Key Points:

• The FY2027 request reflects a significant reallocation toward defense, including partial reliance on budget reconciliation to fund increases.
• Proposed domestic reductions may have greater real-world impact due to fewer available budgetary workarounds (e.g., rescissions, repurposed funds).
• Congressional response remains uncertain, with past appropriations cycles demonstrating bipartisan resistance to some proposed cuts.

On April 3, 2026, the White House released a top-level look at its Fiscal Year (FY) 2027 Presidential Budget Request (PBR). We expect more specific information to be released in the coming days and weeks. While the budget is not a binding document, it serves as a statement of the administration’s policy priorities and a guidepost or a basis of comparison for congressional appropriators as they develop FY2027 spending bills. 

The administration calls for a $500 billion increase in defense funding, totaling $1.5 trillion in budgetary resources. $350 billion of that increase would move through the budget reconciliation process. The remaining $150 billion is requested as part of the discretionary appropriations process. This historic defense increase is paired with a sizeable 10 percent, or $73 billion, reduction in non-defense discretionary spending. 

Proposed non-defense reductions are achieved through the elimination or scaling back of selected programs and a shift of certain responsibilities to state and local governments. The requested reductions in non-defense spending are driven by cuts across a range of domestic agencies, including the Departments of Health and Human Services (HHS), Housing and Urban Development (HUD), Interior (DOI) and portions of the Department of Energy (DOE), as well as many smaller programs. At the same time, the PBR calls for targeted increases at other agencies aligned with the administration’s priorities, including the Department of Justice (DOJ), the Department of Transportation (DOT) and the Department of Veterans Affairs (VA). 

Importantly, recent appropriations cycles have relied on a range of budgetary mechanisms, including rescissions and repurposing of previously enacted funds, to sustain higher effective spending levels than topline allocations alone would suggest. Those mechanisms may have run dry and be less available going forward, suggesting that proposed reductions to non-defense spending could have more pronounced effects if enacted. 

The request comes as the FY2027 appropriations process is already underway in Congress. House appropriators are expected to begin marking up spending bills in mid-April, with Senate consideration anticipated in June. As a result, the extent to which the President’s request will shape the final appropriations outcome remains uncertain. For example, the administration previously proposed eliminating certain programs, such as the Community Development Financial Institutions Fund (CDFI), but Congress on a bipartisan basis has rejected some of those requests, as was the case with CDFIs in FY2026.

Increases in defense spending have typically been accompanied by agreement among appropriators to ensure non-defense priorities are fully funded. We will be closely monitoring the mandatory and discretionary spending discussions in Congress as well as potential supplemental requests that could be forthcoming from the administration.

Discretionary Request by Cabinet Department