The US House of Representatives has passed a colossal $1.15 trillion defense bill, while the ongoing conflict with Iran continues to inflate the federal deficit and elevate geopolitical risks. Debates over long-term fiscal sustainability and persistent inflationary pressures may also undermine the underlying strength of the US dollar.

During Asian trading hours on Thursday, the US Dollar Index initially surged before retreating, currently hovering around the 101.05 level.

The House of Representatives narrowly passed the National Defense Authorization Act (NDAA) for fiscal year 2027 on Wednesday, with a vote of 216 in favor to 212 against. Despite its passage, the significant level of dissent within the ruling party foreshadows intense negotiations ahead as the bill moves to the Senate and into conference committee discussions.

Record Military Spending: "National Security Imperative" vs. "Sacrificing Social Welfare"

The $1.15 trillion military spending authorized by this NDAA sets a new historical high for the US defense budget. Republican lawmakers have emphasized that this funding is critical to support US military operations against Iran, and will also be allocated for defense system research, equipment procurement, and service member benefits.

Against the backdrop of a conflict with Iran that has persisted for nearly five months, the Pentagon has confirmed costs reaching $37.5 billion. The urgent need for frontline supplies, ammunition consumption, and troop rotations forms the core of the Republican argument for pushing through this massive appropriation.

However, Democratic lawmakers have pointed out a logical contradiction: while the Trump administration and its Republican allies are making significant cuts to social welfare programs, they are simultaneously writing a "blank check" for the Pentagon.

This contrast is particularly sensitive with the presidential election approaching. Democratic members have questioned the premise that national security and public welfare should be treated as a zero-sum game. The House vote saw only six Democrats supporting the bill, with opposition encompassing nearly the entire Democratic caucus, highlighting widespread resistance within the party to the scale of this expenditure.

The Iran Conflict: An "Unpopular War" Becomes a Political Liability

What truly ignited Democratic opposition is the ongoing conflict with Iran. This military action, which began with joint US-Israeli airstrikes on February 28th, has triggered a chain reaction in the Strait of Hormuz and the Red Sea region, severely impacting global energy supply chains.

The Pentagon's $37.5 billion conflict bill represents only the confirmed direct costs to date; the final figure is expected to rise substantially as hostilities continue.

For Democrats, this conflict is not only costly but also faces growing public pressure. Since the outbreak of hostilities, anti-war sentiment within the US has been rising, especially as the conflict's effects on oil prices and domestic inflation are being felt acutely by ordinary voters.

The collective Democratic vote against the bill represents both a rejection of the conflict policy and an early response to the political climate in an election year.

Israel Provisions: Testing the Alliance Under the Shadow of Gaza

Another contentious provision in the bill involves a significant expansion of plans for US-Israel military technology cooperation. Supporters argue that strengthening US-Israel defense coordination is a necessary measure to maintain the strategic landscape in the Middle East.

But Democrats have pointed out that expanding military cooperation with Israel at a time when its military operations in Gaza have resulted in significant Palestinian civilian casualties is inappropriate, both morally and politically.

In recent years, calls within the US to reduce support for Israel have grown louder, particularly among younger voters and progressive factions, where criticism of Israel's Gaza policy has become a mainstream narrative.

This provision in the NDAA has effectively detonated a political bomb within the Democratic Party, touching on fundamental foreign policy disagreements and sensitive issues related to mobilizing voter bases during the election campaign.

Legislative Process Outlook: Senate Battle Looms, Rocky Road to Compromise

The annual legislative process requires the House and Senate to each pass their own versions of the defense authorization bill. Subsequently, negotiators from the armed services committees of both chambers must hammer out a compromise version, which is then submitted for separate votes in each chamber. If the compromise version passes Congress, the bill is sent to the White House for President Trump to sign into law or veto.

The razor-thin 216-212 vote on the House version already signals that the upcoming negotiation process will be exceptionally difficult. Deliberations on the Senate version have not yet begun, and Democrats hold veto power over controversial provisions in both chambers. The authorization for the Iran conflict, the expansion of military cooperation with Israel, and the overall cap on military spending are all certain to become focal points of contention during the negotiation stage.

While the White House has expressed support for increased defense spending, its stance on specific provisions remains unclear. Intervention from the executive branch could further complicate the legislative battle.

Conclusion: Record Defense Bill Reflects Deep Divisions in US Domestic and Foreign Policy

The narrow passage of the $1.15 trillion defense authorization bill in the House is far from a simple budget vote. It is a concentrated reflection of deep rifts in US foreign policy, military strategy, and domestic politics.

Externally, the conflicts with Iran and in Gaza are testing the US alliance system and its moral standing in the Middle East. Internally, the zero-sum game between military spending and social welfare is poised to continue fracturing both major parties and their internal factions throughout the election campaign.

Although the bill has barely cleared its first major hurdle in the House, the path to final signature and enactment remains fraught with unresolved divisions, and the political battle is just beginning.