President Trump Releases FY27 Budget Request

On Friday, President Trump released his fiscal year (FY) 2027 budget request, once again seeking to restructure the federal bureaucracy and make steep cuts to education and research—proposals that were largely rejected or at least mitigated by Congress in the FY26 appropriations bills.

Overall, the budget request, which did not include full details or forecasts of annual debt and deficits, seeks total spending of $660 billion for non-defense (-10 percent) accounts, which include funding for research and education, and $1.5 trillion for defense (+42.1 percent) accounts in FY27. More specifically, the defense proposal relies on a mix of discretionary and mandatory spending, including more than $400 billion in mandatory funding that the Administration requests through a second reconciliation bill. On the non-defense side of the ledger, the budget seeks a straightforward reduction in discretionary spending. 

In general, the budget requests funding cuts to practically every major account of interest to research universities, including NIH (-12.8 percent), NSF (-54.7 percent), Defense basic research (-9 percent), ARPA-H (-37 percent), Energy’s Office of Science (-15 percent), and NASA Science (-46.3 percent) as well as the elimination of National Endowments for the Arts and Humanities, the Agency for Healthcare Research and Quality, and many student-aid accounts, although it does request $10.5 billion to cover the Pell Grant’s projected shortfall and maintains the current maximum grant at $7,395. 

The President’s budget reflects the Administration’s priorities, and it marks the starting point in negotiations with Congress for the FY27 appropriations process. It is anticipated that these funding proposals will drive much of the debate in Congress this year – particularly given the proposals for funding some key priorities through a partisan reconciliation process. And, with midterm elections this fall, action is likely to continue through the end of the year.  

What follows is a high-level summary of the President’s request, including proposals to consolidate or restructure agencies. These funding figures are based on the materials released so far and note where these figures are unavailable or uncertain. 

The Budget 

After proposing level funding for defense last year, the President is now proposing a significant investment in defense spending, advancing a $1.5 trillion total request (combined discretionary and reconciliation funds) with an emphasis on resupplying and improving critical munitions and expanding the defense manufacturing base in the wake of the war with Iran. However, the Pentagon has not released its detailed budget documents, sharing only limited, high-level information.  

Across non-defense accounts, the request is predominantly in red ink, including for the Departments of Agriculture (-19 percent). State (-30.4 percent), Labor (-25.9 percent), and Health and Human Services (-12.2 percent) as well as EPA (-52.4 percent), NSF (-54.7 percent), and NASA (-23 percent). The size of the cut to the Department of Education (-2.9 percent) is masked by a one-time infusion of $10.5 billion to bridge the Pell Grant’s funding shortfall. 

The budget generally measures itself against FY25 funding levels rather than FY26 spending, in part because Congress only recently finalized its FY26 appropriations and perhaps to avoid the confusion of all of Administration’s interagency transfers and reductions. The budget also, in some places (like NIH and CDC) where it is proposing reorganization or consolidation, attempts to remove those accounts from its prior-year comparisons—the Administration would argue this makes the comparison more accurate while others would claim it obscures the magnitude of proposed cuts. 

Research 

For NIH, the budget proposes a reduction of nearly $6 billion (-12.8 percent). Of significant note, the budget, once again, seeks to cap indirect costs at 15 percent, despite current legal injunctions and Congressional prohibitions, and indicates that NIH will “fully fund upfront” all research project grants in 2027, a policy that was restricted by Congress in FY26 appropriations law. 

All individual Institutes and Centers, except the National Cancer Institute (+$9 million), would be cut, with the National Institute of Allergy and Infectious Disease taking the largest reduction (-$1.8 billion) , and several are again targeted for elimination, including National Institute for Minority Health and Health Disparities, the Fogerty International Center, and the National Center for Complementary and Integrative Health. Additionally, the budget proposes the transfer of the National Institute for Environmental Health Sciences to CDC (-$994 million) and the consolidation of the National Institute on Drug Abuse and the National Institute on Alcohol Abuse and Alcoholism into a new National Institute on Substance Abuse and Addiction Research. 

The budget proposes discretionary funding of $3.96 billion for NSF, a cut of nearly 55 percent from FY26. Under the proposal, the President directs NSF to prioritize investment in quantum, AI, Biotechnology , and Advanced Materials/Manufacturing, although even these accounts are reduced. The proposal also seeks to halve the budget for and number of graduate fellowships and to close out the Social, Behavioral, and Economics Directorate. The Administration estimates these cuts, taken together, would cause success rates to fall from 19 to 8 percent and the number of awards to drop from 7,400 in FY25 to 2,900 in FY27. Finally, the budget seeks to combine educational accounts with Research & Related Activities, although the chart below continues to list them separately to better track individual reductions

Despite a 13 percent overall cut to the Department of Energy’s Office of the Science, the Administration notes that the Office of Science will support the American Science Cloud – the open platform for the Genesis Mission – as well as research on national science and technology challenges through the Transformative AI Models Consortium and other investments. Separately, the budget seeks to repurpose Biden-era infrastructure/climate funds to support a new Office of AI and Quantum (AIQ), of which $1.2 billion would be used to support the operations and necessary infrastructure upgrades for multiple super computers at Argonne and Oak Ridge National Labs.

The funding and missions for ARPA-H, NASA Science, the EPA, and NIST would all also be cut at least 37 percent. 

Education

The budget requests a 3 percent cut to the Department of Education and continues the President’s efforts to dismantle the agency, transferring core, statutory functions to other agencies. In K-12 and higher education, the budget proposes consolidation of a significant number of programs into  single (but smaller) funding streams. 

As noted above, the budget proposes a $10.5 billion increase (+46.9 percent) in discretionary funding for the Pell Grant program to offset the project budget shortfall and accommodate increased participation following FAFSA simplification and the creation of the Workforce Pell program. With this infusion, the budget is able to maintain the current maximum Pell Grant ($7,395). However, the budget proposes the elimination of other foundational student aid and education programs, including Supplemental Educational Opportunity Grant, TRIO, GEAR UP, GAANN, and the Title VI/Fulbright-Hays international and foreign language education programs. The budget would also cut Work Study 90 percent and reduce the federal share of eligible wages from 75 percent to 10 percent. Like it did last year, the Department is also seeking to end federal funding for Minority Serving Institutions and cut funding for Tribal Colleges and HBCUs. 

FY27 Appropriations Process 

Although the President’s budget is an expression of the Administration’s priorities, Congress ultimately controls the appropriations process. The early response to the President’s proposal has been muted from Republicans, with many sidestepping the details, expressing support for shared goals like deficit reduction and national security, and noting the primacy of Congress’s role in determining funding. Democrats’ responses, predictably, have been negative. 

That said, appropriators in both chambers have begun the FY27 budget process in earnest, soliciting programmatic and community-project requests from Members and beginning to hold hearings with agency representatives. Those hearings will increase in frequency now that the President’s budget is public, and subcommittees are expected to begin marking up their own drafts of the FY27 spending bills later this spring and summer, providing a window into a final agreement for FY27, which ultimately will need to be bipartisan to pass the Senate.

Congressional Republicans are also taking early steps toward at least one reconciliation bill to respond to calls from the Administration for mandatory funding to meet various pressing needs. Reconciliation bills, which are triggered by budget committee action, are procedurally privileged and can pass with simple majority votes but are considered under complex and time-consuming rules and are limited to matters pertaining to spending and saving. The Administration has called for Congress to provide funding for immigration enforcement, war supplemental funding, and, in the budget request, additional defense spending. Reconciliation bills are also often a vehicle for tax matters but thus far the Administration has not proposed new action on taxes, although some members of Congress have begun to float various ideas.

With the delay to the start of the FY27 process, due the challenges completing the FY26 process (including the ongoing shutdown of DHS), and the truncated work session due to the midterm elections, many expect Congress to focus initially on a reconciliation measure (or two) and to pass at least one continuing resolution to fund the government through November and to return to DC for a lame duck session in December, with the final resolution of the FY27 budget process  shaped in large part by the outcome of the election and any change in control of the House and Senate for calendar year 2027. 

Contact

As always, Harvard’s DC-based federal relations office will remain closely engaged with peers and policymakers to advocate for research university priorities and will continue to share more detail as it becomes available. In the meantime, if you have any questions, please contact Suzanne Day (suzanne_day@harvard.edu), Kara Haas (kara_haas@harvard.edu), or Peter DeYoe (peter_deyoe@harvard.edu).