President Barack Obama is on a collision course with Congress over a multibillion-dollar contingency fund almost hidden in the 2016 defense budget that was approved late Wednesday night. If the president stays true to his word and vetoes the military budget – something that has happened only five times since 1961 -- the armed forces could be forced to operate on 2015 funding levels next year, leaving a number of key issues in limbo, including a military pay raise and the ability to fund foreign forces in Syria, Ukraine, Iraq and Afghanistan.

"Most Americans would agree that the world is not getting safer – we’re watching headlines about Syria, Russia, Ukraine, the Middle East, Iran and ISIS, and if the president vetoes this defense bill, he will be preventing progress toward dealing with those issues at home and across the world,” said Timothy T. Johnson, a senior policy analyst for defense budgeting policy at the Heritage Foundation, the conservative Washington think tank.

What's The Problem?

While Obama and Congress both want to pass a defense budget worth exactly $613 billion, the president’s issue is how the money will be delivered. Congress’ version of the bill would sidestep mandatory budget caps by including $38 billion for what’s known as the Overseas Contingency Operations fund, a big pot of money that’s normally reserved for fighting overseas wars and is unaffected by forced sequestration, meaning it can be increased by Congress at will. The White House contends that using this war fund undermines the entire point of sequestration and is unfair on domestic budgets that have no extra pot of cash to fund extras, reported the Military Times. 

The 2016 base budget provides the Pentagon with $534.3 billion, up $38.2 billion from the previous fiscal year. The Overseas Contingency Operations budget is $50.9 billion, a decrease of $13.3 billion from last year. Thus, the Pentagon is expected to have about $25 billion more to spend than it did in fiscal 2015, according to the Department of Defense.

Obama has a key ally supporting a veto in Secretary of Defense Ashton Carter, who characterized the war fund as a “gimmick” that would not help military spending because defense programs usually rely on multi-year authorizations and long-term planning. Anything funded from the overseas contingency fund is only authorized for one year at a time; as such, it would be tough to plan ahead. The White House would prefer to drop all federal budget caps and instead increase defense spending without the war fund, according to a White House report.

In the event of a veto by Obama, there are three main scenarios that could unfold. Most items inside the bill are funded by what’s known as a continuing resolution, which means that they can continue regardless of the veto. The only catch is they'll have to operate on 2015 budget levels. Any item in the defense bill that requires annual authorization will be allowed to continue, but only using funds remaining from the 2015 budget, which could, in some cases, be nothing. Otherwise, any new items inside the bill could receive no funding at all and wouldn’t begin until the White House and Congress resolve their differences.

To override an Obama veto, Republicans would need two-thirds majorities in both the House and the Senate. Earlier this month, the House approved the defense bill with a 270-156 vote, 20 short of the 290 needed to override Obama's veto. The Senate passed the measure by a vote of 70-27 Wednesday evening. But on Tuesday, Senate Minority Leader Harry Reid, D-Nev., said Democrats in that chamber would help sustain a White House veto if Obama follows through on his threat. 

What's Affected? 

Chief among what’s at stake with a possible Obama veto is the 1.3 percent annual pay raise due to troops, one defense expert said. 

“The biggest issue here is the military pay raise which will be stalled by a veto. The president does have the authority to raise pay outside of the defense budget by using other legislation, but that could also prove to be difficult," said Andrew Hunter, director of the Defense-Industrial Initiatives Group at the Center for Strategic and International Studies in Washington. "A lot of authorities that are funded on an annual basis will expire if he vetoes. For example, authorities that do counter-narcotics programs and a lot of authorities to do with the war effort in Iraq, Afghanistan, Syria and Ukraine will need to be renewed, otherwise they'll won't be able to operate.”

Alongside issues for troops, construction of the CVN-80 aircraft carrier would be put on hold. The $1.5 trillion F-35 Joint Strike Fighter program, along with plans to replace the Humvee in favor of the Joint Light Tactical Vehicle, will also be delayed, according to the Department of Defense

On top of that, America’s current involvement in overseas conflicts, such as the funding and continued training of various local forces in Iraq, Syria, Afghanistan and Ukraine will be hampered. For example, a new $715 million fund to help Iraqis fight the Islamic State group will not be able to begin. Furthermore, a $300 million plan to provide defensive weapons to Ukraine and a $600 million provision for Syrian rebels, whose training program was significantly scaled back by the Pentagon Friday, will all be stalled.  

It's not yet clear when, if at all, Obama will veto the bill. He has 10 days to make a final decision on whether to veto it or sign it, but his previous comments about the contingency fund heavily suggest that it will be sent back to Congress without his signature.

Until then, the Department of Defense will remain uncertain about funding U.S. defense in 2016, but time is of the essence.

"It gets more painful as time goes on," a Pentagon representative said during an interview with Vice. "It would have an extremely negative effect on what we are trying to do in terms of modernization."