U.S. International Development Finance Corporation (): Fiscal Year Budget Request

Key Chapter Title List

1. Rebuild National Military Strength
2. Secure the Border
3. Achieve American Energy Dominance
4. Make America Healthy Again (MAHA)
5. Support Veterans
6. Streamline K-12 Education Funding and Promote Parental Choice
7. Make America Skilled Again (MASA)
8. Support Spaceflight
9. Realign Foreign Assistance
10. End Weaponization and Reduce Violent Crime
11. Maintain Support for Tribal Nations
12. Address Substance Abuse and Mental Health

Document Introduction

This report is based on the Fiscal Year 2026 (FY2026) discretionary spending budget proposal document submitted by U.S. President Trump to Congress on May 2, 2025. Released by the Director of the Office of Management and Budget (OMB), the proposal is positioned as a policy course correction aimed at restoring fiscal discipline, reducing the deficit, and fulfilling 2024 campaign promises. The core analysis of this report focuses on how this budget framework systematically reshapes federal government priorities, with particular attention to its significant shifts in foreign policy, international development finance, and strategic competition.

The report first outlines the macro-fiscal contours of the budget proposal. The FY2026 budget request calls for a $163 billion (22.6%) cut to non-defense discretionary spending from the current FY2025 level, with a total base discretionary funding request of $1.45 trillion, a 10.1% reduction from FY2025. The budget makes broad cuts based on a comprehensive review of FY2025 spending but explicitly protects and expands funding for the Department of Defense and the Department of Homeland Security. The budget framework reflects the administration's long-term goal of balancing the budget within a decade. However, as it does not contain detailed agency-specific requests, it is considered a "skinny budget," its contents lack legal force, and it represents only the policy intent of the administration.

The core analytical chapter of the report details the President's twelve key priorities. In the realm of national security, the budget proposes a 13% increase in Department of Defense funding, emphasizing rebuilding military strength, restoring deterrence, and listing countering China's "aggression" in the Indo-Pacific as a key focus. Correspondingly, there is a major realignment of the foreign assistance architecture: the budget proposes reorganizing and merging the U.S. Agency for International Development (USAID) into the State Department to align with the "America First" foreign policy agenda, while simultaneously expanding the functions and resources of the U.S. International Development Finance Corporation (DFC). The document explicitly states that a $3 billion revolving fund will be established for the DFC, aimed at recycling investment returns for reinvestment. This marks a strategic enhancement of development finance tools, intended to serve diplomatic and strategic competition goals through economic means.

On domestic policy, the budget demonstrates a strong ideological orientation and intent to reshape government functions. It proposes significant cuts to the Department of Education budget, moving towards its closure or downsizing, while consolidating education grants and increasing funding for charter schools to promote "parental choice." In the energy sector, the budget cancels over $15 billion in funding from the Infrastructure Investment and Jobs Act (IIJA) designated for renewable energy and carbon removal, instead directing Department of Energy funds towards fossil fuels, nuclear innovation, and reliable baseload power technologies. Furthermore, the budget proposes terminating nearly 40 Department of Justice (DOJ) grant programs to end what it terms the previous administration's "weaponization of the DOJ" and refocus resources on law enforcement priorities.

The report provides data on departmental base discretionary spending requests, offering a crucial basis for quantitative analysis of the policy shift. The data shows that compared to the FY2025 enacted level, budget requests for the Department of Defense (+$113.3 billion), the Department of Homeland Security (+$42.3 billion), and the Department of Veterans Affairs (+$5.4 billion) have increased significantly. In contrast, budget requests for the Department of State and International Programs (after accounting for rescissions and cancellations), the Department of Health and Human Services, the Department of Housing and Urban Development, the Environmental Protection Agency, the National Science Foundation, and other departments face substantial cuts. This drastic reallocation of resources visually reflects the clear intent of the "skinny budget" under the "America First" agenda to shift resources from traditional social welfare, environmental protection, and multilateral diplomacy towards the military, border security, and strategic industries.

This report is strictly based on analysis of the officially released budget proposal document, aiming to provide professional readers with first-hand information and preliminary assessment regarding U.S. FY2026 policy priorities, resource allocation trends, and strategic direction adjustments. The budget process is still in its early stages, and the final appropriations bills will be determined by Congress. However, this proposal provides an authoritative benchmark for understanding the current administration's policy framework and strategic thinking.