The recently vetoed $612 billion U.S. defense budget, which Congress and the White House had argued about all year, could well be back on track after U.S. President Barack Obama and lawmakers came to a tentative agreement Monday night over the fate of the overall government budget. The 2016 National Defense Authorization Act had been held up since last week after Obama vetoed the bill presented to him by Congress that included $38 billion in extra funding from an unregulated and controversial war fund that took the defense budget far beyond cross-government budget caps agreed upon in 2011.

The agreement over the government budget would end five years of bitter clashes between Obama and Republican congressional leaders, allowing a modest budget increase over the next two years, according to a New York Times report Monday. Importantly for defense leaders at the Pentagon and in Congress, it allows the military budget to increase organically without the need for the war fund, also known as the Overseas Operations Contingency fund. That means that new defense projects and military pension and pay reform would not be held up as part of a budgetary fight.

While the settlement means that the overall defense bill will have to be reduced by $5 billion, it’s significant progress from last week when the chance of striking a deal looked unlikely.

Senate and House Armed Services Committee leaders Sen. John McCain, R-Ariz., and Rep. Mac Thornberry, R-Texas, said they expected the defense bill to be reintroduced in the next few days, after the broader budget agreement is finalized in the House and the Senate.

"I think everybody is going to agree," McCain told Defense News on Tuesday. "We'll have to redo it, take $5 billion out, but hopefully we'll get it done. I don't think it will take much time."

It’s not yet clear where the $5 billion of cuts would come from, but McCain said he was confident that a solution would be found quickly.