Trump proposes nearly $7 trillion increase to national debt with new military budget, watchdog warns

(SeaPRwire) –   Washington’s budget watchers are focused on April 3, the date the White House is set to unveil its fiscal year 2027 budget proposal, which is expected to feature a major “historic” defense spending hike to $1.5 trillion. This comes just weeks after the national debt surpassed $39 trillion, a figure that has alarmed diverse figures such as Elon Musk and Jerome Powell.

Musk, the world’s wealthiest individual and a former White House advisor involved with the Department of Government Efficiency before his 2025 departure, stated plainly during a conference last September: “If you look at our national debt, which is insanely high, the interest payments exceed the Defense Department budget—and they keep rising.” His final assessment was: “If AI and robots don’t solve our national debt, we’re toast.”

According to a calculation by a leading watchdog, President Donald Trump’s proposed solution to the situation where interest payments outstrip military budgets is to borrow more money to increase military spending.

On Monday, the nonpartisan Committee for a Responsible Federal Budget (CRFB) estimated that raising the defense budget by the anticipated figure would boost total defense discretionary spending by $5.8 trillion between fiscal years 2027 and 2036. When interest expenses are included, this would add $6.9 trillion to the national debt. The organization stated the forecast was increased from a prior projection due to an extra year in the budget window and currently higher interest rates.

The CRFB stated that the proposal, which Trump initially suggested on Truth Social in January, would be “by far the largest year-over-year increase in defense spending in the post-WWII era.” The group emphasized that the request “should be fully offset by other proposals in his budget” and urged legislators to cut other expenditures, increase revenue, or implement a mix of both if they intend to approve the president’s proposal.

Adding similar remarks on Monday was an authority of no less stature than Federal Reserve Chair Jerome Powell. Speaking in a moderated discussion with approximately 400 Harvard economics students, Powell said that while the nation’s $39 trillion debt is not an immediate threat, its current course requires prompt attention.

“The level of the debt is not unsustainable,” Powell stated, “but the path is not sustainable. It will not end well if we don’t do something fairly soon.”

Powell made a clear separation between the total amount of debt and the speed at which it is increasing.

“What’s clear is that our debt is growing much faster; the federal government debt is growing substantially faster than our economy,” he explained. “And that ratio is going up. And in the long run, that’s kind of the definition of unsustainable.”

The figures underlying Powell’s worry are severe. Net interest payments on the national debt are now forecast to top $1 trillion in fiscal year 2026—almost three times the $345 billion paid in 2020. In merely the first quarter of the current fiscal year, interest payments hit $270 billion, exceeding the country’s defense spending for that same timeframe. The Congressional Budget Office predicts that debt held by the public will jump from 101% of GDP today to 120% of GDP by 2036, breaking the post-World War II record.

Powell placed the responsibility for solving this problem squarely with Congress.

“We don’t have to pay the debt down,” he remarked. “We just need to have primary balance and begin to have the economy actually growing more quickly than the debt.”

He also conceded that his debt warnings, which he has consistently issued for about a decade while leading the central bank, have typically been disregarded in Washington: “I pretty much limit myself to those high-level points,” he said, “which essentially everyone ignores.”

It is unclear if Congress will listen to the CRFB’s appeal to counterbalance the defense expansion. However, the budget math is harsh: Adding almost $7 trillion in new debt to a $39 trillion base, at a time when interest rates are elevated compared to recent years, significantly reduces the room for error—and steepens the dangerous path Powell cautioned about.