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Energy and Water Development and Related Agencies appropriations (E&W) bills typically include funding for civil works activities of the U.S. Army Corps of Engineers (USACE) in the Department of Defense, in Title I; the Department of the Interior's Bureau of Reclamation (Reclamation) and Central Utah Project (CUP), in Title II; the Department of Energy (DOE), in Title III; and a number of independent agencies, including the Nuclear Regulatory Commission (NRC) and the Appalachian Regional Commission (ARC), in Title IV.
President Donald J. Trump sent his initial FY2026 appropriations request to Congress on May 2, 2025. The initial submission issued by the White House Office of Management and Budget (OMB), sometimes referred to as the "skinny budget," includes broad budgetary outlines, reductions, additions, and initiatives.1 The total request for all agencies funded by the E&W bill is not specified. The Trump Administration has indicated that a more detailed budget request is to be submitted later in the year.
On May 30, 2025, OMB released the FY2026 Budget Appendix, which includes some additional details.2 Federal agencies are expected to release detailed congressional budget justifications as they are completed. Funding for E&W agencies could also be affected by actions of the 119th Congress regarding supplemental appropriations and rescissions, as well as by mandatory funding provisions from past and contemplated budget reconciliation measures. Advance funding for E&W agencies in FY2026 has been appropriated by the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58). In addition, the budget reconciliation measure from the 117th Congress commonly referred to as the Inflation Reduction Act of 2022 (IRA; P.L. 117-169) included funding for some E&W agencies to remain available through as long as FY2031.
TheIn the 119th Congress, the budget resolution passed on April 4, 2025 (H.Con.Res. 14) started a budget reconciliation process that could result in rescissions of previous appropriations and changes in mandatory spending. Pursuant to the budget resolution, the House passed a reconciliation bill (H.R. 1) on May 22, 2025. This bill includes rescissions toprovisions that would rescind funds for several programs established and/or funded by the IIJA and the IRA, as well as modification or elimination of certain energy-related tax provisions in the IRA.
modify or eliminate certain energy-related tax provisions in the IRA.
Potential issues for Congress in considering the FY2026 budget request include a proposed 84% reduction in funding for energy efficiency research and development (R&D), elimination of funding for R&D in solar and wind energy technologies, a 57% reduction for the Advanced Research Projects Agency – Energy (ARPA-E), and termination of all the federal regional authorities and commissions except for the Appalachian Regional Commission. Proposed funding increases that could be of interest to Congress include $750 million to support nuclear reactor loan guarantees and a request for $4.8 billion in reconciliation funding for nuclear weapons activities. The interaction of reconciliation actions with regular annual appropriations could add complexity to congressional deliberations over the FY2026 budget.
Along with IRA and IIJA advance appropriations, FY2025 E&W funding is provided by the Full-Year Continuing Appropriations and Extensions Act, 2025, which was signed by President Trump on March 14, 2025 (Continuing Appropriations Act,; P.L. 119-4). The Continuing Appropriations Act provides annual appropriations for FY2025 at the FY2024 level for most E&W programs; that is, the act is a full-year continuing resolution. For details on E&W programs and FY2025 funding, see CRS Report R48097, Energy and Water Development: FY2025 Appropriations, by Mark Holt and Anna E. Normand.
The following sections of this report describe the funding requests for E&W agencies in the Administration's initial FY2026 budget submission to Congress on May 2, 2025, and subsequent budget documents.
For USACE, the Administration is requesting $6.7 billion for FY2026, a reduction of $2.0 billion (-23%) from the FY2025 enacted amount. The request states that it would reduce funding for the Harbor Maintenance Trust Fund by $1.1 billion.23 According to the Administration request, funding for USACE would focus on federal responsibilities, such as ship channel dredging, as opposed to nonfederal activitiesresponsibilities, such as dredging of berths. The request also would eliminate funding for USACE loans and loan guarantees for nonfederal water projects under the Water Infrastructure Finance and Innovation Act (WIFIA; P.L. 113-121, Title V, Subtitle C), a reduction of $7 million. ThisThe topline budget request doesdid not specify what other accounts would receive reductions and what activities those reductions would affect. At the House Appropriations Energy and Water Development Subcommittee hearing on May 21, 2025, testimony from the office of the Assistant Secretary of the Army for Civil Works did not provide further details regarding the request.3On May 30, 2025, USACE released a press book providing the list of projects requested to receive funding and funding levels for each USACE account.4 In past fiscal years, USACE has subsequently released detailed budget justifications for its accounts.5
The Administration is requesting $1.2 billion for Reclamation and CUP in FY2026, a reduction of $609 million (-34%) from FY2025. Reclamation manages water storage and delivery projects in 17 western states. The proposed reduction would eliminate funding for activities, such as fish and wildlife habitat restoration, that the request says are unrelated to the agency's core missions.4
The Administration is requesting $45.1 billion for DOE in FY2026, a reduction of $5.1 billion (-10%) from the FY2025 enacted amount. Most of the proposed funding reductions are for energy and science programs. A relatively small reduction is proposedscience and applied energy programs. An overall increase—including proposed mandatory spending—is requested for the National Nuclear Security Administration (NNSA), which is the largest element of the DOE budget. DetailsDOE released summary documents for its FY2026 congressional budget justification, including a "Budget in Brief," on May 30, 2025.8 Details from budget request documents that were released by the date of this report are provided in the subsections below.
The Administration is requesting $24 billion for NNSA in FY2026, a reduction of $135 million (-1%) from FY2025. The discretionary request for NNSA also includes $6 billion in "reconciliation resources," for a total of $30 billion in FY2026.530.0 billion for NNSA in FY2026, including $4.8 billion in mandatory funding to be provided through the congressional budget reconciliation process (which, as previously noted, is part of ongoing congressional deliberations of the 119th Congress). The total of $30.0 billion would be an increase of $5.9 billion (24.5%) over the FY2025 enacted amount of $24.1 billion. The discretionary funding request of $25.3 billion would be an increase of $1.1 billion (4.7%) above the FY2025 enacted amount. The requested $4.8 billion in mandatory spending would be applied entirely to the Weapons Activities account, for a total of $24.9 billion, an increase of $5.6 billion (29%) over the FY2025 enacted level.9 NNSA is a semiautonomous DOE agency responsible for nuclear warheads, naval reactors, and nuclear weapons nonproliferation.
The Administration is requesting $888 million for EERE in FY2026, a reduction of $2.572 billion (-74%) from FY2025. The budget would focus on early-stage research and development to "support technologies that promote firm baseload power and other priorities established in relevant Executive Orders, such as bioenergy," according to the request.6
The Administration is requesting $7.092 billion for Science in FY2026, a reduction of $1.148 billion (-14%) from FY2025. According to the Administration request, funding would be reduced for climate change and "Green New Scam research." Funding would be maintained for "priority areas such as high-performance computing, artificial intelligence, quantum information science, fusion, and critical minerals."7
The Science program could be affected by recently issued DOE grant policies. On April 11, 2025, DOE announced "updated policies, procedures, and general decision-making criteria for establishing indirect cost rates when awarding grants to IHEs [Institutions of Higher Education]."813 According to the policy, DOE will no longer use the negotiated indirect cost rate for grants awarded to IHEs; instead, DOE is setting a standardized 15% indirect cost rate for all grant awards to IHEs.914 A federal lawsuit filed by several affected IHEs cited previously negotiated indirect cost rates ranging up to 62%.10 Lower15 While lower indirect cost rates may reduce the total federal cost of a research grant, lower indirect cost rates may affect institutions' assessment of conducting research for the Office of Science and may change their willingness to apply for grants in the future.11
Separately, policies were issued on May 8, 2025, that also changed the indirect cost rates DOE would pay to state and local governments, nonprofit organizations, and for-profit organizations.1217
The Administration is requesting $8.093 billion for Environmental Management (EM), which handles cleanup of radioactive facilities and waste management, in FY2026, a reduction of $389 million (-5%) from the program's FY2025 enacted amount of $8.482 billion. According to the request, about $178 million of the reduction results from a transfer of management responsibilities for the Savannah River Site in South Carolina from EM to NNSA. The request says EM funding for the Hanford Site in Washington State—the most extensively contaminated DOE site—would remain unchanged; the reduction would be spread among other EM sites.
The Administration is requesting $200 million for the Advanced Research Projects Agency ‒ Energy (ARPA-E)ARPA-E, which supports research on high-risk but potentially transformative technology, in FY2026,. This would be a reduction of $260 million (-57%). According to the budget request, this level would reduce funding for ARPA-E from $460 million enacted for FY2025.18 According to OMB, funding for ARPA-E would be reduced "to a fiscally responsible level for high risk, high reward research advancing reliable energy technologies and other critical and emerging technologies. Green New Scam technologies are not supported."1319 As discussed above, ARPA-E's research program may be affected by DOE's recent changes to indirect cost rates for IHE grants.
The Administration is requesting $1.277370 billion for Nuclear Energy in FY2026, a reduction of $408315 million (-24%)19%) from the FY2025 enacted total of $1.685 billion. According to the request, the budget would reduce "non-essential research" to focus on "developing innovative concepts for nuclear reactors, researching advanced nuclear fuels, and maintaining the capabilities of the Idaho National Laboratory," which is DOE's lead nuclear laboratory.14
The Administration is requesting $595 million for Fossil Energy in FY2026, a reduction of $270 million (-31%) from the FY2025 enacted amount of $865 million. The request says, "The Budget restores the name and function of the Office of Fossil Energy to its original purpose, which is funding for the research of technologies that could produce an abundance of domestic fossil energy and critical minerals."1521 Under the Biden Administration, the office was called "Fossil Energy and Carbon Management" to reflect a focus on carbon emissions and climate change.
For the Title 17 loan guarantee program, the request includes $750 million to pay the credit subsidy cost (to cover potential losses to the federal government) for loan guarantees for small modular nuclear reactors, which DOE describes as "an immediate priority."22 The budget request cancels previous loan authority but would provide an additional $30 billion in lending authority for geothermal, hydropower, or bioenergy projects, transmission and distribution projects, advanced fossil energy projects, advanced nuclear energy facilities, refineries, and critical minerals supply projects.23
Cancellation of IIJA and IRA AppropriationsThe Administration request calls for cancellation of $15.247 billion of IIJA advance appropriations for renewable energy, carbon capture from the air, electric vehicles and batteries, "and other costly technologies burdensome to ratepayers and consumers."1624 It also would cancel funding for carbon dioxide sequestration pipelines and related transportation projects under the Carbon Dioxide Transportation Infrastructure Finance and Innovation Program established by IIJA Section 40304.
Separately, if enacted, Section 41001 of H.R. 1, as passed by the House, would rescind all unobligated balances of IRA appropriations for several DOE programs, including loan programs, power line grants, offshore wind planning, and advanced industrial facility deployment.
Funding for six federal regional commissions and authorities (FRCAs) would be eliminated under the President's FY2026 request. FRCAs use appropriations for economic development and energy reliability and security grants in their respective regions.
The FY2025 Continuing Appropriations Act provided funding for seven of the 10 authorized FRCAs: (1) the Appalachian Regional Commission (ARC), (2) the Delta Regional Authority (DRA), (3) the Denali Commission, (4) the Great Lakes Authority (GLA), (5) the Northern Border Regional Commission (NBRC), (6) the Southwest Border Regional Commission (SBRC), and (7) the (7) Southeast Crescent Regional Commission (SCRC).1725 Six of the seven FRCAs that received FY2025 appropriations are considered active.1826 The Continuing Appropriations Act also provided $5 million for the GLA, which was not active as of the date of publication.19
Slated for defunding in the FY2026 budget request are the DRA, Denali Commission, GLA, NBRC, SBRC, and SCRC. According to the request, "States and local governments are better positioned to fund and address unique regional and geographic economic development challenges."28 The DRA, Denali Commission, NBRC, and SCRC released summary documents for their FY2026 congressional budget justifications in May 2025 that include additional details for how they plan to use unobligated balances to conduct orderly closeouts of the agencies.29 The appropriations for the largest regional authority in the E&W bill, the ARC, would be reduced from $200 million in FY2025 to $14 million in FY2026 (-93%), while continuing to use remaining funding, including advance appropriations provided by the IIJA, for grantmaking.20
FRCAs have been previously proposed for elimination in presidential budgets, but have continued to receive subsequent appropriations from Congress. For instance, in May 2017, during the first Trump Administration, the President's FY2018 Budgetbudget request proposed closeout budgets (i.e., funding amounts that would be provided only for the purpose of closing down the agencies) for most of the FRCAs and proposed "statutory authority to transfer outstanding grant obligations and associated administrative and oversight responsibilities to the Department of Agriculture." 2132 In March 2018, the Consolidated Appropriations Act, 2018 (P.L. 115-141) provided a total of $225.3 million to five of the FRCAs, and the entities continued to operate.22
| 1. | The Nuclear Regulatory Commission, the largest of the E&W independent agencies, would receive $971 million under the FY2026 request, an increase of $27 million (3%) over the FY2025 enacted amount. NRC licenses and regulates nuclear reactors and radioactive materials. NRC's FY2026 funding request would be offset by fees paid by the nuclear industry, estimated at $819 million for FY2026.34 |
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U.S. Congress, House Appropriations Committee, Energy and Water Development and Related Agencies Subcommittee, Fiscal Year 2026 Budget Requests for the Army Corps of Engineers (Civil Works) and the Bureau of Reclamation, 119th Cong., 1st sess., May 21, 2025. |
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Department of the Army, Office, Assistant Secretary of the Army (Civil Works), Fiscal Year 2026 Civil Works Budget of the U.S. Army Corps of Engineers, May 2025, https://www.usace.army.mil/Portals/2/docs/civilworks/budget/FY2026_Army_CW_Budget_Pressbook.pdf. 5.
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U.S. Army Corps of Engineers, "Civil Works Budget and Performance," https://www.usace.army.mil/Missions/Civil-Works/Budget. |
OMB, "Discretionary Funding Changes," p. 28. |
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OMB, "Discretionary Funding Changes," p. 44, and Testimony of Secretary Christopher Wright, U.S. Department of Energy, before the U.S. House Committee on Appropriations, Energy and Water Development and Related Agencies Subcommittee, Budget Hearing – U.S. Department of Energy, 119th Cong., 1st sess., May 7, 2025, p. 5, https://docs.house.gov/meetings/AP/AP10/20250507/118188/HHRG-119-AP10-TTF-WrightC-20250507.pdf. Section 20008 of H.R. 1 would provide $3.24 billion in additional appropriations for NNSA in FY2025. |
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Department of the Interior, Fiscal Year 2026: The Interior Budget in Brief, May 2025, pp. BOR-1 to BOR-5, https://www.doi.gov/budget/appropriations/2026/highlights. 8.
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Department of Energy (DOE), FY 2026 Congressional Justification, May 30, 2025, https://www.energy.gov/cfo/articles/fy-2026-budget-justification. This site is expected to include detailed budget justification volumes as they are completed. 9.
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DOE, FY2026 Congressional Justification, Budget in Brief, May 2025, p. 24, https://www.energy.gov/sites/default/files/2025-06/doe-fy-2026-bib-v6.pdf; and OMB, Technical Supplement to the FY2026 Budget: Appendix, May 30, 2025, p. 275, https://www.whitehouse.gov/wp-content/uploads/2025/05/appendix_fy2026.pdf.
10.
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OMB, "Discretionary Funding Changes," p. 21.
11.
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DOE, FY 2026 Congressional Justification, Budget in Brief, May 2025, p. 7, https://www.energy.gov/sites/default/files/2025-06/doe-fy-2026-bib-v6.pdf. 12.
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DOE, FY 2026 Congressional Justification, Budget in Brief, May 2025, pp. 19-21, https://www.energy.gov/sites/default/files/2025-06/doe-fy-2026-bib-v6.pdf. The baseline for subaccounts is FY2024, because those amounts are not specified in the Full-Year Continuing Appropriations and Extensions Act, 2025 (P.L. 119-4). 13.
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DOE |
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For additional information on how federal agencies negotiate indirect cost rates, see CRS Report R48540, Universities and Indirect Costs for Federally Funded Research, by Marcy E. Gallo and Laurie Harris. |
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Association of American Universities et al. v. Department of Energy, U.S. District Court for the District of Massachusetts, April 14, 2025, https://www.aau.edu/sites/default/files/AAU-Files/Key-Issues/Research-Administration-Regulation/legal-filing-DOE-4-14-25.pdf. |
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For more background, see CRS Report R48540, Universities and Indirect Costs for Federally Funded Research, by Marcy E. Gallo and Laurie Harris. |
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DOE, "PF 2025-25 Adjusting Department of Energy Financial Assistance Policy for State and Local Governments' Financial Assistance Awards," May 8, 2025, https://www.energy.gov/management/pf-2025-25-adjusting-department-energy-financial-assistance-policy-state-and-local; DOE, "PF 2025-26 Adjusting Department of Energy Financial Assistance Policy for Nonprofit Organizations' Financial Assistance Awards," May 8, 2025, https://www.energy.gov/management/pf-2025-26-adjusting-department-energy-financial-assistance-policy-nonprofit; and DOE, PF 2025-27 "Adjusting Department of Energy Financial Assistance Policy for For-Profit Organizations' Financial Assistance Awards," May 8, 2025, https://www.energy.gov/management/pf-2025-27-adjusting-department-energy-financial-assistance-policy-profit-organizations. |
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OMB, Technical Supplement to the 2026 Budget: Appendix, May 30, 2025, p. 304, https://www.whitehouse.gov/wp-content/uploads/2025/05/appendix_fy2026.pdf.
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OMB, "Discretionary Funding Changes," p. 21. |
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The other three federal regional commissions and authorities (FRCAs) are the Mid-Atlantic Regional Commission (MARC), |
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Each of the six functioning regional commissions and authorities engage in economic development to varying extents, and they address multiple programmatic activities in their respective service areas. These activities may include, but are not limited to, basic infrastructure, energy, ecology/environment and natural resources, workforce, and business development/entrepreneurship. For more information, see CRS In Focus IF11140, Federal Regional Commissions and Authorities: Overview of Structure and Activities. |
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The presidential nomination and Senate confirmation of a federal co-chair is an essential step for the GLA to start operations; as of the date of publication, the President has not nominated a federal co-chair for the GLA. For more information, see CRS In Focus IF11744, Federal Regional Commissions and Authorities: Authorization. |
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OMB, "Discretionary Funding Changes," p. 40. |
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| 21. | See Delta Regional Authority, FY 2026 Budget Justification, May 21, 2025, https://dra.gov/wp-content/uploads/2025/06/DRA-FY-2026-Buget-Justification_FinalV4.pdf; Denali Commission, FY 2026 Budget Justification, May 2025, https://denali.gov/wp-content/uploads/2025/05/Denali-Commission-Congressional-Budget-Justification-Fiscal-Year-2026_Final.pdf; Northern Border Regional Commission, FY 2026 Budget Justification, May 2025, https://www.nbrc.gov/userfiles/files/FY%202026%20Budget%20Justification.pdf; and Southeast Crescent Regional Commission (SCRC), FY 2026 Budget Justification, May 2025, https://scrc.gov/sites/default/files/Reports-2025/fy_2026_scrc_cbj.pdf. As of date of publication, an FY2026 congressional budget justification was not available on the SBRC's website (https://sbrc.gov/). OMB, "Discretionary Funding Changes," p. 40. Appalachian Regional Commission (ARC), FY 2026 Budget Justification, May 2025, https://www.arc.gov/wp-content/uploads/2025/05/ARC-FY-2026-Congressional-Justification.pdf. |
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The Consolidated Appropriations Act, 2018 (P.L. 115-141) provided appropriations for these five FRCAs: the Appalachian Regional Commission (ARC), the Delta Regional Authority, the Denali Commission, the Northern Border Regional Commission, and the Southeast Crescent Regional Commission (SCRC). Amounts provided by P.L. 115-141 for the FRCAs ranged from $250,000 (for the SCRC) to $155 million (for the ARC). P.L. 115-141 did not provide appropriations for the GLA, which had not been established in FY2018, and did not provide appropriations to the Southwest Border Regional Commission, which received inaugural appropriations in FY2021. The President's Budgets for FY2019-FY2021 also proposed closeout budgets (i.e., funding amounts that would be provided only for the purposes of closing down the agencies) for the existing FRCAs except the ARC. |
OMB, Technical Supplement to the 2026 Budget: Appendix, May 30, 2025, p. 1121, https://www.whitehouse.gov/wp-content/uploads/2025/05/appendix_fy2026.pdf.
The total amounts proposed to be cancelled per FRCA in the FY2026 budget request range from $1 million (for the Southwest Border Regional Commission) to $48 million (for the Delta Regional Authority). See OMB, Technical Supplement to the 2026 Budget: Appendix, May 30, 2025, pp. 1045, 1051, 1061-1064, 1127, 1148-1149, https://www.whitehouse.gov/wp-content/uploads/2025/05/appendix_fy2026.pdf.
OMB, "Discretionary Funding Changes," p. 40.
OMB, Technical Supplement to the 2026 Budget: Appendix, May 30, 2025, pp. 1063-1064, https://www.whitehouse.gov/wp-content/uploads/2025/05/appendix_fy2026.pdf.