After weeks of closed-door negotiations, congressional leaders have reached a final agreement on the U.S. government’s annual defense policy package for fiscal year 2025. The sweeping compromise authorizes a 3.8% salary increase for all active-duty service members and introduces major changes to how the Pentagon recruits and retains both civilian and cyber talent.
The newly finalized bill clears the way for voting in the House of Representatives as early as Wednesday, followed by swift consideration in the Senate. If approved as expected, it will be sent to President Donald Trump for signature before the end of the week.
Major Pay and Workforce Changes
The 3.8% pay raise aligns with the administration’s original request. Lawmakers say the adjustment reflects efforts to balance troop compensation with broader budget pressures, while still keeping military wages competitive with the private sector.
In addition to military pay, the legislation includes significant reforms affecting civilian employees at the Department of Defense. One of the most notable changes shortens promotion timelines under the federal General Schedule system, allowing high-performing civilian staff to move up more quickly. Supporters believe this will help the Pentagon better retain skilled professionals in critical roles.
Expanded Cyber and AI Hiring Authority
A major focus of the agreement is strengthening America’s cyber workforce. The bill boosts the Pentagon’s ability to offer higher special pay rates-often referred to as cyber bonuses-to civilian employees working in digital security roles. These enhancements are aimed at competing more effectively with private-sector technology firms.
The legislation also grants new authority to hire experts in emerging fields such as cybersecurity and artificial intelligence at elevated salary levels, bypassing some traditional federal pay limits. Defense officials say these tools are essential to modernizing the military’s technological capabilities.
What Was Left Out of the Final Deal
Several controversial proposals were removed during final negotiations. The compromise measure does not block Pentagon climate initiatives, does not reinstate service members dismissed for refusing COVID-19 vaccinations, and does not restrict Defense Department funding for abortion-related travel-an issue that had sharply divided House lawmakers earlier this year.
House Speaker Mike Johnson confirmed that leadership is moving quickly to bring the bill to the floor, calling the deal a “responsible balance between national security needs and fiscal discipline.”
Budget Scope and Next Steps
The legislation authorizes approximately $900.6 billion in total defense spending, covering military operations, personnel, weapons programs, and national security initiatives for the fiscal year that began in 2024.
With bipartisan backing from key negotiators in both chambers, the bill’s passage is widely expected. Once signed into law, it will set defense policy and funding priorities for the coming year while reshaping how the Pentagon builds its future workforce.
