Overview
Note: When the Senate adjourns, The Topline will also be adjourning. Thus, we may or may not be in your inbox next week. But if we aren't, we hope you enjoy the time off and will see you in September!
Continuing Resolution. Today, the Senate voted 91-6-1 to invoke cloture on its short-term continuing resolution (CR), which would extend government funding through December 11 and avert a potential shutdown fight ahead of the midterm elections.
With the Senate's August recess scheduled to begin next week, Republican leadership hoped to move the CR quickly, but efforts stalled this week due to a provision delaying implementation of the federal ban on certain hemp-derived THC products until December 11. Sens. Ted Budd (R-NC) and Pete Ricketts (R-NE) have sought to remove the delay and allow the ban to take effect as scheduled on November 12. Meanwhile, the Trump Administration has advocated for preserving the extension, arguing that additional time is needed to develop a broader federal regulatory framework.
Without a time agreement, which would require the support of all 100 senators, the earliest the CR could receive a final vote is this weekend. The situation remains highly fluid, as Senate leaders continue to negotiate an agreement to expedite consideration. Majority Leader John Thune (R-SD) has expressed optimism that the Senate can complete action on the measure today.
The Senate CR reflects a bipartisan agreement that would fund the government for one week longer than the House-passed CR and includes several administration-requested anomalies. The package contains targeted funding adjustments for WIC, select national security accounts, surface transportation programs, and the Disaster Relief Fund. It would also extend the African Growth and Opportunity Act (AGOA) and Haiti's HOPE/HELP trade preference programs through 2028. Additional provisions would accelerate funding for Navy shipbuilding and provide resources for priorities such as housing assistance and preparations for the 2028 Olympics. The CR also includes language delaying implementation of the Office of Management and Budget's (OMB) proposed Uniform Guidance (2 CFR Part 200) revisions which aim to expand the role of political appointees in overseeing federal grants and funding.
Looking ahead, assuming the Senate clears the measure, attention will shift to the House, where any changes to the House-passed bill will require additional action when members return later this month from their recess. Three-weeks is a long time for legislation to sit unresolved, and delays could create new political challenges. For now, House Republicans and Democrats alike are responding favorably to the Senate approach. House Appropriations Committee Ranking Member Rosa DeLauro (D-CT) described the Senate proposal as a significant improvement over the House version, while continuing to call for a longer-term legislative solution to concerns surrounding the OMB grants rule before the December funding deadline.
Budget Reconciliation Outlook. Today, the Senate is also expected to vote on its version of a budget resolution that would pave the way for another partisan reconciliation bill focused on funding priorities related to Iran, farm assistance, and the SAVE America Act. The Senate budget resolution would build on the House-passed blueprint but is expected to expand reconciliation instructions from 4 committees to 11, creating a broader vehicle for Republican priorities. However, it is likely to include the same level of funding for the Department of Defense as the House bill. Senate Democrats have warned that pursuing another partisan reconciliation package could undermine the bipartisan cooperation that has helped move the continuing resolution (CR) forward. For now, the path forward remains uncertain, as the measure is not expected to secure even a simple majority of votes in the Senate. As a result, consideration of a third reconciliation bill could easily slip into September.
Vought Faces Impeachment Push. Rep. Sydney Kamlager-Dove (D-CA) this week introduced articles of impeachment against OMB Director Russ Vought, alleging that he improperly withheld congressionally appropriated funds and failed to faithfully execute federal law. The effort follows recent court filings in which the administration acknowledged that certain clean energy grants were terminated based on political considerations, including whether recipient states supported former Vice President Kamala Harris in the 2024 election.
Rep. Kamlager-Dove's resolution includes two articles of impeachment: one alleging abuse of power through the improper impoundment of congressionally appropriated funds and another alleging failure to faithfully execute the laws of the United States. In announcing the effort, she argued that Director Vought had repeatedly interfered with Congress's constitutional power of the purse and characterized the administration's grant decisions as politically motivated.
While the resolution is unlikely to advance in the Republican-controlled House, the move is notable both politically and historically. Based on a review of congressional precedent, no OMB Director appears to have ever been impeached by the House, making the filing an unusual escalation in the ongoing debate over executive branch spending authority. The action also comes as Congress is simultaneously debating the aforementioned CR provision to temporarily block OMB’s Uniform Guidance.
Recess Reflections. Even with a short-term CR, appropriators are already looking toward a busy September. The House will return from the August recess in a relatively strong position, having completed committee action on all 12 FY27 bills and passed three on the floor, giving negotiators a solid starting point for year-end negotiations.
The Senate's path remains more complicated. Continued disagreements between Chair Collins and Vice Chair Patty Murray (D-WA) over topline funding levels, coupled with Sen. McConnell’s absence on the Appropriations Committee, have made progress through regular order difficult. As a result, some expect Chair Collins to begin posting FY27 bills in September to keep the process moving.
While some appropriations activity could occur this fall, the bulk of negotiations are likely to take place during the lame-duck session. That timeline could slip further if Democrats regain control of the Senate in November, as it could reduce incentives to reach a comprehensive year-end agreement before the new Congress convenes.
