Which discretionary programs saw the largest year-over-year funding increases in fiscal 2025 despite headline cuts?
Executive summary
Despite widely reported headline cuts to nondefense discretionary accounts under the Fiscal Responsibility Act and continuing resolutions, several discretionary lines grew in fiscal 2025 — most prominently defense (a multibillion-dollar boost), targeted transportation obligation limitations, and selected law‑enforcement and Treasury program increases — though those gains coexist with CR-driven holdovers, caps, and reclassifications that complicate direct year‑over‑year comparisons [1] [2] [3] [4].
1. Defense: the single largest discretionary increase by far
The clearest and largest discretionary increase in 2025 was defense funding: the administration sought and Congress accepted a notably higher defense topline compared with several prior years, with base defense spending capped at $895 billion under the Fiscal Responsibility Act and the President’s request described as roughly a $37 billion increase relative to the 2023 enacted baseline in administration summaries [1] [5]. The CBO and CRS analyses also treat defense as the dominant driver of any discretionary growth in 2025, even while nondefense caps were constrained [6] [7].
2. Transportation: modest but measurable increases through obligation limitations
Even amid nondefense restraint, transportation programs received discrete increases via obligation limitations — the President requested $81 billion for certain transportation programs for 2025, which the CBO notes is 2 percent more than the comparable 2024 amount — signaling that surface transportation and certain transit programs bucked the broader nondefense squeeze [2]. Because transportation outlays represent the largest slice of nondefense discretionary spending, small percentage upticks in obligation limits translate into sizable dollar impacts within that functional area [6].
3. Justice programs: targeted law‑enforcement and grant upticks
The Department of Justice requested an increase in its discretionary budget for 2025, with the DOJ’s own materials showing the FY2025 discretionary request at $37.8 billion — an increase of about $467 million over the FY2024 annualized continuing resolution level — and additional discretionary grant dollars for programs such as COPS and STOP school‑violence initiatives cited in the request [3]. Those departmental increases demonstrate that headline “cuts” did not mean uniform declines: justice and public‑safety grants were explicit priorities in the request [3].
4. Treasury and IRS modernization: focused discretionary rises inside broader limits
Treasury budget materials highlight increases for specific operational accounts: an example noted in the Treasury executive summary is a $396 million figure for the Bureau of the Fiscal Service — $24 million above a 2023 level — and continued discretionary investments to support IRS modernization tied to Inflation Reduction Act resources and internal capacity building [4]. These are narrower, program‑specific discretionary increases that occur even when aggregate nondefense caps are being enforced [4].
5. Economic development and “shifted” funding: mandatory vs. discretionary nuance
Some programs often described as increases mix mandatory and discretionary sources; for example, the Economic Development Administration’s Regional Technology and Innovation Hub program is driven primarily by $4 billion in mandatory funding with only $41 million in discretionary support noted in Commerce materials — a reminder that apparent program growth sometimes reflects mandatory transfers or one‑time authorities rather than standard discretionary appropriations [8]. Across the reporting, CBO and CRS caution that caps, emergency designations, and reclassifications (mandatory offsets credited against discretionary) complicate year‑over‑year comparisons [7] [6].
6. Important qualifiers: CRs, caps and the counting rules that mask winners and losers
Final enacted 2025 funding was shaped by continuing resolutions and the FRA’s $1.606 trillion base discretionary cap, which raised total caps only about 1 percent for 2025 while explicitly reducing some nondefense accounts; CBO and other analysts stress that enforcement rules, offsets to discretionary totals from mandatory changes, and emergency or “shifted base” designations mean headline cut language can coexist with substantive increases in individual programs [5] [7] [2]. Where the sources do not give a full agency‑by‑agency year‑over‑year table, reporting limits precise ranking beyond the broad winners named above [7] [6].