The Trump administration is trying to rectify a “generation of government underinvestment” in the defense industrial base, according to the president’s new economic report, as the war in Iran provides a stark example of what a high-intensity conflict against a near-peer adversary could entail.

The White House has requested a $1.5 trillion defense budget for fiscal 2027, including a base budget request of $1.15 trillion and an additional $350 billion from reconciliation, which would mark a historic high and a 44% increase compared to last year.