Why It Matters
The Pentagon faces a fiscal crisis that Congress will examine in a closed hearing on September 24. The Pentagon is grappling with mounting FY2026 operational costs with limited options to cover them. The hearing will examine an update on the budget of the Department of Defense before the fiscal year ends and as Congress races to pass fiscal year 2027 funding before October 1. A continuing resolution would freeze spending at fiscal year 2026 base levels through December 11, 2026, while the fiscal year 2027 budget proposal would cut Pentagon research by one-third, a reduction of $3.7 billion from current appropriated levels.
The Hearing
The Senate Armed Services Committee will hold a closed hearing titled "Closed Hearings To Examine An Update On The Budget Of The Department Of Defense" chaired by Sen. Roger Wicker (R-MS) chairs the committee, with Sen. Jack Reed (D-RI) as Ranking Member.
Context
The Pentagon's budget crisis stems from structural pressures building through the year. In July, the Pentagon requested permission to reroute approximately $4.3 billion from fiscal year 2026 coffers to pay for higher priority items, citing increased personnel and operational costs around the globe. The Pentagon was shifting money away from weapons and technology programs to cover higher-than-expected military personnel costs.
Tensions are mounting between the Pentagon and Congress over the flow of information to lawmakers about the U.S. military's priorities. On September 17, the Senate Armed Services Committee held a closed briefing on the implementation of the National Defense Strategy (NDS) and its impact on global defense posture. After that briefing, senators from both parties publicly criticized the Pentagon, accusing a Defense Department leader of being "frustratingly opaque." Senators expressed frustration over unanswered questions on Iran, munitions, and the National Guard following the September 17 briefing.
The Trump administration submitted a defense budget request of $1.5 trillion for fiscal year 2027. This represents an increase from the $901 billion approved for fiscal year 2026. Yet the fiscal year 2027 budget proposal would cut Pentagon research by one-third, a reduction of $3.7 billion from current appropriated levels. The Pentagon's basic research budget has fallen nearly 20 percent since FY2022, dropping from $2.65 billion to $2.14 billion in fiscal year 2026 dollars.
Congress had not yet enacted defense funding for fiscal year 2027, which begins October 1, 2026. The Pentagon faces a continuing resolution that would freeze spending at fiscal year 2026 base levels through December 11, 2026. A continuing resolution would not include mandatory reconciliation funds from the One Big Beautiful Bill Act. Such a freeze would be particularly destructive because only the 2026 base budget will extend, meaning reconciliation-funded programs would not carry over.
The DoD's civilian workforce reduction involved approximately 78,000 to 80,000 workers. A Government Accountability Office (GAO) report found that the DoD's civilian workforce reduction bypassed the department's own procedural guardrails. The DoD's civilian workforce reduction left officials unable to fully account for the consequences. Pentagon workforce cuts could produce slower solicitations, awards, contracting officer determinations, payments, audits and related contract administration functions.
The Bottom Line
A continuing resolution would maintain Pentagon spending at fiscal year 2026 base levels through December 11, 2026. Absent congressional action, the military enters its new fiscal year operating under last year's spending caps with no reconciliation funds—a scenario that could force deeper cuts than any reprogramming request can solve.
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