February 08, 2016

CNAS Press Note: What to Look for in the Defense Budget

Washington, February 8 – With the FY 2017 Defense Budget set to drop this week and Secretary Carter having outlined budget last week, ten experts from the Center for a New American Security (CNAS) have provided insight into the key items to look for in the budget. In this Press Note, they outline what the inclusion or exclusion of given provisions says about DOD’s priorities and strategy for the coming year.

Shawn Brimley, CNAS Executive Vice President and Director of Studies, on near- and long-term military capacity:
The FY17 budget request does a good job of balancing the need for near-term capacity over long-term capability. At $583 billion, it is consistent with the bipartisan budget agreement of 2015. It quadruples spending on U.S. defense posture in Europe. It requests 50 percent more funding for ongoing counter-ISIS operations. It begins to arrest the erosion of America's military-technical edge by rebuilding the stockpile of precision munitions; increasing R&D spending; investing in cutting-edge unmanned systems, both small and large; and making important down payments on modernizing each leg of the nuclear triad. There will be quibbling over details, but absent exogenous shifts in the security environment, the next president is unlikely to radically shift the strategic contours apparent in this or the FY18 budget he or she will inherit.

Jerry Hendrix, Director of the CNAS Defense Strategies and Assessments Program, on failure to address higher long-term spending:
The size of our nation’s debt now exceeds $19 trillion and represents the gravest long-term threat to our national security. The budget submitted does nothing to solve this issue, but rather exacerbates it with higher spending. It is true that our nation needs a larger military, but innovative investments in high-end capabilities in balance with procurement of lower-end systems in mass could allow us to grow the force without increasing spending. The Congress should reject the president’s budget and invest itself in setting clear priorities for our nation’s national security, to include bringing its fiscal house into balance.

Ben Fitzgerald, Director of the CNAS Technology and National Security Program, on technology and innovation:
This budget shows that the secretary is willing to match his rhetoric with funding when it comes to technology and innovation. Heavy investments in a number of technology driven line items including submarines, unmanned systems, and cyber will support the objectives of the so called third offset strategy, hinted at by the secretary’s use of terms like “major inflection point” and “long view” in his speech previewing the budget. Innovation acolytes should not expect to see new “innovation” budget items – such efforts require effective management of existing resources or budget increases too modest to be noticeable in a top line budget request. However, an increase in the Department’s R&D budget to $70.4 billion and the secretary’s pointed praise of Strategic Capabilities Office indicate that funding and attention is following the secretary’s public remarks on innovation.

Julianne Smith, Director of the CNAS Strategy and Statecraft Program, and Rachel Rizzo, Research Associate in the CNAS Strategy and Statecraft Program, on reassuring European allies:

The Pentagon’s FY17 budget more than quadruples the funding requested for the European Reassurance Initiative (ERI), from $789 million to $3.4 billion. The increase is a signal to Russia about American resolve and commitment, one that will hopefully spur additional contributions from our European allies. But ERI’s funding is within the Overseas Contingency Operations (OCO) account, which has been overused during the past decade as a way to skirt spending limits. The long-term security of our European allies is of vital interest to the United States and cannot be ensured through short-term solutions like the OCO fund. We should treat it as such by moving ERI to the base budget.

Paul Scharre, Senior Fellow in the CNAS Defense Strategies and Assessments Program, on resourcing new operating concepts:
The new defense budget does more than invest in key modernization priorities – it also puts resources behind new operating concepts. Two such concepts Secretary Carter unveiled include low-cost robotic swarms and arsenal planes. These new operating concepts are vital to affordable power projection in anti-access environments. Arsenal planes can bring greater numbers of weapons to the fight to augment 5th generation aircraft in a cost-effective manner. Swarms will allow the U.S. military to disperse combat power, complicating an enemy’s targeting and overwhelming the enemy through mass. These and other new operating concepts are key elements of a continuous process of innovation to adapt to a changing battlespace.
Loren DeJonge Schulman, CNAS Deputy Director of Studies and Leon E. Panetta Senior Fellow, on the unanswered questions in the budget:
The FY17 budget proposal is receiving positive reviews in terms of balancing difficult tradeoffs and preserving investment in the priorities Secretary Carter has laid out over the last year. Three major questions, however, reside outside the details of the 2017 budget itself. First, will the two-year budget deal orchestrated by former Speaker Boehner hold, given concerns about base-OCO balance, as well as an undercurrent on the Hill willing re-open the budget debate? Second, how rosy are DOD assumptions about the “out years,” particularly given the upcoming change in administrations? Finally, after months of intensive focus on the innovation agenda and Force of the Future, how will key audiences – in Silicon Valley and among reform advocates – judge how these initiatives are reflected in this proposal?
Kelley Sayler, Associate Fellow in the CNAS Defense Strategies and AssessmentsProgram, on military superiority and combatting A2/AD:
President Obama’s FY17 defense budget request represents an encouraging commitment to the preservation of U.S. military superiority in the face of rapidly proliferating anti-access/area denial (A2/AD) capabilities (e.g., advanced air defense systems, anti-ship cruise and ballistic missiles, and submarines). Indeed, a number of U.S. competitors – including China, Russia, and Iran – have recently accelerated investments in A2/AD capabilities that could significantly constrain U.S. forces in the event of a conflict. The FY17 budget request prioritizes investments in undersea assets capable of operating within this emerging threat environment, providing $8.1 billion for Virginia-class attack submarines in 2017 alone and $40 billion over the five-year defense plan. In addition, the request increases investments in research and development by approximately $1 billion in 2017, bringing total investments to around $71 billion and indicating strong support for emerging technologies – such as railguns and robotic swarms – that could play a vital role in countering adversary A2/AD capabilities in the future.
Katherine Kidder, CNAS Bacevich Fellow, on the health of the All-Volunteer Force:
The FY17 defense budget addresses the need for tradeoffs in the balance between force structure, modernization, and readiness, presenting an array of hard choices. Given this particular budget’s prioritization of technological investment, it raises broader questions about its impact on the most critical component of U.S. military superiority: the health of the All-Volunteer Force. In order to trade force structure for modernization – all while maintaining a ready military – the Department must continue critically rethinking the way it recruits, retains, employs, and manages military personnel, ensuring U.S. military superiority without breaking the force.

Michelle Shevin-Coetzee, Researcher with the CNAS Strategy and Statecraft Program, on the Overseas Contingency Operations debate:
The debate over Overseas Contingency Operations (OCO) funding has become increasingly intense, and this year is no exception. The current administration faces a difficult choice between risk and reward: either grow the Pentagon’s base budget, ignoring the higher caps on discretionary spending set by the 2011 Budget Control Act (BCA) as amended by the 2015 Bipartisan Budget Act, and shrink the OCO fund, or comply with the BCA limits and shift funding to OCO. Should the Pentagon request a larger OCO account, it secures much-needed funding, but risks developing a long-term dependence on supplemental sources. If, however, the Pentagon reduces its reliance on OCO, it maintains fiscal discipline, but endangers programs that could be cut from the base budget.
For CNAS reports on the Pentagon's long term strategy and budget outlet, click here.
These experts are available for interviews. To arrange an interview, please contact Neal Urwitz at [email protected] or 202-457-9409.


  • Ben FitzGerald

    Adjunct Senior Fellow, Defense Program

    Ben FitzGerald is a partner at Lupa, a private investment firm, and an adjunct senior fellow at the Center for a New American Security (CNAS). At Lupa he leads the firm’s inve...

  • Julianne Smith

    Former Adjunct Senior Fellow, Transatlantic Security Program

    Julianne (“Julie”) Smith is a contributing editor to Foreign Policy, where she coedits “Shadow Government.” She is also a senior advisor at WestExec Advisors, an adjunct senio...

  • Katherine Kidder

  • Kelley Sayler

    Former Fellow, Defense Strategies and Assessments Program

    Kelley Sayler is a former Fellow at the Center for a New American Security (CNAS), where she worked with the Defense Strategies and Assessments Program and the Future of Warfa...

  • Loren DeJonge Schulman

    Former Adjunct Senior Fellow

    Loren DeJonge Schulman is a Former Adjunct Senior Fellow at the Center for a New American Security (CNAS). Previously, she served as the Deputy Director of Studies and the Leo...

  • Michelle Shevin-Coetzee

  • Paul Scharre

    Executive Vice President and Director of Studies

    Paul Scharre is the Executive Vice President and Director of Studies at CNAS. He is the award-winning author of Four Battlegrounds: Power in the Age of Artificial Intelligence...

  • Rachel Rizzo

    Former Adjunct Fellow, Transatlantic Security Program

    Rachel Rizzo is an adjunct fellow at the Center for a New American Security (CNAS), working in the Transatlantic Security Program. Her research focuses on European security, N...

  • Shawn Brimley

    Former Executive Vice President and Director of Studies

    Shawn Brimley was the Executive Vice President and Director of Studies at the Center for a New American Security (CNAS), where he managed the center’s research agenda and staf...

  • Jerry Hendrix

    Former Senior Fellow and Director, Defense Program

    Jerry Hendrix was the Senior Fellow and the Director of the Defense Program at the Center for a New American Security. A retired Captain in the United States Navy, his staff ...