Last week President Trump made the opening move in budget negotiations for fiscal year 2027 by proposing a 42% increase in defense spending as compared to 2026 which he intends to pay for by reducing non-defense spending by 10% or $73 billion.
"Savings are achieved by reducing or eliminating woke, weaponized, and wasteful programs, and by returning state and local responsibilities to their respective governments."
The statement comes from the White House's Fiscal Year 2027
State and local governments are already facing higher expenses delivered by the One Big Beautiful Bill Act in the form of paying larger shares of Medicaid funding.
Cutting the Federal Emergency Management Agency budget, also included in the proposal, could impede states from rebuilding after a national disaster and affect their credit ratings.
FEMA is also being prepared for a major
The proposed boost in transportation infrastructure includes "a $481 million increase to continue to support the Administration's air traffic controller hiring surge," and update the Federal Aviation Administration's telecommunications systems.
Private investors looking for more opportunities in the nation's airports could gain access if the proposal's idea of privatizing the Transportation Security Administration gains traction.
At the same time smaller, regional airports could experience financial stress from having to hire private security firms.
While the FAA appears as a budget winner, the proposal envisions cutting the Environmental Protection Agency's budget in half.
The proposal makes no moves on the level of Water Infrastructure Finance and Innovation Act loans, which can compete with municipal bonds.
"Trump's 2027 Budget proposes no new loan funding for WIFIA, as did the 2026 budget proposal, on the grounds that the program has plenty of carryover funding from prior years," said John Ryan, principal at InRecap LLC.
In addition to transportation and defense, spending would increase for the Justice Department, Veterans Affairs and the Department of Energy.
Housing advocates are alarmed about a proposed $3.8 billion cut to the Department of Housing and Urban Development's affordable housing programs – a sector that benefitted from loosening restrictions on Low Income Housing Tax credits.
"The National Low Income Housing Coalition is calling on Congress to once again reject funding cuts and harmful policy changes proposed in the White House's budget request," they said in a statement.
The Center on Budget and Policy Priorities panned the proposal saying it, "isn't a serious plan to address real issues facing families and the nation. It isn't worthy of the American people."
The proposal leans into fiscal optimism by positing a ten-year 2.97% annual growth rate, and unemployment staying below 4%.
It relies on reaping revenue from tariffs despite setbacks in court and stepping up antifraud measures.
Sen. Susan Collins, R-Maine, Chair of the Senate Appropriations Committee issued a reminder that, "while the Administration proposes a budget, Congress holds the power of the purse."
The President's proposed budget is ultimately a suggestion, though his priorities are often very influential over members of his own party.
Collins has promised upcoming hearings with cabinet members and agency heads.
During election years Congress frequently punts any major budget decisions by passing a continuing resolution in September, but there are also plans afoot for a major
