Good afternoon! Congress returns to Washington next week after a two-week recess. The Senate begins business on April 13 and the House on April 14. Both chambers are expected to begin hearings on the Fiscal Year 2027 (FY27) funding cycle. The White House released the framework of its FY27 budget request on April 3; highlights of the request are listed at the end of this update. The administration focused this week on ceasefire negotiations with Iran.
WHITE HOUSE
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The White House released the toplines of its FY27 budget request last Friday, which calls for a large increase in defense spending and large cuts to many discretionary programs. More details below.
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The U.S. and Iran are set for direct talks Saturday in Islamabad, with Vice President JD Vance leading the American delegation. A ceasefire announced earlier this week is broadly holding. Iran’s supreme leader has called for war reparations and signaled continued control over Hormuz until the conflict is fully resolved. The Strait of Hormuz remains effectively closed to shipping, keeping oil prices around $95/barrel.
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Israel’s attacks on Lebanon are a key sticking point, with Israel continuing strikes against Hezbollah and both sides disputing whether Lebanon is covered by the ceasefire.
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Inflation rose to a 3.3% annual rate in March 2026, marking the largest increase in nearly two years. It was largely driven by a 10.9% increase in energy costs due to the Iran conflict. The Consumer Price Index (CPI) rose 0.9%.
SENATE
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Senate Republicans will meet with President Donald Trump today to lay the groundwork for a budget process that would fund the Department of Homeland Security (DHS) for at least the remainder of Fiscal Year 2026. The shutdown has lasted nearly two-months.
- The move is the first step in the Republican plan to reopen DHS through the reconciliation process, which only needs a simple majority vote in the Senate, instead of annual appropriations legislation that requires 60 votes.
HOUSE
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The House Transportation & Infrastructure Committee’s planned markup of the surface transportation bill has been delayed. Chair Sam Graves (R-MO) had aimed to consider the bill next week. Bipartisan negotiations are still ongoing, and he now expects the markup to occur later in the month. The current law expires September 30.
- The House Appropriations Committee has pushed back planned consideration of the FY27 Department of Defense spending bill by approximately one month, as the Pentagon delayed the release of its detailed budget documents until April 21. Appropriators hope to hold the Department of Defense Subcommittee markup in mid-June. The full committee markup is now scheduled for June 24.
TRUMP ADMINISTRATION FY27 BUDGET REQUEST
TOPLINES
Department of Agriculture
$20.8B requested, -$4.9B (-19%) from FY2026
- Rural America programs: +$50 million
- National Institute of Food and Agriculture Formula Grants: -$510 million
- Rural Business Service (RBS): -$82 million
- Agricultural Marketing Service: -$61 million
- McGovern-Dole Food for Education Program: -$240 million
- Community Facilities Grants: -$659 million
Department of Commerce
$9.2B requested, -$1.3B (-12.2%) from FY2026
- Trade Enforcement and U.S. Business Investment: +$110 million
- U.S. Innovation and National Security: +$215 million
- American Maritime Dominance: +$135 million
- Minority Business Development Agency (MBDA): -$47 million
- Economic Development Administration (EDA): -$449 million
- NOAA Operations, Research, and Grants: -$1.6 billion
- National Institute of Standards and Technology (NIST): -$993 million
- International Trade Administration Global Markets: -$150 million
- National Telecommunications and Information Administration: -$2.2 billion
Department of War (Defense)
$1.5 trillion total requested, +$441B (+44%) from FY2026 including Working Families Tax Credit; $1.1T in base discretionary plus $350B in additional mandatory funding.
- Budget priorities include Golden Dome missile defense, shipbuilding, critical munitions, nuclear enterprise, space, critical minerals, AI, unmanned systems, and a military pay raise. Specific dollar amounts for most line items were not provided.
Department of Education
$76.5B requested, -$2.3B (-2.9%) from FY2026
- Special Education: +$539 million
- Federal Pell Grants: +$10.5 billion
- K-12 Programs: -$8.5 billion
- Office of Career, Technical, and Adult Education (OCTAE): -$1.5 billion
- Higher Education Programs: -$2.7 billion
Department of Energy
$53.9B requested, +$4.8B (+10%) from FY2026 (excl. WFTC)
- “Bolstering Energy Dominance”: +$4.7 billion
- Strengthening Nuclear Security (NNSA): +$3.6 billion
- Critical Minerals Production: +$394 million
- Cancellation of IIJA Clean Energy Funding: -$15.2 billion
- Office of Science: -$1.1 billion
- Environmental Management: -$386 million
- ARPA-E: -$150 million
Department of Health and Human Services
$111.1B requested, -$15.8B (-12.5%) from FY2026
- LIHEAP: -$4 billion
- Refugee Resettlement Program: -$768 million
- Unaccompanied Alien Children (UAC): -$819 million
- Community Services Block Grant (CSBG): -$775 million
- Creating Efficiencies through American Hospital Association (AHA): -$5 billion
- National Institutes of Health (NIH): -$5 billion
- Agency for Healthcare Research and Quality (AHRQ): -$129 million
- Administration for Strategic Preparedness and Response (ASPR): -$356 million
Department of Homeland Security
$63B requested, -$2.2B (-3.3%) from FY2026 CR level
- Customs and Border Protection (CBP): $18.5 billion – level funding
- Immigration and Customs Enforcement (ICE): $10 billion – level funding
- U.S. Coast Guard Operations: + $2.1 billion
- U.S. Secret Service: +$36M
- FEMA Non-Disaster Grant Programs: -$1.3 billion
- Cybersecurity and Infrastructure Security Agency (CISA): -$707 million
Department of Housing and Urban Development
$73.5B requested, -$10.7B (-13%) from FY2026
- Program Integrity Initiative: +$30 million
- Melania Trump Foster Youth to Independence Initiative: +$5 million
- Community Development Block Grant (CDBG): -$3.3 billion
- HOME Investment Partnerships Program: -$1.3 billion
- Homeless Assistance Programs: -$393 million
- Housing Opportunities for Persons with AIDS (HOPWA): -$529 million
- Native American and Native Hawaiian Housing: -$489 million
- PRO Housing: -$50 million
- Fair Housing Activities: -$60 million
- Housing Counseling: -$58 million
Department of the Interior
$15.9B requested, -$2.3B (-12.9%) from FY2026
- Budget details focus on reform categories including wildland fire consolidation, permitting, public lands management, and elimination of programs characterized as duplicative or wasteful. Specific dollar amounts for most line items were not provided.
Department of Justice
$40.8B requested, +$4.7B (+13%) from FY2026
- Immigration Law Enforcement: +$99 million
- Drug Cartel and Fentanyl Enforcement: +$362 million
- FBI Public Safety and National Security: +$1.9 billion
- Prisons: +$1.7 billion
- State and Local Grant Program Reductions: -$1.7 billion
Department of Labor
$9.9B requested, -$3.5B (-25.9%) from FY2026
- Job Corps: -$1.6 billion
- Senior Community Service Employment Program (SCSEP): -$395 million
- Worker Protection Agencies: -$234 million
- Office of Federal Contract Compliance Programs (OFCCP): -$101 million
- International Labor Affairs Bureau (ILAB): -$46 million
Department of State and International Programs
$35.6B requested, -$15.5B (-30%) from FY2026
- America First Opportunity Fund: $5.0 billion
- Critical Minerals: $13 billion
- Humanitarian Assistance: -$2.0 billion
- Food for Peace (Title II): -$1.2 billion
- Global Health Programs: -$4.3 billion
- International Organizations and the UN: -$2.7 billion
- National Endowment for Democracy (NED): -$315 million
Department of Transportation
$26.6B discretionary requested, +$1.6B (+6.2%) from FY2026; total DOT funding from all sources declines from $147.5B to $114.1B (-22.6%) due to IIJA advance appropriation expirations
- Overall Infrastructure: +$1.3 billion
- FAA Operations and Capital: +$481 million
- Maritime Action Plan Implementation: +$1.5 billion
- Washington, D.C. Transportation & Infrastructure: +$403 million
- Transit: -$486 million
- Termination of Electric Vehicle Charger Subsidies: -$4.2 billion
- Essential Air Service (EAS) Discretionary Funding: -$372 million
Department of Treasury
$11.5B requested, -$1.5B (-12%) from FY2026
- Community Development Financial Institutions (CDFI) Fund: -$204.5 million
- Internal Revenue Service (IRS): -$1.4 billion
Department of Veterans Affairs
$144.9B requested, +$11.5B (+9%) from FY2026
- Medical Care: +$10.6 billion (discretionary and mandatory)
- Electronic Health Record Modernization (EHRM): +$800 million
- Information Technology (IT) Systems: +$389 million
Environmental Protection Agency
$4.2B requested, -$4.6B (-52%) from FY2026
- Budget details focus on reform categories including permitting, drinking water, and elimination of programs. Specific dollar amounts for most line items were not provided.
NASA
$18.8B requested, -$5.6B (-23%) from FY2026
- Moon Landing by 2028: +$731 million
- Science Programs: -$3.4 billion
- International Space Station (ISS): -$1.1 billion
- Space Technology: -$297 million
- STEM Engagement: -$143 million
Small Business Administration
$329M requested, -$671M (-67%) from FY2026
- Entrepreneurial Development Programs: -$309 million
- Salaries and Expenses: -$170 million
- Business Loan Programs Administrative Expenses: -$158 million
