Appropriations Outlook Ahead of Jan. 30, 2026, Continuing Resolution Deadline

Congressional leaders are actively working to determine the path forward on fiscal year (FY) 2026 appropriations as the Jan. 30, 2026, continuing resolution (CR) deadline approaches. This Holland & Knight alert gives an overview of current developments and strategic considerations shaping the appropriations process.

Senate Activity

The U.S. Senate continues efforts to advance several committee-approved appropriations bills through the full chamber ahead of conference negotiations. Though this step is not required before initiating informal conferencing with the U.S. House of Representatives, Senate Majority Leader John Thune (R-S.D.) has emphasized a return to "regular order." In particular, Majority Leader Thune seeks to pass the Senate's defense appropriations bill, which is $21 billion higher than the House version.

Additionally, the Senate is exploring whether other committee-passed bills can clear the chamber before conference. These include:

• Commerce, Justice, Science, and Related Agencies
• Interior, Environment, and Related Agencies
• Labor, Health and Human Services, Education and Related Agencies (LHHS)
• Transportation, Housing and Urban Development (THUD)

Senators spent this week negotiating a potential package of bills for floor consideration, but as of Nov. 20, 2025, multiple objections remained unresolved.

Additionally, Senate appropriators have yet to mark up several bills, increasing uncertainty to their path forward. This week, Senate Committee on Appropriations Chair Susan Collins (R-Maine) said those bills would "most likely" be marked up by the committee. The bills yet to be released in the Senate are:

• Energy and Water Development and Related Agencies
• Financial Services and General Government (FSGG)
• Homeland Security
• State, Foreign Operations, and Related Programs

House Strategy

House Committee on Appropriations Chair Tom Cole (R-Okla.) has publicly outlined a two-part strategy for completing FY 2026 appropriations:

1. First Package. A grouping of conferenced bills – potentially Energy-Water, Interior and THUD
2. Second Package. Bills that are more challenging from a top-line spending perspective – specifically Defense and LHHS

All these bills have cleared the House Appropriations Committee, but only Defense and Energy-Water have passed the full House chamber. Chair Cole also proposed that remaining bills should be funded through another full-year CR on Jan. 30, 2026, allowing the FY 2027 process to begin on schedule in February 2026.

Key Issues and Differences

• Energy-Water: Despite passing the full House chamber (along with Defense and Military Construction-Veterans Affairs), the bill stalled in the Senate Appropriations Committee due to disagreements over "clean energy" funding levels between Subcommittee on Energy and Water Development Chair John Kennedy (R-La.), Committee Chair Collins and Vice Chair Patty Murray (D-Wash.).
• Defense and LHHS: These two bills represent the bulk of discretionary spending and exhibit significant funding differences between the House and Senate. Both bills are approximately $21 billion higher on the Senate side, which adopted bipartisan bills at higher funding levels. In contrast, the House pursued partisan bills aligned more closely with the president's budget.

Procedural Considerations

Due to the Senate's filibuster rules, final appropriations will require 60 bipartisan votes in the Senate. Similarly, bipartisan support will likely be necessary in the House to secure passage of final spending measures.

Implications for Clients

• Funding Certainty. Clients with federal contracts or grants should anticipate potential delays in new awards or modifications if their programs are in bills covered by a full-year CR.
• Strategic Planning. Stakeholders should prepare for the possibility of FY 2027 appropriations beginning on time in February 2026, even if there is little clarity on how programs will be funded in final FY 2026 bills.
• Regulatory and Policy Engagement. Clients with interests in the Energy-Water bill, including U.S. Army Corps of Engineers and U.S. Department of Energy programs, should monitor negotiations closely, as unresolved funding disputes could influence program implementation.

Bottom Line

With major funding differences and procedural hurdles ahead, the coming weeks will be critical in determining which appropriations bills Congress can finalize and which may need to resort to a full-year CR. Holland & Knight will continue to monitor developments closely and provide updates as negotiations progress.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.