Legislative Update: Congress Returns From Recess to Complete Their Year-End Agenda

Congress Returns From Recess to Complete Their Year-End Agenda

Congress returned from the Thanksgiving recess with a full December agenda and the next funding deadline arriving January 30. Lawmakers are preparing for an intense stretch of legislative work over the next couple of weeks before heading home for the holiday recess. Here’s what is on deck:

National Defense Authorization Act – The House Armed Services Committee is expected to release the compromise fiscal 2026 NDAA this week,  as negotiators resolve remaining policy disputes and leaders weigh late-stage adjustments. While the overall defense topline has not been disclosed, negotiators are reconciling the difference between the House version, which mirrored President Donald Trump’s $882.6 billion request, and the Senate bill’s higher $913.9 billion authorization.

The House is looking to vote on the measure during the week of December 8.  The Senate is also expected to approve the measure this month.  Despite being considered “must-pass” legislation, the final NDAA package could still face late-stage complications if chamber leaders or other committees seek to attach additional policy riders. Internal GOP tensions also persist over whether to include a proposal by Rep. Elise Stefanik requiring notification when the FBI initiates counterintelligence inquiries involving lawmakers or their aides.  Negotiators are also weighing whether to incorporate a package of housing measures added by the Senate. Lawmakers from both parties emphasized that expanding the housing supply and lowering costs must be a central national priority, though diverge sharply on how to achieve it.

Appropriations – Although Congress enacted three of the twelve appropriations bills as part of the agreement that ended the recent 43-day shutdown, lawmakers must still resolve funding levels for most federal agencies if they hope to avoid another lapse or possible shutdown early next year.  Appropriators have said they have agreements on toplines for five of the “smaller” bills, but they do not yet have an agreement on larger bills, such as Defense and the Energy and Water spending bills.

Internal Republican divisions are intensifying as Senate appropriators attempt to advance a five-bill FY2026 spending package before government funding expires on January 30.  Appropriators are urging swift floor action, but conservative fiscal hawks are blocking progress over concerns about total spending levels, earmarks, and the bundling of bills.  These arguments threaten to derail negotiations with the House and raise the risk of another shutdown or a year-long continuing resolution.

Senate Majority Leader John Thune (R-SD) indicated that the Senate is unlikely to complete another package of FY2026 appropriations bills before the December recess. Thune has tried to convince holdouts that passing appropriations bills is the only way to secure lower spending and conservative priorities, but demands from hard-liners appear incompatible with the current framework. Leadership is exploring amendment votes to ease objections.

Interior – Environment Appropriations – Appropriators face significant divisions over the FY26 Interior–Environment spending bill, casting doubt on prospects for a year-end agreement.  Both chambers advanced their versions in July, but diverge sharply on funding levels and core policy direction for the Environmental Protection Agency (EPA). The House bill totals $38 billion, roughly a 7 percent cut from fiscal 2025, offering $7 billion for the EPA, compared with the Senate’s slightly higher $38.6 billion total and $8.6 billion for the agency.

House and Senate appropriators also rejected President Donald Trump’s budget recommendations of allocating $305 million–a nearly 89 percent cut–to the Clean Water and Drinking Water Revolving Funds.   Senate appropriators maintained FY25 funding levels of $2.8 billion for the Clean Water and Drinking Water Revolving Funds –nearly $1.6 billion and $1.13 billion, respectively.  The House is designating $8.9 million to the DWSRF and $1.2 billion for the CWSRF, totaling nearly $2.1 billion.

Subcommittee Chair Lisa Murkowski (R-AK), included report language opposing the administration’s EPA reorganization and directing the agency to halt structural changes such as research office closures unless formally proposed in future budget submissions. The House bill contains no such requirement. and instead adds a new pesticide-labeling provision favored by some conservatives. With appropriators still far apart on how to resource and regulate the EPA, the Interior–Environment bill will likely be a central flashpoint when negotiations resume, whether later this year or in early 2026.

Energy and Water Appropriations – The Energy and Water Development and Related Agencies Appropriations Act, currently faces partisan debate, with Senate Energy-Water Appropriations Subcommittee Chairman John Kennedy (R-LA) bypassing appropriators’ higher topline spending amounts and advancing a fiscal 2026 draft bill that did not include any Democratic input and instead reflects his push for deeper nondefense cuts.  The draft bill would provide $9.8 billion for the U.S. Army Corps of Engineers, an increase of $1.1 billion from fiscal 2025. Kennedy’s office said the bill would ensure funding for the corps remained “robust” in order to help his home state effectively respond to hurricanes and mitigate floods.

SPEED Act/NEPA Permitting –   On November 20, the House Natural Resources Committee approved Chairman Bruce Westerman’s (R-AR) amended Standardizing Permitting and Expediting Economic Development (SPEED) Act (H.R. 4776) on a 25–18 vote, advancing broad permitting legislation that could be folded into a larger reform package later this Congress.  The Committee also passed the Studying NEPA’s Impact on Projects Act (H.R. 573) and the ePermit Act (H.R. 4503).  These three bills are expected to be voted on as early as next week.

If enacted, the SPEED Act would cut National Environmental Policy Act (NEPA) review and permitting times in half and reduce litigation opportunities, making U.S. nuclear power easier to deploy. The bill also broadens exemptions for actions already reviewed under other statutes, such as the Atomic Energy Act, and adds “energy” as a national interest goal under NEPA, prioritizing projects that enhance energy security. Prior to the markup, Westerman presented substitute text that incorporated bipartisan changes, including stronger “permit certainty” language to protect projects from executive branch reversals.

Despite Westerman’s efforts to broaden support, only two committee Democrats voted to back the bill. Throughout the markup, Democrats emphasized their willingness to pursue NEPA reform but maintained that the latest revisions did not adequately address what they view as the Trump administration’s targeted suppression of clean energy projects. Democrats cautioned that without revisions, the legislation is unlikely to secure the 60 votes needed to advance in the Senate.

Senate EPW Chair Shelley Moore Capito (R-WV) is aiming to pass a broader permitting reform package. Committee staff and members continue to work behind closed doors on draft legislation. The Chair has urged a fair, all-energy approach as her committee continues to work in a bipartisan manner behind the scenes. Capito and Ranking Member Sheldon Whitehouse (D-RI) have expressed optimism for a year-end deal despite a recent EPW hearing on permitting reform that underscored persistent partisan differences. Given the constrained calendar and competing legislative demands, the SPEED Act and broader permit reform will likely be pushed to the beginning of next year.

EPA Directs $3 billion to Accelerate Lead Pipe Removal Nationwide

The Environmental Protection Agency (EPA) on November 25 announced $3 billion in new State Revolving Fund grants to accelerate the removal of lead service lines across drinking water systems nationwide, alongside the redistribution of $1.1 billion in previously awarded but unused funding. The initiative is grounded in newly updated data showing that the number of active lead service lines is now estimated at roughly 4 million—less than half of earlier projections—and comes with a new national dashboard to help states track and target replacement efforts.

Under the plan, states that have not obligated funds since 2023 will be required to submit a spending strategy before receiving new allocations, reflecting a push to ensure money moves quickly into pipe replacement and supporting activities such as planning and design. The funding aligns with the administration’s broader effort to modernize drinking water infrastructure and builds on earlier regulatory revisions intended to strengthen oversight of lead contamination. The agency highlighted that updated service-line inventories have enabled more precise distribution formulas and should stretch federal dollars further as states work to remove toxic infrastructure from homes, schools, and businesses.

Agency Moves to Vacate Particulate Emissions Rule, Citing Clean Air Act Limits  

The EPA asked a federal court to vacate the Biden-era rule that would have imposed a stricter national standard on fine particulate emissions, reversing its position from 2024. The earlier rule, issued over strong objections by industry,  was advanced through a highly abbreviated reconsideration process rather than a full five-year statutory review.  It would have lowered allowable fine particulate concentrations from 12 to 9 micrograms per cubic meter—a 25 percent reduction.

The National Association of Manufacturers (NAM), argued that the rule would have placed nearly 600 counties into nonattainment, effectively freezing permitting for new industrial facilities, infrastructure, and energy projects. The U.S. Chamber of Commerce estimated that the revised standard would jeopardize roughly $200 billion in economic activity and up to a million jobs, largely because many regions could not meet requirements due to natural PM2.5 contributors such as wildfire smoke and road dust. Critics further noted that the EPA replaced the existing Clean Air Scientific Advisory Committee during rule formation, raising concerns that expert input was reshaped to reach a predetermined outcome.

The agency’s new position aligns with litigation brought by 24 Republican attorneys general, who assert the rule exceeded statutory authority and lacked the scientific record-building Congress requires. If the court grants EPA’s motion, the standard would revert to 12 micrograms-per cubic meter.

Agency signals possible deadline extensions as TSCA review continues

The EPA on November 28 outlined a new timeline for revising its Biden-era risk management rule for perchloroethylene (PCE), indicating that proposed amendments are expected in summer 2026 with a final rule to follow in 2027. In a filing with the U.S. Court of Appeals for the Fifth Circuit, the agency asked to keep ongoing litigation paused for an additional 90 days while it prepares changes to multiple components of the regulation, including the existing chemical exposure limit (ECEL). EPA also signaled that it may pursue a streamlined, separate process to extend current compliance deadlines for regulated industries.

The rule remains under active review, with the agency considering extensive public comments that reflected widely differing views. The chemical industry recommended raising the ECEL significantly. EPA emphasized that the complexity of the issues, combined with uncertainties surrounding interagency review and public comment response time, makes scheduling fluid as the agency works toward new policy recommendations and a formal revision.

Notable Legislation Introduced

• David Valadao (R-CA) introduced the Determination of NEPA Adequacy Streamlining Act (H.R. 6163) that would amend NEPA to allow federal agencies to reuse or rely on previously completed environmental assessments (EAs) and environmental impact statements (EIS) for new projects, aiming to streamline the permitting process. The measure’s goal is to reduce redundant reviews for projects with similar effects, particularly those involving energy supply, water infrastructure, and other critical upgrades.
• A bipartisan coalition led by Rep. Kim Schrier (D-WA) introduced the Water Infrastructure Finance and Innovation Act Amendments of 2025 (R. 6229)  to modernize drought-resilient water infrastructure and expand access to federal financing for rural, agricultural, and drought-affected regions. The measure would extend and enhance WIFIA authority by broadening loan eligibility for state-led storage projects and federal cost-share initiatives, and by reauthorizing the U.S. Army Corps of Engineers WIFIA program through FY2029.