President Donald Trump unveiled a controversial 7.1 trillion federal budget proposal that would slash 1.2 trillion from social safety nets while increasing defense spending to record levels, setting the stage for a fierce election-year budget battle.

Key Provisions:

• The proposal would reduce federal Medicaid and Affordable Care Act subsidy spending by 25% over five years, amounting to $1.2 trillion in cuts

• The proposed $886 billion defense budget would set a new peacetime spending record, exceeding current levels by 12% in inflation-adjusted terms

• Sixty-two longstanding federal programs would be axed entirely under the proposal, with cultural institutions like PBS and the NEH among the highest-profile casualties

• A proposed 10% across-the-board tariff on all imported goods would generate an estimated $300 billion annually to help finance sweeping income tax reductions

Political Fallout:
“This is class warfare disguised as fiscal responsibility,” charged Senate Majority Leader Chuck Schumer (D-NY), while House Speaker Mike Johnson (R-LA) praised its “return to constitutional spending priorities.”

Economic Impact:

• CBO trigger 2.1 million job losses within three years

• Defense stocks surge pre-market

• Hospital associations warn of rural facility closures