Federal Update: US House Approves Final Spending Bills as Senate Weighs Next Steps

Senate divisions, heightened by concerns over ICE funding, cast uncertainty over avoiding a Jan. 30 shutdown.

The U.S. House on Jan. 22 approved the final four federal spending bills for fiscal year 2026, sending the legislation to the Senate just days before a Jan. 30 shutdown deadline. Since House passage, Senate divisions have emerged, driven by concerns over Department of Homeland Security funding following a second deadly shooting in Minnesota involving Customs and Border Protection.

Together, the four bills total approximately $1.2 trillion and would fund the federal government through the end of fiscal year 2026.

The legislation covers the largest share of federal discretionary spending, including funding for the departments of Defense; Health and Human Services; Homeland Security; Labor; Housing and Urban Development; Transportation; and Education.

All but the Homeland Security bill were packaged into a multibill “minibus” and passed by a 341-88 vote in the House. That package was then combined with a separate two-bill minibus that had passed the House the previous week.

Homeland Security bill draws narrower support

The Homeland Security appropriations bill was considered separately and passed by a narrower 220-207 margin. Debate focused largely on provisions related to Immigration and Customs Enforcement (ICE).

The legislation includes funding for ICE operations, along with additional resources for body-worn cameras and deescalation training for ICE and Customs and Border Protection officers. Despite its narrow passage, the bill drew opposition from members of both parties.

Funding levels rise for most domestic agencies

Overall, discretionary spending levels in the House-passed package are generally higher than in fiscal year 2025. In several cases, funding exceeds levels proposed by the Trump administration. Key funding provisions include:

• Department of Defense: $834 billion, about $3 billion more than fiscal year 2025, reflecting a modest increase focused on readiness and procurement.
• Department of Homeland Security: $64.4 billion, about $600 million less than fiscal year 2025, including about $10 billion for ICE, along with funding for the Federal Emergency Management Agency, Transportation Security Administration, the Coast Guard, and border operations.
• Labor, Health and Human Services, Education: $221 billion, an increase of about $23 billion, driven by higher costs tied to health programs, education, and workforce initiatives.
• Transportation and Housing and Urban Development: Approximately $102.9 billion, up about $15 billion, reflecting increased investment in transit, housing assistance, and infrastructure.
• Commerce, Justice, Science: Between $76 billion and $77 billion, an increase of roughly $9 billion, boosting funding for the Department of Justice, NASA, the National Oceanic and Atmospheric Administration, and federal law enforcement.
• Energy and Water Development: $57 billion, roughly flat compared with fiscal year 2025, maintaining steady funding for the Department of Energy and water projects.
• Interior and Environment: Between $40 billion and $41 billion, slightly below fiscal year 2025, with modest reductions across land management and environmental programs.

Senate action pending as Jan. 30 deadline nears

The Senate is expected to take up the spending package after returning to session on Tuesday, Jan. 27, following severe winter weather. While six of the 12 spending bills for the current budget year have already been signed into law, Senate approval is required to fund the remaining federal agencies and formally avert a partial government shutdown.

As in the House, some senators have signaled they may withhold support for the Homeland Security bill without additional oversight provisions related to ICE and Customs and Border Protection. In the wake of the second deadly shooting in Minnesota involving ICE, senators from both parties have raised serious concerns and called for a thorough investigation.

Senate Democrats have also indicated they may oppose the broader spending package due to the inclusion of the DHS bill. The growing backlash has put the six-bill package in jeopardy, with some Senate leaders calling to advance the other five bills, while attempting to rewrite the DHS bill to include additional policy changes. Absent agreement, a partial government shutdown becomes increasingly likely.

Impacts of a partial government shutdown

Cities could be affected by a partial government shutdown if one occurs. Cities that rely on federal funding may experience delays or reductions in discretionary grants from agencies such as the departments of Justice, Transportation, Housing and Urban Development, and Labor.

The duration of a shutdown would influence the scope of impacts. If a shutdown lasts longer than 30 days, federal safety net programs could exhaust contingency funding. A partial government shutdown will not impact the Supplemental Nutrition Assistance Program (SNAP), since the Department of Agriculture is funded through Sept. 30, 2026. Cities may also see delays in federal permitting and infrastructure projects, along with the suspension of certain federal agency administrative functions.

The League continues to closely monitor federal actions impacting our member cities and remains in close contact with our federal partners, including the National League of Cities. For more information on federal developments impacting cities, visit the League’s Federal Actions Impacting Cities FAQ.

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