Trump proposes $211 billion cut to US budget that slashes domestic spending

Straits Times

03-05-2025

Mr Trump's budget seeks to make good on his promises to boost spending on border security, while slashing the federal bureaucracy. PHOTO: AFP
WASHINGTON - US President Donald Trump's administration on May 2 proposed a US$163 billion (S$211.65 billion) cut to the federal budget that would sharply reduce spending on education, housing and medical research in 2026, while increasing outlays for defence and border security.
The administration said the proposed budget would raise homeland security spending by nearly 65 per cent from 2025 enacted levels, as Mr Trump cracks down on illegal immigration.
Non-defence discretionary spending, which excludes the massive Social Security and Medicare programmes and rising interest payments on the nation's debt, would be cut by 23 per cent to the lowest level since 2017, the White House Office of Management and Budget said in a statement.
The proposal would cleave more than US$2 billion from the tax-collecting Internal Revenue Service and would slice the budgets of the National Institutes of Health and the Centres for Disease Control and Prevention by more than 40 per cent.
Mr Trump's first budget since reclaiming office seeks to make good on his promises to boost spending on border security while slashing the federal bureaucracy.
Congressional Democrats blasted the domestic spending cuts as too severe, and some Republicans called for boosting spending on defence and other areas.
'At this critical moment, we need a historic budget – one that ends the funding of our decline, puts Americans first, and delivers unprecedented support to our military and homeland security,' OMB Director Russ Vought said in the statement.
Mr Vought, while at the Heritage Foundation, was an architect of Project 2025, a roadmap for scaling back the reach of the federal government.
Mr Trump disavowed that effort during the campaign, but once in office, he made Mr Vought his budget czar.
The federal government has a growing US$36 trillion debt pile, and some fiscal conservatives and budget experts worry Mr Trump's proposal to extend his 2017 tax cuts will add to it.
The so-called skinny budget is an outline of administration priorities that will give Republican appropriators in Congress a blueprint to begin crafting spending Bills.
Republican US Senator Susan Collins, the chamber's top appropriator, reacted coolly.
'This request has come to Congress late, and key details still remain outstanding. Based on my initial review, however, I have serious objections,' Ms Collins, of Maine, said.
She cited concerns that defence spending was too low and worried about cuts to programmes to help low-income Americans heat their homes.
'Ultimately, it is Congress that holds the power of the purse,' Ms Collins said.
State, education hit
The budget proposal calls for a US$50 billion cut at the State Department as it absorbs the US Agency for International Development (USAid).
The proposal calls for a US$2.49 billion cut to the IRS, which one White House budget official said would end former President Joe Biden's 'weaponisation of IRS enforcement.'
Non-partisan analysts say cuts to IRS can hurt tax collection and thus add to the deficit.
OMB also called for sharp cuts at Nasa's moon programme and to federal law enforcement agencies including the FBI and Bureau of Alcohol, Tobacco, Firearms and Explosives, as Reuters reported was expected.
The proposal furthers Mr Trump's promise to shutter or greatly diminish the Department of Education, slashing about 15 per cent of the department's budget.
Funding for the Department of Housing and Urban Development, which oversees housing assistance programmes, would be cut almost in half.
'Donald Trump's days of pretending to be a populist are over,' said top US Senate Democrat Chuck Schumer of New York in a statement. 'His policies are nothing short of an all-out assault on hardworking Americans.'
The administration says the budget would boost discretionary defence spending by 13 per cent, but Republican Senator Roger Wicker of Mississippi, chairman of the Senate Armed Services Committee, said defence spending would remain at levels set under Mr Trump's Democratic predecessor Joe Biden, which amounts to a cut due to inflation.
Officials said the White House believes Republicans in Congress will add more defence spending as part of the process of passing Mr Trump's tax-cut Bill on a party-line vote, bypassing the Senate filibuster.
'We think the Hill will be with us on this as we get to talk to more of them along the way,' Mr Vought said in an interview with Fox Business.
Outlays in fiscal 2024, which ended Oct 1, amounted to US$6.8 trillion, according to the Congressional Budget Office.
Lawmakers often make substantial changes in the White House budget request, but Mr Trump commands unusual sway over Republican lawmakers and may get much of what he seeks.
Republicans in Congress hope to enact the tax cut Bill by July 4 and are working to bridge internal divisions over proposed cuts in federal spending to pay for it.
They may have to factor in growing stress in the US economy from Mr Trump's tariff hikes that are upending global trade.
The White House budget calls for an additional US$500 million in discretionary spending to bolster border security and aid Mr Trump's push for mass deportations, as well as US$766 million to procure border security technology funding, and funding to maintain 22,000 border patrol agents and hire additional Customs and Border Protection officers.
The administration is still working to put together a separate rescission package to codify cuts already made by the Department of Government Efficiency, a budget official said.
Republican senators have been demanding this process - stipulated by law, because the administration is withholding funds previously approved by Congress. REUTERS
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