New CR Blocks New Defense Production Starts

New CR Blocks New Defense Production Starts

  • The Senate passed the measure 90-6 on Aug. 8, and the House cleared it 370-48 on Sept. 1
  • Defense funds cannot start new production or raise rates above fiscal 2026 levels
  • The Technology Modernization Fund is extended through Dec. 11

A continuing resolution funding federal agencies through Dec. 11 was signed into law Wednesday, 28 days before the fiscal year ends, the White House said.

The Continuing Appropriations and Extensions Act, 2027 holds most programs at fiscal 2026 levels. Funding runs until Dec. 11 or until the applicable full-year appropriations act is enacted, whichever comes first.

The Senate passed the measure 90-6 on Aug. 8. The House cleared it 370-48 on Sept. 1.

What Restrictions Apply to Defense Spending?

The bill bars the use of War Department funds for the new production of items not funded for production in fiscal 2026 or earlier. It also prohibits increasing production rates beyond what fiscal 2026 funds can sustain.

Agencies cannot initiate, resume or continue any project, activity or program element that lacked appropriations during fiscal 2026.

A separate provision blocks new multiyear procurements that use advance procurement funding for economic order quantity purchases unless Congress later appropriates for them.

Which Programs Get Exceptions?

The Navy’s shipbuilding and conversion funds may be apportioned to cover prior-year cost increases on 20 programs. The largest single ceiling is $566.5 million for the 2021 Columbia-class submarine program, followed by $561.1 million for the 2019 Virginia-class submarine program and $379.2 million for aircraft carrier refueling overhauls.

Procurement funds defensewide may be apportioned up to $2.85 billion for national security systems.

Other carve-outs cover the 2030 decennial census buildup, FBI preparations for the 2028 Olympic Games, the National Oceanic and Atmospheric Administration’s Geostationary Extended Observations, or GeoXO, satellite launch schedule, wildfire suppression and the Federal Emergency Management Agency’s disaster relief fund.

Which Authorities Does the Bill Extend?

The Technology Modernization Fund and its board will run through Dec. 11 under the measure, as do the Cybersecurity Information Sharing Act of 2015 and the Federal Cybersecurity Enhancement Act of 2015.

Surface transportation programs and Highway Trust Fund expenditure authority also extend to Dec. 11. Customs user fees and merchandise processing fees will run through March 31, 2032, and the African Growth and Opportunity Act extends through 2028.

The bill blocks an Office of Management and Budget rule revising the Uniform Guidance for federal financial assistance. That rule cannot be issued or finalized through Dec. 11, and if already finalized, cannot take effect during that window.

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