President Donald Trump called for a significant increase in U.S. military spending, proposing a budget of $1.5 trillion by 2027. This figure represents an increase of more than 50% over the $901 billion budget approved by Congress in December.
Trump announced the proposal on social media Wednesday, stating the increased funding would "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." He also indicated plans to scrutinize payouts to executives and shareholders of major U.S. defense contractors, demanding faster delivery of armaments and the construction of new manufacturing plants.
Following Trump's announcements, shares in major U.S. defense equipment manufacturers, including Lockheed Martin, Northrop Grumman, and Raytheon, experienced a rise of more than 5% in extended trading in New York.
The proposed budget increase comes amid existing concerns from economists regarding the widening gap between U.S. spending and income, which they have warned has reached unsustainable levels. Trump, however, asserted that the U.S. could "easily hit" the $1.5 trillion defense budget due to revenue generated from tariffs.
The proposal now faces consideration by Congress, where it is likely to be met with debate regarding its feasibility and potential impact on the national debt and other budgetary priorities. The increase would require Congressional approval as part of the annual budget process.
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