We are beginning an extremely busy week in Washington, D.C., as the House and the Senate continue to work on both budget reconciliation and the FY26 appropriations bills. It can be overwhelming, leaving more questions than answers. To help, we are providing a breakdown of the distinctions between budget proposals, the appropriations process, and budget reconciliation, along with insight into where we stand in each of these processes.
As we learn more information over the next few days and weeks about what these decisions mean for the rare disease community, we will keep you updated and let you know what actions you can take to help ensure that the voice of our community is prioritized.
The Differences Between a Budget Request, a Budget Resolution, and Appropriations Bills
President’s Budget Request: The President submits a budget proposal for the next fiscal year – FY 2026 will start on October 1.
The President typically submits a detailed budget proposal to Congress that outlines the Administration’s priorities for spending by agency. In addition to top-level spending numbers, most agencies submit a Congressional Justification that highlights the agency’s accomplishments, new and existing strategic priorities, and what will be accomplished with the proposed spending levels. In most years, the President’s budget request is seen only as a starting point and is largely dismissed by Congress when they begin their process.
Budget Resolution: Congress negotiates a budget resolution that sets overall spending limits for the fiscal year.
Appropriations Bills: Each year, Congress must pass 12 appropriations bills that provide funding to federal agencies and specific programs. The two bills most relevant to the rare disease community are the Labor, Health and Human Services (LHHS) bill, which funds most health programs other than the FDA, and the Agriculture, Rural Development, and FDA bill, which allocates funding to the FDA.
As an analogy, if the federal spending budget were a pie, the budget resolution would decide how big the pie will be. The appropriations process will determine how big a slice of that pie each agency will get.
In some cases, the budget resolution comes before the appropriations process; however, Congress often begins drafting the bills while the overall funding levels are still being determined. They have not passed a budget resolution setting the FY26 spending levels yet, but the appropriations subcommittees have begun meeting. You can follow House progress here and Senate progress here.
Continuing Resolution: If Congress can’t agree on final appropriations bills before October 1, it can pass a continuing resolution to temporarily extend the current funding levels, avoiding a government shutdown.
How does Congress Create Appropriations Bills?
- Subcommittees hold hearings to ‘hear’ from federal agency leaders (Most have been completed, but on Tuesday, the NIH Director will appear before the Senate LHHS Appropriations Committee)
- Subcommittees hold markups to discuss draft bills (Markups have started in the House, but most will occur in late June and July)
- Subcommittees release REPORT LANGUAGE along with the marked-up bill. Report language provides federal agencies with instructions or other details that speak to Congressional priorities for the agencies to act on in the coming year. The language is often released after the draft bills pass their respective subcommittees.
- The full Appropriations Committee will mark up and finalize the 12 bills, sometimes combining them with multiple bills.
- The House typically votes to pass appropriations bills first, but the process of drafting the bills in the House and Senate happens concurrently.
- Typically, a conference will be held to reconcile any differences between the House and Senate versions of the appropriations bills before they can be passed and sent to the President for signature.
What is the difference between the appropriations process and budget reconciliation?
This year, Congress is using an additional process related to government funding, known as budget reconciliation. It includes two parts – a budget resolution with instructions on federal spending amounts and an expedited process to pass related legislation. To be included in budget reconciliation, a policy must have a direct impact on federal spending; however, the resulting legislation can be passed in the Senate with 51 votes instead of the usual 60. The House passed budget reconciliation legislation in May, and the Senate is now considering it.
Unlike the appropriations process, budget reconciliation makes changes to mandatory spending (programs like Medicaid and Medicare), revenues (taxes and fees), or the debt limit. It is typically used to implement policy changes, and such changes can occur at any time during a fiscal year.
A current example relevant to rare disease:
Appropriations Process: How much funding the NIH will receive for FY26, and report language that could instruct NIH to prioritize a particular research area, such as accelerating rare disease research.
Budget Reconciliation: Who is eligible for Medicaid, and what administrative requirements must states implement, such as new work reporting requirements.
hat administrative requirements must states implement, such as new work reporting requirements.
