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President Donald Trump’s promise to pay U.S. troops a “warrior dividend” bonus is not a new White House program but a rebranding of a military housing stipend already approved by Congress, according to senior administration and congressional officials.
The $1,776 payments Trump unveiled during a nationwide address Wednesday night will be funded through existing Pentagon housing money authorized in legislation Congress passed earlier this year, not from new revenue generated by the administration, officials said.
The bonuses — expected to reach roughly 1.45 million service members at a cost of about $2.6 billion — will be issued as a one-time supplement to the Basic Allowance for Housing, according to a senior administration official and two congressional officials who spoke on the condition of anonymity to discuss internal deliberations. The Pentagon later confirmed the funding source.
Trump portrayed the payments as a reward for military service and sacrifice, suggesting the money would come from tariff revenue generated under his trade policies.
“Nobody deserves it more than our military,” Trump said during the 17-minute address, calling the payout a “warrior dividend.”
But congressional officials said the money will instead come from $2.9 billion Congress approved for housing supplements as part of the sweeping budget reconciliation package — known as the “Big Beautiful Bill” — that passed in July. Lawmakers included the funds after warnings that housing stipends have failed to keep pace with rising costs for military families.
Tariff revenue will not be used to fund the payments, one congressional official said.
Limits on presidential authority
Under federal law, tariff revenue flows into the U.S. Treasury and cannot be spent at the president’s discretion without congressional approval. White House officials declined to explain why Trump suggested the payments would be funded by tariffs.
In a statement, the White House defended the program.
“President Trump’s administration recognizes the hard work of our service members with this one-time warrior dividend, which places funds directly in the hands of our military members and their families,” the statement said.
Defense Secretary Pete Hegseth said Thursday on X that the payments will be tax-free and described them as part of a broader effort to improve quality of life for military families. The Pentagon did not respond to detailed questions about Trump’s characterization of the funds.
Pattern of overstated credit
The episode follows a familiar pattern for Trump, who has repeatedly taken credit for military pay increases and benefits that were mandated by Congress or tied to long-standing federal formulas.
During a May visit with U.S. troops in Qatar, Trump promised a “substantial” pay raise in 2026. But the 3.8% increase set to take effect next year — approved this week in the annual defense authorization bill — follows the same formula used for decades to track civilian wage growth and does not exceed prior projections.
During his first term, Trump frequently claimed he delivered the first military pay raises in years, despite the fact that service members have received annual increases every year since the 1970s.
The “warrior dividend” payments are scheduled to arrive roughly one week before the 2026 pay raise takes effect.
Who qualifies
Senior officers will not receive the bonus, but most enlisted troops, junior officers and some reservists will be eligible. Service members who do not receive housing allowances may still qualify, officials said.
Trump said the $1,776 figure was chosen to honor the nation’s founding in 1776. The U.S. will mark its 250th anniversary next year, a milestone the president highlighted during his address.
While the bonus will be welcome relief for many troops, it will not represent the largest pay increase they receive this year. Congress last year approved raises of up to 14.5% for troops ranked E-4 and below, which took effect in April and added between $3,000 and $6,000 in annual pay for tens of thousands of service members amid persistent recruiting challenges.
