$838.5B baseline vs. a $1.5T ask: the Dec. 11 CR deadline sets the lame-duck defense money fight

The money

The administration requested $1.5 trillion for national defense in fiscal 2027: $1.15 trillion through regular discretionary appropriations and $350 billion through party-line reconciliation ^[6]. Under the CR, the Pentagon instead works from the FY2026 baseline, which Air & Space Forces Magazine put at $838.5 billion, 44 percent less than the request ^[6]. A separate supplemental request includes $67 billion for defense to recoup expenses associated with the Iran war ^[4]. None of these requests has been enacted ^[4].

The stopgap is the Continuing Appropriations and Extensions Act, 2027 (H.R. 6500, P.L. 119-103), enacted Sept. 2, 2026 ^[2]. Section 101 continues programs “at a rate for operations as provided in the applicable appropriations Acts for fiscal year 2026,” and Section 106 ends that authority on Dec. 11, 2026, unless full-year bills are enacted first ^[1]. The Congressional Budget Office projects $1.701 trillion in annualized discretionary budget authority across government under the CR ^[2].

Section 102 is the provision that matters most to program offices. It prohibits DoD from using CR funds for “the new production of items not funded for production in fiscal year 2026 or prior years,” for “the increase in production rates above those sustained with fiscal year 2026 funds,” and for any project, program element or P-1 or R-1 line that had no FY2026 funding ^[1]. Section 102(b) also bars initiating “multi-year procurements utilizing advance procurement funding for economic order quantity procurement unless specifically appropriated later” ^[1].

Congress granted only narrow defense anomalies. Section 126 lets the Navy apportion Shipbuilding and Conversion, Navy funds to cover prior-year cost increases on 20 named ship programs ^[1]. The caps total about $2.61 billion; the largest are $566.5 million for the 2021 Columbia-class submarine program, $561.1 million for the 2019 Virginia-class submarine program, $379.2 million for CVN refueling overhauls and $324 million for the carrier replacement program ^[1, 7]. Section 127 allows up to $2.853 billion in Procurement, Defense-Wide for National Security Systems ^[1, 2]. Inside Defense reported that the CR does not include the White House’s requested anomalies for $1 billion for the Trump-class battleship, additional critical munitions production, or multiyear procurement authority for five munitions programs ^[7].

Money provided through reconciliation is outside the CR’s reach. The CR continues only programs funded in the FY2026 appropriations acts, so efforts that ran largely on the 2025 reconciliation law have no discretionary rate to fall back to ^[6]. Air & Space Forces reported that the F-15EX started fiscal 2027 with $115 million, less than 5 percent of the $2.65 billion officials requested, because its FY2026 procurement came almost entirely from reconciliation ^[6].

The programs

Breaking Defense searched the FY2027 procurement and research, development, test and evaluation (RDT&E) budget documents and found more than 150 entries labeled as new starts ^[5]. It counted 29 in the Army, 17 in the Navy and Marine Corps, roughly 100 in the Air Force and nine in the Space Force, while noting the documents can contain errors ^[5].

Named examples include about $1 billion in advance procurement and about $837 million in R&D for the Trump-class battleship; $750 million for the first 12 Conventional Prompt Strike weapons; $4.4 billion for two submarine tenders; $921.9 million in THAAD RDT&E; and $1.5 billion for the Space Force’s Autonomous Tactical Fabric ^[5]. The Defense Autonomous Warfare Group (DAWG) request totals $54.6 billion, of which $53.6 billion was to come through reconciliation ^[5]. Golden Dome has $17.5 billion planned for FY2027, but less than $400 million of it sits in the base budget ^[5]. Gen. Michael Guetlein, who leads Golden Dome, said in August that “if they don’t figure it out, there’s no Golden Dome, because there is no funding” ^[5].

The full-year outlook for those lines is mixed. According to Breaking Defense’s Nov. 5 survey of analysts, missile defense interceptor replenishment will remain a priority, but Byron Callan of Capital Alpha Partners called it “highly unlikely that all of the $47 billion in mandatory [request] is funded in discretionary” ^[4]. Drone Dominance funding could be cut to a “fraction” of its $53.6 billion request, and Todd Harrison of the American Enterprise Institute and Callan agreed the battleship is unlikely to be funded ^[4]. Golden Dome may survive in parts ^[4].

For capture teams, the CR’s production-rate cap also matters on programs that are already funded. Sections 102(a)(2) and 102(b) mean a planned FY2027 ramp or a new economic order quantity buy cannot be put on contract until a full-year bill or a specific anomaly provides the authority ^[1].

The politics

The CR passed the Senate 90-6 on Aug. 8 and the House 370-48 on Sept. 1 ^[2]. Since then, regular order has stalled. The House has passed three of the 12 FY2027 appropriations bills, and defense is not among them ^[8]. House appropriators advanced a defense bill in June at $1.07 trillion, but the Senate has not settled on a topline ^[6].

The FY2027 NDAA, which sets policy and authorizations but provides no money, is also unfinished ^[4]. The House passed H.R. 8800 on July 22, 2026, 216-212, with Republicans voting 209-7 and Democrats 6-205 ^[3]. In the Senate, cloture on the motion to proceed to S. 4784 failed 50-46 on July 14, and the Senate had taken no further floor steps as of CRS’s Sept. 1 update ^[9]. Holland & Knight expects the bill to be enacted, but only after significant changes to House provisions ^[8].

Reconciliation is the Republicans’ only route that avoids a 60-vote threshold. The House adopted a budget resolution in July with $60 billion for defense, but Senate Majority Leader John Thune repeatedly declined to bring it up ^[4]. “There’s zero chance of appropriations getting passed because that requires 60 votes in the Senate,” Harrison told Breaking Defense, adding that on reconciliation, “the most likely case is it doesn’t go anywhere, it doesn’t even get a vote” ^[4]. Callan cut his odds of further defense reconciliation passing from 15 percent to 10 percent ^[4].

Democrats are signaling a lower topline for the next Congress. Rep. Adam Smith, who Breaking Defense reports will probably chair the House Armed Services Committee, said, “We must push for the development of a more realistic and sustainable approach to our national security” ^[4]. Rep. Rosa DeLauro said, “We must claw back billions of dollars Republicans unilaterally provided to Border Patrol, ICE, and the Pentagon” ^[4]. Rep. Thomas Massie (R-Ky.) plans to reintroduce impeachment articles against Defense Secretary Pete Hegseth when Congress returns, which would compete for floor time ^[4].

Next milestone

The CR expires Dec. 11, 2026 ^[1, 8]. Before then, Congress must pass full-year bills, a second CR or an omnibus, or accept a funding lapse; Callan puts the shutdown risk at 50 percent ^[4]. If Congress extends the CR, contractors should watch the anomaly list, the only route for the battleship, munitions multiyear authority and other new starts to move before a full-year bill ^[5, 7]. Callan has suggested the FY2027 base budget may not clear Congress until spring 2027 ^[6]. Sen. Chris Coons, the lead Democrat on the Senate Appropriations defense subcommittee, told Breaking Defense that “we are going to be in a mad dash to try and avoid a full-year CR” ^[5].