NASA Projects Lose Weight Under FY 2026 Skinny Budget

The FY 2026 Skinny Budget sought to allocate $18.8B (-24.2%) in discretionary funding for the National Aeronautics and Space Administration (NASA) and focused on continuing space flight programs, streamlining mission support and reducing science programs.

Deep Space Exploration (DSE) programs remained a priority, but investments shifted from Science and Space Operations programs to Human Space Exploration aimed at beating China back to the moon and putting the first humans on Mars. The proposed budget invested $7B for lunar exploration and $1B for Mars-related programs but canceled the Space Launch System (SLS) rocket and Orion capsule programs in favor of pursuing more cost-effective commercial systems.

Science programs would have seen the largest cut at $2.3B (53%), and Mission Support programs faced a $1.1B reduction. And while the "Big Beautiful Bill" did not pass the House vote, impacts on NASA programs are not off the table. These include:

• Science (-$3.8B)
  • Space Science: (-$2.3B)
  • Earth Science: (-$1.2B):
    • Landsat Next Mission – Descoped and restructured
    • Climate monitoring satellites – Funding eliminated
    • DIVINCI mission  – Canceled
    • Mars Sample Return Program – Cancelled
  • Astrophysics: (Nancy Roman Grace Telescope with estimated $3.5B cost to date) – Budget reduced
  • Aeronautics (-$346M): Green Aviation research – Eliminated
• Deep Space Exploration Systems (i.e., Legacy Human Exploration) (-$879M)
  • Space Launch System (SLS) rocket and Orion capsule(Est. cost to date $24B and $20B, respectively) – Canceled
  • Gateway Lunar Space Station (nearing completion) – Canceled
• Space Operations (-$508M)
  •  International Space Station: Crew size and onboard research reduced, with decommission by 2030
• Office of Science, Technology, Engineering, and Mathematics (STEM) Engagement programs (-$143) – Defunded
• Mission Support (-$1.1B) – potential elimination of the office of education and Science, Technology, Engineering and Math (STEM) programs and closing a field center to streamline NASA Center Operations.

Although budget and spending reductions are not new to the agency, the cuts seemed dramatic from a historical standpoint.

NASA Budgets and Spending

Overall agency funding increased between FY 2020 and 2022, but remained relatively flat over the next three years due to caps imposed by the Fiscal Responsibility Act of 2023. Spending also increased through FY 2023 with the increased focus on DSE programs but dropped off in FY 2024. FY 2025 spending to date is about half of FY 2024, and Deltek expects final numbers to be similar or slightly below that level.

 

However, a closer look at the top four directorates, Science, DSE, Space Operation and Safety, Security and Mission Support, provides better performance insight. Investments in Science and DSE increased during this time as NASA ramped up work on the Space Launch System (SLS) and Human Landing System (HLS) programs. In FY 2021, the agency doubled SLS funding and allocated $3.7B for the HLS, both contributing to the 76% growth in DSE that continued through FY 2024. In FY 2023, the Science Directorate funding began an uptick, likely due to programs associated with those projects. The 40% increase in DSE spending in FY 2021 mirrors the prioritization of those projects while spending among all other directorates steadily declined.

 

Safety, Security, and Mission Services Support (Mission Support) fell by 90% over the five-year period with IT spending falling by $520.6M (86%). This included training, equipment/infrastructure, software, programming and semiconductor machinery manufacturing products and services, all of which could be impacted by the proposed budget.

 

Looking Ahead

Although the initial budget proposal failed, Trump 2.0 plans to streamline IT services, NASA Center Operations, staffing, facility maintenance and construction and environmental compliance activities could still come to fruition. This could continue contract consolidations and terminations. But the desire to beat China to the moon and becoming the dominant player in the AI domain could conversely drive increased IT investments.

The NASA four-year strategic plan services as the guidebook for the agency’s goals and objectives with the next edition due in 2026. In preparation for the new plan, NASA issued an update to the Science Mission Directorate Plan in March. While modifications are expected considering plans outlined in the skinny budget, it still provides contractors with a glimpse of potential future contracting opportunities. In the meantime, GovWin’s Federal Market Analysis and GovWin IQ teams provide in depth analysis and insight for contractors navigating today’s dynamic contracting environment.