Fiscal Year 2026 Financial Services and General Government Bill

2025-09-03

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Summary

The Appropriations Committee met to mark up the fiscal year 2026 Financial Services and General Government appropriations bill, with the intention of completing all work on the bill during the session, despite an initial delay [ 00:35:55 ] [ 00:36:48 ] . Chairman Joyce presented the bill, outlining its funding levels and key priorities . However, Ranking Members Hoyer and DeLauro, along with other Democratic members, expressed strong opposition, criticizing the bill's significant cuts and policy riders [ 00:52:45 ]

Themes

Financial Services and General Government (FSGG) Bill Overview and Funding Levels

The bill allocates $23.341 billion for fiscal year 2026, which is $410 million less than the previous fiscal year . Key priorities include fiscal responsibility, leveraging new technology, and strengthening national security [ 00:54:34 ]

. Specific funding allocations include $11.3 billion for the Department of the Treasury (24% lower than FY2025), $828 million for the Executive Office of the President (3.6% cut), and $823 million for federal payments to the District of Columbia (4.6% cut) . The bill also includes policy riders on pro-life protections, climate rules, mask and vaccine mandates, and codifying Trump administration executive orders . Opponents argue the bill severely cuts FSGG funding by $3.2 billion or 12% below FY2025 levels, and will not pass the Senate [ 00:52:55 ] .

IRS Funding and Tax Enforcement

The bill proposes a $2.79 billion (23%) cut to the Internal Revenue Service (IRS), including a $2.4 billion (45%) reduction in enforcement funding . Proponents suggest these measures safeguard taxpayers from IRS overreach [ 00:55:08 ]

. However, opponents argue these cuts make it easier for wealthy individuals and corporations to avoid paying taxes, leading to an estimated $29 billion in lost revenue . They also contend that the cuts will hinder IRS customer service and eliminate the direct file program, making tax filing harder for ordinary Americans .

District of Columbia Issues

The bill cuts federal payments to the District of Columbia by 4.6% and allocates $70 million for emergency planning and security costs . Critics assert that the bill withholds $1 billion in D.C.'s own tax money, effectively defunding the Metropolitan Police Department . Additionally, the bill is said to include "poison pills" that ease concealed weapon carrying and interfere with D.C.'s ability to enforce traffic laws . An en bloc amendment also sought to block D.C. from sister city activities with China and prohibit funds for implementing D.C.'s Human Rights Sanctuary Amendment Act related to abortion and gender transition services .

Consumer Protection Agencies (FTC, SEC, CPSC)

Total funding for independent agencies, including the SEC, FTC, FCC, GSA, USPS, and SBA, is reduced by 34.4%, approximately $1.5 billion . Opponents argue these cuts weaken protections against scams, price gouging, and market manipulation, directly impacting consumers and small businesses . Concerns were specifically raised about the Consumer Product Safety Commission (CPSC) losing funding, potentially endangering children through unsafe products, and the firing of commissioners .

Small Business Administration (SBA)

The bill includes a $324 million cut to the Small Business Administration (SBA) . Critics warned that this reduction would limit crucial support for American businesses, threaten the 62 million Americans employed by or owning small businesses, and hinder programs that help small businesses lower energy costs and remain competitive .

Federal Workforce Pay and Civil Service

The bill maintains a modest pay adjustment for federal workers, with the administration proposing 1% while military personnel are set for 3.8% . An amendment was offered to ensure pay parity between military and civilian federal employees, advocating for a 3.3% raise plus a 0.5% cost-of-living adjustment [ 02:47:09 ]

. This issue sparked debate over the value of federal workers, the impact of inflation on their purchasing power, and the potential politicization of the civil service through actions like reclassifying positions to "at will" employment .

Election Security

The bill allocates $15 million for election security grants . Opponents argue this is an insufficient amount and represents a 40% cut to the Election Assistance Commission (EAC), undermining efforts to keep elections fair and secure at a time of increasing threats . Concerns were raised that these cuts make elections easier to compromise and diminish voting rights access .

OMB and Executive Overreach

Several members criticized the Office of Management and Budget (OMB) and its Director, Russ Vogt, for alleged "lawless upheaval" and illegal impoundment of funds [ 00:53:39 ]

. It was argued that OMB operates without sufficient oversight, treating congressional appropriations as mere suggestions and undermining the appropriations process . An amendment to establish an independent Inspector General for OMB was offered to promote transparency and accountability but was not adopted [ 02:09:05 ] .

Hemp and Cannabis Business Banking

A specific concern was raised about the bill's failure to provide a "safe harbor" for banks and credit unions that offer services to state-sanctioned hemp businesses [ 01:14:20 ]

. This lack of provision leads many hemp businesses to operate primarily in cash due to financial institutions fearing federal penalties, thereby jeopardizing employee and customer safety .

ESG (Environmental, Social, Governance) in Credit Ratings

A manager's amendment included provisions directing the SEC to study how credit rating agencies incorporate ESG criteria into bond evaluations and their impact on public markets [ 02:28:26 ]

. This was highlighted as important due to concerns that ESG factors, such as reliance on fossil fuel industries, were negatively affecting state bond ratings and increasing borrowing costs for essential public services .

Tone of the Meeting

The tone of the meeting was largely contentious and polarized, marked by sharp disagreements between Republican and Democratic members over the bill's funding cuts and policy riders . While there were initial moments of light-heartedness and apologies for tardiness, as well as acknowledgements of staff efforts, the substantive discussion revealed deep frustration and concern, particularly from Democrats, regarding the bill's perceived negative impact on various sectors and the integrity of governmental processes [ 00:36:48 ] [ 00:40:53 ]

[ 00:52:31 ] . There was also a clear sense of urgency from the Chair to move the legislative process forward despite the disagreements and timeline constraints .