Trump Budget Seeks 23% Domestic Spending Cut, 13% Defense Hike

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(Bloomberg) — President Donald Trump is asking Congress for deep cuts to domestic agencies and a boost to the military in a preliminary outline of his 2026 budget request to be released Friday.

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The president’s budget calls for for $557 billion in non-defense spending next year, which represents a cut of $163 billion from current levels, according to administration officials who described the document on the condition of anonymity before its public release. National security funding would increase to $1.01 trillion, a 13% increase from $892.3 billion. 

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Known as the skinny budget because of its lack of detail, the document is a new president’s first opportunity to outline his vision for the size and scope of the federal government. While rarely enacted in full by Congress, it helps to kick off the annual appropriations process. That process in recent years has seen partisan battles that repeatedly featured threats of, or actual, partial government shutdowns.

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The record defense budget would fund the Golden Dome missile defense project, shipbuilding and nuclear modernization, border security among its top priorities. It includes a 3.8% military pay raise.

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On the domestic side, Trump is proposing a 22.6% cut from projected spending in the 2025 fiscal year. The proposal would slash environmental and renewable energy programs as well as programs designed to address racial disparities, with the Environmental Protection Agency and Energy Department seeing deep cuts. Trump is also asking lawmakers to cancel $15 billion in former President Joe Biden’s signature infrastructure law for renewable energy programs. 

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Foreign aid and diversity and inclusion programs are also targeted for elimination or dramatic reductions. Trump proposes cutting $5.2 billion from the National Science Foundation, and eliminating some grants at NOAA, the agency that forecasts weather and monitors oceanic and atmospheric conditions.

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The document calls for federal block grants to be eliminated or consolidated, and envisions additional significant cuts at the Education Department — which Trump aims to eventually eliminate — as well as the National Institutes of Health, and Department of Housing and Urban Development. 

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The US Institute of Peace would be fully shuttered, as would the Minority Business Development Agency and the Community Development Financial Institutions Fund. Details of the domestic spending cuts were first reported by the Wall Street Journal.

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It’s not yet clear how Trump’s budget will approach entitlement programs, which represent the majority of federal spending. The president has vowed not to touch benefits but said he will go after fraud and abuse in the system; some Republican lawmakers have proposed cutting Medicaid as part of an effort to offset the costs of Trump’s ambitious plans to extend and expand his tax cuts, which are set to expire.