The Federal Budget for FY2026: How does it work, and how is it changing?

The federal budget negotiations have been a constant topic of news coverage for the last few months, inducing headlines such as “Trump Seeks to Cut Basic Scientific Research by Roughly One-Third, Report Shows” and “Under Trump, NSF faces worst crisis in its 75-year history.” Unprecedented changes to previously consistently-funded institutions have been proposed, prompting such commanding headlines following President Donald Trump’s inauguration in January. Discussions arrived at a head this week on Oct. 1st, however, resulting in an indefinite government shutdown. Throughout this article, we intend to comprehensively explain the process of federal budget negotiations, how discussions have proceeded since the president’s budget request in May, the negotiations occurring during the shutdown, and the predicted outcomes of these fiscal negotiations on the present state and future of each agency.

The government shuts down when Congress cannot agree on the degree of funding appropriations for all federal agencies such as the Environmental Protection Agency, the Department of Education, and the Department of Commerce by the beginning of the fiscal year on Oct. 1. When a shutdown occurs, most federal functions are paused aside from those deemed “essential,” including operations involving border patrol, hospital care, and air-traffic control, among others. Any agencies classified as non-essential temporarily place most employees on unpaid leave, and their work is typically reduced or entirely paused. As a result, many day-to-day government functions upon which citizens rely are lessened or slowed; these functions include travel delays, increased vandalism at National Park sites, reduced food assistance programs, and potential changes to grants and loans.

Only twenty federal government shutdowns have occurred since the first instance in 1976. While shutdowns have become less frequent in recent decades, their duration has gradually expanded in an increasingly polarized Washington. Prior to Oct. 1, the last government shutdown occurred from Dec. 22, 2018 to Jan. 25, 2019 during President Trump’s first term, setting the record for the longest government shutdown in United States’ history. The 2018 shutdown involved seven of the twelve appropriations bills. Today, however, the shutdown is a full shut down; in other words, none of the twelve appropriations were agreed upon. As a result, all functions of the government are being called into question.

In response to the shutdown, many decisions are still to be determined. President Trump has called the shutdown an "unprecedented opportunity” to implement broad cuts to federal agencies while under pause. The shutdown is being blamed on Democratic Senators, and neither side is appearing to concede on any negotiations. In order for the shutdown to end, agreements will have to be made. But for the time being, the end of this shutdown does not seem near.

The proposed cuts have yet to be finalized, as evidenced by the current government shutdown. Nevertheless, the figures proposed by the Republican majority in Congress are certainly alarming for the scientific community. The suggested funding for NASA, for instance, expects the agency’s science funding to be cut by around 50% and its overall budget by around a quarter, potentially stalling a myriad number of NASA projects. While Trump’s “Big Beautiful Bill Act” allocated NASA $10 billion towards Artemis Program, NASA’s program to return humans to the Moon, the cuts to the agency are still likely to negatively affect several other areas of NASA’s operations. These cuts will likely impede the continued operations of several satellites and telescopes, such as the Hubble Space Telescope, and are likely to cancel future launches. Even activities on Mars, such as the continued operation of several rovers and orbiters, are likely to be affected. These cuts would affect much more than the United States’ operations in space, however. NASA’s research is essential for weather forecasting and climate data collection, and these cuts are set to impact areas of research such as the Landsat program, which is essential for observing weather and precipitation patterns.

The US National Science Foundation (NSF) has also seen itself as a target of budget cuts. While many of the NSF’s grants towards research in universities have been cut in recent months by the White House, the agency itself is now facing a proposed 57% cut in funding under Trump’s budget proposal. The NSF is responsible for funding 25% of federally backed research at universities, and these cuts are sure to result in the elimination of countless research projects. Certain areas of research are being targeted by the cuts, such as clean-energy research having its budget reduced by 99%. Federal grants for research are set to become much more competitive, with the acceptance rate projected to decrease from 26% to 7%. And although the Trump administration has stated that they would continue to prioritize artificial intelligence and quantum information science, their funding increases are still not projected to keep up with inflation.

Though federal employees will bear the initial brunt of government shutdown, an extended impasse could have numerous consequences for federal agencies and citizens. While some essential government functions will continue as normal, many could experience service interruption, delays, or indefinite cancellation. Considered with expected changes to the federal budget, the prospective potential impacts are discussed below.

Department of Education

Title I and IDEA grants will continue to be available. New grant applications and processing as well as civil rights investigations will be put on pause. A shutdown lasting a week or more could see interruptions to federally funded programs like Head Start. The department’s shutdown contingency plan explains that state and local education departments should expect to receive funding for those programs that, “if not continued, would prevent or significantly damage the execution of funded functions.”

Student Financial Aid

The Free Application for Federal Student Aid (FAFSA) and student aid programs will continue to be available.

Safety-net Programs

Medicaid, Medicare, and social security benefits will continue without disruption. Federal nutrition assistance programs, however, are at high risk. An extended shut down could cause significant interruptions to the supplemental Nutrition Program for Women, Infants, and Children (WIC), which provides food resources to thousands of families nationally. The Supplemental Nutrition Assistance Program (SNAP) is expected to continue unaffected.

Department of Health and Human Services

Proposed budget cuts would see a funding reduction of 5 billion USD to the Center for Disease Control (CDC). Downturn in state-level GDP and widespread job loss are predicted as a result. Local and state public health initiatives are especially vulnerable, as their programming is largely supported by federal funding.

Under the government shutdown, CDC activities including monitoring of disease surveillance data, applied public health research, and health communication efforts will be halted. The National Institute of Health (NIH) will maintain clinical operations in support of current patients, and will temporarily discontinue new grant conferrals and management, some research activity, and graduate student and post-doctoral training at NIH facilities.

Environmental Protection Agency (EPA)

The government shutdown will see EPA operations reduced by almost 90%. These shifts come in the aftermath of staff cuts and policy restrictions experienced by the agency earlier in the year.

In line with the contingency plan updated in early September, the shutdown will force a standstill in new grant conferrals, approvals of state pollution regulation requests, and most ongoing research efforts. Public hotlines for reporting air, water or other suspected pollutants are unlikely to be attended to, and non-criminal pollution inspections will be stopped. Clean-up efforts at Superfund sites will cease, except in cases “where public health would be at risk.”