Overview
Reconciliation Returns. The Department of Homeland Security (DHS) remains unfunded for a record 63 days. After prolonged disagreements among congressional Republicans over how to restore funding, the current strategy is a two-track approach using the partisan budget reconciliation process to provide funding for Immigration and Customs Enforcement (ICE) and border patrol. House Republicans have indicated they will only move forward on the FY26 DHS funding bill – funding only the non-immigration enforcement agencies of DHS – once the Senate shows progress with the reconciliation process.
President Trump has set a June 1 deadline for enactment, meaning lawmakers will need to move quickly. The process will begin next week when the Senate passes its budget resolution, which will include reconciliation instructions for specific committees of jurisdiction. Given the narrow scope of the bill sought by President Trump and Senate Majority Leader John Thune (R-SD), these instructions are expected to focus heavily on the Senate Homeland Security and Governmental Affairs Committee. The House is slated to take up the legislation during the week of May 4.
While the Senate is taking steps to keep the process on track, it is important to keep in mind that this will be no easy feat as budget reconciliation is a massive undertaking, especially within such a short timeframe. The GOP conference faces a wide-ranging (and often conflicting) set of demands, and the tight margins in the House make final passage far from certain. These challenges could force leadership to slow the process in order to identify additional provisions that might win over hesitant members.
FY27 Moves Forward. While Republicans consider using reconciliation to fund portions of DHS for FY26, the regular FY27 appropriations process is moving ahead, with both chambers taking steps this week to outline their timelines. The House Appropriations Committee released its updated FY27 markup schedule, with markups beginning today and concluding by the end of June. Bill text is expected to be posted roughly 24 hours before each scheduled subcommittee markup, with the corresponding committee report released shortly after each full committee markup concludes.
In the Senate, the Appropriations Committee will hold six subcommittee hearings next week to hear from the secretaries of Commerce, Treasury, Interior, Energy, and Agriculture, as well as the Senate Sergeant at Arms, on their respective budget requests. The Senate has not yet released a formal markup schedule.
Looking ahead, most appropriations action is expected between now and the end of July leading up to the month-long August recess. After that, legislative activity will be limited given the upcoming November midterm elections. While appropriators aim to advance their bills as quickly as possible, the most likely outcome remains passage of a continuing resolution in September that funds the government until after the November election, enabling lawmakers to complete appropriations work during the lame-duck session.
OMB Budget Hearings. OMB Director Russ Vought appeared before both the House and Senate Budget Committees this week to discuss President Trump's FY27 budget request, framing it as a continuation of what he described as "historic" fiscal progress since Trump returned to office. He highlighted significant achievements from FY26, including what he referred to as the first "real" discretionary spending cuts in over a decade, $2 trillion in mandatory savings, and the elimination of agencies such as USAID and the Corporation for Public Broadcasting. He said that President Trump's FY27 budget proposal builds on this by calling for a 10% reduction in non-defense spending compared to FY26, while setting a $1.5 trillion topline for defense – a 42% increase – to support investments in military capacity, including ships, planes, drones, munitions, satellites, and industrial base expansion.
These hearings focused on the ongoing DHS shutdown and potential funding for military operations in Iran. Director Vought described the shutdown's impact on DHS as "dire," citing risks of future sickouts and resignations, and noted that the administration has not yet determined the amount it will request for the conflict in Iran. He also defended newly proposed tariffs following the Supreme Court's decision striking down Trump's International Emergency Economic Powers Act (IEEPA) tariffs and denied allegations of unlawfully withholding congressionally appropriated funds.
Director Vought also commended Congress for using the budget reconciliation process to facilitate certain defense funding increases, stating that it enables additional defense resources without requiring proportional increases in non-defense spending.
Under the Congressional Budget Act, the reconciliation process is primarily used for mandatory budgetary provisions affecting spending, revenues, or the debt limit, and in the Senate is further constrained by the Byrd Rule, which bars non-budgetary provisions. While reconciliation can expedite passage of budget-related legislation by requiring only a simple majority vote in the Senate, it differs greatly from the annual appropriations process. Appropriations bills provide detailed program-level funding and ongoing oversight. Using reconciliation to allocate discretionary funds has long been controversial among appropriators, who argue it shifts control to a partisan process lacking the same scrutiny and detail. Although this may not become a flashpoint in the current cycle, it is likely to remain a source of tension in the future.
