US Defense Secretary Pete Hegseth has ordered Pentagon officials to plan for annual 8% budget reductions over five years, representing the largest defense spending cuts since 2013, according to an internal memo obtained by The Washington Post.
The directive targets the Pentagon’s $850 billion 2025 budget while protecting 17 categories, including border operations, nuclear modernization, and critical military acquisitions. The plan exempts the department’s 1.3 million active-duty personnel and 800,000 National Guard and Reserve members.
“The Department will develop a list of potential offsets that could be used to fund these priorities, as well as to refocus the Department on its core mission of deterring and winning wars. The offsets are targeted at 8% of the Biden Administration’s FY26 budget, totaling around $50 billion, which will then be spent on programs aligned with President Trump’s priorities,” Deputy Secretary of Defense Robert G. Salesses said in a statement.
The restructuring specifically targets diversity programs and climate change initiatives while maintaining funding for Indo-Pacific Command and Northern Command operations.
DOGE, under Elon Musk’s oversight, leads a parallel workforce review across the department as part of the billionaire’s push to dismantle federal bureaucracy. The National Security Agency has identified about 4,000 probationary employees — 10% of its civilian workforce — for potential dismissal, impacting the Defense Department’s 900,000 civilian employee base.
Speaking in Stuttgart last week, Hegseth advocated for maintaining US defense spending above 3% of GDP while urging NATO allies to increase their defense budgets to 5%. “The time for preparation is over — we must act urgently to revive the warrior ethos, rebuild our military, and reestablish deterrence,” Hegseth wrote in the memo.
Other exemptions include submarine acquisition and one-way attack drones besides Indo-Pacific Command and Northern Command operations. Notably, the plan reduces support for several major geographic commands, including European Command, which oversees US support for Ukraine, and Central Command, responsible for Middle East operations.
The Pentagon spokesperson indicated that further details about the secretary’s directive would be forthcoming.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
