• Proposal jumps from previous $1 trillion target to unprecedented $1.5 trillion
• Budget watchdogs warn plan would add $5.8 trillion to national debt over decade
• Defense contractors criticized for slow production, excessive executive compensation

WASHINGTON (TDR) — President Donald Trump announced Wednesday he will seek a military budget of $1.5 trillion for fiscal year 2027, a 50% increase over the current $901 billion defense spending level that he claims tariff revenue will fully fund without increasing the national debt.

The unprecedented proposal, announced via Truth Social, would represent the largest defense budget in American history by a substantial margin. Trump stated the increase is necessary to build a “Dream Military” capable of keeping the nation “SAFE and SECURE, regardless of foe” during what he characterized as “very troubled and dangerous times.”

“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.”

Budget Watchdogs Sound Alarm

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The Committee for a Responsible Federal Budget released analysis Wednesday projecting Trump’s plan would increase defense spending by $5 trillion through 2035, adding $5.8 trillion to the national debt when interest costs are included.

The nonpartisan fiscal watchdog organization warned the proposed military spending increase would be “about twice as large as expected tariff revenue.” The Congressional Budget Office estimated current tariffs would raise $2.5 trillion through 2035, or $3 trillion when interest savings are included.

The organization noted the $175 billion already appropriated to the defense budget under last year’s “One Big Beautiful Bill Act” creates “little case for a near-term increase in military spending.”

Tariff Math Doesn’t Add Up

Trump justified the massive spending increase by pointing to “tremendous Income” generated by his tariff policies. The president claimed tariffs would allow simultaneous military expansion, debt reduction, and “substantial Dividend to moderate income Patriots within our Country.”

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However, according to the Trump administration‘s own estimates, tariffs generated approximately $200 billion in revenue during 2025 — far below the $650 billion Trump recently claimed to House Republicans. The president has previously told military leaders that tariffs had taken in “trillions of dollars.”

The financial outlook could deteriorate further depending on Supreme Court action. The high court is expected to rule soon on the legality of tariffs implemented under the International Emergency Economic Powers Act. If those specific tariffs are struck down, CRFB estimates total deficit reduction from tariff revenue would plummet to roughly $700 billion through 2035, covering only 15% of the defense spending increase cost.

Defense Contractors Face New Restrictions

In a separate Truth Social post Wednesday, Trump issued harsh criticism of defense contractors, demanding faster production and threatening executive compensation caps.

The president complained that defense companies are “issuing massive Dividends to their Shareholders and massive Stock Buybacks” while producing military equipment too slowly and maintaining existing equipment inadequately. Trump announced that no defense executive should earn more than $5 million annually until production and maintenance issues are resolved.

“Defense Companies are not producing our Great Military Equipment rapidly enough and, once produced, not maintaining it properly or quickly. From this moment forward, these Executives must build NEW and MODERN Production Plants.”

Trump suggested he would attempt to block dividends and stock buybacks for defense firms “until such time as these problems are rectified.” Wall Street responded negatively, with Northrop Grumman shares dropping 5.5%, Lockheed Martin declining 4.8%, and RTX Corp. slipping 2.5%.

Strategic Context and Opposition

The military budget proposal comes days after Trump ordered U.S. forces to capture Venezuelan President Nicolás Maduro. The president has also called for taking control of Greenland and suggested openness to military operations in Colombia.

The Peter G. Peterson Foundation noted that current U.S. defense spending already exceeds the combined military budgets of the next nine highest-spending countries. The proposed $1.5 trillion budget would exceed every nation’s military spending except China.

Senator Rand Paul denounced the proposal: “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.”

Congress must approve all defense budgets before they become law. Lawmakers have yet to pass full-year appropriations for fiscal 2026.

Can tariff revenue that fiscal experts say doesn’t exist truly fund history’s largest military budget without bankrupting future generations?

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