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Congress is Set for August Recess; What Remains?
The House is adjourned for the August recess, the Senate is likely to recess the first week in August, what awaits when they return for the very short period post August and the midterm elections.
Here is what is on deck:
FY27 Appropriations: Stalled, CR Increasingly Likely
The House has made real progress; the Senate has not. House bills appropriate over $1.856 trillion in base discretionary budget authority for FY2027, about $217 billion (13%) above the FY2026 enacted level, and the central question is no longer whether appropriations legislation will move, but how Congress will reconcile competing spending priorities within a compressed calendar. On the Senate side, the Senate has not made comparable progress, and appropriations are unlikely to be enacted by the October 1 start of the fiscal year. Senate appropriators postponed FY2027 markups again due to the continued absence of Defense Appropriations Subcommittee Chairman Mitch McConnell, and a series of setbacks also derailed House floor consideration of both the Energy and Water and the National Security/State bills.
The practical result: absent accelerated negotiations, a continuing resolution to keep the government funded at current levels is the likely path forward, and a CR text is already circulating — H.R. 9770 would fund the government through December 4, 2026. The House has also offered a stop-gap plan to keep the government funded past the September 30 deadline into December, with OMB separately requesting specific funding "anomalies" (exceptions to flat CR funding) for select defense programs.
Emergency Supplemental: $87–88B Request, Contested
OMB Director Russell Vought sent a formal request to Speaker Johnson on June 24 for $86.1 billion in supplemental FY2026 appropriations, including $67.1 billion for DOD military and intelligence activities. Reporting on the same request puts the total slightly higher — $87.6 billion, covering the conflict with Iran, farmer aid, and the Ebola response in Central Africa — with $17.3 billion for operational costs and $21 billion to replenish munitions used in the Iran conflict, plus $5.1 billion for cybersecurity, $2 billion for the Coast Guard, and $12.1 billion for classified programs, and $11.1 billion for farmers, including $10 billion in temporary crop assistance and $1.1 billion for Florida storm losses. As of early July, House Defense Appropriations Subcommittee members were still pressing the administration for more detail, and CRFB has flagged the package for review, cautioning that a supplemental of this size should be carefully reviewed and fully offset.
Reconciliation 3.0: Moving in the House, Stalling in the Senate
The House Budget Committee advanced a $95 billion package known as "Reconciliation 3.0" on July 17, using the special budget process for a third time to bypass the Senate filibuster, passing committee by a vote of 20–14. The resolution instructs four committees: House Administration ($10B, for SAVE America Act election-integrity provisions), House Armed Services ($60B for defense/Iran-related spending), House Intelligence ($13B), and House Agriculture ($12B for farm aid) — though a more recent version reflects $73 billion for defense and intelligence, $12 billion for farm assistance, and $10 billion for voter-ID grant programs, and the resolution as currently written does not direct any committee to identify offsets or pay-fors. The full House passed the budget resolution on July 22, without a single Democratic vote, with the package headed toward reconciliation legislation on defense, election-security, and agriculture priorities.
The Senate is a different story. Majority Leader John Thune has said the Senate won't immediately take up the framework, viewing it as "Plan B" — a backup to keep in reserve in case appropriations negotiations break down before the September 30 deadline — while House Republicans are urging the Senate to move aggressively, given this is likely the party's last chance to advance these priorities before Congress is consumed by the funding fight and the midterms. Notably, Speaker Johnson has signaled some conservative priorities left out of this package would be pushed to a fourth reconciliation bill after the November midterms.
How Will This End?
They're now effectively one negotiation. Thune's team is pursuing a two-track strategy — keep appropriations moving while holding reconciliation in reserve — meaning reconciliation 3.0's fate depends heavily on whether the regular FY27 appropriations process or the supplemental can get unstuck first. For your dinner audience, the throughline worth flagging is straightforward: a CR into December is the most probable near-term outcome, which means Q1 FY27 contract awards and new-start programs are likely to slip, and any procurement planning tied to a "clean" October 1 start should build in that delay as the base case rather than the exception.
Meet The Author:
As Vice President for Government Relations and Public Affairs, I work to explain how actions on Capitol Hill can impact the self-employed. I love D.C. and have made my home in Capitol Hill, where I live with my husband and black Labrador, Coltrane. We love playing volleyball and softball on the National Mall.
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