About $10 billion remained uncommitted before the deadline
The Pentagon obligated about $142 billion of the defense funding provided under last year’s “One Big Beautiful Bill.” But roughly 7% of the total—about $10 billion—remained unobligated and is now subject to automatic budget cuts.
A defense official confirmed that 93% of the total had been obligated before fiscal 2027 began. The official did not specify which programs or budget lines remained unfunded.
Automatic 8.3% reduction
The Republican-backed reconciliation law passed last year included about $152 billion for defense. The money was intended for priorities including the Golden Dome missile-defense program, two Arleigh Burke-class destroyers, munitions and fighter aircraft.
The funding could be spent over several years, but any amount not obligated by October 1 was subject to an 8.3% reduction under sequestration. Applied to the roughly $10 billion left unobligated, the cut would eliminate about $830 million in Pentagon purchasing power.
Pressure to accelerate contracts
The funding was slow to get moving initially, prompting frustration in Congress. Lawmakers pressed Pentagon officials to award contracts before the deadline.
In late April, Defense Secretary Pete Hegseth told senators that contracts had been awarded for only $26 billion. In June, a senior Defense Department official said the department had given program offices guidance on speeding up spending while ensuring the money was used responsibly.
By late July, Hegseth told the Senate Appropriations Committee that about $75 billion remained unobligated. He projected that 95% of the funding would be under contract by the end of the fiscal year, including money for projects such as the Golden Dome system.
Congressional response remains uncertain
It is unclear whether the lost funding will anger lawmakers. Asked on Wednesday whether all defense reconciliation funds would be spent by the end of fiscal 2026, Senate Armed Services Committee Chairman Roger Wicker said he was “very pleased with the amount that’s been executed,” but offered no further details.
Elaine McCusker, a senior fellow at the American Enterprise Institute and a former acting Pentagon comptroller, has previously warned that the department needs every available dollar to address long-term problems. Even an 8.3% reduction when funds are rolled over could have consequences, she said.
