Dialing spending back to Fiscal Year 2022 levels would cost the Department of Defense (DOD) at least $100 billion next year and set back weapons procurement by more than $630 billion over the next five years, the Pentagon’s chief number-cruncher told a Senate panel on May 11.
But the 14 percent slash in the military’s $842 billion Fiscal Year 2024 (FY24) budget request that would be enacted under such a “FY22 plus 1 percent” plan calculated by DOD Chief Financial Officer Michael McCord doesn’t capture the costs of fiscal uncertainty on national security, Pentagon officials insist.
The budget impasse between House Republicans and the Biden administration, and the approaching June 1 default deadline on the national debt, is not going unnoticed, Secretary of Defense Lloyd Austin told the Senate Appropriations Committee’s Defense Subcommittee.
Budget discord presents a “substantial risk to our reputation. We are viewed as being a source of reliability globally” and that would be imperiled—with significant repercussions—should Congress not come to an agreement on a FY24 spending plan and on the June 1 debt default deadline, he said.
In addition to derailing multiyear contracts for development of new systems, such as hypersonic missiles, direct-energy weapons, and Navy ships, Austin said the House GOP plan would do away with 5.2 percent pay increases for service members and DOD civilians.
“Most importantly, this would affect the livelihoods of our troops and civilians. We won’t be able to pay people the way we need to,” he said, adding there is one clear winner in the turmoil. “This is something China can exploit.”
It already is, said Sen. Jack Reed (D-R.I.), noting the budget impasse feeds into the Chinese Communist Party’s (CCP) rhetoric that the United States is a “power in decline.”
Reed said the budget paralysis is making the CCP “look like the stable stalwarts in the room,” warning no-accommodation tactics being touted by House culture war ideologues could turn out to be “one of the greatest strategic errors—vis-à-vis China—in history.”
Without a budget, like the rest of the federal government, the Pentagon will be funded through a Continuing Resolution (CR) that sustains mandatory operations but short-circuits multi-year projects and programs.
Chair Sen. Jon Tester (D-Mont.) said Congress needs to “get a budget done on time so these guys don’t have to rely on the uncertainty of CRs. If it is going to hold the Pentagon and contractors accountable, Congress needs to step up and do its own job and that is to make sure we get a budget to keep this country safe and not do stupid things like CRs and defaults.”
A budget with “a complete appropriations bill” is needed in “countering China,” agreed Sen. Susan Collins (R-Maine).
Doing so “with CRs is not sufficient” she said. “No matter how, the military must have a sufficient budget” delivered on time so the nation’s industrial base knows how to invest and the nation’s allies know who to invest their trust in.
Budget Not Pacing Inflation
Collins and Sen. Lyndsey Graham (R-S.C.) both raised issues with several specifics in the DOD’s proposed spending plan, with the Maine senator raising “serious doubts” it “has all the resources necessary to deter an aggressive China and to deal with the global threats.”President Joe Biden’s $886.3 billion FY24 national defense request is a 12 percent increase from this year’s enacted spending plan. It includes more than $40 billion for other agencies, mostly the Department of Energy (DOE) to build nuclear weapons.
The Pentagon’s $842 billion share of the overall proposed defense spending plan includes $215.1 billion for the Air Force (4.5 percent increase over FY23); $202.5 billion for the Navy (4.5 percent increase); $185.5 billion for the Army (4.6 percent increase); and $53.2 billion for the Marine Corps (3 percent increase).
“The budget includes only enough money for a fleet of 291 ships. This is five ships fewer than today’s fleet and further from” the 370-ship Navy requirement, she said.
“Meanwhile, China has the largest navy in the word and is growing to 400 ships” within two years, Collins said, noting “the story is similar for the Air Force” building plans.
She said among other issues, the budget underfunds fuel costs by an estimated $1.6 billion, or 20 percent, despite “lessons learned from last year” when inflation was peaking.
Collins said this is a familiar Pentagon pattern. Had Congress funded the last DOD budget request as submitted, “our troops would be facing an $8 billion inflation hole” right now, she said. “That hole does not exist today because Congress insisted on higher and more realistic funding.”
It may need to do that again, said Graham. “This budget puts you below inflation,” he said, noting projected spending should always be at “5 percent above inflation.”
McCord said the proposed budget keeps military spending at around 3 percent of the nation’s gross domestic product (GDP). Graham said calculations he’s received peg it “around 2.5 percent” of the GDP.
The proposed spending plan will need to be revised to better buffer inflationary pressures and more narrowly focus on priorities, he said.
“So the committee’s task is to reject all of this stuff and come up with a number that keeps us safe,” Graham said.
But first things first, Tester said. The “number that keeps us safe” will be in a budget, but won’t be in a CR, he said.
It is the panel’s job to ensure “our troops are getting what they need when they need it,” Tester said. “We can’t afford to waste time and can’t afford to waste money” dithering over the budget.
“We know our competitors like the Chinese government are doing everything they can” in preparing to challenge the U.S. military, said Sen. Patty Murray (D-Wash.).
“We owe it to them to work together across the aisle, get our job done, get our government funded without drama, and get them the support they need.”
