After months of negotiations, Congress is on the verge of passing legislation that would reauthorize a key U.S. global infrastructure finance agency while turbocharging its lending authorities, including in certain circumstances to wealthy countries.

The Senate is expected this week to clear the $900 billion annual defense authorization measure after the House passed the legislation last week. The sprawling bill contains a section that would modernize the U.S. Development Finance Corporation (DFC) and extend its authorization through 2031 while increasing the agency’s maximum lending cap from the current ceiling of $60 billion to $205 billion.

The final product represents multiple compromises struck between Republicans representing White House wishes to lift congressionally imposed restrictions included in the first iteration of the DFC and a bipartisan coalition of lawmakers, particularly in the Senate, who wanted the development agency to maintain its lending focus on less-developed countries.

“At the end of the day, neither side got everything they wanted for this, but it worked out and that’s the way Congress is supposed to work,” said House Rep. Ami Bera, the top Democratic lawmaker on the House Foreign Affairs subcommittee that oversees the DFC. “It was a good negotiation.”

The legislation for the first time will permit the DFC to invest in wealthy countries, but with limitations. Those restrictions include financing no more than 25 percent of the total cost of a project in a high-income country. And lending to high-income countries is not allowed to ever comprise more than 10 percent of the DFC’s total loan portfolio. It would also limit loans for infrastructure projects in wealthy countries to the following areas: energy; critical minerals and rare earths; and information and communications technology such as undersea cables.

“We’ve always wanted to put [the DFC] on steroids, so to speak, and now I think we’ve accomplished that,” said Republican Rep. Michael McCaul, a former chair of the House Foreign Affairs Committee who led a previous effort to reauthorize the DFC during the Biden administration. “The equity has been raised to a very high level now so the DFC can do its important work. We’re pulling back in other areas of soft diplomatic power, so the DFC is going to be that much more important.”

The foreign loan agency was created with broad bipartisan support during the first Trump administration with two principal objectives: fostering sustainable economic growth in low-income and middle-income countries and offering an alternative to the soft power Beijing was acquiring through its Belt and Road Initiative.

The fiscal 2026 National Defense Authorization Act (NDAA) also includes multiple State Department-related provisions, similar to prior years.

As the State Department for decades has lacked the political capital on Capitol Hill to grant it limited floor time for its own annual authorization bill, it has become customary for diplomatic and other soft power-related provisions to catch a ride on the must-pass yearly defense policy bill.

This year’s bill includes the noncontroversial aspects of Republican House Foreign Affairs Committee Chairman Brian Mast’s effort to reauthorize the State Department. Those include provisions dealing with the department’s management structure, consular affairs, human resources, and political affairs sections.

Mast, who is in his first year as chairman, set himself the ambitious task at the beginning of the year of accomplishing what hadn’t been done since 2002: passing a full State Department reauthorization bill.

Ultimately, deep disagreements with House Democrats—particularly around Mast’s push to codify the controversial changes unilaterally introduced by President Donald Trump to the U.S. foreign-policy apparatus, such as the shutdown of the U.S. Agency for International Development—meant the majority of department authorization bills approved by the House Foreign Affairs Committee this fall lacked bipartisan support and were not given a floor vote in the House.

Without significant Democratic support for the State Department reauthorization effort in the House, Mast’s project was viewed as doomed in the Senate, where almost all legislation requires significant bipartisan support to overcome the filibuster.

Mast’s office pointed to the bill’s codification for the first time of the department’s regional assistant secretaries as an important achievement.

The chairman indicated this year’s reauthorization attempt was a learning experience that he would build on next year.

“Do I wish that we could get the Senate to do State Auth like they do NDAA? Yes. We’re not there yet,” said Mast, adding the whole process did end up showing the Senate that there was a political willingness in the House to return to the 20th-century practice of annual State Department authorizations.