Former President Donald Trump has unveiled an ambitious proposal for a $1.5 trillion US military budget for fiscal year 2027. This substantial sum represents a significant increase of over 50% compared to the current year's defence allocation. The announcement, made following consultations with congressional figures, was framed as a crucial measure to bolster American security during what he described as "very troubled and dangerous times."
The proposed budget, if enacted, would substantially exceed the $901 billion defence allocation previously approved by Congress. Trump articulated his vision of creating a "Dream Military," which he believes is essential for safeguarding the nation against potential adversaries. This considerable investment is intended to accelerate military hardware production and enhance national defence capabilities to an unprecedented level.
Adding a notable condition to his spending proposal, Trump indicated a desire for increased scrutiny over defence contractors' financial practices. He signalled an intention to curb lucrative payouts to company executives and shareholders. Such distributions would become contingent upon firms demonstrating a commitment to expediting existing deliveries and investing in new manufacturing facility expansions. This suggests a strategic shift to redirect corporate profits towards tangible defence output improvements.
Trump's rhetoric specifically addressed the financial strategies of major defence conglomerates, including prominent companies like Lockheed Martin, Northrop Grumman, and Raytheon. He criticised what he termed "massive" shareholder distributions and stock buybacks, arguing these actions diverted vital capital away from enhancing production capacity. Furthermore, he decried the "exorbitant" compensation packages awarded to senior executives within these firms.
The market reacted swiftly to Trump's pronouncements, with shares in leading US defence equipment manufacturers experiencing a notable surge. These companies saw their stock prices climb by more than 5% in after-hours trading following the news. This uptick suggests investor optimism regarding the prospect of significantly increased government contracts.
This advocacy for heightened defence spending is consistent with Trump's past policy positions. However, the sheer scale of the proposed $1.5 trillion budget for 2027, combined with his direct engagement with industry financial practices, represents a particularly assertive initiative. Economists have previously expressed concerns about the fiscal sustainability of such expansive government expenditure. The proposal now initiates significant debate regarding the nation's defence priorities and overall fiscal health.