Last week in FY27 Budget and Potential Ways Ahead, we covered where the budget stands: a CR through December 11, a Senate with no mark or topline, and a $350B reconciliation request colliding with a roughly $60B appetite on the Hill. We also laid out the courses of action. This week we look at the one bill that has shown forward movement.
The House Appropriations Committee marked its FY27 defense bill in June. Once SAC-D completes their markup, this will be a key position that will determine the outcome of the conference so it’s worth understanding where things stand now.
In our overall analysis, three things stand out with regards to the HAC-D’s actions.
Production Took a Serious Cut
HAC-D cut Procurement $9.2B (3.6%) below the request and added $2.2B (1%) to RDT&E. The FY27 request finally leaned toward buying at scale, and the House pulled it back. Navy shipbuilding took the largest dollar cut. The Marine Corps took the largest percentage cut.
The Reconciliation Gap is Unresolved
The request counted on $350B in reconciliation for DAWG, Golden Dome, Space-Based AMTI, munitions, and industrial preparedness. Congress is coalescing around $60B which is likely to be more of a war supplemental than a source of funds for these priorities. Apart from a few plus-ups (IBAS, APFIT), the House did not shift those priorities into the base bill. If conference doesn’t fix this, certain critical efforts remain underfunded or unfunded entirely
Contains Both Restrictions and Support
The bill gives funding for DIU Fielding, DAWG, and Counter-sUAS with few restrictions but protects many large dollar programs.
Prohibits funds to cancel Black Hawk, E-7, or Next-Gen OPIR
Prohibits funds to divest F-15s, and limits funds to divest U-2s
Orders funds obligated for the Next Generation Fighter
Adds 96 directives, more than half of them reports or briefings back to Congress.
For paid subscribers, below:
Line-by-line RDT&E and Procurement deltas by Service and DoW, PB vs. HAC-D
How much of reconciliation-dependent programs the House actually backfilled
Report language signals on MYP, industrial base, and execution oversight
Our recommendations for SAC-D and conferees
What PAEs, PMs, and industry should do before conference