[Iran Crisis] Trump significantly increases the FY2027 defense budget by 50% to $1.5 trillion. Economists: The increase is comparable to mobilization budgets during World War II.

U.S. President Trump is urging Congress to pass a discretionary spending budget proposal for the 2027 fiscal year totaling $2.2 trillion, in order to significantly increase defense spending, as China’s defense spending budget reaches $1.5 trillion, up 50% year over year. Most economists believe this would be one of the largest budget increases in U.S. history, comparable to the mobilization budgets of World War II.

Of the $1.5 trillion defense spending budget, it includes $1.1 trillion in basic discretionary spending by the Department of Defense, as well as $350 billion in mandatory spending by the U.S. during the Iran war. At the same time, Trump is once again pushing domestic agencies to cut budgets significantly; non-defense discretionary spending will be reduced by 10%, or about $73 billion, but the savings in agency budgets are not enough to offset the increased military spending.

Trump pledges to reinvest in U.S. national security infrastructure

As for the current Iran war, the Office of Management and Budget is still reviewing the $200 billion supplemental budget proposal submitted by the Pentagon for the 2026 fiscal year, and the amount will be added on top of the budget proposals already submitted.

The Director of the White House Office of Budget, Russell Vought, said Trump has pledged to reinvest in America’s national security infrastructure to ensure the country remains safe and secure in a dangerous world, and that the budget proposal for fiscal year 2027 will carry out that commitment and ensure the United States continues to maintain the world’s most powerful and combat-capable military.

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