**Washington D.C.** – House lawmakers on July 15 unveiled a new funding bill that allocates $60 billion for defense, a figure $290 billion less than the President’s requested amount. This proposal casts significant doubt on the administration’s broader ambition for a defense budget totaling approximately $1.5 trillion for the current fiscal year, which includes a substantial supplemental request.
The bill, informally referred to as “Reconciliation 3.0,” is designed to navigate Congress through the reconciliation process. This legislative mechanism allows certain budget-related bills to pass the Senate with a simple majority vote, circumventing the standard 60-vote supermajority typically required. This procedure enables the majority Republican party to potentially pass the measure along party lines in the Senate.
This legislative development marks the second setback for the Pentagon within a short period. It follows the Senate’s failure, just one day prior, to advance its version of the National Defense Authorization Act (NDAA), the annual bill that authorizes defense spending and policy.
Republicans on the House Budget Committee released their “concurrent resolution,” proposing a total of $95 billion, which encompasses the $60 billion designated for defense. This resolution directs the House Armed Services Committee to subsequently detail how the $60 billion in defense funding will be allocated. This directive initiates a critical phase of prioritization for the administration and the committee, as they must reconcile the proposed amount with the White House’s original request. The administration had initially sought $350 billion through reconciliation, intended to supplement a base budget request of $1.15 trillion to be funded through the regular legislative process.
In parallel, the White House has also submitted a separate request to Congress for a supplemental funding bill. This bill aims to cover costs associated with the ongoing conflict with Iran, in addition to addressing other emergent defense requirements.
Should the reconciliation bill maintain its current $60 billion size, the Department of the Air Force and the Space Force could face substantial funding shortfalls. The White House’s original request projected that approximately 8.3 percent, or $28.2 billion, of the Department of the Air Force’s $338.8 billion budget request would be secured through reconciliation. This funding was earmarked for critical programs, including planned F-35 fighter jet purchases, targeting satellites, and various munitions.
This “Reconciliation 3.0” is the latest in a series of such measures. Republicans previously passed their first reconciliation bill a year ago, formally known as the “One Big Beautiful Bill Act,” which included $150 billion for defense. A second reconciliation bill was passed in June to fund immigration agencies, leading to the current package being designated “Reconciliation 3.0.”
Analysts and observers of Congress have expressed skepticism regarding the likelihood of “Reconciliation 3.0” materializing at the scale initially desired by the White House. With narrow majorities in both the House and Senate, Republicans in Congress face significant challenges, as even a small number of dissenting votes could jeopardize the bill’s passage. Fiscal conservatives within the party often oppose reconciliation funding unless it is offset by spending cuts in other areas. Conversely, moderates representing competitive states and districts are concerned that such cuts could lead to negative electoral consequences.
Byron Callan, managing partner and defense analyst at Capital Alpha Partners, has consistently indicated that the passage of the White House’s requested $350 billion reconciliation package was “improbable” due to these complex political dynamics.
In response to these political realities, Republican leaders appear to have coalesced around a more modest package. House Budget Committee Chair Jodey Arrington (R-Texas), who has worked closely with Speaker Mike Johnson (R-La.) on the reconciliation bill, stated that his committee would mark up the new package on July 16. Speaker Johnson expressed his support for the package on social media on July 15, stating: “Safeguarding American elections and strengthening our national defense are the most basic responsibilities of Congress and are supported by an overwhelming majority of Americans. While House Republicans have UNANIMOUSLY PASSED the SAVE Act THREE TIMES, Congressional Democrats…”
The precise allocation of the $60 billion within the new reconciliation package remains unclear, as the House Armed Services Committee still needs to formulate its specific spending plans. As of the time of reporting, spokespersons for HASC Republicans and its leadership had not responded to inquiries regarding these plans.
Concurrently, Congress has yet to act on the Iran war supplemental funding request, which was submitted on June 24. Should Republican leaders opt against relying on Democratic votes for that supplemental, they might consider redirecting the $60 billion from the reconciliation bill towards the needs outlined in the war request. This supplemental request included $21 billion for munitions, $17.3 billion for operational costs, $12.1 billion for classified programs, and $4 billion for two Space Force programs: Airborne Moving Target Indication and Space Data Network Backbone.
However, reallocating the $60 billion in this manner would inevitably leave other key priorities, originally slated for reconciliation funding, unfunded. These programs include:
- $7.8 billion for the Air Moving Target Indicator program
- $4 billion for the Space Data Network
- $2.3 billion for 14 F-35s
- $1 billion for 330 extended-range Joint Air-to-Surface Standoff Missiles
- $990 million for Joint Advanced Tactical Missiles
- $953 million for up to 618 Advanced Medium Air-to-Air Missiles
Alternatively, lawmakers could attempt to pass both a war supplemental and the reconciliation bill. In this scenario, they would be forced to make difficult choices among the programs initially targeted for reconciliation funding, given that only about 17 percent of the original requested funds are available. A proportional cut would reduce the $28.2 billion sought for Air Force and Space Force programs to approximately $4.8 billion combined.
Pentagon leaders have largely refrained from publicly detailing how they would manage these potential shortfalls, although several officials have privately acknowledged the high probability that the initial funding requests would be significantly reduced. Analyst Byron Callan noted that such reticence is expected, stating that military financial planners are undoubtedly modeling various budget scenarios, but would not reveal their contingencies prematurely.
National Defense Authorization Act (NDAA) Delay
The complexities surrounding the reconciliation bill are unfolding concurrently with difficulties faced by the annual National Defense Authorization Act (NDAA). While both the House and Senate Armed Services Committees have successfully passed their respective versions of the NDAA, a motion to proceed with consideration and debate on the bill in the full Senate on July 14 failed to secure the necessary three-fifths majority.
Historically, the NDAA has been a bipartisan, must-pass piece of legislation. However, this year’s version has encountered resistance, primarily from Democrats, who have raised objections concerning the ongoing conflict with Iran and the proposed scale of the defense budget increase in comparison to non-defense spending. The bill received an unusually high number of “no” votes in committee, and nearly all Senate Democrats voted against the July 14 motion to bring it to the floor for debate.
Senator Jack Reed (D-R.I.), the ranking member of the Senate Armed Services Committee, was among those who voted against the motion. In a statement, he affirmed, “There are important provisions in this NDAA that I will continue to fight for. But I cannot vote to proceed to a bill that enables an ongoing war against Iran that Congress never authorized and the American people overwhelmingly oppose.”
Conversely, Committee Chair Senator Roger Wicker (R-Miss.) issued his own statement, expressing difficulty in comprehending the Senate’s action, given that the objections centered on what was *not* included in the bill. He further stated: “We have voted dozens of times on military action in Iran, both on the Senate floor and in our committee. Rather than requesting specific votes on Iran on the NDAA, Democrats simply voted against starting the process altogether. Similarly, the committee has already voted on the defense budget topline. This bill is not the proper vehicle to settle disagreements over the adequate balance between defense and domestic spending.”
While Senate leadership retains the option to bring the bill up for another vote, both sides remain at an impasse. With only a few weeks remaining before lawmakers depart for their August recess, the path forward for the reconciliation bill, the broader budget, and the NDAA is expected to become even more challenging as political pressures intensify ahead of the November midterm elections.
Why This Matters
The current legislative battles over defense funding have profound implications for national security, foreign policy, and domestic politics. The significant reduction in the proposed reconciliation defense funding, from the requested $350 billion to $60 billion, directly impacts the U.S. military’s ability to modernize, maintain readiness, and pursue strategic objectives. Programs vital to air superiority, missile defense, and space-based intelligence, such as F-35 procurement, advanced munitions, and satellite networks, face substantial cuts, potentially affecting the nation’s technological edge and operational capabilities.
The impasse also highlights the ongoing tension between the executive and legislative branches over war powers and spending priorities. The White House’s request for a separate supplemental bill for the war with Iran, coupled with Democratic resistance to the NDAA due to the conflict, underscores a deep division within Congress regarding the authorization and funding of military engagements. This not only affects the military’s current operations but also sets precedents for future conflicts and the role of Congress in authorizing the use of force.
Domestically, the debate exposes deep rifts within the Republican party between fiscal conservatives advocating for spending cuts and defense hawks prioritizing military strength. This internal struggle, alongside the broader partisan divide over defense versus non-defense spending, complicates the legislative process, making it difficult to pass even traditionally bipartisan bills like the NDAA. The looming midterm elections further intensify these pressures, as lawmakers weigh the political costs and benefits of their votes.
Ultimately, the outcome of these funding debates will determine the trajectory of U.S. defense policy for the coming year, influencing everything from troop deployments and equipment upgrades to research and development. It reflects a critical moment where strategic national security needs confront complex political realities and fiscal constraints, with direct consequences for the safety and standing of the United States on the global stage.