Status of FY2026 Labor, Health and Human Services, and Education Appropriations: In Brief

Contents

• Scope of the LHHS Bill
• Context for FY2026
• Enactment of FY2025 Full-Year Continuing Appropriations
• President's Budget Submission for FY2026
• Impoundment Control Act Rescissions
• FY2026 Discretionary Spending Levels and Appropriations Committee Allocations
• FY2025 LHHS Legislative Action
• LHHS Funding Levels

Summary

This report provides an overview of FY2026 Labor, Health and Human Services, and Education, and Related Agencies (LHHS) appropriations, including relevant congressional actions and a top-line comparison of discretionary funding enacted in FY2024 and FY2025 versus relevant FY2026 congressional proposals, as of the cover date of this report. It also provides background on the scope of the bill and context for congressional budgetary decisionmaking.

On July 17, 2025, the House Appropriations Committee voted to report its draft interim suballocations for all 12 subcommittees, including LHHS (35-26). (These draft suballocations have not yet been reported to the House.) The Senate Appropriations Committee has not voted on its full set of suballocations.

On July 31, the Senate Appropriations Committee voted to report its version of the FY2026 LHHS bill (26-3). The measure was subsequently reported that same day as S. 2587 (S.Rept. 119-55). No further action on that proposal has occurred as of the cover date of this report.

As yet, the House Appropriations Committee has not voted to report its respective version of the LHHS bill.

This report provides a brief summary of the status of Labor, Health and Human Services, and Education (LHHS) appropriations during the FY2026 appropriations cycle. It includes relevant congressional actions and a top-line comparison of discretionary funding enacted in FY2024 and FY2025 versus relevant FY2026 congressional proposals. It also provides background on the scope of the bill and context for congressional budgetary decisionmaking.

On July 17, 2025, the House Appropriations Committee voted to report its draft interim suballocations for all 12 subcommittees, including LHHS (35-26). (These draft suballocations have not yet been reported to the House.) The Senate Appropriations Committee has not voted on its full set of suballocations.

On July 31, the Senate Appropriations Committee voted to report its version of the FY2026 LHHS bill (26-3). The measure was subsequently reported that same day as S. 2587 (S.Rept. 119-55). No further action on that proposal has occurred as of the cover date of this report.

As yet, the House Appropriations Committee has not voted to report its respective version of the LHHS bill.

Congressional clients may consult the LHHS experts list in CRS Report R42638, Appropriations: CRS Experts, for information on which experts to contact at the Congressional Research Service (CRS) with questions on specific agencies and programs funded in the LHHS bill.

Scope of the LHHS Bill

The LHHS bill is the largest of the 12 annual appropriations bills, in terms of appropriated funds, when accounting for both mandatory and discretionary funding ($1.4 trillion in FY2024).¹ It provides annually appropriated budget authority for the following federal departments and agencies:

• the Department of Labor (DOL);
• most agencies at the Department of Health and Human Services (HHS), except for the Food and Drug Administration (funded through the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies appropriations bill), the Indian Health Service (funded through the Department of the Interior, Environment, and Related Agencies appropriations bill), and the Agency for Toxic Substances and Disease Registry (funded through the Interior-Environment appropriations bill);
• the Department of Education (ED); and
• more than a dozen related agencies (RA), including the Social Security Administration (SSA), Corporation for National and Community Service (CNCS), Corporation for Public Broadcasting (CPB), Institute of Museum and Library Services, National Labor Relations Board, and Railroad Retirement Board.

In general, mandatory funding represents more than 80% of the total LHHS bill, supporting annually appropriated entitlements such as Medicaid and Supplemental Security Income (SSI). Discretionary funds, which account for less than 20% of total funds in the bill, tend to be the focus of congressional debate during the appropriations process.² This is because the appropriations process generally has little control over the amount of mandatory funding provided for appropriated entitlements; rather, the authorizing statute controls the program parameters (e.g., eligibility rules, benefit levels) that entitle certain recipients to payments. Consequently, the focus of this report generally is on the discretionary spending for LHHS programs and activities under various laws and proposals.

Even though discretionary appropriations represent a relatively small share of the entire LHHS bill, the bill is typically the largest single source of nondefense, discretionary funding for the federal government. (The Department of Defense bill is the largest single source of discretionary funding overall.)

Context for FY2026

Under the congressional budget process, consideration of annual appropriations traditionally is preceded by the submission of the President's budget request and the adoption of the congressional budget resolution. However, the FY2026 cycle has been affected by a number of timing and budgetary issues related to the enactment of FY2025 LHHS appropriations in the form of a full-year continuing resolution (CR), the timing and form of the FY2026 President's budget submission, the consideration of a rescissions bill, and a lack of agreed upon top-line spending levels for FY2026 (either in the form of statutory discretionary spending limits or via a budget resolution). Background related to these issues is provided below.

Enactment of FY2025 Full-Year Continuing Appropriations

Full-year FY2025 appropriations for LHHS were enacted on March 15, 2025, when the Full-Year Continuing Appropriations and Extensions Act, 2025 (hereinafter, "FY2025 full-year CR"; H.R. 1968; P.L. 119-4) was signed into law by the President. H.R. 1968 was introduced by Representative Tom Cole, the House Appropriations Committee chairman, on March 10, 2025. The measure was approved by the House on March 11 (217–213), and the Senate on March 14 (54-46).

In general, the FY2025 full-year CR funds LHHS discretionary programs at the same level and under the same conditions as in FY2024, and funds annually appropriated entitlements at their current-law levels. This approach differs from how regular annual appropriations acts specify funding, and presents challenges in determining FY2025 LHHS funding levels. Although statutory FY2025 LHHS funding levels generally match the comparable funding provided in the FY2024 LHHS appropriations act, there are several exceptions (e.g., "anomalies"⁶ in the FY2025 full-year CR, accounts with appropriations in indefinite amounts, offsets such as fees and rescissions).

In addition, the FY2025 full-year CR is not accompanied by an Explanatory Statement, which would have provided further detail on recommended funding levels for programs, projects, and activities that were not statutorily specified. As of the cover date of this report, the post-enactment allocations for those programs, projects, and activities that have been made by LHHS agencies, which are typically included in agency operating plans, are not consistently available through public executive branch sources.⁷

Lack of comprehensive information on FY2025 funding levels may complicate congressional efforts to determine whether funding should be increased or decreased for FY2026 relative to FY2025. For a more detailed discussion of how the FY2025 full-year CR differs from regular annual appropriations, and related issues, see the report section, "FY2025 Funding Levels for LHHS Accounts, Programs, and Activities," in CRS Report R48598, Overview of FY2025 Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations.

President's Budget Submission for FY2026

The Budget and Accounting Act of 1921 (P.L. 67-13), as amended, requires the President to submit an annual consolidated federal budget to Congress at the beginning of each regular congressional session, not later than the first Monday in February. Typically, many of the proposals in the President's annual budget recommend changes to laws that govern mandatory spending levels or policies, which are usually established on a multiyear or permanent basis. Discretionary spending, however, which is roughly one-third of the federal budget,⁸ is decided and controlled each fiscal year through the annual appropriations process. While Congress is not required to adopt the President's proposals or recommendations, the submission of the President's budget typically initiates the congressional budget process and informs Congress of the President's recommended spending levels for agencies and programs.⁹

The FY2026 budget submission occurred during a presidential transition year—from the presidency of Joseph R. Biden to Donald J. Trump on January 20, 2025. Recent Presidents have not submitted detailed budget proposals until April or May of their first year in office, although they usually advise Congress regarding the general contours of their economic and budgetary policies in special messages submitted to Congress prior to that submission.¹⁰ This delay allows time to prepare a proposal that reflects the priorities of the new administration.

On May 2, President Trump submitted to Congress an outline of his discretionary funding priorities for FY2026.¹¹ This preliminary document provides early highlights of proposed increases and decreases to numerous programs and entities, including several funded in the LHHS bill. Additional documents related to the budget request were submitted in the weeks that followed, including selected "supplemental materials" (e.g., the Appendix volume of the submission) and congressional justifications for individual departments and agencies.¹²

Much of the information that would typically be submitted with a President's budget was not included in these documents (e.g., mandatory spending budget proposals). In addition, the FY2025 column in the LHHS agency congressional justifications, which would usually list amounts at the program, project, and activity levels, did not provide this level of detail for much of HHS and ED; moreover, in some cases, these congressional justifications aligned their account structure with administration proposals to reorganize those departments, and not with the account structure used when FY2025 funding was enacted.¹³

Impoundment Control Act Rescissions

Once funding has been enacted, it can subsequently be cancelled by a provision of law that is commonly referred to as a rescission. As mentioned above, rescissions of previously enacted funds are routinely considered and enacted in regular annual appropriations acts, and may offset the cost of new funding. In addition, the Impoundment Control Act of 1974 (ICA; P.L. 93-344) provides a mechanism for the President to submit a special message to Congress that proposes a rescission. The ICA also provides special procedures for Congress to consider a rescission bill.¹⁴

A rescission bill was enacted into law on July 24, 2025 (P.L. 119-28). This bill originated as an ICA presidential proposal to rescind $9.4 billion in previously enacted funds, including $1.1 billion in FY2026 and FY2027 LHHS advance appropriations for the CPB.¹⁵ (As advance appropriations for CPB are enacted two years in advance, these had been enacted in the FY2024 LHHS omnibus [P.L. 118-47] and the FY2025 full-year CR. The bill did not propose that any CBP funds available for FY2025 be rescinded.) The proposed rescissions were introduced as H.R. 4, and passed the House on June 12 (214-212). The Senate amended and passed H.R. 4 on July 17 (51-48); the House agreed to the Senate amendment on July 18.¹⁶

Rescissions that are enacted in standalone laws prior to the consideration of annual appropriations acts generally would no longer be available to offset the cost of the new funding in those appropriations acts. It is unclear the extent to which Congress might continue to enact rescissions in this manner, including for LHHS accounts and programs, or opt instead to consider those rescissions as part of the annual appropriations process.

FY2026 Discretionary Spending Levels and Appropriations Committee Allocations

Congress has historically used various methods to come to an agreement on total discretionary funding levels for a fiscal year, as well as the discretionary funding that will be allocated for LHHS. These methods have included statutory limits on the applicable spending, procedural limits on such spending, and more informal agreements between the House and Senate.

Prior to FY2026, statutory limits on defense and nondefense discretionary spending were in effect through FY2025 under the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177, as amended).¹⁷ LHHS appropriations are classified as nondefense spending, and the bill has the largest share of such spending compared to the other annual appropriations bills. The statutory spending limits were enforceable through sequestration: largely across-the-board reductions made to the category of spending in excess of the limit (defense or nondefense), to eliminate that excess spending.¹⁸

The procedural elements of budget enforcement are primarily associated with the budget resolution and are enforced through points of order rather than sequestration. The budget resolution process dates back to the Congressional Budget Act of 1974. Budget resolutions are to be used each year to impose a limit on total discretionary spending available to the appropriations committees (commonly referred to as a 302(a) allocation). Subsequently, this amount is divided among each appropriations subcommittee (referred to as 302(b) suballocations).¹⁹

Certain spending may be effectively exempt from these limits (commonly referred to as adjustments to those limits). In recent years, adjustments that have been applied to LHHS appropriations are for (1) emergency requirements and (2) to accommodate new budget authority for specified program integrity initiatives at HHS (health care fraud and abuse control), SSA (continuing disability reviews and redeterminations), and DOL (reemployment services and eligibility assessments conducted by the states related to unemployment compensation).²⁰ The maximum amount of funding allowed for the program integrity LHHS adjustments was $2.531 billion in FY2025.

Under current law, the statutory limits on discretionary spending expired at the end of FY2025. As the FY2026 appropriations cycle progresses, Congress may consider whether to re-impose statutory caps, and if so, at what levels and for how long. In addition, as of the cover date of this report there has been no House or Senate action on a FY2026 budget resolution, nor has either chamber taken steps to provide alternative means of budget enforcement for appropriations, such as through a so-called deeming resolution or by unanimous consent.²¹ As a result of this combination of circumstances, it is unclear how budget enforcement might occur for FY2026. It is also unclear whether adjustments to potential spending limits will continue to be available for the same or similar purposes as in the past.

Generally, the next step in the appropriations process is for each of the appropriations committees to adopt suballocations from the total amount allocated to them. These 302(b) suballocations provide a limit on current-year (i.e., FY2026) appropriations within each subcommittee's jurisdiction and incorporate any applicable scorekeeping adjustments made by CBO. In the absence of a budget resolution, the House or Senate Appropriations Committees may operate under informal suballocations to guide the consideration of appropriations until there is broader agreement on funding levels. The House Appropriations Committee voted to report its draft interim suballocations for all 12 subcommittees, including LHHS (35-26), on July 17, 2025 (see Table 1). (These draft suballocations have not yet been reported to the House.) The Senate Appropriations Committee has not voted on suballocations.

FY2025 LHHS Legislative Action

On July 31, 2025, the Senate Appropriations Committee voted to report its version of the FY2026 LHHS bill (26-3). The measure was subsequently reported that same day as S. 2587 (S.Rept. 119-55). No further action on that proposal has occurred as of the cover date of this report.

As yet, the House Appropriations Committee has not voted to report its respective version of the LHHS bill. The draft 302(b) suballocation for LHHS was adopted by the House Appropriations Committee on July 17. This suballocation provides a basis for comparing FY2026 funding assumed by that committee to the Senate Appropriations Committee FY2026 proposal, and FY2024 and FY2025 enacted levels.

LHHS Funding Levels

Table 1 displays the CBO estimate of enacted LHHS discretionary appropriations for FY2024 and FY2025, alongside the FY2026 draft House suballocation for LHHS and FY2026 Senate committee bill. The amounts shown for "regular discretionary appropriations" represent current-year budget authority subject to the spending limits. (They do not include any funding that is subject to program integrity adjustments or emergency designations.) These amounts also incorporate the budgetary effects of any applicable CBO scorekeeping adjustments that offset the cost of the funding in the bill (e.g., rescissions of previously enacted funding, changes to mandatory program spending included in the bill). Because the House Appropriations Committee's version of the LHHS bill has not yet been released, the degree to which scorekeeping adjustments are intended to offset the total allocated for the bill is unclear. The FY2026 House draft suballocation for LHHS would authorize the subcommittee to provide up to $184.5 billion, which is $13.7 billion (-7%) less than FY2025 enacted, and $9.9 billion (-5%) less than FY2024 enacted.²² The Senate committee bill would provide $196.974 billion, which is $1.200 billion (-0.6%) less than FY2025 enacted, and $2.500 billion (+1.3%) more than FY2024 enacted.

As mentioned previously, certain LHHS appropriations, such as those allowed for program integrity funding or designated for emergency requirements, may be effectively exempt from the discretionary spending limits (see discussion in the "Impoundment Control Act Rescissions" section). The "adjusted appropriations" total in the table includes funding that is assumed to be under these adjustments (if they are subsequently provided for), plus "regular discretionary appropriations." The FY2026 House draft suballocation for LHHS would allow a total of $2.8 billion in funding subject to the program integrity adjustments, which is $223 million (+9%) more than the total amount allowed for those adjustments in FY2025 ($2.5 billion), and $307 million (+12.5%) more than FY2024. The Senate committee bill would provide $3.1 billion in program integrity adjustments, which is $573 million (+22.6%) more than FY2025, and $657 million (+26.9%) more than FY2024. Neither the FY2026 House draft suballocation for LHHS nor the FY2026 Senate committee bill includes FY2026 funding for emergency requirements adjustments.

Footnotes