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Policy Update: Leaked OMB “Pre-Decisional” Budget Proposal Seeks Major Cuts for HHS

by Lewis-Burke Associates LLC

An internal document, detailing the Department of Health and Human Services (HHS) budget “passback,” has come to light and is rapidly gaining media attention due to major proposed cuts to HHS funding and programs. The “passback” is the stage of the federal budget process during which the White House Office of Management and Budget (OMB) shares its budget proposal with federal departments and agencies, in this case for fiscal year (FY) 2026. Once the proposed President’s Budget Request (PBR) is shared, agencies have a chance to appeal and ask for changes to be made to the proposal.

While the leaked draft may undergo changes before emerging as the final FY 2026 PBR, it does provide some early insight into what the Trump Administration is considering for HHS agencies. Ultimately, it will be up to Congress to accept or reject funding levels or policy proposals in the PBR. For example, the first Trump Administration proposed a 20 percent reduction in funding for the National Institutes of Health (NIH), a recommendation which was not accepted by Congressional appropriators.

The draft document includes the following proposed changes to funding for federal health agencies most relevant to the research community:

  • National Institutes of Health (NIH): The “passback” proposes a total program funding level for the NIH of $27.3 billion, a 42 percent decrease from FY 2025. The document also proposes significant reorganization to NIH, including the elimination of several Institutes and Centers (ICs), such as the National Institute of Nursing Research (NINR), the National Center for Complementary and Integrative Health (NCCIH), the Fogarty International Center (FIC), and the National Institute on Minority Health and Health Disparities (NIMHD).  The draft also includes the proposed consolidation of many of the remaining 23 institutes into a total of eight, which would include leaving three of the current ICs intact – the National Cancer Institute (NCI), the National Institute of Allergy and Infectious Diseases (NIAID), and the National Institute on Aging (NIA) – and would fold the rest into: the National Institute on Body Systems, comprised of the National Heart Lung and Blood Institute (NHLBI), the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), and the National Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS); the National Institute of Neuroscience and Brain Research, comprised of the National Institute of Neurological Disorders and Stroke (NINDS), the National Institute of Dental and Craniofacial Research (NIDCR), and the National Eye Institute (NEI); the National Institutes of General Medical Sciences, comprised of the National Institute of General Medical Sciences (NIGMS); the National Human Genome Research Institute (NHGRI), the National Library of Medicine (NLM), and the National Institute of Biomedical Imaging and Bioengineering (NIBIB); the National Institute of Disability Related Research, comprised of the Eunice Kenedy Shriver National Institute of Child Health and Human Development (NICHD) and the National Institute on Deafness and Other Communication Disorders (NIDCD); and the National Institute of Behavioral Health, comprised of the National Institute of Mental Health (NIMH), the National Institute on Alcohol Abuse and Alcoholism (NIAAA) and the National Institute on Drug Abuse (NIDA).  Notably, there is no specific mention of the Office of the Director (OD) or the Clinical Center (CC).
  • Advanced Research Projects Agency for Health (ARPA-H): The “passback” proposes $945 million for ARPA-H, a 37% decrease in funding from FY 2025 levels. The proposal would also move ARPA-H and the National Center for Advancing Translational Sciences (NCATS) out of NIH and under a new Assistant Secretary for Innovation within HHS. This new office would also include the Biomedical Advance Research and Development Authority (BARDA).
    Centers for Disease Control and Prevention (CDC): The proposed budget would decrease the CDC’s base funding levels from $9.2 billion to $5.2 billion, a 44 percent decrease. The proposal would also reorganize the agency to focus solely on “emerging and infectious disease surveillance, outbreak investigations, preparedness and response, and maintaining the Nation’s public health infrastructure,” and would provide $50 million for the Center for Forecasting Analytics, $100 million for Data Modernization, and $52 million for a new Biothreat Radar Detection System to detect novel pathogens in a 24-hour period. While some CDC programs would be moved into a new Administration for a Healthy America (AHA), many programs related to chronic diseases and HIV work would be eliminated.
  • Health Resources and Services Administration (HRSA): Similar to CDC, the proposed budget would eliminate the majority of workforce programs at HRSA, including nearly all Title VII Health Professions and Title VIII Nursing Workforce programs, and move other core programs to the new administration for a Healthy America (AHA). Eliminated workforce programs would include the Health Careers Opportunity Program (HCOP), Area Health Education Centers (AHEC), the Behavioral Health Workforce Education and Training (BHWET) program, the Nursing Workforce Diversity (NWD) Program, the Primary Care Training and Enhancement program, and the Scholarships for Disadvantaged Students program, among others. The proposed budget would also eliminate programs in the Ryan White HIV/AIDS program, including the Ryan White Special Projects of National Significance, as well as the Ending the HIV Epidemic initiative. Notably, the proposal highlights that the Administration is seeking new authority to regulate “all aspects of the 340B Program and to require covered entities to report on use of 340B savings.”
  • Substance Abuse and Mental Health Services Administration (SAMHSA): While Mental Health Services and Substance Use Treatment would receive substantial cuts of approximately 25 and 13 percent,  respectively, Substance Use Prevention would be nearly eliminated, with an approximate 92 percent cut. 
  • Administration for a Healthy America (AHA): The “passback” further expands on the previously announced new agency within HHS, which includes the consolidation of a number of current HHS agencies, including the National Institute of Environmental Health Sciences (NIEHS) and large components of HRSA, SAMHSA, and the CDC. Preserved programs from HRSA that would be moved to AHA include Nurse Corps, Centers of Excellence, Workforce Assessment, and Pediatric Subspecialty Loan Repayment Programs. Additionally, the SAMHSA Centers for Mental Health Services, Substance Use Treatment, and Substance Use Prevention would be maintained under AHA.
  • Administration for Children and Families (ACF) and Administration for Community Living (ACL): The “passback” would dissolve ACL by eliminating a majority of its programs and transferring the remaining ones to ACF and other agencies. Within ACL, the National Institute on Disability, Independent Living, and Rehabilitation Research (NIDILRR) and the University Centers of Excellence in Developmental Disabilities Program would be eliminated. Instead, ACF would receive an additional $325 million for Independent Living State Grants, providing states with flexibility to support disability and independent livingfocused projects with grant and formula funding. The “passback” also proposed eliminating the Head Start program. 
  • Other policy proposals: The “passback” codifies the Trump Administration’s proposal to cap indirect costs, otherwise known as Facilities and Administration (F&A) rates, at 15 percent and refers to a yet-to-be published new OMB policy to reform indirect costs. The proposal also sets a salary cap on government employees hired under what is known as Title 42 hiring authority, which is likely to have a significant impact on HHS employees with a Doctor of Medicine (MD), Doctor of Philosophy (Ph.D.), or other specialized training. 
Sources and Additional Information:
  • A copy of the leaked OMB “passback” can be found at: https://pdf.lewis-burke.com/wpcontent/uploads/2025/04/signal-2025-04-15-213325-003.pdf 
  • More information about the proposed cuts to HHS can be found here.