BY MACKENZIE EAGLEN, JOHN G. FERRARI, and ELAINE McCUSKER
As the Pentagon sprints to deliver its full 2022 budget request to Congress next month, Washington is anxious to get more information to conduct oversight, adjudicate priorities, and move needed military policy and spending legislation. With a presidential transition and without hard data, defense analysts are stuck theorizing answers to the following questions: What will change, by how much, and by when?
There is still a fair amount we do know, however.
The “Goldilocks” Defense Budget
The Biden administration is pursuing a complicated political agenda with its defense budget. By reducing the previous $722 billion discretionary defense topline projected by its predecessor, President Biden gets credit with some of his base, even as plenty would prefer sharper reductions. While Congress could try to add back a token amount, substantial change is unlikely. In addition to substantial stimulus bills, the Biden administration asked for a 16 percent increase for non-defense spending.
Despite a lack of budgetary emphasis on defense and desire to lead with diplomacy, there has been growing public recognition of the rising threat posed by China. Accordingly, the administration will surely characterize their first defense budget as consistent with strategic challenges, yet balanced with domestic priorities.
To accomplish this, Congress might expect to see targeted budget exhibits on the Pacific Deterrence Initiative, tying the budget back to the China Task Force, and an external emphasis on tangentially defense-related investments in other agency budgets — like support for microchip production, supply chain resiliency, energy efficiency, infrastructure, and innovation. More programs already underway might be “tagged” for China or great power competition, as well.
Congress is Increasingly Edgy
Lawmakers are losing patience with the absence of budget facts and concerned about the time available to assemble, debate, and pass the defense authorization and appropriation bills, making continuing resolutions to start the fiscal year nearly inevitable. In nearly every year for more than a decade, CRs were needed even with budget submissions on time. Chairman of the House Armed Services Committee Rep. Adam Smith (D-Wash.) recently commented, “I am deeply concerned about the Biden administration dragging their feet on getting us the damn budget.” He further admonished, “Just send it to us. We need it in order to pass the budget and move forward.”
Pentagon staff are likely pursuing three lines of effort on the budget as it readies for the public. The first involves making final decisions to reflect White House priorities related to pandemic relief and response and supporting Build Back Better objectives. That money is coming from somewhere under the proposed $715 billion defense topline, so offsets are being found in various programs or through taxes to the services.
Budget rollout messaging is also being prepared, along with an avalanche of budget exhibits and justification documents that accompany submission. Third, as expected, responsible political analysis is being conducted, as defense investment decisions that produce winners and losers on Capitol Hill must still garner enough support for final passage.
Reorienting Some Defense to Domestic Priorities
Pentagon leaders are also likely tracking the internal assessments of major program areas, such as triad modernization, shipbuilding, and tactical aviation. The litigation of inter-service disputes about roles and missions will come to a close for this budget cycle. Options for program cost reductions are in high-demand inside the Pentagon, and delays to critical guidance like the joint warfighting concept probably did little to help inform necessary tradeoffs decisions.
Biden’s defense leadership will be balancing a commitment to competing with China with the president’s other priorities, including climate change and COVID. Budget exhibits to describe spending for increasing infrastructure resiliency, operational energy, fuel efficiency, pollution prevention, and environmental programs along with the Pacific Deterrence Initiative and other initiatives will likely accompany the budget submission. Some of these exhibits will relabel and reemphasize ongoing initiatives, whereas others will be new investments taken from elsewhere in the defense budget. An increase in non-defense spending within the defense budget is likely.
All of this will come on top of preparing to answer questions from lawmakers about movement of all overseas contingency operations spending into the base budget, withdrawing from Afghanistan this year, managing vaccinations across the force, reducing sexual assault and extremism, and more.
Modernization Shifts Ahead
Despite the number of options on the table, Capitol Hill should not expect to see dramatic changes to military modernization programs this year. The new team has had little time to evaluate detailed plans, and less time to make significant decisions about future investments. The biggest indicators to watch for include preference for domestic issues, shifts in regional priorities, or even emphasis on one service over the others. Those kinds of reorientations might lead to plus ups to satellite and space spending, sustained support for long range fires, remotely crewed systems, joint all domain command and control, and disruptive technologies (cyber, AI, microelectronics, quantum computing, etc.), for example.
Of course, much of that funding will be for research and development and science and technology. Procurement will be a likely bill payer for internal spending realignments to the COVID response, climate change, and costs-above-inflation to pay for the force of today, including people, raises, readiness, and facilities. Expect more procurement programs to be rephased, with the Pentagon buying fewer quantities of various platforms in the near- to mid-term.
Any analysis of DoD modernization decisions will be particularly complicated if the specifics of five-year spending data for procurement and RDT&E accounts is not released (as expected in the first year of a new administration).
Looking Ahead to Fiscal Year 2023
While the administration has limited time to put its imprimatur on the defense budget this year, the 2023 submission will be the showcase budget that presumably flows from the new team’s security and defense strategies. The future of nuclear modernization, substantial funding shifts over the next five years, cuts to legacy systems, program cancelations, and shipbuilding force mix changes all are on the table for the next budget cycle. By next year, with confirmed service secretaries, an established team of confirmed administration personnel, and the crucial factor of more time, the new administration will be in a position to make a real impact on the future of national defense.
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