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Economic Policy US Politics

Next year, the White House budget plan outlines $163 billion in decreased federal outlays

The document will tee up new spending battles with Congress as the administration seeks a range of policy changes.
By Sara WilliamMay 2, 20250
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U.S. Education Secretary Linda McMahon looks on during a Cabinet meeting at the White House on February 26, 2025. (Photo: Andrew Harnik/Getty Images)
U.S. Education Secretary Linda McMahon looks on during a Cabinet meeting at the White House on February 26, 2025. (Photo: Andrew Harnik/Getty Images)

The White House on Friday will release a partial budget proposal that calls for $163 billion in cuts to federal spending in the next fiscal year, a person familiar with the matter confirmed.

The upcoming “skinny budget” will propose cuts to a broad array of federal spending on environmental, education, foreign aid and health-care programs, including many of those already targeted for reductions by the Trump administration or billionaire Elon Musk’s U.S. DOGE Service, the person said. Among the agencies proposed to see reductions include the Environmental Protection Agency, the Energy Department and the Department of Housing and Urban Development, among others, the person said.

The Wall Street Journal first reported the budget requests. The person spoke on the condition of anonymity to describe documents not yet made public. The White House is expected to release a much lengthier, traditional budget later in the month.

Presidential budget requests are just that — requests for Congress to enact certain spending levels. But they lay out broad priorities, and with Republican majorities in both the House and Senate, President Donald Trump may be able to get a lot of what his proposal seeks written into law.

The budget has gotten outsize attention this year because the Trump administration has already tried to stretch federal spending laws in novel ways. White House Office of Management and Budget Director Russell Vought has argued that the administration should have more authority to unilaterally cancel or redirect federal spending without congressional approval. Musk has also claimed to have cut more than $100 billion in federal spending from this fiscal year, which began in the fall, though the courts have ruled that the administration is required to spend much of money because Congress has passed laws mandating it.

The budget proposal to be released Friday would set spending levels for the 2026 fiscal year, which will begin Oct. 1. The $163 billion in requested cuts would come from a portion of federal outlays known as “nondefense discretionary” spending, which excludes the Pentagon as well as programs such as Social Security, Medicare and Medicaid — which collectively make up the bulk of what the government spends every year.

The person familiar with the matter confirmed that the budget proposes a roughly 23 percent cut in nondefense discretionary spending for the next fiscal year from current levels.

The budget proposal also calls for a $5 billion cut from the National Science Foundation and defunding the National Endowment for Democracy, the person said, as well as eliminating the U.S. Institute of Peace.

Congressional Republicans have thus far balked at enshrining into law even a small fraction of the cuts implemented by Musk, including the elimination of the U.S. Agency for International Development, which Musk’s DOGE group unilaterally shut down over an early February weekend.

Economic Federal Reserve (The Fed) Politics Trump Presidency United States
Sara William

    Sara William is a veteran journalist, economist, and columnist with over 40 years of experience reporting on the intersection of politics and economics. Since beginning her career in 1984, she has built a distinguished reputation for her deep analysis and authoritative coverage of major historical events and their financial implications.Sara has reported extensively on the connection between politics and the stock market, the economic aftermath of the 9/11 attacks, the 2008 financial crash, and the Covid-19 market collapse. Her work unpacks how global and domestic policies shape financial markets and the economy at large.

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