A $1.5T DoD budget in a split Congress would demand prime political maneuvers

Eric White Big spending is the key or the goal for the Trump administration when it comes to increasing the Pentagon’s budget. But with the possibility that we may not have a fully passed defense budget, we could see another year of a continuing resolution. You’re trying to say there’s another route to go.

John Ferrari Well, as you know, the government did pass the FY26 budget, and it was roughly $900 billion for the Department of Defense. But the next budget won’t be worked on until this summer, and likely not enacted until after the midterm elections. And with the possibility of the House of Representatives and possibly the Senate flipping, it will be very difficult to get a $1.5 trillion defense budget through either the House if it turns Democratic, or even the Senate, which requires 60 votes. And so the other method of getting that type of funding is budget reconciliation.

Eric White All right, and so how does that work? We heard that term a couple of times, but it seems as if every time it’s used, the rules of said Congress usually change it up. What would that look like this go around?

John Ferrari The rules are fairly straightforward, but it requires a trifecta to pull off. So you have to have a majority in the House of Representatives, you have a have a majority in the Senate, and you have the presidency. So you need to control all three branches of the government, and in essence, there’s a special rule in the Senate that says if you do this budget reconciliation and It’s just about the money, you don’t have to worry about the filibuster. So, really, budget reconciliation is a carve-out from the filibuster rules. And so, in this case, it would take a simple majority in the Senate, a simple majority in the House, and the president would sign a bill to do a funding package in FY26. And, of course, that would need to be done probably prior to the election.

Eric White You mentioned you need the Senate, the House and the White House. If you have that White House, there are some steps that the Pentagon itself could take, as far as just shoring up where money is going to be allocated and making it a little bit [easier] for lawmakers to vote on. What role does the Pentagon have to play in this?

John Ferrari The interesting thing about reconciliation in the Congress is that it’s money that’s appropriated per the Constitution, but it’s done by the authorization committees, not by the appropriation committees. And within the Congress, the culture is the appropriators like to kind of micromanage down to the line item of what’s being done, but the authorizers tend to be more conceptual. And so last year in the defense reconciliation bill, they would say things like, “$25 billion for Golden Dome, hey, Pentagon, tell us when you know what you want to spend it on,” whereas the appropriators would be down to the line item where each of the millions goes. So in this case, the Pentagon would need to be working with the authorizers today to begin shaping the outlines of what could be a $450 billion dollars’ worth of mandatory spending in this bill. In which case, then you’d have $450 billion in reconciliation, another $1 trillion or so in the base budget for ’27, and that’s how you get to the $1.5 trillion.

Eric White We’re speaking with John Ferrari, he’s a non-resident scholar with the American Enterprise Institute. All right, so now we’ve covered the procedural aspect of this. Let’s look at the politics of this situation. Obviously, the Trump White House wants a bigger spending budget for the Pentagon, has made numerous statements saying that they are looking to increase the lethality of all of the military aspects for the U.S. government. How would this go? Doing this process, how would that help them achieve that goal?

John Ferrari Well, so I’d say the politics are obviously tricky, and they’re tricky for two very important reasons. Number one, in the House of Representatives, the Republicans only have a two- or three-seat majority, depending upon who shows up to vote. So they would have to have 100% agreement on anything that goes into a reconciliation bill, and it’s going to have to be bigger than defense. And reconciliation is meant to do really two things: It either spends money or it takes money back. And there are enough people in the House, enough members in the House, that don’t want any additional spending, the deficit hawks. And there are others that want certain cuts to be done…and there were others who want certain changes to the tax law. And getting everybody together proved very, very difficult last year, but the president managed to get everybody in line and expended an enormous amount of his political capital in the Congress to get it done. So that’s number one. Number two, the OMB director, he probably doesn’t necessarily enthusiastically support the extra spending. The OMB director is a deficit hawk. He is not in favor of more military spending. And so from his point of view, if he just puts it through the normal appropriations process, if it doesn’t happen, well, he tried and the extra spending doesn’t get done. So, he’s probably not looking for a reconciliation bill this year that spends more money. Because that’s not really in his nature. So those are the two political headwinds within the administration and the Republican Party that would make this not happen.

Eric White Let’s look at that scenario. If this doesn’t happen, we’re looking at another CR for fiscal year ’27. I say another just because it’s happened before; I know that we had a budget last year and that was seen as a big improvement on things. But what is at risk here if we go back to using the CR method?

John Ferrari Well, so there will, with near certainty, be a short-term CR to get us from 1 October until after the midterm elections. There’s probably a 0% chance of there being a bill before then. So you are correct. The challenge, of course, comes through the normal appropriation process — you have to actually have control of the House of Representatives. And if the Democrats get control of House of Representatives, they’re not going to just want to spend an extra $500 billion for defense, unless maybe there’s $500 billion more for domestic spending. You get back to, in these bipartisan bills, these dollar-for-dollar adds. And then all of a sudden, the deficit hawks come in and they don’t like either one of them. Then you get into these stalemates where you can’t get it through. The other thing, then, is you got to clear 60 votes in the Senate. And so you have the same problem, which is like, so how do you get an extra $500 billion for defense through the Democrats in the Senate without adding a significant amount of money for domestic programs? In which case the deficit hawks come out again. And so in a split government, it becomes very, very tricky to do just a defense bill without also doing a domestic bill.