BUDGET MATTERS DEFENSE DEPARTMENT

2024 Defense Bills Emphasize Innovation, But Passage in Question

7/20/2023
By Sean Carberry

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In theory, everyone knows what the 2024 defense budget will be. The debt ceiling deal signed into law in May set a cap on total defense spending of $886 billion.

So far, House and Senate drafts of the 2024 National Defense Authorization Act authorize $886 billion in defense spending, of which $844 billion would go to the Defense Department. That would be a $28 billion increase over 2023 enacted funding, although much, if not all, of that increase would be lost to inflation.

However, betting that an $886 billion defense budget kicks in on Oct. 1 is a dangerous gamble.

Odds are high that fiscal year 2024 will start under a continuing resolution. Congress could also increase defense funding through an emergency appropriation to cover additional aid to Ukraine, inflation or some other pressing need.

In fact, as Mark Cancian, senior adviser for the International Security Program at the Center for Strategic and International Studies noted to National Defense in an email, the Senate Armed Services Committee is calling for the president to request supplemental funding.

“That puts pressure on the administration and is an invitation to defense hawks to take action later,” Cancian stated.

Elaine McCusker, senior fellow at the American Enterprise Institute and former deputy undersecretary of defense (comptroller), said in an email it was encouraging to see the Senate call for additional spending, as she believes the 2024 budget underfunds readiness, procurement and facilities improvements.

“The department said the 2024 budget request was a ‘procurement’ budget. Yet the request for these accounts didn’t even keep pace with inflation,” she said. “We need to actually buy stuff in order to have both the military capacity and capability we need. We have not been doing this, which has also negatively impacted the industrial base, the supply chain and the workforce.”

While more is needed to speed up the development and acquisition of new technologies, the congressional marks do place emphasis on making the department a smarter and more agile customer of innovative technologies, she said.

In addition to the NDAA marks, the House Appropriations Committee’s 2024 defense bill is particularly bullish on new technologies and rapid acquisition and fielding. The committee’s report on its bill states:

“After observing the use of non-traditional weapons from non-traditional sources in Ukraine, the committee supports maturing and focusing ‘innovation organizations’ on rapidly fielding new capabilities from new sources at scale.”

The committee’s version of the bill includes $1 billion “to begin deliberately fielding a hedge portfolio within one to three years. This hedge portfolio of many smart, affordable, modular and sustainable systems could include, but is not limited to, low-cost, light-logistics multi-domain drones, satellites and munitions; agile communications, compute and sensor nodes; and artificial intelligence agents and users.”

Under the draft legislation, the Defense Innovation Unit, supported by other “Non-traditional Innovation Fielding Enterprises,” would manage the fund to “mature fielding models like [the Navy’s] Task Force 59 and propagate acquisition models like AFWERX Prime to the joint community,” the report stated.

The committee commended the elevation of DIU to a direct report to the Office of the Secretary of Defense and noted that the bill fully funds “the Office of Strategic Capital to maximize the use of private capital for defense emerging technologies and manufacturing.”

Furthermore, House appropriators increased funding to $300 million for the Defense Department’s pilot program to Accelerate the Procurement and Fielding of Innovative Technologies, or APFIT.

While the provisions to accelerate innovation and acquisition received plaudits from analysts, there are other provisions in the congressional bills that are not sitting well.

Cancian and McCusker flagged the House provision to eliminate the Office of Cost Assessment and Program Evaluation, or CAPE, as a concern, “particularly when the department needs more independent cost estimating, program performance evaluation and analysis of alternatives, not less,” McCusker said.

She also highlighted language in the Senate bill: “The reduction in the minimum number of Navy carrier airwings and [Air Force] fighter aircraft is interesting and could be a troubling signal about the importance of capacity in general.”

However, there is some good news on ships, according to Cancian: “Support of 31 large amphibious ships by both houses. This was a rebuke to the administration, which had been planning on fewer and ‘paused’ construction when the Marine Corps seems to be focusing on small amphibious ships instead.”

He also pointed to Congress allowing the Air Force and Navy to retire platforms. “Although Congress did not approve all the retirements that the administration wanted, they seem to have accepted the ‘divest to invest’ philosophy.”

Still, the good and the bad of the various bills are all irrelevant if Congress doesn’t pass an NDAA and budget on time, which has become the norm.

“We have to break the cycle of starting the fiscal year under continuing resolutions, many of which go deep into the second quarter and sometimes even into the third quarter,” McCusker said.

“The road ahead for enactment of [fiscal year] 2024 appropriations on time is a huge challenge with very high stakes,” she continued. “I was glad to see the budget agreement contained a provision acknowledging the importance of passing appropriations on time, but I am very concerned about the consequences if they don’t and disappointed by the fact that the penalty of failure is not placed on those who can do something about it.” ND

Topics: Budget

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