$1.5 Trillion Defense Budget?
What does that mean for emerging tech and venture capital in defense?
Senator Wicker's proposal to reach 5% of GDP would elevate the defense budget to near $1.5 trillion, based on current GDP levels.
In 2025, GOP leaders of the House and Senate Armed Services Committees are prioritizing a substantial increase in defense spending. Representative Mike Rogers (R-Ala.) advocates for elevating defense expenditures to a minimum of 4% of the U.S. gross domestic product (GDP), aiming to initiate this process promptly. Similarly, Senator Roger Wicker (R-Miss.) proposes a defense budget that would gradually rise to 5% of GDP, surpassing $1 trillion. (news.bgov.com)
Achieving these targets would require significant budgetary adjustments. For context, national defense spending is currently capped at $895 billion for the fiscal year. Raising defense spending to 4% of GDP would necessitate an increase to approximately $1.2 trillion. Senator Wicker's proposal to reach 5% of GDP would further elevate the budget to about $1.5 trillion, based on current GDP levels. (news.bgov.com)
Over the past five years, U.S. defense spending as a percentage of GDP has experienced fluctuations. According to the World Bank, military expenditure was 3.45% of GDP in 2022. (data.worldbank.org) This reflects a general trend of defense spending decreasing as a share of GDP since the 1980s, when it peaked during the Reagan administration at about 6%. (econofact.org)
However, increasing defense spending faces challenges within the Republican Party, particularly from factions advocating for reduced government expenditures. House Republican leaders are currently working to implement deeper spending cuts in response to demands from key Budget Committee members who believe initial plans are inadequate. (politico.com)
In addition to budgetary concerns, GOP leaders are focusing on modernizing defense technology. This includes investments in areas such as drones, missile-jamming systems, critical munitions production, and machine learning.
Key defense programs under scrutiny include…
A special thanks to our strategic partners (raising money? bidding on contracts? looking for a job in tech?)
