US President Donald Trump is set to unveil his 2026 fiscal year budget proposal today, 2 May 2025, which will then be submitted to Congress.

The federal budget release follows after Republicans in Congress’ attempt to resolve divisions over proposed federal spending cuts to fund a tax-cut bill they aim to pass by 4 July 2025. They may also need to address economic stress caused by US tariff hikes, which are disrupting global trade.

Republicans members also aim to extend key provisions of Trump’s 2017 Tax Cuts and Jobs Act, which is set to expire this year. This decision is estimated to cost USD 4.6 trillion over a decade.

As of now, Republicans have proposed USD 880 billion in cuts to Medicaid and green tax credits, along with USD 560 billion in cuts to education and agricultural programs. The proposed budget includes over USD 160 billion in cuts to renewable energy, environmental, education, and foreign aid programs, according to various sources.

Trump also announced plans to propose a military budget exceeding USD 1 trillion. He claims that the tariffs imposed on nearly every country will generate additional revenue to support his tax cut plans and offset the increased spending.

During the 2024 presidential campaign, Trump’s presidential campaign focused heavily on reducing the size of the federal government. According to reports, the Trump Administration has shut down various government agencies and cut tens of thousands of federal jobs.

Earlier, the Trump Administration was reportedly  planning to cut billions from child care, health research, education, and housing programmes in its 2026 budget proposal.