July 24, 2024

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A nearly $1 trillion defense budget faces headwinds at home and abroad

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Sen. Roger Wicker came to a Heritage Foundation event in January with a big request.

He wanted the conservative think tank’s help mustering public and congressional support for a $1.4 trillion defense budget, nearly 50% higher than fiscal 2023 spending levels.

The Mississippi Republican said this figure, equal to 5% of U.S. gross domestic product, is necessary given multiplying threats across the world.

“The U.S. should lead in the Indo-Pacific,” he said. “The U.S. should lead in Europe. The U.S. should lead in the Middle East. This is our official strategy. The U.S. should seek to win, not just manage, against China and Russia. The U.S. should deter Iran and North Korea and terrorist groups.”

The senator’s appeal was quickly followed by a panel with three speakers, all with ties to former President Donald Trump, who questioned the size of the current defense budget, much less a 50% increase, and argued the U.S. can’t do it all.

“Our military is not what it should be, despite spending almost $1 trillion,” said Elbridge Colby, a former deputy assistant secretary of defense who helped develop Trump’s National Defense Strategy.

The contrast between Wicker’s push and the skepticism of many Republicans promises to create new complications as the U.S. defense budget surges toward $1 trillion.

Last year’s debt ceiling agreement caps the FY24 defense top line at $886 billion, though the Pentagon and all other agencies face a 1% cut if Congress does not pass a full FY24 budget by April 30. Even so, FY24 defense spending could balloon as high as $953 billion if Congress also approves President Joe Biden’s foreign aid request for Ukraine, Israel and Taiwan.

As the Pentagon seeks to address these new wars along with consistently rising costs like salaries and health care for troops and civilians, the $1 trillion figure may draw new scrutiny to the defense budget, including questions about where to cut and where it’s falling short.

It’s a figure that seems far too large to some Republicans aligned with Trump’s America First policy and progressive Democrats. It’s also an amount that falls more than $400 billion short of what some defense hawks say the Defense Department needs to meet its many commitments.

Mark Cancian, a senior adviser at the Center for Strategic and International Studies think tank, told Defense News the $1 trillion figure, while symbolic, will pose “a major decision for the next administration.”

“If it’s a Trump administration, everything’s up in the air. But even if it’s a Biden administration, I would argue — many people would argue — that their strategy is underfunded,” Cancian said. “They have this very robust strategy, and they just aren’t putting the money against that.”

Even if Congress chose to keep the defense budget flat, it would soon approach $1 trillion in the next few years to keep up with inflation.

And cuts would be challenging; the Republicans and progressive Democrats advocating to cut $100 billion or more from the defense budget would confront a host of thorny complications that range from personnel to readiness to acquisition policy.

“A $1 trillion figure is attention-grabbing, and it will cause people to start asking some hard questions about what the nation’s return on investment is for its $1 trillion in spending,” said Travis Sharp, a senior fellow at the Center for Strategic and Budgetary Assessments. “The way the $1 trillion budget gets presented, and the types of things it’s measured against, will become pretty important in terms of the political and popular support for that level of spending.”

‘We already spend $1 trillion’

The U.S. today spends more on its military and weapon systems than the next 10 countries combined, including China and Russia, according to data compiled by the Stockholm International Peace Research Institute in 2023.

Cancian — who worked in the White House’s Office of Management and Budget during the Obama administration — estimates defense spending would have to increase by roughly $25 billion annually to keep pace with inflation. This means the U.S. is on track to reach a $1 trillion defense budget within the next few years, regardless of supplemental spending.

And that’s just discretionary defense spending, which excludes mandatory bills such as veterans’ benefits.

“By almost any other metric, we already spend $1 trillion a year on defense,” said Geoff Wilson, who leads the Center for Defense Information at the Project on Government Oversight, an independent watchdog. “We’re one of the only countries that views this as a separate line item.”

At the same time, the Defense Department has trouble tracking its $3.8 trillion in assets, failing its sixth consecutive audit last year. The Marine Corps became the first, and so far only, armed service to pass an audit in February.

“Given all these costly failures and this abhorrent track record of fiscal accountability in the military-industrial complex, how much more defense are taxpayers actually going to get?” Wilson asked. “I don’t think just throwing another $200 billion at the problem is going to fix everything else. The industrial base has been unable to absorb the defense budget it already has.”

Over the last decade, defense priorities have largely received bipartisan support. During the Trump administration, the defense budget continued to grow.

But former Trump administration officials and many Republicans have started to chafe.

For the first two years of the Biden administration, Republicans worked with centrist Democrats to significantly boost the White House’s defense budget requests. The defense budget stood at $740 billion when Biden took office in FY21 and rose to $858 billion in FY23, excluding an extra $35 billion in Ukraine military assistance that year.

“That’s a lot of money that we spend — over 3% of GDP — on defense,” Colby, the former Pentagon official, said at the Heritage event. “A lot of it is for reasons that are understandable … personnel costs, the higher cost of our defense-industrial base, the industrialization in general. At the same time, you’ve got to look at the fact that there are very real political constraints.”

Colby has called for a focus on the Indo-Pacific region to deter China from attacking Taiwan, and pushed for NATO allies to spend 2% of their respective GDP on defense. For his part, Trump has threatened to withdraw from NATO over numerous members’ failures to meet the 2% benchmark set by the alliance.

Republican hawks derided Biden’s $886 billion defense budget request last year as failing to keep pace with inflation, only to lock it in as part of the debt ceiling agreement. Five months into the fiscal year, Congress has yet to pass a full FY24 budget.

The debt ceiling blueprint provides the Defense Department with more discretionary funding than all other federal agencies combined. When Republicans last leveraged a debt ceiling raise in exchange for discretionary spending caps under the Obama administration, Democrats insisted on equal amounts of both defense and nondefense spending.

Sharp, the budget analyst, said because the 2023 debt ceiling agreement “starts out with uneven caps, the parity principle doesn’t really apply as much, which suggests that defense is coming under less fiscal pressure than it could.”

Under the Obama administration, the Pentagon and Congress routinely circumvented defense budget caps through a fund known as overseas contingency operations, billed as a spending account focused on the wars in Afghanistan and Iraq.

Biden eliminated this account in his FY22 budget. But following Russia’s full-scale invasion of Ukraine in February 2022, he has used Ukraine aid packages to similarly increase defense spending beyond the base budget, with much of the money going to Pentagon contractors backfilling U.S. equipment sent to Kyiv.

Now, a group of Republicans wants to put the brakes on the foreign aid packages that have constituted significant defense spending increases outside the base budget.

“We just want the country to have a conversation about the strategy of spending,” Robert Greenway, the new head of Heritage’s Center for National Defense, said in September on a podcast. “We’re probably knocking on the door of a couple hundred billion dollars on Ukraine.”

‘A budget that is too low’

Amid bloody wars in Europe and the Middle East as well as the specter of a potential Indo-Pacific conflict, the Biden administration has rushed arms to Ukraine and Israel, and it seeks to do the same for Taiwan.

Biden’s latest Ukraine military aid request is his largest yet and includes security assistance for Israel and Taiwan. The foreign aid bill the Senate passed 70-29 in February for all three security partners and other Defense Department priorities would total $67 billion in extra Pentagon spending for FY24. If the House passes that bill as well as a full defense budget, it would put FY24 defense spending at $953 billion.

However, House Speaker Mike Johnson, R-La., has refused to put the bill on the floor for a vote amid opposition from Trump.

Growing congressional concerns, fueled in part by Trump’s presidential campaign, mean the Pentagon may be unable to rely on additional funds to boost its base budget the same way it did during the Iraq and Afghanistan wars.

But even after the large defense spending increases in recent years, some analysts argue the Pentagon’s strategy remains underfunded.

“The current strategy, which is pretty consistent with what the Trump administration had and with what the Obama administration had, calls for engagement in Europe; a response to Ukraine; a continued presence in the Middle East, although reduced at least; and China as the pacing threat — but also nuclear modernization; a strong, all-volunteer force; a vibrant defense-industrial base,” Cancian said.

“You stick all that together — that’s very expensive.”

An extra $26 billion in Ukraine military aid for FY22 brought total defense spending that year to $804 billion. Then in FY23, an extra $35 billion in Ukraine military aid brought total defense spending to $893 billion.

“The future of America’s national security faces two huge challenges: an outdated defense strategy and a budget that is too low to support it,” Elaine McCusker, a senior fellow at the conservative think tank American Enterprise Institute, wrote in February. “These factors include an industrial base that is inadequate to meet our needs and stalled emergency spending that includes a long overdue revitalization of our defense production capacity for crucial platforms such as submarines and ships.”

But with Trump increasingly likely to win the GOP presidential nomination, some Republican defense hawks have become wary of lining up behind Ukraine aid ever since Congress passed its last package for Kyiv in December 2022.

Sen. Lindsey Graham, R-S.C., voted against the Senate bill in February, endorsing Trump’s proposal to issue the foreign assistance as loans. Graham’s position marks an about-face from nine months ago, when he made his vote on the debt ceiling deal contingent on passage of a defense spending package for Ukraine to circumvent Biden’s $886 billion military budget top line.

The Heritage Foundation, which has spearheaded the Project 2025 policy document for a future Republican president, has also lobbied against additional Ukraine aid.

Trump’s former acting Defense Secretary Christopher Miller authored the document’s section on the Defense Department, which lambasted the Pentagon for “wasteful spending, wildly shifting security policies [and] exceedingly poor discipline in program execution.”

The Project 2025 transition document doesn’t recommend a specific defense budget top line, but Miller wrote in his memoir last year the U.S. should cut military spending by 40% to 50% to “end American adventurism and retool our military to face the challenges of the next century.”

Meanwhile, several progressive Democrats in the House have come out against the bill’s extra $14 billion for the Israeli military amid the humanitarian catastrophe in the Gaza Strip.

“If the proposed increase were coming as part of the base budget, it wouldn’t attract potentially some of the controversy that supplementals have because base budget spending isn’t always so tightly connected to a security situation occurring in a specific part of the world that people can have strong opinions about,” Sharp said.

‘The status quo is very rigid’

During his first three years in office, Trump proposed large defense increases, in line with his National Defense Strategy, which called for 3% to 5% real budget growth above inflation. But in 2020, his final year in office, Trump proposed a flat defense budget.

For the past several years, progressive Democrats, led by Reps. Barbara Lee of California and Mark Pocan of Wisconsin, have introduced a bill to cut $100 billion in defense spending, though it has failed on the floor.

“The reason that’s delusional is not that you can’t save money with efficiencies or changes in overhead,” Cancian said. “The problem is that all of them are politically difficult, and you have to expend political capital to get those efficiencies. And that’s where the White House typically stops.”

Sharp said it would be possible to eliminate budget inefficiencies and find savings in a theoretical exercise that rebuilds the Defense Department from scratch, but cutting $100 billion in a single year would be a tall order.

“It’s a purely academic exercise mostly because transforming situations in those ways is — I don’t want to say impossible, but it’s extraordinarily difficult,” he added. “The status quo is very rigid.”

The Heritage Foundation and the American Enterprise Institute convened a conference last year to identify savings and efficiencies in the defense budget. The conference’s report proposed potential savings over the long term, but cautioned there’s “no easy button” to press.

“Defense inefficiency is often marbled within the budget across programs, accounts, services and agencies,” it stated.

The report recommended some actions that have previously run afoul of parochial headwinds in Congress, such as base realignment and closure. It noted five previous rounds of base closures saved the Defense Department $12 billion annually. Congress rejected the base closure attempt the Trump administration proposed in 2017.

The largest portion of the Pentagon budget goes toward operations and maintenance, which covers equipment repair and training costs, among other items like some health care costs.

McCusker, who served as acting Pentagon comptroller in the Trump administration, estimated roughly $109 billion within Biden’s FY23 defense budget proposal did not go directly toward core military functions.

“Along with increasing costs of health care, benefits and compensation, the true cost of military capability is disguised and squeezed out by these and other priorities,” she told Defense News. “For example, the [operations and maintenance] appropriation is loaded with spending on health, community, family, climate, education and security assistance programs.”

The next largest category is personnel, including troop payment and retirement benefits for the all-volunteer force. Congress authorized a 5.2% troop pay raise in December when it passed the annual defense policy bill, the largest salary boost in 22 years.

The third is procurement, and defense contractors frequently come under fire for systems hit by delays and cost overruns.

“All you have to do is look at the last 20 years of major weapons developments: the F-35 [fighter jet]; the LCS, or littoral combat ship; the Zumwalt-class destroyer; the Ford [aircraft carrier],” said Wilson, the Project on Government Oversight analyst. “They’ve all been over budget and behind schedule. And this is not only a real cost; it’s a cost on readiness.”

For instance, the submarine-industrial base has been unable to keep up with the Navy’s goal of producing two Virginia-class submarines and one Columbia-class submarine per year. The delays stem in large part from labor shortages and pandemic-related supplier issues.

Wicker inserted another $3.3 billion in the Senate’s foreign aid supplemental to address these challenges.

Sens. Bernie Sanders, I-Vt., and Chuck Grassley, R-Iowa, introduced a bill with eight other Democrats and Republicans last year that would require any part of the Defense Department to return 1% of its budget to the Treasury for deficit reduction if it failed to pass an audit.

Grassley previously chided the Pentagon for spending $10,000 per toilet seat for a fleet of aircraft, saying that “the Department of Defense has been plagued by wasteful spending for decades.”

The Defense Department’s troubled bookkeeping practices can make tracking and eliminating waste a difficult endeavor.

Service contracts for things like administrative and technical support account for roughly half of all Pentagon contracting. But a 2023 Government Accountability Office report found the Defense Department did not fully collect and review data for service contracts that ranged from $184 billion to $226 billion annually from FY17 through FY22. Although the Navy collects and reviews this data, the report said the Army and Air Force do not consistently do the same.

While it’s unclear how much money the Pentagon could find by eliminating waste, pressure to get its fiscal house in order will likely increase as the defense budget nears $1 trillion. In the meantime, any significant defense budget cut may require the U.S. to reexamine its role in the world.

“There are a lot of things that you could do to save money, but you have to have a different strategy,” Cancian said. “You can save $100 billion, but you cannot have the current strategy. And for the Europeans, for Israel, for our allies in the Middle East, this would be a radical change.”

Bryant Harris is the Congress reporter for Defense News. He has covered U.S. foreign policy, national security, international affairs and politics in Washington since 2014. He has also written for Foreign Policy, Al-Monitor, Al Jazeera English and IPS News.

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