Government Funding and Appropriations Update

Key Takeaways:

• Three of the twelve FY 2026 annual funding bills have been signed into law.

• The other nine spending bills expire on January 30, 2026. 

• If spending is not extended, the government faces another shutdown. 

• This week, House and Senate leaders agreed to a bipartisan deal on three more bills (Commerce, Justice, Science/Energy and Water/Interior). 

• That leaves six bills that fund 77% of the government. 

• Negotiating these final appropriations will likely take longer than the January 30 deadline. 

• Consensus on Capitol Hill is that both sides are working in good faith to avoid a government shutdown.  

• The expectation is that there will be a bipartisan continuing resolution (CR) to fund the government while the final deals are negotiated. 

• This plan could still be upended if Democrats demand that health care subsidies are reinserted into the debate.  

Next Steps and the Risk of Another Shutdown 

The deal reached on spending this week was expected to include three additional bills. However, last minute objections within the Department of Defense, Labor, and Transportation appropriations bills reduced the size of the so-called “minibus.” Congress will continue to work with individual Members of Congress to address their concerns. Appropriators hope there is a deal to move these three bills before January 30. 

Under that best-case scenario, there would still be more contentious appropriations that have to be worked through. Those include spending for the Departments of Homeland Security and State. Democrats are pushing for limitations on President Trump’s use of funding through those agencies. Working out those differences will almost certainly require weeks. Failing a deal, those agencies may be under another year-long CR.  

The current plan on Capitol Hill is to pass to a non-controversial CR that funds the government for 30 – 60 days while remaining bills are negotiated. The bipartisan deal reached this week is a sign that progress can be made. If, however, health care is reinstated into the debate, a shutdown will be back on the table.  

Appropriations Update Table 

Lawmakers have agreed to a topline FY 2026 discretionary spending level of $1.6 trillion but have only been able to pass three of the twelve appropriations bills through both Chambers. Below is an update on where the appropriations currently stand as well as the funding contained in each bill.