Government Relations & Washington Update
May 2025
Trump Administration Considers Additional Workforce Reductions and Agency Restructuring
The Trump Administration has directed agencies to evaluate additional reductions in the federal workforce as well as cuts to programs. Many agencies have offered a second round of deferred resignations and deferred retirements. While final numbers are not yet available, it appears that a larger number of federal workers are electing to leave service as a result of the second round. In addition to the resignations/retirements, the administration has indicated that further reductions in force are likely. It has been reported that in preparation for fiscal year 2026 budgeting, the Office of Management and Budget will propose significant funding reductions to federal departments, including USDA. While details of administration proposals have not been publicly released, press reports indicate that USDA could face significant cuts to various agencies and programs. The administration is also considering the consolidation of mission areas and administrative functions, as well as relocation of some staff to new “hubs” around the country. Secretary Rollins has indicated more details on restructuring will be released in mid-May.
Other key science and statistical agencies will also likely be subject to funding cuts. It has been reported that the National Science Foundation could face reductions up to 55 percent and reductions of up to 40 percent are being considered for the National Institutes of Health. While the administration has already cancelled or paused a significant amount of research funding, overall agency allocations are subject to the annual appropriations process where Congress will set funding levels for agencies and programs. The release date of the President’s Budget for fiscal year 2026 has not yet been announced. Once received, Congress will move forward with the appropriations process for fiscal year 2026.
House Prepares to Move Forward with Budget Reconciliation Process
Republican leaders in the House of Representatives have set an aggressive schedule to move a budget reconciliation package through the House by Memorial Day. Budget reconciliation will include an extension of the Tax Cuts and Jobs Act and other tax proposals such as no tax on tips or Social Security. The legislation will also include additional funding to invest in priorities including energy and border programs as well as address the debt limit.
To help pay for some of the provisions, the House has set a target of $1.5 trillion in spending reductions as part of the package. The process will begin with committees marking up their respective sections of the bill to set new spending and savings provisions. The Agriculture Committee has been directed to save $230 billion, which will likely require modifications to the Supplemental Nutrition Assistance Program (SNAP). The committee is also considering whether to address other policies such as reference prices and crop insurance as a part of the budget reconciliation, which could complicate the movement of a comprehensive Farm Bill later in 2025. The House Agriculture Committee has yet to schedule a date for its mark-up. Other committees, including Armed Services, Homeland Security, Financial Services, Judiciary, Oversight, and Transportation & Infrastructure are scheduled to mark-up their sections during the week of April 28th.
USDA Weighs Farmer Assistance as Tariff Policy Evolves
The U.S. Department of Agriculture (USDA) is actively considering new relief measures for American farmers as the deepening trade war with China threatens to impact the agricultural economy. The potential move comes amid the escalation of tariffs between the US and China. Other reciprocal tariffs are in a 90 day pause with bilateral negotiations ongoing.
Agriculture Secretary Brooke Rollins confirmed in a recent interview that the administration is evaluating the use of the Commodity Credit Corporation (CCC), a government-run program designed to stabilize farm income and commodity prices, to support farmers impacted by the rapidly escalating tariffs. Secretary Rollins emphasized that no final decisions have been made, and the administration remains hopeful that its trade strategy will ultimately yield long-term gains for the agricultural sector. During Trump’s first term, a similar standoff with China resulted in $28 billion in direct payments to farmers.
The Trump administration is also exploring additional measures, such as creating new tax credits for U.S. exporters, as part of a broader effort to offset retaliatory trade barriers imposed by other countries. Rollins has announced upcoming trips to Vietnam, the UK, and Japan to negotiate potential tariff exemptions or trade deals aimed at easing the pressure.