US Senate leaders reach short-term funding deal to avert pre-election shutdown

Key senators unveiled a short-term spending bill on Sunday (August 2, 2026) that would keep federal agencies funded past the midterm elections and into early December, as lawmakers seek to avoid a government shutdown during the campaign season.

The Senate is likely to vote on the measure before leaving Washington at the end of the week for its traditional August recess, a period many lawmakers want to spend on their re-election campaigns rather than in the capital.

The bill would generally fund the federal government at current levels through December 11. The House has passed a similar measure, but it did not include various exceptions sought by the White House. Senators have spent the last few days negotiating which of those exceptions to include.

One exception that did not make it into the bill, Democrats noted, was the administration's request to include $1 billion to build “Trump-class” battleships. Democrats also said they were able to include language that would prevent the administration from transferring funds from other programmes to the Border Patrol, a major difference from the House bill.

The late-summer action on a funding fix is unusual. Normally, Congress waits until the final days or hours of a funding deadline to pass short-term extensions. This time, senators are acting two months before the end of the fiscal year on September 30.

Senate Majority Leader John Thune said passing the measure was his top priority going into the August recess. He noted that the American people have already experienced two record-breaking government shutdowns in the past 10 months. “We need to ensure that they do not face a third,” Mr. Thune said.

Both parties want to avoid another shutdown. A short-term funding extension is needed because Congress has struggled to negotiate and approve the dozen annual appropriations bills before the September 30 deadline. By extending government funding now, lawmakers can use the ensuing months to work out their differences on full-year funding.

However, it will not be an easy lift, as Republicans seek a dramatic increase in defence spending while cutting non-defence spending. President Donald Trump proposed a 10% cut in non-defence programmes overall, while calling for a boost in defence spending by some 44%.

A potential shutdown before voters go to the polls is a scenario both parties are looking to avoid. Polling indicated that neither party escaped blame for last fall's record 43-day shutdown. Democrats had sought to extend an expiring health insurance tax credit and refused to go along with a short-term spending bill that did not include that priority. Republicans said that was a separate policy fight to be held at another time.

A second spending battle over funding for the Department of Homeland Security took 76 days to resolve when Democrats refused to fund U.S. Immigration and Customs Enforcement and the Border Patrol without changes to those operations.

The bill also delays a controversial policy on grants. Sen. Susan Collins, the Republican chair of the Senate Appropriations Committee, along with Democratic senators, is seeking to block a proposed rule from the Trump administration related to grants. The rule would require a senior political appointee at each agency to review grant proposals through criteria that include “ensuring that discretionary awards advance the President's policy priorities”.

Ms. Collins and Sen. Patty Murray, the top Democrat on the Appropriations Committee, said the rule would not take effect during the course of the stopgap spending bill. Ms. Collins said she advocated for significant changes to the rule, “citing its potential to politicise grants and harm small, rural communities, families, and biomedical research”.

Democrats want to kill the administration's effort altogether. Senate Democratic leader Chuck Schumer described it as a “disgraceful” effort that would “further politicise all federal grants”.