Status of FY 2026 Funding

Before recessing, the Senate passed just three of the twelve appropriations bills – Agriculture, Legislative Branch, and Military Construction-Veterans’ Affairs (Mil Con).  The House passed only two – Defense, and Mil Con. None of these bills have been enacted into law.  At least some Democratic votes will be necessary for any funding measure to pass the Senate. Congress has a long way to go to fund the government past the end of the current fiscal year (September 30).  House and Senate Republicans have different preferences regarding topline budget numbers, and the party has yet to settle on a strategy going forward. Democrats are under pressure from their base to fight Republicans on everything, but they must unite on feasible demands in exchange for their votes.  In the circumstances, the best-case path forward probably is passage of a short-term continuing resolution (CR) by the end of the month to continue funding at FY 2025 levels (actually, FY 2024 levels, since Congress has funded the government through current fiscal year on a CR) and allow more time for the parties to negotiate a longer-term solution. The alternative to passing a CR is a government shutdown.

One potential long-term resolution under discussion is to pass a CR to last for the duration of FY 2026 that also includes earmarks and perhaps some policy provisions to sweeten the deal.  At least some members of the more conservative Freedom Caucus support this plan – an unusual position since that group typically would not vote for a stop-gap funding measure and traditionally has opposed earmarks. The approach would allow budget hawks to avoid a full-year package that would certainly incorporate higher spending levels, and the sweeteners might convince other members of the party, including moderate Republicans facing tough reelections next year, to support the approach.