Doug Mills/The New York Times via AP, Pool
In a speech Wednesday evening, President Donald Trump touted $1,766 “warrior dividend” checks that would be sent out to the troops for the holidays and claimed the funds were from tariffs. The next day, multiple media reports confirmed a very different funding source.
“1,450,000 military service members will receive a special — we call ‘warrior dividend’ — before Christmas, so warrior dividend, in honor of our nation’s founding in 1776, we are sending every soldier $1,776,” said Trump during his remarks. “And the checks are already on the way.”
However, the funds for these “warrior dividend” checks are actually coming “from Congressionally-allocated reconciliation funds intended to subsidize housing allowances for service members,” reported Defense One senior reporter Thomas Novelly, citing a senior Trump administration official.
Specifically, the funding that will be used for these payments was already allocated in the “One Big Beautiful Bill” Act passed earlier this year: the “Basic Allowance for Housing” entitlement, a monthly payment meant to cover off-base housing expenses for troops including rent, mortgage, and utilities.
It is not from tariff revenue.
Under the bill, Congress appropriated $2.9 billion to the Defense Department “to supplement the Basic Allowance for Housing entitlement within The One Big Beautiful Bill,” the senior official wrote in an email to Novelly, adding that $2.6 billion would be disbursed “a one-time basic allowance for housing supplement” for “[a]pproximately 1.28 million active component military members and 174,000 Reserve component military members” who are ranked O-6 and below.
PBS NewsHour correspondent Lisa Desjardins confirmed the source of funding with her own sources.
“[I]t is not tariff money,” she reported. “It is not a bonus. It IS funding meant to help with high housing costs.”
This assistance was intended to be for two years to help with out-of-pocket for “basic housing costs,” Desjardins added, but the “Pentagon decided to instead give this money as a one time payment.”
The budgetary sleight-of-hand was criticized for not actually sending extra money to the troops and for being misleading.
Jessica Riedl, a Brookings Institution budget and tax fellow and contributor at The Dispatch, blasted the Trump administration for “announc[ing] troop bonuses but then quietly taking it out of their housing allowance fund” as “so typical of this White House: Totally gimmicky, likely illegal, and ultimately accomplishing nothing.”
Nonetheless, it does appear that the administration’s claim that the payments won’t be subject to federal income taxes may in fact be accurate, as a supplemental housing allowance.
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