Congressional action on the FY2018 NDAA reflected a running debate about the size of the defense budget given the strategic environment and budgetary issues facing the United States. Annual limits on discretionary spending set by the Budget Control Act of 2011 ( P.L. 112-25 ) remain in place through FY2021 and fundamentally shape congressional actions related to all federal spending, including defense funding. One exception to that rule is that the Administration's November 2017 amendment to its FY2018 budget request reflected its revision of U.S. strategy in Afghanistan: The additional $5.9 billion requested included $1.2 billion to support the President's decision to deploy in Afghanistan about 3,500 more U.S. personnel than the May 2017 budget request had assumed. The BCA established separate limits (commonly referred to as caps ) on defense and nondefense discretionary budget authority that are enforced by a mechanism called sequestration . The defense limit applies to the national defense budget (function 050), but does not restrict amounts designated by the President and Congress as funding for emergencies or for Overseas Contingency Operations (OCO). The Trump Administration proposed $603 billion for base budget national defense discretionary spending in FY2018—$54 billion more than the BCA cap. 2810 ) authorized defense appropriations at levels which, if enacted, would have exceeded the cap then in force, thus triggering sequestration. After the FY2018 NDAA was enacted, but before final action on any FY2018 appropriations, the caps on discretionary spending for defense and nondefense programs in FY2018 and FY2019 were increased as part of P.L. 115-123 , which included the fifth continuing appropriations resolution for FY2018. The revised cap on base budget, discretionary defense appropriations for FY2018 is $629 billion, which would accommodate appropriations to the level authorized by the enacted version of the FY2018 NDAA. The Trump Administration's initial FY2018 budget request, released on May 23, 2017, included a total of $677.1 billion for national defense-related activities of the federal government (budget function 050). Of the initial, $677.1 billion request, $612.5 billion was for the base budget , that is, for funds intended to pay for those activities the DOD and other national defense-related agencies would pursue even if U.S. forces were not engaged in contingency operations in Afghanistan, Iraq, Syria, and elsewhere. The remainder of the FY2018 request—originally amounting to $64.6 billion—is designated as funding for Overseas Contingency Operations (OCO). House and Senate Action on FY2018 NDAA

Of the $667.6 billion in national defense discretionary funding initially requested by the President for FY2018, $659.8 billion fell within the jurisdiction of the House and Senate Armed Services Committees and was subject to authorization by the annual National Defense Authorization Act. On July 14, 2017, the House passed H.R. 2810 , the National Defense Authorization Act for FY2018, by a vote of 344-81. On September 18, 2017, the Senate passed its version of that bill by a vote of 89-8 after having replaced the text of the House bill with an amended version of S. 1519 , the version of the bill that had been reported by the Senate Armed Services Committee. FY2018 DOD Budget Amendment (November 2017)

In November 2017—after the House and Senate had passed their respective versions of the FY2018 NDAA but before House and Senate conferees had completed work on a compromise version of the bill ( H.R. The requested increase included
$4.01 billion to expand and upgrade missile defense programs intended to counter threats from North Korea; $674 million to repair USS John S. McCain and USS Fitzgerald , destroyers equipped for antimissile defense that were damaged in separate collisions in the Western Pacific; and $1.18 billion to cover costs associated with the deployment in and around Afghanistan of 3,500 more U.S. troops than had been assumed in the FY2018 budget request. Conferees on the FY2018 NDAA authorized the additional funds requested by the budget amendment. The President and Congress designated as emergency funds the $4.7 billion requested for missile defense and ship repair while designating as OCO the funds requested for an enlarged U.S. presence in Afghanistan. The House agreed to the conference report on November 14, 2017, by a vote of 356-70. The Senate agreed to it on November 16, 2017, by voice vote and the President signed the bill into law ( P.L. 115-91 ) on December 12, 2017. A slightly modified version of that requirement is included in Section 1641 of the final version of the NDAA. That amount is authorized by the final version of H.R. 2810 . 2810 . The Senate bill would have approved the request while the House bill would approve a total of $3.74 billion on grounds that the remainder of the funds requested would not be needed during FY2018. The final version of H.R. The final version of H.R.
The Trump Administration's initial FY2018 budget request, released on May 23, 2017, included a total of $677.1 billion for the national defense budget function (Budget Function 050), which encompasses all defense-related activities of the federal government. Of that amount, $659.8 billion was for appropriation accounts for which authorization is provided in the annual National Defense Authorization Act (NDAA). The remainder of the request was either for mandatory funds not requiring annual authorization or for discretionary funds outside the scope of the NDAA.
That initial Administration request included $595.3 billion in discretionary funding for the so-called base budget, that is, funds intended to pay for activities that the Department of Defense (DOD) and other national defense-related agencies would pursue even if U.S. forces were not engaged in contingency operations in Afghanistan, Iraq, Syria, and elsewhere. The remaining $64.6 billion of the request, formally designated as funding for Overseas Contingency Operations (OCO), would fund the incremental cost of those ongoing operations as well as any other DOD costs that Congress and the President agree to so designate.
On July 14, 2017, the House passed by a vote of 344-81 H.R. 2810, the version of the FY2018 NDAA that had been reported by the House Armed Services Committee. That bill would have authorized $613.8 billion for the base budget—$18.5 billion more than the Administration's initial request—and $74.6 billion designated as OCO funding, which is $10 billion more than the Administration's OCO request.
The Senate passed its version of H.R. 2810 on September 18, 2017, by a vote of 89-8, after first replacing the House-passed text of that bill with the text of S. 1519, the version of the FY2018 NDAA that had been reported by the Senate Armed Services Committee. This Senate-passed version of the bill would have authorized $631.9 billion for the base budget—exceeding the base budget request by nearly $37 billion—and $60.0 billion for OCO-designated funding.
In November 2017—after the House and Senate had passed their respective versions of the FY2018 NDAA but before conferees had completed negotiations to produce a compromise version of the bill—the Trump Administration amended its FY2018 DOD budget request, asking for an additional $5.9 billion. The additional funds included $4.0 billion for missile defense-related programs the Administration described as being in response to recent missile tests and other activities by North Korea. The budget amendment also included $674 million to repair two Navy destroyers damaged in collisions and $1.2 billion to support the President's decision to increase by approximately 3,500 the number of U.S. military personnel in and around Afghanistan. The $1.2 billion associated with the Afghanistan troop levels was designated as OCO while the remaining $4.7 billion of the increase was included in the base budget.
The final version of H.R. 2810 authorized $626.4 billion for base budget activities and $65.7 billion for OCO-designated funding. The House agreed to this final version of the bill on November 14, 2017, by a vote of 356-70. The Senate agreed to it on November 16, 2017, by voice vote. President Trump signed the bill into law (P.L. 115-91) on December 12, 2017.
Congressional action on FY2018 defense funding reflected a running debate about the size of the defense budget given the strategic environment and budgetary issues facing the United States. Annual limits (often referred to as caps) on discretionary spending for defense and for nondefense federal activities, set by the Budget Control Act of 2011 (P.L. 112-25), remain in place through FY2021. If the amount appropriated for either category were to exceed the relevant cap, it would trigger near-across-the-board reductions to a level allowed by the cap—a process called sequestration. Appropriations designated by Congress and the President as funding for OCO or for emergencies are exempt from these caps.
For the period during which Congress was considering the FY2018 NDAA, the BCA limit on discretionary defense spending was $549 billion. The caps apply to appropriations, not authorization legislation. However, if Congress had appropriated for national defense programs the amounts requested by the Administration or the amounts authorized by any of the versions of H.R. 2810 passed by House or Senate, those appropriations would have triggered sequestration.
Before Congress enacted any FY2018 appropriations bills, it raised the FY2018 and FY2019 discretionary spending caps on defense and nondefense spending as part of P.L. 115-123, which included the fifth continuing appropriations resolution for FY2018. The revised cap on base budget, discretionary defense appropriations for FY2018 is $629 billion, which would accommodate appropriations to the level authorized by the enacted version of H.R. 2810.