TIP OF THE SPEAR / THE CALL / ISSUE 006 · NOVEMBER 5, 2026 · POLICY
Good morning. We saw Democrats win the House and Senate on Tuesday, according to AP projections. They take over January 3. Until then, the Republican Congress still has to fund the Pentagon, and the clock is short. The stopgap signed September 2 runs out December 11, and none of the 12 FY2027 spending bills is law.
Today's call is whether the outgoing Congress sends the president a real defense bill before it hands over the keys.
THE CALL
20% that Congress enacts a full-year FY2027 defense appropriations bill before the new Congress convenes on January 3, 2027 · Moderate confidence
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01 / THE CALL
An aerial view of the U.S. Capitol. DoD photo by U.S. Air Force Staff Sgt. John Wright, via DVIDS.
WHAT HAPPENED
Congress left in September with a stopgap, P.L. 119-103, that keeps the DoW running at FY2026 rates through December 11. The FY2026 defense bill that cleared Congress in February provided $838.7 billion. For FY2027 the administration asked for roughly $1.5 trillion, with $350 billion of that meant to ride a reconciliation bill that hasn't moved.
The House Appropriations Committee approved its defense bill 34 to 27 on June 24. It never got a floor vote. The Senate side is further behind, and its committee hasn't reported a single one of the 12 bills.
Chair Susan Collins and Vice Chair Patty Murray still haven't settled on a topline.
Democrats have said they won't back a defense increase without more domestic money, and Murray told Punchbowl in June the two sides were “miles apart.” Nothing public since then suggests they've closed the gap.
The calendar is short.
Both chambers return November 9 for two weeks and then break for Thanksgiving. After that they get two or three more weeks before the holidays.
Call it five working weeks.
The NDAA is aiming for the floor the week of December 7, and it needs the same leaders and the same floor time.
WHAT THE MONEY SHOWS
A stopgap keeps the lights on and not much else. Under a CR the department can't start new programs or raise production rates unless Congress writes in an exception, called an anomaly. The September stopgap didn't include one for a new start or rate increase on any major defense program.
The money also depends on which vehicle Congress picks. A full-year CR, the route that ended FY2025 in March 2025, would lock in FY2026 rates and FY2026 program lines for the whole year.
A regular bill is the only way the FY2027 new starts get funded.
Requested | Authorized | Appropriated | Obligated |
|---|---|---|---|
About $1.5T | Not yet | FY2026 rate | Not reported |
FY2027 request. $350B of it is meant for reconciliation. | House bill $1.15T, Senate committee bill $1.14T. Neither is law. | P.L. 119-103 through Dec 11. The FY2026 bill was $838.7B. | Spending continues at the FY2026 rate. No new starts or rate increases without an anomaly. |
Source: Senate Appropriations Committee, CSIS, Punchbowl News and Harbinger Strategies · Table: Tip of the Spear
Source: CRS R46574 and enacted public laws · Chart: Tip of the Spear
OUR READ · OPINION
I put this at 20%, well under what history alone would say. Since 1998, three midterm lame ducks opened with defense still unfunded. In 2014 and 2022, Congress passed a December package that funded defense. In 2010 it passed three stopgaps and left defense to the next Congress, which finished it in April 2011.
This year looks more like 2010 to me. The 2022 omnibus had two retiring Senate appropriators, Patrick Leahy and Richard Shelby, who both wanted one last deal. Collins and Murray haven't even agreed on a topline.
A December package would also be fighting the NDAA for floor time, along with a $67.1 billion Pentagon supplemental request that hasn't moved either. And the White House has shown it can live with a full-year CR. That's how FY2025 ended. A full-year CR resolves this call No.
Tuesday's results pushed me further toward no. Democrats get both gavels in January, and until then Senate Democrats can block any package they don't like. Waiting gets them a better deal.
The case for yes is that Republicans now have every reason to lock in a defense number while they still can. Hakeem Jeffries also said before the election that he'd like to finish the spending bills in the lame duck. Once the results came in, though, he said Democrats plan to “run Pete Hegseth out of town.” I have a hard time seeing a December deal on Hegseth's budget after that.
If Collins and Murray announce a topline before Thanksgiving, I move to 45%. If the next CR runs into February or March, I drop to 5%.
FORECAST #34 · GRADED IN PUBLIC
Congress will enact a full-year FY2027 Department of War appropriations act before the 120th Congress convenes on January 3, 2027.
Probability | Confidence | Resolves |
|---|---|---|
20% | Moderate | Jan 3, 2027 |
Base rate: Of the three midterm lame ducks since 1998 that began with defense unfunded, two enacted it in December (2014 and 2022) and one left it to the next Congress (2010). Across the 15 lame duck sessions from 1994 through 2024, Congress enacted no regular appropriations bill in 10 (CRS R46574).
Signposts to watch
Nov 9 · Congress returns. A Collins and Murray topline deal is the first sign of a real bill. Up.
Before Dec 11 · The end date of the next CR. Late December points up. February or March points down hard.
Week of Dec 7 · NDAA floor target. If the NDAA eats the December floor time, the spending bills wait. Down.
Resolution criteria: Yes if, after November 5, 2026 and before noon ET on January 3, 2027, the President signs a law providing full-year FY2027 regular appropriations for the Department of War (titled the Department of Defense Appropriations Act in law), either as a standalone defense appropriations act or as a division of a minibus or omnibus. A full-year continuing resolution, a stopgap of any length, a supplemental and a reconciliation bill do not count. Source of record: congress.gov.
Sources: CRS R46574 · Senate Appropriations (FY2026 bill) · House Appropriations (FY2027 bill) · CSIS tracker · Punchbowl News · Holland & Knight · Harbinger Strategies
DEADLINE CLOCK
Nov 10, 2026 · China's pause on its October 2025 rare earth controls (No. 70) lapses unless extended · 5 days
Nov 27, 2026 · China's pause on its gallium, germanium and antimony ban for the US (No. 72) lapses unless extended · 22 days
Dec 11, 2026 · FY2027 continuing resolution expires · 36 days
Jan 1, 2027 · DFARS magnet, tantalum and tungsten rules expand; routine EO 14415 waivers end · 57 days
Jan 3, 2027 · The 120th Congress convenes, and any unfinished FY2027 bills start over · 59 days
Jan 16, 2027 · DoW supply chain mapping guidance due under EO 14415 · 72 days
Every date through 2027 is in the Chokepoint Map: tots.nerdrums.com/chokepoint-map
FROM TIP OF THE SPEAR
China's rare earth pause runs out in five days, and the CR runs out in 36. The free Chokepoint Map tracks both, along with all 16 materials and every deadline through 2027. Get it free.
02 / PEOPLE & POSTURE
FUNDING
Dale Marks, Pentagon assistant secretary for energy, installations and environment · Wants private money for base hardening
Marks told an installations conference in Tampa that the Pentagon will use public-private partnerships to help pay for FORTRESS America, its plan to harden bases at home. He doesn't want to go back to Congress “with my hand out,” Breaking Defense reported October 30. He gave no total cost. If you finance energy or infrastructure, this is base work that may not have to wait on Congress. Source
MARKETS
Phebe Novakovic, General Dynamics chairman and CEO · Hands over a record backlog
Novakovic ran her last earnings call as CEO on October 30. Danny Deep takes over January 1, and she moves to executive chairman. She leaves him a record $220.3 billion backlog, lifted by $29.5 billion for five Columbia-class submarines and $42.1 billion for nine Virginia-class boats. For submarine suppliers the orders are on the books now. How fast the yards can build them is the part to plan around. Source
PROGRAMS
Brent Ingraham, Army acquisition chief · Picks PAC-3 Edge for the Future Interceptor
The Army picked Lockheed Martin's PAC-3 Edge for its Future Interceptor program on October 29 under an other transaction agreement. The estimated total is about $1.08 billion. Roughly $660 million comes from the government and $423 million from Lockheed, which is targeting testing in 2027 and fielding in 2031. Other air and missile defense bidders will notice that 39% share. Source
TUESDAY'S NUMBER: THE ANSWER
Tuesday we asked how many daily users the Pentagon said GenAI.mil had by mid-June. The answer is 1.5 million. Pentagon CTO Emil Michael told the Hudson Institute in June that “one-and-a-half-million people out of three-and-a-half million” were using AI every day, a figure widely reported as GenAI.mil's daily users. In December there were about 80,000. Four of you voted, and one got it. Source
03 / PREDICTIONS
5–2 Record · 26 open · Full scoreboard
#34 · New today. Congress passes a full-year defense bill before January 3 · 20%
OPEN
#11 · The 15-business-day commerciality standard is public by October 29 · 30%
HIT
#28 · China extends its rare earth pause (No. 70) by November 10 · 70%
OPEN
#14 · Congress passes another CR instead of full-year defense money by December 11 · 70%
OPEN
#11 is graded, and it's a hit. No memo or class deviation setting the 15-business-day commerciality standard was public by 11:59pm ET on October 29. We had it at 30%, so the record moves to 5–2.
#28 has five days left. As of Wednesday, Beijing still hadn't published an extension. Last year's notice came three days before its deadline, so I'm holding at 70%. Energy Fuels reports third-quarter results this morning, with its call at 11:00am ET, and that's the next real test for #33.
Today's call sits next to #14, our 70% call that Congress passes another CR by December 11. Both can land. A short CR followed by a package is how 2022 went.
THE CROWD'S CALL
Will Congress pass a full-year FY2027 defense spending bill before the new Congress starts on January 3?
Will Congress pass a full-year FY2027 defense spending bill before the new Congress starts on January 3?
Last week: 4 yes, 0 no on the OSC loan call. Tip of the Spear called yes at 55%. Results next Thursday.
TIP OF THE SPEAR PRO
Nearly a fifth of the money in our Price and Policy table is OSC loan promises.
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04 / THE LAST WORD
If your program is waiting on an FY2027 new start, let me know which one and how long you can wait before it costs you. Hit reply. Names stay out unless you say otherwise.
And a correction to last Thursday's Call. It counted 10 open Office of Strategic Capital loan commitments worth about $6.3 billion and missed a $150 million commitment to Stoke Space announced October 26. The count is 11, about $6.45 billion.
Call #33 stands, and Stoke gives it one more way to resolve yes.
Semper Fi,
Justin
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Disclosure: Sponsors and clients have no input on editorial content or forecasts. Justin's affiliations and our corrections policy are on the Standards and Disclosures page.
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