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Congress is taking steps toward a potential third budget reconciliation package after the House of Representatives approved its Fiscal Year 2027 budget resolution on July 22.  The House passed H. Con. Res. 113, which would establish the framework for future reconciliation legislation by directing four House committees — Armed Services, Intelligence, Agriculture, and Administration — to develop legislation addressing key Republican priorities. Under the budget resolution, the committees would be instructed to prepare legislation providing:

  • Up to $73 billion for defense and intelligence priorities;
  • $12 billion in agricultural assistance; and
  • $10 billion to support state election security programs.

The resolution is intended to begin the reconciliation process, allowing legislation to move through Congress with expedited procedures and avoiding the Senate filibuster threshold typically required for major legislation.

President Trump has urged Senate Republicans to approve their own budget resolution before the chamber leaves for the August recess. However, the President has also called for the Senate measure to include instructions for addressing the federal debt ceiling.  Republicans increased the debt limit by $5 trillion, from $36.1 trillion to $41.1 trillion, as part of last year’s reconciliation package. Current projections indicate the federal government will reach the new limit sometime next year. The President has argued that addressing the debt ceiling sooner would provide greater flexibility before the 2026 midterm elections. His position is based on the expectation that if Democrats gain control of one or both chambers, they could seek policy concessions in exchange for supporting a future debt ceiling increase.

White House Office of Management and Budget Director Russ Vought encouraged Senate Republicans to focus the current budget resolution and any resulting reconciliation package on the administration’s immediate spending priorities. He has suggested that a debt ceiling increase could instead be addressed through a potential fourth reconciliation package during the post-election lame-duck session.

Senate Republicans are also considering whether to significantly increase the amount of defense funding included in their version of the budget resolution. Senate Majority Leader Thune has not indicated that he intends to bring a budget resolution to the Senate floor before the August recess. Under the Budget Act of 1974, any senator may force the Senate to vote on a motion to proceed to consideration of a budget resolution. While such an effort would likely fail, it could create political pressure on Republican senators who oppose moving forward with the measure before the recess. Negotiations are expected to continue as Senate Republicans determine the scope, timing, and priorities of a potential reconciliation package heading into the fall legislative session.