Overview
FY26 Hits the Floor. House appropriators are returning to Washington next week with an eye toward holding the first floor vote of the FY26 appropriations cycle. The MilCon-VA bill, having been reported favorably by the full House Appropriations Committee, is expected to be the first measure considered on the House floor. House Republicans are aiming to have all twelve appropriations bills reported out of committee and at least some passed by the full House by the August recess.
The House has released an updated markup schedule. Looking ahead to next week, the full committee will mark up Legislative Branch, Homeland Security, and Ag-FDA bills. The Senate has yet to release a full markup schedule but we expect markups may begin the week after the July 4th recess. This will mean that July is a busy markup month, with Senate Appropriations Chair Susan Collins (R-ME) aiming to advance a three-bill minibus package on the Senate floor before the August recess.
Rescissions Rework. The Senate Appropriations Committee will hear from Office of Management and Budget Director Russ Vought next week on the details of the rescissions package proposed by the White House. The House approved the package – which includes proposed cuts to foreign aid and public broadcasting – without any amendments. Chair Collins has signaled interest in revising the measure, specifically to preserve funding for the President's Emergency Plan for AIDS Relief (PEPFAR). She has noted, however, that any decision to alter the package ultimately lies with Senate leadership. Vice Chair Patty Murray (D-WA) has warned that passage of the package would make a bipartisan appropriations deal "nearly impossible," as Democrats argue distrust between the two parties would only deepen.
As a reminder, Congress has until July 18 to act on the rescissions package before the statutory deadline expires. If no action is taken by that point, the funds targeted for rescission must be obligated and spent as originally appropriated.
Warning on Social Program Insolvency. As noted in previous editions of The Topline, rising costs of mandatory programs – Medicaid, Medicare, and Social Security – remain the main driver of federal deficits. New projections released this week highlight growing concerns over their long-term sustainability.
According to the annual Social Security and Medicare Trustees report, the Social Security Old-Age and Survivors Insurance Trust Fund and the Medicare Hospital Insurance Trust Fund could be depleted by 2033. The combined Social Security Trust Fund is projected to become insolvent by 2034, a year earlier than originally projected. Without congressional action, insolvency would trigger automatic benefit cuts – up to 23% for Social Security and 11% for Medicare – posing serious challenges for beneficiaries and the broader fiscal outlook.
These projections underscore that, despite continued focus on discretionary spending, mandatory programs are placing increasing pressure on the federal budget.
