I see Americans make this comment a lot. Putting aside whether or not it is true that it enables higher domestic social spending, the comment never seems to come with the realisation that many Europeans deride the “need” for higher defence spending. This is due to Europeans’ perception that American military adventurism is what creates the instability from which Europe requires American protection in the first place.
Many Europeans will say: “America, please stop bombing the mideast or continuously expanding NATO; this will stop creating problems that result in you demanding we spend more.”
In other words, many Americans presuppose the validity of their military adventurism and assume Europeans agree with it, and thus think they should want to participate in funding the defence of blowback from it.
By contrast, many Europeans would rather America did not try to play global policeman, or if it’s going to do so, then happily accept paying for European defence as the price of Pax Americana / US hegemony.