The U.S. Commerce Department has rescinded 40% of the current funding for the Office of Space Commerce, impacting its initiatives and operations. Industry sources revealed that the office learned in late August that approximately $26 million would be cut from its $65 million budget for fiscal year 2025. This unexpected reduction is expected to hinder the office’s collaboration with industry on critical projects, including the Traffic Coordination System for Space, known as TraCSS.
The decision to cut funding was first reported by Bloomberg. Specific reasons for the rescission remain unclear, and it has not been included in a broader package of rescissions announced by the Office of Management and Budget on August 29, which primarily targeted State Department and foreign aid programs. Requests for clarification from spokespersons at the Commerce Department and the National Oceanic and Atmospheric Administration (NOAA) went unanswered as of September 5.
Impact on Space Initiatives
Historically, the Office of Space Commerce has operated under NOAA. However, an executive order from the White House on August 13 mandated its transition to the Office of the Secretary of Commerce within a 60-day timeframe. The funding cuts are particularly concerning for the office’s ongoing development of TraCSS, a civil space traffic coordination system designed to enhance safety and coordination in space operations.
Dmitry Poisik, the program manager for TraCSS, addressed concerns raised during a side meeting at the Small Satellite Conference on August 11. He indicated that while core activities could continue under the reduced budget, initiatives aimed at industry collaboration would be adversely affected. “We have more than enough money to do the basic mission,” Poisik stated, noting that budget reductions would chiefly impact funding for commercial space situational awareness providers involved in pilot projects.
With the 2026 budget proposals already causing concern earlier this year, the administration suggested canceling TraCSS altogether, which would have significantly slashed the office’s funding. Fortunately, appropriators in both the House and Senate have moved to restore much of the funding in their respective appropriations bills, which are still pending final approval.
Ongoing Developments with TraCSS
Despite the budget cuts, work on TraCSS continues for now. On September 2, the Office of Space Commerce announced that Amazon’s Project Kuiper has become the latest pilot user of TraCSS. This development comes as the system enters its final months of testing ahead of a scheduled “production release” in January.
Additionally, on September 5, the office released solicitations for a pilot program aimed at enhancing conjunction assessment screening services. They are seeking both service providers and a company to monitor the quality of the data used in these assessments.
As the situation develops, the implications of the budget cuts will closely affect the Office of Space Commerce’s ability to navigate the growing complexities of the commercial space industry. The funding challenges underscore the ongoing balancing act faced by government agencies in fostering innovation while managing fiscal responsibilities.
