The Trump administration has unveiled a sweeping budget proposal for fiscal year 2026, setting the stage for significant funding cuts to non-defense federal agencies while boosting defense spending considerably. This approach marks a drastic shift in federal budget priorities, potentially reshaping the financial landscape of several key government departments.
Defense Spending Increases and Non-Defense Cuts
Under the proposed budget, the Department of Defense would receive a 13% increase, bringing its total allocation to over $1 trillion, with a portion of this increase included in the proposed reconciliation bill. In contrast, nearly all other federal agencies are slated to experience substantial budget reductions, with cuts averaging around 35% across the board, according to senior officials from the Office of Management and Budget (OMB).
Despite historical resistance from Congress to similar proposals, the White House believes Republican lawmakers may be more receptive this time. The administration also indicated its willingness to withhold appropriated funds as a strategy to enforce its budget priorities, a move likely to spark legal challenges.
Impact on Major Federal Agencies
Several agencies, including the Departments of Interior, Labor, Housing and Urban Development, and State, alongside the Environmental Protection Agency and National Science Foundation, are facing cuts of at least 30%. The EPA and NSF, in particular, could see their budgets more than halved. Notably, agencies such as Homeland Security, Transportation, Veterans Affairs, and the Social Security Administration would be exempt from these reductions.
The proposal also hints at significant workforce reductions, particularly at the Internal Revenue Service, which could lose $2.5 billion from its budget and potentially eliminate 19,000 jobs. Similarly, the Education Department may continue downsizing as it reduces its operations.
Strategic Realignments and Program Eliminations
The Trump administration’s budget would also consolidate certain federal functions, such as wildland firefighting, into the Interior Department to enhance efficiency. Furthermore, it seeks to eliminate numerous grant programs deemed ideological, like preschool development grants and certain Justice Department grants, suggesting states should instead take on these funding responsibilities.
Climate change initiatives and related programs would face severe reductions as well. The Energy Efficiency and Renewable Energy office could see its budget reduced by nearly 75%, and $15 billion allocated for clean energy projects under the Infrastructure Investment and Jobs Act is slated for elimination.
Responses and Future Steps
The budget document released is a preliminary version, with a more comprehensive proposal expected to follow. Democratic lawmakers have criticized the proposed cuts, with Sen. Patty Murray, D-Wash., stating, “This budget proposal would set our country back decades by decimating investments to help families afford the basics, to keep communities safe, and to ensure America remains the world leader in innovation and lifesaving research.” These forthcoming details are eagerly awaited by appropriators who will draft the fiscal 2026 funding bills, requiring bipartisan support in the Senate for passage.
Original Story at www.govexec.com