Trump proposes $163 billion cut to US budget

U.S. President Donald Trump‘s administration on Friday proposed a $163 billion cut to the federal budget that would sharply reduce spending on education, housing and medical research next year, while increasing outlays for defense and border security.

The administration said the proposed budget would raise homeland security spending by nearly 65% from 2025 enacted levels, as Trump cracks down on illegal immigration.

Non-defense discretionary spending, which excludes the massive Social Security and Medicare programs and rising interest payments on the nation’s debt, would be cut by 23% to the lowest level since 2017, the White House Office of Management and Budget said in a statement.

The proposal would cleave more than $2 billion from the tax-collecting Internal Revenue Service and would slice the budgets of the National Institutes of Health and the Centers for Disease Control and Prevention by more than 40%.

Trump’s first budget since reclaiming office seeks to make good on his promises to boost spending on border security while slashing the federal bureaucracy. Congressional Democrats blasted the domestic spending cuts as too severe, and some Republicans called for boosting spending on defense and other areas.

“At this critical moment, we need a historic budget — one that ends the funding of our decline, puts Americans first, and delivers unprecedented support to our military and homeland security,” OMB Director Russ Vought said in the statement.

Vought, while at the Heritage Foundation, was an architect of Project 2025, a roadmap for scaling back the reach of the federal government. Trump disavowed that effort during the campaign but once in office, he made Vought his budget czar.

The federal government has a growing $36 trillion debt pile, and some fiscal conservatives and budget experts worry Trump’s proposal to extend his 2017 tax cuts will add to it.

The so-called skinny budget is an outline of administration priorities that will give Republican appropriators in Congress a blueprint to begin crafting spending bills.

Republican U.S. Senator Susan Collins, the chamber’s top appropriator, reacted coolly.

“This request has come to Congress late, and key details still remain outstanding. Based on my initial review, however, I have serious objections,” Collins, of Maine, said. She cited concerns that defense spending was too low and worried about cuts to programs to help low-income Americans heat their homes.

“Ultimately, it is Congress that holds the power of the purse,” Collins said.

STATE, EDUCATION HIT

The budget proposal calls for a $50 billion cut at the State Department as it absorbs the U.S. Agency for International Development.

The proposal calls for a $2.49 billion cut to the IRS, which one White House budget official said would end former President Joe Biden’s “weaponization of IRS enforcement.” Nonpartisan analysts say cuts to IRS can hurt tax collection and thus add to the deficit.

OMB also called for sharp cuts at NASA’s moon program and to federal law enforcement agencies including the FBI and Bureau of Alcohol, Tobacco, Firearms and Explosives, as Reuters reported was expected.

The proposal furthers Trump’s promise to shutter or greatly diminish the Department of Education, slashing about 15% of the department’s budget.

Funding for the Department of Housing and Urban Development, which oversees housing assistance programs, would be cut almost in half.

“Donald Trump’s days of pretending to be a populist are over,” said top U.S. Senate Democrat Chuck Schumer of New York in a statement. “His policies are nothing short of an all-out assault on hardworking Americans.”

The administration says the budget would boost discretionary defense spending by 13%, but Republican Senator Roger Wicker of Mississippi, chairman of the Senate Armed Services Committee, said defense spending would remain at levels set under Trump’s Democratic predecessor Biden, which amounts to a cut due to inflation.

Officials said the White House believes Republicans in Congress will add more defense spending as part of the process of passing Trump’s tax-cut bill on a party-line vote, bypassing the Senate filibuster.

“We think the Hill will be with us on this as we get to talk to more of them along the way,” Vought said in an interview with Fox Business.

Outlays in fiscal 2024, which ended October 1, amounted to $6.8 trillion, according to the Congressional Budget Office.

Lawmakers often make substantial changes in the White House budget request, but Trump commands unusual sway over Republican lawmakers and may get much of what he seeks.

Republicans in Congress hope to enact the tax cut bill by July 4 and are working to bridge internal divisions over proposed cuts in federal spending to pay for it. They may have to factor in growing stress in the U.S. economy from Trump’s tariff hikes that are upending global trade.

The White House budget calls for an additional $500 million in discretionary spending to bolster border security and aid Trump’s push for mass deportations, as well as $766 million to procure border security technology funding, and funding to maintain 22,000 border patrol agents and hire additional Customs and Border Protection officers.

The administration is still working to put together a separate rescission package to codify cuts already made by the Department of Government Efficiency, a budget official said.

Republican senators have been demanding this process – stipulated by law, because the administration is withholding funds previously approved by Congress.