With the House officially out for the August recess, the appropriations spotlight has shifted entirely to the Senate. House Republicans departed Washington after passing a relatively clean continuing resolution (CR) through December 4 while Senate appropriators responded with a bipartisan proposal including several anomalies not included in the House CR, most notable Section 157, which would prevent the Office of Management and Budget (OMB) from implementing its controversial revisions to the Uniform Guidance for the period of the CR (until December 11). This will be a fast-moving week with likely Senate jet fumes driving the agenda towards the back end.
The House Is Gone. The Bipartisan Rewrite Is Here.
House lawmakers left town after approving a stopgap funding measure that would extend government funding through December 4. The bill is notable as much for what it excludes as what it includes. House Republicans deliberately advanced a relatively clean CR without the long list of anomaly requests sought by OMB, sidestepping debates over targeted funding increases and policy adjustments and focusing instead on preventing a September shutdown.
Late last week, the Senate had hoped to release its continuing resolution text, but the timeline slipped as negotiators work through a series of last-minute disagreements. One of the issues slowing release of the Senate CR was a dispute over the administration’s proposed overhaul of federal grants management, which we wrote about here.
Regular readers of the Approps Drop will recall that the proposal generated nearly 500,000 public comments earlier this month, reflecting widespread concern among states, local governments, universities, nonprofits, contractors and other grant recipients who argue the rule would fundamentally alter the relationship between federal agencies and funding recipients. OMB’s proposal would give senior political appointees greater influence over grant approval decisions, prompting criticism from appropriators on both sides of the aisle.
What began as a regulatory debate has now spilled directly into CR negotiations. The CR is very likely the last legislative train leaving the station before OMB’s Rule goes into effect on October 1, 2026. Opposition to the rule extends well beyond traditional partisan divides. In July, Senate Appropriations Chair Susan Collins and a bipartisan group of appropriators formally urged OMB to reconsider the rule, arguing that it would grant political appointees unprecedented influence over grant-making decisions that have traditionally been driven by career officials and objective review processes.
On Sunday evening, Senate appropriators released a bipartisan CR which includes Section 157; a provision that would prohibit OMB from implementing its revisions to the Uniform Guidance through the duration of the CR. The inclusion of Section 157 is particularly noteworthy because Collins had previously questioned whether the grants rule should be addressed through a continuing resolution at all, arguing that it was fundamentally a policy matter rather than a funding issue. Yet the Senate’s bipartisan agreement suggests that appropriators ultimately concluded that the CR is the viable legislative vehicle available before the rule takes effect. The breadth of that bipartisan support was underscored by the overwhelming 89-4 vote to invoke cloture on the motion to proceed, signaling broad support for advancing the Senate-crafted CR. Assuming the provision survives negotiations with the House, the CR could become Congress’s most significant intervention to date in the debate over OMB’s grants management overhaul.
Will Senate Appropriators Finally Show Their Hand?
As appropriators continue to negotiate behind closed doors, a question is increasingly circulating among budget watchers: will any fiscal year (FY) 2027 spending bills be released before senators leave town next week?
With formal markups largely stalled but staff work continuing, there is growing speculation that appropriators could begin posting draft legislative text or explanatory materials before recess. Doing so would allow negotiators to demonstrate progress, provide agencies and stakeholders greater visibility into the Senate’s thinking and potentially build momentum heading into September.
By all accounts, many of the subcommittee products are largely complete. Interior-Environment Chair Lisa Murkowski has said her bill is “ready to go whenever the chairman tells us it’s time to go,” while Agriculture-Food and Drug Administration (FDA) Chair John Hoeven says he has reached “basic agreement with Democrats” on his measure. Commerce-Justice-Science Chair Jerry Moran similarly argues his bill could attract bipartisan support all the way to the Senate floor. The problem does not necessarily appear to be the underlying bills. It remains to be the topline. Committee leaders continue to wrestle with overall spending totals, amendment rules and the practical challenges created by Senator McConnell’s absence.
That dynamic has sparked an intriguing debate among appropriators: should Republicans simply release bill text even if formal markups remain out of reach? Posting legislative language is not unusual, last year several bills never saw a markup and were instead posted. It would demonstrate progress allowing senators to showcase the home-state projects and priorities embedded in their bills, particularly Chair Susan Collins who is in a tough reelect. But doing so could risk aggravating Democrats whose cooperation will ultimately be required to move the measures through committee and across the floor. As Hoeven bluntly observed, “at the end of the day, in order to appropriate, it’s going to take bipartisanship.”
This leaves us with the question heading into recess: do appropriators decide that demonstrating momentum is worth the political risk, or do they continue negotiating behind closed doors? With multiple subcommittee chairs signaling their bills are effectively ready for public consumption, this week may be the best opportunity Senate appropriators have to unveil their products.
One More Thing: Is Debt Limit Round Two Already Coming?
As regular readers of the Approps Drop will recall, the Bipartisan Policy Center recently projected that the federal government could reach the debt limit again sometime in 2027, setting up another potential fiscal showdown in the next Congress. According to recent reporting, White House officials have privately floated the possibility of addressing the debt limit in a party-line reconciliation bill rather than risking a high-stakes negotiation with Democrats if control of Congress changes hands. Senate Majority Leader John Thune has acknowledged that the debt ceiling is “something that a lot of people are looking to address,” and has suggested that a post-election reconciliation package remains a possibility.
For appropriations observers, this is worth watching because it may be the clearest sign yet that some Republicans are thinking beyond a continuing resolution and even beyond FY27 spending bills. If discussions about another reconciliation package gain traction this fall, Congress could find itself debating not only how to fund the government, but also whether to use budget reconciliation once again to address the nation’s borrowing limit before it becomes a crisis.
