The Uncertainty and Ambiguity Are Over
- Shirley
- Jul 7
- 2 min read
Updated: Jul 10
We have an approved FY 2026 budget - like it or not. Now is the time to follow the money, understand new requirements and adjust your business strategy and services to thrive in the new federal marketplace. This is an analysis of the bill signed into law on 7/4/2025:
The total budget increased from $4.6 trillion in FY 2025 to $4.8 trillion in FY2026
Of this FY 2026 total budget amount, $1.69 trillion is discretionary. Non-defense discretionary spending is down 22.5% ($163 billion) to $679 billion. As a point of comparison, the non-defense discretionary spending in 2019 (pre-Covid) was $699 billion.
Of the $1.69 trillion in discretionary spending, $1.01 trillion is for defense (up 13% from 2025); $90 billion is for homeland security (up 82% from 2025).
Budgets that were slashed:
HHS: -26%
State: -79%
HUD: -44%
NASA Science: -52%
NSF: -52%
Agriculture: -52%
Interior/EPA: -23%
Justice: -7%
Labor: -33%
Education: -15%
IRS: -37%
OPM: -18%
Administration priorities were clear in the White House's Executive Orders and re-emphasized in the budget narrative:
Make core operational missions more efficient
Support federal hiring reforms/civil service modernization/accountability
Improve federal workforce leadership skills
Improve cybersecurity
Accommodate data sharing among agencies
"Modernize" IT infrastructure, application development and operations
Leverage technology to improve defense readiness
Defend the nation's borders
Immigration enforcement
Eliminate fraud, waste and abuse
Eliminate Diversity, Equity and Inclusion programs and practices
Reduce spending on Medicare and SNAP through an emphasis on work requirements and eliminating fraud
Reduce climate initiatives. Fund fossil fuels, nuclear R&D, and critical mineral supply chains
Reduce overall regulations
Make procurement more efficient and competitive
Transfer emergency preparedness funds to the states
Transfer educational programs to the states
Invest in air and rail safety, FAA operations, port infrastructure, VA healthcare and electronic records
Fund space programs
Fund programs in primary care, environmental health, mental health, HIV/AIDS and maternal care, despite budget cuts
These are a high level assessment of the flow of funds. More insights are found at the programmatic level in the budget. But the path forward is clear. The time to pivot and act is now.
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