The Approps Drop

With the House finally beginning to break its floor paralysis, appropriations may be back in motion. However, the path to funding the government for FY27, and keeping the lights on past September 30, remains complex. Last week, the House passed the National Security, Department of State, and Related Programs (NSRP) appropriations bill, which included a closely watched vote on Rep. Thomas Massie's amendment targeting aid to Israel. House Republicans also renewed efforts to advance a potential reconciliation 3.0 package, while House Republicans will bring a continuing resolution (CR) funding the government through December 4th this week. Across the Capitol, the Senate remains largely frozen on appropriations, with no markups scheduled and no spending bills released for consideration, though a timely budget justification hearing is on the docket.

The week ahead is unlikely to resolve fundamental questions facing the FY 2027 funding cycle, but it may provide signals about where Congress is headed. As the House defers its attempt to advance the NDAA and Senate appropriators continue searching for a path forward, Congress is running into the reality of a compressed legislative calendar ahead of the midterm elections. With August recess looming, the September 30 fiscal year-end deadline drawing closer, an outstanding OMB supplemental request and Reconciliation 3.0 still in the conversation, the coming weeks will test whether Congress can build momentum on the defense authorization and appropriations or whether political and procedural obstacles once again force leadership into crisis-management mode.

The week of June 22 was marked by significant disruption to the appropriations process. In the Senate, appropriators were expected to begin fiscal year (FY) 2027 markups but postponed once again due to the continued absence of Defense Appropriations Subcommittee Chairman Mitch McConnell. In the House, a series of setbacks derailed consideration of both the Energy and Water Development (EWD) and National Security, Department of State, and Related Programs (NSRP) bills.

The Trump administration’s Fiscal Year (FY) 2027 defense budget request represents a historic high watermark and a significant increase from the FY 2026 defense funding level enacted into law—both in raw dollars and in structure. Clients with defense equities should understand both the numbers and the funding mechanics, both of which carry significant implications for authorization (National Defense Authorization Act (NDAA)), appropriations (discretionary federal funding) and the potential for a defense reconciliation process (mandatory spending).

During the week of June 8^,both the Labor, Health and Human Services, Education and Related Agencies (LHHS) and Homeland Security (DHS) bills were passed out of full committee in the House and the Defense appropriations bill held a classified subcommittee session. We will see an open full committee markup on June 24 after next week’s House recess.

The week of June 1 marked forward progress in the House and a lack of progress in the Senate. The House passed the Interior and Transportation, Housing and Urban Development (THUD) bills out of full committee and unveiled its Labor, Health and Human Services, Education and Related Agencies (LHHS) and Homeland Security (DHS) bills for subcommittee markup. We will see reports for those bills released on June 8 and June 9 respectively. The House also considered its second appropriations bill on the floor. The Agriculture/Food and Drug Administration (FDA) bill passed by a vote of 213-210, with just four Democrats voting for the measure. Not nearly as bipartisan as MilConVA.

During the week of May 12, the House passed its first bill of the Fiscal Year (FY) 2027 cycle, advanced a second bill through full committee, and held cabinet-level budget hearings. The Senate held FY 2027 budget hearings as well. The week of May 19 was the last session week before the Memorial Day recess, and it was largely a rinse-and-repeat week during this busy appropriations time of year.