Overview
Defense Spotlight. The House Appropriations Committee's vote on the defense bill this week marked the final House FY27 appropriations bill to clear committee. Approved on party lines, the measure would provide roughly $1 trillion for defense and intelligence programs.
The full House was also expected to consider the Energy-Water and National Security-State bills this week, but Republican leaders postponed those votes until next week. The delay reflects the GOP’s narrow majority and opposition from members such as Rep. Anna Paulina Luna (R-FL), who has pledged to vote against all bills and rules as part of her effort to advance the SAVE America Act. Following a meeting yesterday afternoon with Speaker Mike Johnson, President Trump posted to Truth Social that House conservatives should support rules going forward. We expect some of the logjams will break next week, allowing the House to take up the appropriations bills before adjourning for the July 4th holiday.
Also on the defense front: the long-awaited White House supplemental funding request was delivered to the Hill this week. The supplemental package includes an additional $67 billion for the Pentagon, largely tied to expenses associated with the Iran conflict and other defense priorities. The request amounts to $87.6 billion in total and includes non-Pentagon related funding such as $10 billion in assistance for farmers, $2 billion for the Coast Guard, and resources to address the Ebola outbreak in Central Africa. Senate Appropriations Chair Susan Collins said this week that she plans to hold a hearing on the Trump administration's supplemental request.
Democrats are not expected to support the supplemental given continued concerns about the Iran conflict and the widening gap between defense and non-defense spending. Noting that conversations on a supplemental package are still at a very early stage, Senate Defense Appropriations Subcommittee Ranking Member Chris Coons (D-DE) said that formally abandoning the path of a third reconciliation package "certainly wouldn't hurt" the chances for a supplemental package, though House Republicans are moving forward with plans for a third reconciliation bill nonetheless.
Senate Challenges Persist. Senate Appropriations Committee markups were delayed for a fourth time this week after plans to consider the Agriculture-FDA, Commerce-Justice-Science, Legislative Branch, and Military Construction-VA bills were postponed following Defense Subcommittee Chairman Mitch McConnell’s (R-KY) hospitalization.
The markup was expected to be contentious, as no agreement has been reached on topline spending levels or amendment procedures. With a narrow 15-14 partisan split on the panel and a requirement that members be present to vote bills out of committee, Republicans could not proceed without Sen. McConnell's presence.
The Senate begins recess on Friday and will not return until July 13. Only seven legislative work weeks remain between now and the end of the fiscal year on September 30, increasing pressure on Senate appropriators to advance their bills.
Reconciliation 3.0. Questions about a third reconciliation package remain front and center, driven by the administration's push for an additional $350 billion in defense funding through the partisan budget process. Speaker Mike Johnson (R-LA) is moving full steam ahead, confirming this week that the House Budget Committee is working on a budget resolution that would establish the framework for the package and that GOP leadership met to discuss the effort.
That said, the timeline for advancing a budget resolution remains uncertain. While Majority Leader Steve Scalise (R-LA) said Republican leaders are still building consensus and have not committed to a specific schedule, House Budget Committee Chair Jodey Arrington (R-TX) is pushing to advance a resolution before the July 4 recess.
Still, appropriators on the Hill favor funding defense priorities through regular order, including a standalone supplemental package. That preference was reflected in the House Defense Appropriations Committee report, which described the administration’s decision to divide its defense funding request between the appropriations and reconciliation processes as "risky and uncoordinated." Senate Appropriations Committee Chair Susan Collins (R-ME) has similarly expressed a preference for addressing Pentagon funding through a supplemental package rather than through reconciliation.
Next Up. The House Appropriations Subcommittee on Financial Services has announced an oversight hearing on the Office of Management and Budget (OMB) next Tuesday, featuring OMB Director Russell Vought. Following last week’s contentious confirmation hearings for Hal Duncan, the nominee for OMB Deputy Director, lawmakers are expected to question Vought about the administration's supplemental funding request, including potential Iran-related spending, as well as OMB’s use of "pocket rescissions."
