President Donald Trump on May 2, 2025, released his fiscal year (FY) 2026 discretionary budget request outlining his administration's high-level spending priorities for the coming year. Known informally as the "skinny budget," the document serves as a policy blueprint rather than binding legislation, signaling the administration's preferred direction ahead of the formal appropriations process.
The topline proposal holds overall discretionary spending flat while increasing defense and homeland security investments, offset by a proposed 22.6 percent reduction in nondefense spending. Within the U.S. Department of Energy (DOE), the budget reflects a targeted reorientation of funding toward technologies that align with the administration's energy, industrial and national security priorities.
DOE Budget Overview
The administration calls for the cancellation of more than $15 billion in unplanned and unobligated Infrastructure Investment and Jobs Act (IIJA) funding previously allocated to the DOE. Specifically called out within those figures is funding for renewable energy demonstration projects, direct air capture and clean energy deployment initiatives. These cancellations reflect a broader pivot and reorientation of funding toward "research and development of technologies that could produce an abundance of domestic fossil energy and critical minerals, innovative concepts for nuclear reactors and advanced nuclear fuels, and technologies that promote firm baseload power," according to a White House press briefing. The budget also notes that the $15 billion in canceled IIJA funds would "not impact any currently awarded projects."
Within the DOE's topline request:
- The Office of Energy Efficiency and Renewable Energy (EERE) would be reoriented toward early-stage research and development, eliminating funding for climate-oriented deployment initiatives and what the administration describes as "Green New Scam interests." The budget criticizes EERE's regulatory footprint – including standards affecting gas stoves and incandescent lightbulbs – and proposes a $2.57 billion (74 percent) reduction from FY 2025 levels.
- The Office of Fossil Energy and Carbon Management would return to its original purpose of researching technologies that expand domestic fossil energy and critical mineral production. The proposed $270 million (31 percent) reduction reflects the elimination of programs the administration believes have drifted into climate policy rather than fossil energy innovation.
- The Office of Nuclear Energy would see a $408 million (24 percent) cut, with remaining funding focused on what the administration deems "essential" to national nuclear leadership – such as reactor development, advanced nuclear fuels and support for the Idaho National Laboratory.
- The Office of Science would face a $1.15 billion (14 percent) reduction, largely tied to climate and renewable energy research. However, the budget preserves funding in emerging national priority areas, including artificial intelligence (AI), quantum information science, fusion and critical minerals.
- The Office of Environmental Management (EM) would be reduced by $389 million (5 percent). This reflects the transfer of responsibilities for the Savannah River Plutonium Processing Facility to the National Nuclear Security Administration, while continuing legacy cleanup activities at the Hanford site and other locations.
- ARPA-E (Advanced Research Projects Agency-Energy) would be reduced by $260 million (57 percent), justified by the administration as a return to "fiscally responsible" levels for high-risk, high-reward research. The budget criticizes past ARPA-E projects as emblematic of federal overreach into speculative technologies.
Offices Not Listed in Skinny Budget
Importantly, the FY 2026 skinny budget does not cover all offices at the DOE, including the Loan Programs Office, Office of Clean Energy Demonstrations, Office of Manufacturing and Energy Supply Chains, Office of Electricity, Grid Deployment Office and many others. Though the budget rescinds many climate-related grant authorities, it provides little detail into many offices and their broader department priorities.
What Comes Next
Expect to see more details on the full FY 2026 presidential budget in the coming weeks and months; however, Congress will ultimately decide which of these proposals will survive the appropriations process. Still, the president's FY 2026 request offers clear insight into the administration's energy policy trajectory – one that favors fossil energy, nuclear innovation and domestic supply chains over the clean energy deployment initiatives emphasized in prior years.
DOE Secretary Chris Wright will testify on the president's FY 2026 budget proposal before the House Energy and Water Development Subcommittee on Appropriations on May 7, 2025, and answer questions from members of the subcommittee.
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