Pentagon failed to obligate about $10 billion by deadline — Breaking Defense
In the United States, by October 1 the Pentagon had obligated approximately $142 billion of the roughly $152 billion provided under last year's One Big Beautiful Bill budget reconciliation law. About 7% of the funds, or approximately $10 billion, remained unobligated and are subject to an 8.3% sequestration at the start of fiscal year 2027.
Breaking Defense reports, citing a source familiar with the situation. A Defense Department spokesperson confirmed that before the start of the new fiscal year, the Pentagon had obligated 93% of the total amount, but did not specify which items still had unobligated funds.
Sequestration of unused funds
The law passed by Republicans last year provided for approximately $152 billion in defense spending. The money was planned for use, among other things, to modernize the armed forces, the Golden Dome air defense program, two Arleigh Burke-class destroyers, munitions and fighter jets.
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The funding was available for several years, but the law provided for sequestration of funds for which no obligations had been made by October 1. According to Breaking Defense's estimate, an 8.3% cut from approximately $10 billion means a loss of about $830 million in purchasing power for defense procurement.
Program implementation before the deadline
At the initial stage, the funds were spent slowly. At the end of April, U.S. Secretary of Defense Pete Hegseth told a Senate committee that only $26 billion had been directed to contracts. In June, a senior department official said that the Pentagon had instructed program offices to spend the money as quickly as possible before the deadline.
At the end of July, Hegseth said that about $75 billion remained unobligated, but predicted that 95% of the amount would be contracted by the end of the fiscal year. On Wednesday, Chairman of the U.S. Senate Armed Services Committee Roger Wicker said that lawmakers were satisfied with the scale of the program's implementation.
