To offset those moves, the bill rejects the Pentagon's plea for another round of military base closures to shutter unnecessary facilities and cuts some $1.4 billion for training, repairs and other operation and maintenance.
The committee plans to consider McKeon's blueprint, known as the chairman's mark, and vote on it Wednesday.
A committee statement faulted President Barack Obama for the cuts even though some congressional Republicans have backed the reductions as part of a bipartisan agreement.
"In developing this proposal, Chairman McKeon, together with members from both parties, worked hard to find savings in less critical areas that do not pose the threat of irrevocable damage to the force or the potential to harm recruiting or retention," the committee said. "Still, at current resource levels, tough choices must be made."
The panel's top Democrat, Rep. Adam Smith of Washington state, warned that the rejection of some of the Pentagon proposals would degrade the military's readiness.
"While it is not our role to accept the defense budget entirely as it is presented, it is also not our role to make significant changes that cause the Department of Defense harm based on parochial interest," Smith said in a statement.
The bill would reject Pentagon plans to slightly increase the out-of-pocket expenses for service members for housing and ask military families and retirees to pay more for health care. The Pentagon also wanted to reduce the $1.4 billion in direct subsidies to military commissaries where military families can buy name-brand groceries and other items at reduced cost.
The bill would provide $100 million of the $200 million requested for the commissaries in the budget for the fiscal year that begins Oct. 1.
Overall, the legislation would provide $495.8 billion for the core defense budget, $17.9 billion for energy programs within Pentagon spending and $79.4 billion for the war in Afghanistan and other overseas operations.
Responding to Russia's annexation of Crimea and its continued aggression, the bill would prohibit funds for bilateral military-to-military contact or cooperation between the United States and Russia "until the secretary of defense, in consultation with the secretary of state, certifies to the appropriate congressional committees that Russia is respecting the sovereignty of Ukrainian territory, no longer acting inconsistently with the Intermediate-range Nuclear Forces Treaty, and in compliance with the Treaty on Conventional Armed Forces in Europe."