President Donald Trump on April 3 unveiled a fiscal year 2027 budget proposal that assumes $1.5 trillion in US defense spending, a more than 40% annual increase, with offsets partially coming from clean energy and environmental programs.
In a 92-page summary, the White House Office of Management and Budget highlighted proposals to repurpose unobligated funds for investments in new and existing thermal power resources and critical mineral supply chains.
The White House's latest budget blueprint again seeks to cut the US Environmental Protection Agency's budget by more than half, although previous Trump administration efforts to slash EPA funding have largely been rejected by Congress.
Funding for the US Energy Department, US Interior Department and the EPA runs through Sept. 30 under a bipartisan fiscal year 2026 appropriations package passed in January, which included new limits on the administration's ability to reprogram appropriated funds.
Since then, the Republican Party's majority in the US House of Representatives has shrunk. After accounting for vacancies, Speaker Mike Johnson (R-La.) can currently lose only one Republican vote while meeting the minimum threshold for advancing legislation.
Republicans currently hold a majority of 53 seats in the US Senate, with Democrats controlling 45 seats alongside two registered independents.
Trump's proposed fiscal year 2027 budget assumes $350 billion in new defense spending enacted through budget reconciliation procedures amid ongoing US military operations in the Middle East. Budget reconciliation requires a simple majority vote in the US Senate, whereas regular legislation typically must overcome the chamber's 60-vote filibuster threshold.
Congress has limited time to complete its annual appropriations work while Republicans pursue a potential party-line budget reconciliation package. The House and Senate are expected to be in session for about two months before the Sept. 30 funding deadline, with both chambers scheduled to break for most of August. Even after the deadline, Congress is slated to be out nearly all of October ahead of the Nov. 3 midterm elections.
DOE, Interior funding
The DOE requested $53.9 billion in fiscal year 2027 discretionary funding, a nearly 10% increase from fiscal year 2026 enacted levels when excluding nearly $3.9 billion in additional funding provided by Republicans' July 2025 budget reconciliation law.
Discretionary nuclear defense funding would increase by $3.6 billion, or roughly 12%, while the DOE proposed a 40% budget cut for what had previously been the DOE's Office of Renewable Energy and Efficiency. Under a reorganization announced in November 2025, the office was renamed the Office of Critical Minerals and Energy Innovation, with proposed FY'27 funding set at $1.1 billion.
Notably, the DOE proposed to repurpose $3.5 billion in unobligated funding from the Infrastructure and Investment Jobs Act (IIJA), also known as the 2021 bipartisan infrastructure law, to "preserve" 9 gigawatts of existing baseload power and add another 9 GW to 13 GW of new capacity.
Those figures include 4 GW of uprates for existing coal-fired resources and 2 GW of battery storage, according to the DOE's fiscal year 2027 budget brief. The repurposed IIJA funds would also support 8 GW of new and existing gas-fired capacity through pipeline infrastructure upgrades, as well as 500 megawatts to 750 MW of nuclear uprates, the DOE said.
The DOE's Office of Electricity, which is responsible for US power grid modernization and expansion, would see a 22% budget cut from fiscal year 2026 enacted levels. The DOE's Office of Nuclear Energy would also see a 9% year-over-year budget cut, with most of the reductions coming from fuel cycle research and development. The Cybersecurity, Energy Security and Emergency Response office within DOE would receive $160.1 million, nearly 16% less than fiscal year 2026 enacted levels.
The Interior Department's fiscal year 2027 request would slightly boost funding for federal oil, gas and coal management activities. The July 2025 reconciliation law requires at least two offshore lease sales per year in the Gulf of Mexico and a minimum of six offshore lease sales in Alaska's Cook Inlet through 2032.
Interior's proposed budget would also zero out line items for renewable energy management activities. At the same time, the department's budget brief anticipates federal receipts for onshore renewable energy leasing to more than double from an estimated $21 million in fiscal year 2026 to over $43 million in fiscal year 2027.
Permitting for wind and solar projects sited on federal land has been a key sticking point for Democrats amid ongoing bipartisan permitting reform negotiations, with Senate negotiators recently citing positive momentum on solar applications.
SPR, critical minerals funding
The DOE's fiscal year 2027 request includes $295 million for the US Strategic Petroleum Reserve (SPR), an increase of $89 million from fiscal year 2026 enacted levels, for maintenance and construction activities. The July 2025 budget reconciliation legislation separately included $171 million for refilling the reserve, which contained 415.4 million barrels of crude as of March 6, according to the DOE. The SPR has a designed storage capacity of approximately 714 million barrels.
The DOE is releasing 172 million barrels as part of a coordinated drawdown with the International Energy Agency to suppress war-related shocks to global oil markets.
According to the DOE, the SPR drawdown involves swaps expected to replenish the reserve with about 200 million barrels within the next year, at no cost to US taxpayers.
The administration's budget also proposed nearly $13 billion in funding through various agencies to rebuild and secure critical mineral supply chains, including $394 million for DOE pilot-scale demonstrations.
Trump has implemented several policies to enhance domestic critical minerals processing, including "Project Vault," a critical minerals reserve, preferential trading zones, and bilateral critical minerals frameworks.
Other priorities include $5 billion through the America First Opportunity Fund to mobilize funds for national security interests and $135 million for the National Oceanic and Atmospheric Administration, with funding to support deep-sea mining and exploration.
EPA funding
The Trump administration proposed to slash the EPA's fiscal year 2027 discretionary budget by $4.2 billion, or 52%, just below the 54% cut it sought for fiscal year 2026. Congressional appropriators ultimately settled on a 4% cut for the agency.
The largest cut would come from a $2.5 billion reduction in revolving funds for state water projects, which the agency said are subsidized by EPA programs "that do not operate as originally intended." Another $1 billion would be trimmed from EPA grants to states.
"With most environmental statutes [such as] the Clean Air Act, Clean Water Act etc., having been on the books for a decade, states and local government should be capable and empowered to fund their own environmental programs to comply with the law," the EPA said in its budget brief.
Many states do not have the resources to take on the work done by EPA staffers laid off in the last year, critics have warned. The agency has lost more than 4,000 employees since Trump took office in early 2025, according to a tally by the Environmental Protection Network, an association of former EPA employees.
After canceling most of its environmental justice programs over the past 15 months, the EPA said it will continue "the full elimination" of grants promoting such initiatives in its fiscal year 2027 budget, although the request did not include a figure on what savings the cuts will bring.
