WASHINGTON, D.C. — President Donald Trump announced a one-time $1,776 payment for roughly 1.45 million U.S. service members during a prime-time address Wednesday, claiming the money came from tariff revenue. Trump said the payments, timed to mark the 250th anniversary of the Declaration of Independence, were possible “because of tariffs,” repeating a long-running assertion that his trade policies generate excess federal funds.
That claim, however, is not accurate. The payments will instead be funded by repurposing military housing assistance already approved by Congress as part of Trump’s “One Big Beautiful Bill Act,” not from new tariff revenue. A senior administration official acknowledged the funding shift, contradicting Trump’s public explanation.
The so-called “warrior dividend” would cost an estimated $2.5 billion. Its announcement raised immediate questions, particularly as the Supreme Court is considering cases that could require the federal government to refund billions collected through Trump-era tariffs. Trump has repeatedly promoted tariffs as a revenue windfall, despite economists noting they function as taxes paid largely by U.S. consumers.
Data from The Budget Lab at Yale shows the effective U.S. tariff rate has climbed to 16.8%, the highest since 1935, costing the average household about $1,700 annually. Defense Secretary Pete Hegseth later said the payment would be tax-free and issued within days, though questions remain about eligibility, especially for National Guard and reserve members.
Trump has previously floated tariff-funded stimulus checks for Americans, echoing similar, but disputed, claims about tariffs replacing traditional federal revenue sources.
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