An emerging legislative deal in the Senate could see passage of the fiscal year 2026 Transportation-Housing and Urban Development or THUD funding bill originally passed by the House of Representatives on January 23.
[Above photo by AASHTO]
The THUD bill would remain part of a “minibus” that also includes proposed federal funding for Defense, Labor, Health and Human Services, and Education. Under the Senate deal, funding for the THUD bill and those other four federal departments would extend through September 30, while funding for the Department of Homeland Security or DHS would be separated from that minibus and extended for two weeks to allow for further debate over its provisions.
[Editor’s note: The THUD bill text starts at page 466 of the minibus here, the joint explanatory statement is here, and the House Appropriations Committee’s summary is here.]
“Republicans and Democrats in Congress have come together to get the vast majority of the [federal] government funded until September, while at the same time providing an extension to the Department of Homeland Security,” said President Trump in a Truth Social post.
However, the House – which must approve the Senate’s changes to the package – isn’t set to return to Washington D.C. until Monday, February 2, meaning a short-term lapse in federal funding is likely to occur even if the Senate’s legislative deal is passed.
According to analysis by the American Association of State Highway and Transportation Officials, the FY 2026 THUD bill provides $111.5 billion in net budgetary resources to the U.S. Department of Transportation and fully honors the Highway Trust Fund obligation limitation provided in the Infrastructure Investment and Jobs Act or IIJA for FY 2026. Notably, the bill repurposes $2.3 billion in General Fund advance appropriations from IIJA’s Division J.
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