The Government Shutdown Ends: The VA is Funded for FY 2026

Last night, President Trump signed H.R.5371- Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026, bringing the 43-day government shutdown to an end. The bill provides continuing appropriations for most federal agencies through January 30, 2026 (see Division A- Continuing Appropriations Act, 2026 in the bill). At that point, Congress will need to either fund those agencies for FY 2026 or pass another continuing resolution to keep the government open.

Nonetheless, H.R.5371 does provide three FY 2026 appropriations bills funding programs including agriculture (which includes the Supplemental Nutrition Assistance Program), military construction, veteran’s affairs and the legislative branch through September 30, 2026 (see Divisions B through D in the bill).

The legislation also provides back pay to all federal employees not paid during the shutdown, bans agencies from reduction in force (RIF) actions through January 30, 2026, and reverses the RIFs implemented during the shutdown.

Additionally, the bill extends several expired authorities and programs, including those related to agriculture, public health, certain Medicare and Medicaid provisions, human services, and select FDA fees and authorities (see Divisions E and F in the bill).

Division D-Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2026

It is always interesting (and often difficult) to compare a President’s budget request with the final appropriations for a federal agency. Funding for certain programs and organizations is frequently divided across multiple appropriation bills, and those bills often lack the level of detail found in agency budget request documents. Fortunately, funding for the Department of Veterans Affairs (VA) is consolidated in a single bill and the agency’s FY 2026 appropriations provides a useful lens for examining VA’s topline budget figures.

VA is appropriated $133.2B in FY 2026 discretionary funding, a small decrease from the $134.5B in the department’s budget request, yet a 3% increase over FY 2025 funding.  After reviewing many of VA’s topline budget figures, it appears there is little variation between the agency’s appropriations and its original budget request for FY 2026. The topline amounts are either identical or show slight increases/decreases within the appropriations bill. Below is a select set of budget figures from each source to illustrate this point.

FY 2026 Request ($B)	FY 2026 Appropriations ($B)	Description
$122.3	$122.3	FY 2027 Advanced Discretionary Funding
$114.9	$115.1	VA Medical Care
$52.7	$52.6	Cost of War Toxic Exposures Fund (TEF)
$5.9	$5.9	Information Technology Systems
$3.5	$3.4	Electronic Health Record Modernization

Looking a little closer at the technology-related portions in VA’s appropriations, the department will receive $3.9B for operations and maintenance, and $578M for IT systems development under the $5.9B allotted to the Information Technology Systems account. Note, operations and maintenance funding up to 5% shall remain available until September 30, 2027, of which $118M shall remain available until September 30, 2030.

In terms of VA’s Electronic Health Modernization (EHRM) program, the department is appropriated $3.4B to support resumption of EHR deployments to 13 locations in 2026 and 27 facilities in 2027. Moreover, the appropriations bill contains a provision that 30% of the EHRM funds shall not be available until July 1, 2026 and is contingent upon a VA report to Congress by June 1, 2026 containing updates on the program, such as an updated lifecycle cost estimate, an updated facility deployment schedule, certification that VA facilities currently using the new EHR have met baseline metrics, and more.

VA’s appropriations bill includes a new provision prohibiting the department of purchasing technology equipment manufactured by any Chinese companies, particularly those included on DOD, Treasury, Commerce or DHS lists.  

Lastly, a provision within the bill prevents VA from cancelling a contract over $10M without advance notice and written explanation to both Houses of Congress of replacement plans for the services being cancelled. Further, "The Department is directed to maintain staffing levels to facilitate the Department’s own goals, including that benefits claims are adjudicated according to the 125 day goal, and that healthcare appointments and service are provided in the timeframes required by statute and regulation."

Before wrapping up, a quick plug for an upcoming webinar on the VA. If you’re interested in exploring the department’s historic contracting trends, upcoming opportunities, and future IT programs and initiatives, this session is for you.