Inside the $1.15T FY27 NDAA: Senate Proposes 3.6% Pay Raise

The 2027 National Defense Authorization Act is nearing floor votes in both chambers, having cleared the Senate Armed Services Committee on June 11. In past years, the National Defense Authorization Act (NDAA) has been one of the few appropriations bills to move through Congress in what’s called “regular order.” Regular order means that bills originate in committee and then advance to the floor of each chamber before being reconciled in a Conference committee. The final agreed-upon language of the bill is then sent to the floor of each chamber for a final vote, then to the president for signature.

The fiscal year 2027 bills are now making their way through the committees. The Senate Armed Services Committee (SASC) completed its markup of the FY2027 NDAA on June 11, voting 18-9 to advance the bill to the Senate floor. The House Armed Services Committee (HASC) passed its version a week earlier, 44-12. Both chambers now have their “marks” in the queue for floor debate. “Marks” refers to committee amendments and the language in the committee report to the Speaker/Senate President for the entire body to vote on. No floor votes have been scheduled as of this writing.

The SASC version authorizes $1.15 trillion for national defense—$1.099 trillion for the Department of Defense and $41.1 billion for the Department of Energy national security programs. It is the 66th consecutive annual defense authorization, a streak that reflects the bill's status as one of the few truly must-pass pieces of legislation Congress still reliably delivers. It’s also the largest defense bill ever sent to the floor of either chamber for a vote. By comparison, total U.S. defense spending for FY2010 during both Iraq and Afghanistan campaigns was approximately $692.78 billion, including the NDAA and all supplemental legislation.

Pay and Compensation: A Capitol Hill Collision

The bill addresses the persistent challenge of recruiting and retaining quality people with the most aggressive pay posture in years.

However, the two chambers are on a direct collision course over how to structure those increases, fueled by entirely different philosophies on military compensation.

Who Is Driving the Lower Pay Plan and Why?

The push for a lower, flat 3.6% baseline pay raise is being driven entirely by the Senate Armed Services Committee (SASC). In doing so, the Senate committee explicitly rejected the White House's budget request and the House Armed Services Committee (HASC) plan, both of which called for an ambitious, tiered model.

Under the House/White House plan, junior enlisted troops in pay grades E-5 and below would receive a targeted 7% raise, while more senior ranks would see increases in the 5% range.

The SASC's resistance to these larger baseline figures is driven by specific policy concerns outlined in their committee report:

• Preventing "Pay Compression": Drawing heavily from the Pentagon's Fourteenth Quadrennial Review of Military Compensation, senators warned that giving massive raises exclusively to lower ranks shrinks the pay gap between ranks. This "compression" reduces the financial incentive for talented service members to work toward promotions and take on more leadership, which could harm long-term retention.
• Historical Context: The committee noted that Congress already enacted a sweeping, targeted 14% pay hike specifically for junior enlisted members back in 2025. According to the QRMC data, junior troop compensation is already well above the 90th percentile of civilian equivalents.
• Redirecting the Funds: By capping the baseline raise at 3.6%, the Senate saves roughly $2.3 billion. Instead of putting that cash into base pay, the SASC chose to redirect it into chronic blind spots in military quality of life: an extra $1.77 billion for the struggling Defense Health Program, $250.9 million for civilian personnel compensation, $38.7 million for childcare programs, and $28.3 million for tuition assistance.

Who Will This Affect?

If the Senate's version wins out during the upcoming compromise negotiations, the impact will be felt differently across the ranks.

Junior enlisted troops will feel the immediate sting of the lower baseline. A junior service member expecting a robust 7% bump to cope with inflation will instead see that raise cut nearly in half to 3.6%.

To soften the blow for the front lines, the SASC did expand specialized funding. Service members in high-risk zones or critical fields will see increases in maximum authorized amounts for hostile fire pay, imminent danger pay, and aviation incentive bonuses.

Conversely, families struggling with healthcare wait times, lack of childcare slots, or a lack of educational funding would theoretically benefit from the billions the Senate is shifting into base services and the Defense Health Program.

Weapons Acquisition Reform

The acquisition provisions in both marks are the most ambitious since the landmark reforms of the 1980s. The language from the HASC seeks to authorize multiyear procurement for 13 munitions systems, plus the F-15EX, F-35, E-2D Advanced Hawkeye, Arleigh Burke-class destroyers, Virginia-class submarines, and the Coyote Block 2C counter-drone interceptor.

Multiyear procurement funding has been a longstanding Pentagon request to provide consistent demand signals to the defense industrial base so they can have the confidence they need to expand production capacity.

The SASC mark requires acceleration of low-cost munitions procurement, including a pilot program specifically aimed at air defense interceptors. This is a direct response to the unsustainable cost exchange ratios seen in recent conflicts, where expensive interceptors have been used against cheap drones.

Both chambers push hard on data rights, shifting the burden of proof to contractors to justify restrictions on technical data, and requiring defense firms to submit investment plans for increasing production capacity or face restrictions on shareholder distributions.

The Autonomous Systems Combatant Command

Perhaps the most forward-leaning provision in the SASC mark is authorization permitting the establishment of a Robotic and Autonomous Systems Combatant Command—a new warfighting headquarters built from the ground up around uncrewed and AI-enabled systems.

It is a significant organizational bet on the future of warfare, reflecting lessons absorbed from Ukraine, the Red Sea, and the Iran campaign, where uncrewed systems have proven both decisive and devastatingly cost-effective.

The bill also codifies the autonomous weapons review process in statute, requiring specific standards for human judgment, validation, and testing, and a centralized incident reporting repository.

This last provision is significant as it directly addresses criticisms from industry and defense experts who are challenging the Pentagon’s approach to AI-enabled weapons platforms.

The Name Change Provision

Both chambers also included language formally renaming the Department of Defense the "Department of War." The Congressional Budget Office has estimated the cost of the rename at between $10 million and $125 million. The provision faces a steeper climb in the Senate than its committee passage suggests, and the Byrd Rule could strip it from any reconciliation vehicle.

Whatever one thinks of the symbolism, a historical note: the pre-1947 "War Department" was solely the Army's department, and later included the Army Air Forces before they became a separate branch.

The Navy maintained a separate cabinet-level secretary reporting directly to the President. The National Security Act of 1947 did not simply rename the Department of War; it combined the War and Navy Departments and created a new one, the Department of Defense, subordinating the service secretaries to the new Secretary of Defense.

What the Leaders Said

Chairman Roger Wicker (R-MS) called the bill "a seminal breakthrough for the American military," citing investment in AI, autonomous weapons, low-cost munitions, and cyber operations, and pledging reindustrialization "the scale of which we have not seen since the Second World War."

Ranking Member Jack Reed (D-RI) was more measured:

"This bipartisan NDAA strengthens national defense and enhances oversight and accountability. It forces the Secretary to be more accountable to Congress and will prevent many errors of the past from being repeated. Advancing this bill is a necessary step in a multi-step process. I will keep fighting to improve the bill."

That last line is the tell. The bill has a long road through floor amendments, conference, and presidential signature—and what emerges from the upcoming House-Senate conference committee may look meaningfully different from what either committee passed. But the framework is serious, and for the men and women in uniform and the veterans who came before them, the direction is the right one.