President Trump’s fiscal year 2026 defense budget request cuts over $25 billion in acquisition funding from the Department of Defense’s base budget, primarily for procurement programs, shifting those expenses to a budget reconciliation bill now advancing through Congress.
The reconciliation legislation could add around $150 billion in defense spending over the next several years, with most of the funding being allocated for FY26. The House and Senate have proposed separate versions of the legislation that provide slightly different amounts for defense programs. Originally intended as a supplemental increase for the Department of Defense, a portion of the reconciliation funding is now poised to offset cuts made to the base budget.
The Biden administration projected FY26 spending levels of $178.2 billion for procurement and $142.7 billion for research, development, test & evaluation (RDT&E). The FY26 base budget only includes $153.3 billion for procurement ($24.9 billion less than planned) and $142 billion for RDT&E ($664 million less than planned).
Many of the same acquisition categories highlighted for increased funding in the reconciliation bill, such as ships, munitions, and space capabilities, are the ones that experienced reductions in the base request. This strategy complicates the narrative behind the reconciliation bill and raises concerns about transparency and long-term planning.
Details of the Shift: What Accounts Are Impacted?
Shipbuilding
The most notable reductions in the base budget correspond directly with the categories prioritized in the reconciliation bill. Shipbuilding, for example, suffers the largest cut. The administration’s FY26 base request includes only $20.8 billion for shipbuilding, which is nearly $16 billion less than the $37.1 billion originally planned under President Biden. The reconciliation bill could include between $29-$34 billion in additional funding for shipbuilding and the maritime industrial base, which would compensate for the shortfall in the base budget.
Munitions
Munitions and missile procurement in the regular budget are also reduced across all military services. Compared to forecasts from the Biden administration, the FY26 base budget cuts $2.5 billion for Navy weapons, $2 billion for Air Force missiles, $1.1 billion for Army weapons and vehicles, and nearly $400 million for Army missiles. These reductions are expected to be offset by more than $20 billion for munitions included in the reconciliation measure.
Aircraft
The Air Force’s aircraft procurement account is reduced by $3.9 billion in the base request, compared to the previous administration’s projections. At the same time, the reconciliation bill could provide between $7-8.5 billion for air superiority programs, which would cover the funding removed from the base budget.
Space
The Space Force experiences a notable cut: $1.8 billion cut from its research, development, test, and evaluation (RDT&E) budget, which is the service’s largest spending account. The reduction likely reflects a shift in funding for missile-tracking satellite programs aligned with the administration’s Golden Dome missile defense initiative. These programs will likely be funded through the reconciliation bill instead. Despite reports of a decline in the Space Force’s FY26 budget, this appears to be more of a reallocation than an outright cut for the service.
Army RDT&E
Not all accounts are reduced in the base budget. The Army’s research and development account totals $14.5 billion in the FY26 base request, up from $12.7 billion projected under the previous administration’s plan and slightly above the $14.3 billion enacted for FY25.
Defense-Wide RDT&E
In contrast, the Defense-Wide RDT&E account is reduced by $1.3 billion relative to prior projections, which could be due to funding shifts for Missile Defense Agency programs.
What Are the Implications?
The most significant implication is that the proposed $150 billion in reconciliation funding does not equate to a full $150 billion increase for the Pentagon. Once the $25 billion in base budget acquisition cuts are accounted for, the net increase is notably smaller.
Another key issue is transparency. Because the base budget and reconciliation funding are so closely linked, evaluating defense spending trends based solely on the base request is no longer sufficient. It’s unclear how reconciliation funding will be reflected in budget documents. Early reports suggest the FY26 budget materials will outline how these funds are applied, even though Congress hasn’t finalized the reconciliation bill yet.
There are also concerns about how the Department of Defense will manage and report on the use of reconciliation funds. Critics have labeled the bill a slush fund that lacks congressional oversight, which could limit accountability.
Finally, it’s important to note that reconciliation is a one-time measure. It does not guarantee sustained budget growth beyond FY26, which complicates future planning and undermines budget predictability.
What Happens Next?
The details outlined here are drawn from a budget appendix released by the White House. However, the administration has not yet published the complete FY26 budget request. Additional information is expected later this month.
Congress, meanwhile, isn’t waiting. While defense committees typically wait until a formal request has been delivered, the House Appropriations Committee has already released its version of the FY26 defense spending bill. The legislation would provide $831.5 billion for the Pentagon (excluding military construction), which is flat compared to FY25 enacted levels.
Lawmakers must also finalize the reconciliation bill, which has become a cornerstone of the administration’s FY26 defense strategy. A budget preview released in May outlined a base defense budget of $892.6 billion for FY26, matching the FY25 enacted level. Total planned spending would rise to $961.6 billion after including $113.3 billion from the reconciliation bill, according to the preview. The fact that the administration is relying entirely on reconciliation funds for the FY26 increase further underscores the bill’s role in offsetting base budget acquisition shortfalls.
Shaun's deep-rooted interest in military equipment continues in his role as a senior defense analyst with a focus on the United States. He played an integral role in the development of Forecast International's U.S. Defense Budget Forecast, an interactive online product that tracks Pentagon acquisition programs throughout the congressional budget process. As editor of International Military Markets – North America, Shaun has cultivated a deep understanding of the vast defense markets in the United States and Canada. He is a regular contributor to Forecast International's Defense & Security Monitor blog and has co-authored white papers on global defense spending and various military programs.
