IT’S MILLEY TIME: In announcing his intent to nominate Army Chief of Staff Gen. Mark Milley to be the next chairman of the Joint Chiefs of Staff almost a year before the current chairman, Gen. Joseph Dunford is scheduled to retire, President Trump has rendered Dunford a bit of a lame duck. Trump has also left open the possibility Dunford could be leaving before September 2019, when his second two-year term is up.

HAPPENING TODAY, TRANSGENDER BAN HEARING: Trump’s Justice Department is set to make an oral argument to the D.C. Circuit Court of Appeals at 9:30 this morning that it should lift an injunction on the president’s ban on transgender troops in the military. Attorneys representing active-duty transgender plaintiffs and two rights groups are set to urge the court against the move, though a final decision is not expected.

MILLEY’S RECORD ON INCLUSIVENESS: When Defense Secretary Ash Carter announced the change in policy to allow transgender troops to serve openly back in June 2016, he chose the words of Army Chief Milley to make his point.

“The United States Army is open to all Americans who meet the standard, regardless of who they are. Embedded within our Constitution is that very principle, that all Americans are free and equal. And we, as an Army, are sworn to protect and defend that very principle. And we are sworn to even die for that principle. So, if we in uniform are willing to die for that principle, then we in uniform should be willing to live by that principle.”

Milley had returned to that theme often in his public remarks, including last year at a meeting of the Association of the Army. “It doesn’t matter if you are gay or straight or anything in between. It doesn’t matter if you are black or white or Asian or Indian or any other ethnic group. It doesn’t matter what the country of your origin is or the spelling of your last name. It does not matter if you are Catholic or Protestant, Muslim or Jew, and it doesn’t matter if you believe at all,” he said. “That is the core organizing principle of the United States of America, and that is why we fight.”

TRUMP’S HEAD-SPINNING $50 BILLION BUDGET PIROUETTE:  It was just two months ago, President Trump shocked the Pentagon with an order to slash its budget for next year from $733 billion to $700 billion. The move sparked outcry from congressional Republicans. Now the president has reportedly been convinced to do a total about-face. According to Politico, Defense Secretary Jim Mattis along with arms services chairmen Sen. Jim Inhofe, R-Okla., and Rep. Mac Thornberry, R-Texas, successfully lobbied Trump to not only abandon his 5-percent cut but boost the defense budget request to Congress next year to a whopping $750 billion.

OPENING BID: The $750 billion budget is being portrayed as a classic negotiating ploy, which Trump outlined in his 1987 book, “The Art of the Deal.” “My style of deal-making is quite simple and straightforward,” he wrote. “I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after.” It’s a stunning shift for Trump, who just tweeted just a week ago the U.S. and its competitors are locked in an uncontrolled arms race, and that spending was unsustainable. “The U.S. spent 716 Billion Dollars this year. Crazy!” Trump tweeted.

So, the eye-popping $50 billion plus-up appears to be Trump’s attempt to strengthen the hand of Republican hawks in Congress as they wrangle with Democrats over the defense and non-defense top lines. “There was a discussion with POTUS about how to get $733 billion, and POTUS suggested that if the position is $733 billion, then we should submit a budget at $750 billion as a negotiating tactic,” a source told Politico. Trump undercut Republicans in October when he made an off-the-cuff announcement of his 5-percent defense cut before any real Hill negotiations have gotten underway, some defense analysts said.

And the new figure tracks closely with an assessment by Inhofe, who argued in an address Thursday no strategic rationale exists for a cut, and that defense spending should increase by 3-5 percent over inflation annually. Even the Pentagon’s original $733 billion plan would have kept spending flat with no real growth compared to this year’s funding.

MILLEY’S POWERFUL RHETORIC: Assuming Gen. Milley is confirmed as the next JCS chairman, Trump will have a powerful voice making the case for fully funding national defense. For example, two years ago during a heated debate over rebuilding the military, Milley issued a pointed warning about a dangerous decline to John McCain’s Senate Armed Services Committee, uttering a favorite phrase that summed up his outlook and has reverberated since.

“The butcher’s bill is paid in blood, of American soldiers, for unready forces,” said Milley, citing the lessons of the Korean War, as recounted in the seminal book “This Kind of War,” by T.R. Fehrenbach, which is required reading at every U.S. war college. In Korea U.S. troops were decimated, Milley recalled, “And it wasn’t because they were bad, it wasn’t because they were incompetent.”

“It was because they had, you know, two 90-millimeter recoilless rifles, their mortars didn’t work, their ammo wasn’t done, the training wasn’t done. They weren’t properly equipped. They weren’t in great shape,” Milley told the senators in September 2016. “They were sent into combat, into harm’s way, unready, and they paid for it. And tens of thousands of others paid for it in those early months, those first six months of Korea. It’s not a pretty picture. Readiness matters. Reps at training centers matters. Equipment matters, personnel fill matters. And to do otherwise… is the ultimate sin, to send someone into combat who is unready.”

‘TALIBAN KHAN’: The U.S. has consistently said publicly that Pakistan remains the key to convincing the Taliban to make peace in Afghanistan — while at the same time privately complaining that the Pakistan government only pays lip service ending the Taliban’s safe havens on its soil. In an interview with The Washington Post’s Lally Weymouth, Pakistan’s new prime minister, and former cricket star, Imran Khan pushes back on the allegations, while insisting his country won’t be America’s “hired gun.”

“When I came into power, I got a complete briefing from the security forces. They said that we have time and time again asked the Americans, ‘Can you tell us where the sanctuaries are, and we will go after them?’ There are no sanctuaries in Pakistan,” Khan told the Post. “But where are these people? Our border between Pakistan and Afghanistan has the greatest amount of surveillance. The U.S. has satellites and drones. These people crossing would be seen.”

That said, Khan says he agrees peace in Afghanistan is in Pakistan’s interest. “We will do everything … We will try our best. Putting pressure on the Taliban is easier said than done. Bear in mind that about 40 percent of Afghanistan is now out of the government’s hands.” And he insisted he does not want the Americans to leave Afghanistan in a hurry like they did in 1989. “I talked for years about how there was no military solution in Afghanistan, and they called me ‘Taliban Khan.’ If you did not agree with the U.S. policy, you were [thought to be] anti-American. Now I’m happy that everyone realizes there is only a political solution.”

F-35s FOR TYNDALL: The Air Force says it is asking Congress for new funding to rebuild Tyndall Air Force Base in Florida and put advanced F-35 joint strike fighters there. The service is already reaching out to lawmakers on Capitol Hill about the plan, which is said could lead to the fifth-generation fighters arriving on the Florida Panhandle in about four to five years.

“We have recommended that the best path forward to increase readiness and use money wisely is to consolidate the operational F-22s formerly at Tyndall in Alaska, Hawaii, and Virginia, and make the decision now to put the next three squadrons of F-35s beyond those for which we have already made decisions at Tyndall,” Air Force Secretary Heather Wilson said in a statement.

MARINE IDENTIFIED: A 28-year-old Marine officer from Florida was among those killed when a military tanker and a fighter jet collided during a mid-air refueling over Japan. Capt. Jahmar F. Resilard was an F/A-18 Hornet pilot based out of a Marine Corps air station in western Japan and was recovered from the ocean following the training mishap.

THE RUNDOWN

Wall Street Journal: Senate to Vote on Withdrawing U.S. Support to Saudis in Yemen War

New York Times: Battered ISIS Keeps Grip on Last Piece of Territory for Over a Year

Defense One: Russia Launched Cyber Attacks Against Ukraine Before Ship Seizures, Firm Says

Washington Post: Chief of Staff John Kelly to leave White House by end of month, Trump says

Military.com: Army Completes Three-Peat, Edges Navy 17-10

Defense News: Blink and you’ll miss it: The B-21 bomber accomplishes another big review

Military Times: DoD Inspector General investigating fewer allegations of senior official misconduct

Task and Purpose: The 2nd SFAB Is Gearing Up For Its New Advise-And-Assist Mission In Afghanistan

Washington Post: Oversight of U.S. military’s food suppliers called into question after fraud indictment