The Fiscal Year 2026 National Defense Authorization Act: Where We Are And What’s Next

• Senate Version
• House Version
• Differences Between the House and Senate Versions

The National Defense Authorization Act (NDAA) is the annual bill to authorize funding, policies and programs for the U.S. national security enterprise. The NDAA sets the topline defense budget with program-by-program authorizations, establishes defense policy such as pay raises for service members, addresses near-term threats from our adversaries and sets end-strength goals for military personnel, among other national security actions, both public and classified.

The NDAA is one of the most important bills passed by Congress and sets the strategic direction of U.S. defense policy. The bill has traditionally been bipartisan and is considered “must-do” before the end of the calendar year.

Senate Version

On Oct. 10, 2025, the Senate approved its version of the fiscal year 2026 defense authorization bill. The bill passed 77 to 20 after senators struck a deal on an amendment package. The NDAA authorizes $924.7 billion in funding for national defense. The Department of Defense will receive $878.7 billion, and the Department of Energy will receive $35.2 billion. An additional $10.8 billion will be for defense related activities. The key provisions of the Senate version include:

1. Pentagon Reform and Modernization
   • Reforming the Pentagon’s business practices to make it easier for America’s defense industry to build weapons by repealing or amending more than 100 provisions of statute in order to streamline the defense acquisition and reduce administrative complexity.
   • Establishing Portfolio Acquisition Executives with expanded authority.
   • Encouraging commercial-first contract and consumption-based software models.
   • Introducing new budgeting reforms enabling flexible lifecycle software funding.
2. Regional Security Priorities
   • Requiring the Trump administration and the Pentagon to brief lawmakers before withdrawing any U.S. troops from Europe or South Korea.
   • Fully funding the Pacific Deterrence Initiative.
   • Extending the Ukraine Security Assistance Initiative through 2028.
   • Extending the Counter-ISIS authorities and US-Israel Counter-UAS programs.
3. Future Battlefield and Innovation
   • Establishing Biotechnology Management Office and AI Oversight entities.
   • Requiring a cyber deterrence strategy and expanding the Cyber Excepted Service.
   • Adding an AI sandbox and ontology governance framework for Department of Defense systems.
   • Strengthening munitions production, supply chain resilience and energetics programs.
4. Personnel, Health and Readiness
   • 3.8% pay raise for members of the military.
   • Expanding mental health initiatives.
   • Strengthening DODEA special education and family legal support services.
5. Building Combat Power
   • Authorizing five Columbia-class submarines and fifteen medium landing ships.
   • Protecting A-10 and RQ-4 fleets and procuring 34 F-35A aircrafts.
   • Expanding infrastructure investment and creates an Advanced Nuclear Energy Working Group.
6. Strategic Deterrence and Industrial Policy

• Enhancing missile defense and space launch studies.
• Establishing statutory targets for Sentinel ICBM ICO and accelerating the nuclear SLCM.
• Codifying B-21 operational timelines and reinforces Air Force Global Strike Command.
• Expanding the Industrial Base Fund, establishing the Economic Defense Unit, and bans procurement from foreign entities of concern for sensitive technologies.

The passage of the Senate version comes after multiple weeks of negotiations. Senators backed an amendment from Sen. Tim Kaine, D-VA, to repeal the 2002 Iraq War and 1991 Gulf War authorizations for use of military force (AUMFs). Sen. John Cornyn, R-TX and Sen. Catherine Cortez Masto, D-NV, successfully included an amendment to thwart U.S. investments in China, the Foreign Investment Guardrails to Help Thwart China Act, which prohibits and requires notification of U.S. investments in certain technologies in China including certain AI models, quantum computers and materials used in hypersonic systems.

Other proposed amendments to block the deployment of troops to American cities and to prevent the Defense Department from converting a luxury Qatari jet for use as Air Force One failed along party lines. Sen. Tammy Duckworth, D-IL, initially vowed to halt the bill’s passage over her objections to the administration’s National Guard deployments to cities, but the Chairman of the Senate Committee on Armed Services agreed to hold a hearing on the issue.

House Version

The House passed its version of the defense policy bill on Sept. 10, 2025. The bill advanced 231-196 along party lines. The bill authorizes $892.6 billion, which follows the president’s budget released earlier this year. The bill language has criticism from Democrats after the Republican majority denied votes to limit the Trump administration’s use of the military in domestic cities. According to the House Armed Services Committee, the fiscal year NDAA codifies all or parts of 15 executive orders issued by President Trump including:

• Restoring America’s Fighting Force (EO 14185)
• Ending Radical and Wasteful Government Diversity, Equity, and Inclusion Programs and Preferencing (EO 14151)
• Declaring a National Emergency at the Southern Border (Proclamation 10886)
• Securing Our Borders (EO 14165)
• Clarifying the Military’s Role in Protecting the Territorial Integrity of the United States (EO 14167)
• Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base (EO 14265)
• The Golden Dome for America (EO 14186)
• Deploying Advanced Nuclear Reactor Technologies for National Security (EO 14299)
• Restoring American Airspace Sovereignty (EO 14305)
• Unleashing American Drone Dominance (EO 14307)

The key provisions of the House version include:

1. Acquisition and Industrial Reform

• Enacting the SPEED Act to cut defense acquisition timelines from three years to 90 days.
• Establishing the Defense Industrial Resilience Consortium and BOOST Program to accelerate innovation.
• Expanding commercial-off-the-shelf and OTA authorities.
• Cutting $20 billion from consulting and outdated programs.

2. Servicemember Quality of Life

• Providing a 3.8% pay raise.
• Authorizing $1.4 billion for housing, $577 million for hospitals and $361 million for childcare centers.
• Enhancing TRICARE, mental health and maternal care access.
• Expanding Department of Defense schools and vocational transferability.

3. Readiness and Lethality

• Prohibiting the retirement of F-22, F-15E, A-10 and C-130.
• Authorizing $22 billion for shipbuilding, $38 billion for aircrafts, $4 billion for ground vehicles and $15 billion for munitions.
• Expanding AI, hypersonic and autonomous weapon research and development.
• Establishing the Joint Counter-UAS Office.

4. Strategic Deterrence and Space

• Fully funding Sentinel ICBMs and SLCM-N programs.
• Expanding NNSA’s Rapid Capabilities Program and nuclear pit production.
• Advancing Space Force’s TacSRT program for commercial data and space-based sensing.

5. China, Allies and Global Security

• Extending the Pacific Deterrence Initiative and funding $1 billion for Taiwan Security Cooperation.
• Prohibiting defense procurement from Chinese-owned entities and critical material dependence by 2030.

In addition to passing the NDAA, the House also passed two measures to repeal the authorizations for military force granted in 2002 and 1991, covering the Iraq War and the first Gulf War.

Differences Between the House and Senate Versions

Both the House and Senate NDAA focus on reforming the defense acquisition process by speeding up the internal process inside the Department of Defense. The House Armed Services Committee focused on these issues with their bill, Streamlining Procurement for Effective Execution and Delivery, as the foundation for the bill. The Senate Armed Services used Chairman Roger Wicker’s FoRGED Act as the base.

The main difference in the House and Senate version is the topline number. The House currently authorizes $892.6 billion in appropriations, in line with the Trump administration, while the Senate authorizes $924.7 billion. The difference is $32 billion.

The House version is savings-oriented and cuts $20 billion from the current NDAA budget. There is $6.8 billion cut from Pentagon’s budget, $5.5 cut from consulting services, $1.6 billion from climate programs and $1.2 billion from retiring obsolete systems. The House version also adds $900 million for counternarcotics and border operations and prioritizes the Golden Dome missile defense through its funding.

The House version emphasizes diversity, equity and inclusion (DEI) elimination and border integration. In the House version, there is a provision barring the military’s TRICARE health insurance program from covering gender transition care.

Additionally, there are several Senate-only legislative provisions, not included in the House version.

Next Steps:

Following the passage of the NDAA in both chambers, a conference committee will form to reconcile the differences between the two versions. The committee will include members of the House and Senate Armed Services Committee and senior staff from both chambers. The committee will negotiate compromise language acceptable to both chambers and produce a single conference report, which is considered the unified NDAA text.

Among the areas of compromise will be the topline authorization number, as the Senate version authorizes $32 billion more. Additionally, key areas of negotiation include differing levels of Ukraine aid, the BIOSECURE Act, AI governance in the Department of Defense and the elimination of DEI and climate policies in the House version.

The conference formation will typically happen in late October to early November but may be impacted by the government shutdown. The conference report is typically finalized in early December, leading to a vote in both chambers. Once the bill passes, the enrolled NDAA is sent to the White House for a presidential signature.