Trump's budget proposal: Deep domestic cuts fund military boost
The Trump administration proposes drastic cuts to federal spending while planning a significant increase in allocations for the military and homeland security. According to Reuters, this is part of a larger strategy—Republicans aim to finance an ambitious tax reform in this way.
The Trump administration has proposed cuts to the federal budget for next year, amounting to 163 billion dollars (225 billion CAD). The plan calls for a reduction of more than one-fifth in non-defense spending, excluding mandatory programs.
According to a statement from the White House Office of Management and Budget (OMB), the proposal anticipates a 13 per cent increase in defence spending and a 65 per cent increase in homeland security compared to the level approved for 2025. Non-defense discretionary spending is expected to be cut by 23 per cent, to its lowest level since 2017, the report states.
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 - said OMB Director Russ Vought.
Planning a tax reform
The budget project presented by the White House includes economic forecasts and detailed spending proposals for each federal agency in the upcoming fiscal year, which begins on October 1. This means the fiscal year will align with the Canadian Thanksgiving, an interesting coincidence.
The final shape of the budget bill, however, is up to Congress—currently controlled by Republicans—and usually differs from the administration's proposal.
The budget was announced at a time when the Republican Party is trying to reach a compromise on cuts to finance the planned tax reform.
At the same time, Republicans must contend with growing economic tensions, caused in part by U.S. tariff increases, which are destabilizing global trade.
