Overview
Markup Movement: Both the House and Senate made progress on FY26 appropriations bills this week – albeit with a readjustment to what we can expect them to complete by August recess.
The full House passed the Defense bill, which was the second FY26 floor vote following MilCon-VA's passage in late June. House subcommittees marked up and passed their Interior; Energy and Water; THUD; and National Security and Department of State bills, with the full committee favorably reporting THUD and Energy and Water. The Senate Appropriations Committee favorably reported its MilCon-VA and CJS bills, recovering from last week’s delay on the latter.
While both committees have made notable progress, Chairman Cole acknowledged that the House will be unable to meet its goal of passing all twelve bills through Committee by the August recess. While FSGG is scheduled for markup next week (leaving only Labor-HHS until September), we do not expect the House to consider additional appropriations bills on the floor before recess. The Senate is hoping to put a minibus on the floor next week. The bills that are ready for floor action include CJS, Leg Branch, MilCon-VA, and Ag-FDA.
Given the start-and-stop nature of this appropriation cycle, a CR after September 30 is all but guaranteed. However, it remains unclear whether it will be a short-term CR to allow appropriators the opportunity to pass their bills by year's end, or a full-year CR. Office of Management and Budget (OMB) Director Russ Vought threw appropriators a curve ball this week, stating the appropriations process should be "less bipartisan." This statement aligns with OMB's goal of exerting more control over the appropriations process, but is likely to sow greater distrust that the White House intends to adhere to congressionally appropriated funds.
Updated 302(b)s: Following the House Appropriations Committee's approval of several FY26 bills, Chairman Tom Cole (R-OK) released updated subcommittee allocations for FY26. Chairman Cole's creative maneuver this week illustrates the broader balancing act appropriators face this year. Navigating the competing priorities of the House, the bipartisan demands of the Senate (despite what the OMB Director says), and the White House on a budget that addresses national priorities while managing budgetary constraints will be a difficult and complex task. This initial step sets the foundation for what will undoubtedly be a challenging process ahead.
Rescissions Wrap-Up: Both the House and Senate have passed the rescissions package requested by the administration, sending the measure that cuts $9 billion from foreign aid and public broadcasting programs to President Trump’s desk.
The rescissions effort was not without some resistance, highlighting ongoing tensions between appropriators and the administration over President Trump’s spending cuts. For example, Senate Appropriations Committee Chair Susan Collins (D-ME) and other Republicans objected to a $400 million cut to PEPFAR, prompting the White House to drop the cut and add language protecting public health programs. Still, Chair Collins and Sen. Lisa Murkowski (R-AK) withheld their support, citing a lack of detail on impacted accounts—a recurring issue this cycle.
Meanwhile, Democratic appropriators have warned that its passage could end bipartisan cooperation on FY26, though Senate Majority Leader Chuck Schumer (D-NY) has not ruled out continued negotiations. Adding to the uncertainty is the expectation that the OMB may submit another rescission request in the near future.
