Trump Proposes $1.5 Trillion Defense Budget; Watchdog Warns of Trillions in Debt

President Trump proposes a $1.5 trillion defense budget for 2027, funded by tariffs; CRFB warns it would add roughly $5.8 trillion to the national debt.

Overview

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1.

President Trump announced via Truth Social a proposal to raise the U.S. defense topline to $1.5 trillion for fiscal year 2027, calling it a 'Dream Military' investment.

2.

Trump said increased tariff revenues would pay for the boost, fund debt reduction and a 'tariff dividend,' but analysts and courts question legal and economic reliability of those revenues.

3.

Nonpartisan watchdog CRFB estimates the $500 billion annual increase would add about $5.8 trillion to debt over a decade; tariffs would cover roughly half, possibly less with economic effects.

4.

The Supreme Court may soon rule on IEEPA-based tariffs; if invalidated, expected tariff revenue could decline roughly $700 billion through 2035, reducing funds to cover increases.

5.

Congress must pass FY2027 appropriations before October 1; lawmakers face choices on funding levels, potential continuing resolutions, and whether to fully offset any defense increases.

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FAQ

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Trump’s proposal would raise defense spending to about $1.5 trillion in 2027, roughly a 50% increase, or about $500 billion more than the current topline of about $1 trillion for defense.[1]

Trump argues the increase can be funded through higher tariff revenues, claiming they would generate enough money to cover the larger defense budget, reduce the national debt, and finance a “tariff dividend” for Americans.[2]

The Committee for a Responsible Federal Budget estimates that raising the defense budget to $1.5 trillion would add roughly $5–$5.8 trillion to the national debt from 2027 to 2035, even after accounting for expected tariff revenues.

Analysts note that tariff revenues depend on economic conditions and trade flows, and courts may limit Trump’s authority to impose tariffs under existing laws, which could significantly reduce projected tariff income and leave much of the proposed defense increase unfunded.[2][3]

Congress controls annual appropriations, so lawmakers must write and pass the 2027 defense spending bills before October 1, potentially use continuing resolutions, and decide whether to approve, reduce, or offset any increase Trump requests.[1]

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