Spending Isn’t a Defense Strategy

The Pentagon has asked for $1.54 trillion for national defense in fiscal year 2027, including $1.15 trillion through regular appropriations and another $350 billion through budget reconciliation. That is a 45% increase over FY 2026’s roughly $1.06 trillion in enacted funds, which included reconciliation funds.

Adjusted for inflation, U.S. military spending grew more than 48% from 2000 to 2024. That means this administration is asking for nearly a quarter-century of growth in one budget cycle.

This steep increase generates risks, from establishing bad precedents to perpetuating cost overruns on unaccountable programs to enriching defense contractors at the expense of the taxpayer.

No version of the Pentagon could responsibly absorb that much money that fast — least of all this one.

The department has failed every financial audit since its first full one in 2018. Meanwhile, the current leadership continues to shirk oversight, eroding trust and confidence with Congress and the taxpayers.

One justification for the increase is the war with Iran. The Pentagon told Congress in April the bill for Operation Epic Fury was $25 billion, updating their estimate to $45.1 billion in September, refusing to provide specific accounting details on both occasions. The Congressional Budget Office, to whom the Pentagon refused to provide any information, estimated costs at $38 billion through August 1, plus another $2 billion to $3 billion each month after. All of these values are estimates, but together they show that this war — which still has no end in sight — remains an expensive drain of taxpayer money. As my colleague Greg Williams has pointed out, its cost, especially given the opaque accounting involved, simply cannot justify an overall budget increase this large.

Very little can justify it, in fact. At POGO, we have pointed out problems with a defense budget increase all year. In an April 3 statement, we warned that a budget this size would mean “greater waste of tax dollars and higher profits for defense company executives.” In July, we called the bill’s topline “recklessly high.” And reckless it is. There’s little to no effective oversight of where the money goes, little to no accountability when good money goes after bad, and little to no willingness to address it. Congress needs to demand more answers.

The Process Is Part of the Problem

The process for defense budgeting is as important as the final number itself. The executive branch’s FY 2027 request to Congress asks for $350 billion of the $1.5 trillion budget to be funded through reconciliation. As we’ve previously explained, reconciliation is a tool Congress can use to allocate additional funds outside of the standard appropriations process. Notably, it does not require the executive branch to formally submit detailed budget request materials ahead of allocation, meaning Congress must take a risk on whether the Pentagon has done the work needed to manage the money appropriately. That is $350 billion going toward programs with minimal formal oversight, to a Pentagon already limiting transparency.

Oversight must come before more money, not after.

As Center for Defense Information Director Greg Williams said earlier this year, “asking for … a 45% budget increase to an organization that can’t balance its own books defies reason.” Before Congress approves another dollar, the Pentagon should explain how this money will be tracked and what the additional funding is meant to achieve.

The Money Is Going to the Wrong Things

A strong defense is derived from setting priorities and aligning strategies, not from throwing money at every new technology pitched to the Pentagon — excessive military spending is not a strategy. And yet the Pentagon is submitting a budget request that is largely additive in its approach, keeping poorly performing programs alive while it chases after new ones. If history is any indication, these shiny new programs will likely overpromise and underdeliver, all at an immense cost to taxpayers. The military should not get to say “yes, and” to everything.

For example, the Pentagon has asked for 85 new F-35s, almost twice as many as they asked for last year. The program has a projected lifecycle cost of over $2 trillion, yet, more than 25 years into the program, 75% of the force is incapable of operating at full capacity at any given time. This request buys more of what doesn’t work, instead of addressing the sustainment issues at hand. Another program in the request, the Trump-class battleship, is a weapons system that runs counter to the Navy’s own doctrine of distributed operations, with initial proposed capabilities that fail to align to the needs of modern and future combat. There is no finalized design for the ship, and current estimates place the cost at $23.4 billion for just the first one.

The Pentagon is also throwing money at problems where it will have limited, if any, impact. An argument in support of this year’s increase that is gaining popularity among members of Congress is that we must replenish munitions expended in the war with Iran. While there are legitimate national security concerns when it comes to depleted munitions, increasing spending on them this year will not produce them any faster. Weapons manufacturers are asking for money in advance to build more factories to mitigate this problem in the future, but contractor promises have rarely been a guarantee of performance. Congress needs to ask the Pentagon for real data about the effectiveness of these proposed increases, rather than uninformedly dumping billions of dollars into it this year.

The Costs Will Only Go Up

A budget this size would not be a one-year event. Congress and the Pentagon generally subscribe to the sunk cost fallacy, so once money flows into major programs, it is extremely hard to pull back. The Sentinel ICBM is a clear example. In 2024, the Pentagon had to notify Congress of a 37% cost overrun. The Pentagon then certified the program to continue, restructuring the plan with the acknowledgement that the program would come in 81% over budget and years behind schedule.

Once programs are allowed to balloon in cost, it is nearly impossible, given the limited or underutilized oversight and enforcement mechanisms, to rein them back in to responsible spending levels, regardless of performance.

Increasing the Defense Industry’s Bottom Line

American taxpayers footing the bill for increased military spending shouldn’t expect to dole out trillions of dollars without seeing some benefit. And yet, where the increase in spending gets doled out suggests that the real beneficiaries of a $1.5 trillion defense budget are contractors. As military spending grew by 22% from the mid-1980s to 2020, the number of people employed by military contractors fell from 3.2 million to 1.1 million, and average, inflation-adjusted salaries for those employees dropped by more than $20,000. While the employment and pay fell, the big defense companies and their stakeholders reaped the benefits. From 2021 to 2024, the four largest of these companies spent $89 billion on stock buybacks and dividends, up from $39 billion over the previous four years.

Even by the kindest of assessments, the money that is flowing from taxpayers through Congress and the Pentagon to military contractors is not returning to the taxpayers through more private-sector jobs or more research and development. Even through the most rudimentary understanding of trickle-down economics, the numbers don’t add up.

And every dollar placed on that trajectory is a dollar not spent somewhere else. Research shows that federal investment outside the military creates more jobs per dollar. The national debt now exceeds $40 trillion, with interest payments rising above $1 trillion this year — costs that will squeeze every other national priority, including security.

What Congress Needs to Do

Congress needs to bring the topline defense budget back down toward FY 2025 enacted levels. POGO partnered with Taxpayers for Common Sense to publish a line-by-line list of specific areas and programs that could be cut to lower the budget. In that report, we show where to start, advocating for more than $518 billion in thoughtful, strategic cuts to the FY 2027 procurement and research budgets. Most would revert programs to FY 2025 enacted funding, bringing the request back to roughly $1 trillion. If Congress also chose to hold operational and maintenance funding to FY 2025 levels, it would save roughly another $80 billion.

Congress should also take additional actions that would help get our spending under control. For instance, it should return to regular order, passing clean defense appropriations bills and keeping reconciliation out of defense budgeting. It should tie new money to accountability, making any funding increases contingent on audit progress and complete spending plans. And it should hold failing programs to account by keeping the House-passed Nunn-McCurdy reforms and the strengthened Truth in Negotiations Act provisions in the final National Defense Authorization Act.

To measure the strength of our national defense by the topline of its budget is exactly backward. A strong national defense is measured by our ability to deter conflict when possible and provide what our service members actually need when conflict is unavoidable. A good budget gives the Pentagon what it needs to accomplish that, while also allowing taxpayers to see where their money is going.

This $1.5 trillion budget fails on all counts.