From Reconciliation to Appropriations...Where are we now?

Congress is currently conducting two separate budget processes at this time. They are working on 1) an annual appropriations package which determines discretionary yearly spending for federal programs like Head Start, the Social Services Block Grant (SSBG), and the Child Care Development Block Grant (CCDBG) and 2) a reconciliation bill which will affect mandatory spending for programs like Medicaid and SNAP.


What is the difference between appropriations and reconciliation?
  • Appropriations: An annual appropriations process that determines federal discretionary spending. This process requires negotiation between the House and Senate.
  • Reconciliation: A special legislative process created as a result of the 1974 Congressional Budget and Impoundment Control Act that allows for expedited consideration of tax, spending, and debt limit legislation. Thus, a reconciliation bill can avoid the Senate's 60-vote filibuster threshold and instead allows lawmakers to pass legislation with a simple majority.
Where are we now?
  • Appropriations: In December, Congress passed a Continuing Resolution (CR) to fund the federal government through March 2025 and avoid a government shutdown. In March, Congress passed another CR to fund the government through September 30, 2025 which includes a decrease in non-defense spending and increase in defense spending. The CR also includes a provision that makes it more difficult to oppose the president's tariffs, but lacks more specific funding directives for many programs and priorities that would normally be laid out in a negotiated full-year spending bill, giving the Executive branch additional spending flexibilities.
  • On May 30, the President released his FY 26 budget proposal which largely holds the line on total spending while massively increasing investments in defense and border security. Funding for Head Start, the Social Services Block Grant, and the Child Care Development Block Grant (CCDBG) have small cuts or flat funding (which equates to a cut given inflation). Other programs like the Preschool Development Grant, the Low Income Home Energy Assistance Program (LIHEAP) and the Community Services Block Grant are proposed for elimination. Click here for overviews and click here for more details.

Reconciliation: Both the House and Senate have agreed on a budget blueprint, which provides a basic budget framework or 'instruction'. Per their agreement, committees will be required to find a total of at least $4 billion in 'savings' over the next decade. These 'savings' will inevitably result in massive cuts to critical social programs like Medicaid and SNAP, which would also affect available funding for annual appropriations.

On Thursday, May 22 the House passed their version of the reconciliation bill, also known as the "Big Beautiful Bill". In it, the House made sweeping cuts to Medicaid, SNAP, energy assistance, and other vital social safety net programs to fund tax breaks for the ultra-wealthy and the President's mass deportation initiatives. The bill then went to the Senate where it underwent further amendments and was subjected to the Byrd Rule, which forced lawmakers to take out a number of provisions. Nevertheless, on July 1, the Senate narrowly passed their version of the bill after more than 24 hours of debate. The Senate version of the bill includes even harsher provisions than the House version last month. Now, the bill gets passed back the House, with the goal of passing the bill by July 4 (a self-imposed deadline set by Congressional Republicans). If the House makes and changes to the Senate version, the bill must go back to the Senate for another vote. The bill will continue to ping pong between houses until both sides can agree on a single, identical bill.

How the “Big Beautiful Bill” Will Impact Our Communities