Pentagon gets big boost as Trump targets domestic cuts

President Donald Trump is set to unveil his fiscal year 2027 budget plan, framing his party’s midterm election message around a massive defence buildup partially funded by cuts to domestic agencies, Bloomberg reports.

The budget signals a political gamble for the White House, particularly as gasoline prices rise and the war in Iran remains unpopular. Trump’s plan envisions cuts to health and science agencies, proposals that Congress rejected last year on a bipartisan basis. Yet the proposal does not address entitlement programs like Social Security or Medicare, which remain politically untouchable and are key drivers of long-term spending. A source familiar with the plan said, “the 2027 proposal is not expected to include 10-year deficit projections,” limiting the administration’s ability to show the full fiscal impact.

Trump, who once called himself a budget hawk, ended his first term with $7.8 trillion in added debt. While last year’s tax package—the “One Big, Beautiful Bill”—promised to be offset by tariff revenue, the Supreme Court struck down most of the president’s emergency tariff powers. The administration is exploring alternatives and congressional approval would be required for proposed $2,000 taxpayer rebates.

The budget seeks to boost defence spending to $1.5 trillion, up from less than $1 trillion in the current fiscal year. “Trump hasn’t made clear whether the $1.5 trillion figure is just for the Pentagon operating budget, or also includes other defence line-items like military construction and nuclear weapons spending by the Energy Department,” according to officials.

Economic assumptions in the budget may already be outdated. The five-week-old war in Iran has spiked oil prices, increased inflation forecasts, and tempered expectations for further Federal Reserve rate cuts. White House projections historically lean optimistic, and investors will be watching closely for signals on US debt sustainability.

With a slim 217-to-214 House majority, Trump faces resistance even within his own party. “Deficit hawks in the party have already voiced opposition,” and any significant cuts could risk a government shutdown just weeks before the midterms.

By Vafa Guliyeva