House Committee Clears Path for Possible Reconciliation 3.0
The House Budget Committee drafted a FY 2027 budget resolution, which activates committees to craft legislation for a new budget reconciliation process, dubbed “reconciliation 3.0.”
The resolution instructs four House committees to generate $95 billion in additional spending, with $60 billion in the Armed Services Committee, $13 billion in the Intelligence Committee, $12 billion in the Agriculture Committee, and $10 billion in the Administration Committee. Committees of jurisdiction are asked to produce bills by September 11, 2026, to provide funds for military and intelligence efforts, farm assistance, and voter registration legislation.
It is notable that the resolution does not include instructions for the Ways and Means Committee regarding tax policy or the Education and Workforce Committee. While nothing is guaranteed, the lack of instructions to those committees likely means that federal higher education and tax programs will be untouched in this potential round of budget reconciliation.
The resolution does not include offsetting receipts for spending increases but sets annual appropriations limits below inflation for the next decade to generate more than $2 trillion in savings. While the legislation is crafted with the intent of passing on a party-line vote, it is not a foregone conclusion that it will pass the House as many fiscal hawks prefer this type of measure to include offsets to pay for the spending increases. Further, while touted as a “defense supplemental,” the defense funding target is billions of dollars short of President Trump’s request of $350 billion.
House leadership plans to vote on the budget resolution before adjourning on July 23. While the outlook in the Senate is uncertain, the chamber will be in session until August 7, which could provide the time needed to move forward. With the death of Senator Lindsey Graham (R-SC), Senator Ron Johnson (R-WI) is expected to take the chair of the Senate Budget Committee. He has indicated that no budget resolution or reconciliation will move in the Senate without offsets.
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Stephanie Giesecke