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President Donald Trump called for defense spending to be raised to $1.5 trillion, a 50% increase over this year’s budget.
“After long and difficult negotiations with Senators, Congressmen, Secretaries, and other Political Representatives, I have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars,” Trump wrote on Truth Social on Thursday evening.
“This will allow us to build the “Dream Military” that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe.”
The president said he came up with the number after tariff revenues created a surplus of cash. He claimed the levies were bringing in enough money to pay for both a major boost to the defense budget “easily,” pay down the national debt, which is over $38 trillion, and offer “a substantial dividend to moderate income patriots.”
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The boost likely reflects efforts to fund Trump’s ambitious military plans, from the Golden Dome homeland missile defense shield to a new ‘Trump class’ of battleships.
The Committee for a Responsible Federal Budget found that the increased budget would cost about $5 trillion from 2027 to 2035, or $5.7 trillion with interest. Tariff revenues, the group found, would cover about half the cost – $2.5 trillion or $3 trillion with interest.
The Supreme Court is expected to rule in a major case Friday that will determine the legality of Trump’s sweeping tariff strategy.
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This year the defense budget is expected to breach $1 trillion for the first time thanks to a $150 billion reconciliation bill Congress passed to boost the expected $900 billion defense spending legislation for fiscal year 2026. Congress has yet to pass a full-year defense budget for 2026.
Some Republicans have long called for a major increase to defense spending to bring the topline total to 5% of GDP, as the $1.5 trillion budget would do, up from the current 3.5%.
Trump has ramped up pressure on Europe to increase its national security spending to 5% of GDP – 3.5% on core military requirements and 1.5% on defense-related areas like cybersecurity and critical infrastructure.
Trump’s budget announcement came hours after defense stocks took a dip when he condemned the performance rates of major defense contractors. In a separate Truth Social post he announced he would not allow defense firms to buy back their own stocks, offer large salaries to executives or issue dividends to shareholders.
“Executive Pay Packages in the Defense Industry are exorbitant and unjustifiable given how slowly these Companies are delivering vital Equipment to our Military, and our Allies,” he said.
“Defense Companies are not producing our Great Military Equipment rapidly enough and, once produced, not maintaining it properly or quickly.”
He said that executives would not be allowed to make above $5 million until they build new production plants.
Stock buybacks, dividends and executive compensation are generally governed by securities law, state corporate law and private contracts, and cannot be broadly restricted without congressional action.
An executive order the White House released Wednesday frames the restrictions as conditions on future defense contracts, rather than a blanket prohibition. The order directs the secretary of war to ensure that new contracts include provisions barring stock buybacks and corporate distributions during periods of underperformance, non-compliance or inadequate production, as determined by the Pentagon.
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