Author’s note: My editors vetoed my first pitch (which was to basically post the meme from “The Babadook” in which a frustrated mom asks, “Why can’t you just be normal?” and her young son shrieks in response). This reporter regrets that she was blocked from making congressional reporting fun again.
With midterm elections on the horizon, 2026 may be the Trump administration’s last chance to enact their agenda without facing Democratic opposition that, in 2027, could be coupled with control of the House.
Midterms are typically bad for the party who holds the White House and 2026 appears to be moving that direction. Democrats swept (an albeit small number of) gubernatorial and state elections in 2025, and a Nov. 19 Marist poll of 1,443 individuals found that 55 percent would vote for Democrats in the midterms.
[This article is one of many in a series in which Breaking Defense reporters look back on the most significant (and entertaining) news stories of 2025 and look forward to what 2026 may hold.]
It appears that Office of Management and Budget director Russ Vought is already considering the administration’s next moves.
During a keynote speech at the Reagan National Defense Forum in December, Vought lauded Republicans’ use of budget reconciliation as a “paradigm shift” allowing the administration to garner funding for Trump budget priorities — including an additional $150 billion for defense — without any of the messy compromise that could result in tit-for-tat increases for Democrat priorities.
He also left the idea of a second reconciliation bill on the table, saying, “Have we made another decision yet on another reconciliation bill? No, we have not.”
But Democrats are already warning Republicans that further gains in 2027 could be difficult unless they are ready to compromise.
“Do you think they’ll get reconciliation again next year? They sure as hell won’t get it after the midterms,” Delaware Sen. Chris Coons, the top Democrat on the Senate Appropriations defense subcommittee, told reporters later during the Reagan Forum.
“This has happened to several presidents,” he added. “You get to the midterms, you lose one of the chambers, you go, ‘Oh my God, we need the other party.’ Surprise!”
And while defense spending is typically an issue that Republicans and Democrats can unite on, the bad blood between political parties and general level of chaos prompts another huge question: Are we ever going to have a regular defense budget ever again? And can we expect defense spending to continue to grow?
The first test for this will be the expiration of the current continuing resolution at the end of Jan. 30. It’s still completely up in the air whether Congress will be able to successfully broker an omnibus spending agreement, or whether another continuing resolution or government shutdown is on the horizon.
If (and it’s a big “if”) Congress is able to come to pass a defense appropriations bill for FY26, lawmakers will have to resolve whether to move forward with the House’s topline — which, like the president’s budget request keeps the discretionary defense spending flat — or go with a higher amount like the Senate bill, which added another $22 billion.
And what might that FY27 budget topline look like? Your guess is as good as mine, as the Pentagon failed to put out a five-year spending plan with its FY26 request.
In a note to investors on the 2026 outlook, Byron Callan of Capital Alpha Partners says the Wall Street consensus is that the FY27 defense budget could grow “slightly” from FY26, but it’s unclear by how much.
He notes that only $37 billion remains for defense from this year’s reconciliation bill. If added to another flat $848 billion topline, that would bump spending about 4 percent compared to FY25.
So far, defense executives are putting on a happy face despite the looming budget questions. Earlier this month, Lockheed Martin Chief Financial Officer Evan Scott acknowledged that the situation is “still very fluid” but noted positive signs for industry.
“What I’ve seen is, first of all, strong demand picture domestically in terms of the products that we provide and others in our industry do, as well as good alignment between our direct customer in Congress with a priority of making sure our war fighters have everything they need to perform their missions and to keep them safe,” he said at an investors conference. “So that alignment gives me makes me more bullish than bearish in terms of how this process would play out.”