Expect Aircraft, Ship Plus-Ups from Congress

Air Force photo by R. Nial Bradshaw

President Donald Trump’s fiscal year 2021 defense budget proposal would reduce procurement of several major aviation and naval platforms, but lawmakers will likely reverse those cuts, analysts say.

“The president’s budget request is simply the first move in what is a long chess game that plays out over the course of this year,” said Doug Berenson, managing director at Avascent.

“The Congress will have the next series of moves. Based on their recent behavior [and] their long-time behavior, we think the Congress is going to … restore many of the programs that DoD proposed to cut in the FY21 request. Procurement of aircraft and ships are probably top of that list,” he added during a webinar hosted by Avascent and Bloomberg Intelligence.

The fiscal proposal includes: $11.4 billion for 79 F-35 joint strike fighters, down from the 81 planned in last year’s request; $1.6 billion for 12 F-15EX fighters, down from 18 planned in last year’s budget; $1.5 billion for seven CH-53K King Stallion helicopters, down from 12 planned last year; no money for MQ-9 Reaper drones, down from nine platforms in last year’s blueprint; and no funding for MQ-4 Triton drones, down from two aircraft in last year’s plan.

Additionally, the administration requested $4.7 billion for just one Virginia-class submarine, one less than planned in last year’s budget; and $3.5 billion for only two DDG-51 Arleigh Burke-class destroyers instead of three.

However, aircraft and ship manufacturers shouldn’t fret too much, Berenson said.

“The Congress is very likely to increase these requests back up to something like we were expecting to see in last year’s budget,” he said. “We’ve run the numbers on requests versus appropriations in the investment budgets going back several years in all of these categories, and what you see is a very consistent approach by the Congress to add money … every year for aviation and ships.”

For example, Congress plussed up the aviation budget 17.4 percent, 4.2 percent and 3.9 percent in fiscal years 2018, 2019 and 2020, respectively, relative to the administration’s request. It also beefed up the shipbuilding budget 9.4 percent, 6.7 percent and 0.8 percent in those years, respectively, according to Berenson’s slides.

“Some [other] accounts sometimes do well … but ships and aircraft are really where you can count on the Congress acting in this way. And I think that FY 21 will be no different,” he added.

Topics: Budget