Congress Ends Shutdown but Federal Funding Standoff Deepens

A Temporary Deal That Leaves Most of the Budget Unsettled

The agreement that reopened the government after a 43-day shutdown resolved only the most straightforward pieces of the federal budget. Congress approved funding for veterans’ programs, food assistance, agricultural support, and internal legislative operations—about 10% of annual discretionary spending.

Government operations for the remaining 90 percent, however-including defense, health programs, and major domestic agencies-remain on short-term funding set to expire January 30. For all practical purposes, the shutdown may be over, but the federal funding standoff is not.

Spending Targets Still Divide Lawmakers

Congress has not agreed to a top-line spending level for FY2026, and internal Republican disputes are slowing everything down. Appropriators cannot finish any of the major bills without that figure.

House Majority Leader Steve Scalise says the real negotiation begins now that the short-term measure is signed. At the same time, some Democrats are signaling they may accept the risk of another shutdown unless they secure an extension of Affordable Care Act subsidies expiring at the end of the year.

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Political Tensions Make Next Steps Complicated

The shutdown did not mend relationships across the aisle. The final hours of negotiation inflamed tensions when Senate Republicans released bill text before House sign-off. Rep. Rosa DeLauro called the move an unnecessary breach of trust.

Sen. Jeanne Shaheen described the situation by underlining that Congress needs to rebuild cooperation in order to handle the next funding phase well.

Senate Prepares a Broad but Controversial Funding Package

When the Senate returns, leadership intends to package a multi-department funding deal that includes: Defense, Education, Commerce, Labor, Health and Human Services, Justice, Transportation, Interior, and Housing and Urban Development.

While these bills have fewer ideological hurdles to clear, the Senate still needs unanimous consent to hurry them along, which would give any individual senator the ability to hold up such a process.

Four High-Risk Bills Remain Stalled

The four most contentious funding bills are Energy, State, Treasury, including IRS, and Homeland Security. None advanced out of committee, and lawmakers from both parties acknowledge that prolonged disagreements may push these departments onto a long-term stopgap lasting through September.