Where Things Stand with the Pentagon’s $350 Billion Reconciliation Request

With key members of Congress wavering on the possibility of a $350 billion defense reconciliation bill, defense experts told Air & Space Forces Magazine that the Pentagon is likely drawing up budget backup plans—but such plans would face hard choices between high-end weapons and low-cost drones and other programs in U.S. military’s autonomous arsenal.

The Defense Department’s $1.5 trillion budget request for 2027 is split in an unusual way, with $1.15 trillion meant to go through the normal appropriations process and $350 billion earmarked for reconciliation, a complicated process that requires the majority party—in this case, the Republicans—to stay united through a series of party-line votes.

The window to pass a new reconciliation bill, Congress’ third in about a year, is starting to close. The midterm elections are just a few months away, and if Democrats take control of either the House or the Senate, they will certainly block any efforts. In recent weeks, President Donald Trump and Defense Secretary Pete Hegseth have started urging Republicans in Congress to get a move on. Sen. Lindsey Graham (R-S.C.), chair of the Senate Budget Committee, and Rep. August Pfluger (R-Texas), chair of the Republican Study Committee, have both voiced support for the idea and pledged to introduce legislation.

Still, other key Republican lawmakers have voiced apathy toward the idea or skepticism that their conference will be able to wrangle another reconciliation bill after months of work on the previous two.

“I think it is looking harder and harder by the day for the Pentagon to get the reconciliation package through,” Todd Harrison, a senior fellow at the American Enterprise Institute, told Air & Space Forces Magazine. “It’s not impossible, and I think there’s still a chance, but I think at this point it most likely would not happen until after the November election in the lame duck session of Congress.”

The stakes for the Pentagon are huge. Not only does the reconciliation package account for 23 percent of the planned defense budget, it is focused on high-priority areas like critical munitions, the U.S. drone industrial base, and F-35 fighters.

The Air Force is counting on $16 billion in reconciliation to pay for big ticket items such as $2.3 billion for 14 F-35s and more than $2.9 billion for munitions such as Joint Air-to-Surface Standoff Missiles and Joint Advance Tactical Missiles. The Space Force has requested $12 billion in reconciliation to pay for the Air Moving Target Indicator program and for Space Data Network development and procurement.

Should Congress not pass the bill, the Pentagon may be forced to cut expensive programs from the base budget to make room for reconciliation priorities, Undersecretary of Defense for Research and Engineering Emil Michael said during a June 12 Hudson Institute event.

“I think if we’re forced into that position, you just make other trade-offs, like against exquisite weapons and systems,” Michael said, pointing to the Pentagon’s plan to invest nearly $54 billion to build America’s autonomous warfare might. “How much of those are we willing to sacrifice in place of low-cost autonomous weapons?”

There is the possibility that should reconciliation fail to get off the ground, lawmakers may pivot to the planned supplemental spending package the White House is planning to pay for the Iran war and fold some reconciliation priorities into that. But that bill is almost certain to be less expansive than $350 billion.

Acting Pentagon comptroller Jules “Jay” Hurst III told lawmakers in May that the Iran conflict had cost about $29 billion, but that number did not include funding estimates to repair more than a dozen bases in the Middle East that have been damaged by Iranian attacks. Hegseth said that the Pentagon would present a supplemental request to Congress when “it’s relevant and required,” though that has yet to materialize.

A supplemental could offer a “relief valve” if Congress can’t find the votes for the full reconciliation, said Capital Alpha Partners analyst Byron Callan

“How much can they put in a supplemental request?” Callan said. “If you don’t get reconciliation, you’re not going to have a $350 billion supplemental bill … but is it $50 billion or $70 billion? It may be some number that’s bigger than the $29 billion than the administration talked about.”

Like Harrison, Callan is not ruling out the possibility that reconciliation will pass. But he is bearish.

Earlier this month, Sen. Susan Collins (R-Maine) and Sen. Mitch McConnell (R-Ky.)—chairs of the Senate Appropriations Committee and its defense subcommittee, respectively—said they didn’t believe the reconciliation package would happen. Rep. Brian Fitzpatrick (R-Pa.), a key swing vote in the House, has also said a third reconciliation is “not happening,” according to The Hill.

“The problem is you’re really only dealing with a one- or two-vote margin in the House.” Callan said, while noting that reconciliation would have an easier time in the Senate.

Harrison said Pentagon officials have “to be concerned and have to start thinking through what is the game plan of how do you prioritize what you want in the base budget if reconciliation doesn’t come through, because it’s not as if reconciliation was a bunch of lower priority items that are just extra things to fund.”

While it’s difficult to predict what programs could face cuts, Harrison said that the E-7 battle management aircraft could be vulnerable since it was not included in the original budget rollout in April. The Air Force announced in May that it was working on a $1.5 billion budget amendment to restore funding for the E-7A Wedgetail in fiscal 2027.

The service made the decision to cut the E-7 during the budget process when officials were planning for an $890 billion Pentagon budget, Air Force Secretary Troy Meink told lawmakers May 20. He added that the larger defense budget gave the service “enough flexibility” to return the E-7 to the funded programs list.

At the Hudson event, Michael appeared unconcerned about the defense reconciliation bill’s chance of passing.

“Congress does appropriations, that’s what they do. We receive them, and we do the best we can,” he said. “There’s no alternative.”

But Callan said it’s very likely that budget officials in the Defense Department and the individual services are already drafting alternative budget plans.

 “I’d be shocked if they were somehow oblivious to this whole set of variables,” Callan said. “I’m sure the comptroller’s office and the services are kind of playing with” budget numbers. “That’s why it’s like a poker game. Why would you say, ‘Here are my cards now’ If it gave Congress an easy out to say, ‘OK, we don’t have to do reconciliation because they’ve got this other plan.’”

The vast majority of the reconciliation funding is slated for Defense-wide accounts, Harrison said. For example, the Defense Autonomous Working Group, or DAWG, is slated to receive $53.6 billion in reconciliation funding, according to budget documents.

But that money is slated to be spread over five years, Harrison said.

“If they aren’t going to get reconciliation, they could say, ‘just give us $10 billion this year, and we’ll figure it out in future years,” he said. “They could cut it from $54 billion to $10 and not really change their plan at all.”

Callan pointed out that “a lot of these advanced programs, like what’s in the DAWG, don’t employ a lot of people who vote, and that’s just the reality of Congress right now. Production lines in Texas, California, the Southeast, and Midwest—that’s probably what’s going to drive Congress to keep things flowing, not necessarily autonomous drones.”