Executive summary
- Since assuming office in January 2025, the Trump administration has pursued a “paradigm shift” in the federal budget-making process, employing a number of legal and procedural tactics to expand executive power over government spending and to reduce congressional oversight and control over how money is allocated. This has included defence spending, regarded by lawmakers on both sides as one of the few remaining areas for consistent bipartisan cooperation, but which is increasingly vulnerable to partisan politics.
- These efforts to circumvent the regular appropriations process have posed a serious challenge to Congress’ constitutional ‘power of the purse’. Specifically, the administration has sought to leverage the reconciliation process, continuing resolutions (CRs), rescissions, apportionments and restrictions on information-sharing with Congress to stifle lawmakers’ control over how, when and for what purposes mandatory and discretionary defence dollars are allocated and spent.
- Importantly, these developments have affected both sides of politics. The White House has framed its actions largely in terms of pursuing an avowedly more “partisan” budget-making process, seeking to bypass Democratic resistance to higher Pentagon spending and ring-fencing specific presidential priorities, such as Golden Dome, from regular oversight. However, these tactics have also exacerbated real and growing differences between the White House and Republican defence hawks over how to connect greater, sustained defence spending with a coherent defence strategy.
- To date, the Trump administration’s efforts have produced mixed results, and lawmakers on both sides are increasingly cognisant of the significant challenge to congressional budget control. Yet the sheer scale of President Trump’s US$1.5 trillion defence budget request for FY27 and the likelihood of a split Congress after the November 2026 mid-term elections is likely to amplify the administration’s incentives to persist with its current approach.
- These dynamics are of acute interest to Australia. The prospect of further disruptions to the regular US defence budgeting process will have a direct impact on the United States’ capacity to resource its national strategic priorities, including in the Indo-Pacific region. Indeed, a prolonged battle over budgetary control is emerging on the cusp of what many regard as the window of maximum vulnerability for high-end conflict in the Indo-Pacific beginning in 2027, compounded by the sunk costs and persistent risks of a protracted war with Iran, and by longer-standing readiness and production shortfalls for key military assets.
Introduction
“Don’t tell me what you value. Show me your budget, and I’ll tell you what you value.”
This adage, often favoured by former US President Joe Biden, is one that analysts of US defence policy often paraphrase when comparing the strategic objectives and federal spending blueprints of an incumbent administration, regardless of their political persuasion. That, of course, includes the second Donald Trump administration, particularly in the wake of its recently released 2025 National Security Strategy and 2026 National Defense Strategy.
In this case, however, one could make the case that how the budget is made and managed is just as important as what it contains.
Since coming to office in January 2025, the Trump administration’s approach to federal budget matters has demonstrated not only how it wants to resource its domestic and global priorities, but the diminished role that it sees for Congress in doing so. That includes defence spending, a historically bipartisan area which has increasingly become a key battleground for control over US foreign policy resources between the White House and lawmakers on both sides of politics. To be sure, the Trump administration’s pursuit of significant defence spending increases in FY26 and FY27 has relied on assistance from Republican allies in Congress. Yet, it has simultaneously employed a number of legal and fiscal tools and tactics in an attempt to wrest greater control from lawmakers of both parties over the so-called ‘power of the purse’; that is, Congress’s constitutional prerogative to ultimately determine how federal funds — including for the Pentagon — are distributed and used.
Though the results of these efforts have been mixed, they nonetheless fit with a broader trend of “real and growing differences” between the White House and Congress over how to scope, resource and implement the United States’ defence strategy across the board. Even if the November 2026 mid-term elections are widely expected to alter the balance of power between Democrats and Republicans in Congress, those results may only amplify the incentives for the Trump administration to persist with its current efforts to maximise its freedom of manoeuvre on defence spending. In fact, the size and nature of Trump’s FY27 budget request suggest that this is likely to remain the case. Given the stock placed in keycongressionalcommittees to steer and to resource US foreign policy and strategy, the sheer scale of President Trump’s US$1.5 trillion defence budget request for FY2027, and growing questions over whether the Trump administration is adhering to its own 2026 National Defense Strategy, the changing contours of the US defence budgeting process should be of paramount interest to Australia.
How does the US budget cycle work?
The US budget cycle is bewildering even for seasoned experts. At its most basic level, while the president both proposes and signs off on federal budgets, the legal authority to approve and appropriate spending for mandatory and discretionary funding has historically resided with Congress. In practice, this entails a complex, iterative process of negotiation and revision between the executive branch and different congressional committees.
Under the Congressional Budget and Impoundment Control Act of 1974,1 the president first submits a defence budget proposal to Congress on the first Monday of February, known as the President’s Budget Request (PB), drafted by the Office of Management and Budget (OMB) in consultation with federal agencies. Historically, the PB has been less a governing document and more of a negotiating gambit or a tool for strategic and political signalling about how the US Government wants to pursue its priorities through fiscal means. It accounts for both mandatory funding, which automatically rolls over each year, guided by legally established criteria and formula, and discretionary funding, which is subject to the appropriation process.
While the president both proposes and signs off on federal budgets, the legal authority to approve and appropriate spending for mandatory and discretionary funding has historically resided with Congress.
The overwhelming portion of the US defence budget is funded through discretionary appropriations. As opposed to ‘mandatory funding’, both caps and distribution of discretionary funding are subject to yearly approval by Congress. This places two key constraints on the incumbent administration. First, it cannot spend more than the amount appropriated by Congress through regular Appropriations legislation, short of emergency supplemental funding delivered through stand-alone legislation passed outside of the regular budget process. Second, funds can only be used for the purposes and conditions specified in those laws unless the federal agencies seek authorisation from Congress to reprogram funds from one account to another.
Following the release of the PB, both the House and Senate budget committees then draft budget resolutions, adopted as ‘concurrent resolutions’,2 setting overall spending levels and providing guidelines for appropriations. These provide a mechanism for Congress to set an alternative path for a whole-of-budget fiscal policy — distinct from that proposed by the president — ahead of negotiations in the House and Senate Budget committees. While concurrent resolutions are not legally binding, they constitute a key juncture in the budget process being the only occasion when spending and revenue are considered together. Crucially, budget resolutions can include specific directives to congressional budget committees to draft a reconciliation bill, a fast-track process to create, change or expand mandatory funding streams pertaining to certain tax, spending or debt-limiting legislation. Passing reconciliation funding requires only a simple majority vote in the Senate, thereby circumventing the 60-vote threshold required to overcome a filibuster.
In parallel, the House Armed Services Committee (HASC) and Senate Armed Services Committee (SASC) each develop and pass a National Defense Authorization Act (NDAA) for the fiscal year — the final version being a legally binding document, akin to an enduring defence policy or strategy document for Congress in that it signals lawmakers’ priorities for the year. The primary purpose of the NDAA is to confer the legislative authority to establish or maintain federal defence and military programs or agencies. While it does itself set funding levels, the NDAA can pave the way for subsequent appropriations. Subsequently, the House and the Senate Appropriations Committee each draft an appropriation bill codifying spending conditions and limits as well as authorising corresponding budget outlays. Through a process known as ‘conferencing’, variations across the House and Senate authorisation and appropriation bills are addressed and reconciled, before final versions are forwarded to the White House for the president to sign into law. Widely regarded as foundational to US national security in the broadest sense, the NDAA stands as one of the few pieces of legislation enacted annually with bipartisan support. In contrast, appropriations are often hostage to party brinkmanship, as the actual allocation of resources surfaces partisanship over defence priorities, fiscal responsibility arrangements and competing social policy imperatives.
In the event that the House and the Senate fail to reach a consensus within or between their chambers to enact a regular appropriation bill by the start of the new fiscal year, Congress can instead issue temporary legislation to maintain the government funding at current spending levels via a stopgap measure known as a 'Continuing Resolution' (CRs), provided that it is supported by a majority in both chambers and signed by the president. While CRs are now largely routine — the Pentagon has started each fiscal year under a CR from FY10 through to FY26, with the exception of FY19 — their duration has extended progressively in recent years, reflecting lawmakers’ growing reliance on temporary funding to keep the government running amid increasingly frequent appropriations lags.
Failure by Congress to pass an appropriation bill or a CR, and/or a presidential veto on either legislation, can then trigger a government shutdown if the fiscal year has already ended, requiring all non-essential government services to cease and all employees with a temporary, non-duty, non-pay status to be furloughed.3 There have been twenty such shutdowns since 1974, though only six affected government operations for more than a single business day.
Figure 1. The US federal budget process
Budget cheat sheet
Signature moves: Budget battle tactics
The last two US federal budget cycles have resembled less the usual process of negotiation between the White House and Democratic and Republican lawmakers, and more a tug-of-war for the power of the purse — including for key defence and foreign policy accounts. Since January 2025, the White House Office of Management and Budget (OMB) and the Pentagon have employed a number of financial, legal, political and procedural tactics to push President Trump’s FY25 and FY26 defence budget agendas on Capitol Hill. Though some methods have relied on support from Republican allies in Congress, the Trump administration’s ultimate objective has seemingly been to ultimately bypass or minimise congressional influence over defence funding. The results of these efforts have been mixed, yet they have nonetheless posed a serious challenge to congressional control and oversight of Pentagon spending and, by extension, lawmakers’ ability to shape US strategy abroad.
1. Reconciliation funding
Firstly, the White House has pushed for the use of reconciliation as a means to bypass Democratic opposition to Trump’s policy agenda, and to limit overall congressional control over additional funding for President Trump’s defence priorities.
Historically, Pentagon spending has been determined by levels set by lawmakers in the annual Defense Appropriations Act, with additional funding outside of those Acts occasionally provided through supplemental legislation tailored to specific emergency requirements. However, 2025 marked the first time ever that lawmakers approved significant spending for defence through the reconciliation process. Republicans included an additional US$150 billion for defence spending as part of the June 2025 ‘One Big Beautiful Bill Act’ (OBBB), which they intended to be distributed across a range of Pentagon programs between FY25 and FY29.
Figure 2. Two categories of defence spending
The use of reconciliation to secure this funding was important for three reasons. Firstly, reconciliation bypasses the usual 60-vote threshold in the Senate and, importantly, Democratic opposition to increases in defence spending without equivalent increases in non-defence spending. Second, it creates a precedent for treating military spending as ‘mandatory’ rather than ‘discretionary’ federal spending, thereby eroding congressional scrutiny and oversight over key military accounts, with mandatory funding free from both regular annual congressional approval and any caps imposed by other legislation (see Figure 2). The 2025 OBBB case did not include specific guidance from Congress — in the form of the committee reports or joint explanatory statements that typically accompany Appropriations legislation — on how the defence funding allotment was to be spent, outside of a small number of broad budget categories like shipbuilding, integrated air and missile defence, border security and others. Thirdly, reconciliation funding is determined entirely by the authorisers on the Armed Services Committees, bypassing the influence of Appropriations committees in both chambers which, historically, have often funded the Pentagon at lower levels than authorisers.
To be sure, congressional Republicans were instrumental in passing reconciliation, but there quickly emerged differences between these lawmakers and the White House over how to spend that money. During negotiations over the OBBB, the Republican chairmen of the House and Senate Armed Services Committees stressed that this funding was intended to “complement… sustained investment and real growth” in core Pentagon spending over a five-year period. The Trump administration, however, saw things differently. Its “trillion dollar” FY26 defence budget request released in May 2025 included US$113 billion in reconciliation dollars — about 75% of available funding for FY25 to FY29 — while keeping ‘base’ discretionary funding flat at FY25 levels and below the level recommended by the Biden administration’s projections. It also proposed allocating reconciliation funding against budget accounts without clear spending parameters, which did not reflect congressional priorities. The White House justified its reliance on reconciliation in its FY26 budget request letter to appropriators on the grounds of ensuring that defence dollars would “not [be] held hostage by Democrats to force wasteful non-defense discretionary spending increases as was the case in the President's first term.”
Figure 3. How is the US defence budget counted?
Though overall supportive of higher defence spending, leading Republicans slammed the White House budget blueprint as a “gimmick,” decrying the budget’s overreliance on reconciliation funding and the absence of regular base funding to support US defence priorities over the longer term. For instance, outgoing chair of the defence subcommittee of the Senate Appropriations Committee Mitch McConnell warned that relying on reconciliation to fund major defence programs has seen important initiatives “slip through the cracks” and that an over-reliance on one-time supplemental funding measures to support US global security initiatives and defence industrial base priorities will inevitably undermine the very objectives that reconciliation packages seek to achieve. Importantly, however, lawmakers also took the unusual step of seeking verbal commitments from dozens of senior Pentagon officials, including its then-presumptive budget manager or ‘Comptroller’, to adhere to congressional intent on how to spend reconciliation funding, outlined in broad categorical tables submitted to the Pentagon in July 2025. Yet leading defence experts warned that there was “no guarantee” that the Trump administration would adhere to that guidance without legally codified appropriations language. The Pentagon subsequently missed several deadlines to submit its reconciliation spending plans to Congress, finally submitting a classified plan in October 2025, amid a protracted government shutdown, which reportedly accounted for only US$90 billion of the total available funding. This led several Senate Democrats to express concerns that the plan’s classification “deviates sharply from long-standing practice and raises serious questions about DOD’s rationale.” Though an unclassified spending plan was belatedly submitted in February 2026, it suggested that the Pentagon would obligate the entirety of the US$150 billion in reconciliation funding in FY26 alone, effectively adding US$37 billion to the budget outside of regular procedures and directly contradicting congressional intent to supplement base budget spending over five fiscal years.
Those dynamics look as though they will be rinsed and repeated for FY27. Having initially ruled out a second reconciliation package, Trump’s US$1.5 trillion 2027 defence budget request — a 44% increase on total FY26 levels — proposes to supplement US$1.15 trillion in base budget funding with US$350 billion from a yet-to-be-determined second reconciliation bill. This follows from Vought’s characterisation of the administration’s first reconciliation package as a “paradigm shift” that enabled “a Republican-only strategy” toward funding presidential priorities like Golden Dome, the Golden Fleet and F-47 fighter jet program — all of which will carry hefty long-term price tags — without needing to negotiate parallel increases in non-defence spending with Democrats – or, it would seem, to adhere to congressional intent for discretionary spending. Indeed, though the Pentagon’s complete FY27 budget request will not be released until the end of April, analysts have already noted it would effectively ring-fence programs like Golden Dome from regular Congressional oversight both this fiscal year and into the future “beyond the reach of routine political revision.”
However, despite vocal support from some prominent Republicans for a second reconciliation package, its prospects for success are far less assured than in FY26. Members of the prominent Republican Study Committee members have endorsed Reconciliation 2.0 as “the perfect vehicle” to implement “Trump’s America First agenda in 2026,” particularly before the November 2026 mid-term elections where Democrats are expected to regain control of the House, allowing them to block the use of reconciliation as a funding tool thereafter. The chairmen of the House and Senate Armed Services Committees have also praised the Trump administration’s request for driving national defence spending towards 5% of GDP, having endorsed a US$450 billion Reconciliation 2.0 defence blueprint shortly ahead of the release of the President’s budget in the pursuit of that same objective.
These voices, however, appear to be a minority among lawmakers. As the Iran war has begun to take an economic toll on American voters and with the November 2026 mid-terms fast-approaching, many Republicans are increasingly wary of lending support to higher military spending at the same time if they entail, or perceived to entail, further cuts to domestic welfare and education programs — and of relying on reconciliation to sustain higher defence spending without regular oversight. Coincidentally, these concerns mirror those of leading Democrats. For instance, while top Republican Senate appropriators like Susan Collins and Mitch McConnell commended the US$1.15 trillion base budget request, they rejected the repeated reliance on reconciliation and voiced concerns about planned cuts to essential domestic programs. Similarly, Jack Reed, the top Democrat on the SASC, criticised the request as “unjustified” and called out the Trump administration’s reliance on reconciliation funding as an attempt to secure funding with “less oversight and fewer strings attached.” Lawmakers have also questioned the logic of the administration’s request when it has submitted a US$200 billion supplemental funding request, one nominally intended to backfill stockpiles and readiness logs drained by military operations against Iran, but which some analysts believe goes well beyond the estimated price tag for those operations and which could create more political friction in the regular defence budget process as a result.
Irrespective of the extent to which Congress adopts or reconfigures the President’s budget, the request confirms the entrenchment of reconciliation as the Trump administration’s preferred mechanism to fund its defence priorities — something which Democrat defence leaders worry will compromise one of the few remaining areas of bipartisan consensus in Congress.
Irrespective of the extent to which Congress adopts or reconfigures the President’s budget, the request confirms the entrenchment of reconciliation as the Trump administration’s preferred mechanism to fund its defence priorities — something which Democrat defence leaders worry will compromise one of the few remaining areas of bipartisan consensus in Congress. Yet, such is the complexity of the political equation underpinning the budget process that many analysts and several lawmakers have given the President’s Budget Request little chance of passing through Congress in its present configuration. Whether that means Reconciliation 2.0 succeeds or fails, or what these trends portend for the future of reconciliation as a regular funding mechanism, remains to be seen.
2. Stopgap funding measures
Secondly, legal ambiguities in stopgap funding measures have provided opportunities for the Trump administration to sidestep congressional authority over federal spending during periods of irregular order, including under Continuing Resolutions (CR) and during government shutdowns.
Continuing resolutions, October 2024 – present
The prevailing consensus among experts, lawmakers and government officials has long been that CRs are inefficient and costly for defence and foreign policy spending, delaying new programs from commencing increasing administrative burdens (as some government contracts need to be reissued with every CR), and reducing government purchasing power — essentially, making defence items and services more expensive by failing to adjust budget levels to account for inflation. However, unlike regular annual appropriations legislation, CRs do not include legally binding language for how government departments are to spend allocated funding. Instead, lawmakers have historically relied on federal agencies and the White House to voluntarily respect congressional intent as outlined in the prior year’s appropriations legislation upon which the CR is modelled.
A succession of stopgap budget measures stretching from October 2024 to February 2026 created opportunities for the Trump administration to take advantage of those ambiguities. This was chiefly made possible by a succession of three CRs covering the FY25 defence budget, amounting to the first-ever year-long stopgap funding measure for the Pentagon, one actively endorsed by President Trump in February 2025 and enabled by Republican majorities in both the House and the Senate after the October 2024 election. Importantly, contrary to legislative precedent, the latter did not authorise funding for the Pentagon at the previous year’s level. Instead, it allowed funding to be moved across different accounts, albeit ensuring the aggregate amount did not exceed total FY24 spending levels. In other words, while the topline budget remained the same, its allocation across accounts at a more granular level was markedly different.
That decision led some leading US defence experts to muse that Congress had “ceded a significant degree of authority” to the White House in managing Pentagon spending, given that what would otherwise have been legally binding language in a proper appropriations bill now figured as “spending recommendations” for an entire fiscal year. Put differently, one long-time advocate for defence budget reform described CRs as “large lump-sums” and as an opportunity for the Pentagon to ignore Congress’ traditional “line-item micromanagement” to “shift money within accounts to meet real-world demands.” Other experts went as far as to suggest that the regular defence budget process — and Congress’s role in it — might be “moving into a new era,” pointing to the fact that the CR broke new ground in authorising the commencement of a limited number of new initiatives and providing additional “emergency-designated appropriations” for key accounts.
One long-time advocate for defence budget reform described continuing resolutions as “large lump-sums” and as an opportunity for the Pentagon to ignore Congress’ traditional “line-item micromanagement” to “shift money within accounts to meet real-world demands.”
How funding was ultimately distributed across FY25 remains difficult to discern. In March 2025, the Republican chairmen of the House and Senate defence appropriations subcommittees issued over 180 pages of Pentagon funding tables outlining “Congressional intent for programs, projects and activities” for the FY25 CR. Yet leading budget experts and policy professionals doubted whether the Pentagon would abide by those recommendations not explicitly outlined in the CR, given the Trump administration’s “very different view on executive power” and fiscal control compared to its predecessors. Furthermore, though the FY25 CR also required the Pentagon to submit a detailed “spending, expenditure, or operating plan” by April 2025, it remains unclear whether its plan aligned with that directed by Congress, though some experts have observed that it largely did.
In any case, these ambiguities have continued to impact budget planning into FY26. White House defence budget materials submitted in support of the President’s budget request in May noted that, as the FY25 CR “did not provide account-by-account appropriations language,” it had proposed its own legislative language and spending guidance for FY26 instead. Likewise, the Pentagon’s delay in delivering key budget documents to Congress and protracted deliberations over reconciliation funding forced lawmakers to prepare additional stopgap funding measures for FY26.5 Negotiations over these measures were complicated by competing views between lawmakers and the White House over their appropriate length. In September 2025, with the fiscal year-end deadline fast approaching, Republican appropriators sought only a short extension into November 2025 to allow sufficient time to negotiate a regular appropriations bill. However, they were met with a White House eager to push for a much longer measure extending through to 31 January 2026 while seeking a range of funding anomalies to head off delays in major submarine programs (though the administration ultimately dropped these requests).
Government shutdown, October 1 to November 12
Ultimately, Congress failed to pass either a regular appropriations bill or a CR for FY26 by 1 October 2025, resulting in a 43-day government shutdown, the longest in US history. Much as with the FY25 CR, President Trump characterised the shutdown as “an unprecedented opportunity” to “eliminate bloated, unnecessary federal programs,” suggesting that the US Government would take steps to preserve its own priorities in the event of a prolonged funding lapse by leaning into its campaign to slash government programs and workforce deemed antithetical or surplus to requirements of its policy agenda.
The Pentagon did not escape the shutdown fallout, enduring its first full closure since 2013. This involved freezing all new contracts and acquisition programs, while some 334,900 civilian employees were furloughed consistent with the department’s internal shutdown contingency plan. Furthermore, in the absence of special congressional legislation to cover military payroll during the shutdown, the US Government reprogrammed Pentagon funding on at least two occasions to support troop payments. In October 2025, President Trump directed the Pentagon and OMB to use “any funds appropriated by the Congress that remain available for expenditure in Fiscal Year 2026… consistent with applicable law.” This first included drawing US$8 billion in unobligated funds from FY25 defence research, development, testing and evaluation (RDT&E) research accounts, and later reallocating US$2.5 billion from defence housing accounts within the One Big Beautiful Bill reconciliation package,6 along with US$1.4 billion from regular RDT&E accounts and US$1.4 billion from the Pentagon’s shipbuilding procurement account. In both instances, it was unclear whether the Department of Defense had notified Congress in advance of those decisions, nor whether it had documented which programs these funds would come from, actions which former Pentagon officials described as “murky” in their legality in the absence of authorisation or appropriations legislation from the preceding fiscal year. Notably, because funding for many of President Trump’s defence priorities — such as the Golden Dome initiative or Southern Border operations — was funded via reconciliation, these were largely insulated from funding lapses and cascading contractual delays prompted by the shutdown. If there was any lingering doubt, the Pentagon’s contingency plan also made clear that these presidential flagship programs were to be prioritised at the expense of funding for other programs if required.
In mid-November 2025, lawmakers eventually passed another short-term CR through to 30 January 2026, effectively ending the government shutdown though inevitably protracting existing budgetary ambiguities. At the same time, language in the CR signalled growing anxiety in Congress over the executive branch’s encroachment on its budgetary authority, and included specific provisions to backpay furloughed employees and to bar the Pentagon from launching new weapon programs not explicitly funded in FY25. Language in the December 2025 NDAA echoed that pushback, with certain leading budget experts noting that the nature of oversight provisions indicated that Congress was becoming “procedurally more assertive in constraining the Administration through statutory floors, reporting demands, and earmarked authorities.” Likewise, the FY26 Defense Appropriations Act rejected Pentagon requests for “legislative changes to the appropriations structure” before the Pentagon could demonstrate “full and effective use of its existing flexibilities.” In itself a small win for congressional budget control after 15 months of CRs, a proper appropriations bill was passed in February 2026, allocating US$838.7 billion in discretionary funding — some US$8.4 billion more than President Trump’s initial request. In its aftermath, prominent Democrat appropriators framed the completion of a regular FY26 appropriations bill and the evasion of another year-long CR as critical to “avoid ceding power to the Trump administration in making funding choices,” including with respect to defence.
3. Recissions and apportionment
Thirdly, the Trump administration has sought to leverage budget ‘rescissions’ and ‘apportionments’ to withhold or return money appropriated by Congress for key foreign policy accounts. In July 2025, the White House filed a rescission to Congress of $US9.4 billion in FY25 funding for public broadcasting and foreign aid — a special legislative process to request the cancellation of appropriated but unobligated funds. This rescission, narrowly passing in Congress along party lines at US$9 billion, marked the first presidentially initiated rescission accepted by Congress since 1992. At the time, while voting in favour of rescission, Chairman of the Senate Armed Services Committee Senator Roger Wicker stated that Congress had “ceded that decision voluntarily to the executive branch” without necessarily having information on where these funds would be drawn from.
A month later, in August 2025, the White House rescinded nearly US$5 billion in foreign aid via the seldom-used practice of “pocket rescission” — which entailed timing President Trump’s rescission request so late in the fiscal year that it effectively impounded funds without congressional review. Legislatively contentious, it sparked a bipartisan outcry and an appeal to the Supreme Court. Though the latter ultimately ruled in favour of President Trump, the US Government Accountability Office, which serves as the government-wide watchdog, released a statement claiming pocket rescission to be illegal. Further, the OMB has sought to use ‘apportionment’ authorities to block or reduce spending for federal programs that it deems inconsistent with President Trump’s policy priorities, including many at the State Department. Aside from withholding appropriated funds, many of these apportionment decisions were only brought to light after the OMB removed the ‘Public Apportionments Database’— previously publicly available online as required by law — three months into the Trump administration’s term, citing concerns over the disclosure of “sensitive, predictive, and deliberative information.”
In the medium to long term, the normalisation of mechanisms such as recissions or apportionment will introduce a new layer of uncertainty into the US defence budget cycle and set a precedent for presidents on both sides of politics to follow.
To date, the Pentagon budget has avoided apportionment and pocket recissions, meaning immediate operational and strategic impacts have been limited. Still, in the near term, development aid cuts will necessarily entail increased military costs and long-term pressure for the United States to maintain its influence abroad. Cuts to broadcasting will also weaken US capacity to operate in the information environment, even as China and Russia intensify efforts to shape narratives worldwide.7 In the medium to long term, the normalisation of mechanisms such as recissions or apportionment will introduce a new layer of uncertainty into the US defence budget cycle and set a precedent for presidents on both sides of politics to follow. Beyond undermining planning and project management for US military programs, both processes could conceivably help shift Pentagon funding to presidential priorities without explicit congressional approval, complicating oversight and reducing transparency over the White House’s spending.
4. Information Sharing
Lastly, the Pentagon’s handling of information flows to Congress has thrown sand in the gears of the congressional budget process, even if sometimes unintentionally. Firstly, the Office of the Secretary of Defense (OSD) has sought to tighten restrictions on all forms of official engagement between the Pentagon and Congress. This was most succinctly captured in an October 2025 memo from Defense Secretary Pete Hegseth directing that all congressional requests for departmental engagement and information were to be managed by the legislative affairs office attached to the OSD. This marked a departure from a standing policy whereby the separate military services, combatant commands and other department agencies were largely responsible for managing their own engagements with Congress. These new restrictions were justified on the basis of ensuring “coordination and alignment of Department messaging when engaging with Congress to ensure consistency and support for the Department’s priorities.”
This approach has led to bipartisan frustration across Congress. In November 2025, for example, Republicans and Democrats alike vented their frustration that they had had little to no engagement with Elbridge Colby — the Undersecretary of Defense for Policy and effectively the third most senior figure in the Pentagon — on the then-forthcoming 2026 National Defense Strategy, expressing their displeasure by suspending the appointments of two key Pentagon appointees who would work directly with Undersecretary Colby. These restrictions are also impacting the budget-making process. Indeed, the FY26 Defense Appropriations joint explanatory statement included a section devoted to lawmakers’ “concerns with the ability of budget and appropriations liaison offices to exercise their responsibility towards the Committees on Appropriations,” directing the Secretary of Defense to ensure that the role of specialist congressional liaisons across different Department agencies and offices were equipped and authorised to “provide information on a timely basis to the Committees on Appropriations.”
The Trump administration’s inconsistent engagement with Congress on budget matters has impacted lawmakers’ oversight capacity and their ability to support its priorities.
Secondly, the Trump administration’s inconsistent engagement with Congress on budget matters has impacted lawmakers’ oversight capacity and their ability to support its priorities. This has been both deliberate and an unintended byproduct of the Pentagon’s new congressional engagement protocols, internal reorganisation and slowness to nominate an internal budget chief (known as the ‘Comptroller’). The FY26 defence budget process is instructive, characterised by some leading experts as “the most disjointed and poorly executed budget release” in recent history. The initial President’s Budget Request released on 2 May 2025 did not provide supporting documentation beyond topline figures for different government departments. Furthermore, technical supplements for the Department of Defense were not released until 6 June — nearly five months after the statutory deadline — and without the standard ‘Green Book’ and supporting OMB budget tables that had, until this point, regularly accompanied presidential budget requests. That left lawmakers only four months to draft their own defence budget authorisations and appropriations before the end of the fiscal year on 30 September. These delays meant that the House Armed Services Committee was forced to draft and approve its initial version of the FY26 National Defense Authorization Act in June 2025 without access to the Pentagon’s own proposal.
Alleged errors in the budget request documents meant that subsequent engagements between the Senate and Pentagon on the budget were, in the words of one top authoriser, “chaotic at best.” Major shortfalls in its platform and program costings forced the Pentagon to submit over US$50 billion in supplementary funding requests between June 2025 and January 2026. Ultimately, however, many of these requests went unfunded. Though the SASC’s version of the NDAA proposed additional funds to offset those errors, the final defence appropriations bill did not account for most of these eleventh-hour requirements on the basis of missing budget documentation and the absence of “adequate funding offsets or additional topline.” This means that funding for these initiatives will have to be reprogrammed from other accounts or funded through reconciliation or the FY27 budget request instead.
On the other hand, a lack of information has also forced Congress to seek greater oversight of presidential priorities funded through the reconciliation process. For instance, appropriators noted in the FY26 defence appropriations bill that they “were unable to effectively assess resources available to specific program elements and to conduct oversight of planned programs and projects” associated with the US$24.4 billion designated for the Golden Dome missile defence initiative in reconciliation funding due to “insufficient budgetary information.” As a result, lawmakers included several program oversight provisions in the act, including a requirement for the Secretary of Defense and Director of the Golden Dome program to submit “a detailed breakdown showing how the discretionary and mandatory funds are used for the initiative through 2027,” and mandating that the Pentagon Comptroller publish dedicated budget materials, analogous with those for other bespoke programs, for Golden Dome beginning in 2027. These requests also cast doubt over whether Pentagon officials had briefed Congress on the initiative and its funding plans as they had claimed.
Vought’s vision: the role of the OMB Director
Central to the deployment of these budgetary tactics has been the director of the White House Office of Management and Budget (OMB), Russell Vought. As the ideological architect for shrinking the US government during Trump’s second term, Vought was one of the co-authors of Project 2025, which advocated an expansive interpretation of the ‘unitary executive theory’ and provided a roadmap to grant the president sole authority over the executive branch. Crucially, Vought has rejected the 1974 Congressional Budget and Impoundment Control Act, viewing presidential authority to impound enacted funds as “a necessary remedy to our fiscal brokenness” and the OMB office as the “President’s air-traffic control system with the ability and charge to ensure that all policy initiatives are flying in sync and with the authority to let planes take off and, at times, ground planes that are flying off course.”
Vought’s rise as arguably the most powerful unelected official in the White House is informed by his stint as OMB Director during Trump’s first term. Beyond famously freezing US$214 million in security aid to Ukraine amid White House pressure on Kyiv to investigate Joe Biden, he sent Congress the largest rescission request in decades — which failed by a single vote in the Republican-held Senate. During his January 2025 confirmation hearing, Vought clearly announced the US Government’s intent to roll back the 1974 Act and declined to commit to executing appropriated funds. Albeit stopping short of impounding funds without explicit congressional approval, his careful instigation and timing of budget processes to date have reflected his ambition to expand executive powers and for appropriations to be “less bipartisan.”
Seen as controversial by Democrats and Republicans alike, critics and allies of Vought have argued that he is deliberately testing legal norms to provoke judicial review to alter the established budget process. In a 2022 essay, Vought argued that the United States was in a “post-constitutional moment,” characterised by a performative and “perverted” adherence to the Constitution — calling for the right “to throw off the precedents and legal paradigms that have wrongly developed over the last two hundred years.” Accordingly, his record to date reflects a readiness to dare both the courts and Congress to challenge some of his more contentious decisions, with a view to cementing expansive executive powers through precedent-setting decisions.8
Implications
Long delays in delivering budgetary documents, the protraction of temporary budget measures, a heavy reliance on one-time funding increases and efforts to freeze government spending are diminishing the time and information required by lawmakers to effectively review and respond to the Trump administration’s requests within the bounds of their own legally defined powers. Together, these are fostering a permissible environment for the White House to at least partially circumvent congressional control over the US defence budget, one of the few remaining areas of considerable bipartisan consensus amid growing political polarisation.
Still, the extent to which the Trump administration can truly cut Congress out of the loop is debatable, given the volume of lawsuits and Government Accountability Office investigations into the White House’s budget tactics, and growing disquiet among Republicans and Democrats alike about the growing challenge to their fiscal oversight. The administration has enjoyed some success with these tactics over the course of FY25 and FY26, but lawmakers on both sides of the aisle are increasingly aware of the growing challenge to their oversight powers and budget control mechanisms. Even Republican Senator Wicker, a staunch ally of President Trump, has expressed his dismay with some of the administration’s budget tactics and the “disregard for the constitutional responsibilities of the legislative branch under article 1” that they have suggested. Senator Chris Coons, the top Democrat on the Senate Appropriations Committee’s defence subcommittee, has added: “There seems to be a view among some, including the director of OMB, that you can run a modern military and prepare for the challenges of this century through a full-year CR, reconciliation and rescission. I don’t think that’s sustainable.”
Whether or not the coming mid-term elections will lead to changes in current dynamics remains to be seen. In fact, the sheer scale of President Trump’s FY27 defence budget request and expectations of a split Congress may only amplify the incentives for the Trump administration and its congressional allies to persist with their present tactics. That Democrats are widely expected to retake the House of Representatives in November 2026 is already prompting Republican lawmakers to consider another Reconciliation package. As lawmakers deliberate the merits and risks of Reconciliation 2.0 to push through key elements of President Trump’s agenda, others clearly worry that drawn-out discussions over the contents of such a package will take time out of other legislative priorities with much greater bipartisan support — including regular order negotiations over the FY27 NDAA and Defense Appropriations Act. In fact, seasoned budget experts believe that the scale of President Trump’s FY27 request and its heavy reliance on another reconciliation bill all but guarantees another lapse in regular appropriations — possibly for an entire fiscal year — and heightens the risks of another government shutdown. The likelihood of a split Congress, Democrats’ efforts to tether any support for a higher defence topline to parallel increases in non-defence spending, and enduring deficit pressures mean the odds of a resumption of regular order in the defence budget making process in 2026 are negligible. Then again, given its actions to date, that might well suit the Trump administration’s preference for greater control over government spending, including the Pentagon’s budget.