House GOP releases ‘Reconciliation 3.0’ with $60B for defense

WASHINGTON — House Republicans have unveiled the outlines of their “Reconciliation 3.0” funding bill with $60 billion for defense, a number that does not even hit the $67 billion sum requested by the White House to pay for defense-related expenses tied to the Iran War.

The budget resolution, published today ahead of a markup on Thursday, kickstarts a third reconciliation process, which would allow Republicans to bypass the filibuster in the Senate and pass the bill on party lines.

For defense hawks, the bill is likely to be a bit of a disappointment, falling short of the $67 billion requested in June in a supplemental spending request to cover operations in Iran.

It also fails to address the $350 billion request for reconciliation dollars issued by the Pentagon as part of its fiscal 2027 budget submission— a sum that department leaders have said is critical for boosting munitions production, drone procurement, and several high-profile weapons programs like the F-35.

Todd Harrison, a defense budget expert at the American Enterprise Institute, said the Pentagon’s dreams of a $1.5 trillion defense budget for FY27 are “effectively dead.” 

“I think what ends up going in the reconciliation is likely to be a grab bag of different things, and what ends up going in the full appropriations bill, if we get to that point, may end up including some things that were in reconciliation but didn’t make it in the final bill, and it may cut some things that were in the base budget request,” he said. “There’s gonna have to be a lot of reshuffling here by Congress to fit into what is shaping up to be a much smaller top line budget than DoD was planning for.”

Byron Callan, an analyst with Capital Alpha Partners, said the $60 billion sum was “confusing” given House Speaker Mike Johnson previously made supportive statements about the Pentagon’s $350 billion reconciliation request. 

However, he pointed to a recent downturn in share prices among the defense primes — unusual given the ongoing war with Iran — which signaled that investors lacked confidence that the full amount of requested funding would come through in Reconciliation 3.0.

“You’d think that these things would do a hell of a lot better if the market was confident. But I think people [on Wall Street] kind of made that adjustment a number of weeks ago,” he said.

The $95 billion budget resolution tasks the House Armed Services Committee to come up with a plan for spending the $60 billion allocated for defense.

That sum could go toward the areas laid out in June’s supplemental spending request, which included $21 billion to recoup munitions expenditures, $17.3 billion for operational costs, $5.1 billion for cybersecurity and autonomy, $2.4 billion for drones, $4 billion for systems related to airborne moving target indication and the space data network backbone, and $12.1 billion for classified programs, among other needs.

But Harrison opined that Republicans could more strategically wield the $60 billion by using it to pay for defense-related needs outside of the supplemental funding request, which could then force Congress to pay for Iran War costs as part of a continuing resolution. 

“Politically it it would be smart to leave the supplemental request — the actual restocking of munitions and O&M [operations and maintenance] accounts and all of that — leave that for a continuing resolution, and don’t put it in this bill because that might actually help you get the CR passed in a timely manner,” he said.

“What I would put in this bill are the catch-up funding items that you need, catching up on scaling munition production, catching up on building out new mission areas for the Space Force … things that are truly one-time influxes of funding that are needed to make progress on longer-term goals,” Harrison said. 

Beyond defense, the reconciliation proposal also includes $12 billion for agriculture, $13 billion for intelligence, and $10 billion that would go to the administrative committees to implement the SAVE America Act.

Sen. Ron Johnson, R-Wisc., who is set to pick up the gavel for the Senate Budget Committee following the death of Sen. Lindsey Graham, told Politico on Tuesday that he has already started talks with House Budget Chair Jodey Arrington, R-Texas, about advancing the reconciliation legislation. Both chambers must adopt the budget resolution before a more detailed reconciliation bill is formulated and passed.

Updated at 7/15/26 at 1:25 pm ET to add analysis from experts.