The conference is preparing to hash out discrepancies between the House and Senate defense policy bills, and the biggest one they'll have to deal with is a fundamental difference between how the two chambers fund the military in fiscal 2017.
The Senate passed its version of the National Defense Authorization Act by an 85-13 vote in early June, but rejected an amendment to boost defense spending by $18 billion. That means the Senate's bill is in line with the president's request, which provides $543 billion for base priorities like troop pay, readiness and equipment purchases, and $59 billion for a year's worth of overseas contingency operations, or OCO.
The House's bill, however, has the same top line but breaks down the funding differently. The House takes $18 billion from the war chest and puts it toward base priorities for a total of $574 billion for base needs. That only leaves enough overseas funding to cover U.S. operations through April.
"It's not the best way to run a railroad, no question ... We've got two or three options, none of which are ideal, but if I'm going to err on the side of anybody, I'm going to err on the side of the preparation and support of the people in the military," Rep. Mac Thornberry, R-Texas and chairman of the House Armed Services Committee, said.
To keep U.S. troops operating anywhere overseas past that point, including eastern Europe, Iraq and Syria, the next administration would need to work with Congress to pass a supplemental funding bill within months of taking office.
Justin Johnson, an analyst with the Heritage Foundation, said the conversation about which funding method will end up in the final bill will have to include both defense authorizers and appropriators, in order to make sure the spending and policy bills end up with the same budget structure.
"I think it's going to be the biggest open question," Johnson said. "There's a couple different scenarios. Obviously you can pick the House or Senate position, or you could potentially go in between and do some sort of reduction of OCO for a smaller increase for base."
Senate defense appropriators in their spending bill for fiscal 2017 made 450 cuts that resulted in $15.1 billion in savings that went to other priorities, like the purchase of a new ice breaker. Johnson suggested that the conference could look at incorporating some of these cuts into the policy bill to cover some of the extra base funding included in the House bill.
Johnson said that reconciling the two different budget mechanisms will slow down the conference and increase the odds that Congress will not produce a final bill until late in the year.
"I think at this point, the budget disagreement probably makes it more likely that we don't get a conference bill until after the election and that all the budget stuff gets wrapped into larger budget negotiations once again about [continuing resolutions] and funding for the government writ large," he said.
The president has threatened to veto both the House and Senate version of the bill, but Johnson predicted that a veto is more likely to actually happen if the conference produces a bill with a funding method more similar to the House bill.
"Because the underfunding of OCO is such a political issue, I think if it were before the election, the president would almost certainly veto it," he said.
If it comes after the election, or if the funding more closely matches the Senate's bill, Johnson said a veto is still possible over the tightening of Guantanamo detainee transfer procedures, though it's unclear if that'll be enough to make Obama follow through on his threat.
While the budgetary discrepancies are the largest issue conferences will have to deal with, there are other differences between the two bills that will need to be smoothed out into a final bill. The two bills tackle reforms of the Pentagon's acquisition system and of the military's organization under Goldwater Nichols very differently.
The House's acquisition reform would mandate that all weapons systems are made with an open architecture to allow for easy upgrades as threats evolve. In addition, the provision would protect intellectual property by requiring all components to fit into an overall system. This will allow contractors to keep their intellectual property "inside a black box" while seemlessly linking to the larger systems.
The Senate's main acquisition reform comes as a personnel change. Under the Senate NDAA, the undersecretary for aquisition, technology and logistics would be split into two positions: an undersecretary for research and engineering, and an undersecretary of management and support.
Experts believe this change is vital as U.S. technological advancement is deteriorating, yet Defense Secretary Ash Carter has publicly criticized it.
The House's Goldwater Nichols reform tackles the growing cyberthreats by elevating U.S. Cyber Command to a unified command. Additionally, it reduces functional commanders' rank of service from four stars to three stars, allowing for more authority at the top-level commands.
On the contrary, the Senate's version does not change Cyber Command. Instead, it directs the defense secretary to conduct a pilot plan by replacing one combatant command's service component commanders, the three-stars who represent each service, with a joint task force focused on operational military missions. The goal is to increase integration throughout each command.
In addition, four-star general billets will decrease from 41 to 27, with proportional decreases in lesser general officer grades.
The Senate bill also includes a provision requiring women ages 18-26 to sign up for the draft, while the House one does not.
David Wilkes contributed to this report.