A $1.5 Trillion Defense Budget Could Mean Nearly $7 Trillion in Higher Debt

President Trump is expected to release his Fiscal Year (FY) 2027 budget later this week, which may include a proposal to increase the defense budget to $1.5 trillion. Using the latest projections for defense discretionary spending in the Congressional Budget Office’s baseline ­­– which accounts for inflation – along with actual appropriated defense spending for FY 2026, we estimate that increasing the defense budget to $1.5 trillion would raise total defense discretionary spending by $5.8 trillion from FY 2027 through 2036 and add $6.9 trillion to the national debt when accounting for increased interest costs.

This estimate is revised from our previous estimate due to an additional year of the budget window as well as higher interest rates.

The President’s potential request would represent by far the largest year-over-year increase in defense spending in the post-WWII era, and it should be fully offset by other proposals in his budget. If lawmakers wish to accommodate the President’s request, they should either reduce other spending, raise revenue, or enact some combination of the two.