On a Friday afternoon, just two days before the start of the new fiscal year on Oct. 1, the White House announced that President Trump had signed into law annual funding for the Pentagon.
At the Pentagon, budgeteers heaved a sigh of relief after years of late funding and stopgap budget measures that caused havoc for military planning.
But the respite from years of budget dysfunction on Capitol Hill is already receding. The Pentagon and lawmakers are now facing the imminent return of the same thorny budget issues that have snarled on-time funding and hobbled the Pentagon for years, as well as a wild card with the November midterms and a ballooning deficit.
“I think it’s going to be a long, hard, drawn-out fight over the next year,” said Todd Harrison, the director of defense budget analysis at the Center for Strategic and International Studies.
Under Trump, Congress has pushed through two major budget hikes for the Pentagon, described as the largest year-on-year increase in 15 years. But that was only possible because lawmakers struck a deal to raise Budget Control Act spending caps for 2018 and 2019.
The 2011 BCA law mandates two more years of capped spending. Congress has no deal yet to avert the limits and that means the military is facing a $71 billion fiscal cliff, according to the Congressional Budget Office.
The last Hill fight over the caps delayed the 2018 defense budget by six months, from October to March, making it difficult for the military to spend the money effectively. The Pentagon may be set for a repeat of last year’s months-long stopgap funding measures when it sends its next budget to lawmakers in about four months.
“The FY20 budget request will come out in February, or it’s supposed to. We’ll see if it comes out on time, and I don’t think we’re going to have a resolution to that for probably, you know, a year and a half from now,” Harrison said. “I’d be looking at the spring of 2020 as when we might actually get close to a budget deal.”
For now, the outcome is completely unknown and the stakes are high for Defense Secretary Jim Mattis. The Pentagon is flush with cash to rebuild forces, but it is also depending on continued increases in the coming years to realize the Trump administration’s national security goals.
“The secretary and the others at the department have said all along that FY20 is going to be the first budget that really reflects the new National Defense Strategy. So I think we’ll be looking for that. Put the dollars where the strategy is,” said Rep. Mac Thornberry, chairman of the House Armed Services Committee.
Mattis and the Pentagon have indicated the military will need about 3-5 percent budget growth over the coming years to stay competitive against adversaries such as Russia and China, which the new strategy puts at the top of U.S. national security priorities.
“If defense spending flattens out after FY19, [the Defense Department] will not be able to do badly needed nuclear and conventional modernization simultaneously, it will not be able to repair accumulated readiness problems, it will not be able to sustain America’s ability to project power,” Hal Brands, a senior fellow at the Center for Strategic and Budgetary Assessments, said in testimony to Congress.
Where defense spending ultimately lands on the vast range between the $71 billion cliff and the Pentagon’s vision of steady annual growth may well depend on the outcome of the midterm elections.
If Democrats realize their hopes and win control of the House, that will elevate fiscal hawk Rep. Adam Smith, D-Wash., to chairman of the House Armed Services Committee. Thornberry, a champion of increased defense spending, and his party would be relegated to the committee minority.
The shift in leadership would no doubt make increases in the next defense budget more difficult. Smith believes the growing U.S. debt is making large Pentagon budgets untenable. Smith has made clear in recent weeks that his vision as Armed Services chairman would be a scaled-back military role in the world, fewer nuclear weapons, and a hard look at shaving defense spending.
“When you say that defense shouldn’t be part of the equation, defense is still, I think, 17 percent, 18 percent of the total budget. It’s a big chunk of it, and you’ve got a trillion-dollar debt, and it would still be your vision as we deal with that that defense should be off the table?” Smith said, pushing experts at a recent committee hearing.
Democrats could use growing deficit spending and a $1.2 trillion increase in national debt over the past year to hammer Republicans as a fight over a new BCA funding caps deal unfolds. In past years, the party has pushed for defense spending increases to match non-defense priorities.
But the debt could also pose a real threat to the Pentagon’s topline, another in the growing list of potential problems for the defense budget.
“We don’t quite know when the crunch will come with respect to the deficit and the debt, but I’m quite sure it will come,” Brands said in his testimony. “And so, if we don’t get a handle on the problem, at some point we are going to find we are constrained in paying for national security.”
