Debt Ceiling Fight Puts Defense Budget in Limbo

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This time of year, Congress is usually busy marking up the annual National Defense Authorization Act and mapping out the defense budget for the next fiscal year. However, just as the House Armed Services Committee was to begin work on the 2024 NDAA, Chairman Rep. Mike Rogers, R-Ala., pumped the brakes.

The entirety of his May 9 statement on the pause read:

“Providing for our nation’s defense is the most important responsibility that Congress has been tasked with under the U.S. Constitution. I look forward to beginning the [2024] NDAA process in the near future to fulfill this critical responsibility and strengthen our national security.”

The following day, GOP leaders said the markup was postponed so the House can focus on negotiating a deal to avoid a default when the federal government reaches the current debt ceiling, which at the time of writing was projected to be June 1.

“For now, we’re going to wait and see how that process plays out before starting the NDAA,” House Majority Leader Rep. Steve Scalise, R-La., told reporters May 10.

The process has been bound on one side by legislation the House passed by a two-vote margin on April 26. That bill would return discretionary spending to 2022 levels, plus 1 percent, in exchange for lifting the debt ceiling by $1.5 trillion.

After the announcement of the NDAA markup postponement, ranking member of the House Armed Services Committee Rep. Adam Smith, D-Wash., issued a lengthy press release criticizing the delay of the markup.

“There is no way to make the substantial cuts to discretionary spending the Republican majority is vaguely proposing without doing great harm to the defense budget and the national security of this country,” he said.

After a few more paragraphs excoriating House leadership for complaining that the president’s defense budget request was inadequate while calling for major cuts in discretionary spending, he landed the plane.

“It is way past time to end these games,” he said. “The debt ceiling must be raised, the budget discussion must be had in the normal budget authorization and appropriations processes and we must get back to the regular order of business and markup the defense bill in committee, pass it off the floor and begin negotiations with the Senate to once again pass this crucial piece of legislation.”

That tone was echoed in a May 11 Senate Appropriations Committee defense subcommittee hearing on the Defense Department’s $842 billion 2024 budget request — which is a 3.2 percent nominal increase above the $816 billion Congress approved for 2023.

“The risk of a government default is real. The risk of a government shutdown is real. The risk of a long-term [continuing resolution] is real, none of which are good by the way,” said subcommittee chair Sen. Jon Tester, D-Mont. “And while we’re busy fighting amongst ourselves, the Chinese continue their military buildup and aggressive behavior, the Russians continue their unjust war against Ukraine.”

Subcommittee ranking member Sen. Susan Collins, R-Maine, piled on, saying that the president’s budget request was inadequate to address current threats. She listed off some of what she saw as shortfalls in the budget request.

“$3.5 billion in the INDOPACOM unfunded priorities; $266 million to fund NORTHCOM unfunded priorities to detect airborne targets such as Chinese spy balloons; funding to replenish $1 billion in presidential drawdown authority for Taiwan that Congress authorized last year. … Security assistance for Ukraine beyond September and $1.6 billion in under-budgeted fuel costs,” she said.

Sen. Lindsey Graham, R-S.C., asked Undersecretary of Defense (Comptroller) Michael McCord what the House debt ceiling and spending plan would mean for the defense budget.

“In this year, it would be about $100 billion below our request,” McCord said. “Over five years would be about $600 billion [less].”

Those numbers are nominal and do not factor in inflation since the passage of the 2022 defense budget.

Assuming there is no default, the House plan would stand as the worst-case scenario for the 2024 defense budget. Compared to that, a continuing resolution — it’s hard to find any defense or budget expert who doesn’t think there will be at least a partial-year CR for 2024 — would be substantially better for the department, to the tune of some $70 billion.

Still, a continuing resolution would prevent new starts for things like the Air Force’s collaborative combat aircraft and delay plus-ups for munitions procurement and investments in the submarine industrial base.

Secretary of Defense Lloyd Austin warned senators of the consequences of another continuing resolution.

“When you lose time … no amount of money can buy back time,” he said. “Again, you can’t start new programs. I would point out that [China] is not waiting. They will execute on their own timeline. I pointed out earlier, chairman, that our budget is directly linked to our strategy. And of course, if we don’t have a budget, we can’t effectively execute that strategy.”

Tester ended the hearing with a stern message to Congress and the Defense Department witnesses.

“The truth is, this Congress needs to step up and do their job,” he said. “If we want to hold you guys accountable, if we want to hold the contractors that supply us with our military equipment accountable, we need to do our job.

“And part of that job is making sure that we get a budget that” keeps the country safe. “And the other part of it is just not do stupid things like CRs and defaults,” he said.

Topics: Budget, Defense Department