The US Department of Defense (DoD) has outlined the proposed FY26 national defence budget from US President Donald Trump, a more-than $1tn package intended to provide investment into key capabilities across the country’s military services.
According to a 26 June release from the DoD, the request, which represents a 13.4% increase from FY25, includes $848.3bn for the discretionary budget and $113.3bn in mandatory funding through congressional reconciliation.
Additional elements take the FY26 budget request to $1.01tn, by some margin the largest defence budget on the planet.
In comparison, the next largest defence budget is China’s, which although not publicly available is thought to be in excess of $300bn, according to analysis conducted by the Stockholm International Peace Research Institute.
“This historic defence budget prioritises strengthening homeland security, deterring Chinese aggression in the Indo-Pacific [region], revitalising the defence industrial base and maintaining our commitment to being good stewards of taxpayer dollars,” a senior defence official told reporters, according to the US DoD news service.
The official added the $113bn in mandatory reconciliation funding would address President Trump’s priorities, including shipbuilding, missile defence, munitions production and quality-of-life initiatives for service personnel.
Divided across the DoD, the proposed budget breaks down to $197.4bn for the US Army, $292.2bn for the US Navy, $301.1bn for the US Air Force (USAF) and $170.9bn defence-wide, according to the senior defence official.
Included in the USAF’s proposed budget is $40bn toward the Space Force, which represents a 30% increase in funding from FY25.
According to the US DoD, other notable elements in the budget proposal include:
- $25bn initial investment on the Golden Dome missile defence system
- $60bn on nuclear enterprise modernisation, including all three legs of the nuclear triad
- $3.1bn for continued F-15EX Eagle II fighter production
- $3.5bn in funding for the USAF’s F-47 Next Generation Air Dominance fighter
- Funding for 19 new US Navy battle force ships, maintaining 287 ships
- $2.5m for nuclear shipyard productivity enhancements
- $6.5bn invested in conventional and non-hypersonic munitions and $3.9bn in hypersonic weapons
- $15.1bn invested in cybersecurity
- $1.3bn for industrial base supply chain improvements
- $2.5bn for missile and munitions production expansion
- $1.2bn for the Office of Strategic Capital’s loan program, meant to attract private investment in national security projects
The budget proposal also includes a 3.8% pay increase and $5bn investment in unaccompanied housing for service personnel.
Winners and losers: the trillion-dollar question
It is difficult to imagine that a share of $1trn could leave winners and losers in the President Trump’s proposed FY26 budget, which will now head to the US House of Representatives and Senate for debate and approval.
However, virtually all US President budget proposals are amended in some form, as US politicians lobby to secure or preserve defence interests in their constituency.
Critically, the FY26 budget recommends to cancellation of the E-7 Wedgetail early warning and control aircraft – a type currently in service in Australia and being delivered to the UK – due to apparent concerns over its survivability in a contested environment.
The proposal also recommends reducing the number of F-35 Lightning II stealth fighter from 74 aircraft in FY26 down to 47 airframes.
Despite this, the USAF comes out with the largest individual share among the US military’s services, with big ticket programmes such as the under-construction B-21 Raider fleet and planned F-47 sixth-generation fighter.
According to Fox Walker, defence analyst at GlobalData, a notable omission was any information on defence research, development, testing, and evaluation (RDT&E) stood out in a era market by steep RDT&E cuts across the US government.
In May, US Secretary of Defence Pete Hegseth said the results of an internal review identified “redundant, non-essential, non-statutory functions” within Office of the Director of Operational Test and Evaluation that “do not support operational agility or resource efficiency”.
As a result, a series of cost cutting measures, including reduction in staff, would save “more than $300 million” per year, Hegseth said.
Meanwhile, Walker said it was “curious” the US DoD would not highlight how much it spends on artificial intelligence given the area is a cornerstone of the country’s competition with China.
“I would suggest the DoD itself as a big winner. Congress was not set to allocate $1 trillion annually in military spending until 2030,” said Walker.
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