U.S. Federal Budget Summary: Critical Infrastructure
Federal critical infrastructure grants finance the construction, maintenance, and defense of essential public works across the U.S. While municipal bonds, state highway funds, and ratepayer fees fuel the baseline operations of public utilities and transportation networks, federal discretionary grants provide necessary supplemental capital. These federal dollars tackle a wide array of high-impact projects—from repaving roads and replacing pipes in wastewater networks to modernizing the power grid to handle increased loads and deploying middle- and last-mile broadband to connect unserved areas. Ultimately, this grant funding primarily flows to state, local, and tribal governments, alongside targeted special districts, transit agencies, and port or airport authorities.
This year, funding for critical infrastructure was passed across two consolidated packages in February and just last month, DHS funding measures were signed into law, ending a record-long shutdown of most DHS agencies. This means grants are flowing from the Departments of Transportation, Energy, Interior, Homeland Security, and other major players.
Major Funding Agencies
Learn more about today’s emergency preparedness and disaster response funding landscape from our recent webinar:
Event link - https://www2.grantsoffice.com/EmergencyPreparedness
Event title - From Crisis to Capital: Unlocking Grant Opportunities for Emergency Preparedness and Response
Navigating the 2026 infrastructure funding landscape requires a clear understanding of the federal government's shifting priorities. While baseline capital remains available, the administration is actively pivoting away from generalized economic development and green innovation. Instead, funding continues to be realigned to prioritize car-centric transportation, private development, and supply chain resilience. For municipalities and transit authorities, success in this cycle will depend on framing physical upgrades around domestic security and economic throughput.
- Building Hard Infrastructure: The 2026 budget continues the trend of deprioritizing renewable energy and soft infrastructure, such as zero-emission municipal buses and unspent discretionary funds for electric vehicle charging stations. Instead, funding is being redirected toward hard assets, aviation modernization, and grid reliability. As explored further in our transportation breakdown on page 16, the USDOT’s Bridge Investment Program will see an 87.5% increase to reach $1.5 billion in available grants. Port infrastructure projects will receive $550 million, while $190 million will be appropriated for energy sector cybersecurity and capital equipment alongside funding for the buildout of the physical electrical grid.
- Increasing Earmark Spending: Elected representatives - rather than grant reviewers - are increasingly deciding which infrastructure projects receive federal funding. The US Department of Transportation (USDOT), for example, will distribute more than $2.3 billion to earmarked projects in this budget cycle - including $1.5 billion to highway projects, $542 million to aviation projects, and $148 million to transit projects. As legislators increase their use of Congressionally-directed spending, the amount of money available in competitive grant pools for infrastructure projects decreases.
- Prioritizing National Security: Infrastructure is increasingly viewed through the lens of homeland security rather than local economic development. While some agencies are actively funding projects that act as a defensive shield - such as a 22.4% increase in USDOT Cyber Initiatives to protect transit hubs - grantseekers must navigate a staggered timeline in 2026. Core preparedness programs, including the State Homeland Security Program (SHSP), the Emergency Management Performance Grant (EMPG), and the Urban Area Security Initiative (UASI), are expected to flow in the summer months now that the DHS budget was signed into law on April 28, 2026.
Grants to Watch out For