House and Senate lawmakers on Thursday kicked off conference negotiations over the fiscal 2016 defense policy bill during a closed-door ceremony.

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The conference chairman for talks over the National Defense Authorization Act (NDAA) is selected during the annual “pass the gavel” ceremony.

Membersof the House and Senate Armed Services panels also chime in about their priorities for the massive $612 billion legislation.

The chairmanship alternates between the two chambers each year. This year, Senate Armed Services Chairman John McCain John Sidney McCainMomentum growing among Republicans for Supreme Court vote before Election Day McConnell urges GOP senators to 'keep your powder dry' on Supreme Court vacancy McSally says current Senate should vote on Trump nominee MORE (R-Ariz.) bestowed the gavel on his House counterpart, Rep. Mac Thornberry (R-Texas).

Thornberry told reporters before the ceremony that both sides would work hard to resolve differences in each committee’s version of the defense policy bill, which authorizes Pentagon funding and activities.

“We’re going to work hard to resolve issues and try to get them done mid-July, or at least in time before the August break,” he said.

A major difference between the two bills centers on restrictions on closing the Guantanamo Bay detention facility. The House bill would extend and add restrictions, while the Senate bill gives the administration a path to closing the facility.

“We’ll look at what the Senate has in their bill,” said Thornberry.

McCain said he didn’t “know of any real markup differences” on major areas.

Another hurdle the bill faces is a veto threat from the White House. The president has threatened to veto the bill since it adheres to federal spending caps, but uses the Overseas Contingency Operations (OCO) account, commonly known as the war fund, to boost defense funding.

Thornberry called the veto threat “the same song, however many verse that we’ve had before,” citing previous veto threats by the administration. “We’ve had a similar thing pretty much every year.”

He said spending issues would not be resolved in the bill since it’s an authorization bill, not an appropriations bill, and that committee members could not control “things beyond our purview,” adding that they would work to get the bill “done and done on time.”

The bill has passed for 53 years in a row.

“For me, the overall issue, no matter what, is OCO funds,” Rep. Ruben Gallego (D-Ariz.) told The Hill after the ceremony. “I agree with the president that this is not the way to fund the NDAA, how you fund the defense budget.”

However, he predicted there wouldn't be a fight over the plus-up during conference talks.

“I think there will be a fight when the president comes down with either a veto or a veto threat. That's when the real fight will occur,” Gallego added.

Conferees for the bill have yet to be named. The process for doing so hit a road bump on Wednesday when members of the Senate Armed Services panel received a “blue slip” saying the proposed NDAA provisions on military retirement are actually in the purview of the Senate Finance Committee.

“We have to resolve this blue slip issue and I hope we can. If blue slip doesn’t get removed, there’s still are ways of doing it, but it gets complicated,” McCain told reporters before the ceremony.

In addition to McCain and Thornberry, the roughly 15-minute long meeting was attended by a host of Republicans, including Reps. Steve Russell (Okla.), Trent Franks Harold (Trent) Trent FranksArizona New Members 2019 Cook shifts 8 House races toward Dems Freedom Caucus members see openings in leadership MORE (Ariz.), Duncan Hunter (Calif.), Randy Forbes James (Randy) Randy ForbesBottom line Selection of Sarah Makin-Acciani shows the commitment to religious liberty Too much ‘can do,’ not enough candor MORE (Va.), Mike Coffman (Colo.), Chris Gibson (N.Y.), Frank LoBiondo (N.J.), Mike Conaway (Texas), Joe Wilson Addison (Joe) Graves WilsonDemocrats raise alarm about new US human rights priorities Democrat Teresa Leger Fernandez defeats Valerie Plame in New Mexico primary Trump campaign launches new fundraising program with House Republicans MORE (S.C.), John Kline (Minn.), Rob Wittman Robert (Rob) Joseph WittmanTrade groups make lobbying push to be included in small business loan program Overnight Defense: 32 dead in ISIS-claimed attack in Kabul | Trump says Taliban could 'possibly' overrun Afghan government when US leaves | House poised for Iran war powers vote next week Republicans eye top spot on Natural Resources panel MORE (Va.), Walorksi (Ind.), Brad Wenstrup (Ohio), Elise Stefanik (N.Y.), Paul Cook (Calif.), Richard Nugent (Fla.) and Thomas MacArthur (N.J.).

Besides Gallego, Democrats who attended the non-mandatory ceremony included Sen. Jack Reed John (Jack) Francis ReedWhen 'Buy American' and common sense collide Hillicon Valley: Russia 'amplifying' concerns around mail-in voting to undermine election | Facebook and Twitter take steps to limit Trump remarks on voting | Facebook to block political ads ahead of election Top Democrats press Trump to sanction Russian individuals over 2020 election interference efforts MORE (R.I.), the ranking member on the Senate Armed Services Committee, and Reps. Tim Walz (Minn.), Joe Courtney (Conn.), Jim Cooper (Tenn.) and Susan Davis (Calif.).

— This story was updated at 5:25 p.m.