Defense gets $150B jolt, but 'sugar high' may not last
President Trump's July 4 signing of the "One Big Beautiful Bill Act" injected $150 billion into Defense Department coffers through reconciliation — a parliamentary maneuver that bypassed the usual appropriations gauntlet. For the space industry, the headline is $13.8 billion flowing to the Space Force through mandatory spending channels. Some of that funding is part of a $24.7 billion allocation for the Golden Dome missile defense project.
With this bill, the Pentagon secured authority to begin obligating funds in FY 2025 — with a five-year window to lock in contracts.
Shipbuilding makes up the largest share of the $150 billion at $29 billion, followed by $25 billion for munitions and $24.7 billion for Golden Dome.
Golden Dome funding is spread across nearly three dozen budget lines. Among the Golden Dome allocations focused on space: -
$7.2B — Military space-based sensors -
$5.6B — Development of space-based and boost phase interceptors -
$2B — Air moving target indicator satellites -
$500M — Space launch infrastructure -
$150M — Ground moving target indicator satellites Defense analyst Todd Harrison from the American Enterprise Institute calls this a "down payment," not a long-term funding plan. Speaking last week on the Downlink podcast, he warned of a "one-time sugar high" followed by a budget cliff. The Pentagon has five years to obligate the reconciliation funds, but with discretionary defense spending expected to remain flat, programs will compete for shrinking resources once the reconciliation boost expires.
Space Force's big bump
The Space Force is a standout winner—at least in the short term. Its FY 2026 budget jumps $11.3 billion from FY 2025 and totals $39.9 billion. But that includes $13.8 billion in mandatory funding from the reconciliation bill. Its discretionary budget — what Congress must appropriate annually — is actually lower than in past years.
Notable reconciliation-funded space programs: -
$1B — X–37B spaceplane -
$3.6B — Military satellite systems and satellite protection -
$528M — Space situational awareness systems -
$125M — Space communications -
$350M — Command and control systems -
$68M — Facilities improvements The Space Force's RDT&E (research, development, testing and engineering) request alone clocks in at $29 billion, with nearly half ($13.5 billion) coming from mandatory reconciliation funding.
The administration's "one budget, two bills" approach means this mandatory spending is already locked in, while the discretionary portion still faces the traditional congressional appropriations process.
This method of funding the Defense Department is likely unsustainable, Harrison cautioned. "You're going to fall off a cliff in fiscal year '27." Why? Because reconciliation is a partisan maneuver that only works under full single-party control of the White House and Congress. It's rare and hard to repeat, he said.
Budget mechanics
Although DoD can start obligating funds in FY 2025, most of the $150 billion — about $113 billion — is being counted toward FY 2026. This accounting quirk makes year-over-year comparisons tricky for investors and analysts.
Harrison said future discretionary budget caps, if flat or declining, could force DoD to cannibalize other programs in 2027 and beyond just to keep projects like Golden Dome afloat.
Short-term: This bill is a bonanza for major primes in missile defense and satellites — especially those with existing contracts or fast-pivot capabilities in interceptors, tracking sensors and classified spacecraft.
Long-term: Without repeat reconciliation authority or a new long-term funding line, programs started with this money will need to find space in an already strained base budget. | 
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