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The Trump administration has directed senior US military leaders to prepare for significant budget cuts that could reduce defense spending by up to eight percent annually. Over the next five years, this would amount to approximately $290 billion in reductions, according to reports from US media on Wednesday.
Pentagon Ordered to Develop Cost-Cutting Plans
Defense Secretary Pete Hegseth has instructed the Pentagon to develop these deep spending cuts, as reported by The Washington Post, which cited an internal memo.
Currently, the Pentagon’s budget for 2025 stands at around $850 billion. While lawmakers from both parties recognize the necessity of this funding to counter global threats, particularly from China and Russia, the proposed cuts would reduce this figure to about $560 billion by the end of the five-year period.
Uncertainty Over Areas Targeted for Cuts
Details about which sectors of the military will see reductions remain unclear. However, an earlier report from The Washington Post indicated that the focus would be on junior civilian workers rather than uniformed personnel.
The announcement of these budget cuts follows a reported visit to the Pentagon last week by Elon Musk’s Department of Government Efficiency. The proposal is expected to face strong opposition from military officials and members of Congress.
Impact on Defense Contractors
News of the potential budget cuts briefly impacted the stock prices of major US defense contractors such as Lockheed Martin and Northrop Grumman. Investors reacted to the possibility of reduced government contracts in the coming years.
Priorities and Exemptions in the Budget Cuts
According to Hegseth’s memo, the Pentagon must present its proposed cuts by February 24. The plan includes 17 specific categories that President Trump wants to exempt from reductions. These include border security operations and the modernization of nuclear weapons and missile defense systems. Funding is also expected to continue for regional commands such as the Indo-Pacific Command and Space Command.
However, certain major centers are notably absent from the exemption list, including European Command, which plays a key role in US strategy regarding the Ukraine conflict. Additionally, Africa Command and Central Command, which oversees operations in the Middle East, were not mentioned as priorities.
Trump’s Vision for Military Reform
In the memo dated Tuesday, Hegseth emphasized the need for urgent action to reform the military. “The Defense Department must act urgently to revive the warrior ethos, rebuild our military, and reestablish deterrence,” he wrote.
He further outlined that the budget would focus on creating a more effective fighting force, cutting unnecessary expenditures, reducing bureaucracy, and making meaningful progress toward completing a full financial audit.
