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March 12, 2026 – Don’t worry, you haven’t missed it. For those of you who have been waiting for the president’s budget to be issued, you are . . . still waiting.
Every year (usually during the first week in February), the administration puts out the president’s budget, which requests funding from Congress for the following fiscal year (FY). The president’s budget has traditionally been an opportunity for the administration to lay out its priorities and state publicly what programs and activities it wants to invest in and which it wants to cut. While Congress doesn’t have to accept what’s in the budget request (more on that later), legislators can use it as a tool to set funding levels for agencies and assess the status of government programs. The FY 2027 appropriations process has already kicked off, so appropriators are awaiting the FY 2027 president’s budget as eagerly as I am. We hear that it could come out in the next few weeks, so in the meantime, I’ll preview some key areas to watch out for in the budget.
Since the FY 2026 president’s budget was the first under the new Trump administration, it came out piecemeal, with a skinny budget first, followed by a more comprehensive request. Taken together, the pieces helped stakeholders complete the puzzle around the US Department of Health and Human Services (HHS) restructuring effort. It’s been about a year since HHS Secretary Kennedy initially announced the restructuring, which called not only for major reductions in staff, but also for fundamental structural changes to HHS, including the creation of a new agency called the Administration for a Healthy America (AHA).
While a lot of changes have occurred at HHS over the past year, the department’s structure has stayed largely the same. In addition to legal and administrative challenges, Congress’ unwillingness to adopt the new framework has prevented HHS from fully carrying out its plan. As I alluded to above, Congress does not have to accept the president’s budget request, and in the Consolidated Appropriations Act (CAA), 2026, Congress chose not to accept core HHS changes, including the creation of AHA. Instead, Congress decided to continue funding the agencies that HHS wanted to eliminate and transition to AHA, including the Health Resources and Services Administration (HRSA), the Substance Abuse and Mental Health Services Administration (SAMHSA), and parts of the Centers for Disease Control and Prevention (CDC). In some cases, Congress provided even more detailed instructions in the CAA, 2026, than it typically does in an appropriations bill for how specific programs, offices, and functions within these agencies should be funded.
You’ve probably heard the adage, if at first you don’t succeed, try, try again. That is exactly what I expect to see in the FY 2027 president’s budget. The HHS restructuring initiative remains a priority for this administration and still represents Secretary Kennedy’s vision for how HHS can operate more effectively and best carry out his Make America Healthy Again agenda. Thus, the FY 2027 president’s budget request for HHS will most likely be structured as it was for FY 2026, with specific funding requests for all the new agencies and subdivisions that HHS plans to form and no such requests for existing ones that HHS would like to eliminate.
The FY 2026 president’s budget request for HHS’s discretionary budget (funding that relies on congressional appropriations) was $95 billion, which represented an overall $32 billion or 25% cut from FY 2025 levels. Embedded within this $32 billion cut was a proposed $16 billion reduction to the National Institutes of Health (NIH) and full elimination of certain programs from HRSA, SAMHSA, and the CDC that would not be shifted to AHA. The AHA congressional justification listed dozens of programs from these agencies that the administration proposed for elimination.
While Congress did not accept these reductions (in fact, Congress provided a slight increase in funding for NIH), it is unclear whether the FY 2027 president’s budget will again propose these reductions in full. The administration could continue to push for bold changes to funding levels for existing programs or, based on how Congress responded to the FY 2026 request, decide to temper these reductions. Because one of this administration’s priorities is to create a leaner and more efficient government, the FY 2027 president’s budget likely will still include some reductions to current funding levels and request to eliminate certain programs. However, the scale of these proposed reductions remains to be seen at this point.
Typically, president’s budgets have included both discretionary budget requests and mandatory budget proposals (ideas for how to reform existing programs such as Medicare and Medicaid that do not rely on annual appropriations). The FY 2026 president’s budget only included discretionary requests.
The One Big Beautiful Bill Act and the CAA, 2026, included several modifications to Medicare, Medicaid, and the private insurance market that will keep HHS busy for the foreseeable future. However, the FY 2027 president’s budget could still ask Congress to modify existing entitlement programs with any eye to key priorities, including:
Specific legislative proposals in previous president’s budget requests have become law in the past, so the administration could use this budget as an opportunity to put more options on the legislative menu for Congress to consider going forward.
As someone who worked on eight president’s budgets during my tenure at HHS, I appreciate what it takes to create the budget and, once it’s released, how different stakeholders interpret it. In my opinion, it remains one of the most consistent and comprehensive mechanisms for each administration to lay out its vision and priorities and for Congress and the public to better understand how programs are currently operating and how HHS believes that they should run going forward. When the FY 2027 president’s budget is released in the coming weeks, you can expect McDermott+ to do a full analysis. Stay tuned!
Until next week, this is Jeffrey saying, enjoy reading regs with your eggs.
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