Congress will return from its summer recess and attempt to complete action on the FY 2026 federal budget having thus far taken limited action on the 12 annual appropriations bills. Although some appropriations bills have advanced earlier than in recent years significant differences in funding levels threatens the possibility of a government shutdown. The October 1 start of the new fiscal year looms large, raising the possibility that a short-term continuing resolution (CR) will again be needed to keep the government operating.
Partisan differences over spending priorities are likely to complicate negotiations in September. House Republicans are seeking lower overall discretionary levels in some areas, while the Senate is proposing modest increases for programs such as rural development, nutrition assistance, and infrastructure. Defense spending, veterans’ programs, and certain disaster-related accounts may see bipartisan agreement, but disputes over climate, housing, and regulatory funding could stall final passage.
Programs of interest to LICA members have received some action. For transportation programs, both the House and Senate committees have passed their respective versions of the DOT appropriations bill and floor action is pending. Both bills approved DOT investment levels authorized by the 2021 infrastructure law and includes additional resources for highway, public transportation and airport construction projects.
For agriculture programs, the House committee reported the agriculture appropriations bill providing discretionary funding totals of approximately $25.5 billion, a 4.3 percent decrease from FY 2025 enacted levels.. In contrast, the Senate-reported version proposes around $27.1 billion, which is a 3.0 percent increase over FY 2025. President Trump’s FY 2026 budget request envisions just $21.0 billion in discretionary Agriculture appropriations—a sharp 21.1 percent cut from FY 2025.
Within the Trump administration’s request, the Natural Resources Conservation Service (NRCS) faces particularly deep reductions. Notably, the Conservation Operations account would be slashed by $783 million—a staggering 88 percent cut from FY 2025 levels. However, under USDA’s internal budget planning (reflecting more detailed allocation), mandatory funding transfers to support conservation programs see modest increases: the Agricultural Conservation Easement Program rises from $8 million to $10 million, the Conservation Stewardship Program from $21 million to $25 million, and the Environmental Quality Incentives Program from $31 million to $36 million.