The appropriations process that directs the use of federal funds in fiscal year 2027 has begun in earnest, with hearings and markups scheduled in both chambers in the coming weeks.
The first to go is the $469.49 billion military construction and veterans affairs bill, which passed the House on May 13 by a bipartisan vote of 400 to 15. The bill maintains funding above enacted 2026 levels for military construction at $19.2 billion for military construction and Department of Defense family housing, as well as a $2 billion increase for capital improvements to US Department of Veterans Affairs medical facilities and cemeteries.
After the bill passed, House Appropriations Committee Chairman Tom Cole (R-Okla.) said in a statement that the bill “strengthens the base posture by investing in military construction, improving barracks and ensuring our facilities are equipped to maintain readiness.”
But other hearings and brands have been far more contentious, with the GOP largely supporting the administration’s priorities and Democrats challenging them. At an April 29 Environment and Public Works Committee hearing on the U.S. Environmental Protection Agency’s $4.2 billion fiscal 2027 budget, which cuts spending by 52 percent from fiscal 2026 levels, Chairwoman Shelley Moore Capito (RW.Va.) praised agency administrator Lee Zeldin for leading the EPA in a new address “The [Biden] The EPA buried the economy in red tape and killed economic growth,” he said. “Now it’s working hard to undo, point by point, the Biden administration’s war on coal and other issues.”
But a day earlier, at a House Appropriations subcommittee hearing, ranking member of the committee Rosa DeLauro (D-Conn.) clashed with Zeldin, describing the proposed EPA budget as “a manifesto of climate denial.”
Zeldin argued that the US Supreme Court Runner Bright The 2024 ruling gives the agency no leeway to make policy decisions that don’t directly conform to established law, such as the federal Clean Air Act.
Zeldin also claimed that the State Revolving Fund (SRF) loan programs for clean drinking water have been “under attack” by lawmakers, using the funds for their own discretionary spending preferences. The Center for Environmental Policy Innovation, a center-left learning nonprofit, says such earmarks reduce resources for state agencies. The group predicts that over the next 20 years, the reserves could result in a net loss of $19.4 billion in water infrastructure funding, enough to finance about 5,700 projects. Thirty-nine states are projected to lose an average of $550 million each.
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new intelligent AI search tool.
Ask ENR →
Steve Hall, executive vice president of the American Council of Engineering Cos., says lawmakers will likely restore some funding cuts requested in the White House budget. He said lawmakers are ramping up discussions related to the upcoming Water Resources Development Act bill, which could include additional funding for clean and drinking water projects, and that Congress often increases state revolving fund money in final versions of spending bills.
“The administration for two years in a row has proposed pretty steep cuts to water and wastewater funding,” says Hall, but Congress ultimately rejected those cuts in the 2026 bill. “That’s a good sign,” says Hall, but he adds that it won’t be easy. “We have our work cut out for us.”
Among the bills the National Association of Counties (NACo) is watching are the yet-to-be-introduced 2027 fiscal appropriations bill for the U.S. Department of Transportation and the upcoming surface transportation reauthorization, says Eryn Hurley, the group’s director of government affairs. According to the Congressional Research Service, the DOT budget request of $113.9 billion for fiscal year 2027 is 23% lower than the $148.5 billion enacted in fiscal year 2026.
Hurly says his group will watch whether the bills allocate more funds to localities, which often receive less funding than states. Under the Jobs and Infrastructure Investment Act, for example, state transportation departments received 90 percent of highway and bridge funding, with only 10 percent going to localities. “That’s significantly less than what counties were getting, despite the fact that we own and maintain nearly 45 percent of the miles of public roads, and also nearly 40 percent of the bridges,” Hurly says. NACo will push lawmakers to increase local access to formula funding within the federal-aid highway program, he said.
DHS funding
Beyond the annual appropriations process, lawmakers are working together to consider a $72 billion reconciliation measure that would fund the Department of Homeland Security and its agencies, including the Federal Emergency Management Agency, through 2029.
Reconciliation is a tool used by the majority party in Congress to sidestep debate on spending and other budget-related bills. They only require a simple majority, rather than a two-thirds majority, to advance to the president for signature.
Republicans say the reconciliation is necessary to avoid another prolonged DHS shutdown that GOP leaders say was caused by Democratic opposition to tactics used by the agency’s Immigration and Enforcement (ICE) division.
The House passed a budget resolution, the first step in the reconciliation process, on April 29 by a party-line vote of 215-211. The bill, known as Reconciliation 2.0, is now under consideration in the Senate.
On May 19, the Senate Homeland Security and Governmental Affairs Committee advanced the measure by an 8-5 vote, with all Democrats in opposition. The Judiciary Committee will also vote on the package before it goes to the Appropriations Committee, which will combine the Senate and House versions into an omnibus that will then require approval from both chambers.
ACEC Hall says it’s not clear the reconciliation bill has enough support to cross the finish line. “It’s still an open question whether House and Senate Republicans have the votes,” he said.
