Massive 2026 Funding Bill Sets IRS Rules, Freezes High-Level Pay, and Boosts DC College Aid

This massive spending bill, the Financial Services and General Government Appropriations Act for 2026, is basically the federal government’s operating budget for everything from the IRS to the Supreme Court. It allocates billions to keep the lights on and the gears turning across the Treasury, the Judiciary, the Executive Office of the President (EOP), and a slew of independent agencies.

The bill funds core Treasury functions, including $59 million for cybersecurity upgrades—a necessary investment given how much of our financial data the Treasury holds. It also aims to improve taxpayer experience by funding the IRS with separate pots for services ($3.2 billion) and enforcement ($5.4 billion), while mandating better training and stricter data protection policies (Title I). However, it throws a significant wrench into the regulatory process by prohibiting the IRS from finalizing new rules for social welfare organizations (501(c)(4)s), forcing the agency to stick to standards from 2010. If you’re involved in political advocacy or non-profit work, this freeze means the rules of the road for these groups stay stuck in the past, potentially limiting clarity and transparency.

The Fine Print on Federal Benefits and Oversight

For federal employees and contractors, this bill carries some significant policy riders. Title VI includes a provision that bans the use of federal employee health plan funds for abortion coverage, except in cases of life endangerment, rape, or incest. This is a direct restriction on health benefits that affects hundreds of thousands of federal workers and their families. At the same time, the bill tries to enforce accountability by prohibiting bonuses for underperforming government contractors and banning agencies from accepting travel payments from the industries they regulate (Title VI).

If you’re a high-level political appointee, Title VII delivers a practical blow: a pay freeze for the Vice President and certain high-level officials for 2026. This title also mandates stricter transparency, requiring agencies to report detailed information on expensive conferences and prohibiting funds from being used to retaliate against whistleblowers who talk to Congress. Essentially, it’s giving the Inspectors General and the GAO the green light to watch how every dollar is spent, which should, in theory, improve efficiency and reduce waste.

DC Gets College Boost, But Loses Local Control

Title IV and Title VIII focus on the District of Columbia, which is unique because Congress controls its budget. On the positive side, the bill significantly boosts college affordability for D.C. residents. It establishes a $40 million Resident Tuition Support Program and increases the maximum annual tuition grants for both in-state private institutions and out-of-state public schools (Title IV, Title VIII). This is a huge win for D.C. families, making college much more accessible.

However, the bill also imposes federal policy preferences by restricting how D.C. can spend its own local funds. Specifically, it prohibits the use of federal funds for local initiatives like legalizing recreational Schedule I drugs, funding petition drives for D.C. voting representation in Congress, and certain abortion services (Title VIII). While D.C. can spend its locally raised funds, these restrictions essentially tie the city’s hands on several key policy issues, overriding local decisions and sparking ongoing debates about home rule.

Regulators and Safety Agencies Get Strict Instructions

For independent agencies, the funding comes with strings attached. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) receive substantial funding—$2.149 billion and $365 million, respectively—to oversee financial markets (Title V). This means more resources for regulating Wall Street and protecting investors.

But the Consumer Product Safety Commission (CPSC) gets specific policy mandates: while funded with $145 million, the bill explicitly bans the use of funds to finalize a safety rule for off-highway vehicles until a study is completed, and, more notably, prohibits any funds from being used to ban gas stoves (Title V). This shows how appropriations bills often become vehicles for blocking specific regulatory actions, directly impacting consumer safety standards and the products available on the market.