2026 Spending Bill Funds IRS, Cyber Security, and CDFIs—But Bans Funds for CRT, ESG, and Specific D.C. Laws

The Financial Services and General Government Appropriations Act, 2026, isn't just about funding the government; it’s a massive instruction manual detailing exactly where billions are going and, more importantly, where they absolutely cannot go. This bill sets the budget for the Treasury Department, the IRS, the White House, the Judiciary, and various independent agencies for the fiscal year ending September 30, 2026.

The Treasury’s Budget: Tax, Tech, and Trade

If you interact with the government financially—which is everyone—Title I is where the action is. The IRS is getting two huge pots of money: $2.78 billion for Taxpayer Services and $3 billion for Enforcement. This means better help lines (a top priority, according to the bill) and more audits, respectively. Crucially, the bill sets aside $13 million for the Tax Counseling for the Elderly (TCE) program and $45 million for the VITA matching grants, programs that help lower-income and elderly folks file their returns for free. If you rely on these services, this funding keeps them running.

Separately, the Treasury Department is getting $99 million for cybersecurity upgrades, available through 2028. This isn't just bureaucratic spending; it’s meant to protect everyone’s sensitive financial data from breaches. They also set aside $21 million for the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign deals for national security risks. The twist? They expect to collect enough fees from those deals to cover the entire $21 million budget, aiming for a net cost of $0 to taxpayers.

Community Investment Gets a Boost

For those focused on local economic development, the bill earmarks $276.6 million for the Community Development Financial Institutions (CDFI) Fund. This money goes directly to organizations that invest in underserved communities. At least $35 million is specifically set aside until 2027 for Native American, Native Hawaiian, and Alaska Native communities. Furthermore, the fund must prioritize Financial Assistance awards to organizations working in “high-poverty areas”—defined as census tracts where at least 20 percent of residents have lived in poverty over the last 30 years (Title I, Sec. 150).

The Policy Battleground: Bans on Spending

This bill uses the power of the purse to enforce major policy preferences through spending prohibitions—a common but powerful legislative tactic. If you’re a government employee, contractor, or grantee, several areas are now off-limits for funding:

• No CRT or DEI: None of the funds can be used for any program or activity that promotes or advances Critical Race Theory (CRT) or for Diversity, Equity, and Inclusion (DEI) training or implementation (Sec. 630, Sec. 631). If your company or organization receives federal grants, this means that specific training or curriculum is unfundable through this Act.
• No ESG: The bill strictly prohibits the Treasury Department from using funds to create a new advisory committee focused on Environmental, Social, and Governance (ESG) issues (Sec. 183). The FCC is similarly blocked from funding an ESG advisory committee (Sec. 518).
• First Amendment Protection: The IRS is explicitly banned from using funds to target U.S. citizens based on their exercise of First Amendment rights (Sec. 165). Furthermore, the bill prohibits the use of funds to penalize individuals based on their sincerely held religious or moral belief that marriage is between one man and one woman (Sec. 641).

D.C. and Independent Agencies Face Restrictions

Title IV funds the District of Columbia, but comes with specific policy strings attached. While D.C. gets $20 million for tuition support and $70 million for public safety during national events, it is blocked from using any funds to enforce certain local laws. For instance, D.C. cannot use money to implement the Comprehensive Policing and Justice Reform Amendment Act of 2022 (Sec. 817) or the Local Resident Voting Rights Amendment Act of 2022 (Sec. 819). This effectively neuters local legislative efforts that Congress disagrees with.

Independent agencies also face bans. The Federal Trade Commission (FTC) is restricted from spending funds on several pending rules, including the one regarding “Combating Auto Retail Scams” (Sec. 531) and defining “unfair methods of competition” (Sec. 534). Meanwhile, the Securities and Exchange Commission (SEC) is blocked from enforcing its final rule on “Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure” (Sec. 544).

The Bottom Line for Busy People

This bill is the ultimate example of policy by appropriation. Your tax dollars are going to keep the lights on at the IRS, fund cybersecurity, and support local investment through CDFIs. However, the legislation simultaneously imposes a sprawling list of cultural and regulatory red lines. If you work in government, receive federal funding, or live in D.C., the fine print in this bill dictates not just how much money is available, but the specific political and social activities that federal funds simply won’t touch.