The satellite, launched at the expense of the welfare budget, did not function properly.
Literal
Welfare-budget [object-を] sacrifice-[means-にして] launched satellite [topic-は], normally function did-not.
福祉予算を犠牲にして is a means clause: 'by sacrificing the welfare budget.' 打ち上げられた is the passive of 打ち上げる (to launch). 正常に動作しなかった means 'did not function normally.' A political criticism embedded in factual reporting.