Pentagon: $30B Budget Bump in 2017 Only a ‘Down Payment’

A $30 billion funding request for the Defense Department for fiscal year 2017 would plug holes in military budgets across the board, but the Pentagon ultimately is looking for the administration and Congress to commit to “long term growth” in defense spending, officials told reporters March 16.

The request includes $24.9 billion for the base budget and $5.1 billion for overseas operations. This would boost the 2017 base request from $524 billion to $549 billion. And OCO funding would grow from $65 billion to $70 billion. 

But the Pentagon is not counting any chickens yet. Officials in fact acknowledge that they have no idea how the administration plans to convince Congress to undo a 2017 defense spending bill that already has moved through the House, and insert an additional $30 billion. The supplemental funding request would break a bipartisan budget deal and could increase the odds of a government shutdown when temporary funding runs out April 28.

“We understand the technicality, that this requires an increase in the cap,” said John P. Roth, who is performing the duties of undersecretary of defense comptroller. “Does it create a legislative challenge? Yes,” he said. “There’s a number of ways in which Congress can do that. That’s something that Congress will have to work with the administration.”

Roth said it would be self-defeating for the Pentagon to precipitate a budget impasse at a time when it sorely needs financial stability. He said the worst-case scenario for the Pentagon would be for Congress to not pass a 2017 bill and extend stopgap funding through the end of the fiscal year. He argued that the $30 billion request is what the military must have now to “start rebuilding the force and accelerate the defeat of ISIS.” And even if the $30 billion is approved for 2017, “this is a multiyear effort, it’s not going to fix the problem. It is going to take some time to get out of the hole we built for ourselves.”

To avert criticism that the Pentagon is shoving nonessential expenses into the OCO account, Roth said, the request was broken down into base and operational needs.

The $25 billion base budget request is extraordinary in that more than half, or $13.5 billion, is for procurement of weapon systems, including 24 Super Hornet fighter aircraft for the Navy and five F-35 joint strike fighters. “The Navy is flying the wings off their airplanes, they don’t have enough,” said Roth. “Admittedly the aircraft won’t be delivered for two to three years but you need the money now." The additional five F-35s would allow the Pentagon to make up for past cuts to the program.

The procurement request also would pay for Army helicopters, munitions and missile interceptors. Included in the $25 billion base budget request is money to shore up combat units and cover “must pay bills” for items that Congress mandated in last year’s authorization act but didn’t fund, such as an increase of 36,000 troops, a 2.1 percent pay raise (the Pentagon only budgeted a 1.6 percent raise) and health care costs.

Roth was especially emphatic that the Pentagon not only needs more money but also the discretion to spend it to meet military demands, and that requires a full-year appropriations bill. “We’re going seven to eight years in a row operating under continuing resolutions,” he said. “Clearly we have for better or worse learned how to manage through CRs as best we can.” Under a CR, funding is frozen at the previous year's level and there are restrictions to how money can be spent.

The current CR, soon to exceed six months, is more than the Pentagon can manage through, Roth said. “This year is particularly problematic, it’s the longest CR in recent memory.” 

The prospect of a year-long CR that would extend until September 30 is haunting the Pentagon right now. 

“We continue to hear chatter on the Hill about doing a full-year CR, calling it a day and going home. We would find that extremely harmful,” said Roth. “We are essentially muddling along, playing a bit of a financial shell game, borrowing resources against money we expect to get later, in order to keep things going. That game gets to be increasingly difficult as we go through the fiscal year.”

Beyond the current logjam is the possibility of another CR to start fiscal year 2018 if the political gridlock continues.

“We’re the eternal optimists here,” said Roth. “We would like a bill by 1 October. Managing through CRs, with each passing week that gets harder to do.

Ultimately, he said, “We’re looking for a commitment, from Congress and from the administration for long term growth in defense spending. The FY17 supplemental is the down payment.”

Trump’s 2018 budget blueprint unveiled March 16 by White House Office of Management and Budget Director Mick Mulvaney seeks to boost the defense base budget to $574 billion, but the proposal has been declared a nonstarter because it is paid for with cuts to nondefense programs, including steep reductions across key federal agencies. 

Defense industry analyst Byron Callan, of Capital Alpha Partners, said Trump’s politically toxic budget proposal “sets up yet another period of uncertainty for defense spending. We would expect FY18 to begin under a continuing resolution, with the main issues how long it then takes Congress to strike a deal on defense and nondefense discretionary spending,” Callan noted. “We see 10 percent odds of this budget passing Congress as proposed. The main issue in this plan is the breadth and depth of cuts to nondefense discretionary cuts and the bipartisan nature of opposition that has already emerged.”

Topics: Budget, Defense Department