FY2026 U.S. Federal Discretionary Budget: Agency-by-Agency, Program-by-Program Guide for Government Contractors & Capture Teams
Every fall, the federal budget cycle turns into one of the most important roadmaps for companies that do business with government. The FY2026 discretionary budget requests are more than just numbers on a page, they’re signals of federal priorities, funding shifts, and opportunities that can shape your capture strategy for the year ahead.
If you’re a business leader, a government contractor, or even a policy nerd, paying attention to these details can give you a real edge. Understanding where agencies are increasing investment, whether it’s cybersecurity at DHS, Artemis exploration at NASA, or healthcare modernization at VA, can help you align proposals, forecast demand, and position your solutions before competitors even see the wave coming.
Discretionary Budgets vs. Regular Budgets: What’s the Difference?
One of the biggest misconceptions about the federal budget is that everything Congress funds is discretionary. Not true. The U.S. federal budget has two major categories:
Mandatory spending (a.k.a. “regular” or entitlement programs): This includes Social Security, Medicare, Medicaid, and other programs where funding levels are set by law. These aren’t negotiated annually, they keep flowing unless Congress changes the underlying statute.
Discretionary spending: This is what we’re talking about here, the money Congress allocates each year through the appropriations process. Defense, education, housing, transportation, health research, science programs, and more all fall under discretionary. It’s where the White House and Congress have the most annual give and take, and it’s where businesses and contractors can spot growth areas and future procurement opportunities.
Why This Matters for Capture Strategy
The FY2026 discretionary budget requests reveal which missions and projects are rising, which are consolidating, and which are shrinking. If you’re in federal contracting, this is your early-warning system. Budgets tell you:
Where the new money is going (think AI, quantum, cyber, climate resilience).
Which programs are being realigned or consolidated, potentially opening the door for innovative contractors to step in.
Where cuts may affect incumbent vendors, creating opportunities for more competitive solutions.
By breaking the budget down agency by agency, program by program, this report arms you with actionable intelligence to map your pipeline, adjust BD strategies, and strengthen your capture efforts.
Department of Agriculture (USDA)
Total FY26 Discretionary Budget Requested:
Discretionary share ~18% of USDA outlays (see USDA Budget Summary)
Requests:
WIC fully funded (~6.8M participants), maintain enhanced CVB
FSIS inspection workforce & modernization
ARS/NIFA research, extension, education
NRCS technical assistance & conservation delivery
APHIS biosecurity & regulatory actions
Justification:
Prioritize WIC access, food safety, and field TA; align research portfolios to FY26 topline; reduce duplication and empower states.
Department of Commerce
Total FY26 Discretionary Budget Requested:
~$8.5B (department total)
Requests:
NOAA: $4.515B; sustain NWS ops, satellites (NESDIS), research (OAR)
NIST: $831.9M (STRS $707.159M; ITS $37.0M; CRF $87.758M) for AI/quantum/facilities
BIS: licensing & enforcement for sensitive tech controls
ITA/BEA/Census/NTIA/MBDA: bureau CJs outline trims and focus areas
Justification:
Preserve safety-critical forecasting and observing; refocus NIST on core measurement science and critical/emerging tech while reducing overall discretionary.
Department of Defense (DoD)
Total FY26 Discretionary Budget Requested:
$961.6B (including reconciliation resources)
Requests:
Force modernization: long-range munitions, air & missile defense, resilient space
RDT&E prototypes/testing to accelerate capability fielding
Industrial base & readiness (facilities, production capacity); personnel pay/quality-of-life
Justification:
Rebuild deterrence and readiness while accelerating procurement and next‑gen technology.
Department of Education
Total FY26 Discretionary Budget Requested:
See Department of Education Budget Summary; key K-12 lines noted
Requests:
Title I-A Grants to LEAs: $18.4068B (level)
IDEA Part B – Grants to States: $14.9B; consolidates multiple IDEA set-asides into formula
Eliminate/realign several smaller K‑12 lines; consolidation strategy in CJ tables
Justification:
Hold Title I steady; simplify special-education funding while maintaining IDEA accountability.
Department of Energy (DOE) / NNSA
Total FY26 Discretionary Budget Requested:
~$46.3B DOE (excludes NNSA reconciliation)
Requests:
NNSA: increases for Weapons Activities, Naval Reactors, Nonproliferation; reconciliation lifts program level to ~$30.0B
Office of Science / EERE / Nuclear Energy / CESER: reshaped portfolios aligned to grid security & energy posture
Justification:
Prioritize nuclear security and grid/cyber resilience; streamline civilian energy R&D while sustaining lab infrastructure.
Department of Health & Human Services (HHS)
Total FY26 Discretionary Budget Requested:
$94.7B (Budget-in-Brief)
Requests:
NIH: $27.506B discretionary; structural realignments
CDC/ATSDR: $4.116B discretionary; focus on core surveillance & outbreak response
IHS: $7.909B discretionary
FDA: $3.167B discretionary ($6.755B program level incl. fees)
Justification:
Streamline org; emphasize primary care, maternal/child health, mental health/SUD, public health readiness, and program integrity.
Department of Homeland Security (DHS)
Total FY26 Discretionary Budget Requested:
$115.6B (complements reconciliation request)
Requests:
CBP/ICE: border security, enforcement, detention/removal operations
CISA: federal network defense, critical infrastructure risk reduction, cyber workforce
FEMA/TSA/USCG: disaster preparedness/response; transportation security; Coast Guard ops
Justification:
Resource border/immigration operations, strengthen cyber resilience, maintain disaster/security missions.
Department of Housing & Urban Development (HUD)
Total FY26 Discretionary Budget Requested:
Detailed in CJ; major policy shifts highlighted
Requests:
State Rental Assistance Program (new): transition from vouchers to state-run aid
Homelessness: expand ESG; repurpose prior balances for renewals
Native American Programs: NAHASDA and related credit subsidies/TA
Justification:
Streamline rental aid via state administration; consolidate homelessness funding flows to reduce barriers and speed access.
Department of the Interior (DOI)
Total FY26 Discretionary Budget Requested:
Dept. highlights ~ $14.4B; proposes U.S. Wildland Fire Service
Requests:
Create U.S. Wildland Fire Service (USWFS) at DOI to consolidate Interior + USFS wildland fire programs; FY26 exhibits show proposed accounts/amounts
Justification:
Unify doctrine/workforce and drive efficiency across federal wildfire operations (requires authorizing legislation).
Department of Justice (DOJ)
Total FY26 Discretionary Budget Requested:
$33.9B (–$2.7B vs. FY25)
Requests:
FBI/DEA/ATF/USMS: sustain core investigations & enforcement; staffing in CJ tables
BOP: inmate care, facilities operations, corrections staffing
Grants: consolidate (e.g., COPS within OJP); adjust state/local assistance lines
Justification:
Streamline grants/overhead; protect frontline law-enforcement mission; right-size via vacancy management.
Department of Labor (DOL)
Total FY26 Discretionary Budget Requested:
$8.6B; 10,821 FTE
Requests:
ETA: consolidate workforce grants into MASA (~$2.966B); maintain UI systems support
BLS: $647.952M; proposal to coordinate BLS with Census/BEA under Commerce policy direction
Justification:
Focus on frontline worker services and efficient delivery; align stats & workforce funding with market needs.
Department of State / International Programs
Total FY26 Discretionary Budget Requested:
See State FY26 CBJ hub
Requests:
Diplomatic Programs/Worldwide Ops: embassies/consulates/security/IT
Security Assistance (PM et al.): targeted partner support; oversight enhancements
MCC/related accounts: compact/threshold portfolio oversight
Justification:
Sustain core diplomatic/consular ops and prioritized foreign assistance under a reduced topline.
Department of Transportation (DOT) / FAA
Total FY26 Discretionary Budget Requested:
$27B new discretionary for DOT; historic $22B for FAA ops & infrastructure
Requests:
Controller Workforce Surge: hire up to 2,500; train ≥1,900
Safety Oversight & Cyber: production oversight & cybersecurity increases
Project LIFT: telecom modernization (copper→fiber/IP)
Radar Replacement: down payment for surveillance modernization
Justification:
Safety first, rebuild ATC staffing and modernize NAS infrastructure/cyber as traffic and new entrants grow.
Department of the Treasury
Total FY26 Discretionary Budget Requested:
See Treasury BIB & CBJs
Requests:
IRS: $9.8B appropriations (–20.2% vs FY25) + rescind $16.5B unobligated IRA funds; refocus modernization
Fiscal Service: $391.1M for payments/collections/reporting systems
FinCEN/CDFI/OFAC/TFI/DO S&E: priorities per BIB sections
Justification:
Improve taxpayer experience, payment integrity, sanctions/illicit-finance capabilities, and core financial systems at lower appropriations.
Department of Veterans Affairs (VA)
Total FY26 Discretionary Budget Requested:
~$125B discretionary (of ~$441.3B total; TEF separate)
Requests:
VHA: expand access, specialty care, mental health/suicide prevention, community care
VBA: claims processing & appeals timeliness improvements
EHR Modernization: stabilize & accelerate rollout
BRAVE: Bridging Rental Assistance for Veteran Empowerment (housing)
Justification:
Meet rising demand, reduce homelessness/suicide, and modernize IT/EHR to improve care continuity.
Environmental Protection Agency (EPA)
Total FY26 Discretionary Budget Requested:
$4.1607B (–54% vs. FY25)
Requests:
Science & Technology: $500.8M
Environmental Programs & Management: $2.482B
Superfund: $282.7M
STAG: $744.8M; reduces categorical grants & SRFs; adds $10M Water Sector Cybersecurity
Justification:
Recenter on core statutory duties, streamline workforce, strengthen permitting/partnerships, and address drinking-water cyber risks.
National Aeronautics and Space Administration (NASA)
Total FY26 Discretionary Budget Requested:
$18.8B
Requests:
Artemis & Exploration Systems: Orion, SLS/EGS, HLS services, lunar surface systems
Science: Earth/Planetary/Astrophysics/Heliophysics portfolio adjustments
Space Operations & Aeronautics/Space Tech: ISS & commercial LEO; tech maturation; aviation research
Justification:
Advance Moon‑to‑Mars and high‑value science/tech within a constrained topline.
National Science Foundation (NSF)
Total FY26 Discretionary Budget Requested:
$3.903B
Requests:
R&RA (core): prioritize AI, microelectronics, advanced wireless, biotech/biomanufacturing, quantum, and major facilities
Organizational changes: consolidate EDU & Mission Support into R&RA; establish CRSP as standalone program activity
Justification:
Target federal research where it complements private R&D and sustains U.S. tech leadership.
U.S. Army Corps of Engineers: Civil Works (USACE)
Total FY26 Discretionary Budget Requested:
See USACE FY26 press books & justification sheets
Requests:
Investigations / Construction / O&M / MR&T / HMTF / FUSRAP: project‑level details in justification sheets
Justification:
Prioritize navigation, flood risk management, ecosystem restoration, and infrastructure reliability.
General Services Administration (GSA)
Total FY26 Discretionary Budget Requested:
See GSA CJ (FBF, FAS, TTS/WCF)
Requests:
Federal Buildings Fund: life‑safety/infrastructure, backlog reduction, right‑size real estate
FAS/TTS: efficiency and digital services (incl. FedRAMP performance indicators)
Justification:
Lower government operating costs through footprint optimization and modern shared services.
Small Business Administration (SBA)
Total FY26 Discretionary Budget Requested:
See SBA CBJ & APR
Requests:
Capital/Contracting/Counseling programs per CBJ/APR
Office of Advocacy CBJ published
Office of Inspector General CBJ published
Justification:
Support small business growth/resilience with rebalanced resources and clear performance measures.
Social Security Administration (SSA): Administrative (Discretionary)
Total FY26 Discretionary Budget Requested:
$14.793B (LAE)
Requests:
Customer service & backlog reduction (field offices/call centers)
IT & Program Integrity: identity proofing, systems modernization, CDRs/SSI redeterminations
Justification:
Improve service delivery and safeguard program integrity for OASI/DI/SSI administration.
* Additional agencies and program specific data will be included as it is released and analyzed.
Want to get an agency by agency overview of shutdown contingency plans? Head over and take a look at 2025 U.S. Government Shutdown: Agency-by-Agency Contingency Plan Breakdown.
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