The Trump Administration’s Fiscal Year (FY) 2026 budget proposes a $961.6 billion budget for the Department of Defense, an increase of $113.3 billion or 13.35% from FY 2025. On top of that, Congress is considering additional defense funding through the reconciliation bill, likely bringing national security discretionary spending over $1 trillion for the first time ever.
While national defense is a top priority, an increase in funding without reform risks repeating past mistakes at the taxpayers’ expense. Without accountability, even well-intended funding becomes vulnerable to fraud and wasteful spending.
Any defense budget increases should be paired with concrete steps to improve how the Pentagon manages its resources. The Government Accountability Office (GAO) recently released a report with 79 priority recommendations for the DoD aimed at eliminating fraud, improving efficiency, and restoring fiscal discipline.
Secretary of Defense Pete Hegseth has promised to “clean house” at the Pentagon and has already announced a 20% cut to top general and flag officer positions, along with plans to streamline the force structure and rein in contractor overuse. While these early moves are promising, true reform depends on implementing deeper structural fixes like those recommended by the GAO. Below, we highlight seven practical and impactful reforms from the report that the Pentagon, with guidance from lawmakers, can implement immediately to protect taxpayers and strengthen transparency.
1) Improving Financial Management
The Department of Defense has never passed a full financial audit, and the Pentagon has failed seven in a row. A key reason is poor tracking of its assets like buildings, equipment, and inventory. Outdated IT systems and missing records make it impossible to track where all the money is going.
The GAO recommends investing in better IT systems, verifying assets, and using fraud detection tools. These changes would reduce waste, improve oversight, and finally move the Pentagon toward a clean audit, something every major agency is already expected to do.
2) Reining in F-35 Sustainment Waste
The F-35 fighter jet program will cost an estimated $1.3 trillion over its lifetime, mostly due to heavy reliance on outside contractors. The military doesn’t control key data systems, making it harder and more expensive to maintain the fleet.
The GAO recommends shifting sustainment work back in-house to save costs and increase readiness. Greater control would reduce contractor fees and help taxpayers get more value from one of the Pentagon’s most expensive programs.
3) Fixing Improper TRICARE and Military Health Payments
The DoD provides healthcare to over 9 million individuals through Military Treatment Facilities (MTFs) and TRICARE. The GAO found that this fragmented care system alongside improper payments leads to potentially millions of taxpayers’ dollars wasted.
By identifying the root causes of billing errors, increasing oversight of clinical quality, and assessing workforce changes, the DoD can eliminate overpayments and simplify a split care system. Veterans, military personnel, and their families deserve better services without spending more.
4) Reducing Contract Waste and Duplication
The Pentagon spends billions on service contracts each year, often without enough oversight. Secretary Hegseth discusses how the Defense Department “has become very much overreliant on management consultants and contractors . . . We found that we likely have more contractors than we have civilian employees.” The GAO flags overreliance on contractors as a high-risk area, citing mismanagement in weapon systems acquisition and contract oversight.
To fix this, the GAO urges better acquisition policies, stronger forecasting, and clearer contract management. Without reform, failures such as 12 of 24 critical IT systems going over budget or the logistics program that went $815 million over budget will continue to exist. Strengthening oversight of operational contracts would help reduce inefficiencies and fix a fragmented management system. These steps would rein in spending and bring greater transparency to a costly category of the defense budget.
5) Addressing “Forever Chemicals” (PFAS) Liability
The DoD faces significant financial exposure to “forever chemicals” contamination. Yet, it still hasn’t assessed the full cost of cleanup, leaving taxpayers vulnerable to unlimited future liabilities.
The GAO urges DoD to calculate its exposure and create a cleanup plan with clear funding limits. Without action, Congress may end up writing blank checks. Planning now would protect public health while containing long-term costs.
6) Improving Cybersecurity and Oversight
The GAO report finds that the current cybersecurity system is incomplete and fragmented, leaving critical networks exposed and driving up costs. GAO found that basic protections are poorly implemented across the Department.
To fix this, GAO recommends stronger cyber hygiene, better planning, and clear oversight of risk decisions. Without urgent improvements, the DoD risks costly breaches and continued waste in programs that handle trillions of dollars.
7) Avoiding Infrastructure Waste
The DoD manages over 700,000 buildings and facilities worldwide worth roughly $2.2 trillion. Yet, its facility management is weak, and infrastructure data is incomplete or unreliable. Hundreds of billions of dollars are earmarked for barracks, housing, and repairs, but, without tracking quality or contracting results, this money is easily wasted or underutilized.
GAO recommends improving data systems, monitoring housing quality, and enforcing contract standards. These steps would ensure that maintenance funds are used effectively and that service members and their families live in safe, well-managed facilities.
Conclusion
GAO’s report outlines a clear blueprint to fix the Pentagon’s most persistent and costly failures. Yet, despite agreeing in principle with many of GAO’s recommendations, the Department of Defense continues to fall short in implementation. Progress has been slow, inconsistent, and in some cases nonexistent—especially in critical areas like cybersecurity, financial tracking, and contractor oversight.
This mixed response makes it clear that simply throwing more money at the Pentagon won’t solve its problems and is an urgent reminder for the need for continued congressional oversight to turn reform plans into impactful outcomes. Defense spending must not be exempt from scrutiny. Implementing just these seven GAO recommendations would help reduce waste, improve transparency, and help the DoD efficiently spend taxpayer dollars. This isn’t about budgeting, it’s about ensuring the DoD engages in responsible governance and uses taxpayers’ money effectively.