Trump Promises Defense Spending, But May Not Get it

For as long as anyone can remember, the U.S. has always been a military superpower. America leads the world in military spending – and not by a little. But now President Trump has announced that he will raise Pentagon spending by almost 10 percent above the already set budget for next year to restore America’s “depleted” military. But as Trump prepares his first budget proposal, that money has to come from somewhere.

What are the Pros and Cons of Trump’s Proposed Defense Increase?

As with other promises he’s acted on so far, Donald Trump made expanding the military a priority during his campaign. He promised voters an increase in active army troops, Marine Corps battalions, Navy ships, and Air Force fighter jets. Now, he’s looking to act on that promise with what Trump refers to as “a historic increase” in defense spending to “rebuild the depleted military of the U.S. at a time we most need it.”

However, there’s one hiccup with his plan. That money has to come from somewhere. Currently, that plan, which the administration calls an “America First Budget”, would cut that same amount from non-defense agencies, notably the EPA and State Department. But even with cuts to those agencies of $54 billion, Trump would need significantly more money to fulfill his other promises, most notably his border wall and promises of infrastructure spending. On top of that, officials have already stated that Trump will not propose any changes to Social Security and Medicare, which are the two largest drivers of federal spending.

But regardless, Trump can not just pass a budget on his own. Congress has to pass spending bills with 60 Senate votes, meaning that even with control of 52 seats, the GOP must still convince 8 Democrat Senators to pass the proposal. Most likely, Congress will pass some part of the proposal while modifying or removing others.

Watch the news report regarding Trump's defense budget increase from NBC News:

One thing is clear, though. Whether or not his proposal passes, Trump is making the military a priority. Investors should look into publicly traded defense stocks, such as Heico Corp. (HEI, HEI-A), Raytheon Co. (RTN), and General Dynamics Corp., all of which have spiked UP on news of Trump’s announcements, and should continue to rise.

Trump's Chief Strategist, Steve Bannon finally spoke in public since the President's inauguration. See the whole story right here.

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