FY 2026 Appropriations and Federal Policy Outlook
Posted February 04, 2026
by Lewis-Burke Associates, LLC – February 2026
Recent appropriations and authorization actions signal a preference for stability in federal science funding, while setting the stage for key decisions on emerging technologies, workforce priorities, and infrastructure reauthorization later this year.
Congress Passes Legislation to End Partial Government Shutdown
On Tuesday, February 4, the House approved a five-bill funding package (H.R. 7148) to end the partial government shutdown, sending the bill to the President’s desk for signature. This legislation includes final fiscal year 2026 funding for the Department of Defense, the National Institutes of Health (NIH), and other critical departments and agencies. In order to allow lawmakers time to negotiate potential changes to the Department of Homeland Security (DHS) amid ongoing disputes over immigration enforcement, the funding package also includes a continuing resolution (CR) to fund DHS at current spending levels through February 13. With the short timeline, it will be increasingly difficult for congressional leaders to reach a consensus on DHS before the department's funding expires again at the end of next week.
FY 2026 Appropriations Update: Congress Rejects Deep Cuts, Stabilizes Science Funding
Ahead of its January 30 federal funding deadline, Congress has negotiated all 12 final FY 2026 appropriations bills. Six have been enacted into law, with the remaining bills at various stages through Congress. However, because of shutdown, agencies will continue operating under a continuing resolution (CR) that maintains funding at FY 2025 levels until the remaining bills are enacted.
Overall in the appropriations, Congress rejected the steep cuts proposed by the Trump Administration. Under the Administration’s proposal, key science agencies would have faced reductions ranging from 14 percent at the Department of Energy (DOE) Office of Science to as much as 57 percent at the National Science Foundation (NSF), with some agencies, such as the Economic Development Administration (EDA), nearly eliminated. Instead, Congress has opted for relatively stable funding levels, with modest increases for several science agencies.
On January 22, Congress introduced a $1.2 trillion “minibus” spending package (H.R. 7148) that includes four FY 2026 appropriations bills: Department of Defense (Defense); Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS); Department of Homeland Security (DHS); and Transportation, Housing and Urban Development, and Related Agencies (THUD) Appropriations Acts.
Of interest to HFES, the legislation provides $145.9 billion in FY 2026 funding for Department of Defense (DOD) Research, Development, Test, and Evaluation (RDT&E), a $4.7 billion (3.3 percent) increase over the FY 2025 enacted level. The minibus includes $47.22 billion for the National Institutes of Health (NIH) base budget, which incorporates $226 million from the 21st Century Cures Act. The bill maintains NIH’s 27 institute and center (IC) structure and provides largely level funding across ICs. It also preserves existing language prohibiting changes to indirect cost policies at NIH and other Department of Health and Human Services agencies, protecting the current facilities and administrative cost framework through FY 2026.
Additionally, of interest, on January 23, President Trump signed into law a separate $175 billion minibus spending package (H.R. 6938) covering three FY 2026 appropriations bills: Commerce, Justice, Science (CJS); Energy and Water Development (E&W); and Interior and Environment. In the bill, NIST receives $1.8 billion in FY 2026, an increase of $387 million or 26.5 percent compared to the FY 2025 enacted level, and nearly double what was proposed in the President’s budget request. It also provides $10 million for the U.S. Center for AI Standards and Innovation (USCAI) to support AI research and measurement science.
Taken together, these appropriations reflect Congress’s broad interest in funding stability and targeted investments for the research science community. Once all the bills are passed, agencies will begin translating the funding levels into programmatic priorities.
Key Congressional Legislation: FY2026 NDAA Bill Passed into Law
On December 18, 2025, President Trump signed the FY 2026 National Defense Authorization Act (NDAA) into law, after it was passed by wide margins in the U.S. House of Representatives and Senate.
The NDAA, passed annually for 64 years, sets spending and policies for the Department of Defense (DOD) and other national security and nuclear energy programs. It reflects priorities from both chambers, including streamlining acquisitions, revitalizing the defense industrial base, formalizing the Golden Dome Initiative, and advancing emerging technologies like biotechnology and AI.
Of interest to HFES, the NDAA authorizes about $146 billion for DOD RDT&E, $3.7 billion above the FY 2026 PBR and $1.9 billion above FY 2025 enacted levels. DOD’s Science and Technology (S&T) accounts, basic research, applied research, and advanced technology development, would be authorized at $18.9 billion in total funding, roughly $873 million higher than what was proposed in the FY 2026 PBR and $1.4 billion higher than the FY 2025 enacted level. Under RDT&E, the bill also gives 6,703,000 to “Personnel, Training, Simulation, and Human Factors” focused on developing and implementing training technologies, simulation systems, and human performance tools for the U.S. Navy.
The bill also strongly emphasizes DOD integration of AI, cyber deterrence, and protection of AI systems. Provisions include:
- $7 million for Army AI/ML basic research and $5 million for Navy AIMM initiatives.
- Establishing an AI sandbox task force and a National Security and Defense AI Institute.
- Promoting collaboration with Israel in AI, robotics, and automation, and establishing a Steering Committee for AGI strategy.
HFES Advocacy: NIOSH Workers Reinstated
After nine months of community advocacy, all National Institute for Occupational Safety and Health (NIOSH) employees who received reductions in force (RIFs) last April were reinstated at the agency. Last year, NIOSH lost approximately 90 percent of its staff to RIFs, which led to the shuttering of critical NIOSH programs that promote worker health and safety. The reinstatement of the remaining workers that received RIFs ensures the continuation of critical research programs aimed at reducing workplace deaths and injuries, particularly those related to hazardous materials and unsafe working conditions.
Last April, HFES supported community advocacy efforts through press releases, Congressional engagement, and participation in coalition meetings to urge the rescission of NIOSH layoffs. By the summer, HFES led a community sign-on letter to highlight to Congress the importance of NIOSH research programs and the need to reinstate workers for NIOSH to carry out its mission. As a result, not only did NIOSH reinstate its entire staff, but the federal appropriations bill that funds NIOSH would provide the agency with a $4 million increase over current levels once passed.