Trump proposes $163 billion cut to federal budget

Andrea Shalal, James Oliphant and Bo Erickson

Fri, May 2, 2025, 7:21 AM 3 min read

By Andrea Shalal, James Oliphant and Bo Erickson

WASHINGTON (Reuters) - U.S. President Donald Trump's administration on Friday proposed a $163 billion cut to federal spending next year, which would eliminate more than a fifth of the non-military spending excluding mandatory benefit programs.

The proposed budget would raise defense spending by 13% and homeland security spending by nearly 65% from 2025 enacted levels. Non-defense discretionary spending would be cut by 23% to the lowest level since 2017, the White House Office of Management and Budget said in a statement.

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.

As Trump's first budget since reclaiming office, it sets out to make good on his promises to boost spending on the armed forces and border security, while slashing the federal bureaucracy.

"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.

The federal government currently has a growing $36 trillion debt pile, and some fiscal conservatives and budget experts worry Trump's tax-cut bill will add to it without sufficient spending cuts.

Trump is pushing the Republican-controlled Congress to extend the 2017 tax cuts that were his major legislative achievement in his first term, which nonpartisan forecasters say could add $5 trillion to the nation's debt.

The annual White House budget request includes economic forecasts as well as detailed proposals about how much money should be spent by every government agency for the fiscal year that starts on October 1. Outlays in fiscal 2024 amounted to $6.8 trillion, according to the Congressional Budget Office.

Lawmakers often make substantial changes in the White House's budget request. But Trump commands unusual sway over this Republican-controlled Congress 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 U.S. economy from Trump's tariff hikes that are upending global trade.

The budget proposal furthers Trump's promise to shutter or greatly diminish the U.S. Department of Education, OMB said, while preserving funding for children from low-income families.