President Trump just released the first budget for his second presidential term. 

The fiscal year 2026 budget proposal includes many cuts to programs and agencies meant to root out divisive ideological agencies, eliminate waste and duplication, and realign federal spending with the president’s priorities.

U.S. presidents release their budget wishlists each year. Congress decides whether to adopt the recommendations, which hardly happens anymore. The budget process is largely ceremonial.

However, with the aggressive and swift pace at which President Trump has been remaking Washington directly or through the critical efforts of DOGE, this budget proposal carries greater weight. 

The President wants America to tighten its belt through an agenda that helps get us onto a surer financial footing in the future.

Toplines

Here is an overview of the proposed budget:

  • 10.1% cut in discretionary spending ($1.691 trillion down from the $1.831 trillion in FY 2025)—for programs and services excluding mandatory programs such as Social Security and Medicare.
  • 22.6% cut to base non-defense discretionary funding, to $557 billion, with an additional $43.8 billion restored through reconciliation.
  • No change to defense spending ($892.6 billion) from FY 2025. However, an additional $119.3 billion will be enacted through reconciliation, bringing total defense resources to $1.01 trillion for FY 2026—a 13.4% increase over the prior year.
  • 64% decrease in non-base funding for emergency spending, disaster relief, and program integrity initiatives. 
  • $2.5 billion reduction in the IRS budget.

The budgets of cabinet agencies were largely slashed:

  • 11 of 16 agencies had budget cuts.
  • 4 agencies had budget increases: Defense (+13.4%), Homeland Security (+64.9%), Transportation (+5.8%), and Veterans Affairs (+4.1%). 
  • The State Department had the largest percentage cut (-83.7%).
  • The top 3 cabinet agencies cut by dollar figure were (1.) State (-$49.1 bil), (2.) Housing and Urban Development (-$33.6 bil), and (3.) Health and Human Services (-$33.3 bil).

Non-cabinet agencies also face significant reductions.

Known as a “skinny” budget, this proposal is President Trump’s statement of priorities and principles. 

The big winners are agencies supporting the core functions of national defense, border protection, energy production, and transportation. Also, there are bright spots for long-overlooked conservative issues, such as increased funding to expand school choices or IRS regulatory rollbacks, including the onerous and confusing 1099-K reporting requirements (i.e., Venmo tax). 

The big losers from this skinny budget are efforts that support ideological agendas such as diversity, equity, and inclusion; climate change; and foreign aid. Consequently, the State Department was slashed most aggressively as well as many HUD programs.

A more detailed budget is expected to follow. However, this budget proposal leans heavily on restraint-—not just empty promises of spending control–the direction in which he wants to take the federal government for the next few years at least.

The president’s budget is as good as what Congress does with it, though. Members may not be willing to approach such significant cuts to programs, especially those they feel their constituents benefit most from.

Congress also has other pressing agenda items, such as passing the “Big, Beautiful Bill” to keep expiring tax cuts, secure the border, and encourage companies to “Drill, baby, drill!” Passing this budget is not on the immediate horizon, but the president has laid out an agenda of restraint for them to follow. We’ll watch to see how Congress responds.