Trump proposes massive increase in 2027 defense spending to $1.5T,
citing 'dangerous times'
[January 08, 2026]
By AAMER MADHANI and KONSTANTIN TOROPIN
WASHINGTON (AP) — President Donald Trump on Wednesday proposed setting
U.S. military spending at $1.5 trillion in 2027, citing “troubled and
dangerous times.”
Trump called for the massive surge in spending days after he ordered a
U.S. military operation to capture Venezuelan leader Nicolás Maduro and
spirit him out of the country to face drug trafficking charges in the
United States. U.S. forces continue to mass in the Caribbean Sea.
The 2026 military budget is set at $901 billion.
Trump in recent days has also called for taking over the Danish
territory of Greenland for national security reasons and has suggested
he’s open to carrying out military operations in Colombia. Secretary of
State Marco Rubio has ominously warned that longtime adversary Cuba “is
in trouble.”
“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,” Trump said in a posting on Truth Social announcing
his proposal.
The military just received a large boost of some $175 billion in the
GOP’s “big, beautiful bill” of tax breaks and spending reductions that
Trump signed into law last year.
Insisting on more funding for the Pentagon is almost certain to run into
resistance from Democrats who work to maintain parity between changes in
defense and non-defense spending. But it’s also sure to draw objections
from the GOP’s deficit hawks who have pushed back against larger
military spending.
But Trump said he feels comfortable surging spending on the military
because of increased revenue created by his administration through
tariffs imposed on friends and foes around the globe since his return to
office.
The U.S. government collected gross revenues of $288.5 billion last year
from tariffs and other excise taxes, up from $98.3 billion in 2024,
according to the Bipartisan Policy Center. That’s a meaningful increase
in revenues from taxing imports. But it’s not enough to cover the
various promises made by Trump, who has said the tariffs can also cover
dividends to taxpayers, pay down the national debt and, now, cover
increased spending on the military.
Meanwhile, Trump on Wednesday also threatened to cut off Pentagon
purchases from Raytheon, one of the biggest U.S. defense contractors, if
the company did not end the practice of stock buybacks and invest more
profits into building out its weapons manufacturing capacity.
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“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 said on social media.
“Also, if Raytheon wants further business with the United States
Government, under no circumstances will they be allowed to do any
additional Stock Buybacks, where they have spent Tens of Billions of
Dollars, until they are able to get their act together.”
The threat came as the president issued an executive order calling
on the Pentagon to begin a review to spot defense contractors who
are underperforming on fulfilling contracts and insufficiently
investing in building manufacturing but are still engaging in stock
buybacks or distributing dividends to shareholders.
The order also calls for the Pentagon to take steps to ensure future
contracts with any new or existing defense contractor contain a
provision prohibiting stock buybacks during a period of
underperformance on U.S. government contracts. The order also calls
for the Pentagon to stipulate in future contracts that executive
incentive compensation is not tied to short-term financial metrics.
Trump in recent months has repeatedly complained broadly that
defense companies have been woefully behind on deliveries of
critical weaponry, yet continue to mete out dividends and stock
buybacks to investors and offering eye-popping salaries to top
executives.
The criticism of Raytheon, however, was the most pointed to date of
a particular contractor.
The company is responsible for making some of the military’s most
widely used and notable missiles, including the Tomahawk cruise
missile, the shoulder-launched Javelin and Stinger missiles, and the
Sidewinder air-to-air missile.
Raytheon also owns Pratt and Whitney, a company that is responsible
for manufacturing a host of jet engines that power aircraft for all
the military branches, including the newest F-35 Joint Strike
Fighter.
On Wall Street, shares of defense contractors fell, with Northrop
Grumman dropping 5.5%, Lockheed Martin declining 4.8% and RTX Corp.,
the parent company of Raytheon, slipping 2.5%.
Raytheon did not immediately respond to a request for comment.
—
AP writers Josh Boak, Stephen Groves, Paul Harloff and Lisa Mascaro
contributed reporting.
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