# Congress Wraps Up 2025 *Annual Defense Bill Passed, Appropriations Bills Punted* December 19, 2025 Before adjourning for the holidays this week, Congress approved its annual defense policy bill but delayed any significant consideration of fiscal year (FY) 2026 funding until the new year. When Congress returns in 2026, it will face renewed pressure to finish its work and avoid a second, partial government shutdown when the current continuing resolution (CR) expires on January 30. **National Defense Authorization Act (NDAA)** This week, the House and Senate approved (312-112 and 77-20), and the President signed into law, the final bipartisan agreement on the FY26 NDAA, which authorizes funding and establishes programmatic priorities for the Department of Defense (DOD). Although Congress must still pass annual defense spending legislation to provide funding aligned to this policy bill, the passage of NDAA is an important bipartisan indicator of strong support for DOD, despite lingering bipartisan concerns about use of force, military strikes on suspected drug boats, troop levels in Europe, and the firing of top admirals and generals absent congressional notification. Overall, the final agreement authorizes an $8 billion increase in DOD topline spending over the President’s request of $893 billion, and includes a 3.8 percent pay raise for military personnel, significant reforms to the Pentagon’s procurement system, and the repeals of the 1991 and 2002 authorizations for use of military force in Iraq. Of significance to higher education, the agreement prevents the Defense Secretary from modifying facilities & administrative rates for DOD grants until the Secretary certifies that he has developed an alternative model in consultation with the research community that covers essential costs and allows for adequate transition time – a bipartisan rebuke of the Administration’s unilateral action to cap F&A rates for DOD grants at 15 percent, which is currently blocked by the courts. (Separate blocking language also has been included in the FY26 annual spending bills, although this is the first to be enacted into law.) The NDAA also includes the BIOSECURE Act, which establishes a process to identify and prohibit the purchase of equipment or services from certain Chinese “biotech companies of concern,” although there is a 5-year grandfathering clause for existing contracts as well as due process for any biotech companies that are named to the restricted list. The final agreement also is notable for what it does not include – the House-passed SAFE Research Act, which would have prohibited broadly defined educational affiliations and research partnerships with entities in China, and postemployment restrictions for researchers who were previously funded by DOD. Additionally, the final agreement does not include a proposal, backed by the White House, to block states from regulating AI, although the President recently signed an Executive Order to advance this policy goal. **FY26 Appropriations** Before the shutdown this fall, [both chambers made significant progress](https://ofr.harvard.edu/news/2025/09/congress-contends-fy26-deadlines) on competing drafts of the annual spending bills, albeit with significantly different approaches with the House advancing bills that include funding cuts and dozens of partisan policy riders and the Senate proposing targeted funding increases and a bipartisan approach to the legislation. That said, on the whole, both chambers have rejected the deep cuts and agency reorganization proposed in the President’s budget request. Three of the least controversial annual spending bills – Agriculture, Legislative Branch, and VA/Military Construction – were enacted as part of the November agreement to reopen the federal government, but there has been limited progress on the nine remaining bills, given the focus on completing the NDAA and the end-of-year expiration of the Affordable Care Act’s enhanced insurance subsidies. Senate Republican leadership had hoped to begin debate on a second package of funding bills, including the Labor-HHS-Education and Commerce-Justice-Science bills, before the holiday recess, which would have created some positive momentum in funding the rest of the federal government. Unfortunately, even that progress has been halting, underscoring the challenges in moving forward. When the Senate does advance another package of FY26 bills – likely in 2026 – negotiators still will have to bridge significant differences in funding and policy between the House and Senate as part of any final agreement on FY26. As a reminder, here is a chart of how research university priorities accounts fare in the House and Senate’s draft FY26 spending bills: Sort **FY26 House Cmte** **FY26 House v FY25** **FY26 Senate Cmte** **FY26 Senate v FY25** **Labor-HHS-Education (in millions)** NIH – Total 46900 0.2% 47201 0.9% ARPA-H 945 -37% 1500 0.0% AHRQ 0 -100% 345 -6.4% CDC 7480.9 -18.9% 9152.1 -0.8% Pell Grants (Discretionary Funding) 22475 0.0% 22475 0.0% Pell Grants (Max Grant - actual dollars) 7395 0.0% 7395 0.0% Work Study 779 -36.7% 1230 0.0% SEOG 0 -100% 910 0.0% TRIO 1191 0.0% 1191 0.0% GEAR UP 388 0.0% 388 0.0% Title VI 0 -100% 81 -5.8% GAANN 0 -100% 23.5 0.0% Institute of Education Sciences 740.4 -6.6% 793.1 0.0% Institute of Museum and Library Services 291.8 -1% 291.8 -1% **Commerce-Justice-Science (in millions)** NSF - Total 7000 -22.7% 9000 -0.7% NSF- Research and Related 6373 -11.2% 7176.5 0.0% NSF - Major Research Equipment 251 7.3% 350 49.6% NSF - Ed & HR 0 -100% 1000 -14.7% NASA - Total 24875 0.1% 24900 0.2% NASA - Science 6000 -18.2% 7300 -0.5% NASA - Aeronautics 775 -17.1% 950 1.6% NASA - STEM Engagement 0 -100% 148 3.5% NIST - Total 1279.8 10.6% 1604.5 38.7% NIST - Scientific and Technical Research 980 14.3% 1006.6 17.4% **Defense (in millions)** Basic Research 2481 -5.6% 2327 -11.5% Applied Research 6508.4 -14.4% 6535.5 -14.1% DARPA 4210.7 2.1% 4370.9 6% **Energy and Water (in millions)** Office of Science - Total 8400 1.9% 8250.2 0.1% High Energy Physics 1229.8 2.5% 1253 4.4% Nuclear Physics 845.4 5.1% 870.6 8.3% Basic Energy Sciences 2727.8 3.9% 2577.9 -1.8% Biological and Envir. Research 800 -11.1% 830 -7.8% ARPA-E 350 -23.9% 414 -10% **Interior-Environment (in millions)** NEA 135 -34.8% 207 0.0% NEH 135 -34.8% 207 0.0% EPA S&T 522.4 -30.9% 742.6 -1.8% **Looking Ahead** Many of the same challenges that precipitated the government shutdown remain, and with very little time in January to negotiate, debate, and advance individual spending bills or small packages. As a result, there is growing concern that Congress will be forced to enact another CR or face the prospect of a second, partial government shutdown. Additionally, the deeper this gridlock goes into FY26, the greater the chances of a yearlong CR, which would lock in funding at FY25 levels as well as delay the start of the FY27 process. For now, however, members are hoping a brief break will help ease tensions and the new year will offer a narrow, but doable, window to complete action on the funding bills. As always, Harvard’s federal relations team in Washington will remain closely engaged and coordinate with peer institutions and national associations to advocate for core University priorities. If you have any questions, please feel to be in touch with Suzanne Day ([suzanne\_day@harvard.edu](mailto:suzanne_day@harvard.edu)), Kara Haas ([kara\_haas@harvard.edu](mailto:kara_haas@harvard.edu)), or Peter DeYoe ([peter\_deyoe@harvard.edu](mailto:peter_deyoe@harvard.edu)). Share on:- [ Facebook ](#) - [ Twitter ](#) - [ Linkedin ](#)