Trump's $350 Billion Defense Gamble Has a $290 Billion Problem

President Donald Trump wants Congress to add $350 billion in military funding for fiscal 2027, but lawmakers appear ready to deliver only a fraction of it.

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A new analysis from the Center for Strategic and International Studies (CSIS), published last Wednesday, concludes any additional defense money Congress passes is more likely to land near $60 billion than the $350 billion the White House requested. The difference comes to $290 billion.

Where the Numbers Stand

The administration’s request would sit on top of $1.15 trillion in regular defense spending. Budget proposals in the House and Senate, however, set aside just $60 billion for the extra funding through the reconciliation process. 

Those figures have been public since earlier this year, and Politico reported in July on the trouble facing Trump’s roughly $1.5 trillion defense plan.

CSIS points to divisions within the Republican Party as a central obstacle. Some GOP lawmakers want spending cuts to offset any new military money. Others are pushing for even more defense spending. Agreement has been hard to find.

Even the $60 billion outcome assumes Republicans settle those differences first.

Midterms Raise the Stakes

Tuesday’s elections add another layer of pressure. If Democrats win control of either chamber on Nov. 3, Republicans could be left with only the short post-election session to pass the additional funding before the new Congress takes office in January.

The calendar is tight. CSIS counted just 20 scheduled House session days and 22 Senate session days after the election.

What Is at Stake

Trump’s request includes $113 billion for defense manufacturing and $103 billion for advanced technologies, including drones and AI. A smaller package could leave some programs facing funding shortfalls or delays.

Exposure varies, but could hit several types of companies across the defense sector. Lockheed Martin Corp. (NYSE:LMT) and RTX Corp. (NYSE:RTX) rank among the Pentagon’s largest prime contractors, with businesses tied to fighter jets, missiles and missile defense. 

Money aimed at manufacturing would likely matter most to companies like these, both of which have been working to expand production of munitions and interceptors.

Palantir Technologies Inc. (NASDAQ:PLTR) sits closer to the technology side of the request. Its software and AI platforms have become a growing part of Pentagon modernization efforts, which makes the advanced technology bucket especially relevant to the company.

AeroVironment Inc. (NASDAQ:AVAV) and Ondas Inc. (NASDAQ:ONDS) could be exposed if funding to drone programs is cut. AeroVironment builds small unmanned aircraft and loitering munitions such as the Switchblade, while Ondas has expanded into autonomous drone and counter-drone systems. 

Smaller defense companies often see sharper stock swings when spending expectations shift.

A Conditional Forecast

CSIS is offering a conditional assessment, not reporting a decision by Congress. Congress has not cut the $290 billion.

Lawmakers could still approve additional defense funding through other legislation. Election results could also quickly reshape the math, depending on which party controls each chamber next year.

Defense investors will likely get their first clues Tuesday night.

Photo: Dylan Hayes Photo / Shutterstock