As the prospect of a second Trump administration looms, significant changes in federal budgeting and appropriations are anticipated. Former President Donald Trump has positioned cost-cutting as a central pillar of his platform, emphasizing the need to streamline government operations, reduce waste, and restructure federal agencies to create a more efficient and fiscally responsible government.
At the heart of Trump’s cost-cutting initiative is the creation of the “Department of Government Efficiency.” Despite its Cabinet-like name, this entity is designed to serve as an advisory board, not a formal government agency. Co-led by Elon Musk and Vivek Ramaswamy, the board will focus on dismantling bureaucratic inefficiencies, slashing excessive regulations, cutting wasteful expenditures, and restructuring federal agencies. For more on DOGE, see our detailed analysis here.
According to the 2024 Republican Party platform, a second Trump administration would prioritize significant shifts in federal budget and appropriations to reflect its core policy goals. Education is one of the most contentious areas targeted for budget realignment. Under Trump’s proposed agenda, federal funding would be stripped from schools that promote ideologies such as Critical Race Theory or gender ideology, with those resources redirected toward initiatives championing patriotic education.
Immigration policy is another focal point of Trump’s appropriations strategy. Trump has pledged to significantly reduce federal funding for sanctuary cities and jurisdictions that fail to cooperate with immigration enforcement. Resources currently allocated to federal housing and benefit programs for undocumented immigrants would instead be redirected toward initiatives supporting veterans, including housing and healthcare. Trump has also made clear his commitment to allocating significant resources toward border security, including completing the border wall and enhancing enforcement measures at the U.S.-Mexico border. This includes potential increases in funding for the Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE).
Defense spending is also set to increase significantly under Trump’s plans. Military modernization will take center stage with a focus on advanced technologies such as missile defense systems, including an “Iron Dome”-style shield for the United States.
Looking to Trump’s first term provides valuable context for what to expect in his budgetary approach. During his previous administration, Trump proposed deep cuts to social programs, particularly housing. His fiscal year 2020 budget suggested reducing the Department of Housing and Urban Development’s budget by nearly 20%, eliminating programs like HOME, Community Development Block Grants, and Choice Neighborhoods. These proposals also included significant reductions in public housing funding and plans to eliminate hundreds of thousands of Housing Choice Vouchers. Beyond housing, Trump sought to cut funding for Medicaid expansion, food assistance programs, and arts and humanities initiatives. While many of these cuts faced significant resistance from Congress, they reflect Trump’s commitment to curbing federal spending in areas he considers nonessential.
However, implementing such sweeping changes will require navigating a challenging political landscape. While Trump wields significant influence over the Republican Party, any alterations to the federal budget must pass through Congress. With Republicans holding a razor-thin majority in the House and the expected appointment of several House members to Trump’s administration potentially narrowing that margin further, achieving a purely partisan budget will be difficult, and bipartisan negotiation may be required. There is also the possibility that legislators will not wrap up Fiscal Year 2025 funding before the end of the 118th Congress, meaning it will bleed into the new term. Republicans will also have to deal with the debt ceiling, which has been suspended under a debt-ceiling agreement through January 1, 2025. Unless a new deal is reached, the federal government will reach its borrowing limit, which could have significant implications.
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