Budgeting – January 30, 2026

No, this is not a conversation on people or households, nor about family owned businesses to the largest corporations on the planet. I am talking about the one entity in this economy that spends the most, by far.

The Federal Government.

Today at midnight is yet another in a long line of “deadlines” for Congress to figure out a way to pass some sort of funding for the Federal Government. In the balance is not just a possible umpteenth shutdown of some degree but yet another threat to the bond markets in terms of keeping up with our debt obligations.

Initial question – Why is Congress so inept with Budgets?

If you asked a Democrat or Republican in Congress there is a very good chance each one will blame the other no matter if in the majority or minority position of power. There is very little claim, across the board, on accepting responsibility.

A brief history on this current fight.

On January 22, 2026 the House passed the final batch of spending bills into some “minibus” package, and a separate DHS funding bill that has the most political attention thanks to all the chaos caused in Minnesota and elsewhere.

The Consolidated Appropriations Act of 2026 is the “minibus” package, passed 341 to 88, and provided discretionary funding across several key departments. Defense, Health and Human Services (HHS,) and Transportation & Housing. Note, other departments are more or less blended into these areas and combined in one bill.

More entertaining, the Homeland Security Appropriations Act of 2026 passed by a much more damn near party line vote of 220 to 207. In the bill is funding for baseline discretionary spending and additional Border Patrol Agents. There are also a few cuts in the mix, namely to the IRS and “DOGE backed” reforms. This was purposefully excluded from the first Act above entirely over the current political backlash for the DHS.

Look at these two measures as the conclusion of the standards 12 annual appropriations bills for Fiscal year 2026. The prior 6 departments made their way and were somehow part of bills passed and enacted in November 2025 and a few in early January 2026.

Before you ask, yes, Congress is very late on this as the official Fiscal Year start for 2026 was October 1, 2025.

And that means yet again Congress did not complete their primary responsibility as a Legislative Branch of the Federal Government. We’ll chat more about that miss later as this happens more commonly than anyone wants to admit.

Anyway, this current round of Bills was set in motion from the last deal made, from the last shutdown, and by goal is intended to by piecemeal of efforts fund the government for the rest of this Fiscal Year ending in September.

So as of today this is all in the hands of the Senate. Leadership of the Senate claims it has a “bipartisan funding deal” and we are quickly running out of time to see how valid that is. And we already know to get to 60 votes that would mean Republicans have to back off of funding the DHS through the end of the year and in its place go with a two-week stopgap.

How this will be done is severing the DHS portion from both Acts that passed the House. And that means whatever the Senate does, whenever they do so, will send back to the House something else to get through voting.

The odds of this getting done by midnight is slim to none.

Oh, speaking of process, did I mention that the House is currently on a week-long recess? They are not due back until Monday from their “district work period.”

We may have answered the initial question, but pause on that a moment.

How should the process work?

The Congressional Budget Act of 1974 outlines several steps on how this is all designed to work for each fiscal year. Hold that thought for a moment.

The first step starts with the President, who should submit a detailed budget proposal for the next fiscal year to Congress due “around or about” the first Monday in February.

The next step is more complicated, of course. Each chamber, House and Senate, has a Budget Committee that should review the proposal and draft their own resolutions. From the point of a resolution out of Committee to each chamber floor, negotiation between parties then the chambers, back and forth for edits and so forth, by the rules they should have a unified budget resolution by April 15th. Note, this step is not program or area specific but more overall spending limits.

Assuming Congress gets that done, this all goes to House and Senate Appropriations Committees to “divide out” into the small 12 areas as subcommittees that should eventually become 12 appropriations bills. Hearings, debates and amendments, and some shenanigans to the point that all 12 are ready for the full chamber vote process.

Now it gets much more fun…

Senate and House full chamber debate these measures, amend further if needed, vote on all 12 individual appropriations bills, sent back and forth where “reconciliation” processes are sometimes deployed, perhaps other more informal negotiations occur, then eventually the goal is both chambers passing identical text for these 12 appropriations bills.

The idea of “omnibus” or “minibus” is blending the 12, in some way, into one larger bill for the purpose of speeding up passing between the chambers of Congress.

Assuming all that happens… The final step is a President signing the bill (or bills) into law.

All of this is supposed to happen before October 1, the start of that next fiscal year.

What happens when the process that should happen by law does not?

Risk of shutdown is the short answer.

That is when Congress goes into pure scramble mode. Fills the networks with commentary adding interviews across the media spectrum, runs in and out of various committees, perhaps has a hearing or two and usually entirely unrelated to budgets, each side talks terrible about the other social media and elsewhere, usually the President also chimes in adding to the chaos, and between all of them totally devoid of any sense of being productive at the one damn task that Congress has the primary function of completing. A budget.

A Continuing Resolution (CR) is the natural fallback. A sort of temporary non-specific funding bill designed to kick the can down the road for some period of time, usually arbitrary date selected as the whole thing is guesstimate to the next date the government runs out of money, with a goal being that before whatever date is picked that something else is passed more closely resembling a budget.

If all of that does not happen, the Federal Government goes into shutdown at some date based on what the Treasury is telling them. (We will have a conversation at some later date on exactly how that happens, in what order, how various obligations are handled, etc.)

A question that may anger some, make others sad, perhaps some laugh, laugh as to not cry, some combination of feelings about all this.

When was the last time Federal Budget was passed, on time, and by the rules?

Note that above we mentioned the Congressional Budget Act of 1974, the governing law on how things are supposed to work. Surface that thought.

The last time Congress did all this, on time and by the process, was… wait for it… for Fiscal Year 1997, and in the last hours before that Oct deadline. The vote date for that was September 30, 1996 for the 104th Congress and it was a combined Omnibus bill with other measures added in.

Said another way it was over 29 years ago that Congress did this correctly and by their own rules. Since the Act was signed into law, Congress has only achieved this 4 times. Most recently going back for Fiscal Years 1997, 1995, 1989, and 1977.

To sum it up, almost 52 years ago the government huddled up and came up with a more defined way to budget for the nation each fiscal year. Between all the Congresses from then to now they only pulled it off 4 times.

Just shy of an 8% success rate, give or take (napkin paper math.)

If you were in the NBA and only pulled off 8% of your shots, your ass would be on a bench and more likely off the team if not highlighted repeatedly on ESPN’s Not Top 10.

Just for the sake of perspective, the current 119th Congress has 20 members that were in the 104th Congress. 7 Senators, 12 Representatives. Names you may know like Chuck Grassley, Mitch McConnell, Dick Durbin, Nancy Pelosi, and Maxine Waters.

We will have a conversation on deficits and debt, the economics of all that, another time as the above on budgets is more than enough for this one.

So, how has the Government been funded all these years?

In short, a dreadful and complex combination of Continuing Resolutions and late by law Omnibus Appropriations Bills.

Between Fiscal Year 1998 and Fiscal Year 2026 Congress has relied on some 139 Continuing Resolutions of various timeframes to fund the government kick the can down the road style, and this is in addition to some 31 Omnibus, or Minibus, measures of some sort.

Again note that CRs buy them time as temporary funding measures, Minibus measures are usually about some spending (handful of departments or functions) from a date to the end of fiscal year, and Omnibus measures usually are all spending needed from a date to end of year. Also note, all of that can be thrown out the window when Congress gets creative.

Regardless, Congress has turned these things into permanent crutches. For Fiscal Year 2000 the government was entirely funded by CRs. For 2001, 2009, and 2012 Congress ended up using multiple Omnibus measures within the same fiscal year.

Lest we forget, with all the above the Federal Government has still experienced five separate shutdowns from Fiscal Year 1997 to current. The longest was just last year, October into November, you may remember some news on this.

Why does Congress have such a failure rate at budgeting?

Deep ideological divisions, the very real politics of blame, and a bipartisan goal of avoidance in taking responsibility. (Well, outside of a political win here or there.) There really is no other way to explain how the Federal Government has such a terrible reputation of failing at their core function.

A bit more explanation though.

For the last 50 years Congress has had about a 30% approval rating, fluctuating wildly based on events and conditions, and for the last decade or so is more like 20% or less. And as of the last month or so the current Congress is more like 17% approval rating. (Be my guest, go research on your own to see these numbers.)

The average reelection rate for the House of Representatives over the same period is 93%, rarely if ever seeing a Congress to Congress reelection rate fall below 90%. And for the Senate the average is 80% reelection rate. Largely because state wide races have more room for competition, whereas the House is gerrymandered to the point of guaranteed party seats.

You may get variation on this but if you asked how many seats in the House of Representatives are considered “competitive” that answer may be as high as 38 “true toss-up” seats but could be as low as 18 that have “little lean districts” of a total 435 seats. So shy of 9% down to perhaps 4% of seats could go either way, meaning all the rest a party has successfully ensured they pick their voters right down party loyalty lines.

That answers two questions at once. One, why they enjoy having such a failure rate and two, why they get to go back so frequently regardless of that failure rate.

What is next?

It is anyone’s guess.

These bills will likely get through both chambers and by consequence kick the DHS funding can down the road several weeks or more. There will be a new fight then.

It may or may not be early next week before this is said and done, forcing the hand of the US Treasury to keep things funded. Very short shutdown, no idea. The showdown for the midterm election season, not that far away from becoming more a news dominant story, has more fuel for the ads.

Not just budgets but current conditions and events, outrage over several Trump Administration actions, and of course the budget. Even if we escape a shutdown it will be difficult to forget the last one, 43 days for the same lot in Congress now to get their shit together, and is in the books as the longest in US history.

Advice. The next time any politician, Republican or Democrat, hands out a lecture on treating the Federal Government like a household, or talking to you about what you can live without so they can spend on something else, or even utters the phrase “fiscal responsibility” please remember that these same guys no matter a D or R behind the name rarely get their own house in order from fiscal year to fiscal year.

Ask yourself, with these midterms coming up, is the one doing the talking part of the problem or offering a plausible solution.

That does not mean offering the yearbook answer pretending it is a sudden solution, some line of rhetoric that belongs on a picture circulating Facebook for the mindless to consume, but something plausible. Something to get us to a point of trust and approval of the very branch of government just about entirely responsible for deciding what is spent and on what. Again, 8% success rate? Really?

Does not mean blindly handing the next Congress to Democrats either, we have seen enough of the violent political pendulum give both front running parties control over Congress. If it does happen, and likely will, it will be for other reasons in the news. Not sudden fiscal responsibility.

In the past 50 or so years, 26 distinct Congresses (the current one goes to January next year,) 6 were held both chambers Democratic Controlled, 7 held both chambers Republican Controlled, and 13 were divided (one chamber held by each party.) One even shifted mid-Congress when a Republican went Independent, caucused with Democrats. Senator Jim Jeffords. An indication on how razor thin some of these majorities can be.

The point being we have plenty of evidence to ask ourselves is either party really all that good at ensuring Congress completes one of their core primary functions.

No matter if a single party has majority control over Congress and the Presidency, or some other split condition, their core function has been a galactic failure. All evidence supporting.

The midterm fight for the next 120th Congress seated early in 2027 is here, perhaps you recall a news story or two on “redistricting” going on to control the outcome.

There was a reason.

As for budgeting, this conversation is plenty to consider when hearing all of them give their pitches on why a seat should be retained, why a party should carry on with majority control, and what a President says about it all.