Overview
Continuing Resolution Solution? Following the House’s passage of a clean continuing resolution (CR) last week, Senate Majority Leader John Thune (R-SD) has made advancing a short-term CR the Senate’s primary focus during the final two weeks before senators depart for the August recess. Negotiations between Senate Appropriations Committee Chair Susan Collins (R-ME) and Vice Chair Patty Murray (D-WA) progressed relatively smoothly this week, with text of the CR expected to be released sometime today.
The measure is expected to be more expansive than the House-passed version, incorporating several anomaly requests from the White House and Senate Democrats. It is rumored that it would extend government funding through December 11, which would be one week beyond the expiration date in the House measure if confirmed in the final text.
The Senate CR is also expected to delay implementation of the Office of Management and Budget’s (OMB) proposal to rewrite Uniformed Guidance on how grants and contracts are approved. Senate Appropriations Committee Chair Susan Collins reiterated her opposition to the proposal this week but noted that leadership will ultimately decide whether to include related language in the CR. Although the timeline could change, the legislation is currently expected to clear the Senate before the end of next week.
With the House already in recess, consideration of any Senate-passed CR in the lower chamber will have to wait until September. While some reporting suggests the two chambers have been coordinating their efforts, the path forward in the House remains unclear. If history is any guide, several weeks of negotiations and back-and-forth may be required before this measure, or a revised version, is signed into law. As a result, much of September could be devoted to finalizing a CR.
House Majority Leader Steve Scalise (R-LA) also indicated this week that he intends to bring the FY27 Energy-Water and Transportation-HUD appropriations bills to the House floor in September. Such a move, and continued momentum toward regular order, would strengthen House Republicans’ negotiating position following the midterm elections. Meanwhile, Senate efforts to advance regular-order appropriations bills continue to face delays due to Sen. Mitch McConnell’s (R-KY) ongoing absence. His office announced Monday that he will remain away from the Senate for an unspecified period.
Reconciliation 3.0. Senate Majority Leader Thune has postponed consideration of a budget resolution for a third reconciliation package until after the Senate passes a CR. With just one week remaining before the Senate leaves for August recess, President Trump and Senate Budget Committee Chair Ron Johnson (R-WI) are placing significant pressure on Leader Thune to bring the House-passed budget resolution to a vote next week. Leader Thune noted this week, however, that he does not currently have the votes needed to advance the measure. The President has countered that Leader Thune does have the votes and should move forward.
A vote-a-rama on a reconciliation bill would certainly include some politically difficult amendment votes that Republicans would prefer not to take before the midterms. Additionally, the House-passed budget resolution would permit up to $95 billion in deficit increases for defense, intelligence, farm assistance, and for the SAVE Act without requiring corresponding offsets. Among those Republicans whose votes are not assured are fiscal conservatives who have raised concerns about increased spending and want to see offsets included before supporting a third reconciliation bill.
Chairman Johnson has argued that Congress does not typically offset the cost of wartime emergency supplemental funding and believes that the same standard should apply here. OMB Director Russ Vought also met with Senate Republicans on Wednesday to advocate for Reconciliation 3.0 and suggested that debt-related measures, including a debt ceiling increase, could instead be addressed through a separate fourth reconciliation bill.
At the risk of sounding like a broken record, we also note that most appropriators would prefer to address funding through the regular appropriations process, arguing that using reconciliation for funding measures departs from regular order and the traditional supplemental appropriations process. The Senate has thus far proceeded through regular order on the President’s supplemental funding request, including by holding a hearing last week with key administration officials.
OMB: Before departing for recess, the Senate is expected to consider a tranche of nominations, including Hal Duncan’s nomination to serve as OMB Deputy Director. Duncan was approved on party-line votes in both the Senate Budget Committee and the Homeland Security and Governmental Affairs Committee last week.
