Congress Unveils $900 Billion Defense Bill Targeting China, Including Tech Bans and Military Pay Raise

Congress has unveiled a comprehensive $900 billion defense bill that significantly reshapes America’s strategic competition with China through new investment restrictions, supply chain protections, and expanded global monitoring of Beijing’s activities.

The National Defense Authorization Act (NDAA), which exceeds the White House’s budget request by $8 billion, includes a 4% pay raise for service members while directing new investments in missile defense systems and nuclear modernization programs. The legislation also strengthens U.S. military posture in the Indo-Pacific region and extends Pentagon support for law enforcement operations at the southwest border.

Among its most consequential provisions, the bill establishes an outbound investment screening system requiring U.S. companies to notify the Treasury Department when investing in sensitive technologies in China or other “countries of concern.” This gives federal authorities the power to block deals deemed risky to national security and impose sanctions on foreign firms connected to China’s military or surveillance operations.

“This is a long-overdue step to prevent U.S. capital from fueling Beijing’s development of dual-use technologies,” said one congressional source familiar with the negotiations.

The legislation also bans the Pentagon from contracting with Chinese genetic sequencing and biotechnology firms linked to the People’s Liberation Army or security services. Additional procurement restrictions target advanced batteries, photovoltaic components, computer displays, and critical minerals from “foreign entities of concern,” further disentangling U.S. defense supply chains from Chinese influence.

In a diplomatic expansion, the bill directs the State Department to deploy Regional China Officers at U.S. posts worldwide to monitor Chinese commercial, technological, and infrastructure activities across major geographic regions, including Beijing’s Belt and Road Initiative. The Pentagon must also produce biennial reports comparing China’s global diplomatic presence to that of the United States.

Several controversial provisions sparked intense debate during negotiations. In a victory for privacy advocates led by House Judiciary Committee Chairman Jim Jordan (R-Ohio), the bill mandates FBI disclosure when the bureau investigates presidential candidates and other federal office seekers.

This measure became a flashpoint last week when Rep. Elise Stefanik (R-N.Y.) publicly accused Speaker Mike Johnson (R-La.) of removing the provision to appease Democrats. Johnson claimed he was blindsided by her criticism. Stefanik later declared victory on social media, stating the provision had been reinstated following conversations between herself, Johnson, and President Donald Trump.

However, several contentious items were excluded from the final legislation. Coverage of in vitro fertilization (IVF) for military families did not make the cut, nor did provisions preempting state-level AI regulations or prohibiting a U.S. central bank digital currency (CBDC). Republicans had advocated for the CBDC ban as a privacy protection measure, arguing that a government-issued digital dollar could enable federal monitoring of private transactions.

The bill does establish a new “Artificial Intelligence Futures Steering Committee” charged with producing long-range forecasts and policy recommendations for advanced AI systems, including artificial general intelligence.

For defense industrial base reform, the NDAA authorizes new investment tools, expands multi-year procurement for high-demand munitions, and overhauls acquisition systems to accelerate deployment of commercial and emerging technologies. It also includes “right-to-repair” requirements forcing contractors to provide technical data needed for weapons system maintenance—addressing vendor lock-in issues and maintenance delays.

On international security matters, the legislation reauthorizes the Ukraine Security Assistance Initiative at $400 million annually for fiscal years 2026 and 2027, with enhanced reporting requirements on allied contributions to Ukraine’s defense. It also contains several Israel-related provisions, including authorization for joint missile defense programs and a directive preventing Pentagon participation in international defense exhibitions that bar Israeli involvement.

The bill repeals two dormant war authorizations: the 1991 Gulf War AUMF and the 2002 Iraq War AUMF, which successive administrations have deemed no longer operationally necessary. However, the 2001 Authorization for Use of Military Force, which underpins current counter-terrorism operations, remains intact.

House leaders hope to bring the bill to a vote this week after review by the House Rules Committee, followed by Senate consideration before reaching the president’s desk for signature.