Federal Update: Congress Nears Finish Line on FY 2026 Appropriations

With just over a week remaining before current spending authority runs out, Congress is moving closer to an agreement to avert a partial government shutdown. As of this writing, lawmakers are actively debating a roughly $1.2 trillion appropriations package that would fund most of the federal government through the remainder of the fiscal year. The measure combines multiple spending bills into a single legislative vehicle, commonly referred to in Washington as a “minibus.” 

The proposed minibus includes the final four outstanding funding bills for fiscal year 2026 – covering the Departments of Defense, Homeland Security (DHS), Labor-Health and Human Services, and Transportation-Housing and Urban Development. While Congress considers 12 appropriations bills annually, these four account for more than 70 percent of total discretionary spending, making this package central to the broader funding negotiations. 

Funding for DHS has become one of the most debated parts of the legislation. The proposal includes roughly $64 billion for DHS, including about $10 billion for U.S. Immigration and Customs Enforcement (ICE), which has drawn opposition from many Democrats who argue that ICE should not receive expanded enforcement funding, particularly in light of recent incidents involving federal immigration agents that have heightened scrutiny of ICE operations and prompted calls for additional oversight. As part of the rule governing House consideration, the DHS title will receive a separate vote, though the remaining bills would not advance unless all four measures clear the chamber. 

It should be noted that the DHS bill includes a significant policy win related to disaster recovery. The legislation would require FEMA to create an interactive, publicly accessible dashboard tracking the status of Public Assistance reimbursement requests. The dashboard would provide project-level transparency, including cost estimates and federal/non-federal cost shares, submission and approval timelines, explanations for delayed or denied projects, progress updates, and disbursement information. The provision is designed to improve predictability and transparency in FEMA’s administration of disaster assistance, an ongoing priority for California’s counties. 

Despite recent momentum on the aforementioned appropriations measures, the timeline remains tight. Congress must act before funding expires next Friday, and the Senate will have only a narrow window to consider the four-bill package alongside a separate two-bill funding measure already pending before the chamber. Forecasted winter weather in Washington, D.C. and along major travel corridors could further complicate Senate scheduling and member travel, adding uncertainty as the deadline approaches. 

Highlights from the Labor-HHS Spending Bill 

Key highlights from the Labor-HHS and housing portions of the minibus reflect congressional priorities around program stability, oversight, and continuity of services. The bill does not implement the administration’s proposed departmental reorganization, which remains subject to ongoing litigation. Instead, lawmakers would provide the department with $116.8 billion in discretionary funding, $210 million above FY 2025 levels and approximately $33 billion above the administration’s request. 

Most programs within the Administration for Children and Families (ACF) are funded at roughly level amounts, with targeted increases for several core safety-net programs, including an $85 million increase each for the Child Care and Development Block Grant and Head Start, a $6 million increase for the Community Services Block Grant, and a $20 million increase for the Low-Income Home Energy Assistance Program (LIHEAP).  

Programs administered by the Administration for Community Living (ACL), which supports aging and disability services, are largely level-funded aside from modest earmark adjustments. The bill also extends authorization of the Temporary Assistance for Needy Families (TANF/CalWORKs) program through December 31, 2026, providing continuity beyond the end of the fiscal year. 

The measure includes language aimed at reinforcing congressional oversight of agency spending. These provisions require advance notification to appropriators prior to grant terminations or delays in fund disbursement. It also directs the agency to brief Congress on staffing levels within the Office of Community Services, including LIHEAP-related positions. In addition, the bill directs  HHS to maintain staffing levels necessary to fulfill its statutory responsibilities. 

With respect to housing and homelessness, the package provides $77.3 billion for the Department of Housing and Urban Development (HUD), an increase of roughly $7 billion over FY 2025. This includes a nearly $2.4 billion increase for Tenant-Based Rental Assistance and $600 million for Tenant Protection Vouchers, allowing public housing authorities to transition households currently assisted through the Emergency Housing Voucher program to new assistance. 

Funding for Homeless Assistance Grants totals $4.4 billion, a $336 million increase from the prior year. The bill requires HUD to renew Continuum of Care (CoC) grants expiring in the first quarter of 2026 for a full 12 months, with additional automatic renewals triggered later in the year if litigation delays issuance of the FY 2025 Notice of Funding Opportunity. These renewals would maintain prior award levels while incorporating cost-of-living and fair market rent adjustments. The bill also establishes a new requirement for the FY 2026 CoC competition, directing HUD to fund at least 60 percent of each CoC’s Annual Renewal Demand to provide greater baseline stability for homelessness response systems.