The House Passed a Clean CR
Fiscal year 2026 has been marred by unprecedented brinkmanship over government funding.
This has resulted in parts of the government being shut down for 161 days, equivalent to 44% of the full year.
To head off another shutdown when fiscal year 2027 begins on October 1, the House passed a truly clean continuing resolution (CR) on July 21, 2026.
NTU supported the House CR, describing it as “a clean continuing resolution that would fund the government, without gimmicks or poison pills, through December 4, 2026. In other words, this legislation would prevent yet another government shutdown before elections this fall, and keep the government operating normally for taxpayers until December.”
This legislation was a commonsense proposal that should not have been controversial.
The Senate CR Is Not Clean
Senate Appropriations Committee Chair Susan Collins (R-ME) and Vice Chair Patty Murray (D-WA) released the Senate’s proposed CR on August 2, 2026.
The Senate CR includes many more provisions than the House-passed version. Several incorporate technical assistance from the Trump Administration, providing additional funding or rate of operations flexibility for certain programs. The Senate CR also provides temporary extensions for programs that are expiring at the end of the current fiscal year, such as surface transportation programs.
Although Chair Collins stated that “the CR also avoids any poison pills,” taxpayers may be concerned that the Senate CR is not a purely “clean” extension of current policy.
Sec. 157 of the Senate CR would prohibit the Office of Management and Budget (OMB) from finalizing its proposed reforms to federal grant programs through the length of the CR, December 11, 2026. This section is being touted by Vice Chair Murray as a “key” win for the Democrats and a notable policy change highlighted by Senate Minority Leader Chuck Schumer (R-NY).
Blocking Reforms to Federal Financial Assistance
OMB’s proposed “Regulation for Federal Financial Assistance” would revise and amend government-wide rules regarding grants and contracts provided by the federal government. The primary objective of the reforms is to promote transparency, accountability, and oversight of how the federal government distributes taxpayer funds.
The Democratic members of the House Appropriations Committee have criticized the OMB rule, including the proposed “pre-issuance review” process that would require senior appointees of federal agencies to review federal grants. They argue that this additional scrutiny would politicize federal spending decisions. It might be a shock to many taxpayers that federal agencies would spend billions of dollars without having senior level officials carefully review how their funds are being spent.
The proposed rule would also expand authority to terminate or suspend federal grants if the recipient is failing to comply with the terms and conditions of the award or if it is determined that the award no longer meets program goals or the national interest.
Many Americans are rightly concerned with rampant waste, fraud, and abuse across government programs. The proposed rule would have added a tangible step in the federal grantmaking process to catch some of the most preventable waste, fraud, and abuse before dollars flowed out the door. While a better solution would be a significant overall reduction in the number of federal grants, at a minimum, Congress should work with the Administration to strengthen controls over federal funding to protect taxpayers.
A Series of Authorizing Extenders
The House’s clean CR did not incorporate a vast list of extenders of authorizing legislation unrelated to the most narrow version of appropriations requisite to preventing a funding lapse.
The Senate, however, has taken a different approach. Its legislative text includes 25 pages of authorizing extensions on top of a significantly longer list of extensions considered related to appropriations. Some taxpayers may be surprised to see some of the inclusions in what should be a shutdown prevention stopgap. For example, one of the more minor extensions is the Senate CR’s Sec. 129, which provides $7.4 million for a controversial California Bay Delta conservation water project for the duration of the CR.
A more notable authorizing extension is the entirety of the Senate CR’s Division C, “Surface Transportation Extension Act of 2026.” This would extend supercharged highway spending that was enacted more than five years during the Biden Administration. In fact, almost $160.7 billion remains in unobligated Infrastructure Investment and Jobs Act of 2021 (IIJA) funding, including $74.9 billion backed by the Highway Trust Fund (HTF), according to an analysis by NTUF. Under the IIJA, roughly 30% of HTF spending has been diverted to non-core surface transportation projects like highways and bridges, with billions being spent on “green” projects like installing EV chargers across the country using federal taxpayer resources.
Including the IIJA extension in the Senate’s CR sets the stage for this to become the standard spending and type of projects allowable. The current expiration on September 30, 2026, would be the first opportunity for Congress to revisit and reassess transportation spending since the Biden Administration’s significant expansion with IIJA. Establishing the precedent of IIJA continuation in the CR gives those who would spend taxpayer money freely on questionable transportation projects the upper hand in coming negotiations.
Shutdown Brinkmanship Is Becoming More Common
For years, political commentators insisted that the party demanding policy changes through a government funding deadline would bear responsibility for any resulting shutdown.
Blocking OMB’s grant reforms would be bad policy and would reward shutdown brinkmanship. Most congressional Democrats opposed the House-passed clean CR, in part because it did not reverse the OMB rule. They are using the credible threat of a pre-election shutdown to extract policy concessions.
The Senate should remove Section 157 and pass a clean continuing resolution. Allowing unrelated policy demands to ride on must-pass funding legislation would further weaken the taboo against shutdown threats and make future appropriations fights even more difficult.