This week, the House is expected to pass a “minibus” appropriations package comprising the final bills needed to fund the rest of the government for Fiscal Year 2026. This package is actually set up as two separate bills that are procedurally linked. Under a Senate rule, one bill (HR 7147 - covering Homeland Security) cannot be transmitted to the Senate unless the other one (HR 7148 - covering the other three appropriations bills and other random pieces of legislation) is also passed. This latter bill covers the last three outstanding appropriations bills: Defense, Labor, Health and Human Services (LHHS), and Transportation, Housing and Urban Development (THUD).
While there are still some items in these bills that taxpayers can applaud, the list is much shorter this time around. There are some smaller cuts to 38 wasteful programs in the LHHS bill, while the THUD bill codifies staff reductions instituted by the Department of Government Efficiency (DOGE). The package also helps reduce health spending by placing new requirements for pharmacy benefit managers (PBMs) to negotiate discounts, drug distribution, and placement. It eliminates the expensive and wasteful “Shelter and Services” program at DHS, which provided $650 million in services to illegal aliens in ongoing immigration proceedings. California’s wasteful High Speed Rail project would lose all of its nearly $1 billion in allocated funding in this package. And the Corporation for Public Broadcasting, which was eliminated via a rescissions package last year, remains zero funded this year.
Despite these targeted savings, the overall spending picture in this set of appropriations bills is not nearly as taxpayer-friendly as the previous FY 2026 minibus packages. Although baseline discretionary spending for Homeland Security would decline by 1% compared to FY 2025, to $64.4 billion, an increased disaster spending of $26.4 billion pushes the net total discretionary funding to $97.4 billion. This is an increase of 3.7% over last year’s total.
Total appropriations for Defense for FY 2026 would be $839.1 billion, $2.9 billion less than last year’s comparable totals. According to a summary from the House Appropriations Committee, total discretionary spending in FY 2026 for the Labor HHS Education bill would be $221 billion, which is roughly the same level as in FY 2025. Any spending reductions championed in the bill are roughly offset by spending increases in other (mainly health) agencies in other parts of the bill. While total spending in the Transportation HUD appropriations bill, including highway trust fund and other accounts, is pegged at $186.2 billion, $9.9 billion less than FY 2025, both Transportation and HUD receive increased spending over last year. HUD, in particular, receives 12% more in spending over FY 2025 levels.
Overall, net savings year to year in this package is estimated to be just over $3 billion. That is a lot of money for a person, but, in federal budget language, this is a rounding error. With almost $2 trillion annual deficits, Congress can do better. Lower topline amounts in FY26 is a core priority for NTU, and we hope that taxpayer interests are better considered in future appropriations discussions.
Moreover, this bill reverses or limits key Trump Administration successes from 2025. It mandates that current indirect costs calculations for federal research grants overseen by Defense and HHS remain at the high levels (sometimes over 50% of a grant) from previous administrations. Funding for Community Development Block Grant (CDBG) programs, targeted for elimination by the Administration, was actually increased. HUD, in particular, received several new appropriations that were not requested by the Administration, including increases in homeless assistance grants and a series of low income housing programs. Further, this bill would block consideration of air traffic controller privatization, even after studies have shown that other countries have successfully improved airline safety through its implementation.
This legislation also contains thousands of earmarks (officially designated as “Community Project Funding”), more than in the previous minibus packages under consideration. While we understand that, at times, members of Congress may have a better understanding of certain spending needs than federal agencies, taxpayers benefit when federal spending is allocated according to need, not doled out for political purposes. This helps keep more egregious earmarks from being funded, wasting taxpayer dollars.
NTUF’s Vice President of Research Demian Brady compiled earmarks from the Appropriations Committees’ documents into a sortable spreadsheet, available for download here. An analysis of the earmarks shows the following breakdown:
Homeland Security:
203 earmarks, at a total cost of nearly $273 million
All Homeland Security earmarks in this bill flow through the Federal Emergency Management Agency (FEMA), primarily for pre-disaster mitigation or resilience projects. Even when the underlying projects may be defensible, earmarking is a poor way to set priorities for FEMA because it circumvents the agency’s risk-based and cost-effectiveness evaluations in favor of political sponsorship.
Defense:
No earmarks (not allowed in this appropriations bill).
Labor HHS Education:
987 earmarks, at a total cost of over $1.4 billion
This includes:
$1.6 million for the purchase of equipment at the Washburn Institute of Technology in Kansas
$1 million for the Alaska Joint Electrical Apprenticeship and Training Trust
$50,000 for the 2nd Lt. Richard W. Collins III Foundation in Maryland
Transportation HUD:
3,218 earmarks, at a total cost of nearly $6 billion
This includes:
$7 million for the Charleston Capital Sports Center in West Virginia
$3.2 million for the Peterstown School Athletic Facility in West Virginia
$19 million across 14 earmarks for blight removal in various cities and towns
As we have referenced earlier, earmarks provide some of the clearest examples of wasteful spending in Washington. While we appreciate the fact that this legislation is somewhat transparent regarding the so-called “community project funding” programs, earmarking remains a poor way to allocate taxpayer dollars, because political sway trumps more objective assessments of project merit.
Considering our nation is currently facing a federal debt load of over $38 trillion, Congress should make the prudent decision of foregoing spending on these projects altogether. Especially since this legislation walks away from the chance to lock in spending reductions initiated by the Trump Administration, directing nearly $8 billion in spending on pet projects in random congressional districts seems a little off in the current fiscal environment.