In the last two months of the fiscal year that ends Wednesday, the Pentagon spent tens of billions of mandatory dollars from last year’s reconciliation law, intensely accelerating spending from its unusually large overall budget for the year, congressional sources said this week. 

The Pentagon spends scores of billions of dollars each year, and the Sept. 30 end of the fiscal year is always a time to ensure budgets get spent to the maximum. But this year’s last-minute spending spree was atypical in its speed and the amount of money at issue.

Tens of billions of dollars were hurriedly obligated in the last two months from last year’s “one big beautiful bill,” and millions of fiscal 2026 omnibus dollars for arming Ukraine — money enacted nearly eight months ago — sprung loose just in the last several days, the sources said. 

The Pentagon was simultaneously working its way through obligating funds from the rest of the omnibus’s roughly $860 billion base discretionary total — the largest in the department’s history. 

When combined with other national security spending, the defense discretionary and mandatory topline for fiscal 2026 exceeded $1 trillion.

Mandatory money

Spending the reconciliation funds before they would be exposed to a sequester at the start of the new fiscal year on Thursday was doubtless challenging for the Pentagon. 

At a July 21 Senate Appropriations Committee hearing, several Democratic senators said the Defense Department had yet to spend over $75 billion of the $156 billion in multiyear mandatory appropriations from the reconciliation law, which had been enacted one year earlier. 

On Wednesday, a knowledgeable Senate aide said the Armed Services Committee has been informed that some 90 percent of the $156 billion has been spent. The final percentage may be higher.

That would suggest the department obligated just since late July roughly $60 billion from the reconciliation account. 

Under 1985’s Balanced Budget and Emergency Deficit Control Act, however much of the 2025 reconciliation law’s nonexempt mandatory appropriations are not obligated are subject to a sequester that the Office of Management and Budget pegged at 8.3 percent this year for defense mandatory funds.

So if 10 percent of the reconciliation funds — or $15.6 billion of the $156 billion — remain unspent after Wednesday, the end of the fiscal year, then about $1.3 billion would be subject to sequester, although the final tally could be even smaller. Those monies would be applied to deficit reduction.

Arms for Kyiv

As for the Ukraine funds, appropriators who support that country’s fight against Russian aggression have been concerned for months that the $400 million in security assistance appropriated for U.S.-made arms for Ukraine was being released too slowly and was not going toward weapons Congress wanted funded, such as Patriot antimissile interceptors. 

These lawmakers were apparently correct about the pace of the Ukraine spending.

In just the last week, the Pentagon rushed to spend the final approximately $93 million that had yet to be obligated from the $400 million Ukraine weapons fund, another Senate source said.