Federal Update - February 11

February 11, 2026

GOVERNMENT RELATIONS HIGHLIGHTS

Nearly There for FY2026: Only Homeland Security Awaits Resolution 

Reconciliation 2.0 DOA: Republicans Nix Second Budget Package

ELEVEN OF TWELVE APPROPRIATIONS BILLS DONE

What You Need to Know 

Following a brief government shutdown, nearly all federal agencies, including the US Department of Education, are now funded through September 30, 2026. Last week, Congress cleared another appropriations package that included the Labor-HHS-Education bill, which was a bipartisan compromise that continued funding levels similar to prior year education spending bills. The only outstanding appropriations measure is the Homeland Security bill, which has been temporarily extended until this Friday, February 13. 

Why This Is Important 

Republicans, led by the White House, remain at an impasse with congressional Democrats over the Homeland Security bill. Democrats are focused on proposed reforms to ICE. These reforms include clarifying use-of-force standards, expanding body camera requirements, and requiring that agents show identification. At the same time, conservative Republicans want to attach voting legislation that would require additional voter identification measures. As a result, it is increasingly likely that the US Department of Homeland Security, which includes ICE, Customs and Border Protection, the Coast Guard, and TSA, will shut down again on Saturday. Despite the unresolved Homeland Security funding, work on the FY2027 appropriations process will begin in earnest next month. 

SECOND RECONCILIATION DEAD

What You Need to Know 

To pass OB3, President Trump and congressional Republicans utilized the budget reconciliation process. Reconciliation allows the majority party to avoid the Senate’s 60‑vote threshold to pass legislation, with specific rules on the types of provisions that can be included. Some of the more conservative elements of the House‑passed OB3 bill were removed during Senate consideration last year. In response, conservatives immediately began pushing for a second reconciliation bill to advance additional elements of the Trump agenda. Last month, the House Republican Study Committee released a “Reconciliation 2.0 Framework” centered on health care and consumer affordability. 

Why This Is Important 

Despite this release, a second reconciliation effort is now highly unlikely. The House majority is extremely fragile, and moderate Republicans are increasingly focused on protecting themselves ahead of the midterm elections. President Trump said yesterday that he will not pursue a second reconciliation bill, and House Ways and Means Chair Jason Smith (R‑MO), who leads the chamber’s tax writing committee, also publicly rejected the idea. While the White House could change course, this decision aligns with expectations around Washington. From a practical standpoint, the elimination of budget reconciliation for the year means that few, if any, large legislative packages will be considered before the elections in November, meaning that statutory fixes will be more difficult – or impossible – to secure this year.