The text of the latest version of the NDAA was not immediately available, but Senate aides said it would include elements of a bill to significantly enhance security assistance for Taiwan that was passed by the Senate Foreign Relations Committee in September.

The NDAA also includes new funding for the Ukraine Security Assistance Initiative, authorizations for new weapons systems and a host of other provisions.

"We have to ensure that the United States can out-compete, deter and prevail against near-peer rivals. This NDAA confronts China and Russia by fully investing in the Pacific Deterrent Initiative, the European Deterrent Initiative and Ukraine Security Assistance Initiative," Senator Jack Reed, chairman of the Senate Armed Services Committee, said in a Senate speech.

The Taiwan Policy Act passed by the foreign relations panel included billions of dollars in military financing for Taiwan and programs to fast-track weapons sales and increase military coordination.

Because it is one of the only major pieces of legislation Congress passes every year, the NDAA closely watched by a broad swath of industry and other interests because it determines everything from purchases of ships and aircraft to pay increases for the troops and how to address geopolitical threats.

The Senate is out of session until after the Nov. 8 mid-term elections, but Reed came back to Washington to formally start debate to ease the way for the bill to pass later this year. Reed said he was sure it would pass.

"There's always friction but we'll get it done," he told reporters.

The NDAA has passed every year since 1961.

The fiscal 2023 NDAA must pass the Senate and House of Representatives later this year before it can be sent to the White House for President Joe Biden to sign into law.

(Reporting by Patricia Zengerle; additional reporting by Richard Cowan; Editing by Bernadette Baum)

By Patricia Zengerle