Context:

President Donald Trump has proposed a budget for fiscal year 2026 that includes a significant 20% reduction in government spending, aiming to pass $150 billion in cuts through Congress. The proposed budget, described as 'skinny', excludes cuts to Medicare and Medicaid, but still raises concerns about potential impacts on these social programs. The budget plans to eliminate funding across various federal departments, notably slashing the Department of Housing and Urban Development by 40% and the Departments of Labor and Interior by 30%, while keeping defense spending flat, causing discontent among defense hawks. The Trump administration contends that despite criticisms, the budget will provide a 13% increase in national defense spending through discretionary and reconciliation spending. Amidst Republican support, there remains skepticism about the feasibility of passing the budget by Memorial Day, as some members question the strategy of bundling various legislative priorities into one comprehensive bill.

Dive Deeper:

• President Trump's 2026 budget proposal demands a 20% cut in annual congressional spending, equating to a reduction of $150 billion, marking a significant effort to curb government expenditure.

• The budget is termed 'skinny' as it intentionally omits cuts to large social programs like Medicare and Medicaid, which are major federal spending areas, though Republicans assert no direct cuts will be made to these programs.

• Significant reductions are proposed for various federal departments, with the Department of Housing and Urban Development facing a 40% cut, and the Departments of Labor and Interior seeing 30% reductions, sparking concerns about the impact on these sectors.

• Defense spending remains flat despite a declared 13% increase in national defense funding through budget reconciliation, a move criticized by defense advocates who argue it undermines the military's capability.

• The budget proposal faces internal GOP tensions, as some members express doubt about the strategy to pass it by Memorial Day, suggesting that addressing issues like border security and tax cuts separately might be more effective.

• Republicans are leveraging reconciliation to pass the budget with only GOP votes, attempting to bypass potential Democratic filibusters that could block funding increases for defense and Homeland Security.

• There is a contentious debate over the exclusion of tax credits for electric vehicles, with Republicans arguing that Americans should not subsidize them, while also aiming to use EV sales to bolster the Highway Trust Fund amidst declining gas tax revenues.