BY ELLEN MITCHELL AND REBECCA KHEEL – 10/23/17 Thehill.com

Congress will kick off the coming week with formal negotiations on the budget caps-busting annual defense spending bill, with several looming points of contention that must be worked out by December.

The House and Senate are moving to combine their versions of the fiscal 2018 National Defense Authorization Act (NDAA) after the Senate last week officially pushed forward its bill to go to conference.

The House earlier this month agreed by unanimous consent to go to conference, and passed its version of the NDAA in July.

Lawmakers must now reconcile key differences in the two bills, including the total number of new aircraft and ships to buy, the size of the Army, and whether to create a new Space Corps military service within the Air Force.

The House version authorizes a new Space Corps, which would be focused on addressing threats from such countries as Russia and China to U.S. assets in space, such as satellites.

The Senate’s bill, meanwhile, blocks the creation of a space service. Instead, Senate lawmakers only want a new position created that reports directly to the defense secretary and heads all cyber and space warfare policy.

Several high-ranking officials have come out against the plan for a Space Corps, including Air Force Secretary Heather Wilson and Air Force Chief of Staff Gen. David Goldfein and even the White House.

Defense Secretary James Mattis, who spoke against the idea in the past, last week reiterated his position in a letter to chairmen and ranking Democrats on the House and Senate Armed Services committees.

House Armed Services Committee Chairman Mac Thornberry (R-Texas) has told reporters that negotiators hope to resolve all major differences by the end of October, except for the biggest point of contention — the topline dollar amount.

The House NDAA would authorize $621.5 billion in the base defense budget and $75 billion for a war fund known as the Overseas Contingency Operations (OCO) account.

The Senate version, meanwhile, would authorize $640 billion for the base defense budget and $60 billion for the OCO.

Both versions are widely above President Trump’s $603 billion base defense spending request and the Budget Control Act caps for fiscal 2018, which are set at $549 billion.

Senate Armed Services Committee Chairman John McCain (R-Ariz.) this week expressed some optimism over being able to lift the budget caps, but should lawmakers be unable to work out a compromise, it could mean another continuing resolution.

That’s a worrisome prospect for military leaders, who for years have bemoaned continuing resolutions and budget uncertainty as the biggest threat to military readiness