The National Defense Authorization Act (NDAA)—H.R. 4909 in the House and S. 2943 in the Senate—is Congress’ annual defense policy bill, and one of few remaining pieces of critical legislation on its to-do list during the lame-duck session following the November elections.

The most critical difference between the House and Senate versions of the bill is an $18 billion base defense budget disparity. The House version would allocate $18 billion in Overseas Contingency Operations (OCO) funds, America’s war-fighting spending account, to the base defense budget as a technical end-around to avoid: (1) the existing defense spending cap; and (2) a related requirement that any increase above the defense spending cap must be paired with a corresponding increase in domestic spending. Under the House’s NDAA framework, the OCO account would be funded through April 30, 2017, requiring Congress to approve a war-funding supplemental early next year. With Republican control of the Senate in 2017 now in jeopardy, many GOP defense hawks are wary of the House’s framework, as they fear they may not be in a position to pass the necessary war-funding supplemental next spring without making major domestic spending concessions to Democrats. The Senate’s version of the NDAA would fund the OCO account through the end of fiscal year (FY) 2017 (September 30, 2017).

House and Senate Armed Services Committee staff members worked during the July-August recess to resolve many of the key differences between the competing versions of the bill. Despite these efforts, House and Senate conferees were unable to produce a compromise version of the bill before Congress adjourned in September to hit the campaign trail one last time before the November elections. Although an environmental provision relating to the endangered species status of the greater sage grouse was publicized as a primary sticking point that led to the stalling of negotiations on the bill in September, final agreement on the base defense budget level remains the chief obstacle to production of a compromise bill. Conferees did reach a tentative agreement in September to increase the base defense budget by $9 billion, rather than the $18 billion increase included in the House bill, but exactly how the $9 billion will be allocated across Department of Defense (DoD) programs remains unresolved.

With White House veto threats hanging over both versions of the bill, and President Obama focused on legacy-building during the final months of his presidency, it is likely that the President will veto whichever version of the NDAA comes out of conference during Congress’s lame-duck session. (The President vetoed the NDAA for FY 2016 in the fall of 2015 before eventually signing it later that year). Although the Senate passed its version of the NDAA this year by a significant veto-proof majority, the House version fell 13 votes shy of a veto-proof majority, so Congress will not be able to override a Presidential veto of the compromise bill. Further complicating passage of a compromise version of the bill is the President’s recent decision to maintain a troop level in Afghanistan of 8,400 into 2017, rather than the 5,500 personnel accounted for in the Administration’s defense budget request, and the recent deployment of 615 additional US troops to Iraq in preparation for the impending Mosul offensive. 

Several billion dollars in additional funding is required for these troop-level increases in Afghanistan and Iraq, and for an anticipated increase in US military operations against ISIS in Syria. In late September, Secretary of Defense Ash Carter announced that the DoD will send a request for supplemental defense funding to Congress during the lame-duck session in November. The Administration’s position is that the supplemental must be paired with a corresponding increase in domestic spending.

The fates of the NDAA and DoD supplemental for Afghanistan, Iraq and Syria will be intertwined, and will depend, in part, on the outcomes of the Congressional and Presidential elections. House Armed Services Committee Ranking Member Adam Smith (D-WA) believes that during the lame-duck session, Congressional appropriators and leadership must first agree on the topline defense and domestic funding levels of a broad FY 2017 spending deal before conferees can complete their work on the NDAA. Although differences remain unresolved in conference and between Congress and the Administration, the NDAA has been signed into law every year for more than 50 straight years, and while continued negotiations and horse-trading must take place after the November elections, ultimately the NDAA will become law before year’s end. (H.R. 4909; S. 2943).