With $1.5 Trillion Defense Bill Unlikely, Congress Weighs Options

Getting back to business after the midterm elections, Congress has just weeks to try to hammer out the fiscal 2027 budget—and without a new spending bill or another continuing resolution, the government will run out of funding Dec. 11. 

Pentagon funding is frozen at fiscal 2026 levels under the current CR—about $858 billion annually. The consensus among experts and observers is that the White House’s $1.5 trillion defense plan for fiscal 2027 is dead; split between a $1.15 trillion “base” appropriations bill and $350 billion in a separate reconciliation bill, it faces too many hurdles for Republicans to overcome, they say.

Pentagon leaders continue to press their case for the full $1.5 trillion. Secretary of Defense Pete Hegseth said Nov. 10 that “this lame-duck period is critically important for funding of our department.” A few days earlier, Chief Master Sergeant of the Air Force David R. Wolfe told the Airlift/Tanker Association: “I can’t stress to you enough how important it is for Congress to pass this budget this year. We need the entire budget.” 

But with realism settling in, some defense officials have begun to talk about trades they must make. Likewise, new reports from the Center for Strategic and Budgetary Assessments and the American Enterprise Institute are also attempting to game out the options. 

“Plan B for Defense Hawks,” a new report from CSBA budget analyst Travis Sharp released Nov. 5, outlines four scenarios, ranging from $1.05 trillion to $1.15 trillion. 

AEI’s John G. Ferrari, Todd Harrison, and Elaine McCusker tackle the same issue in “FY 2027 Defense Budget End Game: Options for the Lame Duck Congress,” released Nov. 6. Their report presents what each analyst would do with budgets of $1 trillion, $1.1 trillion, or $1.25 trillion—a total of nine scenarios. 

The House Appropriations Committee passed a $1.07 trillion defense spending bill that largely followed the “base” appropriations request. The problem with that measure is that approach anticipated a reconciliation bill that would make up for shortfalls in the base budget. Although some Republicans still hope to complete a reconciliation bill, Majority Leader Sen. John Thune (R-S.D.) has been lukewarm to the concept. Meanwhile, Rep. Adam Smith (D-Wash.), who is poised to chair the House Armed Services Committee come January and is already its ranking minority member, is pressing to cap the budget at $1 trillion. 

For the Air Force and Space Force, the stakes are high. CSBA’s Sharp built his plan to “protect high-priority investments,” including 85 F-35 purchases, regardless of topline. “That one’s a no-brainer,” he said. 

But all three AEI experts would cut purchases of Air Force F-35As and Navy F-35Cs, also regardless of total spend. They saw that unity as telling: “These areas of consensus are likely starting points for congressional reductions at any level of funding below the request,” Ferrari, Harrison, and McCusker wrote. They also proposed delaying or even cancelling the F-47 next-generation air dominance fighter.  

The AEI report presented a variety of aircraft options. Harrison avoided cutting any with a $1.25 trillion topline, but whacked 89 airframes in his $1 trillion budget. McCusker and Ferrari outlined cuts ranging anywhere from 300 to 582 airframes.

The Golden Dome missile defense shield, another Trump administration priority, was also an area of debate. Sharp concluded “it needs to be incrementally funded, not all upfront at once,” arguing for cutting the proposed $17.5 billion investment to $2 billion—enough to keep it going, but modestly. “Future base budgets can add or subtract funding based on the programs’ demonstrated progress (or lack thereof),” he wrote. 

The AEI experts were divided on Golden Dome. Ferrari cut it to $7 billion under his $1.25 trillion topline, but at $1 trillion would terminate the program entirely. Harrison would preserve funding but abandon one element of the shield: space-based interceptors. McCusker said if funding was capped at $1 trillion, she would delay Golden Dome into the future. 

Munitions

Sharp prioritized investments in munitions including the Joint Air-to-Surface Standoff Missile, the Long-Range Anti-Ship Missile, and the Advanced Medium-Range Air-to-Air Missile, but cuts here are inevitable at any level short of $1.5 trillion.

“The number of missiles you’re requesting, you have to be able to responsibly spend that amount of money over three years without going over” if the funding is through the regular appropriations process, he said. “So the number of munitions requested has to come down quite a bit.”

The Pentagon has announced framework deals with many munitions suppliers to ramp up production, doing so will take time. Sharp said he focused on what was possible today.  

Harrison, of AEI, suggested cutting $10 billion from munitions accounts under a $1.25 trillion topline, trimming to “what could be reasonably executed.” With lower toplines, he would cut deeper. All of the AEI experts made some cuts to munitions, even though Ferrari wrote that it was essential Congress “replenish munitions and readiness dollars depleted from the Iran conflict.” 

While the AEI and CSBA experts varied wildly in their priorities, all four analysts agreed the worst possible outcome was no budget at all—and a full-year continuing resolution. “Harmful continuing resolutions are clearly the wrong answer,” Sharp wrote.

The exercise of presenting options, AEI’s experts wrote, “does not endorse a funding level, but it shows how each step down in funding leaves fewer choices. A cut to the CR level would leave even less room for decisions, with budget math rather than strategy dictating the outcome.”