Trump repurposing money earmarked for troop housing for ‘warrior dividend’ bonuses
By Haley Britzky, CNN
(CNN) — The one-time bonuses President Donald Trump said Wednesday will be paid out to over a million US service members will be pulled from funds already approved by Congress to cover housing and other household costs for troops as part of a military stipend program.
President Trump announced the $1,776 bonuses in an address to the nation, dubbing them a “warrior dividend.”
“Nobody deserves it more than our military, and I say congratulations to everybody,” Trump said, crediting his domestic policy bill which was passed earlier this year and tariffs, which he said made the US “a lot more money than anybody thought.”
However, a senior administration official said the $2.6 billion cost of the bonuses was being taken from $2.9 billion in extra funding for basic allowance for housing, or BAH, payments appropriated by Congress in July, CNN reported.
The supplemental funds were marked for “improving the quality of life for military personnel” within what Trump labeled the “Big Beautiful Bill.”
BAH is an additional form of payment to many troops that is intended to cover living expenses for military families. The stipends vary based on rank, geography and whether the service member has dependents, with military family advocates arguing that the payments often do not fully cover expenses for those living in higher-cost areas.
It’s unclear if the supplemental funds approved by Congress had been intended for anything specific, such as offsetting housing costs in those more expensive areas. Congress had previously approved base funding for the stipend, and though it signed off on the extra funding, it had given the Pentagon broad discretion on how to use the money to help troops with the cost of living.
A report last year from the Government Accountability Office found that the Pentagon “does not routinely assess the negative financial and quality-of-life effects that limited supply or unaffordable housing has on affected service members.”
“During GAO visits to selected DoD sites, some service members reported having to take on debt or commute long distances to afford quality housing,” the report said.
The bonuses will go to active-duty members at the rank of O-6 — officers at the rank of colonel in the Army, Air Force, and Marine Corps, and Captain in the Navy — and below, as well as reserve component members on active-duty orders for 31 or more days as of November 30, according to a White House social media post. That would mean some troops who don’t currently receive BAH stipends, such as junior troops living in barracks, might still get the bonuses.
“This warrior dividend serves as yet another example of how the War Department is working to improve the quality of life for our military personnel and their families,” Defense Secretary Pete Hegseth said in a video posted to social media on Thursday, referring to the Defense Department’s secondary name of War Department. “I can think of no better Americans to receive this check right before Christmas. Whether it’s for pay, housing, faith support, all elements of what we’re doing are to rebuild our military.”
It’s unclear what impact if any pulling funds from the supplemental BAH funds will have. The Pentagon regularly increases the BAH rate for service members, and earlier this month announced a 4.2% increase to the stipend for next year.
The benefit of pulling the funds from the housing stipend is that those allowances are tax-free, Beth Asch, a senior political economist at RAND Corporation, told CNN.
But the bonuses should not take away from the expected BAH allowance rates established for next year, Asch said.
“The rate is going to go up as it usually goes up using the same methodology that’s been used year after year after year,” Asch said.
CNN’s Kit Maher contributed to this report
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