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US President Donald Trump on Friday requested a 10 per cent cut in non-defence spending for the 2027 fiscal year and a massive $500 billion increase in the military budget, as the US continues its war against Iran.
The huge proposed surge in defence spending to $1.5 trillion, up from about $1 trillion in 2026, includes a 5 per cent to 7 per cent pay rise for military personnel at a time when thousands of troops are actively deployed.
The White House boasted that this defence funding approaches the “historic increases just before the Second World War”.
The US already spends more on its military than the next nine countries combined, a total of about 40 per cent of global defence outlays. The next biggest defence spender is China, at about $300 billion annually.
The 2027 budget request comes as Mr Trump faces risky choices abroad, with the administration sending US service members to the Middle East, and a weary public at home feeling the economic crunch of skyrocketing gas prices due to the conflict.
The request ultimately requires approval by Congress, where disagreement over Mr Trump's spending decisions recently led to the longest government shutdown in US history.
Mr Trump came into office vowing to cut federal spending and rein in the nation’s growing budget deficit. He brought in the world’s richest person, Elon Musk, to lead an effort that pushed about 300,000 people off the federal payroll.
Despite that, the nation’s deficit – the gap between the amount of money the federal government takes in and how much it spends – has continued to widen, with the non-partisan Congressional Budget Office forecasting a $1.853 trillion shortfall in the fiscal year that ends on September 30, deeper than last year’s $1.775 trillion.
The nation’s $39.016 trillion debt has continued to grow under Republican and Democratic governments. This is partly because most of the political battles around spending revolve around the amount Congress directly controls – the roughly one quarter of the budget known as “discretionary spending”.
The 2027 budget request did not grapple with the most expensive part of mandatory federal spending – Social Security retirement and Medicare health spending for senior citizens. Suggesting cuts there is considered politically perilous.
If enacted, total federal spending would reach $2.2 trillion in 2027, compared with the roughly $1.8 trillion spent for the current fiscal year.
Defence costs
The military request will please defence hawks on Capitol Hill, but also highlights how Mr Trump is trying to pay for doubling down on military pursuits, even after Republicans boosted defence spending last year in party-line legislation.
The Pentagon has already requested $200 billion in extra funding to pay for the Iran war. The White House has not yet officially made that request to Congress, where it is also likely to face scrutiny from politicians in both parties.
Other funding increases proposed by Mr Trump include his Golden Dome missile defence shield, money to build up critical mineral supplies for the defence industry and $65.8 billion to build 34 combat and support ships.
Funds for shipbuilding, a priority for Mr Trump since his first term, include initial funding for the so-called Trump-class battleship as well as submarines.
