President’s FY 2027 Budget Proposes Significant Cuts to Indian Affairs Programs

4/14/2026

WASHINGTON, D.C.   –  On April 3, 2026, President Trump released his Fiscal Year (FY) 2027 budget request which includes significant cuts to Indian Affairs programs while increasing defense funding by 40 percent. The President’s proposed $1.5 trillion in defense spending would be the highest military expenditure in United States history. To offset these increases, the budget proposes to cut Indian Affairs and other domestic programs by $73 billion. 

The Bureau of Indian Affairs (BIA) Budget in Brief can be found here, and Bureau of Indian Education Budget in Brief can be found here. As described in these and other budget documents, BIA funding would be cut by $744 million, the Indian Housing Block Grant Program could be cut by 34 percent, and the President again proposes to eliminate the Indian Loan Guarantee Program. Tribes are encouraged to contact their Congressional Delegations about these proposed cuts. 

The FY 2027 budget also includes some targeted increases in health and infrastructure initiatives. The budget proposed $19 million for Indian tribes to participate in a new “Make America Healthy Again” initiative and provides a $27 million increase for the Reservation Drinking Water Program to improve wastewater infrastructure. The FY 2027 budget also introduces several legislative proposals that would fundamentally alter the administrative and financial landscape of the federal-tribal relationship. 

Proposed Program Eliminations 

• Low Income Home Energy Assistance Program (LIHEAP). LIHEAP provides federal funding directly to Tribal governments to help eligible households manage costs associated with home heating, cooling, and energy-related crisis intervention. 

• Community Development Financial Institutions (CDFI) Fund. The CDFI Fund manages the Native American CDFI Assistance (NACA) Program, which provides specialized grants and technical assistance to Native-led financial institutions to increase access to capital, credit, and financial services specifically for Native American, Alaska Native, and Native Hawaiian communities. 

• Minority Business Development Agency (MBDA). The MBDA manages the American Indian, Alaska Native, and Native Hawaiian (AIANNH) Projects, which provide Tribal entities with technical assistance in strategic planning, federal procurement, and transformative economic development to drive job creation and capital access. 

• Indian Land Consolidation Program (ILCP). The ILCP seeks to reduce fractionation by purchasing small, undivided factional interests in trust or restricted land from willing sellers and restoring that land into tribal trust land ownership. 

• Tribal Wildlife Grants. Tribal Wildlife Grants are used to provide technical and financial assistance to Tribes for the development and implementation of programs that benefit fish and wildlife resources and their habitat. 

Bureau of Indian Affairs. $1.8 billion. A $744 million cut from FY 2026 levels enacted by Congress. This includes the following funding: 

• Operation of Indian Programs. $1.3 billion. A $703 million cut from FY 2026 enacted. 

• Contract Support Costs. Fully funded at $215.9 million. 

• Construction. $88 million. A $97 million cut from FY 2026 enacted. 

• Road Maintenance. $27 million. A $12 million cut from FY 2026 enacted. 

• Public Safety and Justice. $560 million. A $10 million cut from FY 2026 enacted. 

• Public Safety and Justice Construction. $46 million. A $2 million cut from FY 2026 enacted. 

Bureau of Indian Education. $933 million. A $437 million cut from FY 2026 levels enacted by Congress. This includes the following funding: 

• Operation of Indian Education Programs. $894 million. A $238 million cut from FY 2026 enacted. 

• Education Construction. $35 million. A $200 million cut from FY 2026 enacted. 

Bureau of Trust Funds Administration. $90 million. A $10 million cut from FY 2026 enacted. 

Historic Preservation Fund. $11 million. A 95% cut from FY 2026 enacted. The Historic Preservation Fund provides funding for State and Tribal Historic Preservation Offices among other programs. 

Indian Health Service. $9.1 billion for the Indian Health Service (IHS) which is a $1 billion increase over FY 2026 enacted levels, including: 

• Advance Appropriations. $5.6 billion for FY 2028. 

• Electronic Health Records (EHR) System. $287.07 million for EHR modernization, a $96.44 million increase. 

• Contract Support Costs. Fully Funded at $1.96 billion. 

• 105(l) lease agreements. Fully funded at $929 million. 

• Hospitals and Health Clinics. $2.84 billion. A $202.6 million increase over FY 2026 enacted. 

• Purchase/Referred Care. $1.05 billion. A $57.7 million increase. 

• Sanitation Facilities Construction. $14 million. A $94 million cut from FY 2026 enacted. 

• Special Diabetes Program. $49 million. A $150.6 million cut from FY 2026 enacted. 

Food Distribution Program on Indian Reservations (FDPRI). The budget allocates $271 million for food distribution. This is a $36 million increase over FY 2026. The FY 2026 report language mandates immediate U.S. Department of Agriculture (USDA) accountability for recent 

supply chain failures while directing a long-term shift toward Tribal self-determination and localized food procurement for the FDPIR program. 

This includes directing the USDA to provide a briefing within 60 days detailing corrective actions taken after the failed consolidation of FDPIR and Commodity Supplemental Food Program into a single warehouse model; Submitting a plan to expand “638” contracting authority beyond current pilots to transition FDPIR management directly to Tribes; and streamlining administrative requirements to facilitate the direct purchase of food from local and regional producers. A formal report on existing barriers is due within 180 days. 

Proposed Legislative Language Included in the Interior Budget 

• Expediated Review of Interior Board of Land Appeals and Interior Board of Indian Appeals Cases. This proposal establishes a strict timeline to resolve administrative appeals within the Department of the Interior. If an appeal has been pending for over 18 months, all appellants may jointly request an expedited review, which mandates a final decision within 6 months. If the Board fails to meet this deadline, the original agency decision automatically becomes the “final agency action,” allowing the parties to bypass further administrative delays and proceed directly to Federal Court for judicial review. 

• Tribal Agreements under the Indian Self-Determination and Education Assistance Act. This provision allows the Bureau of Indian Affairs and IHS to cancel certain funding increases that were gained through administrative “automatic” or administrative approvals. This bypasses the usual legal protections that keep contract amounts stable, the agencies are prohibited from reducing any more than the exact amount of that specific increase. 

• Office of Navajo and Hopi Indian Relocation Elimination. This provision seeks to eliminate the Office of Navajo and Hopi Indian Relocation program by inserting an effective date of September 30, 2026. 
  

Skenandore Wilson LLP is dedicated to the representation of Tribal Nations, Tribal entities, and individual Tribal members throughout Indian Country.  Our mission is to support and advance the sovereignty, self-sufficiency, and self-governance of our Tribal clients.  To learn more about how we can assist you, contact us at info@skenandorewilson.com or 608-608-1210.