White House and Congress Split in DFC Reauthorization Over Development and Congressional Oversight

Making Markets Work

BLUF. The White House and both political parties in Congress generally agree on making the Development Finance Corporation (DFC) larger, faster, and better aligned with U.S. foreign policy goals. But recent draft reauthorization texts expose two areas where the White House and Congress diverge:

[1] How to balance DFC’s national security interests with its development mandate, and
[2] How much oversight Congress should have over agency priorities and investments.

Urgency

DFC must be reauthorized by Congress before October 7 in order to continue operating. Both pieces of draft legislation analyzed here reflect years of negotiation in an increasingly charged political atmosphere. The debate over DFC’s development mandate has taken on new importance now that other U.S. development agencies have been dismantled or thrown into uncertainty. And with DFC likely to be larger and more empowered than ever, Congress may step up to provide more oversight and strategic direction.

Context

This memo compares two pieces of draft reauthorization legislation:

White House Text. Submitted by the DFC’s Acting Chief Executive to Speaker of the House Mike Johnson on June 18, 2025. It has the support of the White House Office of Management and Budget, and can be assumed to reflect the priorities of the Trump administration.
Senate Foreign Relations Text. Submitted on August 1st by Senator Risch, Chairman of the Senate Foreign Relations Committee, as a proposed amendment to the National Defense Authorization Act for FY2026. It reflects a largely bipartisan consensus on the Senate Foreign Relations Committee.

Here’s where they align…

… And here’s where they don’t.

What happens next

Both houses of Congress will need to hammer out a final compromise, either by October 7 or early in the next fiscal year. Fortunately, despite the political climate — and thanks to the hard work of countless staffers including in the offices of Senators Risch and Shaheen — the two political parties are coalescing around a solution. There’s a good chance we’ll end up with reauthorizing legislation that strengthens DFC, enhances US foreign policy, and continues to prioritize investment in lower-income countries.