% noncarbon emitting energy for new operations through utility agreements. After 2040, 100% clean energy would be required.

“The future is technological. We’re trying to do it the right way,” Rep. Valdez told the Colorado Sun.

Rep. Valdez has also framed the competing mandates bill as a de facto ban, telling CPR that the other bill “seeks to ban this sort of industry from coming to Colorado.” “We believe we’ve struck the exact right balance between what is doable and what is best in terms of stewardship,” he said.

Sen. Kipp rejected that characterization. “They’re insisting on remaining with the huge incentives, and we’re like, ‘No, we just need to have guardrails around the future development so that we don’t have negative impacts,'” she told the Colorado Sun. She added bluntly: “These are big companies like Meta and Amazon. They can afford to freaking pay their own way.”

The competitiveness argument

Supporters of HB26-1030 point to a stark competitive reality. At least 37 states already offer significant data center incentives ranging from sales tax exemptions to discounted property taxes, according to a Husch Blackwell survey cited in multiple reports. Colorado is among a minority of states without such incentives, and state lawmakers have repeatedly shut down data center subsidy legislation in recent years.

“We’re not getting the revenue currently, because the companies are going elsewhere,” Rep. Valdez told the Colorado Sun.

The Data Center Coalition, a membership association that describes itself as “the voice of the industry,” argues the investment is substantial. Dan Diorio, the coalition’s vice president of state policy, told CPR that “data centers are drivers of local tax revenue” and that they “support local jobs in those communities, and they allow those communities to reinvest in priorities that are important to them.”

Colorado currently hosts approximately 53 data center facilities statewide, according to Data Center Frontier, most of them smaller operations in the Denver metro area. The industry publication also reported that the average data center contributes $32.5 million annually to local economies and supports roughly 157 local jobs, citing U.S. Chamber Technology Engagement Center data.

Julian Aguilar of IBEW Local Union 68 expressed support for the incentives approach. “We need to be looking at innovative ways to bring jobs to our state, and this is a great way to do it,” he told The Sum and Substance.

The ratepayer protection argument

Proponents of SB26-102 counter that the competitiveness argument ignores serious risks to Colorado ratepayers, grid reliability, and water resources.

Xcel Energy, Colorado’s largest electric utility, currently operates 6.2 gigawatts of capacity in the state. Pending data center applications total 5.8 gigawatts, according to the Colorado Sun, enough to power more than 3 million homes. The utility has projected data center load could reach 8.5 gigawatts by 2040, requiring a proposed $22 billion investment in new generation and transmission.

“This is a really massive load forecast far in excess of what we’ve seen on the system,” PUC Commissioner Megan Gilman told the Colorado Sun.

PUC Chairman Eric Blank was more pointed. “We are bringing data centers that don’t fully cover the cost they impose on the system,” he said.

The rate impact is already a concern. Residential electricity rates could rise more than 25% by 2031, according to Western Slope Trellis. A Carnegie Mellon University and NC State study found that without policy changes, large power users could increase power bills by an average of 8% nationwide by 2030, and up to 25% in data center hubs like Virginia.

Alana Miller, a state policy director for the Natural Resources Defense Council (an organization that describes its mission as safeguarding “the earth, its people, its plants and animals, and the natural systems on which all life depends”), warned: “If there aren’t sufficient guardrails and you’re encouraging unconstrained data center development, we could lock in greenhouse gas emissions for decades. It could also threaten our grid reliability and raise energy prices.”

Sara Schueneman, state director of AARP Colorado (an organization focused on championing social change for Coloradans age 50 and older), put it simply: “Ratepayers of any age should not be footing the bill for big tech companies.”

National cautionary tales

The national experience offers warnings for both sides.

Virginia, the world’s largest data center market, has seen its data center tax incentive program grow from $1.5 million to $1.6 billion annually in foregone revenue, according to MultiState Insider. Nearly 100 bills addressing data center tax treatment have been introduced or carried over in Virginia’s legislature in 2026. Texas has similarly lost an estimated $1 billion in potential revenue from data center tax breaks, according to Colorado Politics.

“Data center tax breaks have exploded into runaway giveaways in other states,” said Kathy White, executive director of the Colorado Fiscal Institute, an organization that uses “innovative research, advocacy, strategic communications, and deep partnerships to advance equity-focused fiscal and economic policies.” She made the comment to Western Slope Trellis.

Virginia Gov. Spanberger herself acknowledged the tension. “I’m open to extending them philosophically, but I do think we need to comprehensively evaluate what they bring to communities,” she said, as reported by MultiState Insider.

Several states are now moving to limit incentives, including South Dakota, Georgia, and Maryland, according to the same report. Others, including New Mexico and Washington, are expanding them.

Local governments are not waiting

While the state legislature debates, several Colorado counties have already acted on their own.

Larimer County approved a 30-day moratorium on data center development in January 2026 so county staff could develop specific land-use regulations, and is considering a six-month extension. Logan County implemented a six-month moratorium in October 2025. Weld County has been actively drafting regulations since late 2025. Denver has formed a stakeholder workgroup but has not yet established a clear policy direction, according to the Brownstein analysis published via JD Supra.

Rep. Brown, co-sponsor of the mandates bill, acknowledged the pressure on local communities. “Massive data centers add incredible pressure to our power grid and water systems, challenges we can’t ignore,” he told Western Slope Trellis.

Free-market critics question both approaches

Not everyone fits neatly into the incentives versus mandates debate. The Independence Institute, a Colorado policy organization that describes itself as “an action tank” promoting “individual Freedom, economic Freedom and journalistic Freedom,” has raised concerns about HB26-1030’s regulatory requirements even though that bill is the incentives approach. Policy analyst Sarah Montalbano argued the bill’s energy mandates, including a requirement before 2039 for a 3-to-1 nameplate capacity ratio of clean energy per megawatt of thermal load, would make Colorado uncompetitive against neighbors like Utah and Wyoming that are not imposing similar requirements.

The Colorado Union of Taxpayers, a taxpayer advocacy organization, opposes HB26-1030 on different grounds. CUT argues the bill creates “another bureaucracy” and that existing data centers and taxpayers will subsidize the incentives through reduced TABOR refunds.

Sen. Kipp told the Colorado Sun that it is unlikely the two sides will find common ground, suggesting a compromise may be difficult to reach.

Gov. Polis has not endorsed either bill. His spokesperson, Eric Maruyama, said the governor’s “north star is ensuring that any data center development does not increase energy costs on Coloradans,” according to the Colorado Sun.

The agency’s 10-year outlook has worsened by $1.4 trillion compared to its January 2025 projections, driven largely by the fiscal impact of the One Big Beautiful Bill Act signed into law last July. Annual deficits are projected at $1.9 trillion in fiscal year 2026, rising to $3.1 trillion by 2036. Cumulative deficits over the next decade total $24.4 trillion.

“The fiscal trajectory is not sustainable,” the CBO director stated in an official assessment accompanying the report.

Interest payments surpass defense spending

For the first time, net interest payments on the federal debt will exceed $1 trillion in fiscal year 2026, eclipsing both the $885 billion defense budget and the $708 billion spent on Medicaid, according to an analysis by the American Action Forum, a center-right policy institute.

By 2036, interest payments are projected to reach $2.1 trillion, consuming nearly one in five federal dollars. Over the full decade, the federal government will spend $16 trillion on interest alone, according to the Peter G. Peterson Foundation, a nonpartisan organization dedicated to “addressing America’s long-term fiscal challenges to ensure a better economic future”.

“The CBO’s latest budget projection is an urgent warning to our leaders about America’s costly fiscal path,” said Michael Peterson, CEO of the Peterson Foundation. “Borrowing trillion after trillion takes us in the wrong direction, leading to higher interest costs and higher prices for everyday needs.”

Interest costs at 3.3% of GDP in fiscal year 2026 eclipse the previous record set in 1991, and net interest is now the fastest-growing category in the federal budget. Interest payments are projected to grow 106% over the decade, according to the Committee for a Responsible Federal Budget, a nonpartisan fiscal watchdog that describes itself as “a non-partisan, non-profit organization committed to educating the public on issues with significant fiscal policy impact.” That growth rate is double the 53% increase in total federal spending over the same period.

What is driving the deterioration

The 10-year deficit projection of $23.1 trillion is $1.4 trillion worse than what the CBO projected in January 2025. Several factors contributed to the worsening outlook.

The One Big Beautiful Bill Act is the largest single driver. The CBO estimates the law increases deficits by $4.7 trillion between 2026 and 2035, primarily through the permanent extension of Tax Cuts and Jobs Act provisions that were set to expire at the end of 2025. Individual income tax revenue alone is reduced by $4.4 trillion over the period. Mandatory spending cuts of $1.2 trillion partially offset the revenue losses, according to The Hill.

Higher tariffs generate $3 trillion in new federal revenue through 2035, partially offsetting the OBBBA’s fiscal cost, according to the CRFB. However, the CBO projects those tariffs will increase consumer inflation through 2029, delaying the Federal Reserve’s ability to reach its 2% inflation target until 2030.

Other factors include higher-than-expected Treasury yields, which increase debt servicing costs, and reduced immigration, which lowers both the labor force and tax revenues.

Ninety percent of spending growth locked in

The CBO projects total federal spending will grow from $7.4 trillion in fiscal year 2026 to $11.4 trillion by 2036. Ninety percent of that $4 trillion increase comes from just four categories: Social Security, major health care programs, net interest, and veterans’ benefits, according to a CRFB analysis.

Social Security spending rises from $1.6 trillion to $2.7 trillion, accounting for 27% of all spending growth. Major health care programs, including Medicare, Medicaid, and Affordable Care Act subsidies, grow from $1.9 trillion to $3.1 trillion, accounting for 30%. Net interest accounts for 28% of growth, and veterans’ programs contribute another 5%.

The demographic pressures underlying these increases are structural. Americans aged 65 and older will grow by 42% by 2050, driving sustained increases in Social Security and Medicare costs, according to Fortune.

Two trust funds face insolvency within the decade. The Highway Trust Fund is projected to be exhausted by fiscal year 2028, and the Social Security Old-Age and Survivors Insurance trust fund by fiscal year 2032, one year earlier than previously projected, according to the CRFB. Under current law, trust fund exhaustion would trigger automatic across-the-board benefit cuts unless Congress acts.

Why this time differs from World War II

The last time federal debt exceeded GDP was in 1946, when wartime borrowing pushed the ratio to 106.1%. After the war, debt-to-GDP declined steadily, falling to 23% by 1974. That decline was made possible by a combination of large budget surpluses, rapid economic growth, surprise inflation, and the abrupt end of temporary wartime spending. Outlays dropped to roughly 18% of GDP, and deficits averaged just 1.1% of GDP for nearly three decades, according to the Peter G. Peterson Foundation.

Today’s trajectory is fundamentally different. Federal spending is projected to average 26% of GDP over the coming decade, while revenues average roughly 18%. Annual deficits are projected to average 6.1% of GDP, more than double the 3% often cited as a sustainable benchmark and more than double Treasury Secretary Scott Bessent’s stated goal of shrinking the deficit to about 3% of output, according to Al Jazeera.

The Baker Institute at Rice University found that real GDP over the next 30 years is projected to grow by 66%, roughly one-third as much as the period following World War II. “Economic growth alone will not be sufficient to outpace debt accumulation,” the institute concluded. An NBER working paper by economists Alan Auerbach and William Gale found that stabilizing the debt-to-GDP ratio at 2024 levels would require permanent spending cuts or tax increases equaling 2.9% of GDP.

The growth counterargument and debt spiral risk

Defenders of current fiscal policy point to near-term economic strength. The CBO projects real GDP growth of 2.2% in 2026, partly boosted by the OBBBA’s economic stimulus. The Tax Foundation, a policy organization that describes itself as “the world’s leading nonpartisan tax policy nonprofit,” estimates the law increases long-run GDP by 0.7% through lower tax rates and enhanced business investment deductions. Dynamic revenue effects reduce the OBBBA’s fiscal cost from $4.9 trillion to $3.8 trillion on a dynamic basis. Tariff revenue of $2.1 trillion over the next decade further offsets the law’s costs, and supporters of the tax cuts note that extending the TCJA provisions preserves relief for working families.

However, the CBO projects growth will slow to 1.8% annually after 2027. The CRFB warns that later in the decade, the average interest rate on all federal debt may exceed nominal economic growth, a condition that could represent the beginning of a debt spiral, Fortune reported. If tariffs are struck down by the courts and policymakers extend expiring provisions, deficits could reach $3.8 trillion by 2036 with debt climbing to 131% of GDP.

Jonathan Burks, executive vice president of the Bipartisan Policy Center, an organization whose stated mission is to “achieve bipartisan solutions” to national policy challenges, said: “There’s no sugarcoating it: America’s fiscal health is increasingly dire. Our debt is now 100% of GDP, and rather than pumping the brakes, we are accelerating. These large deficits are unprecedented for a growing, peacetime economy.”

Burks added: “The good news is there is still time for policymakers to correct course. There are many solutions to improve our trajectory.”

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SB26-004, sponsored by Sen. Tom Sullivan (D-Centennial) and Sen. Julie Gonzales (D-Denver), passed the Senate 20-13 on February 3 and now heads to the House State Affairs Committee, where a hearing is scheduled for March 2. Democrats hold a 43-22 majority in the House, and passage is expected.

If enacted, Colorado would become the first state to explicitly authorize institutional petitioners, allowing entities such as hospital systems, school districts, and behavioral health treatment centers to file Extreme Risk Protection Orders as organizations rather than through individual employees, according to a state-by-state comparison by the Giffords Law Center, an organization that describes itself as dedicated to “saving lives from gun violence.”

What the bill would change

Under Colorado’s current ERPO law, petitions to temporarily remove firearms can be filed by law enforcement officers, family or household members, licensed medical and mental health providers, licensed educators, and district attorneys. The original law was signed in April 2019 and expanded in 2023 to add individual professionals.

SB26-004 adds two new categories of petitioners. The first is behavioral health co-responders, the specialists who respond to crisis calls alongside law enforcement or other first responders. Currently, co-responders who encounter dangerous situations must work through their law enforcement partners to file petitions. The bill would allow them to petition judges directly, according to the Colorado Sun.

The second category is institutional petitioners: healthcare facilities, behavioral health treatment facilities, K-12 schools, and institutions of higher education. Under this provision, the institution’s name would appear on the petition rather than an individual doctor’s or teacher’s name. The bill still requires an individual’s signature on the ERPO form even when an institution files, according to Chalkbeat Colorado.

The bill also enables firearm seizure if a child in the household is determined to pose a danger to themselves or others.

Supporters say the bill fills dangerous gaps

Sen. Sullivan, whose son Alex was among the 12 people murdered in the Aurora theater massacre on July 20, 2012, has championed ERPO legislation since winning office in 2018. He sponsored the original 2019 law and the 2023 expansion.

“Gun deaths are happening by suicides and domestic violence, which is a number one thing that we can do with an extreme risk protection order, temporarily remove a firearm from someone who’s going to be a danger,” Sen. Sullivan told the Colorado Sun.

Sen. Sullivan argued that institutional petitions provide “a layer of protection for the individuals who work directly with a respondent.” He noted that teachers, doctors, and therapists “were not trained to fill out the forms to file this type of paperwork,” according to Chalkbeat Colorado.

Sen. Gonzales cited statistics suggesting that “for every 20 ERPOs that are filed, a life is saved,” according to the Canon City Daily Record.

Evie Hudak, representing the Colorado PTA, testified that institutions allow educators to “elevate concerns to their employers” and that teachers recognize potential warning signs but need institutional support to navigate the ERPO process, according to Chalkbeat Colorado.

Democratic lawmakers emphasized that individuals subject to ERPOs retain the right to counsel and the right to appeal, and that all petitions still require judicial review.

Opponents raise due process and accountability concerns

The bill drew sharp opposition from Republican lawmakers during a Senate floor debate that followed a four-hour committee hearing.

Sen. Lynda Zamora Wilson (R-Colorado Springs), a former Pentagon analyst, argued the bill violates the Second, Sixth, and 14th Amendments. “This is not due process, this is presumption of guilt,” Sen. Wilson told the Senate.

Sen. Barb Kirkmeyer (R-Brighton) challenged the bill’s procedural framework directly: “There is an issue with due process. Where is the due process?” according to the Canon City Daily Record.

Sen. Rod Pelton (R-Cheyenne Wells) objected to the possibility of anonymous complaints. “That’s not right. That’s not America,” according to the Canon City Daily Record.

Gun rights organizations raised concerns about institutional accountability. Ian Escalante, executive director of Rocky Mountain Gun Owners (an organization that describes itself as “Colorado’s largest state-based gun lobby”), argued that institutional petitioners “absolve responsibility from the individual,” according to Denver7. Critics noted that while false petitions by individuals carry a class 3 misdemeanor penalty, SB26-004 does not include specific provisions for false claims filed by institutions.

Escalante also warned of a chilling effect on mental health treatment. “Gun owners feel very uncomfortable about speaking freely in therapy,” he told Denver7. Research from New York indicates about 9% of gun owners said they would be less likely to seek mental health treatment because of red flag laws, and about 23% said they would be less willing to report mental health symptoms that concerned them.

Ray Elliott of the Colorado State Shooting Association (an organization that describes itself as “the official state association of the National Rifle Association”) said the expansion “invites abuse, inefficiency, and potential violations of due process,” according to Colorado Politics. Vice President Teddy Collins added: “We are talking about (entities that are) further removed: institutions with ideological positions and individuals who hold personal and political anti-gun bias.”

Michelle Grey, a retired teacher, testified against the bill. “Students only come forward when they believe their teachers are there to help them, not to report them or to trigger legal action,” according to Colorado Politics.

The NRA’s Institute for Legislative Action urged senators to oppose the bill entirely rather than seek amendments, stating, “These expansions invite abuse of the system and threaten due process protections for lawful firearm owners,” according to the NRA-ILA.

How Colorado’s ERPO process works

Colorado’s red flag law allows petitioners to ask a court to temporarily prevent a person from purchasing or possessing firearms. A temporary order can be issued after an ex parte hearing, meaning the respondent is not present or notified, on the day the petition is filed or the next court day. The burden of proof for a temporary order is a preponderance of the evidence.

A continuing order requires an adversarial hearing within 14 days, at which the respondent can be present, challenge evidence, and cross-examine witnesses. The burden of proof rises to clear and convincing evidence for a continuing order, which can last up to one year.

To terminate an order early, the respondent bears the burden of proving by clear and convincing evidence that they no longer pose a significant risk, according to the bill text.

From 2020 through 2024, Colorado courts received 692 ERPO petitions, granted 478 temporary orders, and issued 371 continuing orders, according to the Colorado Sun. In 2024 alone, 164 petitions were filed with an 80.27% grant rate, according to The Center Square.

A peer-reviewed study published in PMC examining 353 petitions from 2020 to 2022 found that law enforcement filed 54.6% of petitions and received temporary orders at a rate of 94.3%, compared to 35.0% for non-law-enforcement petitioners. Approximately 37.7% of petitions mentioned mental health issues.

Sanctuary counties and enforcement gaps

When the original ERPO law was enacted in 2019, 37 of Colorado’s 64 counties declared themselves Second Amendment sanctuaries, with counties including Weld, El Paso, and Fremont publicly stating they would not enforce the legislation.

Research shows that sanctuary county declarations had measurable effects. Judges in sanctuary counties approved 48% of petitions compared to 77% in all other counties, according to a PMC study on sanctuary status and ERPOs.

Colorado’s broader firearms agenda

SB26-004 is one of several firearms bills moving through the legislature this session. SB26-043 would regulate gun barrel sales by requiring in-person transactions and five-year record retention. A separate bill would restrict 3D-printed firearms and the possession of digital instructions to manufacture firearms or large-capacity magazines.

Republicans are pushing back with HB26-1021, the Second Amendment Protection Act, which would repeal nearly every gun violence prevention law enacted in Colorado from 2013 to 2025, including background checks on private sales, safe storage requirements, and the existing red flag law.

Democrats have held complete control of Colorado lawmaking since 2019. In the current session, they hold near-two-thirds majorities in both chambers, with the Senate split 23-12 and the House 43-22. Sen. Nick Hinrichsen (D-Pueblo) was the only Democrat to vote against SB26-004, according to the Denver Post.

Law Week Colorado identified SB26-004 as one of at least 10 bills in the 2026 session raising constitutional, administrative, and enforcement questions and potential court fights.

The mental health tension

Colorado ranks 41st nationally in mental health outcomes and 47th in per capita mental health spending, according to a report by Axis Integrated Mental Health. The state has the second-highest prevalence of mental illness in the nation as of 2024.

Critics argue those rankings point to a misplaced priority. Rather than expanding the mechanisms to seize firearms from people in crisis, they say, lawmakers should invest in the treatment infrastructure that might prevent crises in the first place. Opponents contend that if gun owners avoid therapy or medical care out of fear of being red-flagged, the expansion could reduce the very crisis interventions it aims to facilitate.

Supporters counter that ERPOs are not a substitute for mental health treatment but an emergency tool for preventing imminent harm. Sen. Sullivan described the bill as one element of a broader effort. “The public health crisis that is gun violence isn’t something that can be addressed in just a singular policy attempt,” he told Colorado Politics.

How Colorado compares nationally

Twenty-one states and the District of Columbia have enacted ERPO laws. Five states limit petitioners to law enforcement only, while 16 states and D.C. allow both law enforcement and family or household members to petition.

A handful of states have expanded further. New York allows school administrators, healthcare practitioners, and district attorneys to file. Massachusetts and Hawaii allow certain healthcare providers and school administrators. Maryland, Michigan, and the District of Columbia include mental health providers.

Colorado’s bill goes beyond all of them. While New York and others authorize individual professionals to petition, SB26-004 would allow the institution itself to be the petitioner. Three states, Texas, Oklahoma, and Tennessee, have moved in the opposite direction, banning or restricting ERPO legislation entirely, according to the Giffords Law Center.

No court has struck down a red flag law as of February 2026. A New York appeals court upheld that state’s ERPO law, ruling the regulation “is consistent with the nation’s historical tradition of firearm regulation in keeping dangerous individuals from carrying guns.”

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The Congressional Budget Office projects the law will add 0.9 percentage points to real GDP in 2026, its peak year of impact. At the same time, CBO estimates the law adds $4.1 trillion to the national debt over the next decade on a conventional scoring basis. If temporary provisions are eventually made permanent, that figure rises to $5.5 trillion, according to the Committee for a Responsible Federal Budget, a nonpartisan organization that describes itself as committed to educating the public about issues with significant fiscal policy impact.

The central tension for fiscal conservatives is straightforward: the tax relief is real, the growth is measurable, and the debt is growing faster than either.

The Growth Picture: Real but Front-Loaded

Third-quarter 2025 GDP came in at 4.4 percent annualized growth, according to the Bureau of Economic Analysis. That figure reflected increases in consumer spending, exports, government spending, and investment. Imports, which are a subtraction in the calculation of GDP, decreased.

Most individual tax provisions do not take full effect until 2026, meaning the strongest fiscal impulse lies ahead. CBO projects an average GDP increase of 0.5 percent over the 2025 to 2034 budget window, with effects peaking in 2026 and diminishing afterward as demand-side factors subside.

The Tax Foundation, a policy research organization that describes itself as the world’s leading independent tax policy nonprofit, projects a GDP trajectory of 0.4 percent in 2025, 0.8 percent in 2026, peaking at 1.2 percent in 2028, and stabilizing at a long-run increase of 0.7 percent.

Not all analysts share that optimism beyond the near term. The Yale Budget Lab, an academic research center at Yale University, projects that by 2054, GDP will be nearly 3 percent smaller than it would have been without the bill. The mechanism: rising debt crowds out private investment, pushes interest rates higher, and reduces the capital stock available for productivity growth. Yale projects the 10-year Treasury yield will be 1.2 percentage points higher by 2054 as a consequence.

RBC Economics warns of a “barbell” effect, noting that high-income households who receive the largest tax cuts are more likely to save or pay down debt than to spend, muting the consumer-spending boost that drives GDP growth.

What Families Actually See: Tax Cuts by Income Level

About 85 percent of American households will receive a tax cut in 2026, according to the Tax Policy Center, the Urban-Brookings joint venture. The average cut is $2,900 per household.

The distribution, however, is heavily skewed. Households earning under $35,000 per year see an average cut of about $160, less than 1 percent of income. Middle-income households receive roughly $1,600 to $1,850, accounting for 13 percent of total benefits. Households in the 95th to 99th income percentile, those earning $460,000 to $1.1 million, see average cuts of $21,000, a 4.3 percent boost to after-tax income.

Nearly 60 percent of all tax benefits flow to the top quintile of earners, those making over $217,000.

The law makes permanent the seven individual tax brackets from the 2017 Tax Cuts and Jobs Act, ranging from 10 percent to 37 percent. It also delivers on several campaign trail promises: a tip income deduction of up to $25,000 per year, an overtime pay deduction of up to $12,500, and an additional $6,000 standard deduction for seniors. Each provision phases out for higher earners.

The SALT deduction cap rose from $10,000 to $40,000 for tax years 2025 through 2029. The Bipartisan Policy Center, a nonprofit organization that describes itself as combining the best ideas from both parties to promote health, security, and opportunity, notes the higher cap carries a significant revenue cost. The Tax Foundation found that only the top 20 percent of taxpayers meaningfully benefit, with the bottom 80 percent seeing no material gain from the SALT change.

The Debt Equation: Growth vs. Borrowing

This is where the numbers demand honest accounting.

On a conventional (static) basis, the law reduces federal tax revenue by $5.2 trillion over 10 years and increases spending by more than $500 billion for defense, border enforcement, and farm subsidies. It offsets those costs with $2.5 trillion in spending cuts and an estimated $1.5 to $3 trillion in tariff revenue, depending on whose projections are used.

Dynamic scoring, which accounts for economic growth generated by the tax cuts, narrows the revenue loss. The Tax Foundation estimates growth pays for 16 percent of the tax cuts, reducing the revenue loss from $5.2 trillion to $4.3 trillion. CBO’s dynamic estimate shows $85 billion in macroeconomic feedback over the budget window.

But the Penn Wharton Budget Model, an academic research initiative at the University of Pennsylvania’s Wharton School, reaches the opposite conclusion. PWBM finds that dynamic scoring actually increases the cost by $130 to $410 billion because government borrowing crowds out private investment. That disagreement between models is significant: it reflects fundamentally different assumptions about how much additional federal debt constrains private-sector growth.

The American Action Forum, which describes itself as a 21st century center-right policy institute providing actionable research and analysis to solve America’s most pressing policy challenges, projects the FY2034 deficit will reach $3.0 trillion, or 7.1 percent of GDP. Total debt held by the public would reach $53.7 trillion as written, rising to $54.5 trillion if temporary provisions are extended.

As Federal Reserve Chair Jerome Powell has stated, as cited by the Bruegel think tank: “The level of the debt is sustainable, but the path is not.”

Spending Cuts and Safety Net Changes

The law’s $2.5 trillion in offsets come with real-world consequences that are beginning to materialize.

Medicaid changes account for $911 billion in savings over 10 years, according to KFF, an independent health policy research organization. Work requirements alone save $326 billion but subject 18.5 million people to new obligations each year. CBO estimates 7.5 million people will lose Medicaid coverage by 2034, with the total uninsured population rising by 10 million. The uninsured rate is projected to climb by at least 3 percentage points in 20 states and the District of Columbia.

SNAP funding faces a $186 billion reduction over 10 years, a 20 percent cut that the Brookings Institution, a nonprofit public policy organization, calls the largest reduction in the program’s history. Work requirement ages rise to 64 from 54, and states must cover 75 percent of administrative costs beginning in FY2027, up from 50 percent.

Student loan reforms save nearly $300 billion by eliminating Grad PLUS loans and imposing a $257,500 lifetime borrowing cap. Clean energy credit phase-outs from the Inflation Reduction Act generate $540 billion in savings.

School Choice and Conservative Priorities

The law includes provisions that advance several longstanding conservative goals.

The Education Freedom Tax Credit, the first federal school choice tax credit in American history, offers a dollar-for-dollar credit of up to $1,700 per year for contributions to qualified Scholarship Granting Organizations. The credit takes effect January 1, 2027, and 23 states have already opted in as of February 2026, with mostly Republican governors leading the way.

Supporters argue the law represents a philosophical shift in federal revenue policy: tariff revenue replaces a portion of income taxation with consumption taxation on imports, keeping more money in workers’ paychecks while taxing foreign goods. The White House Council of Economic Advisers has projected GDP gains of up to 3.5 percent and wage increases of $11,600 per worker, though CBO and independent analysts have published considerably more modest estimates.

The Medicaid work requirements reflect a conservative view that able-bodied adults should contribute to their own support as a condition of receiving public benefits. The SNAP reforms extend the same principle.

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“Republicans started this redistricting war, and Democrats have made clear, we’re going to finish it,” Jeffries told CNN on Saturday. “When they go low, we strike back.”

The declaration — a combative twist on former first lady Michelle Obama’s “when they go low, we go high” mantra — signals a party that has formally abandoned the fair-maps high ground it spent a decade building. For Colorado voters who approved an independent redistricting commission in 2018, the fight is no longer theoretical. Jeffries and his allies are already looking at the state for 2028.

The redistricting scorecard

Both parties have been redrawing congressional maps at a pace not seen since the last full census cycle, with courts and ballot initiatives clearing the way in state after state.

On the Republican side, the Supreme Court allowed Texas to use a new map in a 6-3 decision last December, a map designed to deliver as many as five additional GOP seats. Justice Samuel Alito wrote in a concurrence that the partisan motivation was “indisputable” but argued that courts cannot police partisan redistricting under the precedent set in Rucho v. Common Cause. North Carolina approved a new map in October targeting the seat held by Rep. Don Davis, which would shift the state’s delegation from 10-4 Republican to 11-3. Missouri signed a new map into law in September.

Democrats have answered in kind. The Supreme Court cleared California’s new congressional map on Feb. 4, denying Republicans’ emergency request to block boundaries designed to flip five GOP-held seats. California voters had approved Proposition 50 with about 64% support in November 2025. In Virginia, the state Supreme Court ruled Feb. 13 that an April 21 redistricting referendum can proceed. Democrats there have proposed a 10-1 congressional map, up from a current 6-5 Democratic advantage. In Utah, a state court struck down the GOP-drawn map as an unlawful partisan gerrymander and ordered a fairer replacement for 2026.

The one place Democrats have stalled themselves is Maryland, where the state House passed a new map 99-37 that would eliminate the state’s sole Republican-held seat. But Democratic Senate President Bill Ferguson has refused to support it, noting that a similar 2021 map was struck down as extreme partisan gerrymandering.

Jeffries has pushed back publicly on Ferguson’s resistance. “One man shouldn’t stand in the way of the people of Maryland…being able to decide,” he told CNN.

The Cook Political Report’s assessment: the likeliest outcome is roughly a wash, with Republican gains in Texas, North Carolina, Missouri, and Ohio offset by Democratic gains in California, Virginia, and Utah. The net depends heavily on whether the Virginia referendum passes and whether Ferguson relents in Maryland.

Rep. Glenn Ivey, D-Md., put it bluntly to CNN: “It’s an awful game… We better not lose the House by one seat.”

Colorado’s choice

For Coloradans, the redistricting fight carries a specific question: Should the state dismantle the independent commission voters created in 2018?

Attorney General Phil Weiser, who is running for governor in 2026, became the first statewide official to support an emergency redistricting ballot measure last October. Under his proposal, a 2026 ballot measure would allow the state legislature to draw new congressional maps for 2028, bypassing the voter-approved commission.

Rep. Yadira Caraveo went further, calling for outright repeal of the independent commission. Sen. Michael Bennet backed a “one-time” change rather than a full repeal.

Gov. Jared Polis has taken the opposite position. He called the effort “a craven and cynical mid-decade redistricting ploy.” Sen. John Hickenlooper also expressed opposition, according to Rocky Mountain PBS.

The split has effectively turned the 2026 governor’s race into a proxy fight over who draws Colorado’s maps. Additional legal barriers exist: a 1980s state court ruling that voided a “midnight gerrymander” creates precedent against mid-decade redistricting, and a separate proposed constitutional amendment would give the governor authority to suspend the commission entirely.

Meanwhile, the DCCC has added Colorado’s 5th Congressional District — the Colorado Springs seat — to its target list for the first time. And NBC News reported that Jeffries’ team is positioning Colorado, along with Washington, New York, and New Jersey, for 2028 constitutional changes.

The man leading the charge

Jeffries is staking his political capital on the redistricting fight at a moment when his standing within his own party has deteriorated sharply.

Congressional Democrats hit 18% overall approval in a December Quinnipiac poll — a record low since 2009. Among Democrats themselves, only 42% approved of their own party’s lawmakers, while 48% disapproved. A Pew Research survey found that 59% of self-identified Democrats disapproved of party leaders in Congress, with only 40% approving — the first time since 2014 that more Democrats disapproved than approved.

Jeffries’ personal numbers have dropped from 80% approval among Democrats in 2023 to 64% in December 2025, according to the Quinnipiac data.

The dissatisfaction has translated into concrete defections. During the 43-day government shutdown last November, six House Democrats broke ranks to vote with Republicans, defying Jeffries’ insistence on linking a deal to a three-year extension of Affordable Care Act subsidies. The six — Reps. Jared Golden of Maine, Marie Gluesenkamp Perez of Washington, Henry Cuellar of Texas, Don Davis of North Carolina, Adam Gray of California, and Tom Suozzi of New York — all represent districts won by former President Donald Trump.

That same month, 23 House Democrats voted with Republicans to rebuke Rep. Jesus “Chuy” Garcia of Illinois over a controversial election filing. Jeffries had opposed the resolution, calling Garcia “a progressive champion.”

An Axios survey of 113 Democratic House candidates found that only 24 confirmed they would support Jeffries for speaker or leader. Twenty said they would not. Fifty-seven remained noncommittal. “I think we need to have a new type of leadership that’s going to fight back significantly harder against the Trump administration,” Democratic candidate Heath Howard told Axios.

An Our Revolution survey of grassroots Democrats found 70% said Jeffries should step aside, and 77% backed a primary challenger against him. New York City Council member Chi Osse, 27, filed to challenge Jeffries in the NY-8 primary before ultimately backing off. Candidate Vance Bostic is still running. Even Jeffries’ top deputy, Rep. Katherine Clark, faces a primary challenge from Jonathan Paz, who argues Democratic leadership has become ineffective.

Follow the money

The redistricting offensive requires enormous sums. House Majority Forward, a super PAC linked to Jeffries, has committed at least $5 million to the Virginia referendum alone. Jeffries told CNN he is willing to spend “tens of millions of dollars” on the effort.

Where that money comes from has drawn scrutiny. The DCCC accepted nearly $4 million from Invariant, a lobbying firm that represents SpaceX and Palantir — companies tied to Elon Musk and Peter Thiel, respectively. Over $2.5 million of that arrived in January 2025, representing more than a quarter of the DCCC’s entire monthly fundraising haul, according to Sludge.

Jeffries personally raised approximately $1.2 million from the finance sector in the first quarter of 2025. Henry Laufer, a former chief scientist at Renaissance Technologies, and his spouse contributed a combined $601,400 to Jeffries’ victory fund. That fundraising occurred while grassroots activists protested outside Jeffries’ Brooklyn office, according to Sludge.

Eric Holder’s National Democratic Redistricting Committee, co-founded with former President Barack Obama, has identified 13 priority states for 2025-2026, targeting governor’s races and state supreme court seats in Arizona, Florida, Michigan, Texas, and other states that control the redistricting process.

What the numbers say

Despite the money and effort on both sides, the Cook Political Report’s tracker projects the redistricting arms race will likely be a wash for 2026. Republican-drawn maps in Texas (up to five seats), North Carolina (one seat), Missouri (one seat), and Ohio stand to be offset by Democratic-drawn maps in California (five seats), Virginia (as many as four seats, if the referendum passes), and Utah (one seat).

The real stakes, multiple sources suggest, extend beyond 2026. NBC News reported that New York Democrats have unveiled a constitutional amendment allowing the legislature to redraw maps if another state does mid-decade redistricting. New Jersey Gov. Mikie Sherrill has signaled she is open to joining. Colorado, Washington, and Pennsylvania are all in play for 2028.

The open question is whether Jeffries can execute a multi-state redistricting war while his own coalition fractures. Only 24 of 113 Democratic candidates surveyed would commit to supporting him as leader. His approval among his own party’s voters has dropped 16 points in two years. Six members broke ranks during the shutdown, 23 defied him on the Garcia vote, and as many as 10 Senate Democrats were prepared to break ranks on the spending fight.

Jeffries is betting that redrawn maps will deliver the House majority that would validate his leadership. The party’s progressive wing is betting that his leadership is the problem, not the solution. Both sides will have their answer by November.

The proposed ballot initiative, filed in February 2026 by the Independence Institute and the League of Women Voters of Colorado, would amend Article II of the state constitution to establish a right to know the affairs of all levels of state and local government. Government bodies could close meetings or restrict records only if they demonstrate that individual privacy or another state interest clearly exceeds the need for transparency. Violations would carry a minimum fine of $1,000.

If it makes the ballot, the measure would need signatures from at least 2 percent of voters in each of Colorado’s 35 state Senate districts. As a constitutional amendment, it would require 55 percent of the vote to pass.

What is driving the initiative

The push for constitutional protection did not emerge in a vacuum. It follows three consecutive legislative sessions in which transparency advocates say Colorado’s open-records and open-meetings frameworks were weakened or tested.

In March 2024, Governor Jared Polis signed Senate Bill 24-157 into law, exempting state legislators from key provisions of the Colorado Open Meetings Law. The bill, sponsored by Senate President Steve Fenberg and House Speaker Julie McCluskie, allows lawmakers to discuss bills and public policy via email, text, or other electronic communications without triggering public meeting requirements.

In his signing statement, Polis said the bill would provide clarity to the Legislature as it seeks to resolve ambiguities around their own conduct under the open meetings law.

Critics were sharply opposed. Steve Zansberg, who leads the Colorado Freedom of Information Coalition — an alliance of journalists, news organizations, and civic groups focused on government transparency — called the signing profoundly disappointing, noting that one branch of government had effectively exempted itself from transparency requirements. The League of Women Voters urged Polis to veto the measure.

The timing drew particular scrutiny. Polis signed the bill during National Sunshine Week — a week specifically intended to celebrate open government and public access to information.

The open-records fight

In 2025, a bipartisan group of lawmakers introduced Senate Bill 25-077, which would have extended the deadline for government agencies to respond to public records requests under the Colorado Open Records Act. The bill would have given agencies five working days instead of three for an initial response, plus additional extension time.

Polis vetoed the bill — his first veto of the 2025 session. In his veto letter, the governor wrote that it would be convenient for the executive branch to agree to weaken CORA, but as a representative for the people of Colorado, he supports more, not less, openness and transparency.

Polis also objected to the bill’s creation of different response timelines depending on who was making the request and why — effectively creating three classes of open records requests with government officials deciding which class applied.

State lawmakers considered overriding the veto but abandoned the effort when it became clear they lacked the two-thirds support needed in both chambers.

Now, in 2026, lawmakers are trying again. Senate Bill 26-107, introduced in February, is nearly identical to the vetoed 2025 measure — extending initial response times from three working days to five, and extension periods from seven additional days to 10. One notable change: the 2026 version removes an exemption for journalists that appeared in the 2025 bill, meaning all requesters would face the same extended timelines.

An unusual coalition

The ballot initiative’s proponents represent an unlikely alliance. The Independence Institute, which calls itself an “action tank” devoted to individual, economic, and journalistic freedom, is led by Jon Caldara and widely characterized as aligned with free-market conservative causes. The League of Women Voters of Colorado identifies as a nonpartisan, grassroots organization working to protect voting rights, though the group also maintains policy positions on climate, healthcare, gun violence, and reproductive rights.

Beth Hendrix, executive director of the League of Women Voters of Colorado, said a healthy democracy requires informed understanding and public participation in government decision-making, calling the right to know fundamental.

Some 50 organizations have joined the coalition — groups that, on most policy questions, would find little shared political ground.

What the amendment would change

Currently, Colorado’s transparency protections exist entirely in statute — the Colorado Open Records Act and the Colorado Open Meetings Law. Because they are ordinary laws, they can be amended, weakened, or exempted by a simple majority vote in the legislature, as happened with SB 24-157 in 2024.

Placing transparency rights in the constitution’s Bill of Rights would change that calculus. Lawmakers could still write exemptions and procedures, but any restriction that failed to demonstrate a clear overriding interest — individual privacy or another compelling state interest — could be challenged and struck down by courts. The $1,000 minimum fine per violation would give the provision enforcement teeth that current law lacks.

What comes next

The initiative must first pass through a comment and review period by the Legislative Council and Office of Legislative Legal Services before going to the state Title Board for approval. If approved, proponents begin collecting signatures across all 35 Senate districts. The timeline puts a potential ballot appearance in November 2026.

Meanwhile, SB 26-107 continues working its way through the legislature. Whether the governor would veto a third attempt at extending response deadlines — or whether the ballot initiative’s momentum changes the political calculation — remains an open question.

Senate Bill 26-097, sponsored by Sens. Nick Hinrichsen and Lisa Cutter and Reps. Lorena Garcia and Rebekah Stewart — all Democrats — would repeal six offenses from the state criminal code while preserving felony penalties for pimping, coercion-based pandering, human trafficking, and all offenses involving minors.

The bill has been assigned to the Senate Judiciary Committee, which holds a 5-2 Democratic majority. No hearing date has been scheduled.

It arrives in a legislative session already consumed by a parallel debate over how Colorado handles child sex trafficking — and amid data showing the state’s trafficking problem is getting worse, not better.

What the bill does

SB 26-097 would repeal criminal penalties for prostitution, soliciting for prostitution, keeping a place of prostitution, patronizing a prostitute, prostitute making display, and a subset of pandering involving the knowing arrangement of consensual adult activity.

It would preserve pimping as a Class 3 felony carrying up to 12 years in prison. Pandering involving menacing or criminal intimidation would remain a Class 5 felony. The bill does not touch Colorado’s human trafficking statutes — including trafficking for sexual servitude and trafficking of a minor for sexual servitude — or the state’s sexual exploitation of a child laws.

Commercial sexual activity would remain illegal for anyone under 18. The bill adds explicit protections for minors: trafficking victims under 18 would receive immunity from criminal liability or juvenile delinquency proceedings, and law enforcement encountering a minor whose conduct suggests trafficking would be required to immediately report it.

The bill also declares sex work regulation a “statewide concern,” preempting all local ordinances. And it would allow individuals with prior convictions for the repealed offenses to petition to have their records sealed.

“I don’t think this is something that we should shy away from because it’s uncomfortable,” Hinrichsen told The Colorado Sun. “I am convinced that the outcomes for individuals who are involved in sex work are really harmful.”

Colorado’s trafficking crisis

The policy debate is unfolding against a backdrop of worsening trafficking numbers in Colorado — numbers that are particularly stark when it comes to children.

An analysis of FBI and CBI data by Mitch Morrissey, former Denver District Attorney and Owens Early Criminal Justice Fellow at Common Sense Institute, found that Colorado ranked 13th nationally with 88 reported trafficking incidents in 2024. Seventy-nine percent of those cases involved sex trafficking.

Morrissey’s analysis of the underlying law enforcement data found that roughly two-thirds of trafficking victims identified through criminal cases were minors, and that 60% of all trafficking victims since 2008 were children — some under age 10. In 2023, the FBI and CBI recorded 113 trafficking cases statewide, a record. Victim counts increased 63% during the 2020s compared to the late 2010s.

The National Human Trafficking Hotline, which tracks a different data stream based on calls, texts, and tips rather than law enforcement cases, reported 185 cases in Colorado in 2024 — a 123% increase from 83 cases in 2015. Of 318 identified victims in the hotline data, 40 — about 12.6% — were minors.

The gap between the two data sources is significant. Law enforcement case data, which Morrissey analyzed, may skew toward minors because agencies prioritize cases involving children. Hotline data captures a broader cross-section of contacts, including labor trafficking and self-reported cases. Both paint a picture of a problem that is growing, but they disagree on the proportion of child victims — a central point of contention in the decriminalization debate.

In July 2023, the FBI and state agencies rescued 27 trafficking victims in a two-day operation across Colorado. Eight were minors, including a 16-year-old who had been trafficked by her father in exchange for drugs.

Of 86 people convicted of soliciting sex from a child in Colorado between fiscal years 2022 and 2025, only 20 received prison sentences, according to Denver7.

The case for decriminalization

Supporters argue that criminalization is itself a driver of trafficking and violence — that punishing sex workers makes them less safe, not more.

The core harm-reduction argument: when sex workers face arrest for their own activity, they cannot report violence, exploitation, or trafficking to police without risking prosecution. Decriminalization, advocates say, would bring sex work out of the shadows and make it easier for workers to identify and report trafficking — including of minors.

The ACLU of Colorado is listed as supporting SB 26-097. Human Rights Watch and Amnesty International both support full decriminalization globally. Freedom Network USA, the largest anti-trafficking coalition in the United States, has formally endorsed decriminalization as a strategy to reduce trafficker power over victims.

The American Medical Association’s Journal of Ethics published research in 2017 arguing that criminalization creates a “climate of impunity” that enhances vulnerability to trafficking.

Supporters point to two data sets. New Zealand, which fully decriminalized sex work in 2003, saw no reported increase in trafficking in the years that followed. And a study by researchers at UCLA and Baylor University examining Rhode Island’s accidental indoor decriminalization from 2003 to 2009 found that reported rapes fell 31% and gonorrhea cases declined 39% during the period. The study’s authors cautioned that their findings have “internal validity but not necessarily external validity” — meaning they may not generalize to other policy contexts — and the study could not measure effects on trafficking due to data limitations.

Supporters also note that Colorado’s current approach is failing on its own terms. Despite full criminalization, trafficking cases have grown 123% since 2015 and child victim identification has not improved. “Sex workers deserve clarity and certainty that they can safely conduct business within the state, regardless of the local governing authority,” the bill’s sponsors wrote in the legislation, according to Westword.

A key distinction from prior decriminalization efforts: SB 26-097 preserves pimping as a Class 3 felony. The Washington, D.C. decriminalization bill that drew opposition from Polaris Project — the nation’s leading anti-trafficking organization — would have legalized pimping. Colorado’s bill does not.

The case against

Opponents argue that expanding the legal market for sex work will expand trafficking — and that the data on child victims makes the gamble unconscionable.

A 2013 study published in World Development by researchers at Harvard and the London School of Economics, analyzing more than 100 countries, found that the “scale effect” of legalization dominated the “substitution effect” — countries that legalized prostitution had larger reported trafficking inflows. The researchers noted that higher reported trafficking may partly reflect better detection rather than more actual trafficking, but concluded the overall effect pointed toward expansion.

Polaris Project, which operates the National Human Trafficking Hotline, supports decriminalizing people who sell sex but opposes full decriminalization that includes buyers and third parties. CEO Bradley Myles cited more than 200 trafficking survivors who opposed the D.C. bill, warning that if brothels become legal, police lose cause to enter venues where trafficking occurs. The Colorado bill’s preservation of pimping penalties addresses one of Polaris’s concerns but not the broader worry about reduced law enforcement access.

Shared Hope International, citing hundreds of survivors, argues that legislation “to decriminalize the purchase and sale of another for sex will perpetuate and normalize harm, especially to youth.” The organization advocates the Nordic or Equality Model — decriminalizing sellers while continuing to criminalize buyers and profiteers.

Critics also point to what would be lost. Repealing “keeping a place of prostitution” would eliminate an early intervention tool that law enforcement uses to investigate problem properties. Removing buyer-side criminal exposure would reduce leverage to investigate trafficking networks. And prostitution arrests, opponents argue, currently serve as contact points to identify minor trafficking victims who may not self-report.

New Zealand’s experience, while cited by supporters, carries caveats. Post-decriminalization studies found that 9.3% of sex workers entered the trade at ages 16 or 17, with another 9% entering before age 16. The U.S. State Department noted in 2021 that New Zealand had convicted child sex trafficking offenders but failed to identify the victims as trafficking victims. Gang members and family members continued exploiting children.

The preemption clause draws particular opposition from local government advocates. By declaring sex work a “statewide concern,” the bill would strip municipalities of the authority to regulate it through local ordinances. Towns including Fountain, Monument, and Woodland Park have expressed opposition, and policy analyst Scott K. James has called the measure a “statewide power grab — not genuine deregulation but statewide social policy backed by statewide preemption.”

For opponents, the through-line is the data on children. In a state where Morrissey’s analysis of law enforcement data shows roughly two-thirds of trafficking victims in criminal cases are minors — and where the problem is growing, not shrinking — expanding the legal market is a risk they say Colorado cannot afford to take.

The legislative context

SB 26-097 is not arriving in a vacuum. It is entering a legislature simultaneously wrestling with what to do about child sex trafficking — with sharply different outcomes depending on the bill.

On Feb. 10, 2026, the House Judiciary Committee voted 7-4 along party lines to kill HB 26-1082, the “Children Are Not for Sale Act,” which would have made child sex trafficking a Class 1 felony punishable by life without parole. Democrats opposed the bill, citing concerns about mandatory life sentences and judicial discretion. The ACLU warned it could affect trafficking victims themselves.

It was the second consecutive year a child trafficking penalty bill died along party lines. In 2024, HB 24-1092 — which proposed mandatory minimum sentences for child sex trafficking — was killed 8-3 in the House State, Civic, Military and Veterans Affairs Committee. More than 50 witnesses testified in favor, including trafficking survivors. Three opposed.

A narrower bill, SB 26-015, is advancing. The bipartisan measure — sponsored by Republican Sen. Byron Pelton and Democratic Sen. Dylan Roberts — would impose mandatory four-year minimum prison sentences for child sex trafficking offenses. It advanced 6-1 from the Senate Judiciary Committee to Appropriations on Feb. 11, the same day SB 26-097 was introduced. The fiscal note estimates a cost of $17 million over five years, reflecting an anticipated 25 additional prison sentences per year.

Survivor testimony has been a feature of the companion debate. Camryn Finnigsmier, a trafficking survivor, told CBS Colorado that “trafficking continues because there are virtually no consequences for those who seek out to buy children for sex.” Rebecca Layton, a survivor who opposed mandatory minimums, said that “under this bill, many would continue to be charged with the very acts they were coerced into.”

Gov. Polis has not taken a position on SB 26-097. His office told The Colorado Sun it would “monitor the measure.” Hinrichsen acknowledged that Polis “could be a hurdle,” telling the Sun, “I’ve opened up conversations with the governor — haven’t gotten any solid answers yet.”

Attorney General Weiser has also remained silent.

What comes next

SB 26-097 awaits a hearing before the Senate Judiciary Committee. No date has been set. If approved by the committee, it would move to the full Senate, then to the House, where it would need to clear its own committee before a floor vote. If enacted, the bill would take effect approximately 90 days after the legislature adjourns — around Aug. 12, 2026.

Meanwhile, SB 26-015 continues through the appropriations process, and the defeat of HB 26-1082 leaves an open question about whether Colorado will strengthen its penalties for child trafficking in the same session it considers weakening the criminal framework around the adult sex trade.

No Colorado law enforcement agency has issued a public statement on SB 26-097. No major anti-trafficking organization has released a statement specific to the bill. It has been four days since introduction.