Trump’s proposal to cut Budget upto $163 Billion that slashes domestic expenditure

On Friday, U.S. President Donald Trump’s administration proposed a $163 billion cut to the federal budget, sharply reducing spending in areas such as education and housing next year, while increasing outlays for defense and border security.

The administration said it would raise homeland security spending by nearly 65% from the 2025 enacted levels under the proposed budget.

The White House Office of Management and Budget said in a statement that non-defense discretion spending, excluding the massive Social Security and Medicare programs as well as the rising cost of interest payments on the nation’s debt, would be cut by 23% to the lowest level since 2017.

The proposed budget would cut more than $2 billion from the tax-collecting Internal Revenue Service.

Trump’s first budget since reclaiming office seeks to fulfill his promises to boost spending on border security while slashing the federal bureaucracy. Congressional Democrats blasted the cuts in domestic spending as too severe, while some Republicans called for increasing spending on defense 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 milit and homeland security,” OMB Director Russ Vought said in the statement.

The federal government faces a growing $36 trillion debt pile, and some fiscal conservatives and budget experts worry that Trump’s proposal to extend his 2017 tax cuts will contribute to it.

The so-called skinny budget outlines the administration’s priorities and gives Republican appropriators in Congress a blueprint to begin crafting spending bills. Trump is also urging the Republican-controlled Congress to extend the 2017 tax cuts enacted during his first term, which nonpartisan forecasters say could add $5 trillion to the nation’s debt.

Republican U.S. Senator Susan Collins, the chamber’s top appropriator, reacted indifferently.

“This request has come to Congress late, and key details remain outstanding. Based on my initial review, however, I have serious objections,” Collins, of Maine, said.

She expressed concerns that defense spending was too low and worried about cuts to programs that help low-income Americans heat their homes. “Ultimately, Congress holds the power of the purse,” Collins said.

State and Education budgets face major cuts in the latest proposal:

The budget proposal calls for the State Department to absorb the U.S. Agency for International Development, resulting in a $50 billion cut.

The proposal calls for a $2.49 billion cut to the IRS, which a White House budget official said would end former President Joe Biden’s “weaponization of IRS enforcement.” Nonpartisan analysts warn that cuts to the IRS could hurt tax collection, thus contributing to the nation’s deficit. The OMB also calls for sharp cuts to NASA’s moon program.

The proposal furthers Trump’s promise to shutter or greatly diminish the Department of Education. It would preserve funding for children from low-income families but would slash about 15% of the department’s total budget.

The proposal would cut funding for the Department of Housing and Urban Development, which oversees housing assistance programs, by almost half.

“Donald Trump’s days of pretending to be a populist are over,” said top U.S. Senate Democrat Chuck Schumer of New York in a statement. “His policies are nothing short of an all-out assault on hardworking Americans. As he guts healthcare, slashes education, and hollows out programs families rely on, he’s bankrolling tax breaks for billionaires and big corporations.”

The administration says the budget would boost discretion defense spending by 13%. Still, Republican Senator Roger Wicker of Mississippi, chairman of the Senate Armed Services Committee, argues that defense spending remains at levels set under Trump’s Democratic predecessor, Biden, which amounts to a cut due to inflation.

Officials said the White House believes that Republicans in Congress will increase defense spending in the final budget.

A senior OMB official responded to Wicker’s criticism, stating that work on Capitol Hill is still needed to secure full Republican support for the plan.

The annual White House budget request includes economic forecasts and detailed proposals for spending levels for every agency in the fiscal year starting on October 1. The Congressional Budget Office reported that outlays in fiscal 2024 amounted to $6.8 trillion.

Lawmakers often make substantial changes to the White House budget request, but Trump holds unusual sway over Republican lawmakers and may secure 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 federal spending cuts to finance it. They may need to consider the growing stress in the U.S. economy caused by Trump’s tariff hikes, which are disrupting global trade.

The White House budget calls for an additional $500 million in discretion spending to strengthen border security and support Trump’s push for mass deportations. It also allocates $766 million to procure border security technology and provides funding to maintain 22,000 border patrol agents while hiring additional Customs and Border Protection officers.

A budget official said that the administration is still working on a separate rescission package to codify cuts that the Department of Government Efficiency has already made. Republican senators have demanded this process, as required by law, because the administration is withholding funds that Congress had previously approved.