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7 May 2026

The Topline: Steptoe Appropriations Newsletter | May 1, 2026

SJ
Steptoe LLP

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In more than 100 years of practice, Steptoe has earned an international reputation for vigorous representation of clients before governmental agencies, successful advocacy in litigation and arbitration, and creative and practical advice in structuring business transactions. Steptoe has more than 500 lawyers and professional staff across the US, Europe and Asia.
After a record 76-day shutdown, the House unexpectedly passed the Department of Homeland Security funding measure, ending the longest funding standoff in the department's history.
United States Government, Public Sector
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DHS Shutdown Ends. After a record-breaking 76-day shutdown, the House passed the Department of Homeland Security (DHS) funding measure Thursday afternoon, ending the longest funding standoff in the department's history. The resolution came somewhat suddenly. Days earlier, Speaker Johnson indicated his intention to remove language in the Senate-passed bill zeroing out immigration enforcement agencies and send it back to the Senate, a move that many expected would extend the shutdown even further.

Instead, the House moved unexpectedly to approve the measure via voice vote after holdouts acknowledged that a recorded vote would not have changed the outcome and therefore withdrew their objections. Additionally, many Republicans felt satisfied that enough progress has been made on reconciliation to move the FY26 funding bill forward. As always, weekend travel and an upcoming recess have a way of focusing minds.

The shutdown had strained DHS operations across the country, forcing contingency plans within critical border, immigration, cybersecurity, and disaster management functions. Its resolution, though welcomed by both parties, raises new questions about how future funding debates for high-profile agencies like DHS will be managed, particularly when policy disputes over immigration enforcement remain deeply divisive.

Reconciliation Round Two. On Wednesday, just a day before the DHS vote, the House narrowly approved the Senate-passed budget resolution along party lines, following a long and contentious night of debate. Disagreement centered largely around an unrelated provision in the farm bill, causing leadership to keep the vote open late into the evening to secure the necessary support. With the resolution now adopted, Congress has officially launched the budget reconciliation process—one that Republican leaders have signaled will be narrowly focused on immigration enforcement, Immigration and Customs Enforcement (ICE) operations, and border protection initiatives.

The Senate is expected to bring the legislation to the floor during the week of May 18 to stay on track with President Trump's June 1 deadline.

Understanding the Reconciliation Process. The reconciliation process is a powerful procedural tool that allows Congress to pass certain budget-related legislation through the Senate with a simple majority of 51 votes, thereby avoiding the 60-vote threshold typically required to overcome a filibuster. Once a budget resolution containing reconciliation instructions is adopted—as it now has been—relevant committees receive guidance on drafting legislation to meet specific fiscal targets.

Those committees will now begin shaping proposals that align with the budget resolution’s instructions, focusing on how to provide funds and adjust related policies within the defined parameters. Their work will then be submitted to the Budget Committee (the Senate Budget Committee in this particular situation), which will consolidate the various pieces into a single comprehensive reconciliation bill. That package will move to the Senate floor for debate and a "vote-a-rama," a rapid-fire series of amendment votes often lasting through the night. Debate and amendments during this stage are constrained by the Senate’s Byrd Rule, which prohibits the inclusion of provisions that do not directly impact federal revenues or spending.

After the Senate passes the bill, it is sent to the House, where it will either be approved as is or kicked back to the Senate for further consideration. Once a final bill is agreed upon and passed by both chambers, it then goes to the President for signature, completing a process that, while complex, is increasingly used to fast-track the passage of budget-related measures.

Appropriators from both parties have raised flags about the erosion of Congress's "power of the purse" role, concerned that reconciliation is increasingly being used as a way to supplant the bipartisan appropriations process. Expect these concerns to be vocalized as the funding debates roll on.

FY27 Outlook. Looking ahead, the House has reported four of the twelve FY27 appropriations bills and plans to maintain an accelerated markup schedule when they return from recess, with Legislative Branch and Commerce-Justice-Science (CJS) next up for full committee consideration on May 13. The Energy and Water subcommittee markup is slated for May 15.

The Senate, by contrast, remains in the early stages of its appropriations process, continuing budget hearings with department officials and agency heads. Senate appropriators are targeting June to begin their markups, setting the stage for another compressed summer appropriations calendar.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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