FY 2026 Spending Bill Cuts $200M from Rail & Housing, Blocks New NYC Congestion Pricing Funds

The new Transportation, Housing, and Urban Development (THUD) Appropriations Act for Fiscal Year (FY) 2026 is essentially the federal government’s massive checkbook, detailing exactly where billions of dollars for roads, rails, housing vouchers, and airport safety will go. This bill sets the budget for the Departments of Transportation (DOT) and Housing and Urban Development (HUD), funding everything from Amtrak’s operations to your local public housing authority (PHA). For busy people, this means setting the stage for everything from your commute times to the cost of rent assistance for veterans and seniors.

This bill doesn’t just allocate new money; it’s also doing some serious financial house cleaning. It cancels (rescinds) hundreds of millions in unspent funds from previous years across various programs, including $75 million from rail projects and $417 million from HUD’s lead hazard control efforts. It also imposes a staggering number of restrictions—over 100 in total—on how the money can be used, covering everything from political appointments to specific local tolling projects.

The Transportation Checkbook: Where Your Commute Money Goes

For the Department of Transportation, the money is split up into highly specific buckets. The Federal Aviation Administration (FAA) gets over $13.7 billion for operations, ensuring air traffic control and safety inspections continue. Crucially for rural residents, the bill injects a massive $514 million into the Essential Air Service (EAS) program to keep small community air routes alive. However, there’s a catch: for FY 2026, the bill temporarily waives some standard eligibility rules for EAS (Sec. 115), meaning some carriers that might not otherwise qualify could still receive subsidies, potentially keeping smaller, less efficient routes operating.

On the ground, the Federal Highway Administration (FHWA) is capped at $504 million for administrative costs, but the bill authorizes over $62.6 billion in spending from the Highway Trust Fund for construction and safety programs. For drivers in the New York City area, the bill includes a significant prohibition: none of the funds provided can be used to set up or run the New York City Central Business District Tolling Program (Sec. 136). This means federal dollars are explicitly banned from supporting the implementation of NYC’s congestion pricing plan.

Rail and Roadblocks: Bans and Boosts

Rail funding sees a major shift. While Amtrak gets over $2.3 billion for the Northeast Corridor and National Network, this money is being transferred from funds originally set aside for the Federal-State Partnership for Intercity Passenger Rail Grants (Sec. 165, 166). Essentially, Congress is moving money from one rail pot to another. The bill also includes several specific geographic prohibitions, banning federal funds from going to the Texas High-Speed Rail Corridor and Minnesota’s Northern Lights Express Intercity Passenger Rail Project (Sec. 169, 170). If you’re a taxpayer funding these projects, the bill ensures your money isn't going toward those specific regional plans.

The bill also tightens the rules for the trucking industry. It explicitly bans the DOT from using any funds to enforce electronic logging device (ELD) requirements for trucks hauling livestock or insects (Sec. 153). More broadly, it prohibits the use of funds to create any new rule that would mandate speed limiters on commercial motor vehicles weighing over 26,000 pounds (Sec. 155). This is a win for truckers concerned about new regulations and operational flexibility.

Housing: Vouchers and Vetoes

For HUD, the bill allocates over $35 billion for tenant-based rental assistance (Section 8) for FY 2026 and FY 2027 (Sec. 202), ensuring funding for existing housing vouchers for millions of low-income families, seniors, and veterans. It also provides over $7.3 billion for the Public Housing Fund (Sec. 204), covering both day-to-day operations and major capital improvements like roof repairs and system upgrades. This money is critical for PHAs that manage properties where many essential workers and families live.

However, a significant restriction in the bill directly impacts tenant protections. The bill prohibits HUD from using any funds to implement or enforce the final rule requiring a “30-Day Notification Requirement Prior To Termination of Lease for Nonpayment of Rent” (Sec. 228). This means that while HUD may have wanted to standardize a 30-day notice period for non-payment evictions in subsidized housing, this funding bill blocks the agency from enforcing it, leaving tenants subject to local and state laws that may offer less protection.

Administrative Oversight and Accountability

Beyond the big numbers, the bill includes numerous provisions designed to tighten the leash on federal agencies. It caps the number of political appointees at DOT and HUD, limits the use of funds for first-class air travel (Sec. 412), and prohibits paying incentive bonuses to contractors who are performing poorly, over budget, or behind schedule (Sec. 418). This is a clear signal that the government expects better performance for taxpayer dollars.

Furthermore, the bill includes a ban on using funds to support new scheduled air travel over property confiscated by the Cuban Government (Sec. 423), a restriction that links transportation policy directly to foreign relations. It also mandates that any agency receiving funds must block pornography on its computer networks (Sec. 416), with exceptions for law enforcement. These seemingly small provisions show how deeply this appropriations act reaches into the daily operations and policy decisions of the federal government, impacting everything from who gets a bonus to what you can browse on a government-funded network.