U.S. President Donald Trump looks on after disembarking from Air Force One at Palm Beach International Airport, West Palm Beach, Florida, U.S. May 1, 2025. REUTERS/Leah Millis/File Photo

Trump Administration Proposes $163 Billion Budget Cut, Prioritizing Defense and Border Security

May 2, 2025

The administration of U.S. President Donald Trump has proposed a federal budget for the next fiscal year that would reduce overall government spending by $163 billion, significantly cutting funds for domestic programs while increasing allocations for defense and border security. The proposal marks Trump’s first budget since returning to office and underscores a shift toward austerity in non-defense sectors.

Domestic Cuts Target Education, Housing, and Public Health

The budget calls for deep reductions across several key federal agencies and programs:

• Department of Education: Funding would be reduced by approximately 15%, reflecting Trump’s long-standing goal of downsizing or eliminating the department.
• Department of Housing and Urban Development (HUD): HUD’s budget would be cut nearly in half, affecting housing assistance programs for low-income Americans.
• National Institutes of Health and Centers for Disease Control and Prevention: Both agencies would see cuts exceeding 40%.
• Internal Revenue Service (IRS): A $2.49 billion reduction is proposed, aimed at reversing what the administration terms “weaponization” of IRS enforcement under President Biden.

The proposal would also eliminate or sharply reduce funding for federal law enforcement agencies such as the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives, as well as trim NASA’s moon program.

Increased Spending for Border and Military Programs

In contrast to domestic program cuts, the budget would:

• Increase homeland security funding by 65%, compared to 2025 levels.
• Boost discretionary defense spending by 13%, although critics, including Republican Senator Roger Wicker, argue this remains below inflation-adjusted levels and thus represents a real cut.
• Allocate $500 million for mass deportation efforts and $766 million for border security technology, as well as funding to support 22,000 Border Patrol agents and hire additional Customs and Border Protection officers.

OMB Director Russ Vought, a former architect of the Heritage Foundation’s “Project 2025” to limit federal reach, described the budget as a “historic” reset of federal priorities. Trump had previously distanced himself from Project 2025 during his campaign, but Vought now holds a central role in shaping fiscal policy.

Political Response and Congressional Outlook

Reactions to the budget were sharply divided:

• Democrats condemned the proposed cuts as harmful to working-class Americans. Senate Majority Leader Chuck Schumer called the budget “an all-out assault on hardworking Americans.”
• Republicans offered mixed reactions. Senator Susan Collins, ranking member of the Senate Appropriations Committee, voiced concerns over reduced defense funding and the potential impact on heating assistance for low-income households. She emphasized that “Congress holds the power of the purse.”
• Senator Wicker and other Republicans suggested the defense budget may be expanded during congressional negotiations.

The budget was submitted later than usual and lacks several key details. However, it is intended to serve as a framework for congressional Republicans as they begin drafting appropriations bills.

Fiscal Concerns and Tax Policy

Despite the proposed spending cuts, some fiscal conservatives remain wary of the administration’s plan to extend the 2017 Trump-era tax cuts, which they fear could exacerbate the federal debt, now standing at $36 trillion.

Lawmakers aim to pass a tax-cut bill by July 4, potentially using reconciliation procedures to bypass Senate filibusters. Budget officials indicated that Congress may adjust defense allocations during that process.

Additional Measures and Legal Considerations

The White House is preparing a rescission package to formalize budget reductions already enacted by the Department of Government Efficiency. Some Republican lawmakers have insisted on this step, citing legal requirements after the administration withheld previously approved funds.