Badenoch repeated existing Conservative plans to fund an increase in defence spending, including by reimposing the two-child benefit cap.
The cap, which was scrapped by Labour in April, meant parents could only claim universal credit or tax credits for their first two children.
She said the final part of her party’s plans to reach the 3% spending figure on defence had now been completed.
The Tories said this would include saving at least £4bn through reforms to housing benefit and removing the VAT exemption for Motability vehicles, saving £1bn.
“Alongside savings from the disastrous Chagos deal and re-purposing money from the British Business Bank into defence, we will be able to hit that 3% target,” Badenoch said.
Housing benefit made up about 12% of the government’s welfare bill this year, with £37.3bn forecast to be spent.
The Motability scheme, operated by a private company overseen by a charity, has historically given disabled people in receipt of eligible welfare benefits a 20% VAT discount on cars.
Last year, Rachel Reeves made the first changes to the Motability scheme in 50 years, removing about 50,000 premium cars like BMWs and Mercedes from the scheme and reinstating 20% VAT for most new cars, along with higher mileage charges.
Challenged over whether she was increasing child poverty to fund defence by reimposing the two-child benefit cap, Badenoch denied this.
“It is not going to increase child poverty. What increases child poverty is children’s parents not having work or being paid low wages. We want to grow our economy,” she told the BBC.
“Right now there are some people making choices not to have children because they can’t afford it and paying for other people to have more children. That is not fair.”
Responding to Badenoch’s speech, a Labour Party spokesperson said: “These unserious plans are hardly surprising from the same Tory Party that hollowed out our Armed Forces, shrinking the British Army to its smallest size since the Napoleonic era.
“Andy Burnham has made it clear that his Labour government is determined to give our Armed Forces the investment needed to keep us safe.
“In just two years, Labour has delivered the biggest sustained increase in defence spending since the Cold War, with funding already higher than at any point during 14 years of Conservative government.”
It comes after Badenoch pressed Burnham over the issue during Prime Minister’s Questions on Wednesday, when she urged him to cut welfare spending and invest the money in defence.
Burnham also came under friendly fire from Labour MP Tan Dhesi at PMQs, who called on the prime minister to urgently commit to setting out a path to spending 3% of GDP on defence by 2030.
“Defence is definitely one area where vibes alone just isn’t going to be enough,” he said.
Burnham has insisted his government is committed to fully funding its defence plans, saying it will set out a pathway to spending 3.5% of GDP on defence by 2035 in the spring.
