The D Brief: Offshore banks to hold seized-oil profits; Pay caps for defense CEOs; Army’s flight-school outsourcing, snagged; Right-to-repair urged; And a bit more.
Developing: The White House says it will put the proceeds from selling seized Venezuelan oil into offshore accounts, so that the money would not be held by the U.S. Treasury but be controlled by President Trump, as he declared on social media Tuesday evening.
The official line from the administration: “All proceeds from the sale of Venezuelan crude oil and oil products will first settle in U.S. controlled accounts at globally recognized banks,” the Department of Energy announced Wednesday. “The only oil transported in and out of Venezuela will be through legitimate and authorized channels consistent with U.S. law and national security,” according to a fact sheet.
This raises serious questions, Lisa Desjardins of PBS reported, including:
- “Who decides which U.S. bank(s) get this very large account?”
- “Will Congress have any say over how the funds are dispersed?”
- “Or, will President Trump + admin. unilaterally oversee *billions* of dollars in Venezuelan oil money?”
- “Will US or Venezuelan taxpayers have access to decisions about this money?”
Greenland update: Secretary of State Marco Rubio is set to meet with Danish officials next week in the wake of Trump’s declared interest in acquiring the territory by force or otherwise.
Rubio told lawmakers this week Trump wants to buy Greenland, not invade it. But Danish officials for years have been adamant the island is not for sale. Indeed, the New York Times reported Thursday, “Denmark does not have the authority to sell the territory, and Greenland’s prime minister, Jens-Frederik Nielsen, has repeatedly scoffed at the idea, reiterating this week: ‘Our country is not for sale.’”
Danish troops in Greenland would “shoot first, ask questions later” in response to an invasion, Denmark’s defence ministry confirmed on Wednesday. Under a policy in place since 1952, soldiers are required to “immediately” counter-attack invading forces without awaiting orders. Ministry officials have confirmed that the policy remains in place. More, here.
Canadian officials are discussing “a voluntary civilian-defence force” to support its military after Trump floated the possibility of using “economic force” to turn America’s northern neighbor into its 51st state, The Economist reported Wednesday. Relatedly, “Plans are now regularly updated to deal with a surge of migrants who might want to enter Canada from the United States. Mr Trump’s predilection for sending troops into states run by Democrats while using his department of justice to prosecute his political opponents has compelled Canada to prepare for the event of civil strife next door.”
Welcome to this Thursday edition of The D Brief, a newsletter focused on developments affecting the future of U.S. national security, brought to you by Ben Watson with Bradley Peniston. It’s more important than ever to stay informed, so we’d like to take a moment to thank you for reading. Share your tips and feedback here. And if you’re not already subscribed, you can do that here. On this day in 1814, Gen. Andrew Jackson led U.S. forces to victory in the Battle of New Orleans, unaware that U.S. and British officials had formally ended the War of 1812 about two weeks earlier.
Trump 2.0
New: The president said he wants a $1.5 trillion defense budget for the coming year. That would amount to a roughly 50% increase from an already historically-high total for FY2026.
According to Trump, “This will allow us to build the ‘Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe,” he wrote on social media Wednesday afternoon, just five days after sending the military to abduct Venezuela’s leader and less than three days since he threatened to annex Greenland, which is territory of America’s NATO ally Denmark.
Trump said his tariffs “and the tremendous Income that they bring” make a $1.5 trillion defense budget possible, thereby allegedly “producing an unparalleled Military Force, and having the ability to, at the same time, pay down Debt, and likewise, pay a substantial Dividend to moderate income Patriots within our Country!”
Reality check: Trump’s apparent plan to dramatically boost defense spending “while paying down debt…is not based in mathematical reality,” NBC’s Sahil Kapur pointed out on social media. For one thing, Trump’s tariffs brought in roughly $236 billion through November, which is less than half of Trump’s proposed spending hike.
And far from paying down the national debt, the tariff income is dwarfed by last year’s federal budget deficit, which rose by $2.2 trillion during his first year in office, according to a recent USA Today analysis.
Second opinion: “It is not clear to us that defense contractors have the capacity to absorb the magnitude of this increase even if it's spread over FY27-30,” analyst Byron Callan wrote in a note following Trump’s social media post. And during a mid-term election year, “An increase of this magnitude will put non-defense spending in sharper focus.” As a result, “Reconciliation might again be attempted by Congress, but the GOP margin in the House will be razor-thin through March, and without reconciliation, there would need to be 60 votes in the Senate to move this size increase forward.”
What’s more, “An increase of this magnitude would appear to override efforts to find cost savings and other efficiencies in the DoD budget,” Callan warned. And it’s entirely unclear what kind of consequences that might have.
Trump also declared a pay cap for defense CEOs to encourage them to produce weapons faster, though it’s not yet clear how that might be enforced.
He also said he would bar defense companies from buying back stock and issuing dividends until they invest more to develop new technologies and increase production. Later on Wednesday, the White House released an executive order to that effect, Defense One’s Lauren C. Williams reports.
Trump: “From this moment forward, these Executives must build NEW and MODERN Production Plants, both for delivering and maintaining this important Equipment, and for building the latest Models of future Military Equipment. Until they do so, no Executive should be allowed to make in excess of $5 Million Dollars,” the president announced on his social media platform. “I will not permit Dividends or Stock Buybacks for Defense Companies until such time as these problems are rectified,” he added.
In a separate post, Trump took particular aim at “Raytheon,” likely a reference to RTX. He said the company would receive no further defense contracts until it invests more in production capacity, nor be allowed to buy back its own stock “until they are able to get their act together.”
For the record: Boeing, Lockheed Martin, Northrop Grumman, and RTX did not respond to requests for comment on the president’s statements by publication. General Dynamics, HII, and L3Harris declined comment.
Worth noting again: Trump didn’t specify how restricting buybacks or measuring research investments would be enforced, Williams writes.
Expert reax: For a number of years, some U.S. shipyards have maintained a “backlog” of ships paid for but not built or even started. “Yet we instinctively order more ships each year,” Mark Montgomery, senior director of the Foundation for the Defense of Democracies’ Center on Cyber and Technology Innovation said. “The yards could use this backlog to justify investments in modernizing the yards—or they could use this future revenue to justify payments such as dividends or stock buybacks. They have all too often chosen the latter.”
“A lot of problems need to be addressed to get our shipbuilding system back in order, and this action will certainly not do this alone,” he said, “but it is part of an overall effort that includes more investments, partnering with successful Korean yards and more efficient design and acquisition processes.” Read more, here.
Around the Defense Department
Congress pumps brakes on Army’s plans to outsource flight training. “Tucked into the 3,000-page National Defense Authorization Act, which was signed into law last month, is a provision stating that funds can’t “be obligated or expended to solicit proposals or award a contract for the implementation of any transformation of the Initial Entry Rotary Wing training program”—a reference to the Army’s Flight School Next plan to shift training for new helicopter pilots from an in-house school to a contractor-owned and -operated model, reports Defense One’s Thomas Novelly.
Bidders winnowed: But right around the time the law was passed, the Army was notifying several bidders that they would move on to the next phase of the competition for the Flight School Next contract. Novelly has the names, here.
The Pentagon’s push to accelerate the tempo of battlefield adaptation is hindered by arms-purchase contracts that forbid troops to repair or modify their gear in the field, special operators and defense experts warn. They note that Ukrainian forces often must ship U.S.-supplied weapons out of the country for maintenance, but can modify Ukrainian-built drones to advance the tactical state of the art. Defense One’s Patrick Tucker reports, here.
Another deadly shooting by ICE
An ICE officer shot and killed a woman attempting to drive away from a stop in Minneapolis on Wednesday. “The woman, identified by the Minneapolis City Council as Renee Nicole Good, 37, was shot in the head on Jan. 7 in a residential neighborhood south of downtown Minneapolis. The fatal shooting was captured on video by witnesses and sparked widespread anger amid heightened political and community tensions over immigration activity in the city,” USA Today reported.
Video evidence refutes Trump-administration officials’ attempts to portray the shooting as self-defense, the New York Times reports.
ICE officers have shot at least 14 people in the past year, according to The Trace, which tabulates incidents of gun violence. The total includes three people who were observing ICE and five who were driving away. At least four people have died after being shot by ICE. Read, here.