Overview
After the House passed the remaining six appropriations bills last week, FY26 funding seemed on track to be finalized this week, following the Senate's return from recess. However, a Customs and Border Protection (CBP)-involved shooting in Minneapolis this past weekend abruptly halted the FY26 appropriations process, leaving lawmakers scrambling to identify an alternative path forward as funding for the remaining six bills expires at midnight.
After a week of negotiations, Senate Republican and Democratic leaders and the White House reached an agreement yesterday evening: the Department of Homeland Security (DHS) appropriations bill will be replaced in the legislative package with a two-week continuing resolution (CR) to allow negotiations on ICE and CBP reforms to continue. The other five bills will remain in the package. This amended package will then be sent back to the House for approval, which won't happen until next week, guaranteeing there will be a temporary partial shutdown.
As of this writing, the situation remains fluid. Senate leadership is working to resolve senators' "holds" on the legislative package and to reach a time agreement on amendment considerations, with the goal of expediting debate and securing passage. We expect the Senate will clear the remaining holds later today, and passage should be smooth once the bill reaches the floor. The House could prove trickier, as some Democrats are unwilling to support any funding for DHS at this time, while conservative members have raised several concerns about the deal. Speaker Mike Johnson (R-LA) is keeping his options open on how to get this over the finish line, but in any case, we believe that enough support will eventually materialize and that the package will be enacted next week.
The outlook for DHS funding after the two-week CR expires is uncertain. Notably, ICE and CBP receive mandatory funding under the One Big Beautiful Bill Act, meaning they would not be affected by a shutdown.
While we have kept a close eye on FY26 this week, we have largely shifted our focus to FY27, shaping client requests, drafting language, filling out early appropriations forms, and requesting meetings. The appropriations cycle keeps churning!
