[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 has urged Congress to pass a discretionary budget bill for fiscal year 2027 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 will be one of the largest budget increases in U.S. history, comparable to the mobilization budgets during World War II.

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

Trump pledges to reinvest in America’s national security infrastructure

As for the ongoing conflict involving Iran, the Office of Management and Budget is still reviewing a $200 billion supplemental budget proposal submitted by the Pentagon for fiscal year 2026, with the amount to be added on top of the budgets already submitted.

Russell Vought, director of the White House Office of Budget, said Trump has promised to reinvest in the United States’ national security infrastructure to ensure the country remains secure in a dangerous world, and that the fiscal year 2027 budget proposal will fulfill that promise and ensure the United States continues to have the world’s strongest and most combat-capable military.

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