Federal Policy, Action Alert (April 2025)

Three Ways that Congress May Cut the Budget – Here’s What That Might Mean for Children and Youth Experiencing Homelessness

This spring, Congress will work on three separate budget processes simultaneously. This page summarizes each process, outlines the potential impact on children and youth experiencing homelessness, and explains what you can do.

Actions You Can Take Today!

This spring, Congress will work on three separate budget processes at the same time:

  1. A long-term budget reconciliation bill to cut mandatory spending and change tax law
  2. A bill to rescind, or eliminate, FY2025 funding for certain programs that it previously approved
  3. The annual appropriations process that provides FY2026 funding for discretionary federal programs. 

Below we summarize each process, the potential impact on children and youth experiencing homelessness, and what you can do.

Budget Reconciliation

What is budget reconciliation?

Budget reconciliation is the special process that allows Congress to make sweeping changes to the federal budget. This unique process only needs the majority of the House and Senate to advance and is guaranteed expedited consideration (limited debate time). All components must have a direct impact on the federal budget. Unlike the annual appropriations process, the budget reconciliation makes long-term changes to mandatory spending – for example, programs like Medicaid, Medicare, Pell grants, or the Supplemental Nutrition Assistance Program (SNAP) program – as well as revenue (taxes). It is a top priority of the Trump Administration to pass a budget reconciliation bill that provides more resources for border security and other Administration priorities, offset by cuts to social safety net programs.

What’s at stake for children, youth, and families experiencing homelessness in budget reconciliation?

Both the House and Senate have passed instructions requiring Congressional committees to make significant cuts to mandatory programs within their jurisdictions, but do not provide details on how those cuts will be achieved.  For example, the House resolution requires the Agriculture Committee to cut $230 billion, the Education and Workforce Committee to cut $330 billion, and the Energy Committee to cut $880 billion. Individual committees must now draft detailed legislation to accomplish the overall target reductions. 

Many programs that help low-income families and youth survive are likely to be targeted for cuts, including Medicaid and SNAP. Cuts to student loan programs will put higher education out of reach for many low-income and homeless youth, leaving them trapped in lower-paying jobs and poverty. 

In addition, Congress could use budget reconciliation to create a federal voucher tax credit for individuals and corporations who donate to scholarship-granting organizations that pay for private school tuition and homeschooling. This could reduce funding available for public schools, and therefore the support that is available to children and youth experiencing homelessness.

What is the current status of budget reconciliation?

Budget reconciliation is moving quickly. Committees are meeting throughout the month of May to draft their respective sections of the legislation, with the goal of completing work by Memorial Day.  See our Live Tracking of Major Actions for the most recent information.

Rescissions

What is a rescissions bill?

A rescission bill eliminates funding from specific federal programs that have already been approved by Congress. Under the Impoundment Control Act, Congress can pass a rescissions bill with a simple majority. In this current Congress, that means that no Democratic votes would be needed. Congress can act on all or some of the proposed rescissions. The process begins in earnest when a member of Congress introduces a bill with the rescission(s).

What’s at stake for children, youth, and families experiencing homelessness in a rescissions bill?

It is unclear at this time if any federal programs serving children, youth, and families who are homeless or at risk of homelessness will be included in the rescissions package.

What is the current status of rescissions?

The Administration has announced plans to send its priorities for a FY2025 rescissions bill to Congress the week of April 21st, in order to make permanent cuts to federal agencies by the Department of Government Efficiency. If Congress doesn’t approve the Administration’s request within 45 days of receiving it, the Administration is required to release funding back to the federal agencies. See our Live Tracking of Major Actions for the most recent information.

Annual Appropriations

What is the annual appropriations process?

The annual appropriations process determines each year’s funding levels for discretionary programs like the Education for Homeless Children and Youth program, Runaway and Homeless Youth Act program, HUD Homeless Assistance, Head Start, and TRIO/GEAR UP. Unlike budget reconciliation or rescissions, Democratic votes are needed to pass annual appropriations bills.

What’s at stake for children, youth, and families experiencing homelessness in the FY2026 appropriations process?

The future of many federal programs will be decided in the FY2026 appropriations process. Amidst a push to dismantle the U.S. Department of Education, all federal education programs are at risk of severe cuts, including the McKinney-Vento Act’s Education for Homeless Children and Youth (EHCY) program. The Runaway and Homeless Youth Act (RHYA) program, Head Start, higher education programs, and homeless and housing assistance programs are also at risk.  

What is the current status of the annual appropriations process?

The FY2026 appropriations process is also underway. The federal government’s fiscal year runs from October 1st – September 30th of each year, which means Congress has several months to finalize the FY2026 budget. The President is expected to release a “skinny budget” in the coming weeks, which will provide an overview of the Administration’s top priorities. Receiving the President’s budget is often the unofficial kickoff to the budget process which will include committee hearings, mark-ups, conferences, and more before Congress passes a final bill. Most of the committee action will take place during the summer prior to the August recess, with conference negotiations likely to occur during September.

While the timeline for the appropriations process is longer than for reconciliation or rescissions, there are some pivotal moments occurring now. In particular, “Dear Colleague Letters” are circulating that request funding for specific programs and demonstrate to the appropriations committee that these programs have broad support. These letters often have deadlines in the Spring, and one such letter is circulating right now to support both the EHCY and RHYA programs.

What Can You Do Right Now?

With several budget processes happening simultaneously, it is imperative that your members of congress hear directly from their constituents about the unique needs of children and youth experiencing homelessness. Below are two actions that you can take to educate them.

  1. On FY2026 appropriations: Click here to urge your U.S. Representative to sign on to a bipartisan Dear Colleague Letter that supports continued federal funding of McKinney-Vento’s Education for Homeless Children and Youth program and the Runaway and Homeless Youth Act program in FY2026.
  2. On budget reconciliation: Click here to contact your Members of Congress to urge them to oppose cuts to student loans, SNAP, and Medicaid, and to reject proposals that would divert funding from public schools.
  3. Please consider a virtual meeting with the staff of your US Representative and U.S. Senators. It is not lobbying to simply share local information with Congress. SHC can help schedule, prepare, and even facilitate the meeting if you wish. Please contact TJ Lucas, Senior Manager for Federal Policy.

Bookmark our Live Tracking of Major Actions for the most recent information.