President Trump released his Fiscal Year 27 budget on Friday. Though the budget request is mostly performative, it serves as a starting point for Congress in negotiating a spending deal ahead of the start of the fiscal year on October 1.
Here are some key facts and figures from the President’s budget request, especially as it compares to the recent budget baseline released by the nonpartisan Congressional Budget Office (CBO) in February.
Fiscal Year 2027 Topline
Total spending would be $8.09 trillion, compared to $7.54 trillion in FY25, a 7.3% increase.
Total revenue projections are $5.92 trillion, compared to $5.24 trillion actual in 2025, a near $700 billion increase despite enactment of the Working Families Tax Cuts, which provided historic tax reductions for families, small businesses, and other job creators.
Together, this amounts to a budget deficit of $2.17 billion if the President’s budget were to be enacted, representing about a $300 billion increase to the deficit compared to 2025 enacted.
Interest on the debt is expected to reach $1.35 trillion in FY27.
President Trump’s proposed budget continues the tradition in Washington of spending beyond our means with insufficient regard for our country’s unsustainable fiscal trajectory. Not only does the budget substantially increase spending relative to last year, it falls short in efforts to find savings across all agencies. It also forecasts rosy tax revenues and GDP growth that may not materialize.
Key Spending Proposals
Despite being a net increase in spending, there are a handful of reductions that taxpayers would be pleased to see:
$52 million in savings by beginning the process of privatizing transportation security.
$372 million in savings by reducing the Essential Air Service.
$449 million in cuts to the Economic Development administration, which is often used for pet projects that waste taxpayer dollars.
$1.4 billion in savings through reforms of the Internal Revenue Service.
$2.2 billion in cuts to the National Telecommunications and Information Administration, which has a history of wasting taxpayer dollars on duplicative projects.
$4.2 billion in savings by eliminating subsidies for electric vehicle charging stations.
$12.7 billion in cuts to the Department of Education to reduce the federal government’s role in functions that should be state-level responsibilities.
$17 billion in cuts to renewable energy programs and subsidies.
These are only some of the major spending reductions in the President’s budget. There are many other initiatives to help make the federal bureaucracy more efficient and thereby save taxpayer dollars.
Key Policy Changes
Permitting Reform. The President’s budget request includes numerous changes to address the bureaucratic red tape that has strangled domestic energy and infrastructure development. Specifically, the budget directs a handful of agencies to address duplicative permitting requirements, reforms the Endangered Species Act, and creates new tools for the federal government to speed up permitting approvals. While these administrative changes can make an impact, it still does not negate the need for a broader comprehensive permitting reform bill to be passed by Congress.
TSA Fee Diversion. American travelers pay a mandatory $11.20 charge for every round-trip ticket purchase that is meant to fund the Transportation Security Administration. However, Congress passed a law diverting this $4.5 billion revenue stream toward deficit reduction instead of using it for its dedicated purpose. The President’s budget rightly addresses this problem to ensure TSA workers can receive their paychecks regardless of whether the government is shut down or not.
Spending and Revenue Red Flags
$1.4 Trillion for the Department of War. This budget increases military spending by almost 50% year-over-year. While national defense is a core responsibility of the government, particularly during this period of conflict, allocating such a large share of federal resources without spending offsets elsewhere in the budget is not a prudent way to replenish our munitions stockpiles. The Department of War consistently fails to pass an annual audit so it is rightfully concerning that such a substantial windfall could be squandered without proper oversight of these funds.
$10 Million for Trade Enforcement. This budget includes a $10 million increase in funding for trade enforcement at the International Trade Administration (ITA). While funding the ITA to monitor trade is a standard government function, using these funds to promote protectionist trade policies would only risk higher costs for American consumers and businesses.
$100 Million for Establishing the United States Investment Accelerator. This budget includes $100 million in funding for establishing the “U.S. Investment Accelerator,” which seeks to fast-track trillions in inbound investment into the U.S. While encouraging investment is obviously a worthy goal, a more effective approach is to simply get the government out of the way by lowering regulatory hurdles and allowing the private sector to make its own decisions.
Reliance on Tariff Revenues. President Trump’s use of tariffs has proven to be one of the most destructive economic policies implemented during his presidency, and largely without congressional approval. This budget continues the rosy assumptions that the tariffs would raise $1.675 trillion through 2031 despite the Supreme Court ruling the majority of these import taxes to be unconstitutional. A reliance on this figure grossly overestimates the amount of revenue that would be raised, the impact on economic growth, and job creation.
Ten-Year Projection
Normally, Table S-1 in the annual Budget of the U.S. Government publications provides a consolidated summary of revenues, outlays (including discretionary and mandatory), the resulting deficit, and the net impact on the total federal debt. In this year’s publication, this information was spread across multiple sections. The table below brings that data together to provide a clearer picture of the government’s fiscal outlook under the President’s proposal.
Projected Federal Outlays, Revenues, Deficits, and Debt under President Trump’s Proposal from 2026 to 2036 (in Billions) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | 2036 | 2027-36 | |
$7,540 | $8,093 | $8,445 | $8,653 | $8,996 | $9,280 | $9,655 | $10,179 | $10,421 | $10,647 | $11,190 | $95,560 | |
$5,476 | $5,921 | $6,288 | $6,660 | $7,137 | $7,559 | $7,984 | $8,447 | $8,891 | $9,361 | $9,846 | $78,096 | |
Deficit | -$2,065 | -$2,172 | -$2,157 | -$1,993 | -$1,859 | -$1,720 | -$1,671 | -$1,732 | -$1,529 | -$1,286 | -$1,344 | -$17,464 |
$39,016 | $41,188 | $43,345 | $45,338 | $47,197 | $48,917 | $50,588 | $52,321 | $53,850 | $55,136 | $56,480 | ||
Taken together, these projections show a persistent gap between spending and revenues over the next decade. From 2027 through 2036, cumulative deficits are projected to total approximately $17.5 trillion, adding significantly to the federal debt, which is expected to rise from roughly $39 trillion in 2026 to over $56 trillion by 2036.
Annual deficits remain above $1 trillion throughout the projection window. However, as a share of GDP, deficits are projected to decline from roughly 6% this year to below 3% by FY 2035, according to Table S-1 of the FY 2027 budget. This projected level aligns with growing bipartisan interest in targeting deficits at or below 3% of GDP as a benchmark for fiscal sustainability. However, these projections in the budget rely on sustained strong economic growth, which may not fully materialize. Further restraining spending while promoting pro-growth economic and regulatory policies would help achieve a 3% target.
Conclusion
NTU looks forward to continuing to scrutinize and analyze President Trump’s budget request and working with congressional appropriators to ensure the most fiscally-responsible package reaches the President’s desk. With our national debt now above $39 trillion, all policymakers must treat the unsustainable fiscal situation with the seriousness it deserves.