Even bigger budget deficits are now in store due to the first $1 trillion defense budget.
February 19 – 8% Cut
On February 19, 2025, the Military Times reported White House Eyes 8% Cut to Defense Budget to Boost Trump Priorities
Defense Secretary Pete Hegseth ordered senior military officials to develop a budget plan that would slash defense spending by 8%, a dramatic cut which could reshape military end-strength and readiness for decades.
Hegseth ordered the proposed cuts to be compiled by Feb. 24. Seventeen categories would be exempt from the budget reductions, including military operations at the southern U.S. border, nuclear weapons and missile defense programs, and acquisition of certain drones and munitions.
The idea of steep defense cuts, originally reported by Bloomberg last week, is certain to draw opposition from lawmakers on Capitol Hill, where Republicans in recent weeks had been discussing major increases in defense spending in upcoming years – not significant cuts.
But Hegseth’s budget plans appear to follow broader instructions from President Donald Trump to reduce government spending, including the dismissal of thousands of federal workers in the last few weeks.
April 8 – 12% Rise
On April 8 we learned Trump Promises $1 trillion in Defense Spending
President Donald Trump this week unveiled plans for a $1 trillion defense budget next year, a massive increase that he claimed will provide the country with unmatched military strength for years to come.
During a press event with Israeli Prime Minister Benjamin Netanyahu on Monday, Trump offered the outline for total defense spending in the fiscal 2026 budget as part of his larger plans for U.S. national security.
“We’re going to be approving a budget, and I’m proud to say, actually, the biggest one we’ve ever done for the military,” he said. “$1 trillion. Nobody has seen anything like it.
“We are getting a very, very powerful military. We have things under order now.”
A $1 trillion defense budget would represent an increase of nearly 12% from current fiscal year spending levels. Trump indicated that at least some of the new spending would come from savings found by cuts ordered by the Department of Government Efficiency, although he did not specify any accounts.
An 8% Cut is Now a 12% Gain
Best of all, many of the same people who were cheering the cut are now cheering the gain.
This makes perfect sense since “nobody has seen anything like it.” Who wouldn’t want that?
And Hegseth who ordered the cuts, praised the news on social media Monday evening.
Ordering Weapons but No Budget
Trump said the extra money for defense will allow the country to purchase new equipment and capabilities needed for the future.
“We’ve never had the kind of aircraft, the kind of missiles, anything that we have ordered,” he said. “And it’s in many ways too bad that we have to do it because, hopefully, we’re not going to have to use it.”
This makes sense given there is no need for Congress to approve budgets despite what the Constitution says.
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US Debt Will Grow to a Staggering 156 Percent of GDP by 2055
On March 27, 2025, I noted US Debt Will Grow to a Staggering 156 Percent of GDP by 2055
If Congress extends the TCJA tax cuts with no offsetting savings, the deficits will surge.
Please consider the Peterson Foundation Statement on CBO Long-Term Budget Outlook
“Over the next 30 years, debt will grow to a staggering 156% of GDP. Annual interest costs will exceed $1 trillion next year, and total a stunning $76 trillion over the next three decades. This report also shows that the depletion of Social Security’s retirement fund is just 8 years away, which would result in immediate, automatic cuts for all beneficiaries.
“As bad as this outlook is, it represents an ‘optimistic’ scenario, because policymakers are currently considering adding trillions more in tax cut extensions, which would only add to these levels of debt.
‘Optimistic’ Scenario
The Peterson Foundation correctly notes the snake oil and the optimistic nature of that snake oil.
Trump also wants no tax on tips, no tax on Social Security, more military spending, restoration of state-and-local tax (SALT) dedications, and a new iron dome defense shield. He recently proposed interest deductions for made-in-America autos.
Not a bit of that is factored into the CBO projections.
The “optimistic” scenario just got dramatically worse.