TRAVIS SHARP, CASEY NICASTRO and EVAN BRADEN MONTGOMERY
By month’s end, Congressional leaders expect the Trump administration to release a “skinny budget” containing topline spending amounts for the Defense Department. Though specifics will come later, the choices that shape this fiscal 2026 skinny budget will set policy direction for the next four years.
This first budget submission will surely reflect the administration’s interim strategic guidance, which reportedly downgrades Europe relative to Asia. It will also showcase the administration’s ongoing push to shrink the Defense Department civilian workforce. Most importantly, it will reflect the results of the 8-percent spending shift directed by Secretary Hegseth. In February, he tasked defense organizations to prepare lists of lower-priority activities totaling 8 percent of their 2026–2030 projected budgets—some $365 billion over five years that may be reallocated elsewhere. He also identified 17 high-priority areas that were to be protected from funding reductions.
The Center for Strategic and Budgetary Assessments got some early insight into the hard choices involved with the skinny budget and spending relook. Back in January, we conducted an exercise to assess how to adjust defense spending to meet the China challenge. Participants joined from across the U.S. government, defense industry, and think tank community. They wrestled with what to fund based on different strategies for stopping a Chinese invasion of Taiwan and different trajectories for defense budgets.
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