Pentagon orders budget revamp to reinvest $50 billion into Trump defense priorities

The Pentagon said it was directing military leaders to draw up a list of potential cuts totaling about $50 billion from the upcoming budget for fiscal year 2026 to be redirected into President Donald Trump's priorities for national defense.

The review could set the stage for Defense Secretary Pete Hegseth to follow through with goals to invest more in the Asia-Pacific and prioritize securing the U.S. border with Mexico, along with other reforms.

It was unclear how the effort would square with other cost-savings initiatives led by Elon Musk's government downsizing teams, which have started working from the Pentagon as civilian employees brace for job cuts.

Robert Salesses, performing the duties of the deputy defense secretary, said the military would develop a list of potential savings after examining the budget drawn up by the previous administration of President Joe Biden.

"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," Salesses said.

The statement clarifies a memo reported on Wednesday by Reuters from Hegseth, who asked some parts of the military to propose what could be cut as part of a potential 8% spending reduction for them over each of the next five years, U.S. officials said on Wednesday.

There was a long list of exemptions, including U.S. Indo-Pacific Command, funding for the military's mission along the U.S. border with Mexico, as well as missile defense and autonomous weapons, one of the officials said.

The military's commands that oversee operations in Europe, the Middle East and Africa were not exempt.

The Pentagon's budget is approaching $1 trillion per year. In December, then-President Joe Biden signed a bill authorizing $895 billion in defense spending for the fiscal year ending September 30.

Hegseth has said publicly that the Pentagon's focus is on U.S. border security and threats posed by China. He has said the U.S. can no longer be "primarily focused on the security of Europe".

As Musk's teams start their review, some civilian employees in the military said they had started receiving emails on Thursday saying they could be separated from the government since they were hired less than a year ago.

Leaders from across the political spectrum have long criticized waste and inefficiency at the Defense Department. But Democrats and civil service unions have said Musk, the world's richest person, lacks the expertise to restructure the Pentagon, and the efforts of his team risk exposing classified programs.

Attempting to cancel defense programs could trigger pushback from lawmakers to defend spending in their electoral districts, a fact defense contractors are well aware of.

The F-35 fighter jet, for example, has suppliers located in all 50 U.S. states, a point Lockheed makes with a map on its website detailing the economic value derived from production of the jets.

Musk, himself a major U.S. defense contractor, has a particular disdain for certain defense projects, especially the F-35. He has posted on X that "Some U.S. weapons systems are good, albeit overpriced, but please, in the name of all that is holy, let us stop the worst military value for money in history that is the F-35 program!"