Congress Turns to a Stopgap as the Senate Stalls
Congress Turns to a Stopgap as the Senate Stalls
This month’s memo covers a decisive turn in the FY 2027 process. The House has passed all twelve bills through committee and three on the floor, but the Senate remains frozen over the defense/non-defense topline. With the fiscal year beginning October 1 and no full-year bills within reach, the House passed a continuing resolution to push the deadline past the November midterms. In parallel, Republicans have leaned on budget reconciliation — twice already this cycle, and now a third time — to fund priorities outside the regular appropriations process. The KR Public Affairs team monitors these issues daily and is available to discuss any item in depth.
Passed Floor
Reported
(H.R. 9770)
House Blueprint
The Bottom Line
Congress will not enact full-year FY 2027 appropriations before October 1. The House passed a continuing resolution 220–205 holding funding at FY 2026 levels through December 4, 2026, moving the deadline past the November midterms. The Senate has not reported a single FY 2027 bill and remains deadlocked over topline spending. Meanwhile, Republicans continue to use reconciliation to fund priorities — ICE and CBP earlier this year, and now a third package for defense and farm aid. Plan on flat FY 2026 funding into the lame-duck session, and treat both a second stopgap and a reconciliation end-run as live scenarios.
The House — Moving
The House has had a genuinely productive cycle by recent standards. All twelve bills are out of committee, and three have passed the floor: Military Construction-VA (400–15), Agriculture-FDA (212–210), and National Security-State (217–209). Those margins tell the story — outside the veterans bill, Republicans are passing appropriations with almost no room to spare. Nine bills still await floor time, including the three hardest: Defense, Labor-HHS-Education, and Homeland Security.
The Senate — Stalled
Zero bills reported. Zero floor votes. Markups were scheduled and postponed three separate times — June 4, June 25, and July 14. The obstacle is the 302(a) topline, the total the Appropriations Committee may spend, split between defense and non-defense. Chair Susan Collins backs a defense number consistent with the Administration’s roughly $1.5 trillion request; Vice Chair Patty Murray requires a matching non-defense increase and has called the two sides “miles apart.” Until that number is set, subcommittees cannot receive 302(b) allocations and cannot finalize bill text — which is why the stall affects all twelve bills at once. The death of Sen. Graham and the continued absence of Sen. McConnell, both Appropriations members, have further thinned the Republican margin.
The Continuing Resolution — H.R. 9770
The stopgap holds all twelve appropriations areas at FY 2026 rates and conditions through December 4. Chairman Tom Cole introduced it early and deliberately, a direct response to last year’s 43-day shutdown and 76-day DHS partial shutdown. The roll call is worth reading closely: Rep. Thomas Massie was the lone Republican to vote with Democrats against it, while Reps. Castor, Cuellar, Davis, Golden, and Vasquez broke with their party in support — four of the five are frontline members, a useful signal about how a shutdown fight is expected to play in competitive districts this fall. The measure now goes to the Senate, where it needs 60 votes.
| Chamber | Status | Detail |
|---|---|---|
| House | Moving | All 12 reported; 3 passed floor (MilCon-VA, Agriculture, Natl. Security-State). Nine await floor time. |
| Senate | Stalled | Zero reported, zero floor votes. Markups postponed 3×. Deadlocked on the 302(a) topline. |
| CR (H.R. 9770) | In Progress | Passed House 220–205. Funds government at FY 2026 levels through Dec 4. Needs 60 Senate votes. |
With the regular appropriations process stalled in the Senate, reconciliation has become the Republican majority’s primary tool for funding priorities on a party-line basis. Because reconciliation bills need only a simple Senate majority — bypassing the 60-vote filibuster threshold that governs appropriations — they let the majority move funding without Democratic votes. This cycle has already produced two enacted packages and a third now moving.
Why Reconciliation Matters Here
Appropriations bills require 60 votes in the Senate; reconciliation requires 51. When bipartisan agreement on a topline proves elusive — as it has all summer — reconciliation becomes the path of least resistance for the majority. The trade-off: reconciliation can carry dollars but generally cannot carry the policy directives and guardrails that ride on regular appropriations, and multi-year funding through reconciliation weakens the annual budgeting process, a concern raised by members of both parties.
The Three Packages
| Package | Status | Scope & Key Figures |
|---|---|---|
| Reconciliation 1.0 “One Big Beautiful Bill” |
Enacted Early 2026 |
The initial package enacted at the start of 2026. Included roughly $350B in supplemental defense funding and provided the first tranche of multi-year ICE/CBP resources. |
| Reconciliation 2.0 ICE & CBP funding |
Enacted June 5, 2026 |
After the 76-day DHS shutdown ended without ICE/CBP money in the regular bill, the Senate passed this 52–47 on June 5. Provides roughly $70B for ICE and CBP through the end of FY 2029 — funding the agencies for 3.5 years, “through the Trump presidency.” Republicans stripped $1B in White House ballroom funding before passage. |
| Reconciliation 3.0 Defense, farm aid, SAVE Act |
House-passed blueprint July 22, 2026 |
The House passed a $95B budget blueprint 216–214 on July 22. Instructions: ~$60B defense (Armed Services), $13B intelligence, $12B farm relief, and $10B for SAVE Act voter-ID grant programs. Reps. Massie (R-KY), Davidson (R-OH), and Kiley (I-CA) joined all Democrats against. |
Where Reconciliation 3.0 Stands
The July 22 vote passed only a budget resolution — the blueprint that unlocks the process. Committees must still draft the actual reconciliation bill against those instructions, and both chambers must adopt identical resolutions before that drafting can begin. The Senate’s path is uncertain: Majority Leader Thune has said the Senate will not take up a budget resolution until Congress first agrees to keep the government funded past September 30. If the Senate amends the resolution, it returns to the House — and with the House in recess, that could push consideration into September.
The Strategic Question for Clients
Reconciliation 3.0 is explicitly framed as leverage. If Democrats do not support a bipartisan funding extension, Republicans have signaled they could use reconciliation to advance priorities without Democratic votes — potentially funding parts of the government outside appropriations entirely. That would move decisive funding decisions out of the Appropriations subcommittees and into Budget Committee instructions and leadership negotiations, changing where and how advocacy happens.
Note the internal GOP divisions: opposition from Massie and Davidson centered on the lack of spending offsets, while Kiley objected to using reconciliation for war-related funding and attaching the SAVE Act. Those fault lines will shape whether a third package can actually be enacted before the election.
- Budget to FY 2026 levels, not to House numbers. The increases and reductions in House-passed bills are not operative and may never be. Under a CR, agencies run at prior-year rates — generally meaning no new starts, no program expansions, and constrained grant and contract cycles.
- The CR will not stay clean — the anomalies list is the opening. The Senate has flagged roughly eleven pages of anomalies: exceptions to straight-line FY 2026 funding covering rate adjustments, new-start authority, and expiring provisions. That package is being assembled now and is the best near-term vehicle to shield a program from flat-funding effects. The window to get into it is measured in weeks.
- The Senate topline governs everything downstream. Not one of the twelve bills moves until Collins and Murray settle the defense/non-defense split. That negotiation, not any individual subcommittee, is the variable worth tracking.
- Watch the reconciliation track as closely as appropriations. If no bipartisan topline deal materializes, funding for defense and other priorities may move through reconciliation instead — a simple-majority path that bypasses the appropriations process. If your programs intersect with defense, agriculture, immigration enforcement, or election administration, the Budget Committee instructions may matter more than the appropriations subcommittee this fall.
Get the Full One-Page Briefing
Chamber-by-chamber status, the complete takeaways, and our watch list through December — on a single page you can forward to your team.
Download the FY 2027 Appropriations Update →| Window | Development |
|---|---|
| August | Senate action on H.R. 9770 — and the scope of the anomalies package attached to it. Majority Leader Thune has said the Senate will vote on a CR before recess. |
| Aug–Sep | Any Collins–Murray breakthrough on the 302(a) topline — the precondition for any full-year Senate bill. |
| Sep–Oct | Whether the Senate takes up the Reconciliation 3.0 budget resolution, and whether Republicans pivot to reconciliation to fund the government absent a bipartisan deal. |
| Sep–Dec | House floor time for the remaining nine appropriations bills; the shape and duration of a second CR beyond December 4. |
| Ongoing | Committee drafting against reconciliation instructions ($60B defense, $13B intelligence, $12B farm, $10B SAVE Act) if both chambers adopt identical resolutions. |
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