SENATE BILL BOOSTS F-35 BUYS: After a brief 15-minute subcommittee hearing Tuesday, Sens. Richard Shelby and Dick Durbin sent their $675 billion annual Pentagon funding bill to the full Senate Appropriations Committee. A final markup of the bill is set for Thursday. The bill details unveiled at the hearing point toward a big increase in F-35 joint strike fighters for 2019. The committee added $1.2 billion to pay for 12 more F-35s than the 77 requested by the Pentagon. That includes eight of the carrier variants for the Navy and four of the jump-jet versions for the Marine Corps.

HAPPENING TODAY, MATTIS IN BEIJING: This the big day for Defense Secretary Jim Mattis in China as he meets with senior leaders and searches for common ground while trying to avoid directly confronting the Chinese over the many contentious issues dividing the two strategic competitors.

Mattis has said he’s going to be mostly in listening mode while he waits to see if North Korea makes good on its promise to begin dismantling its nuclear program. The U.S. needs China to keep up the economic pressure on Kim Jong Un’s regime. “Our hopes are riding with the diplomats, so we’re going to see progress in the days and weeks ahead,” Mattis said. There is no word if Mattis will be meeting President Xi Jinping.

WHAT’S GOING ON AT YONGBYON? The North Korea monitoring project 38 North says commercial satellite imagery from last Thursday shows North Korea is making infrastructure improvements to its Yongbyon Nuclear Scientific Research Center. “Modifications to the 5 MWe plutonium production reactor’s cooling system appear complete, but a less-than-normal cooling water discharge from the outfall pipe makes a determination of the reactor’s operational status difficult,” the group said.

But the analysis contains this important caveat. “Continued work at the Yongbyon facility should not be seen as having any relationship to North Korea’s pledge to denuclearize. The North’s nuclear cadre can be expected to proceed with business as usual until specific orders are issued from Pyongyang.”

CONGRESS GIVES DoD A TRADE WEAPON: House Armed Services Chairman Rep. Mac Thornberry says passage of the Foreign Investment Risk Review Modernization Act would give the Pentagon a better way to scrutinize trade deals that undermine national security. “It strengthens the Pentagon’s hand as the government decides what technology we need to protect the country and what technology is too sensitive to hand over to our adversaries,” Thornberry said in a statement.

Thornberry says the bill “closes loopholes and tightens the lax regulations” that have allowed  China to take advantage of American innovation. “For years, China has been using America’s open economy against us, leveraging our investments and stealing sensitive technology and information to overcome our military advantage,” Thornberry said. “That has to stop.”

BOLTON IN MOSCOW: National security adviser John Bolton is scheduled to meet Russian President Vladimir Putin and Foreign Minister Sergey Lavrov today to discuss a possible meeting between President Trump and Putin. In an interview on MSNBC last Friday, Secretary of State Mike Pompeo predicted that following Bolton’s high-level meetings in Moscow, “It’s likely that President Trump will be meeting with his counterpart in the not-too-distant future.”

Vienna has been mentioned as a possible location for a U.S.-Russia summit, and Lavrov has said Moscow “is ready for contacts.”

AEGIS FOR SPAIN: The State Department has approved the possible $860 million sale of five Aegis Weapons Systems to NATO ally Spain. The anti-missile systems will bolster Spanish frigates and help it maintain security in Europe, according to the Defense Security Cooperation Agency. Prime contractors are Lockheed Martin, Raytheon and General Dynamics.

SASC NOT TOTALLY ON BOARD WITH SPACE FORCE: Sen. Jim Inhofe, the senior Republican on the Senate Armed Services Committee, is a reliable ally of Trump on Capitol Hill, but he is opposed to the president’s plan for a new Space Force military service. “This is one of the rare cases where I kind of disagree with him and I am concerned about it. There’s a lot of disagreement,” Inhofe told the Washington Examiner. “We’re doing [space operations] very well. We have an old saying that ‘if it ain’t broke don’t fix it,’ and I think it’s operated pretty well with all the services taking care of their own concerns in those areas. We don’t need one more huge bureaucracy.”

Other Republicans on the Senate committee have been hesitant to back the proposal. “I’m listening but I’ve got questions,” said Sen. Roger Wicker, who chairs the seapower subcommittee. That could be a problem for Trump as he pushes the Pentagon to create a sixth branch of the military, since he will almost certainly need the Senate and House armed services committees to pass legislation for the Space Force. The two committees are set to hammer out space policy as part of a final National Defense Authorization Bill this summer. The House wants changes in the military’s structure that could lay a foundation for Space Force, but the Senate has proposed no such changes. “I think the indication, since it wasn’t in the bill, is that it’s not a top priority,” said Sen. Jack Reed, the Senate committee’s top Democrat.

UPPING OUR GAME IN THE ARCTIC: During his stop in Alaska en route to China, Mattis admitted the U.S. has been slow to adapt to the strategic competition in the Arctic where shrinking and thinning polar ice has opened new opportunities for shipping and resource exploration. “America has got to up its game in the Arctic. There’s no doubt about that,” Mattis said at a news conference with Alaska Sen. Dan Sullivan at Eielson Air Force Base.

Mattis said the Arctic is cited as an “area of concern” in the National Security Strategy, but as many critics in Congress have pointed out, the Arctic is barely mentioned, and there is no strategy for asserting more U.S. control over territorial waters. “I think one good news piece on that is that the Congress is starting to recognize this more strategically,” Sullivan said, noting that in the National Defense Authorization Act there’s a requirement to develop an Arctic strategy, which he said “the secretary signed off on.”

The U.S has only two working icebreakers compared to Russia’s 40, although the Senate’s 2018 NDAA authorized six new icebreakers, three heavy, three medium, but they are not yet funded. “We’re going to fight for it like crazy in the conference this year to keep [the provision] in,” Sullivan said.

PURELY LOGISTICAL: Mattis also confirmed that the Army’s Fort Bliss and Goodfellow Air Force base will be the sites of temporary migrant camps requested by the Department of Health and Human Services to accommodate children and families who cross the southern border illegally.

“We’ve provided logistical support. And we’re not going to get into the political aspect,” Mattis said. “Providing housing, shelter for those who need it, is a legitimate governmental function.  This one I recognize the political aspects of it, but for us it’s a logistics support effort.”

MISSILE SHIELD NOT GOING AWAY: While in Alaska, Mattis inspected the U.S. missile defenses at Fort Greely, which are being expanded with another field of 20 ground-based interceptors. Mattis called the interceptors in Alaska “the absolute center of the defense, of our country,” and said, “I’m absolutely confident the missile defense system will work.”

Asked if a peace deal with North Korea might lessen the need to build up the facilities at Greely, Mattis said no. “Even if one threat goes away, we have to stay alert to other things in the world that could constitute a threat.”

TURKEY ON TRACK FOR SANCTIONS: Turkey’s planned acquisition of a Russian anti-aircraft system could result in the U.S. imposing sanctions on the key NATO ally, a senior State Department official told Congress yesterday.

“We’ve been clear on multiple occasions with the highest levels of Turkish government, there will be consequences,” once Turkey receives the Russian S-400 air defense system, Assistant Secretary Wess Mitchell told a Senate Foreign Relations subcommittee. “When we determine that a transaction has been made, we will impose sanctions in accordance with the CAATSA Section 231.”

CAATSA is the Countering America’s Adversaries Through Sanctions Act from last year, which requires the president to impose sanctions on anyone who “engages in a significant transaction” with the defense or intelligence sectors of Russia.

“This has the potential to spike the punch,” Mitchell testified. “We can’t be any clearer than saying that both privately and publicly, that a decision on S-400 will qualitatively change the U.S.-Turkish relationship in a way that would be very difficult to repair.”

Mitchell also warned that Turkey’s further participation in the F-35 program, of which it is not just a customer but a partner, is also at risk. “Acquisition of S-400 will inevitably affect the prospects for Turkish military-industrial cooperation with the United States, including F-35.” He conceded that Turkey remains a “crucial ally and partner,” and has been “absolutely essential” in defeating the Islamic State in Iraq and Syria.

HARRIS NOM MOVES AHEAD: The Senate Foreign Relations Committee has approved the nomination of retired Adm. Harry Harris to be the next U.S. ambassador to South Korea, paving the way for his confirmation.

The former U.S. Pacific Command chief won unanimous approval from the committee yesterday ahead of a full Senate vote expected for early next month.

MORE MERGERS: As the Trump administration ramps up military spending, mergers among aerospace and defense contractors may jump as much as 5 percent, according to a survey from investment bank KippsDeSanto & Co.

More than 150 senior executives, nearly half of whom represented publicly-traded companies, responded to the survey, with three-quarters predicting the number of government services deals would increase this year, two-thirds of them forecasting gains in defense and a little more than half projecting gains in aerospace.

CBO WARNING: Rep. Adam Smith, senior Democrat on the House Armed Services Committee, says the latest report by the nonpartisan Congressional Budget Office contains ominous implications for the future of defense spending. The CBO report projects the U.S. budget deficit will reach record levels by the mid-2030s and says interest payments could double as a percentage of GDP.

“I am seriously concerned by the CBO’s finding that the national debt will break record levels and become ‘the highest in the nation’s history by far’ in the early 2030s, due to the tax cuts and spending increases Congress has passed over the previous two years,” Smith said in a statement. “If we are worried about having an economy and a defense establishment that can compete with China and other global powers in the 2020s and 2030s, then enacting a massive, unpaid-for tax cut that will put us in a terrible position was the absolute worst thing we could do.”

THE RUNDOWN

Washington Examiner: State Department: China, Russia want to ‘break the West’

Washington Examiner: Reality Winner pleads guilty to leaking classified information

Defense News: Underwater: Will rising debt spark Pentagon cutbacks?

Army Times: Should the US permanently station troops in Europe? New US Army Europe chief weighs in

Bloomberg: U.S. Upgrading Korea Missile Defense Even as ‘War Games’ Halted

Breaking Defense: AI Can Help Fix DoD Spending And Audits

Bloomberg: Lawmakers Back Lockheed’s F-35 Jet for Production Boost

Foreign Policy: Experts Question Wisdom of Canceling U.S. Exercises with South Korea, As Mattis Makes It Official

Defense One: The Mystery at the Heart of North Korea Talks

Marine Corps Times: As the Corps moves to the ACV, Taiwan wants more AAVs

Fox News: President Trump presents Medal of Honor to widow of World War II veteran Garlin Murl Conner

Defense Tech: MQ-9B SkyGuardian to Highlight Endurance With Trans-Atlantic Flight

New York Times: In a Chemical Weapons Debate, Russia Tries to Change the Subject

Task and Purpose: Second Female Marine Finishes Infantry Officer Course

AP: US Aircraft Carrier Patrols Disputed Sea Amid China Buildup

Washington Post: Syria Escalation Displaces Thousands, Risks Wider Strife