With the defense budget, GOP lawmakers say Biden is blind to a stubborn foe: Inflation

But despite the $30 billion increase, this year’s budget submission met with the same withering criticism from Republicans on the Armed Services Committee as last year’s proposal.

And the reason is inflation, which is hovering at about 8% at the moment.

“For the second year in a row, President Joe Biden has submitted to Congress an inadequate defense budget that does not provide the real growth we need to counter China,” said Oklahoma Sen. Jim Inhofe and Alabama Rep. Mike Rogers, the ranking Republicans on their respective committees.

In letters sent to Defense Secretary Lloyd Austin, Joint Chiefs Chairman Gen. Mark Milley, and all the service secretaries and chiefs, Rogers and Inhofe questioned why the president’s budget is based on inflation in the 2.3% to 2.6% range, especially when Republicans in Congress have been warning for weeks that an extra 5% would be needed to account for rampant inflation.

“Put simply, the inflation we are experiencing is effectively a 5% to 8% cut to the Department’s buying power, which could amount to between $20-$30 billion in unfunded costs in fiscal year 2022 alone, not to mention lost buying power in fiscal year 2021 and potential lost buying power in fiscal year 2023.”

“Unfortunately, President Biden’s budget has proven to be once again wholly inadequate,” said Rogers in a separate statement. “This budget fails to account for the record-high inflation that is wreaking havoc on our nation.”

In the March 28 budget rollout, Pentagon officials admitted their inflation assumptions were four months old and didn’t reflect the current economic picture.

“We built into this ’23 budget the best information that we had at the time,” said Deputy Defense Secretary Kathleen Hicks, who indicated the Pentagon could come back to Congress with supplemental requests if inflation doesn’t diminish.

“So we will be looking, over the summer, where exactly inflation lands and how inflation ends up affecting our service members,” Hicks said.

But Biden administration officials are clearly hoping that as the pandemic wanes, supply chains are rebuilt, oil prices stabilize, and inflation will come down.

“We don’t have an accelerating assumption that inflation continues at high rates,” said the Pentagon’s comptroller, Michael McCord. “We’re a long way off even from figuring out, from knowing what’s going to happen in F.Y. ’23, which doesn’t start for six months and doesn’t end for 18 more months.”

Defending the administration’s budget on Capitol Hill, Office of Management and Budget Director Shalanda Young said the inflation numbers were “in line with blue-chip private forecasters” at the time they were locked in on Nov. 10.

In a separate call with reporters the day before, she conceded, “If we were updating today, we would look at it somewhat differently.”

“The Pentagon’s inflation assumptions for 2023 are almost certainly low, nor does the budget make up for current record inflation rates,” said Inhofe. “President Biden’s defense budget reflects the world he wishes for — but not the world as it is. You simply can’t look at the world around us now and think this budget is adequate to confront all the threats we face.”

It is not unusual for the president’s budget to be dead on arrival in Congress. Under the Constitution, the legislative branch, not the executive, holds the power of the purse.

When this year’s Pentagon budget was deemed inadequate, a bipartisan effort in Congress succeeded in adding $27 billion before sending it to the president for his signature.

“The president’s Defense Department budget request is an outline and a starting point,” said Rhode Island Sen. Jack Reed, the Democratic chairman of the Armed Services Committee.

“In the coming weeks, the Armed Services Committee will hold in-depth, bipartisan hearings on the budget request,” said Reed.

“Congress must make thoughtful decisions about how we resource and transform our tools of national power,” he said in a statement. “Now that President Biden has issued his budget request, the committee can begin our work.”

Both Inhofe and Rogers vowed to spearhead the fight to add billions more to the defense budget, which could push the Pentagon’s share to over $800 billion if last year is a guide.

“Given the reaction on the Hill to the budget request, I expect to see Congress enact $30-40b more than requested for FY23 — around a 5 percent increase,” said Todd Harrison, a budget expert at the Center for Strategic and International Studies. “Part of that will be motivated by inflationary pressures, but part of it will be to restore things that the administration cut out of the budget in this request.”

Under Biden’s plan, the Pentagon would cut the number of F-35 fighter jets it buys from a planned 84 to 61, retire 24 ships while building only nine new ones, and allow the Army and Navy to shrink by 5,000 troops because it’s hard to recruit in a hot job market.

As a recent Wall Street Journal editorial put it, “The overall budget picture is that the Biden team is betting on weapons that don’t yet exist for a war they hope arrives on someone else’s watch. They want to save money now in order to spend on what they say will be a more modern force in a decade.”

“Just as I did last year, I will continue to fight to ensure that Congress once again gives our military the funding increase they need,” said Rogers.

“We’ll do our due diligence in our constitutional duty as we did last year,” said Inhofe, who is retiring at the end of the year.

The question is, will enough Democrats go along, defying their president on defense spending for the second year in a row?

And then there is the genuine possibility that the midterm elections could hand Republicans control of Congress before the budget is enacted, giving them the final say on the Pentagon’s top line.

Jamie McIntyre is the Washington Examiner’s senior writer on defense and national security. His morning newsletter, “Jamie McIntyre’s Daily on Defense,” is free and available by email subscription at dailyondefense.com.