The U.S. Senate unanimously passed a deal last Friday to fund the majority of the Department of Homeland Security (DHS) while excluding Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP). However, the House rejected the Senate’s package and instead voted 213-203 to pass a continuing resolution to fund all of DHS through May 22. Despite not reaching a bicameral agreement on DHS funding, both chambers left Washington, D.C. for their two-week Easter Recess, and the DHS shutdown has become the longest funding lapse of any federal agency in U.S. history. President Trump signed an executive order over the weekend to declare a national emergency that will allow for TSA workers to be paid during the shutdown.
As lawmakers continue to negotiate a resolution to the shutdown, some are considering using the budget reconciliation process to fund portions of DHS operations. Reconciliation allows for legislation to be passed with simple majorities in both the House and Senate, therefore avoiding the need for Democratic support. Only one reconciliation package may be passed per fiscal year, with last year’s package used for the One Big Beautiful Bill Act (OBBBA). The process requires each chamber to pass an identical budget prescribing the policies to be included and expected costs or savings to the government.
Senate Budget Committee Chair Lindsey Graham (R-SC) indicated last week that his committee will move “expeditiously” to draft a second reconciliation bill, which may include funding for ICE and CBP if not agreed to in a broader bill to fund DHS, along with military funding for operations in Iran, and potential election security measures from the SAVE America Act that was passed by the House but has stalled in the Senate; this may face challenges to the rules of reconciliation that prohibits provisions that do not have a direct effect on federal spending or revenue. House Budget Committee Chair Jodey Arrington (R-TX) has said his committee would focus on defense supplemental and ICE funding.
House Ways and Means Committee Chair Jason Smith (R-MO), who led negotiations on the One Big Beautiful Bill Act (“Reconciliation 1.0”), said that tax policies will be part of a second reconciliation. Argentum has been working with lawmakers on long-term care tax policies that could be advanced in a potential second reconciliation bill.