As the U.S. Army attempts one of the biggest reorganizations in recent decades, it will have to do it within the confines of a minimal budget increase in fiscal 2026 amid unrelenting inflation and as demands for the force grow at home and abroad.

The Army is requesting $192 billion for its fiscal 2026 base budget and is also banking on an additional $5.4 billion in funding included in a separate $113 billion party-line spending bill now under debate in Congress, according to a service-issued budget overview document released Thursday.

Factoring both the base request and the one-time bill, the Army is planning on working with a budget of $197.4 billion, which marks a nearly 7% increase over last year’s enacted amount of $184.6 billion.

The Army announced at the start of last month that it would undertake a massive transformation to include consolidating major commands, making drastic force structure changes and canceling a wide variety of programs where billions have already been spent to make way for priority efforts perceived to increase overall lethality.

To jump start the Army Transformation Initiative, the service has to make major muscle movements in its fiscal 2026 budget, and an Army official Thursday emphasized an effort to “divest” old or ineffective equipment in order to “invest” in enhancing combat formations.

The Army is requesting to divest $4.9 billion in old equipment and requirements. These include divesting Paladin Integrated Management howitzers, legacy anti-tank missiles, Gray Eagle Unmanned Aircraft Systems and Humvees, according to the budget overview document.

The service has listed the M10 Booker, the Joint Light Tactical Vehicle, the Improved Turbine Engine Program and Future Tactical UAS as programs that will be reduced in the budget.

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The Army is also budgeting to restructure units and headquarters, including consolidating Army Futures Command and Training and Doctrine Command and merging Army Forces Command, U.S. Army North and U.S. Army South into what it is calling the Western Hemisphere Command.

On the flip side, the service plans to invest in closing the gap in being able to effectively counter enemy drones. As part of that, the Army is requesting $729 million to accelerate Maneuver Short Range Air Defense vehicle procurement and is also investing in deeper integration of counter-UAS capabilities in maneuver platoons.

For another layer of air defense capability, the Army is requesting a funding boost for the Lower-Tier Air and Missile Defense Sensor that will replace the Patriot air and missile defense radar, asking for $1.3 billion to fund accelerated procurement.

The Army plans to buy loitering munitions to outfit five Brigade Combat Teams and is accelerating the Future Long-Range Assault Aircraft program with a $1.2 billion boost to fast-track its fielding.

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The Army wants $723.5 million to build at least four M1E3 Abrams tank variants, which is still in the early phases of design. The service has recently committed to drastically accelerating the timeline to developing and fielding the new version of the tank.

To inject new unmanned aircraft capability into formations rapidly, the Army plans to buy 10 BCTs of commercial, off-the-shelf drones using a new agile funding mechanism it put into place in the fiscal 2026 request for the first time.

Overall, the Army is proposing $1.7 billion in agile funding across three areas: UAS, C-UAS and Electronic Warfare. The service is asking for $79 million in flexible funding to buy ready-to-field EW capability, $693 million for counter-UAS systems and $959 million for a variety of drones.

The request would also fund long-range UAS for one Multidomain Task Force and two BCTs.

The Army plans to invest $616 million to convert five Infantry Brigade Combat Teams to Mobile BCTs, procure Infantry Squad Vehicles for seven MBCTs, buy loitering munitions and off-the-shelf drones for those units and grow to new High Mobility Artillery Rocket System Battalions and three Batteries.

Another $2.9 billion would be devoted to pursuing one of the Army’s top modernization priorities: designing and rapidly fielding a Next-Generation Command and Control capability to replace a multitude of stove-piped systems tied crudely into a cumbersome network.

Building on what the Army has already done to grow and improve its organic industrial base, the service is requesting $1.1 billion to modernize seven facilities to help increase magazine depth.

The request includes $476 million for improvements at Lake City Army Ammunition Plant in Missouri and $385 million for munition production and sustainment at Holston Army Ammunition plant in Tennessee.

Jen Judson is an award-winning journalist covering land warfare for Defense News. She has also worked for Politico and Inside Defense. She holds a Master of Science degree in journalism from Boston University and a Bachelor of Arts degree from Kenyon College.