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 House: Finally a Floor Victory After Weeks of Gridlock

After weeks of internal procedural gridlock, House Republican leaders successfully unlocked the chamber by attaching the SAVE America Act to the NSRP bill, which passed largely along party lines in a 217-209 vote. This victory secures a critical legislative milestone for appropriators ahead of the August recess, sustaining momentum for House Republicans’ ambitious "12-for-12" appropriations strategy.

During floor consideration of the NSRP bill, the debate over foreign aid proved nearly as noteworthy as the bill itself. Rep. Thomas Massie's amendment to eliminate $3.3 billion in Foreign Military Financing for Israel exposed a sharp divide among House Democrats. While the amendment ultimately failed, 104-314, the Democratic caucus split almost evenly; 103 members voted in favor, 98 opposed, and 10 voted present.

The vote also triggered a rare public disagreement within top Democratic leadership. Minority Leader Hakeem Jeffries broke with Minority Whip Katherine Clark, with Jeffries opposing the measure while Clark voted in support of it. The outcome underscores a growing divide between Democrats who remain committed to the traditional U.S.-Israel security relationship and an increasingly influential faction seeking greater conditions on U.S. military assistance. As Israel remains a highly contentious issue in Democratic primaries, this fault line is likely to reemerge during future appropriations negotiations and potentially become even more consequential should Democrats retake the House next year.

Meanwhile, signs are already emerging that Congress may be looking beyond regular-order appropriations. On Friday, House Republicans released a 15-page CR extending funding through December 4th.  Moving forward with a CR at this stage is unusual; CR negotiations are typically informed by a package of "anomalies" developed by the Office of Management and Budget. These anomalies identify funding and policy exceptions needed to keep agencies functioning when a CR's across-the-board funding approach proves inadequate. They frequently include requests for disaster-response flexibility, extensions of expiring authorities, funding to address program shortfalls, transfers between accounts, or other technical fixes. Because OMB traditionally develops these requests and transmits them to Congress as part of CR negotiations, drafting a clean stopgap bill without programmatic guidance could present steep technical challenges. We’ll be watching to see how Democrats react to the CR; it will be difficult to oppose a clean CR but we’ve heard technical issues related to DHS spending as extended by the drafted CR could complicate bipartisan support.

Even as appropriators advanced a spending bill, the House is turning its attention to contingency plans if the process fails. On Wednesday, the full House Appropriations Committee will hold a hearing entitled Funding Lapses: Analyzing Shutdown Reform, examining proposals ranging from automatic continuing resolutions to broader budget-process reforms designed to reduce the frequency and impact of government shutdowns.

Appropriations watchers will recall that Senator Ron Johnson has authored two reform proposals in recent years. The Shutdown Fairness Act - which received support from the American Federation of Government Employees - would guarantee pay for federal and military personnel during a shutdown. His Eliminate Government Shutdowns Act would automatically trigger successive 14-day continuing resolutions whenever Congress fails to enact appropriations. Democratic appropriators have generally resisted automatic CR mechanisms, arguing that they weaken Congress's incentive to complete the annual appropriations process. However, the Shutdown Fairness Act generated bipartisan support amid the 40-day shutdown in 2025.  Expect these competing visions to be featured during Wednesday's hearing.

The Senate Reality Check

Senate appropriations markups remain completely stalled. With Senator McConnell yet to return to in-person Committee work and Senator Graham’s vacancy being reassigned, Chair Susan Collins still lacks a viable path to move appropriations bills out of committee. Democrats remain unified in opposition amid unresolved disputes over overall topline defense/nondefense spending levels.

However, Senate appropriators are not sitting idle. On Tuesday, the Committee will hold a budget justification hearing on the President’s June supplemental funding request, including nearly $70 billion for the Department of Defense. That’s a big number, but a far cry from the President’s $350 billion defense number requested to move via reconciliation. Defense Secretary Pete Hegseth, Joint Chiefs Chairman General John Caine, and Agriculture Secretary Brooke Rollins are scheduled to testify.

The hearing offers a preview into Senate sentiment about additional spending as Capitol Hill is already grappling with reconciliation 3.0 alongside looming FY27 funding deadlines. Members’ line of questioning may prove just as revealing as the witnesses’ testimony, offering insight into whether lawmakers view the supplemental as a standalone emergency package, a candidate for inclusion in reconciliation, or a request that faces strong headwinds amid growing fiscal and political pressures.

A Rare Appearance by Sitting Justices

The Supreme Court's budget request took center stage this week as Justices Elena Kagan and Amy Coney Barrett appeared before House and Senate appropriators—a noteworthy departure from routine practice given that Supreme Court justices have not testified before the House Financial Services and General Government (FSGG) Subcommittee since 2019. The timing is particularly notable, following the seemingly late-stage inclusion of additional funding for the Court in the FY26 Homeland Security bill. The unusual placement of judicial branch funding in a Homeland Security measure suggests the request may not have been finalized in time for consideration during earlier action on the FSGG bill, forcing appropriators to find an alternative legislative vehicle. Ultimately, the hearings offered members a rare opportunity for appropriators to weigh the Court's resource needs and to question the justices directly on the judiciary's funding priorities, operations, and growing workload.

One (Two) More Thing(s): Reconciliation 3.0 and OMB Proposed Rule Comment Period Ends

Momentum for a third reconciliation package continues to build in the House. Last week, the Budget Committee advanced a budget resolution and we will see it on the floor this week. Whether that momentum can survive contact with the Senate is another matter entirely.

Senate Republicans face a host of challenges that their House counterparts do not: razor-thin margins, Byrd Rule constraints, and a legislative calendar already crowded with the now fraught NDAA, stalled appropriations, and year-end funding negotiations. That reality was on display last week when Senate Majority Leader John Thune publicly characterized reconciliation 3.0 as a “risky proposition,” questioning whether another pair of grueling vote-a-ramas is worthwhile for a defense funding level that falls well short of the administration’s request.

Senate Republicans have expressed similar concerns that the package's agriculture funding provisions do not adequately address the needs of farmers. Complicating matters further, any final package is expected to incorporate some version of the SAVE America Act at the insistence of President Trump. The central question is not really whether the House can pass another reconciliation package, it is whether Senate Republicans have the appetite, floor time, and votes to take up another partisan budget fight while juggling must-pass appropriations and defense legislation.

OMB’s proposed overhaul of federal grants management closed its public comment period after generating one of the most significant rulemaking responses in recent memory. By the July 13 deadline, nearly 500,000 comments had poured in, reflecting intense interest from states, local governments, universities, nonprofits, contractors, scientific organizations, and advocacy groups. The extraordinary volume of feedback underscores the degree of concern surrounding a proposal that many stakeholders believe would fundamentally reshape the relationship between federal agencies and grant recipients. With the comment period now closed, attention turns to OMB's review process. Given the breadth of opposition of comments received, stakeholders will be closely monitoring whether the administration intends to move forward largely unchanged despite widespread concerns about its implications for federal grantmaking and financial assistance programs.

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.

Paralysis or Progress? The House Faces a Pivotal Week

Heading into the July 4 recess, House Republican leadership hoped to demonstrate momentum on both appropriations and the NDAA. Instead, the House floor was left paralyzed by demands and disputes surrounding the SAVE America Act. This was particularly disappointing for appropriators, as Chairman Cole spent months working on an aggressive timeline. House leadership has struggled to convert Committee action on appropriations and the NDAA into floor action. The broader significance extends beyond a single week of canceled votes. With so few sessions days remaining, every lost week increases pressure.

This week, the House is back with a hopeful agenda that includes the FY 2027 National Security, Department of State, and Related Programs Appropriations Act (formerly SFOPS). The Energy and Water bill and the House’s NDAA, previously slated for consideration, will not see the floor this week. For the NSRP bill, we are likely to see fireworks primarily between Democrats on Rep. Thomas Massie’s amendment that would end aid to Israel and cut the overall foreign military program by $3.3 billion. The dynamic on display between Democrats is a case study into likely their most divisive intra-party disagreements.

But, for Rep. Massie’s amendment to be considered, House Republicans must be able to pass the Rule. Rep. Anna Paulina Luna has vowed to maintain her floor blockade. Stay tuned.

Senate Appropriators Face Familiar Challenges

The Senate returns this week without a bipartisan topline spending agreement, continuing to complicate forward movement for appropriations bills through committee and onto the floor. As a reminder, Senate Appropriators remain split on how to handle the Administration’s historically high defense budget request, with the administration’s recent defense supplemental request adding another layer of complexity. As the week progresses, observers should watch for movement between Chair Collins and Vice Chair Murray, as well as indications that Senators are coalescing around a framework that could move the process forward. Equally important will be whether Senators can agree to avoid controversial amendments considered “poison pills” that could derail the process.

If no agreement is reached and Democrats remain united in their opposition to advancing bills, Chair Collins will likely be unable to move bills to the floor even if she is willing to proceed on a partisan basis. Senator Mitch McConnell released a statement over the weekend saying that he has moved from the hospital to a rehabilitation center and intends to return to the Senate, but he did not indicate when exactly that would be. Compounding Chair Collins’ challenge, the unexpected passing of Senator Lindsey Graham leaves Republicans down another member on the Appropriations Committee until a replacement is named. If Senator McConnell remains unavailable and Democrats continue to oppose advancing appropriations bills, Chair Collins will not have the votes to move bills to the floor. Readers of the Approps Drop will know that this means that instead of markups, the bills and reports are likely to be posted on the Senate Appropriations Committee’s website likely around the start of August recess.

September 30 is Coming. Now What?

At this point, few expect Congress to enact FY 2027 appropriations bills or negotiate a final omnibus or series of minibuses before the fiscal year ends on September 30. Instead, appropriators’ attention will likely shift in late August or early September to the Office of Management and Budget’s list of continuing resolution (CR) anomalies —targeted exceptions designed to provide agencies with additional flexibility or funding authority during a temporary funding measure. Appropriators will carefully review that list, discuss it with the agencies, and distinguish operational necessities from requests that are simply “nice to have.” The most likely outcome remains a relatively clean CR extending current funding levels. From there, Congress would once again postpone the most difficult funding decisions until after the election, when greater clarity will emerge regarding the political landscape and the path forward for FY 2027 spending negotiations. While funding fights can quickly become unpredictable, the appetite for a government shutdown currently appears limited on both sides of the aisle. The principal wild card remains whether disputes surrounding the SAVE America Act spill into broader fiscal negotiations and create procedural or political obstacles that complicate efforts to pass even a temporary funding measure.

One More Thing

Just weeks after wrapping a consequential term, Associate Justices Elena Kagan and Amy Coney Barrett are scheduled to testify Tuesday before the House and Senate Financial Services and General Government (FSGG) Appropriations Subcommittees on the Court’s FY 2027 budget request. Their appearances will mark the first time Supreme Court justices have testified before the appropriations subcommittees since 2019, when Justices Kagan and Samuel Alito appeared to discuss the Court's budget request.

The hearings also come amid increased congressional scrutiny of the judiciary’s request for additional security resources. In recent appropriations cycles, Congress provided supplemental funding for Supreme Court security following concerns about threats directed at the Justices and ongoing efforts to transition certain residential protection responsibilities from the U.S. Marshals Service to the Supreme Court Police. The request has generated debate among appropriators over both its size and the Court's justification for seeking additional resources outside the normal appropriations process, making security spending one of the most closely watched aspects of the Court’s budget presentation. While the intent of the hearings is to focus on the Court’s budget request, the Justices are also likely to face questions about recent decisions and issues like Supreme Court ethics standards.

Overview

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 Senate Outlook

The Senate Appropriations Committee’s slim 15–14 partisan split is designed to encourage bipartisanship. Without Senator McConnell present, and with Democrats voting in opposition while absent a bipartisan topline agreement, the committee is deadlocked at 14–14, which prevents bills from advancing to the floor. A tie loses.

While proxy voting is permitted for amendments, members must be physically present to vote on reporting bills out of committee. As a result, Senator McConnell’s presence remains critical to moving the process forward.

Compounding the delay, there is still no topline or amendment agreement between Chair Collins and Vice Chair Murray. Democrats appear unified in withholding support absence these agreements, particularly a bipartisan topline agreement. If Senator McConnell returns in the near term, markups could resume as early as mid-July. However, we anticipate disagreements over topline funding levels will persist through the Fourth of July holiday, especially considering Office of Management and Budget’s (OMB) recent supplemental request (see below). While Chair Collins seems committed to holding markups, Senate Republicans may ultimately opt to release all 12 appropriations bills and accompanying reports without markups before the August recess.

The House – What's Next?

House floor action stalled midweek following an unexpected intervention from President Trump, who announced he would withhold signing the bipartisan 21st Century ROAD to Housing Act until Congress passes his preferred version of the SAVE America Act. This disrupted House Republican leadership’s plans to adopt a rule to bring up the FY2027 Energy and Water Development (EWD) and National Security, Department of State, and Related Programs (NSRP) appropriations bills. By Thursday, House leadership had canceled votes for the remainder of the week.

Attention now theoretically shifts to the National Defense Authorization Act (NDAA) for FY2027, which the House is expected to consider this week. However, Rep. Anna Paulina Luna has threatened to continue blocking floor proceedings unless the SAVE America Act is attached to the NDAA, despite the President’s own call to avoid further obstruction. It remains unclear whether the House will be able to advance the NDAA this week, or whether leadership will again be forced to cancel votes, which would result in a longer Fourth of July recess that aligns with the Senate’s schedule.

Separately, on June 30, the House Appropriations Subcommittee on Financial Services and General Government will hold an oversight hearing with the OMB Director Russell Vought. Given OMB’s recently proposed revisions to 2 CFR Part 200 (Uniform Guidance), which would expand oversight and compliance requirements for federal funding recipients, this hearing is likely to be particularly consequential for grantees and recipients of federal assistance. Akin recently released an alert on these proposed revisions, which provides background, insights and implications into the proposed rule. Next week’s Approps Drop will include an analysis of the hearing.

One More Thing – OMB Supplemental Request

On June 24, OMB transmitted an $87.6 billion supplemental funding request, largely focused on urgent needs associated with Operation Epic Fury, with additional proposals geared toward specific member needs and priorities, likely intended to garner some level of bipartisan support. The request includes:

• $67 billion for Department of Defense military programs.
• $672 million for National Nuclear Security Administration (NNSA) Defense Nuclear Nonproliferation Programs to support efforts aimed at preventing Iran from acquiring nuclear weapons.

 Additional funding proposals include:

• $10 billion for temporary economic assistance for crop producers (crop year 2026).
• $1.1 billion for agricultural producers impacted by recent winter storms.
• $600 million for GSA building repairs and HVAC modernization.
• $500 million for National Park Service restoration projects, including the Seawall and World War II Memorial.
• $1 billion for Pension Benefit Guarantee Corporation Fund to restore pensions for former General Motors Delphi workers.
• $1 billion for reconstruction of New York’s Penn Station.
• $1.4 billion for Ebola response efforts in Central Africa.

Congressional Democrats, including Leaders Jeffries and Schumer, have signaled opposition to the request, making bipartisan support unlikely at this stage. Expect upcoming Appropriations Committee justification hearings in both chambers to provide further clarity on the administration’s priorities and the outlook for the request.

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).

Key Highlights

• The Trump administration’s FY 2027 defense budget request is historic in both size and formulation.
• The road ahead looks bumpy for the full defense request, as Republicans and Democrats aren’t on the same page.
• Reconciliation 3.0 is unlikely as of publish date but seems to be the only vehicle for $350 billion of requested defense funds.

The Numbers

Between FY 2026 defense appropriations and mandatory funding as provided by the One Big Beautiful Bill Act, the effective FY 2026 defense spending total is roughly $1 trillion. Secretary of War Hegseth described the FY 2027 request as building “upon the historic $1 trillion FY26 topline.”

On April 3, 2026, the White House released its much-anticipated FY 2027 budget request, proposing a whopping $1.5 trillion in defense spending. That amounts to a $445 billion or 44% increase over FY 2026. If enacted, this would be a larger single-year increase in defense spending than we saw during the Reagan-era buildup of the 1980s. It is a remarkable increase. It is notable that appropriators on both sides of the aisle have sought additional details on the request outside of what’s been included thus far.

Numbers Structure

What is perhaps most interesting about the FY 2027 defense budget request is its dual-track funding model. The request combines $1.15 trillion in base discretionary funding with an additional $350 billion in mandatory funding intended for a reconciliation bill. The reconciliation component also includes funds for the National Nuclear Security Administration (NNSA). Some committee leaders have expressed discomfort with appropriating such sums through the reconciliation process, most recently with regard to Reconciliation 2.0. It is reasonable for appropriators to feel this unease; for starters, the reconciliation process is bound by the Byrd Rule and does not allow for guardrails around funding like the regular appropriations process does.

Legislative Outlook

The House Armed Services Committee will mark up its version of the NDAA for FY 2027 (H.R. 8800) on June 4. The chairman’s mark would authorize almost $1.15 trillion, in line with the President’s request. The remaining $350 billion sought by the administration is not included and has been reserved for a separate reconciliation measure. The Senate Armed Services Committee will mark up its version on June 9 and 10.

As a reminder, NDAA bills are just that: authorizations. They do not fund defense spending; they only authorize it. Defense funding is provided by the Appropriations Committees. To that end, it is notable that top Senate Appropriations Committee Democrat Patty Murray has said that the $1.5 trillion defense budget request (discretionary + mandatory) is a nonstarter and must come “way down” for appropriators to reach a bipartisan topline spending agreement. This dynamic will be one to watch as the Senate marks up—or does not mark up—bills this summer.

As for Reconciliation 3.0, which has been the anticipated vehicle for $350 billion in mandatory defense funding requested by the President, prospects appear limited. House and Senate Republicans must find a path forward for Reconciliation 2.0 first and grapple with an Iran conflict supplemental request likely to come from the White House. As a reminder, top appropriators and administration officials have said the United States will run out of funding for the conflict sometime this summer.

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.

It was a different story over in the Senate. While no markups were officially noticed, we expected at least three bills to be marked up on Thursday, June 11. That did not happen, and instead a simmering topline spending disagreement boiled over into public view.

Key Highlights

• Simmering Senate disagreements over a topline spending deal boiled over into public view.
• An OMB Proposed Rule would significantly change the Uniform Guidance for federal financial assistance, including grants.
• The Byrd Rule remains a challenge for passing President Trump’s policy priorities via Reconciliation 3.0.

The House – 11/12 Through Full Committee

The House has officially passed 11 out of 12 bills through full committee markups, with just the Defense bill remaining. This is impressive but as a general rule, the House moves bills through Committee and to the floor on a partisan basis and under majority rule. The bills are largely not formulated on a bipartisan basis, and most amendments offered by the minority are rejected on partisan lines in markup. Bipartisanship for the House generally begins at Conference negotiations with the Senate.

During consideration of the LHHS bill, Ranking Member Rosa DeLauro offered an amendment blocking OMB’s most recently published Proposed Rule that would make significant revisions to 2 C.F.R. Part 200, commonly known as the Uniform Guidance governing federal financial assistance. The Proposed Rule includes new prohibitions on the use of federal funds, establishes a new pre-issuance review process involving senior political appointees and imposes new compliance obligations on recipients. The amendment failed 29-32 with one Republican voting in favor. While the rule is slated to go into effect October 1, 2026, this is an issue House Democratic leadership will likely want to confront in any final Fiscal Year (FY) 2027 negotiations.

The Senate, The Stalemate

Last week in the Senate brought much finger pointing and little markup action for Chairwoman Susan Collins and Vice Chairman Murray. Three bills were slated for Full Committee markup on June 4: Agriculture/FDA, Legislative Branch, and Commerce, Justice and Science. That markup was postponed, ostensibly due to Reconciliation 2.0’s vote-a-rama. We expected to see those bills marked up on June 11, but instead Chair Collins released a statement explaining that the Committee could not go forward in part because while Vice Chair Murray insists on a topline spending agreement (how much money the committee plans to spend across all 12 bills) to proceed to markups, Chair Murray did not. Chair Collins also noted that then-Chair Murray refused to proceed if poison pill riders were considered.

From Vice Chair Murray’s reported perspective, the two leaders historically always had a bipartisan understanding on topline funding going into each of the first markups, whether on paper or otherwise. Vice Chair Murray also made it clear in her reported statements that Congress must use its power via the Appropriations Committee to respond to the Trump administration, meaning tough amendments votes are on the table.

What Does It All Mean?

It’s clear that the path forward for final FY 2027 appropriations bills remains rocky at best and certainly uncertain. For the optimists, Chair Collins and Vice Chair Murray traditionally return to bipartisanship, even when the congressional environment is exceedingly grim.

But, for many years Appropriators have underwritten bills with rescissions and offsets from funding pots that have now run dry or are close to it, like Internal Revenue Service (IRS) funds in the Inflation Reduction Act. To keep the non-defense funding merely flat with FY 2026, Appropriators must spend billions, to speak nothing of sought after additional investments in priorities like the Supplemental Nutrition Assistance Program (SNAP) or cancer research funding at the National Institutes of Health (NIH). It is unlikely that Vice Chair Murray can accept large increases to defense spending but is even less likely without increases to non-defense priorities that pull the bills out of their mathematical holes.

If no progress can be made, Chair Collins will likely post the bills on the Senate Appropriations Committee website closer to August recess, but there are many weeks between now and then. Senate magic can always happen.

One More Thing – Reconciliation 3.0

It remains to be seen how real Reconciliation 3.0 will be. Last week during a Defense Appropriations Subcommittee hearing, both Sens. Mitch McConnell (R-KY) and Susan Collins (R-ME) threw cold water on the prospect. Sen. McConnell was quoted as saying “I think it’s safe to conclude there will not be another reconciliation bill. So, it’s really not an option.” Chair Collins agreed with his assessment.

Without another reconciliation bill, it is not clear where $350 billion of requested defense funds will ride, especially given that the NDAA authorized level for the House and Senate exclude those funds. President Trump has increased the pressure by calling on Congress to immediately advance $350 billion in defense spending via Reconciliation 3.0 with the SAVE America Act attached.

It is unclear how the SAVE America Act will fit within the restrictions of the reconciliation process. The reconciliation process is bound by the Senate’s so-called Byrd Rule (named for former Sen. Robert Byrd (D-WV)), which removes any provisions deemed not to have a direct budgetary consequence. Policy provisions such as the SAVE America Act, as currently written, would be in violation.

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.

In the Senate, we had an initial false start as the Legislative Branch, Agriculture/FDA, and Commerce Justice and Science (CJS) bills were scheduled to be marked up and ultimately pulled from Committee consideration. This is likely due to a combination of the Reconciliation 2.0 vote-a-rama series and controversy surrounding the Trump administration’s $1.776 billion “anti-weaponization” fund.

Key Highlights

• House Appropriators continue to make progress on a partisan basis while Senate Appropriators have postponed markups.
• House and Senate NDAA authorization levels are important indicators of where defense spending could be headed.
• The Bipartisan Policy Center gives us a predicted X date.

The House

Last week, the House lined up two more funding bills for consideration: LHHS and DHS. LHHS passed out of subcommittee on a party-line vote and DHS passed by voice note, leaving only the Defense bill’s topline yet to be released.  This is perhaps the most interesting 302b (subcommittee allocation) of the 12, given the historic level of defense funding requested by the Trump administration for FY 2027.

During the House Armed Service Committee’s consideration of its Fiscal Year (FY) 2027 National Defense Authorization Act (NDAA), one of the Democrats their first amendments cut the bill’s topline authorization by $150 billion, with some noting they wished the amendment cut more. That amendment unsurprisingly failed along mostly partisan lines, with one Democrat voting yes. House Appropriations Committee Chairman Tom Cole has said he wants to see what number the House Armed Services Committee (HASC) NDAA lands on before deciding his appropriations total for defense spending, so this proposed authorization level is likely a roadmap.

Senate Postponement

As noted, the Senate Appropriations committee punted consideration of its first three bills for FY 2027: Agriculture, CJS and Legislative Branch. It is not unheard of for partisan clashes to impact the Senate’s markup schedule; the Senate Committee has smaller margins than the House and generally prefers to move bills on as bipartisan of a basis as possible. But the combination of a Reconciliation 2.0 vote-a-rama series and the Department of Justice’s (funded in CJS) “anti-weaponization fund” made moving the bills impractical.

It is important for readers to remember that there is no overall funding agreement between Ranking Member Murray and Chair Collins. This means the underlying 302(b) subcommittee allocations for the 12 bills have not been agreed to on a bipartisan basis. Typically, the Committee reaches a topline deal before markups begin, whether publicly or privately. While a lack of bipartisan agreement creates no issue for reconciliation, it is a roadblock for regular appropriations bills given the 60-vote threshold.

What to Watch

While LHHS is scheduled for June 9 in the House, Chairman Cole has said he reserves the right to move that markup to align with Defense later in the month, depending on when he gets agreement on topline totals. The Chairman’s stated goal is to have all 12 funding bills approved by the Committee by July 4.

Additionally, the likely absence of inclusion of requested defense mandatory funds in both the House and Senate NDAA toplines puts more pressure on Reconciliation 3.0 to materialize.

One More Thing

A new projection out of the Bipartisan Policy Center estimates that the United States will likely hit the debt limit sometime between late winter and mid-summer of 2027 without congressional action. The Department of the Treasury would invoke extraordinary measures lasting six to nine months. After that, we’d reach the X date (when the United States can no longer meet its financial obligations in full and on time). The last time Congress lifted the debt ceiling was last summer in the One Big Beautiful Bill.

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.

Key Highlights

• MilCon-VA passed the House on an overwhelmingly bipartisan basis, likely the only bill to do so this cycle.
• Senate appropriators are grappling with large prospective cuts to key non-defense priorities while the President’s defense budget request reaches historic heights.
• Continuing Resolutions into the fall, and perhaps next Congress, are likely before a completed cycle of final FY 2027 bills.

House Floor: MilCon-VA Passes Overwhelmingly

The House passed its first FY 2027 Appropriations bill on May 15 in a 400-15 vote. In 2026, it’s rare to see a post office naming clear by such a margin, but the strong response reflects the traditionally bipartisan nature of veterans and military construction funding, especially in an election year. The small group that voted against the bill cited concerns about policy riders, which are perennial issues for these members.

The bill provides more than $157 billion, $4 billion above FY 2026, and authorizes $323.9 billion in mandatory programs. It also includes more than $2 billion to renovate Veterans Affairs (VA) hospitals and national cemeteries. On the policy rider front, the bill includes language banning the VA from removing a veteran’s firearm rights without a court order. This provision has been subject to intense back-and-forth during final conference negotiations in recent years.

House Appropriations Committee: CJS, Energy and Water, THUD and Interior

The House Appropriations Full Committee adopted its Commerce Justice and Science (CJS) bill by a vote of 32-28, a sharp contrast to the overwhelming bipartisan support for the MilCon-VA bill on the House floor. This comes as no surprise, as CJS is a more highly contested bill due to the agencies it funds. The CJS bill proposes a 13% increase for the Department of Justice (DOJ) and a 31% cut to science agencies like the National Science Foundation (NSF), National Oceanic and Atmospheric Administration (NOAA), National Aeronautics and Space Administration (NASA) and National Institute of Standards and Technology (NIST). Ultimately, in conference negotiations, regardless of which party is in power, these funding levels will likely move closer together, and the disparities between agencies will narrow.

House Appropriators also passed the Energy and Water bill out of full committee on party lines. The National Nuclear Security Administration comes out on top in that bill, as does civilian nuclear energy, which sees nearly $2.7 billion in repurposed funds for nuclear reactor demonstration programs.

The Transportation, House and Urban Development (THUD) bill and the Interior-Environment bill were marked up in subcommittee, with full committee markups scheduled for June 4 and June 3 respectively.

Senate Appropriations Budget Hearings

Key hearings during the week of May 19 include the National Institutes of Health (NIH) FY 2027 budget justification hearing, where Senate Appropriations Chair Susan Collins called proposed cuts to biomedical research “inexplicable.” Top Democrat on the Committee Sen. Patty Murray (D-WA) pressed NIH’s director on proposed cuts to medical research to help finance the $1.5 trillion defense budget.

The Senate markup schedule remains elusive. The Senate has approximately 60 days in session between now and October, with an extended recess from August 8 through September 14. This compressed calendar puts pressure on Senate appropriators to move their bills. As a candidate for re-election this year, Chair Collins has a strong incentive to return to Maine during the August recess with cleared bills that benefit her constituents.

What to Watch

Readers are reminded that Congress is unlikely to pass full-year appropriations bills prior to the September 30 funding deadline. We will likely see a continuing resolution (CR) through Election Day. Election outcomes will dictate what happens after that, but it is more likely than not that we will see multiple CRs through the first quarter of the next Congress. In that case, it is likely that much of what is drafted this summer will be renegotiated at that time.