Bacon says Pentagon raided housing fund for troop bonuses, demands repayment

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(The Center Square) – A retiring Republican congressman plans to confront Defense Secretary Pete Hegseth this week over how $2.6 billion appropriated by Congress for military housing assistance was redirected to fund "Warrior Dividend" bonuses paid to 1.45 million service members before Christmas.

Rep. Don Bacon, R-Neb., a retired Air Force brigadier general and member of the House Armed Services Committee, says the money, drawn from a $2.9 billion Basic Allowance for Housing appropriation in the One Big Beautiful Bill, was intended to help service members living off base.

He is calling on Hegseth to restore the funds and plans to raise the issue before the full committee on Wednesday.

"The barracks budget has been looted for many years for other priorities," Bacon told The Center Square. "We brought in $2.5 billion to increase housing allowances for people living off base in the reconciliation bill. The [Department of Defense] took that money and paid the entire force $1,776 in bonuses, but it was targeted to help those living off base."

President Donald Trump said the funds were from tariff revenue, but the Pentagon used money from the Housing Allowance budget.

Bacon previously chaired the HASC Military Quality-of-Life Panel, leading a year-long inquiry into military pay, housing, childcare and healthcare access.

Congress appropriated $2.9 billion in taxpayer funds for military housing in the One Big Beautiful Bill. An estimated $2.6 billion was allocated to bonuses, leaving $300 million for actual BAH needs.

Trump announced the surprise check for military members on Dec. 18, saying it was a reward funded in part by tariff revenue and his signature funding bill.

"Because of tariffs, along with the just-passed 'One Big Beautiful Bill,' tonight, I am also proud to announce that more than 1,450,000 military service members will receive a special, we call 'Warrior Dividend' before Christmas," Trump said during an address to the nation.

A Pentagon official confirmed to The Center Square that the funding came from the BAH appropriation in the One Big Beautiful Bill.

"Congress appropriated $2.9 billion to the Department of War to supplement the Basic Allowance for Housing entitlement," the official said, adding that the department used an estimated $2.6 billion of those funds for the one-time payment, with the remaining $300 million being used "to support BAH requirements."

Hegseth, in a Dec. 18 video posted to social media, described the payment as a "direct investment in the brave men and women who carry on the legacy of our Armed Forces" and said it was intended to "improve the quality of life for our military personnel and their families."

The House Armed Services Committee convenes at 10 a.m. Wednesday in Rayburn 2118 for a full committee hearing on the Department of Defense's $1.5 trillion budget request. Hegseth and Gen. Dan Caine, chairman of the Joint Chiefs of Staff, are set to testify.

"This money should be restored," Bacon told The Center Square.

Bacon announced in June 2025 that he would not seek reelection in 2026.