March 22, 2018

2019 President’s Budget Request for Defense

Conclusions and Next Steps

By Susanna V. Blume and Lauren Fish

The 2019 President’s Budget request for the Department of Defense grew by $40 billion over the total requested in 2018.1 We have spent the past four weeks assessing this request, figuring out what grew (endstrength and procurement), what was cut (not much), and what stayed about the same (training and maintenance). Having now been through every line item, we can draw a few conclusions. Forty billion dollars is an enormous sum. However, once we account for inflation and cost growth above inflation in personnel and maintenance accounts, the increase is likely not enough to execute the administration’s ambitious new National Defense Strategy, though in fairness, it is rare that an administration can honestly claim that its strategy is fully resourced. Further, the administration has not spent these funds to greatest effect. 2019 was the best chance for the Trump administration to reshape the future joint force. Instead of doing so by directing most of this new investment toward the strategy’s priority of strategic competition with China and Russia, the department’s request spreads it around like peanut butter, investing just a bit more money across a great many existing programs and activities. Any budgeteer will tell you that it is much easier to make new investments when there is new money to back them (i.e., money not already claimed by a program), rather than having to take money from existing programs (which have advocates prepared to fiercely defend those funds in the budget process). Funding levels for 2020–2023 released along with the 2019 budget request indicate that there is no new influx of cash coming for defense. Consequently, the administration has missed its best chance to reshape the joint force by deciding instead to more-or-less sustain the status quo. 

The Strategy and the Budget 

Budgets should not announce strategy, but it would be foolish not to look at them as evidence of an administration’s priorities. Budgets can also reveal what vague or overbroad strategies do not: what the administration plans to deemphasize, or where it has decided to accept risk. Though the unclassified summary of National Defense Strategy, released just a month prior to the President’s Budget request, does identify clear priorities, notably strategic competition with China and Russia, it does not indicate any areas that DoD intends to deemphasize or provide guidance on where or how to accept risk. We hope that the full classified strategy provides this guidance to the department. But if it does not, the strategy attempts to be everything to everyone, an unexecutable ambition. 

The department’s budget request has the same lack of focus. In this sense, the two are aligned, which is the good news. The bad news is that without guidance about what to stop doing or do less of, DoD is saddled with more mission than it can afford to sustain. The department has spent the past several years taking a series of peanut butter spread cuts (i.e., cuts that skim a bit off the top of most organizations and programs, rather than cutting entire programs or activities). At least these cuts were accompanied by attempts to reduce DoD’s obligations (e.g., the 2012 Defense Strategic Guidance decision that the force “will no longer be sized to conduct large-scale, prolonged stability operations.”).2 What we now see is the opposite – a series of peanut butter spread adds, which is a perplexing approach given that the strategy’s expansion is focused on strategic competition with China and Russia. We are left to conclude that the budget that appears insufficient to meet the administration’s strategic ambition. For example: 

  • The Air Force grew at the lowest rate of the three military departments, a mere 6 percent over its 2018 request.3 This outcome is difficult to justify, given the Air Force’s responsibility for so many advanced capabilities required to retain a technological advantage over Chinese and Russian competitors – the priority announced in the strategy. In particular, investment in space remains insufficient to recapitalize existing systems and invest in the new capabilities required to cope with a war that extends into space. This level of investment is one of the reasons why Congress continues to be frustrated by the department’s lack of attention to space, despite DoD’s focus on space capability in public statements and strategy documents. Conversely, the Air Force has substantially increased investment in its Next Generation Air Dominance program, designed to ensure continued technological advantage in the air domain decades into the future. So while the Air Force may be the smallest it has ever been, it remains focused on retaining overmatch into the future.
  • The Army received the largest increase in this budget cycle, 10 percent more than its 2018 request.4 However, due to a series of failed modernization programs, the Army finds itself without next generation systems ready to enter production and in which to invest this influx of new funding. Instead, the service is pumping billions into keeping its legacy combat systems like Abrams tanks and Bradley Fighting Vehicles going. However, General Dan Allyn, former Vice Chief of Staff of the Army, has stated that these legacy systems leave the Army “outranged, outgunned, and outdated” and “at risk of losing overmatch in every domain.”5 Prior to releasing the budget request, the Army announced new modernization priorities and plans to revamp its requirements and acquisition processes to speed development of next generation systems. But for the now, the nation is left with a decidedly unmodern ground force, one that is thoroughly capable of continuing current missions in the Middle East and confronting regional adversaries such as North Korea, but that may find itself inadequately equipped to face an adversary with the most advanced battlefield capabilities.
  • The Navy and Marine Corps’ 2019 request came in at the middle at about 8 percent over its original 2018 request.6 Unfortunately its plan remains unbalanced, investing in new ships and aircraft (though not as many as many as one would expect given the Navy’s force structure goals) but without the training and maintenance capacity required to ensure a ready force. This decision is inconsistent with findings regarding the root causes of 2017’s ship collisions and aviation mishaps – factors like inadequate training and crew fatigue. Further, the request does not adequately emphasize investment in the kinds of capabilities that would make a difference in a fight with China or Russia. For example, the Navy chose to buy far more 4th generation F/A-18E/F Super Hornets than stealthy 5th generation F-35Cs. The request also does not substantially increase subsurface capability or capacity, a domain where the United States currently retains an advantage over the competition. In sum, this budget request will not solve the readiness problems currently plaguing the Navy (low ship and aircraft availability and inadequate training), nor will it adequately prepare the Navy to fight in a future conflict against a highly capable adversary.  

These deficiencies are emblematic of the Trump administration’s approach to distribution of new defense resources. Instead of aggressively going after known challenges in the space domain or significantly increasing investment in areas like undersea warfare, where the United States has a known asymmetric advantage over the advanced capabilities of its rivals, the 2019 budget request generally just does more of the same. An influx of $40 billion presented the department with an incredible opportunity to reexamine what it wants the future joint force to look like and then begin to make it so. Instead, the administration is doubling down on combat systems that are already out-of-date like the Abrams tank and the Super Hornet. There is logic in this approach. DoD has cash in hand today, but the future remains uncertain. Investing in developmental programs is wise only if there will be money in future years to bring those programs into production. Instead of taking this chance, the department has for the most part opted to buy tried and true systems that are available today. Without stability in defense budgets, it is difficult to blame the department for going this safer route. However, another influx of cash of this magnitude does not appear on the horizon. In this sense, the department missed the rare opportunity presented for the 2019 budget request to make significant changes to the future years defense program. 

Next Steps 

The President’s Budget is the first step in the process; it is the administration’s request to Congress for resources. It is now up to Congress to decide how much money it will give the department and how the department may spend that money. Unfortunately, Congress has a pretty terrible track record of providing timely and stable defense budgets. At time of writing, Congress has yet to pass a final defense appropriation for fiscal year 2018, which is already half over. It has, however, made a deal to adjust discretionary budget caps for both fiscal years 2018 and 2019, increasing funding for defense by tens of billions each year. By the time Congress actually does pass the 2018 appropriation, the department will only have five or six months left to spend all this new money, which will be difficult, if not impossible. DoD Comptroller David Norquist is seeking additional flexibility from Congress to allow the department to execute this additional funding responsibly. Even if Congress grants DoD these flexible authorities, it will be difficult to execute these new funds efficiently, ensuring that taxpayer dollars go to the department’s highest priorities. 

Once Congress has appropriated funds for 2018, the defense authorizing committees (Senate and House Armed Services) will begin work on the 2019 National Defense Authorization Act (NDAA). This bill provides DoD with authority spend money, but not the money itself; providing funds is the remit of appropriations bills, which are developed with real resource constraints. As a result, the funding levels contained in the NDAA are frequently higher than those in the final appropriation. The appropriations committees (Defense Subcommittees of House and Senate Appropriations) usually begin their work after the authorizing committees are close to finalizing the NDAA. They develop a defense appropriations bill that is usually passed as part of an omnibus federal funding package but is occasionally taken up on its own if Congress wishes to fund DoD before it is ready to provide funds for the rest of the federal government.

The two-year budget deal, covering both fiscal years 2018 and 2019, should, in theory, allow Congress to pass a 2019 budget on time, before the new fiscal year begins on October 1. If Congress does so, it would be the first time since 2009. However, this outcome is not assured. As recently as 2017, Congress elected not to abide by the second year of a two-year budget deal, resulting in the longest string of continuing resolutions in recent memory. Further, Office of Management and Budget Director Mick Mulvaney has already indicated that he would like to alter the terms of the current budget deal by reducing funding for non-defense discretionary accounts to levels lower than what the post-deal caps provide, which is not a good sign for the deal’s future.7 The 2018 midterm elections add another layer of complexity. If either Republicans or Democrats chose to walk away from the budget deal, the result will likely be another round of long continuing resolutions, potential shutdowns, and continued budget chaos

Beyond 2019 

Even if the current two-year deal survives its full term, the law of the land requires a return the draconian 2011 Budget Control Act caps for fiscal year 2020 unless Congress negotiates yet another deal, reinforcing the continued instability and uncertainty in the defense budgeting process. Both the White House’s Office of Management and Budget and DoD have committed to a future years defense program (FYDP) that increase the defense budget by around 2 percent per year from 2020 to 2023. Under the most optimistic assumptions, this growth may just cover inflation. Consequently, we can predict that DoD will not be receiving any additional windfall in the near to mid-term. The best it can hope for is to hold on to the planned 2018 and 2019 funding levels. 

Further complicating matters, the future of Overseas Contingency Operations (OCO) funds remains an open question. OCO funds were designed help the department get the funds it needed to prosecute the wars in Iraq and Afghanistan as those conflicts evolved. When used appropriately, they provide increased transparency on the costs of war. However, following the 2011 Budget Control Act, OCO funds, which are not subject to the spending caps, were the only release valve available for an over pressurized defense budget. Congress, the White House, and DoD were all complicit in using OCO funds to support enduring requirements such as ship operations and permanent infrastructure in the Middle East. In presenting the 2019 budget request, DoD Comptroller David Norquist announced an intent to gradually shift enduring costs currently in OCO into the base budget over the next several years, an intent that the Obama administration shared. However, doing so without reducing DoD’s overall topline is contingent upon Congress granting further relief from the existing base budget caps, a tall order, to say the least.

Conclusion

Deputy Secretary of Defense Patrick Shanahan has described the 2020 budget request as “the masterpiece,” but in fact it might be the Trump administration’s last chance.8 It is the last budget that this administration will execute before the 2020 presidential election. In truth, this administration has already missed its best chance to make substantial changes to the defense program. There is logic to the department’s decision to emphasize acquiring or upgrading existing systems rather than more aggressively perusing next generation systems given continued uncertainty and instability in future defense budgets. However, the opportunity presented by a large increase in topline to pursue the kinds of programs that will keep the U.S. military competitive against China and Russia into the future is rare indeed, and the 2019 President’s Budget request for defense does not make the most of it. 

This analysis is the final piece in our series on the fiscal year 2019 President’s Budget request for defense. To view all the analyses in this series, visit CNAS.org/PB19.

Endnotes

  1. Includes FY 2018 budget request amendments for missile defense, ship repair, increased presence in Afghanistan, and hurricane recovery. U.S. Department of Defense, Office of the Undersecretary of Defense (Comptroller) Chief Financial Officer, Fiscal Year 2019 Budget Request, (February 2018), 20, http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2019/FY2019_Budget_Request.pdf; U.S. Department of Defense, Office of the Undersecretary of Defense (Comptroller) Chief Financial Officer, Fiscal Year 2018 Budget Request, (May 2017), 21, http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2018/fy2018_Budget_Request.pdf; Mulvaney, Mick to Donald J. Trump, November 3, 2017. In Estimate #3 — FY 2018 Budget Amendmentshttps://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/DOD_budgetamendment_package_nov2017.pdf; and Department of Defense, Details in support of the FY2018 Budget Amendment Request for Recovery from Hurricanes Harvey, Irma, and Maria, (November 2017), http://comptroller.defense.gov/Portals/45Documents/defbudget/fy2018/November2017HurricaneAmended/FY18_DoD_Budget_Amendment-Hurricane_Recovery_Nov2017.pdf
  2. Department of Defense, Sustaining U.S. Global Leadership: Priorities for 21st Century Defense, (January 2012), http://archive.defense.gov/news/Defense_Strategic_Guidance.pdf.
  3. U.S. Department of Defense, Office of the Undersecretary of Defense (Comptroller) Chief Financial Officer, Fiscal Year 2019 Budget Request, (February 2018), 20, http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2019/FY2019_Budget_Request.pdf; U.S. Department of Defense, Office of the Undersecretary of Defense (Comptroller) Chief Financial Officer, Fiscal Year 2018 Budget Request, (May 2017), 21, http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2018/fy2018_Budget_Request.pdf. Fiscal year 2018 figure does not include amended requests for ship repairs, missile defense, or hurricane recovery.
  4. Ibid.
  5. General Daniel Allyn, Vice Chief of Staff United States Army, testimony to the House Armed Services Committee, U.S. House of Representatives, February 7th, 2017, http://docs.house.gov/meetings/AS/AS00/20170207/105530/HHRG-115-AS00-Wstate-AllynD-20170207.pdf
  6. U.S. Department of Defense, Office of the Undersecretary of Defense (Comptroller) Chief Financial Officer, Fiscal Year 2019 Budget Request, (February 2018), 20, http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2019/FY2019_Budget_Request.pdf; U.S. Department of Defense, Office of the Undersecretary of Defense (Comptroller) Chief Financial Officer, Fiscal Year 2018 Budget Request, (May 2017), 21, http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2018/fy2018_Budget_Request.pdf. Fiscal year 2018 figure does not include amended requests for ship repairs, missile defense, or hurricane recovery.
  7. “Press Briefing by OMB Director Muck Mulvaney on President Trump’s FY2019 Budget,” Interview, Office of Management and Budget, February 12, 2018, https://www.whitehouse.gov/briefings-statements/press-briefing-omb-director-mick-mulvaney-president-trumps-fy2018-budget/
  8. “Off-Camera, On-The-Record Media Availability with Deputy Secretary Shanahan,” Interview, U.S. Department of Defense, December 21, 2017, https://www.defense.gov/News/Transcripts/Transcript-View/Article/1402941/off-camera-on-the-record-media-availability-with-deputy-secretary-shanahan/.
  • Susanna V. Blume

    Senior Fellow, Defense Program

    Susanna Blume is a Senior Fellow in the Defense Program at the Center for New American Security. Her research areas include the Defense program and budget, defense posture and...

  • Lauren Fish

    Research Associate, Defense Program

    Lauren Fish is a Research Associate with the Defense Program and Future of Warfare Initiative at the Center for a New American Security (CNAS). Prior to joining CNAS, Ms. Fis...

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