D efense spending will be squeezed out of the federal budget by 2036. The Cato Institute states that by that year, Social Security, Medicare, Medicaid and interest on the national debt will consume 100% of federal revenues.
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federal budget Trump’s budget promises $500 billion military boost — and a 15.3% rise in discretionary spending
The Trump administration’s proposed budget for fiscal year 2027 increases discretionary spending by $288.4 billion, or 15.3%, compared to fiscal year 2026. This rise contradicts the president’s campaign promise to cut the federal budget every year. The increase is driven by a $500 billion boost to military spending, which would make the Pentagon’s budget the largest in U.S. history. That surge outweighs a $70 billion reduction in non-defense discretionary programs, which fund services ranging from health to homeland security. The net effect is a significantly larger discretionary budget. The proposal does not include major reforms to mandatory spending programs like Medicare, Social Security, or Medicaid—areas that are primary drivers of long-term debt. Without changes there, the administration offers no credible path to reducing deficits. The Committee for a Responsible Federal Budget projects that, even under the administration’s optimistic economic assumptions, federal public debt will climb from 100% of GDP in 2025 to 103% by 2029 if the budget becomes law. Presidential budget requests require congressional approval, and Congress has not yet acted on this proposal.
This projection comes as congressional Republicans consider President Trump's budget request for fiscal year 2027. The request asks for $1.5 trillion for discretionary defense spending and $660 billion for non-defense discretionary spending. When mandatory spending is included, the total price tag rises to $6.7 trillion.
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stablecoin regulation Treasury Department Proposal Would Mandate Technical Kill Switches in Stablecoins
Stablecoin users will face restricted access to funds, reduced on-chain privacy, and an increase in wallet freezes and asset seizures. This is the result of a a Treasury Department proposal to implement the GENIUS Act, which treats permitted payment stablecoin issuers as permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act. Under this rule, the US Treasury, through FinCEN and OFAC, { "// own single quote quote: the source material provided does not contain a quote from a person, and the "// own single quote quote: the source
The federal deficit topped $1.7 trillion in fiscal year 2025, while the national debt exceeds $39 trillion. As of October 2026, Social Security and Medicare combined account for 37% of federal spending. The federal government currently spends $7.68 billion per day.
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digital assets Stablecoin Yield Ban Transfers $800 Million From Consumers to Banks
Consumers lose $800 million in annual returns under a prohibition of yield on digital assets. This loss is the result of the GENIUS Act, enacted in July 2025, which prohibits stablecoin issuers from offering issuers from offering interest or yield on holdings. Users moved $54.4 billion from stablecoins back into bank deposits. Total bank lending increased by $2.1 billion, representing 0.02% of the total loan size. Large banks provide 76% of6% of the additional lending, while community banks with assets below $10 billion provide 24%. Community bank lending increased by $500 million, or 0.026%.
Dominick Lett of the Cato Institute argues that because the administration has not discussed reforms to entitlement programs, it is not possible to put the budget back on the right track. He suggests that Congress could use a budget reconciliation bill to include $2 of cuts to entitlement programs for every $1 in increased spending.
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federal budget A $1.5 trillion military spending push is framed as national necessity — but the real fiscal burden falls on social programs, not Pentagon waste
The Trump administration’s push for a $1.5 trillion annual military budget — a 44% increase — is being sold as a national imperative, but the fiscal trade-offs are not falling on Pentagon waste. They’re falling on social programs. The budget request includes more than $600 billion in new defense spending and just $73 billion in non-defense cuts, widening the deficit by over $500 billion. Rep. Michael Baumgartner, a Republican from Spokane, supports the increase despite the $39 trillion national debt, arguing that the Constitution mandates the common defense, not expansive social welfare. He backs cuts to Medicaid and food stamps, pointing to the One Big Beautiful Bill Act’s eligibility restrictions as a model. Those changes are projected to save $1 trillion over a decade, but they don’t take effect until after Trump’s term, leaving them vulnerable to reversal by Democrats. Only about a quarter of federal spending is discretionary — subject to annual appropriations — and half of that goes to defense. The rest is mandatory, locked in by law: Medicare, Social Security, Medicaid. Together, they make up 60% of spending. Any serious deficit reduction would have to touch them. Yet the administration recently reversed course on Medicare Advantage, abandoning proposed reforms that would have saved $1.3 trillion over ten years and instead proposing to increase spending. Social Security now pays some of the wealthiest retirees more than $100,000 a year. Capping those payments at $100,000 could save $190 billion over a decade, according to the Center for a Responsible Federal Budget. Meanwhile, the Pentagon spent $93.4 billion in September alone — the last month of the fiscal year — including $6.9 million on lobster tail and $1.8 million on musical instruments, with more than $98,000 going to a grand piano for the Air Force chief of staff’s home. Since 2008, the department has spent an average of over $257 million on furniture each September, driven by 'use it or lose it' rules. The fiscal burden of higher defense spending isn’t being offset by eliminating excess. It’s being shifted to programs for low-income Americans, pregnant women, and people with disabilities.
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