McMASTER OUT: President Trump’s purge of naysayers from his Cabinet continues, as he once again parted ways with a voice of dissent over Twitter. Lt. Gen. H.R. McMaster, who privately, and sometimes publicly, clashed with his boss, was a dead man walking after the White House leaked last week that Trump had decided to replace him, and then issued a lukewarm “non-denial denial.”

DONE DEAL, SHUTDOWN AVERTED: Congress has approved a $1.3 trillion federal budget a full day ahead of tonight’s deadline. The Senate voted 65-32 to approve the measure that funds the government for the next six months, and the bill now goes to Trump for his signature.

The early morning vote showed the clear bipartisan support for the measure, which fully funds the Pentagon, but only provides limited funds, $1.6 million, for the southern border wall with Mexico, money that is earmarked largely for replacing segments of the existing wall along with some new construction.

There was some drama in the Senate chamber that threatened to delay, but not derail the vote.  Sen. Rand Paul complained he did not have time to read the 2,232-page legislation, which he said would raise the deficit to $1 trillion this year, and Idaho Sen. Jim Risch demanded that lawmakers remove a provision renaming Idaho’s White Cloud Wilderness after late Democratic Gov. Cecil Andrus, who made unflattering comments about Risch to the local media before he died. Both Rand and Risch eventually backed off, clearing the way for passage.

The House voted 256-167 yesterday in favor of the spending bill, which includes what appropriators said is the biggest year-to-year increase for defense spending in 15 years. The Defense Department would get $589.5 billion for its base budget and $65.2 billion for overseas contingency operations. It includes a $25 billion increase from last year for equipment and upgrades, including 14 Navy ships, 90 Lockheed Martin F-35 joint strike fighters, and 24 Boeing F/A-18 Super Hornet fighter jets. Still, the mammoth bill faced opposition in the House from the Freedom Caucus and fiscal hawks who criticized it as out-of-control spending.

Rep. Kay Granger, the House Appropriations defense subcommittee chairwoman, defended the hike for defense. “I say all dollars aren’t the same,” Granger, who spearheaded the defense portion of the bill, told Travis Tritten. “If our military is losing its competitive advantage and it takes dollars to change that, then I was willing to take some risk and say we’ve got to change that. We’ve got to make sure they have the equipment, the training, the readiness they need.”

SPENDING FLEXIBILITY: Granger also added language in the omnibus that gives the Pentagon more flexibility on spending $238 billion in operations and maintenance funding this year. “I went to the secretary and I say, you know, because the Congress didn’t do our bills on time we’ve left you approximately five months to spend and to buy what’s 12 months worth of training, equipment, whatever. I said that’s our fault and I said I’d like to try to find a way to help with that,” Granger said.

Granger then went to the Pentagon comptroller and asked for recommendations, which ended up in the omnibus. The bill expands the amount of the $238 billion in operations and maintenance money the military can spend in the last two months of the fiscal year from 20 to 25 percent. Unspent O&M money goes back to the Treasury, so the legislation could allow the Pentagon to pump another $12 billion in August and September into rebuilding what many on Capitol Hill say are depleted military forces. “I sent that to [Defense Secretary Jim Mattis] and said read this. He said it would be an enormous help,” Granger said.

THE STRIP CLUB BAN: Buried in the 2,232-page omnibus bill is language that explicitly bans U.S. troops and civilians working for the Defense Department from using government funding on expenses incurred in casinos or strip clubs, the Washington Post reported. The provision follows the release of a 2015 DoD Inspector General report that found in a 12-month period ending June 30, 2014, $952,258 was improperly spent using government charge cards in casinos and $96,576 was spent in “adult entertainment establishments.”

SAUDI NUCLEAR DEAL: Democrats on the Senate Armed Services Committee said they are concerned the Trump administration might spark nuclear proliferation through a potential Saudi Arabia nuclear energy deal. Sen. Jack Reed, the committee’s ranking Democrat, said the Saudis may be exempted from Section 123 of the U.S. Atomic Energy Act, which bars countries that receive American nuclear technology from using it to enrich uranium for weapons. “There’s indications that there may be a waiver of the traditional standard we insist upon, which is no nuclear enrichment, the so-called gold standard. In fact, we have an arrangement with the UAE, the Emirates, in which they have to adhere strictly to the gold standard,” Reed said. “If such a deal was proposed where the Saudis would not be liable to and required to adhere to the standard, I would oppose it and I think many others would too.”

Saudi Crown Prince Mohammed bin Salman visited the White House this week and discussed a nuclear energy agreement with Trump. Energy Secretary Rick Perry, in rare Senate Armed Services testimony, said the U.S. should be flexible in negotiations because Russia and China are interested in partnering with Saudi Arabia as it tries to develop civil nuclear energy to shift away from oil. “I am very confident that the prior two have no requirements of nonproliferation, so I think it’s really incumbent upon us to sit down, to work as closely with the kingdom,” he said. “I think it’s important for us to negotiate in a really good and a powerful way, but recognizing that the alternative of who they’re going to be doing business with is of great concern to me.”

YEMEN’S DEATH TOLL: At the Pentagon yesterday, the crown prince was said to have promised to work with the U.S. to reduce civilian casualties in the Saudi-led war with Yemen. The subject came up only briefly in the 45-minute meeting in Mattis’ E-ring office, according to chief spokeswoman Dana White, and only after a reporter asked Mattis about it during brief public comments before the two met privately. The war, which began in 2015 after Iranian-backed Houthi rebels ousted government officials, has claimed 10,000 lives and displaced more than 2 million people, according to the United Nations.

“We are going to end this war, that is the bottom line,” Mattis said in response to the question about whether he would raise the subject of the high number of civilian casualties caused by Saudi airstrikes. “We are going to end it on positive terms for the people of Yemen but also security for the nations in the peninsula.”

TOW MISSILES TO SAUDI: The State Department has announced approval for the possible sale of more than $1 billion in arms to Saudi Arabia — including anti-tank missiles. The Saudi Arabian government requested to purchase approximately 6,700 U.S.-built anti-tank missiles made by Raytheon. Additionally, the kingdom also sought the purchase of support and maintenance parts for supplies and machinery Saudi Arabia already owns, such as American tanks and helicopters.

TRUMP’S TRANSGENDER LOGS: A federal court in Seattle has ordered the Trump administration to turn over log information that could show whether president told the truth about who he consulted before announcing a transgender military ban via Twitter last year. The Justice Department opposed the court order issued Tuesday in the Karnoski v. Trump case, arguing the names and dates are privileged information. Plaintiffs in four federal lawsuits opposing Trump’s ban, including the one in Washington state, believe the logs will disprove Trump’s tweeted claim that he consulted with military officials before announcing his decision to ban transgender people from service.

“If they comply, that will make apparent whether he was consulting generals and military experts or whether as the evidence so far suggests he was actually consulting people from right-wing, anti-LGBT groups,” said Shannon Minter, legal director for the National Center for Lesbian Rights and counsel in federal lawsuits filed against Trump’s ban in Washington, D.C., and California. The Justice Department declined to comment on the court order, which was issued Tuesday.

Last month, the federal cases exposed email correspondence by Gen. Joseph Dunford, the chairman of the Joint Chiefs of Staff, that calls into question Trump’s claim that he consulted military brass before announcing his decision. Dunford sent the email July 27, a day after Trump’s tweet, to the chiefs of the Army, Navy, Marines, Air Force and National Guard. “I know yesterday’s announcement was unexpected,” Dunford wrote to the chiefs. Dunford sent a follow-up email to the service chiefs a few hours later saying, “P.S. When asked, I will state that I was not consulted.”

BAN DEADLINE: Today is the deadline Trump gave the Pentagon to reinstate the ban on transgender troops that existed before July 2016 and cut all funding for sex reassignment surgeries. The order was part of his guidance sent to Mattis on Aug. 25 as a follow-up to the tweet. But Trump’s ordered transgender policy changes are unlikely to take effect on Friday. All four courts now hearing lawsuits against the ban have issued injunctions that bar any new transgender personnel policies while the cases are being heard.

For now, the military will continue to comply with the court injunctions and consider transgender applicants, said Maj. Dave Eastburn, a Pentagon spokesman. Mattis delivered recommendations on a new transgender personnel policy to the White House on Feb. 23, though they have not been made public. “Conversations and recommendations between the secretary and the president are confidential and private,” Eastburn wrote in an email. “The president will implement the new policy once he makes that decision.”

Trump may be hemmed in by the courts, said Aaron Belkin, director of the Palm Center, an advocacy group that supports transgender service. “He is locked in by the courts, and if he tries to pretend that some modified version of his original ban is a new policy, then he will have to go back to court and prove that, and it’s going to be pretty hard to pass that test because a ban is a ban,” Belkin said.

AN EPONYMOUS PORTMANTEAU: In his announcement yesterday of $60 billion in tariffs targeting China yesterday, Trump referenced Marillyn Hewson, CEO of Lockheed Martin who was in the group standing behind him. But the president managed to mangle her introduction into a mashup of her name and her company.  

“We have some of our great business leaders — and leaders, period — right behind me.  I may ask Marillyn Lockheed, the leading woman’s business executive in this country, according to many.  And we buy billions and billions of dollars’ worth of that beautiful F-35. It’s stealth. You cannot see it. Is that correct?” Trump said

Hewson had the grace not to correct the president, either about her name or the fact that the F-35 isn’t actually invisible. “That’s correct, Mr. President,” she said. “Better be correct. Right?” Trump said for emphasis. “Absolutely,” Hewson replied. See video of the introduction here.

THE RUNDOWN

AFP: First rebels leave Syria enclave under Russian-brokered deal

Breaking Defense: Wittman, Courtney Question Omnibus Ship Numbers, Funding

Air Force Times: Congress’ new omnibus bill sets up hurdles for JSTARS recap cancellation

Business Insider: The US dropped charges against Turkish officers involved in DC brawl 2 days before Tillerson had an unusual meeting with Erdogan

Defense News: Congress directs Army to conduct light vehicle competition in FY18 spending bill

Army Times: US forces remain in Manbij, despite threats from Turkey

Defense One: The War in Iraq Isn’t Done. Commanders Explain Why and What’s Next

New York Times: Emboldened Turkey Pushes Deeper Into Syria, but Risks Abound

Foreign Policy: Here’s Hoping Trump-Kim Isn’t Like Kennedy-Khrushchev

Military Times: Mattis, Saudi leader discuss Taliban safe havens to support peace talks

USNI News: FY 2018 Omnibus Bill Boosts Shipbuilding $3.3B Over Pentagon Request; Expands F-35, Super Hornet Buys

War on the Rocks: How the U.S.-China Intellectual Property Dispute Could Play Out