Hegseth, Caine Say Budget Increases Lethality, Strengthens Defense Industrial Base

The War Department's $1.5 trillion fiscal year 2027 budget request reflects the urgency of the moment, addressing both the deferment of long-standing problems, as well as positioning the joint force for both the current and the future fight, Secretary of War Pete Hegseth said today during a House Armed Services Committee hearing in Washington.

The secretary said the defense industrial base has been hollowed out by years of offshoring and outsourcing and is riddled with cost overruns, adding that under the leadership of this administration, the department is helping put it back on a wartime footing.

"[This] budget will ensure the United States continues to maintain the world's most powerful and capable military, as we grapple with a complex threat environment across multiple theaters," Hegseth said.

The budget includes a pay increase for service members. Specifically, a 7% increase for military personnel in the grade of E-5 and below, a 6% increase for personnel in the grades of E-6 to O-3 and a 5% increase for members in the grade of O-4 and above. 

It also eliminates all poor or failing barracks.

"Quality of life for our troops is front and center in this budget," Hegseth said. "We have flipped the Pentagon acquisition process from a bureaucratic model to a business model 180 [degrees], decisively moving from an acquisition environment - paralyzed by bureaucratic red tape - into an outcomes-driven organization, focused on delivering the most [impact] at cost [and] at scale for taxpayer dollars."

He noted that those changes would be achieved through multiyear procurement agreements and smart business deals for critical munitions and capabilities.

"We've sent an unambiguous demand signal to industry partners to build more and build faster. The result has been a surge, a revitalization of our great factories and a massive reinvestment in the skilled American workers who serve as the industrial muscle behind our warriors," he said.

The secretary said U.S. companies are investing in America with their own money and, their own capital, adding that this has never been done before and is long overdue.

"We are firing up the American economic engine, and at every level of our defense industrial base. Every policy we pursue, every budgetary item we request, serves to ensure the department remains laser-focused on increasing lethality and survivability of our forces from the front lines to the factory floors," Hegseth said.

Air Force Gen. Dan Caine, chairman of the Joint Chiefs of Staff, also testified and said the department needs timely, predictable and sustained investment.

The budget is critical to modernizing the joint force and ensuring that whatever threats emerge in the future, warfighters are ready to meet those challenges and defend the nation, Caine said.

The chairman reiterated Hegseth's comments on the need to recharge the defense industrial base to ensure military readiness.

"I have the absolute trust in the extraordinary men and women who come and volunteer to serve our nation within our joint force. They execute the missions quietly every day and, coupled with the American spirit, out-think, out-compete and relentlessly innovate," Caine said.