Is President Trump a champion of the commercial space industry, or is the budget axe poised to cut it off at the knees? Well ... the short answer is, it’s complicated.
What began as a signature space policy achievement during Trump’s first term has become a casualty of his second administration’s aggressive cost-cutting agenda, despite fierce opposition from across the space industry and mounting concerns about America’s leadership in managing the final frontier.
The Program Under Siege
Trump has long seemed to be a proponent of space programs and the space industry. During his first term in 2017, he reestablished the National Space Council, which had been disbanded by President Bill Clinton in 1993, installing then Vice President Mike Pence as the chair of the council. Towards the end of his first term in 2019, Trump spun the U.S. Space Force out of the U.S. Air Force, establishing it as a stand-alone branch of the Department of War. But now, there appears to be a schism when it comes to space, and particularly commercial space, in the current Trump administration.
The Office of Space Commerce (OSC), housed within the National Oceanic and Atmospheric Administration, has found itself in the crosshairs of what appears to be a systematic dismantling effort. The Trump administration’s fiscal 2026 budget proposal seeks to slash the office’s funding from $65 million to just $10 million—an 84% reduction that would effectively terminate TraCCS operations. arstechnica+4
But the cuts began even earlier. In September 2025, the administration implemented a mid-year budget reduction that pulled back approximately 40% of OSC’s annual funding, leaving the office with just $37 million to operate through the remainder of fiscal 2025. The timing was particularly damaging, as personnel were informed they had already exhausted their funding through July, creating an immediate operational crisis. finance.yahoo+1
The cuts resulted in multiple layoffs at OSC, with reports indicating that as many as 25% of the office’s small staff lost their jobs. Critical positions, including the TraCSS program manager and lead system engineer, have remained unfilled since job postings closed in November 2023. This staffing situation has created what program officials describe as a significant risk to executing the TraCSS mission. breakingdefense+2
But Is OSC Truly At Risk?
In Trump’s Executive Order “Enabling Competition in the Commercial Space Industry”, the President mandates that the Office of Space Commerce be elevated to the Secretarial level, reporting directly to the Secretary of Transportation. Section 6 of the executive order Reforming Regulatory Leadership and Accountability says:
(a) Within 60 days of the date of this order, the Secretary of Transportation SHALL establish a position in the Office of the Secretary with the responsibility of advising the Secretary of Transportation on fostering innovation and deregulation in the commercial space transportation industry. The Secretary of Transportation SHALL further direct the Administrator of the Federal Aviation Administration to take all necessary steps to appoint a senior executive noncareer employee to be the Associate Administrator for Commercial Space Transportation.
(b) Within 60 days of the date of this order, the Secretary of Commerce SHALL elevate the Office of Space Commerce into the Office of the Secretary. (emphasis ours)
The word “shall” is important. It leaves no ambiguity as to the Presidents’ intentions. When that language is used, there is normally no wiggle room for interpretation. Executive Order
Industry Unites in Opposition
The proposed elimination of TraCCS has triggered an unprecedented mobilization of the commercial space industry. A coalition representing more than 450 companies across seven major trade organizations has launched a coordinated lobbying campaign to preserve the program. satellitetoday+2
The Aerospace Industries Association (AIA), American Institute of Aeronautics and Astronautics (AIAA), Commercial Space Federation, Commercial SSA Coalition, National Security Space Association, Satellite Industry Association (SIA), and Space Data Association jointly sent letters to congressional leadership in July 2025, warning that eliminating TraCCS would put critical missions at risk and potentially drive U.S. industry overseas. sia+1
“Without funding for space traffic coordination, U.S. commercial and government satellite operators would face greater risks—putting critical missions in harm’s way, raising the cost of doing business, and potentially driving U.S. industry to relocate overseas,” the coalition wrote. satellitetoday
The opposition includes major players across the space ecosystem. SpaceX, Amazon’s Project Kuiper, Planet Labs, Maxar, Telesat, Intelsat, Eutelsat OneWeb, and Iridium are among the companies that have either signed opposition letters or are currently beta users of the TraCCS system. gvwire+1
Audrey Schaffer, vice president of strategy and policy at Slingshot Aerospace, warned that the cuts would forfeit an opportunity to shape global space traffic control standards. “If the U.S. doesn’t have a system that it brings to the table, I’m not really sure how the U.S. exercises any leadership in the establishment of international space traffic management”. reuters+1
The $613 Billion Question
The stakes extend far beyond government budgets. The global space economy reached a record $613 billion in 2024, with the commercial sector accounting for 78% of that total. The U.S. commercial space sector alone generated $480 billion in revenue, making it a critical component of American economic competitiveness. spacefoundation
Space traffic management directly impacts this economic powerhouse. Satellite operators spend approximately $4.2 million annually on collision avoidance operations per 1,000 satellites. With more than 12,000 active satellites currently in orbit and thousands more launching each year, the economic implications of inadequate traffic coordination are substantial. astuteanalytica+1
Insurance costs provide another window into the financial stakes. The worldwide satellite insurance market generates approximately $800 million in premiums annually, with third-party collision coverage adding another $20 million. As orbital congestion increases, insurance companies are beginning to factor debris and collision risks into their pricing models, potentially driving up costs for satellite operators. hanspeterschaub+2
The ripple effects extend throughout the economy. Satellite-enabled services underpin everything from GPS navigation and weather forecasting to broadband internet and financial transactions. A major collision creating significant debris could disrupt these services and impose substantial economic costs across multiple sectors.
Congressional Resistance Builds
Despite the administration’s determination to eliminate TraCCS, both chambers of Congress have pushed back against the proposed cuts. The House Appropriations Committee proposed funding OSC at $50 million for fiscal 2026, while the Senate committee recommended $60 million—both significantly higher than the administration’s $10 million proposal. breakingdefense+1
Senator John Cornyn (R-TX) has been particularly active in supporting space traffic coordination, co-sponsoring the Situational Awareness of Flying Elements in Orbit (SAFE Orbit) Act with a bipartisan group of colleagues. The legislation would direct OSC to acquire and disseminate data on space activities and traffic coordination in low-Earth orbit. cornyn.senate+1
“Commercial space objects in low-Earth orbit can help scientists make new discoveries and spur technological innovation, but this hinges on the ability to conduct safe and effective space traffic coordination,” Cornyn said in introducing the bill. cornyn.senate
The Senate Appropriations Committee took a particularly strong stance in its fiscal 2026 spending bill report, describing space situational awareness and traffic management as “inherently governmental” functions and providing $60 million to continue expanding TraCCS operational capabilities. spacepolicyonline
However, the ultimate outcome remains uncertain as lawmakers negotiate final spending legislation ahead of critical deadlines.
Military Voices Concern
The Space Force and broader defense establishment have also expressed reservations about eliminating the civilian space traffic management system. A spokesman for Space Operations Command (SpOC) stated that the command will “continue to advocate” for the objectives outlined in Space Policy Directive-3, which originally established the civilian transfer of space traffic coordination responsibilities. airandspaceforces
The military’s concern reflects a fundamental tension in space policy. Defense officials have long argued that managing civilian and commercial satellite traffic diverts resources from their core national security mission. TraCCS was specifically designed to allow the military to focus on defending against space threats while leaving routine traffic management to a civilian agency.
Charles Galbreath, a retired Space Force colonel and senior fellow at the Mitchell Institute for Aerospace Studies, noted that eliminating TraCCS would force the military to resume civilian traffic management duties at a time when the service’s military mission is already expanding. airandspaceforces
White House Rationale and Strategy
The Trump administration has provided limited public justification for its decision to eliminate TraCCS. In budget documents, the administration argued that private industry has demonstrated the “capability and the business model to provide civil operators with SSA data and STM services using the releasable portion of the DOD catalog,” making the government system unnecessary. spacepolicyonline+1
The administration’s broader space policy, outlined in the August 2025 Executive Order “Enabling Competition in the Commercial Space Industry,” emphasizes reducing regulatory barriers and promoting private sector solutions. The order elevates OSC within the Commerce Department hierarchy while simultaneously proposing to eliminate its primary operational program. spacepolicyonline+1
However, industry observers and former officials question whether this represents a coherent policy strategy or simply reflects the administration’s broader cost-cutting agenda driven by the Department of Government Efficiency (DOGE) initially led by Elon Musk.
Richard DalBello, who served as OSC director during the Biden administration, characterized the administration’s rationale as reflecting a “fundamental misunderstanding” of TraCCS’s role. “DoD lacks both the institutional focus and the capacity to manage safety across a rapidly expanding commercial sector,” DalBello said. “No single company offers a unified, authoritative capability that can support the broader public interest—or meet global coordination needs”. payloadspace
The Negotiating Game
The pattern of Trump administration decision-making suggests the TraCCS controversy may be part of a broader negotiating strategy rather than a final policy position. The administration has consistently used dramatic proposals as opening positions in budget and policy negotiations, often moderating its stance in response to stakeholder pressure.
This approach mirrors Trump’s broader negotiating style, which frequently employs “zero-based budgeting”—taking spending to zero and rebuilding from there. It is a way to extract maximum concessions, but also assures that the budget requests match the needs of the office or agency. Many local governments and private companies use zero-based budgeting to set their annual budgets, rather than just taking the previous year’s budget and adding a percentage to account for inflation. It forces the budget requestors to justify their spending. The Trump administration has used similar tactics in trade negotiations, employing tariff threats to secure broader policy concessions from foreign partners. scm.ncsu+2
The timeline of TraCCS-related decisions supports this interpretation. The administration first floated elimination of the program in internal memos in April 2025, formalized the proposal in budget documents in May, but has continued to engage with industry and congressional stakeholders throughout the process. payloadspace+1
Some industry sources speculate that the administration may be using TraCCS as leverage to secure broader space policy objectives, such as regulatory reform or increased private sector participation in space traffic management functions.
International Implications
The potential elimination of TraCCS carries significant implications for America’s role in international space governance. The U.S. has long led efforts to establish global norms for space traffic management, leveraging its technological capabilities and regulatory framework to shape international standards.
European Space Agency Director General Josef Aschbacher recently revealed that his organization is in discussions with SpaceX about joining an international charter to reduce space debris, highlighting the active diplomacy around orbital safety issues. Without a robust U.S. government system to contribute to these discussions, America’s ability to lead international coordination efforts could be diminished. reuters
China and other space powers are developing their own traffic management capabilities, potentially creating a fragmented global system if the U.S. withdraws from civilian space traffic coordination. This fragmentation could complicate international cooperation and reduce overall system effectiveness.
The Technology Stakes
TraCCS represents more than just a government service—it embodies America’s approach to managing the commercialization of space. The system integrates data from multiple sources, including Department of Defense tracking networks and commercial space situational awareness providers, to create a comprehensive picture of orbital activity. space.commerce+1
Nine satellite operators, including NOAA, Maxar, Telesat, Intelsat, Georgia Institute of Technology, Planet Labs, Eutelsat OneWeb, Iridium, and The Aerospace Corporation, currently receive validated safety notifications from the initial TraCCS deployment. The system provides conjunction data messages alerting operators to potential collisions, with plans to expand services as the program matures. guiceoffshore
The cloud-based architecture developed for TraCCS, built on Amazon Web Services infrastructure, represents a modern approach to space situational awareness that could serve as a model for international systems. Eliminating the program could cede this technological leadership to other nations or private entities. arstechnica
Winners and Losers
The potential shutdown of TraCCS would create clear winners and losers across the space ecosystem. Commercial space situational awareness companies could benefit from increased demand for their services if the free government alternative disappears. Companies like Slingshot Aerospace, LeoLabs, COMSPOC Corporation, and others already provide commercial tracking and collision prediction services. astuteanalytica
However, smaller satellite operators and emerging space nations could face significantly higher costs for essential safety services. The government system was designed to provide basic services free of charge, ensuring that cost doesn’t become a barrier to safe space operations. Commercial alternatives typically charge substantial fees that could limit access for smaller players. space.commerce
Satellite operators with large constellations, such as SpaceX’s Starlink and Amazon’s Project Kuiper, might prefer commercial solutions tailored to their specific needs. These companies have the resources to purchase premium services and may benefit from the elimination of a government system that could impose uniform standards or requirements.
The Defense Department faces a mixed outcome. While eliminating TraCCS would reduce the pressure to transfer civilian space traffic responsibilities, it would also require the military to continue providing services that divert resources from national security missions.
The Path Forward
As Congress continues to debate fiscal 2026 appropriations, the fate of TraCCS remains uncertain. The significant gap between the administration’s proposal ($10 million) and congressional preferences ($50-60 million) suggests that final funding levels will likely emerge from broader budget negotiations.
The space industry’s unprecedented mobilization in support of TraCCS demonstrates the program’s perceived importance to commercial space operations. However, the administration’s broader deregulatory agenda and cost-cutting objectives create powerful countervailing pressures.
The resolution of this conflict will likely depend on whether Congress can maintain sufficient political unity to override administration preferences, and whether the space industry can effectively demonstrate the economic and strategic costs of eliminating the program.
Conclusion
The battle over TraCCS reflects broader tensions in American space policy between government leadership and private sector solutions, between immediate cost savings and long-term strategic investments, and between domestic priorities and international competitiveness.
What began as a signature achievement of Trump’s first-term space policy has become a test case for his second-term governing approach. The outcome will signal whether the administration’s commitment to American space leadership extends to the unglamorous but essential work of managing orbital traffic, or whether cost-cutting imperatives will win the day.
What is also unclear is how the Office of Space Commerce will look once it has been established as a direct report to the Secretary of Transportation as mandated under the Executive Order, where it will fall in the DoT budget, and how Transportation Secretary Sean Duffy will see the government’s role in Space Traffic Management. Add to that the longstanding issues Congress has had in passing any kind of a budget beyond a Continuing Resolution, and it may all turn out to be a tempest in a teapot. While a large chunk of the OSC budget has been clawed back, resulting in layoffs and programs being potentially put on hold, the end game is in no way clear. And while the President proposes his budget with his priorities, the House still holds the power of the purse. There is a lot of negotiation yet to come, and while Trump may not be standing for reelection, there are a lot of members of the House and Senate who are.
A coalition of over 450 companies, along with industry organizations such as the Aerospace Industries Association and American Institute of Aeronautics and Astronautics, is lobbying vigorously to prevent the cuts and maintain OSC funding at current levels. Although the Trump Administration proposed drastic reductions, Congress is under significant pressure from these groups to reach a compromise. The history of legislative responses to space industry needs suggests a potential for restoring some funding—but perhaps with conditions, oversight, or a phased shift toward greater reliance on private sector SSA data and services.
A likely budgetary compromise could involve:
Restoration of partial funding for OSC and TraCSS.
Mandating increased public-private partnerships and SSA data sharing.
Establishment of a federal oversight committee tasked with developing a transition plan for space traffic management responsibilities.
This would preserve the federal government’s central role, continue supporting TraCSS, and maintain U.S. influence in international space policy negotiations, while ensuring commercial providers continue improving technical capabilities and service delivery.
So while this is not going to be a “kitchen table” issue in the midterm or 2028 elections, lets just say there might be a few campaign contribution dollars in play.
For those companies opposing the cuts, for the satellite operators who depend on collision warnings, and for the millions of Americans who rely on space-based services, the stakes could not be higher. In the unforgiving environment of space, where collisions occur at speeds of 17,500 miles per hour and debris persists for decades, the margin for error is zero.
The question facing law and policy makers is how big a gamble would it be to shut down what some call an essential safety net that protects the $613 billion space economy, and if the ultimate cost of eliminating TraCCS will far exceed the relatively modest savings achieved by shutting it down. When politics is involved, the answer always seems to be … its complicated.
Editorial Notes
Sources: This investigation is based on analysis of 108 sources, including government budget documents, congressional testimony, industry association letters, trade publications, and interviews with current and former government officials. All major factual claims have been verified through multiple sources.
Verification Limitations: Some internal administration deliberations remain confidential, limiting insight into detailed decision-making processes. Budget figures are based on publicly available appropriations documents and may not reflect all funding sources or transfers.
Research Gaps: Limited access to classified space situational awareness data prevents full assessment of operational impacts. Some industry financial data is proprietary and not publicly available.
IMPORTANT DISCLAIMER: This article is for informational and educational purposes only and does not constitute investment advice, financial advice, or a recommendation to buy, sell, or hold any securities. The information presented is based on publicly available data and should not be relied upon for making investment decisions. All investments carry risk, including the potential loss of principal. Readers should conduct their own research and consult with qualified financial advisors before making any investment decisions. Past performance does not guarantee future results. The authors and publishers are not licensed financial advisors and assume no liability for any financial losses that may result from the use of this information.
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This article was produced with the assistance of A.I.
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Office of Space Commerce - “Traffic Coordination System for Space (TraCSS)” official website
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