The House has passed only one of the 12 FY26 appropriations bills (Military Construction-Veterans). The Senate Appropriations Committee began mark-ups on Commerce-Justice-Science, Agriculture, and Legislative Branch this week. There are only 81 days left in FY25, and Congress is only in session for about 30 of those days. The entire government has been operating under a full-year continuing resolution for all of FY25 since March and come October 1, another continuing resolution, short- term to start, is expected for FY26, leaving considerable funding discretion to the President.
There is no agreed upon topline on spending for FY26 in either the House or Senate. The President has proposed that the domestic budget be cut by 23% below FY25 levels (-$174 billion), a cut that is unlikely to pass the House and can’t pass the Senate, where 60 votes are needed to pass the bills.
So far, the House Appropriations Committee has only reported five of the twelve bills (Military Construction-VA, Defense, Agriculture, Legislative Branch, and Homeland Security). They have not yet marked up any of the bills for which the President has proposed deep cuts.
If President Trump and Director Vought get their way—and Republicans pass this package—they will not only gut the heart of compromise that this Committee is built around, but zero out longstanding bipartisan investments.
Senate Appropriations Committee Vice Chair Murray (D-WA),
June 25
The lack of progress to date has increased prospects for another full year continuing resolution, likely in December that slows the FY26 procurement process.
Further complicating progress on the FY26 bills is the President’s proposal to rescind $9.4 billion from FY25 spending ($8.3 billion from foreign assistance and $1.1 billion from the Corporation for Public Broadcasting/National Public Radio/ Public Broadcasting System). Those funds were just approved in the full-year CR in March. While the House passed the rescission bill on June 12 by a vote of 214-212, the Senate has not yet acted. Senate floor action is expected the week of July 14 under a discharge procedure that allows the bill to pass with a majority vote. It is possible that Senate Appropriations Committee (SAC) Chair Collins (R-ME) will offer a substitute, given her opposition to the President’s proposed rescissions for PEPFAR (global AIDS) and GAVI (global vaccine initiative).
SAC Vice Chair Murray (D-WA) stated that if the Senate passes the House rescission bill, Democrats will not cooperate in moving the FY26 bills. If the Senate fails to act by July 18, the White House is required to obligate the funds.
In a June 25 Senate Appropriations Committee hearing, OMB Director Vought testified that if the President’s rescission package is adopted, it is highly likely that the President will send Congress additional rescission proposals, canceling more funding that he signed into law on March 15, 2025. If the President does so, the Senate may consume significant floor time debating these measures, reducing the limited time available in late July and September to consider FY26 bills.
For my part, I believe it needs some significant changes. For example, I want to strike the rescission of funds for PEPFAR.
Senate Appropriations Committee Chair Collins (R-ME),
July 7
The Trump Administration’s plans for unilaterally cancelling enacted appropriations through so-called “pocket rescissions” at the end of FY25 will also contribute to the uncertainty of completing the appropriations process. Vought confirmed at the June 25 hearing that this is an option under discussion.
In the meantime, Congress, in the recently enacted reconciliation law (HR 1), has usurped the appropriations process by appropriating billions of dollars for:
- National defense programs ($156 billion, including $24.4 billion for Golden Dome missile defense);
- Border security and immigration programs, infrastructure, and technology ($170 billion);
- Coast Guard ($24.6 billion, including funding for systems improvements);
- Federal Aviation Administration systems modernization ($12.5 billion);
- NASA Moon / Mars missions ($10 billion);
- Kennedy Center repair and restoration ($257 million);
- Secret Service personnel ($1.17 billion);
- FEMA for Presidential residence protection ($300 million);
- Strategic Petroleum Reserve repairs and purchases ($389 million);
- Office of Management and Budget ($100 million);
- Bureau of Prisons ($5 billion); and
- The 250th Anniversary celebration ($150 million).
Funding provided is available for obligation from FY25 to FY29, with considerable discretion given to the President on how rapidly to spend the money and for what specific activities. A not-well-publicized element of the bill, consistent with White House policy moves, is language that shifts costs from the federal government to the states for selected programs.
WHAT’S AHEAD
Do not expect Congress to return to regular order this Fall and send the President the twelve appropriations bills by October 1. Given that the President has already accomplished his major appropriations objectives (funding the wall, detention beds, Golden Dome, and national security) through reconciliation, the lack of agreement on spending toplines for FY26, the uncertainty about unilateral spending cancellations, the potential for more rescission packages, government by continuing resolution is expected to continue for FY26.
FORECAST
>90%
Most civilian agencies end up operating
under CRs for all of FY26.