The Trump administration has proposed USD 163 billion budgetary cuts for the 2026 federal budget on Friday, 2 May 2025.
The federal budget drastically reduces spending on education, housing, and medical research while increasing funding for defence and border security. The proposal also seeks to slash over USD 2.49 billion from the Internal Revenue Service (IRS), which a White House official said would end the “weaponization” of IRS enforcement. Analysts warn that cutting the IRS’s spending could hurt tax collection and increase the deficit.
This is President Donald Trump’s first budget since returning to office, and it aims to increase border security spending while cutting federal bureaucracy. Democrats have criticised the domestic spending cuts, while some Republicans advocated for increased spending on defense.
Earlier, Trump announced plans for a military budget of over USD 1 trillion, claiming tariffs on most countries will fund his tax cuts and offset the increased spending. During the 2024 campaign, Trump focused on reducing the federal government’s size. Reports say his administration shut down several agencies and cut tens of thousands of federal jobs.
The US government faces a mounting USD 36 trillion debt, raising concerns among fiscal conservatives and budget experts. Many fear that Trump’s proposal to extend the 2017 Tax Cuts and Jobs Act could further exacerbate the nation’s financial challenges.
Sources reported that the Trump Administration was reportedly planning to cut billions from child care, health research, education, and housing programmes in its 2026 budget proposal.
