Funding rescissions, re-staffing initiatives and other major takeaways from the final FY26 funding package
A government shutdown at the end of January is looking unlikely, even as Congress has just more than a week to take critical votes to fund agencies for the remainder of fiscal 2026.
Appropriators this week put forward a fourth spending package, meaning they have reached a bipartisan, bicameral agreement on all 12 of the annual, must-pass funding bills. Half of those have already cleared Congress, while the third easily won approval in the House and is awaiting a vote in the Senate.
Lawmakers on Tuesday unveiled the fourth and final minibus, which would fund the departments of Defense, Labor, Health and Human Services, Education, Homeland Security, Transportation and Housing and Urban Development. Those agencies, as well as State and Treasury, are currently funded through a stopgap continuing resolution that is set to expire after Jan. 30.
The funding bills largely avoided any major cuts that President Trump proposed and provided a boost in some cases.
Republicans boasted that the plan locked in some of the workforce reductions and agency cuts Trump implemented in 2025, noting the bills reduced funding “for staffing across the board to reflect the rightsizing of the federal bureaucracy.” Still, in some key areas, lawmakers are looking to reverse some of Trump’s workforce cuts.
Democrats, meanwhile, celebrated that the measures would provide more direct, program-by-program requirements of how federal dollars are spent. They added new provisions to boost transparency on the termination or modification of any grants, contracts and loan, and will require more reporting on any agency offices closures. The bills provide specific funding tables setting line-by-line funding for every agency program, the lawmakers said.
The House is expected to approve the measure this week. The Senate would then take it up next week, when it returns from recess. Here is a look at the most significant outcomes for federal agencies in the bills:
DHS oversight: The DHS funding bill was among the most contentious for lawmakers to put together this year, as Democrats clashed with Republicans over what restrictions to place on Trump’s immigration crackdown. Ultimately, Democrats won some concessions, but far fewer than what they had hoped to achieve. The measure trims Customs and Border Protection funding by $1 billion. Immigration and Customs Enforcement spending would remain flat, but capacity for detaining immigrants would shrink. The measure would provide $20 million for body cameras for law enforcement at both agencies, with provisions to ensure implementation. It would also require their personnel to go through deescalation training.
DHS will still have plenty of funds from which to draw: the department was awarded $190 billion in the One Big Beautiful Bill Act, though lawmakers are looking in the new measure to require monthly updates on how that money is being spent. The DHS inspector general would receive an added $13 million for its oversight work.
Reversing some Trump-era staffing cuts: As ICE and CBP engage in an unprecedented hiring spree, lawmakers found bipartisan support for boosting staffing levels at other components in DHS. Cybersecurity and Infrastructure Security Agency would receive a $20 million boost for hiring as lawmakers pushed CISA to maintain an adequate staffing level. U.S. Citizenship and Immigration Services would be asked to evaluate the need for additional staff to address the asylum case backlog.
While the funding bills mostly adjusted spending levels to reflect the large-scale workforce cuts across the government, lawmakers carved out some exceptions. At the Social Security Administration, lawmakers said in a bipartisan, bicameral statement adjoining the spending package that they held concerns about staffing cuts and provided $50 million for new hiring. They called for boosted headcounts in field offices and called on the agency to avoid closures or office hour reductions. At Education and HHS, lawmakers issued new provisions requiring the departments to maintain a minimum staffing levels as required to fulfill their statutory duties “including carrying out programs, projects, and activities funded in this title of this act in a timely manner.”
Health research: Trump had sought to make dramatic reductions to public health functions, though lawmakers declined to provide the president’s requested 30% cut to HHS. The National Institutes of Health would see a funding boost of $415 million, despite Trump seeking a 40% reduction, and policy changes the administration has put forward to limit the agency’s grants were walked back. The Centers for Disease Control and Prevention would maintain its current appropriation, whereas Trump suggested cutting it in half. The Biomedical Advanced Research and Development Authority would receive a full funding allotment of $1 billion, staving off the 36% cut Trump proposed. Trump was looking to trim the Advanced Research Projects Agency for Health by 33%, but lawmakers did not include any reduction.
At the Pentagon, the package would provide $2.7 billion for medical research, a $770 million increase from fiscal 2025.
Boosting air traffic control: Lawmakers included $40 million to provide a 3.8% pay raise to air traffic controllers and funding to boost the workforce by 2,500 individuals. The Federal Aviation Administration, which has grappled with staffing problems for years and struggled to keep employees working during the recent government shutdown, would see an overall boost of 8%.
Preserving FEMA: Trump has frequently railed against the Federal Emergency Management Agency and has sought to phase it out entirely in favor of states taking on more responsibility for disaster response. Congress rejected that proposal, boosting the agency’s operational budget by 18% and requiring the agency to unfreeze preparedness grants from fiscal 2025 within 10 days. Lawmakers said the funding level is meant to reject the staffing cuts FEMA has absorbed in the last year, when the agency shed more than 2,000 permanent employees. FEMA is considering letting go of half of its workforce that deploy in disasters, though Congress instructed the agency to keep staff necessary to meet all of its duties.
Trump has stood up a review panel to overhaul FEMA’s structure and mission, though lawmakers said the agency cannot reorganize, close any offices or eliminate functions without direct authorization from Congress.
IRS rescissions: Ever since Congress provided $80 billion to the Internal Revenue Service as part of the Inflation Reduction Act, Congress has chipped away at the funding boon. In the latest spending package, which does not pertain to IRS, lawmakers agreed to claw back another $11.7 billion. Lawmakers previously rescinded more than $40 billion from the agency, which had planned to use the funds to modernize its antiquated technology, boost customer service and ramp up hiring to increase enforcement.
Avoiding eliminations: As in previous spending packages, lawmakers largely stood in the way of Trump’s efforts to eliminate certain offices and agencies. The Institute of Museum and Library Services received its normal appropriation after Trump sought to zero it out. The same was true for the Corporation for National and Community Service, which houses AmeriCorps. The Administration for Community Living within HHS was set to be dissolved into other entities within the department, but lawmakers preserved it as its own office. The Corporation for Public Broadcasting, however, which had helped fund PBS and NPR, received no appropriation after Trump successfully clawed back its funding last year.
