The Pentagon obligated about $142 billion of the roughly $152 billion in defense funding it received from last year’s Republican reconciliation bill before the Oct. 1 sequestration deadline, leaving about 7 percent of the total subject to across-the-board spending cuts, a source familiar with the matter told Breaking Defense.
A defense official confirmed that only 93 percent of the total amount had been obligated ahead of fiscal 2027, which began Oct. 1, but could not provide details about which funding lines remained unspent.
The party-line reconciliation bill, known as the “One Big Beautiful Bill,” included about $152 billion in defense spending for priorities including Golden Dome, two Arleigh Burke-class destroyers, munitions and fighter jets. The funding is available for several years, but any amount not obligated before Oct. 1 suffers an 8.3 percent cut known as sequestration.
The unspent 7 percent — around $10 billion, according to Breaking Defense’s estimates — is now subject to that cut, meaning roughly $830 million of defense buying power has been lost.
Reconciliation funding was initially slow to be awarded. In late April, Defense Secretary Pete Hegseth told a Senate panel that only $26 billion had been placed on contract. By June, a senior department official said the Pentagon had issued guidance to program offices on how to spend the money quickly. In late July, Hegseth told the Senate Appropriations Committee that roughly $75 billion remained unobligated, but projected that 95 percent would be under contract by the end of the fiscal year.
The deadline pressure also drove a major fighter jet purchase. The Air Force bought 22 additional F-15EX fighter jets at the budget deadline, Stars and Stripes reported Oct. 1.
Separately, the Pentagon launched its new Cyber Mastery Incentive Pay (C-MIP) program on Oct. 1, a two-tiered, military-wide pay structure intended to reward troops for advanced technical cyber skills. Internal documents reviewed by DefenseScoop show skill-based pay cuts ranging from $100 to $1,000 a month for some troops, with the Army triggering a temporary pay protection policy to soften the blow for soldiers expected to face cuts. The Air Force was still “working to finalize” its rollout last week, according to a service spokesperson.
Sources: Breaking Defense · DefenseScoop