Overview
Note: With the congressional recess for Thanksgiving, The Topline will take a break next week and will be back in your inbox on Friday, December 5.
The FY26 Clock is Winding Down. The FY26 appropriations environment continues to shift, and time is becoming a critical constraint. With the Thanksgiving recess now upon us and members not returning until the week of December 1st, appropriators face a compressed window before the January 30th funding deadline, after which passing additional appropriations bills will be extremely difficult.
This week's "four corners" meeting between House and Senate Appropriations Committee leaders underscored the significant workload that remains. Given the complicated political dynamics stemming from the shutdown, Democrats’ participation in the meeting at minimum signaled interest in continuing to negotiate. Political pressures remain high, and the next several weeks will determine whether Congress can build momentum and deliver results on FY26 — or whether larger hurdles will stand in the way.
Crossroads of Strategies. Notable differences between the House and Senate strategies persist. Senate Republican leadership is interested in advancing a larger, Senate-only "minibus" package that would include the more challenging Defense and Labor-HHS bills, positioning the chamber to conference on that bill before the January 30th deadline. The House Republicans favor a smaller, more targeted, conferenced package they believe is easier to pass by year’s end and would build momentum through incremental progress. As House Appropriations Chair Tom Cole (R-OK) said after meeting with his subcommittee chairmen Wednesday morning: "That's certainly our preference right now. We'd like to get something done before Christmas. But again, we’re open to what the Senate wants to do institutionally, and what our Democratic friends might be willing to do."
In the Senate, procedural holds from a handful of senators remain a roadblock to moving bills quickly on the floor. As Senator John Kennedy (R-LA) told reporters Wednesday, "There are about a squillion holds on the minibus right now, one of which is mine, and they're going to have to work their way through that." Senate Majority Leader John Thune (R-SD) acknowledged that leadership is "working through those holds" and urged colleagues to work constructively through the amendment process to enable a traditional appropriations pathway. The bills expected to be included in this Senate minibus have not yet been conferenced with the House, and any conference discussions will require agreement on a topline and subcommittee allocations.
External Policies Shaping FY26: Negotiations are also being shaped by outstanding health care issues and the GOP-promised Affordable Care Act vote. How these dynamics unfold over the next month will almost certainly affect how willing Democrats are to engage on appropriations. For now, Democrats appear to be maintaining a wait-and-see approach until the ACA path forward becomes clear. Ultimately, both chambers are navigating numerous political challenges in which funding debates are increasingly intertwined with broader messaging on healthcare affordability and the midterm elections.
Continuing Resolution Impacts. Any remaining FY26 bills that Congress does not pass before January 30th will likely be funded through a continuing resolution (CR) for the remainder of the year, potentially lasting until September 30th or through the midterm elections. Given that possibility, it is important to outline the implications of operating portions of the federal government under a CR.
A long-term CR would continue to shift funding and policy decision-making authority to the White House, limiting congressional control. Appropriators would continue to rely on the Office of Management and Budget to submit "anomalies" to address urgent needs, but such adjustments cannot fully resolve issues such as stalled scientific research projects or outdated program authorizations. Under a CR, agencies are unable to start new projects, ongoing programs remain frozen at outdated funding levels, and research activities face significant delays. Additionally, moving through the regular appropriations process allows Congress to include language establishing legal authority or requiring agencies to take specific actions and spend funding as Congress intends — an opportunity that is lost under a CR.
These dynamics underscore the stakes in the FY26 appropriations process, as a CR remains a more likely outcome for several bills if agreement cannot be reached by the January 30th deadline.
