What Is the NDAA and What Does It Actually Do?

The National Defense Authorization Act, commonly called the NDAA, is the annual law that sets policy, programs, and spending limits for the entire U.S. military. Congress has passed some version of it for 65 consecutive years, and the most recent one, signed on December 18, 2025, authorized $890.6 billion in defense spending for fiscal year 2026.¹ The critical thing to understand up front: the NDAA does not actually write checks. It tells the military what it can do and how much it can spend, but a separate set of appropriations bills must follow to release the money.

Authorization Is Not the Same as Funding

The single most misunderstood thing about the NDAA is the gap between authorization and funding. The NDAA authorizes programs, sets pay raises, caps troop levels, and greenlights weapons purchases. It does not fund any of them. That job belongs to the defense appropriations bills, which can approve less money than the NDAA authorizes, more in certain accounts, or nothing at all if Congress can’t reach a deal.²

When appropriations stall, the military operates under a continuing resolution that freezes spending at the prior year’s level. No new programs can start under a continuing resolution, which is why delayed appropriations can undercut what the NDAA just authorized. The NDAA is a permission slip. The appropriations bill is the wallet. One without the other doesn’t accomplish much.

How the NDAA Becomes Law

The process starts in the House Armed Services Committee and the Senate Armed Services Committee. Each holds hearings, takes testimony from Pentagon officials, and drafts its own version of the bill.² The two versions inevitably differ on dozens of issues, so a conference committee made up of members from both chambers negotiates a single compromise text. That conference report goes back to both the House and Senate for a final vote, and then to the President’s desk for signature.

The FY2026 NDAA, designated Public Law 119-60, followed this path.³ The bill typically runs well over a thousand pages and touches everything from troop pay to submarine construction to how the Pentagon handles artificial intelligence. Members of Congress frequently attach provisions on topics that go well beyond core military matters, which makes the NDAA one of the most legislatively fertile vehicles in any given session.

What the NDAA Covers

Pay and End Strength

Compensation is where most service members feel the NDAA directly. The FY2026 law allowed a 3.8 percent raise in basic pay, which took effect on January 1, 2026. That figure tracks a formula tied to private-sector wage growth measured by the Employment Cost Index, and Congress can override the formula with a larger or smaller raise.⁴ For comparison, the FY2024 NDAA authorized a 5.2 percent raise, which at the time was the largest increase in over two decades.⁵

The NDAA also sets end-strength numbers, meaning the maximum number of people each service branch can have on its rolls. For FY2026, those caps include 454,000 for the Army, 344,600 for the Navy, 172,300 for the Marine Corps, 321,500 for the Air Force, and 10,400 for the Space Force.¹ Those numbers drive recruiting budgets, retention bonuses, and how aggressively the services compete for talent.

Housing and Family Benefits

The Basic Allowance for Housing is a tax-free monthly stipend calculated to cover roughly 95 percent of local housing costs, with the service member picking up the remaining 5 percent out of pocket. The exact dollar amount varies by pay grade, dependency status, and duty station location.⁶ In high-cost areas like San Diego or the D.C. suburbs, the allowance can exceed $3,000 a month. In rural duty stations, it may be a fraction of that.

For the hundreds of thousands of families living in privatized military housing, past NDAAs have driven a Military Housing Privatization Initiative Tenant Bill of Rights. It guarantees access to a military tenant advocate, the right to a plain-language briefing before signing a lease, and protection from retaliation for reporting maintenance problems.⁷ Healthcare adjustments to the TRICARE system are also a regular feature of the annual bill, with past changes covering hearing aids for dependents, co-payments, and mental health services.⁸

Weapons and Domestic Sourcing

Building a warship or a fighter jet takes years, and the NDAA is where Congress grants the legal authority to start. Federal law allows the Department of Defense to enter multi-year procurement contracts for weapon systems, which lets manufacturers plan production lines and order materials in bulk rather than year by year. The Secretary of Defense must certify to Congress that the five-year defense budget fully covers the program’s costs before that authority kicks in.⁹ The FY2024 NDAA authorized a multi-year procurement deal for Virginia-class submarines.¹⁰

Congress has also repeatedly used the NDAA to block the retirement of specific aircraft. The FY2017 version prohibited funding for retiring A-10 attack aircraft and required the Air Force to keep certain stored planes in recallable condition.¹¹ Domestic sourcing rules have grown stricter in recent years. The FY2026 NDAA raised the domestic content threshold for major defense acquisition programs to 65 percent for items delivered from 2026 through 2028, with scheduled increases to 75 percent for 2029 through 2032 and 90 percent from 2033 onward.

Technology and Cybersecurity

The FY2026 NDAA treats artificial intelligence as something the military needs governance for right now. It creates an AI Futures Steering Committee inside the Pentagon, a cross-functional team responsible for assessment standards and testing procedures, and AI sandboxes where the military can experiment with tools without risking live systems. It also prohibits the Pentagon from using or acquiring AI systems from adversary nations, specifically China, Russia, Iran, and North Korea. Cybersecurity provisions in the same law require encrypted communications and continuous monitoring for secure mobile phones issued to senior officials in sensitive national security roles.¹²

Hypersonic weapons research continues to consume significant funding, with the Pentagon’s FY2025 budget request at $6.9 billion, up from $4.7 billion two years earlier. Quantum computing and biotechnology research also get dedicated attention, and the FY2026 law requires a new Biotechnology Management Office and a department-wide strategy for incorporating bio-manufactured products.¹

Military Justice

One of the most consequential changes driven by recent NDAAs is the creation of independent military prosecutors for serious crimes. Under previous rules, a service member’s commanding officer decided whether to send charges like sexual assault to a court-martial, a system that drew heavy criticism for conflicts of interest and low prosecution rates. Beginning with the FY2022 NDAA, Congress required each military branch to establish an Office of Special Trial Counsel staffed by independent prosecutors who report directly to the service secretary rather than through the chain of command.

These special trial counsel now hold exclusive authority over covered offenses, which include sexual assault, domestic violence, murder, manslaughter, kidnapping, and child exploitation. Their decision to refer or decline charges is binding on commanders, who cannot override it.¹³ This represents the most significant structural change to military justice in decades.

Foreign Policy and Alliances

The NDAA is where Congress puts money behind its foreign policy rhetoric. The Pacific Deterrence Initiative, created to counter China’s military buildup, had a $10 billion budget request for FY2026 covering troop rotations, base improvements in Guam and the Philippines, and munitions stockpiles across the Indo-Pacific.¹⁴ A parallel European Deterrence Initiative supports rotational deployments and readiness exercises aimed at deterring Russian aggression against NATO allies, with a $3.6 billion FY2024 request.¹⁵

Country-specific security assistance flows through the NDAA as well. The FY2026 law authorizes $400 million for Ukraine through the Ukraine Security Assistance Initiative and includes provisions modifying Taiwan security cooperation.¹⁶ The AUKUS partnership with Australia and the United Kingdom, which includes a pathway for Australia to acquire nuclear-powered submarines, is now codified in federal law under its own chapter of the U.S. Code.¹⁷

Environmental Provisions

Military installations are among the largest sources of PFAS contamination in the country, largely because of decades of using firefighting foam containing these chemicals during training. Recent NDAAs authorize the Department of Defense to destroy or dispose of PFAS substances using cost-effective, federally or state-approved technologies, and require the Pentagon to continue providing bottled water to communities whose private wells were contaminated by military PFAS use.¹⁸ Environmental provisions tend to draw less attention than pay raises or weapons programs, but for communities near bases dealing with contaminated drinking water, they are the sections that matter most.

Why the NDAA Matters Every Year

The 65-year passage streak is not a curiosity. It’s a reflection of how much the Pentagon depends on the NDAA to operate. Without an authorization, pay formulas don’t reset, end-strength caps don’t adjust, procurement programs can’t move forward, and country-specific security assistance authorities can lapse. Even provisions that read like housekeeping, such as extending an existing pilot program by a year, matter because if Congress skips the NDAA, the underlying authority disappears. That is why the bill draws so many attached provisions on subjects that have little to do with the military: it is one of the few pieces of legislation that reliably gets to the President’s desk.

1
United States Senate Committee on Armed Services. Summary of the Fiscal Year 2026 National Defense Authorization Act
2
Congress.gov. Defense Primer – The NDAA Process
3
Congress.gov. S.1071 – National Defense Authorization Act for Fiscal Year 2026
4
Congress.gov. Defense Primer – Military Pay Raise
5
United States Senate Committee on Armed Services. Summary of the Fiscal Year 2024 National Defense Authorization Act
6
Office of the Law Revision Counsel. 37 USC 403 – Basic Allowance for Housing
7
Department of Defense. Military Housing Privatization Initiative Tenant Bill of Rights
8
TRICARE Manuals. TRICARE Policy Manual 6010.60-M Change 132
9
Office of the Law Revision Counsel. 10 USC 2306b – Multiyear Contracts
10
U.S. Government Publishing Office. National Defense Authorization Act for Fiscal Year 2024
11
U.S. Government Publishing Office. National Defense Authorization Act for Fiscal Year 2017
12
Congress.gov. Cyber and Artificial Intelligence Provisions in the FY2026 National Defense Authorization Act
13
Office of the Law Revision Counsel. 10 USC 824a – Art. 24a Special Trial Counsel
14
Department of Defense. Pacific Deterrence Initiative Department of Defense Budget Fiscal Year 2026
15
Department of Defense. European Deterrence Initiative Department of Defense Budget Fiscal Year 2024
16
Congress.gov. S.1071 – National Defense Authorization Act for Fiscal Year 2026
17
Office of the Law Revision Counsel. 22 USC Ch. 111 – Australia, United Kingdom, and United States (AUKUS) Security Partnership
18
Congress.gov. S.2296 – National Defense Authorization Act for Fiscal Year 2027