The newly proposed defense budget was created before inflation rates reached their current levels, Pentagon officials acknowledge.
Defense Secretary Lloyd Austin and the Joint Chiefs of Staff’s Chairman Gen. Mark Milley testified in front of the House Armed Services Committee on Tuesday about the proposed budget for the 2023 fiscal year, and during their testimony, they admitted that the budget was written before inflation hit its highest rate in 40 years in the gauge favored by the Federal Reserve at the end of last month.
“This is a very robust budget that we’ve asked for, and I think, ranking member [Mike] Rogers, that we can address our needs with what’s in this budget,” Austin said. “And clearly, when we snapped the chalk line, when we built the budget, inflation was at a different point. But … this budget gives us the capability to go after that types of things that we believe we need to support our strategy.”
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Republicans, before Biden unveiled the $773 billion request for the Defense Department, had repeatedly called for a 5% increase over the inflation-adjusted enacted level for fiscal year 2022. They have rebuked Biden for including only an increase of 1.5% when adjusting for inflation. Republicans have maintained in the days after the budget was released that the request wasn’t enough to factor in the current inflation levels.
“It’s ignorant to believe these historically high inflation rates aren’t hurting our service members just like they are every other American family,” Rogers and Sen. Jim Inhofe, the ranking member on the Senate Armed Services Committee, said in a statement after its release. “Beyond that, inflation is also driving up key military needs like fuel, as well as the cost of labor and supplies — but this budget doesn’t appear to address that reality. We need to understand what assumptions the Department is operating under, how they arrived at their inflation estimate, and how Congress can help meet the needs of our military as we develop our own recommendations for the 2023 fiscal year.”
Milley acknowledged during the hearing that the budget was created with a built-in inflation bump of 2.2%.
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It’s “obviously incorrect,” he admitted, adding, “It’s almost 8%, and it might go up, might go down, but most forecasts indicate it’s going to go up, and it could level out at 9% or 10% — who knows. But it’s clearly higher than what the assumption was in this budget.”
Michael McCord, the department’s undersecretary of defense (comptroller), also testified, and he acknowledged that the Defense Department paid a 4% inflation rate last year when purchasing equipment to handle national security.
