Trump Suggests $163B Budget Cut Targeting Domestic Spending

• Trump aims for a significant increase in homeland security funding.
• The budget proposal seeks to reduce non-defense discretionary spending by 23%.
• Critics claim budget cuts will impact vital services for working Americans.

WASHINGTON: President Donald Trump’s administration proposed a $163 billion reduction to the federal budget on Friday, targeting cuts in areas like education and housing for the upcoming year, while boosting funds for defense and border security.

The proposal includes an almost 65% increase in homeland security funding compared to the levels enacted in 2025.

Non-defense discretionary spending—which excludes large programs like Social Security, Medicare, and rising debt interest payments—would see a 23% decrease, reaching its lowest level since 2017, according to the White House Office of Management and Budget.

The budget plan also includes a more than $2 billion cut to the Internal Revenue Service.

This is Trump’s first budget since he returned to office, designed to fulfill his commitment to increase funding for border security while cutting down on federal bureaucracy. Congressional Democrats criticized the severity of the domestic spending cuts, while some Republicans advocated for increased funding in defense and other areas.

“At this critical juncture, we need a transformative budget—one that halts our decline, prioritizes Americans, and offers unprecedented support to our military and homeland security,” stated OMB Director Russ Vought.

The federal government currently grapples with a mounting debt of $36 trillion, raising concerns among fiscal conservatives and budget analysts that Trump’s proposal to extend his 2017 tax cuts may exacerbate this issue.

This so-called “skinny budget” serves as a framework for administration priorities, giving Republican lawmakers a foundation to draft spending bills. Trump is urging the Republican-dominated Congress to extend the 2017 tax cuts enacted during his first term, potentially adding $5 trillion to the national debt, according to nonpartisan estimates.

Senator Susan Collins, a senior appropriator, responded with caution.

“This request has arrived in Congress late, and there are still key details missing. However, based on my initial assessment, I have significant concerns,” Collins, a Republican from Maine, remarked. She highlighted worries over insufficient defense spending and cuts to programs that assist low-income Americans with heating their homes.

“Ultimately, Congress controls the budget,” Collins emphasized.

Impact on State and Education

The budget outlines a $50 billion reduction for the State Department as it incorporates the U.S. Agency for International Development.

It proposes a $2.49 billion cut to the IRS, which a White House budget official claims will alleviate former President Joe Biden’s “weaponization of IRS enforcement.” Analysts warn that IRS cuts may hinder tax collection, worsening the national deficit.

Sharp reductions are also suggested for NASA’s lunar program.

This proposal aligns with Trump’s pledge to either eliminate or significantly reduce the Department of Education. While it aims to protect funding for disadvantaged children, approximately 15% of the department’s overall budget would be slashed.

Funding for the Department of Housing and Urban Development, which manages housing assistance initiatives, would be nearly halved.

Senate Democratic Leader Chuck Schumer described the budget as “an outright attack on hardworking Americans.” He asserted that Trump’s approach dismantles healthcare and education, leaving families without essential programs while financing tax breaks for the wealthy.

Although the administration claims a 13% increase in discretionary defense spending, Senator Roger Wicker of Mississippi, chair of the Senate Armed Services Committee, remarked that defense funding remains at levels set during Biden’s administration, resulting in an effective cut due to inflation.

Officials are optimistic that Republicans in Congress will augment defense funding in the final budget.

In response to Wicker’s critiques, a senior OMB official indicated that further discussions on Capitol Hill are necessary to ensure robust Republican backing for the proposal.

The annual White House budget request includes economic projections and detailed spending proposals for each agency for the fiscal year starting October 1. The Congressional Budget Office reported that outlays in fiscal 2024 totaled $6.8 trillion.

While lawmakers often modify the White House budget requests significantly, Trump wields considerable influence over Republican legislators and may achieve many of his goals.

Congressional Republicans are eager to pass the tax cut bill by July 4 while addressing internal disagreements concerning proposed federal spending reductions. They must also consider the increasing strain on the U.S. economy caused by Trump’s tariff policies disrupting global trade.

The White House budget further seeks an additional $500 million for discretionary spending to enhance border security, supporting Trump’s push for mass deportations. It allocates $766 million for border technology and maintains funding for 22,000 border patrol agents while aiming to hire more Customs and Border Protection officers.

The administration is currently assembling a separate rescission package to formalize cuts already implemented by the Department of Government Efficiency, as per budget officials.

Republican senators have insisted on this legislative process due to the administration holding back funds already approved by Congress.