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    Understanding the “One Big Beautiful Bill” as Federal Appropriations

    By Alan Chvotkin on

    Executive Summary: The OBBB

    If it looks and acts like an appropriations, it’s because it is an appropriations! The “One Big Beautiful Bill” (OBBB) was signed into law on July 4, 2025. While its legislative path to enactment was through a process called “reconciliation,” it also had billions in new spending for a wide range of government programs.

    Just in the last two weeks, with the continuing temporary lapse in appropriations for the Department of Homeland Security, and with a new report that the Department of Defense is planning to rapidly accelerate into the current federal fiscal year almost all of the $151 billion in new spending provided to it in the OBBB, there is renewed attention to these provisions.

    A Brief Lesson in Federal Budget Categories

    Despite the general prohibition on using a Reconciliation bill for new spending, that’s exactly what the OBBB does. But first a brief lesson is federal budgeting. Government spending is generally divided into four main types:

    1. Discretionary Spending: Typically set in annual appropriations acts.

    2. Mandatory Spending: Often called “entitlement” or “direct” spending, which is determined by existing laws that set eligibility criteria and benefits formulas (e.g., Social Security, Medicare, Medicaid, federal judge salaries, and some agriculture programs).

    3. Tax Expenditures: Subsidies for health insurance, savings, and similar costs.

    4. Interest Payments: Interest on the federal debt.

    The Role of the Reconciliation Process

    According to the Congressional Research Service, when Congress adopts a budget resolution setting budgetary goals for a given federal fiscal year, it may be necessary to change existing revenue, direct spending, or debt limits to achieve those goals, i.e. to “reconcile” current law with the budgetary goals adopted.

    The OBBB was a Traditional Reconciliation Bill

    The OBBB was a “traditional” reconciliation bill – and treated as such under the special rules in both the House and Senate for such legislation – because it responded to the reconciliation instructions included in the covered budget resolution and included changes in mandatory spending and tax expenditures.

    The Unusual Twist: New Discretionary Appropriations

    But in an unusual twist, the OBBB was also loaded with new discretionary appropriations for dozens of departments and agencies, including the Departments of Defense and Homeland Security. Most of the new appropriations established an unusual five fiscal year period of eligibility – through September 30, 2029 – before the funding would expire.

    Statutory Phrases in the OBBB

    For many of the DHS and DoD provisions in the OBBB Act, each of the lead-in phrases for such provisions used a very slight variation of the classic appropriations statement:

    “In addition to amounts otherwise available, there is appropriated to the Secretary … out of any money in the Treasury not otherwise appropriated, to remain available until September 30, 2029, the following…”.

    Strategic Implications for DHS and DoD Funding

    Here, the Republicans in Congress chose to use the reconciliation process to not only reduce mandatory spending and include tax and other policy provisions, but also to increase appropriations for numerous programs and activities of government.

    How else would DHS be able to “spend” money on CBP and other DHS employees’ salaries and other activities? How else would DoD be able to fund, let alone accelerate, its “discretionary spending” on Golden Dome, on shipbuilding and on industrial base needs?

    Given the unmistakable intent of Congress to enact traditional-style appropriations, even in this “reconciliation” package, the full array of authorities are available to the President to execute these appropriations, including transfer and reprogramming authorities. Thus, it is not surprising that the congressional failure to enact a “regular” appropriations act for DHS appears to be having minimal effect on DHS operations and personnel.

    Contact Protorae Law

    If you have any questions or need any additional information, please do not hesitate to contact the author, Alan Chvotkin, at achvotkin@protoraelaw.com or the Protorae Law attorney with whom you normally work.

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