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When Donald Trump<\/a> promised a one-time $1,776 payment for 1.45 million US military workers to mark the 250th anniversary of the Declaration of Independence during a primetime TV address on Wednesday, he pointed to his favorite source of federal funding.<\/p>\n \u201cBecause of tariffs\u201d, the US president said, along with his massive tax-and-spending bill<\/a>, \u201cwe are sending every soldier $1,776 \u2013 and the checks are already on the way. Nobody deserves it more than our military.\u201d<\/p>\n \u201cWe made a lot more money than anybody thought because of tariffs, and the bill helped us along,\u201d he added.<\/p>\n In reality, the payments will be funded by repurposing military housing assistance \u2013 approved by Congress as part of the One Big Beautiful Bill Act \u2013 the Washington Post reported<\/a> on Thursday, citing an unnamed senior administration official.<\/p>\n The pledge to issue a so-called \u201cwarrior dividend\u201d \u2013 a policy worth about $2.5bn, which he suggested was finalized \u201cabout 30 minutes\u201d before his address \u2013 had raised immediate questions, particularly ahead of a highly anticipated decision by the supreme court<\/a> that could force the administration to return billions of dollars the US has raised from steep tariffs on foreign goods.<\/p>\n \u201cWould it be a complete mess?\u201d Justice Amy Coney Barrett asked about prospective tariff reimbursement<\/a> during oral arguments in November. \u201cIt seems to me like it could be a mess.\u201d<\/p>\n On Trump\u2019s watch the overall average US effective tariff rate has surged to 16.8%, its highest level since 1935, according<\/a> to The Budget Lab at Yale, with an average hit to households of about $1,700.<\/p>\n Details also remained unclear about precisely who qualifies to receive the dividend, when it will be issued, its taxable status and its effect on military pay and benefits.<\/p>\n The US defense secretary, Pete Hegseth, said in a video posted<\/a> on Thursday that the payment would \u201cprovide 1776 with a whole new modern meaning for our joint force\u201d, adding that the payment would be tax-free and issued to more than 1.45 million service members \u201cin the coming days\u201d.<\/p>\n \u201cThis has never happened before, every member of our military, from E-1 to O-6,\u201d Hegseth said, referring to military pay grades from private, airman basic and seaman recruit to the senior officers in the ranks of colonel, captain and commander.<\/p>\n The announcement comes as Operation Southern Spear is amassing forces in the Caribbean in what was initially described as an anti-narcotics operation against Venezuela\u2019s Maduro regime, and as US forces suffered three casualties during an Isis attack in Syria.<\/p>\n But despite Trump saying the payment will go out to \u201cevery soldier\u201d, it remains unclear if national guard and reserve members meet active-duty criteria. \u201cUnder federal law, most bonuses and special pay are treated as taxable income unless Congress specifies otherwise\u201d, Military.com advised,<\/a> pointing out that no tax exemption had been announced.<\/p>\n