Proposed FY26 budget signals changes to federal TBED policy

The White House Fiscal Year 2026 discretionary budget proposal outlines a significant shift in federal spending priorities, proposing substantial reductions in non-defense discretionary funding, which, if enacted by Congress, would impact scientific research and regional economic development support across numerous federal agencies. 

The initial release of the White House's FY2026 budget proposal is characterized as a "skinny budget," indicating that it provides a high-level overview of the administration's discretionary spending priorities without the detailed line-item specifics contained in a full budget request. The proposal aims for a $163 billion cut in non-defense discretionary funding, a 22.6% reduction from the previous fiscal year. 

The FY2026 proposal details considerable cuts to key research-funding bodies, including the National Institutes of Health (NIH), the National Science Foundation (NSF), the National Aeronautics and Space Administration (NASA), and the Department of Energy (DOE). While substantial cuts are proposed for many research areas, the budget also outlines increased funding for defense-related research, human space exploration, and the maintenance of current funding levels for artificial intelligence and quantum computing research.

The Department of Health and Human Services (HHS) faces an overall proposed budget cut of 26.2%. This reduction amounts to $33.3 billion from the FY2025 enacted level of $127 billion, reducing HHS overall to a proposed $93.8 billion for FY2026. NIH, the lead research component within HHS, is slated for a cut of nearly $18 billion, representing approximately 40% of its current funding. This reduction would bring the NIH budget down to $27 billion in 2026 from approximately $47 billion in 2025. The new budget proposal also includes a plan to consolidate the NIH from 27 centers and institutes into just five entities and to eliminate specific centers, including the National Institute on Minority and Health Disparities, the Fogarty International Center, the National Center for Complementary and Integrative Health, and the National Institute of Nursing Research.

The second largest R&D component of HHS, the Centers for Disease Control and Prevention (CDC), also faces a significant proposed budget cut of $3.6 billion, or approximately 40%. The Agency for Healthcare Research and Quality (AHRQ) is proposed to have its funding cut by $129 million, or 25%, and eliminate AHRQ as a standalone agency.

NSF is slated for a budget cut of $4.9 billion, representing more than half of its current funding. Despite these cuts, funding for AI and quantum information sciences research is proposed to be maintained at current levels. No other directorates, research areas or specific programs are mentioned in the 47-page skinny budget.

NASA faces a proposed budget cut of $6.0 billion, or approximately 24%, reducing its funding from about $24.8 billion in FY25 to $18.8 billion in FY26. This cut includes a decrease in Space Science funding by $2.3 billion and the termination of the Mars Sample Return mission. Earth Science funding is proposed to decrease by $1.2 billion.

DOE faces an overall proposed budget cut of 9.4%, including a decrease of $1.148 billion for the Office of Science. The Advanced Research Project Agency-Energy (ARPA-E) would see a decrease of $260 million and a refocusing of priorities toward reliable energy and critical technologies. The Office of Nuclear Energy is proposed to have its funding decreased by $408 million while also becoming more focused on national dominance in nuclear technology, and the Office of Fossil Energy would see a decrease of $270 million. Investments in renewable energy research and infrastructure would experience larger cuts or elimination through executive order attempts, a likely rescission package against FY2025 spending, and the full FY2026 budget request

Among the proposed cuts to the Department of Agriculture (USDA) is a decrease of $159 million for the Agricultural Research Service (ARS) and USDA Research Statistical Agencies. The Department of the Interior (DOI), specifically the U.S. Geological Survey (USGS), faces a proposed cut of $564 million, or more than 30%, with the elimination of programs providing grants to universities. The budget also mentions eliminating rural business programs, which may include USDA’s Rural Innovation Stronger Economy (RISE) grants program and other long-standing Rural Development economic development funding. 

Within the Department of Commerce (DOC), the National Institute of Standards and Technology (NIST) would see a reduction of $325 million. The administration has already signaled its intention to eliminate the Manufacturing Extension Partnership program, which has provided technical assistance and training to small and medium manufacturers nationwide (as reported by SSTI in April 2025). 

The DOC budget also proposes eliminating the Economic Development Administration (EDA) and the Minority Business Development Agency (MBDA). President Trump proposed EDA’s elimination in each budget request during his first term of office and Congress did not go along with it. Political analysts expect all domestic spending cuts to be in greater play this year because of Congressional leadership wanting to extend the 2017 tax cuts while also not expanding the federal deficit. 

The Small Business Administration (SBA) Entrepreneurial Development programs would be consolidated, eliminating almost all programs, including SCORE and the Women’s Business Centers. The agency’s Small Business Development Centers (SBDC) would continue and see a $10 million increase in funding in order to avoid “a disruption in business technical assistance services for veteran-owned small businesses.”

Regional Commissions face significant cuts, with the elimination of the Delta Regional Authority, Denali Commission, Northern Border Regional Commission, Southeast Crescent Regional Commission, Southwest Border Regional Commission, and Great Lakes Authority. The Appalachian Regional Commission (ARC) would be maintained at $14 million. ARC has supported TBED programs in the past through its Appalachian Regional Initiative for Stronger Economies (ARISE) and Partnerships for Opportunity and Workforce Economic Revitalization (POWER) initiative.

A new Rural Financial Award Program proposes to create a $100 million award program through the Treasury Department’s CDFI Fund, requiring 60% of funds to go to rural areas. The balance of the CDFI grant funding is discussed for elimination.

The Department of Labor’s workforce development activities are consolidated under the administration’s Make America Skilled Again (MASA) funding stream. The proposal requires 10% of a state’s MASA grant go towards apprenticeship programs. No specific skill areas or targeted industries are mentioned.

The Jobs Corps program would be eliminated, removing a program that has provided technical training for low-income youth in fields such as advanced manufacturing, health care, information technology, and renewable resources and energy.

The budget reduces several STEM education initiatives, including NSF’s Broadening Participation portfolio, NASA’s Office of Science, Technology, Engineering, and Mathematics Engagement, and NOAA’s educational grant programs. Included in cuts to the Department of Education (ED) is the elimination of the TRIO programs and Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP), which supports college access and completion for low-income students, including pre-college math and science training.