President Donald Trump has called for a dramatic increase in U.S. defense spending.
The proposal marks a more than 50% increase from the $901 billion defense budget that Congress approved for 2026.
Trump said the increase would allow the U.S. to build what he described as a “dream military” during what he has called “dangerous” times.
Highlights
- Trump has proposed a 50% defense budget increase, raising it from $1 trillion to $1.5 trillion for 2027 to build a 'dream military.'
- Trump claimed increased tariffs will cover the proposed military budget surge without harming debt repayment or dividends.
- Trump threatened to cut Raytheon’s contracts if it failed to invest more in plants and equipment instead of stock buybacks.
Donald Trump called for a dramatic 50% increase in the U.S. defense budget
Image credits: The White House/Flickr
Trump announced the proposal in a January 7 post on Truth Social.
“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.
“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,” he added.
Trump said he decided this after long discussions with senators, members of Congress, secretaries, and other political representatives.
He then touted how his tariffs were so “tremendous” that the U.S. would be able to pay off its debt and pay dividends to “moderate income” Americans—even after allocating $1.5 trillion to the military budget.
Any increase of this size requires approval from Congress. Republicans have held narrow majorities in both the House of Representatives and the Senate, though lawmakers have not yet confirmed whether they have supported the proposal.
Taxpayers for Common Sense, a nonpartisan federal budget watchdog, called for the proposal to “be rejected.”
Steve Ellis, the president of the watchdog, said in a statement, “President Trump’s proposal to explode the Pentagon budget with a 50 percent hike next year is as wasteful as it sounds.
“Congress is already poised to approve a 13% increase in Pentagon spending this year. We’re over $38 trillion in debt. We have real needs, at home and abroad, none of which will be easier to meet by hitting the gas pedal on the debt crisis.”
Image credits: The White House/Flickr
He continued, “The president says this enormous increase would be offset by tariff revenue. Besides the fact that the math doesn’t add up, he has also promised that revenue to reduce the deficit, send $2,000 checks to citizens, bail out farmers impacted by the trade war, and the list goes on.”
“This increase cannot happen. It must not happen. Congress must repudiate this nonsense,” he added.
Trump’s announcement comes amid recent U.S. military actions abroad. The U.S. military conducted a raid to detain President Nicolás Maduro in an overnight operation in Venezuela over the weekend.
The Trump administration also discussed options for acquiring Greenland and has not ruled out the use of military force to annex the North Atlantic island from Denmark. Trump additionally threatened strikes on Iran amid nationwide protests due to a failing economy in the Middle Eastern country.
These developments have added urgency to Trump’s call for higher defense spending.
In another Truth Social post, Trump said he wants to ban “large institutional investors” from buying single-family homes in the U.S. He also criticized defense firms issuing dividends, stock buybacks, and “exorbitant” pay packages.
Trump also demanded that U.S. defense contractors invest more in plants and equipment
He especially called out Raytheon, a major U.S. defense contractor, by name. He threatened to cut the company's government contracts if it didn't invest more in plants and equipment.
“Either Raytheon steps up, and starts investing in more upfront Investment like Plants and Equipment, or they will no longer be doing business with Department of War,” Trump wrote.
He said Raytheon is “the least responsive” to the government’s needs, slow in increasing volume, and has prioritized returning capital to shareholders over the military’s priorities.
Trump, who often calls himself “the president of peace” despite his now apparent hawkish stance, warned he will not allow the company to conduct any stock buybacks until it has invested more in manufacturing plants and equipment.
Image credits: Richard Baker/Getty Images
He also said the company risks losing government contracts if it fails to act.
Financial markets reacted strongly. Shares of Raytheon and its competitors dropped after Trump’s post, but rebounded in early after-hours trading, rising more than 3% as of 6 p.m. ET.
Raytheon had announced a $10 billion buyback plan in 2023 and says it has paid a dividend every year since 1936.