The debt ceiling and budget continue to dominate the agenda in Washington, with everything else coming in a distant second. The ethanol industry is attracting much negative attention on the Hill as deficit hawks see it as an easy cut in budget negotiations. The EPA is poised to publish what is being dubbed the “transport rule” this week which would regulate GHG emissions in Eastern states that might migrate to other states. A rupture in a Montana oil pipeline, discovered over the weekend to have leaked 1,000 barrels of oil into the Yellowstone River, could have implications for multiple pieces of energy legislation, but again, everything at the moment is subsumed by deficit and budget issues.

The House returns from a week-long recess to resume consideration of fiscal year 2012 appropriations legislation during the July 5 week, while the Senate is scheduled to continue consideration of a resolution related to the ongoing military operation in Libya.

The House is scheduled to meet July 6 to continue on the Department of Defense Appropriations Act of 2012 (H.R. 2219). Next, the House leadership plans to bring up the energy and water development appropriations bill (H.R. 2354) for debate, probably by July 7. The legislation includes $30.6 billion in funding, which is about $1 billion lower than last year's level and $5.9 billion under Obama’s budget request.

The Senate had been scheduled to take a week-long recess in observance of the July 4 holiday. However, Sen. Majority Leader Harry Reid (D-NV) announced June 30 that the Senate will be in session starting July 5, in order to resume negotiations on deficit reduction and raising the debt limit.