Overview
A Loss, A Vacancy, and a Challenging Road Ahead. Washington was stunned over the past week by several major developments, most notably the passing of Sen. Lindsey Graham (R-SC) on Sunday. Sen. Graham's death marks the loss of one of the Senate's most influential voices on national security and foreign policy, as well as a longtime leader on the Appropriations Committee. Over the past week, colleagues from both parties have reflected on his decades of public service, his relationships across the aisle, and his enduring impact on the US Senate.
The loss comes at a particularly challenging moment for the Senate. Sen. Mitch McConnell (R-KY) recently provided an update on his ongoing medical issues, stating that he plans to return once he has recovered. As chair of the Defense Appropriations Subcommittee, McConnell has played a central role in negotiations over federal spending, particularly as Republicans and Democrats remain divided on defense and non-defense funding allocations.
At the same time, Senate topline negotiations remain at an impasse. In a recent Dear Colleague letter, Senate Minority Leader Chuck Schumer (D-NY) criticized what he described as a partisan approach to budgeting and urged Republicans to negotiate FY27 spending bills in good faith. Republicans, meanwhile, argue that Democrats have been unwilling to engage meaningfully on a topline spending agreement. Sen. McConnell's absence has effectively put Senate appropriations markups on hold, as Republicans lack the votes needed to advance spending bills through partisan markups without him.
It remains unclear who will succeed Sen. Graham as chair of the State and Foreign Operations (SFOPS) Appropriations Subcommittee. The Republican Steering Committee is expected to address his committee vacancies in the coming weeks.
Combined with the departure of former Sen. Markwayne Mullin (R-OK), who is now serving as Secretary of Homeland Security, the Senate Appropriations Committee has experienced unusual turnover among its leadership ranks this year. Three subcommittee cardinals have been affected, creating significant challenges for Chair Susan Collins (R-ME) and the committee as a whole.
CR Announcement. House leadership announced plans to bring a clean continuing resolution (CR) to the floor next week, a move that effectively takes the September 30 funding deadline off the table while postponing final FY27 appropriations decisions until after the midterm elections. While the legislation is expected to be a clean extension of current funding levels, Democratic leaders have not yet indicated whether they will support the measure and are expected to closely scrutinize any requested funding anomalies. Any effort to attach significant policy riders would quickly complicate consideration.
House Progress. This week the House passed its third FY27 appropriations measure, the National Security-State bill, after floor consideration had been delayed by a dispute over the SAVE America Act. Ultimately, House leadership attached the SAVE Act to the legislation, a move that helped resolve Rep. Anna Paulina Luna's (R-FL) procedural hold on floor activity and cleared the way for the bill's passage.
Reconciliation 3.0. The House Budget Committee also advanced a new $95 billion budget resolution by a vote of 20-14, setting up a floor vote next week before the House departs for the August recess on July 24. Speaker Mike Johnson (R-LA) and House Republicans have been discussing their strategy for several months, and as negotiations progressed, the package became significantly narrower in scope, now focusing on defense spending, farmer assistance, and $10 million for SAVE America Act grants. The new blueprint reflects what House Republicans believe can realistically pass the chamber given current political constraints.
The proposal contains no offsets and includes approximately $60 billion for the Pentagon, a figure that falls below the level sought by the President, many defense hawks, and Senate Republicans. More broadly, a third reconciliation package remains a difficult sell in the Senate, where many Republicans are reluctant to cast politically challenging amendment votes so close to the midterm elections.
Meanwhile, in the Senate, Chair Collins will hold a hearing next week on the administration's supplemental funding request. Scheduled witnesses include Defense Secretary Pete Hegseth, Joint Chiefs Chairman Gen. John D. Caine, and Agriculture Secretary Brooke Rollins, highlighting the Senate's different approach to providing supplemental funding through regular order instead of by reconciliation, which is the current House plan.
