A MATTER OF PRINCIPLE: Almost from the beginning of his tenure as President Trump’s defense secretary retired Marine Gen. Jim Mattis faced questions of how he could continue to serve a president who did not share his core values. Particularly his belief in the importance of allies, and an understanding that protecting America’s friends was as much in our interests as theirs.

HAPPENING TODAY: With President Trump insisting he won’t sign a funding bill without $5 billion for his border wall, and with Senate Minority Leader Chuck Schumer D-N.Y. insisting the Senate will never approve the measure passed by the House last night, we appear headed for a shutdown of a quarter of the federal government — nine agencies including the Departments of Justice and Homeland Defense.

“Soon to be Speaker Nancy Pelosi said, last week live from the Oval Office, that the Republicans didn’t have the votes for Border Security,” Trump tweeted after last night’s House vote. “The House Republicans voted and won, 217-185. Nancy does not have to apologize. All I want is GREAT BORDER SECURITY!”

The deadline is midnight tonight, and there’s no resolution in sight. Trump has rebranded the border as “steel slats” to give Democrats cover, but the Dems aren’t buying it. “The Trump temper tantrum will shut down the government, but it will not get him his wall,” Schumer said last night.

AS WE END THE YEAR: As 2018 draws to a close, the Pentagon faces uncertainty on many fronts. Questions loom about whether ISIS will make a comeback now that the U.S. is pulling its troops out before the last remnants of the Islamic State are eliminated. It’s also unclear whether troop cuts in Afghanistan will embolden the Taliban, who will fill the outsize shoes of Jim Mattis, and whether a Congress where Democratic majority House can reach another budget deal to lift the spending caps still imposed by the Budget Control Act of 2011.

So, as Daily on Defense prepares to go on a holiday hiatus until Jan. 2, 2019, here is a marker on where things stand at year’s end. And perhaps, if we are all here a year from now, check back to see if the world is a better place. As TV reporters say when they can’t figure out where a story is going, “The future remains to be seen, so only time will tell.”

INHOFE VS. SMITH: The New Year will bring contrast in congressional armed services chairman with two very different visions for the defense budget. Sen. Jim Inhofe, R-Okla., a staunch party-line conservative, has convinced Trump to back a $750 billion defense budget next year. Inhofe has now assumed the mantle of its chief advocate in the Senate, a role previously filled by the late Sen. John McCain. But as Congress enters a new era of divided government, he will not have a Republican chairman on the House Armed Services Committee as his wingman, as McCain had Rep. Mac Thornberry, Texas.

Instead, Inhofe will face off against and will have to cut conference committee deals with Rep. Adam Smith, D-Wash., the House Armed Services ranking member. Smith, the chairman-in-waiting, is a long-time skeptic of big defense spending.

“When I saw the $750 billion, to be perfectly honest with you, my reaction was, ‘They’re just pulling a number out of the air. I want to see the justification for it,’” Smith said recently. With committee gavel in hand, Smith is set to spend months publicly challenging Inhofe’s assertions that the military needs $17 billion more than it planned and is perilously under-funded.

SYRIA/ISIS: One most controversial stories of the year is President Trump’s unilateral decision to declare victory over ISIS in Syria and to order 2,200 U.S. troops home. In Sen. Lindsey Graham’s view, it is a colossal mistake that will lead to the resurgence of ISIS and erode trust in the U.S. as an ally.

“My question to the president: If you do not want to fight this war alone, how do you justify leaving Syria at a time when those who helped us, the Kurds, are certain to be overwhelmed and slaughtered?” the South Carolina Republican said on CNN. “And if we do this to the Kurds, who is going to help us fight in the future?”

Secretary of State Mike Pompeo insists, in an interview airing on NPR this morning, the move is just the beginning of the next phase of the battle against terrorists. That means not only ISIS but also al Qaeda and other groups, according to Pompeo.

“The president made an enormous commitment to take down the caliphate, and that has been achieved,” Pompeo said. “We now have the battle, it’s a long-term battle, which is the counter-terrorism battle. We continue to push back against ISIS in West Africa, in Afghanistan, all across the world. That threat certainly is out there.”

Trump responded to Graham in a tweet. “So hard to believe that Lindsey Graham would be against saving soldier lives & billions of $$$. Why are we fighting for our enemy, Syria, by staying & killing ISIS for them, Russia, Iran & other locals? Time to focus on our Country & bring our youth back home where they belong!”

CONGRESS UNITED: But opposition in Congress to Trump’s decision is widespread and bipartisan.

“ISIS was and still remains a lethal threat to America’s security and will seek to inspire threats to the homeland from safe havens around the world,” said a joint statement Reps. Mac Thornberry, and Adam Smith, the outgoing and incoming chairmen of the House Armed Services Committee. “An effective counterterrorism strategy to confront those groups remains appropriate. Congress must be fully informed and included in the deliberations about any policy under consideration.”

Graham, along with the top Democrats on the Senate Foreign Relations and Armed Services committees, Sens. Bob Menendez, N.J., and Jack Reed, R.I., continued to hammer on Trump’s troop withdrawal in Syria, with a joint press conference.

“None of us believe that ISIS has been defeated,” Graham said. “I can promise you, everything that happened in Iraq is going to happen in Syria unless we change course. I can promise the president if you will reevaluate this decision you will have a lot of support across both sides of the aisle.”

AFGHANISTAN: Last night word began leaking that Trump has ordered the Pentagon to prepare plans to withdraw up to half of the 14,000 American troops serving in Afghanistan, in another abrupt policy reversal. One official told the AP the troops could be out by summer, but no final decision has been made.

Once again, Sen. Lindsey Graham sounded the alarm.

“The conditions in Afghanistan – at the present moment – make American troop withdrawals a high-risk strategy,” tweeted Graham. “If we continue on our present course we are setting in motion the loss of all our gains and paving the way toward a second 9/11.”

But Fazel Fazly, chief adviser to Afghan President Ashraf Ghani seemed unfazed by the pending announcement, tweeting: “If the few thousand foreign troops that advise, train & assist, leave it will not affect our security, in the past four & half years our security is completely in the hands of Afghans and the final goal is that ANDSF will stand on their feet to protect & defend soil on their own.”

NORTH KOREA: In the six months since Trump tweeted, “There is no longer a Nuclear Threat from North Korea,” after his historic Singapore summit with Kim Jong Un, the North Korean leader has made no substantial progress in dismantling its nuclear and missile programs, aside from abiding by a moratorium on testing.

Trump is hoping for a second summit early next year, but Kim has issued a new demand that defines denuclearization in North Korea’s traditional construct, stating that it must include removing the U.S. nuclear threat from the region. That includes what North Korean official state media called “U.S.’s nuclear weapons and other invading forces in the territory of the Republic of Korea.”

Trump, who has railed against the $3.5 billion annual cost of maintaining 28,500 U.S. troops in South Korea, reportedly asked the Pentagon in May to prepare options for troop withdrawal or drawdown. In the wake of his surprise Syria decision, one has to wonder if he might consider force reductions as part of a much desired nuclear deal in 2019.

SPACE FORCE: The Pentagon will reportedly recommend that the president ask Congress to a approve his “Space Force” as separate service but under the Department of the Air Force. ABC News, quoting “a U.S. official with knowledge of a draft legislative proposal,” said the plan calls for the creation of the new service within the Air Force, in the same way the Marine Corps is part of the Department of the Navy.

The Space Force would be led by a chief of staff who would also serve on the Joint Chiefs of Staff along with representatives from the Army, Navy, Air Force, Marine Corps and the National Guard, the ABC report said.

The proposal’s future will turn on the months of debate after Congress receives the administration’s request in February. For now, Space Force has shaky support on House Armed Services where the original bipartisan duo who backed the overhaul, Reps. Mike Rogers, R-Ala., and Jim Cooper, D-Tenn., are likely to retain control of a key subcommittee but where Smith remains skeptical. There has also been plenty of skepticism on the Senate Armed Services Committee. But Chairman Inhofe, a close ally of Trump, has said he is warming to the idea.

IRAN: The President Trump’s withdrawal from the Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action or JCPOA, along with the pressure the administration he has put on U.S. allies to stop doing business with Iran, has crippled the Iranian economy. Trump’s abandonment the agreement, negotiated by six world power during the Obama administration, was one of the first instances in which Trump ignored Mattis’s advice. Mattis believed the agreement was flawed but better than no agreement.

“We have begun a pressure campaign that has made clear to the Iranian people it’s not acceptable to commit assassination efforts in Europe, it’s not acceptable to continue to threaten Israel, Pompeo told NPR yesterday. “Those are things that the previous administration had taken a very different approach, and we have put real pressure on Iran to change its behavior, and we’re working diligently to make sure that that happens in 2019.”

TURKEY: The planned U.S. withdrawal from Syria is giving Turkish President Recep Tayyip Erdogan the opening he needs to move against the Kurdish factions in northern Syria that he considers terrorists. Trump reported told Erdogan in a phone call a week ago, that the U.S. would withdraw its troops, clearing the way for a Turkish offensive against U.S.-baked Kurdish factions Erdogan has labeled terrorists.

“Here’s the long-term problem for the country,” said Sen. Angus King I-Maine on CNN. “We can’t do anything anywhere without allies. Everything we do depends upon coalitions and allies. Who’s going to be our ally when we abandon them in their moment of need, which is what we’re doing with the Kurds. Why would anybody come and say, ‘Yes, we’ll join up and fight and take bullets for you’? And then, all of a sudden, you know, in the middle of the night, you’re on your own, man.”

F-35: The Pentagon’s most expensive weapons program ever, at $400 billion dollars is also one of the most maligned. It is under constant fire from critics who say that after years of delay it’s still not ready for prime time. But next year it begins full combat testing, and yesterday Lockheed Martin reported that it delivered U.S. Marine Corps F-35B Marine Corps Air Station Beaufort, South Carolina, the 91st F-35 aircraft for the year. The delivery meets the joint government and industry delivery target for 2018, said Lockheed Martin in a news release and demonstrates the F-35 enterprise’s ability to ramp to full-rate production.

“To date, more than 355 F-35s have been delivered and are now operating from 16 bases worldwide. More than 730 pilots and over 6,700 maintainers are trained and the F-35 fleet has surpassed more than 175,000 cumulative flight hours. Ten nations are flying the F-35, seven countries have F-35s operating from a base on their home soil, four services have declared Initial Operating Capability, and two services have announced their F-35s have been used in combat operations,” the company said.

THE RUNDOWN

Washington Examiner: Mattis quits at Pentagon over policy clashes with Trump

Wall Street Journal: Putin Accuses U.S. Of Triggering An Arms Race

Reuters: U.S. Also Seen Ending Air War Against Islamic State In Syria: Officials

Aerospace Daily: Pentagon Stalls Two-Ship Aircraft Carrier Buy

Defense News: Trump’s new Space Force to reside under Department of the Air Force

Foreign Policy: A Win (Sort of) for Mattis on Syria

Fox News: Triple-amputee Air Force veteran on mission to raise $1B for US-Mexico border wall

Air Force Times: HIV-positive airmen sue Pentagon, Air Force to stop their discharges

Business Insider: These were the world’s 15 weakest militaries in 2018

Task and Purpose: Turks Release US Soldier Who Was Detained At Istanbul Airport

Defense One: To Succeed in Syria, Don’t Withdraw — Rebrand

Bloomberg: Chinese Nationals Accused in U.S. of Decade of Hacking