Fiscal 2026 Rail Money Bill: Could Be Much Worse [UPDATE]

by Jim Mathews / President & CEO

[Jan. 23rd, 2026; 3:01pm: This post has been updated to reflect corrections to the analysis of several capital investment grant programs. The initial post was based on an out-of-date summary that was initially distributed on the bill's release, and didn't accurately reflect the joint agreement released by the House and Senate Committees on Appropriations. This week's agreement, in fact, rejects an earlier House proposal to pay for operations through the reallocation of IIJA advanced appropriations. You can read a more detailed analysis here. We apologize for the error.]

So now we know what’s in store for rail appropriations for the rest of Fiscal 2026. There are some wins and some losses, Amtrak operations are largely untouched, and overall it could have been much, much worse.

Fortunately, the agreement rejects an earlier House proposal to siphon off funding for capital upgrades and new corridors already appropriated in the Bipartisan Infrastructure Law and to redirect them to other purposes (such as Amtrak operations).

Everyone on Capitol Hill has been racing to work out some kind of deal on a package of spending bills in time to avoid the Jan. 30 government shutdown deadline, and both Republican and Democratic leaders today were urging colleagues to support these compromise spending packages.

The so-called three-bill “minibus,” -- a play on the word “omnibus,” in which Congress wraps all of its separate appropriations into single, much-maligned umbrella package -- should head for a vote this week. Homeland Security is being voted on separately from the other three bills (Defense, Labor-HHS-Education, and Transportation-HUD) as a way to get more votes for these must-pass bills.

There were more than 60 Fed-State Partnership (FSP) projects funded with about $4.6 billion in FY 22 FSP money; 75 projects in FY 23 for nearly $9 billion; another 30-plus in FY 24 for just over $2 billion. This measure funds FSP at $65 million -- well below the $1.5 billion authorized in FY26 by the BIL, but better than the zero dollars proposed in this summer's House draft bill.

The CRISI program (Consolidated Rail Infrastructure and Safety Improvements) funding stands at $137 million in FY 2026, including about $87 million in what we used to call “earmarks” from individual members of Congress. There are seveal worthwhile programs on the CRISI list -- Alabama Port Authority gets $2 million for Port Rail Expansion, the North County Transit in San Diego gets $600,000 for Positive Train Control Safety Enhancement at Oceanside, and Fort Collins and Loveland, in Colorado, got $900,000 for station planning.

Positive Policy Developments

Thanks to the Senate, Congress began tentatively reasserting its power of the purse after a year in which we watched the new Trump Administration unilaterally yank funds from programs whose money had already been appropriated and contracts had been awarded.

“The DOT and the HUD shall not carry out any federal award terminations that are not in accordance with the procedures established in the governmentwide guidance for federal financial assistance in 2 CFR Part 200,” Senate appropriators said in a joint statement summarizing the 1,000-plus page legislation.

The statement went on to say that DOT and HUD must tell Congress within 90 days which grants and contracts they cut or canceled in 2025, where, how much money was affected, who was hurt, and why they did it.

The budget agreement also “continues the directives in” the previous Senate report on expanding the Confidential Close Call Reporting System (C3RS). Last year FRA dissolved the C3RS Working Group (of which I was a member) claiming the effort was at an impasse.

If the three-bill minibus passes this week, and if Congress is able to work out controversies around Homeland Security funding, the government will avoid a shutdown and this will be the funding picture for rail between now and September 30. And of course talks on Fiscal 2027 will have to start in earnest to avoid this same go-round on October 1.

(You can read all 1,059 pages of this spending package by clicking here. Rail programs start on page 466 and Federal Railroad Administration-specific sections begin on 559. But if you want to save yourself the eye-watering exercise of reading the entire bill, Senate Appropriators created this jointly approved summary which might be an easier read. You can read the summary by clicking here.)