Federal Legislation & Budget

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

Congress was concurrently conducting two separate budget processes: annual appropriations 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 a reconciliation tax and spending bill which affects 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.
  • Learn more here.
• 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.
  • Learn more here.

Where are we now?

Appropriations

• December:
  • Congress passed a Continuing Resolution (CR) to fund the federal government through March 2025 and avoid a government shutdown.
• 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.
• May:
  • 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.
    • Appropriations 101 [CRFB]
    • How proposed cuts to Temporary Assistance for Needy Families (TANF) and the Social Services Block Grant (SSBG) programs will disrupt care for millions [CLASP]

• September
  • On Tuesday, September 30, Congress failed to reach a budget agreement to fund the federal government, leading to the first federal government shut down since 2019.
  • How did we get here? For weeks leading up to the shutdown, Democrats and Republicans held unsuccessful negotiations on a Continuing Resolution (a short-term funding extension that would have avoided a federal shutdown). While the House managed to pass a spending bill that would increase defense spending and flat fund for programs like CCDBG, Head Start, and the elimination the PDGB, Senate Democrats refused to accept the package without certain health care protections.
  • Specifically, Democrats want to reverse some of the harmful health care provisions passed in H.R. 1 and extend tax credits that make health insurance premiums more affordable for millions (i.e. the Affordable Care Act). Note: If Congress fails to renew the tax credits, 22 million Americans could see major increases in their health care insurance premiums and an estimated 4 million Americans will become uninsured altogether. Read more here from the Center on Budget and Policy Priorities.
  • What should you expect to see as a result?
    • Mass furloughs of Federal Employees: Many federal employees are already seeing Reduction In Force (RIF) notices i.e. layoff notices while "essential workers" may be forced to work without pay. Note: ICE and Immigration Enforcement Officers are included in the list of "essential workers" and will continue operations.
    • Medicare/Social Security: While current Medicare/SSI recipients will continue to see their payments, there may be delays or issues for those looking to apply for programs. There may also be issues with payments down the line if the shutdown lasts through mid/late October.
    • SNAP/CalFresh: Payments will continue for October because the California program is funded the month before. However, if the shutdown lasts until mid-October, we could see impacts on November benefits. Additionally, EBT stores may see immediate impacts, particularly around re-applying to be an EBT authorized store.
    • WIC: National WIC Association ensures that the program has funds to remain open temporarily.
    • The Bureau of Labor and Statistics won't release job data this Friday, which may impact market activity.
    • National Parks and Airports: Both will see immediate impacts including park closures, trash/upkeep halting, and major staffing shortages at national airports that may cause traveling delays, cancellations, and service disruptions.
    • Child Care and Development Block Grants: States have multiple streams of funding and flexibility in timing for spending funds. In a short shutdown, services are unlikely to be disrupted on a wide scale.
    • Head Start: Having learned from years past, very few Head Start grantees receive funding on October 1st. As a result, most services are unlikely to be affected immediately. That said, the longer a shutdown continues, the more likely it is that Head Start programs could see a disruption.
    • Read more from our federal partners, Child Care Aware of America here.
    
    
    Bottomline: The longer we have a shutdown the more uncertain and unstable vital programs, services, and funding could become.

Read the Network's Response to the Federal Shutdown

Reconciliation

On July 4, the President signed the "One Big Beautiful Bill Act" (OBBBA) into law, making massive, widespread changes to our country's spending. Earlier in the spring, the House and Senate agreed on a budget blueprint which required committees to find a total of at least $4 billion in 'savings' over the next decade, resulting in massive cuts to critical social programs like Medicaid and SNAP.Over the next three months the House and Senate ping ponged the bill between houses, reaching a final agreement on July 3.While a number of provision were excluded in the Senate version due to the Byrd Rule, the final package still included over $1 trillion in cuts to health care and $186 billion in SNAP cuts through 2034. In California alone the Big Beautiful Bill will...

• Take away health care from 13.6 million Californians, including 3.5 million children. [CBPP]
• Take food off the table for 11.4% of California households facing food insecurity. [CBPP]
• Push 57,000 Californian families, seniors, and children back into hunger and poverty each year with devastating cuts to SNAP. [CBPP]
• Force the State of California to find an additional $15.5 billion in its own budget to make up for lost federal funding. [CBPP]

More resources on the OBBBA:

• What is Reconciliation? Reconciliation 101 [Committee for a Responsible Federal Budget]
• When Will the OBBBA Provisions Take Effect? Check out this detailed timeline [The Center on Budget & Policy Priorities]
• What's in the OBBBA? Summary of OBBBA provisions [Holland & Knight Analysis]
• How Budget Cuts Could Impact Californians [California Budget & Policy Center]
  • Medicaid is a critical support for the Early Childhood Education Workforce [Georgetown University McCourt School of Public Policy]
  • How Medicaid and SNAP Cutbacks in the “One Big Beautiful Bill” Would Trigger Big and Bigger Job Losses Across States [Commonwealth Fund]
  • Senate Follows House Lead on SNAP Cuts Proposal: A Direct Threat to Families, Communities, and the Economy [FRAC]

Read the Network's Response to the Passage of the OBBBA