Trump to hand out $2.6B in ‘warrior dividends’ — and the surprising pot he’s pulling the money from

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DETAILS: Trump unveils MAJOR bonus for US military

Fox News' Rich Edson reports the latest on President Donald Trump's primetime address focused on the economy.

President Donald Trump told Americans this week that 1.45 million U.S. service members would receive a one-time $1,776 "warrior dividend," a $2.6 billion initiative he said would hit service members’ bank accounts before Christmas. 

The president credited tariffs for bringing in money. 

"We made a lot more money than anybody thought because of tariffs, and the bill helped us along. Nobody deserves it more than our military, and I say congratulations to everybody," Trump said Wednesday. 

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A senior administration official told Fox News Digital the president had directed Secretary of War Pete Hegseth to offer the money as a one-time supplement to the basic allowance for housing for all active duty service members pay grades O-6 and below, including colonels for the Army, Air Force and Marine Corps and the captain rank in the Navy. Reservists ranked O-6 and below are eligible for the checks if they have been on active-duty orders for 31 days or more as of Nov. 30. 

Approximately 1.28 million active component military members and 174,000 reserve component military members will receive this supplement.

President Donald Trump told Americans this week that 1.45 million U.S. service members would receive a one-time $1,776 "warrior dividend," a $2.6 billion initiative he said would hit service members’ bank accounts before Christmas.  (Doug Mills/The New York Times/Bloomberg via Getty Images)

The money comes not from tariffs but from $2.9 billion that Congress appropriated in the "big, beautiful bill" to the Department of War to supplement the Basic Allowance for Housing entitlement. 

After taking office, Trump announced an aggressive tariff plan that paired targeted tariff increases with a broader proposal for a 10% across-the-board tariff on nearly all imported goods, a policy he argues would protect U.S. industry and raise substantial federal revenue. Countries he accused of engaging in unfair trade practices or "ripping off" the U.S. were hit with tariffs far above the 10% baseline. Brazil and India face 50% levies, and the average rate on Chinese goods is now close to 50% after Trump threatened triple-digit tariffs earlier this year.

The warrior dividend, according to the official, "exemplifies the department’s ongoing commitment to improving the housing and quality of life for our military members and their families."

Additionally, the 2026 National Defense Authorization Act (NDAA) authorized a 3.8% raise for basic military pay for all service members in 2026.

A senior administration official told Fox News Digital the president had directed Secretary of War Pete Hegseth to offer the money as a one-time supplement to the basic allowance for housing for all active duty service members. (Getty Images )

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The annual defense policy bill also includes a suite of quality-of-life enhancements designed to support service members and their families. Lawmakers authorized a 60% increase in the Family Separation Allowance, raising it to $400 per month for troops separated from their dependents, and directed studies aimed at improving how housing and subsistence allowances are calculated to better reflect real-world costs.

A military policeman stands guard at JBSA-Lackland Air Force Base June 9, 2021, in San Antonio. (Eric Gay/AP )

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The legislation funds expanded childcare programs, including extensions of in-home childcare assistance, and boosts resources for spouse employment support, housing condition evaluations and mental health care access. It also provides for increased educational impact aid for military-connected students and additional support for families facing relocation or deployment challenges. 

The new measures come after years of documented quality-of-life challenges inside the military, from rising housing costs and shortages of childcare to persistent issues with pay, barracks conditions and family support, problems lawmakers say these initiatives are designed to begin addressing.