By Emma-Louise Blondes.
President-elect Donald Trump promised during his campaign to increase the Department of Defense (DoD) budget along with the country’s military capabilities and capacities. Defense experts have estimated that this plan would increase spending from the current level of $590 to $850-900 billion over four years. Given the United-States’ current budgetary stalemate, it will be interesting to see how the President-elect manages to fund his project which, if carried out, would raise American military spending to a level unprecedented since WW2. However, regardless of ideology, the new Administration is obliged to pick up where Obama left off and work within budgetary parameters of the FY2017 defense budget, which will be enacted as soon as Donald Trump takes office. This article presents an overview of the defense budget and the fiscal challenges Mr. Trump will face as Commander in Chief.
Obama’s defense legacy
The $590.6 billion FY2017 defense budget marking the end of Obama’s presidency highlights current US military commitments and offers a snapshot of Obama’s defense legacy. The trends in budget spending over the last eight years underline how Obama tried to tailor defense spending to reflect his political posture, while responding to global security challenges. Obama’s goal of reducing America’s military presence abroad was not attained as ongoing wars in Afghanistan and Iraq continue to command $49.2 billion of the FY2017 defense budget. However, Obama avoided a surge in defense spending by imposing federal budget regulations in 2011. As the American deficit grew after the Great Recession, President Obama enacted the Budget Control Act (BCA) with the objective of reducing all federal discretionary budgets over a ten-year period. Consequently defense spending, with the exception of “War Funding” comprised within the Overseas Contingency Operations (OCO) account, was subject to this regulation. Although Congress passed legislations in 2013 and 2015 to authorize slight increases in the defense budget over a two-year period, the BCA remains in effect today. Within this budget environment, the DoD has to make significant tradeoffs between the services’ capability, capacity and readiness. In fact, in the CSIS analysis of the FY2017 defense budget published this past summer, Todd Harrison explains how the DoD is currently faced with a dual challenge: while the Pentagon needs to find ways to cut back on spending without further reducing the force structure, it also needs to operate more effectively with this reduced force. These are the challenges Donald Trump will face when becoming America’s next Commander in Chief. Therefore, before Trump decides to implement his defense plan, he will need to work with Congress to find the required funds.
Where will Trump find the money?
Before submitting his first US defense budget, the new president must confront the reality of US budgetary constraints. If Trump intends to increase defense spending, he will need to amend or repeal the Budget Control Act (BCA). Although amended in 2015 to authorize a slight increase for FY2016 and FY2017 defense budgets, it is still limited to a fixed dollar ceiling ($551.1 billion for FY2017). Donald Trump pledged to abrogate this law during his campaign, but the BCA can only be repealed with the support of Congress. While a simple majority is needed in the House to pass legislation, the Senate requires the support of 60 of the 100 Senators. Despite Republicans holding the majority with 54 Senators, 6 Democratic Senators would need to side with them for a change to be approved. Given the growing political divide between Republicans and Democrats, this is unlikely. Furthermore, Republicans will take advantage of their majority in Congress to push for as much legislation as possible before Congressional elections in two years time. Even if defense spending is a priority, it will not be their sole concern. Although Democrats have also advocated reforming BCA caps, they hoped to do so for non-defense spending. They will not support increased defense spending without compromise on social issues, which is unlikely given the current political mood. Donald Trump may increase the defense budget by introducing legislation to raise the ceiling above the BCA caps, but he will struggle to get Democrats to agree to any major increase.
There is a greater chance of increasing the Overseas Contingency Operations (OCO) budget, which is $58.8 billion in FY2017. This portion of the defense budget, used to fund ‘emergency’ spending for US military operations abroad, is not subject to BCA caps. Because the term ‘emergency’ is roughly defined, it is subject to interpretation. Consequently, the fund has increasingly been used for discretionary defense spending, which could not be accommodated in the base budget due to BCA caps. In the FY2017 budget, Todd Harrison estimates that roughly $25 to $30 billion of OCO funding is in fact used to by-pass base defense spending. Thus, it is likely OCO budget will partially increase under Trump’s presidency should he fail to lift the BCA caps. However, Democrats will be wary of this loophole and certainly limit any massive increase. How Trump’s Administration alters the allocation of funds within the OCO budget will be interesting to observe. During his presidential campaign, Trump spoke in favor of adopting an allegedly isolationist foreign policy, but also claimed he would “bomb the shit out of ISIS”. While Trump made little mention about Afghanistan during his campaign, he will soon be confronted with the scale of the ongoing involvement. At $41.7 billion, Operation Enduring Freedom accounts for the biggest share of the OCO budget. This is significantly greater than the $7.5 billion allocated to Operation Inherent Resolve in Iraq and Syria. Obama has also increased the European Reassurance Initiative funding by $2.6 billion to reach $3.4 billion to help the NATO alliance defend European states and deter a tentative Russian aggression. Europeans fear American commitment will be reduced since Trump expressed skepticism about NATO and a desire to strengthen US relations with Russia. Thus, if Donald Trump follows through in conducting the foreign policy he laid out during his campaign, the distribution of OCO funding might drastically bifurcate and increase. However, the President cannot avoid dealing with an ongoing war in Afghanistan, which he seems to have overlooked.
Distributing funds between services and domains
Although the defense budget has decreased since the War on Terror’s peak-years between 2001 and 2010, the current budget still reflects repercussions of the war’s impact. Between 2001 and 2012, Operation and Maintenance (O&M) – used to support operating forces, mobilization, training and recruiting, and health care – and Military Personnel-related costs (MILPERS) grew extensively. Although their accounts have shrunk since 2010, DoD still struggles to further reduce their budgets. The Congressional Budget Office states that the two largest contributors to O&M growth are the Defense Health Program and activities that support combat forces. We can assume these increases result indirectly from the US military’s long-lasting operations in Afghanistan and Iraq. In addition, the Washington-based think tank CSBA reports that the cost of maintaining troops has increased in the past 15 years. The cost per service member has risen from $58,240 in 2001 to $132,243 in 2017. Thus, although the Obama Administration has significantly reduced the number of troops, the cost of maintenance has limited net savings. The O&M and MILPERS categories take up the lion’s share of the FY2017 budget (O&M: $205.9 billion in base budget and $45 billion in OCO budget; MILPERS: $146.4 billion in base budget). As it is increasingly difficult to reduce funds within these domains, the President must cut back on spending within other domains to meet the BCA caps. This reality highlights the challenge the Trump Administration will face trying to increase the number of active-duty soldiers from 475,000 to 540,000.
After deducting these allocations from the discretionary defense budget, a limited amount remains for Procurement and RDT&E spending. This is where Obama had an opportunity to align spending with his political goals. While Procurement still represents the third largest share of defense funds, it is 7,4% lower than in FY2016. This reduction is mainly due to the increase in O&M and MILPERS spending and a need to comply with BCA caps. Within this domain, the Navy and the Air Force received the most funds, for the procurement of Combat Aircrafts (13.24%) and Warships (12.53%). The Air Force’s main concern is the procurement of F-35 combat aircrafts. Due to lack of funding, this ambitious program has been delayed and its target numbers gradually decreased. Consequently, the Air Force cannot retire older aircraft such as F-15s, F-16s, or A-10s until new higher performance models replace them. Because the US fighter fleet is somewhat outdated and costly to maintain, more funds must be allocated to the Air Force within the O&M line. Donald Trump’s administration will have to confront this hurdle before adding the 100 aircrafts promised during his campaign. The Navy faces a similar dilemma as ship-building was also cut back during the Obama administration due to lack of funds. Congress attempted to bridge the shortfall by creating a National Sea-Based Deterrence Fund to produce the Ohio-Class replacement submarine. However, it is still unclear how this program will be funded within the BCA caps. Trump has pledged to increase the US fleet from 272 to 350 ships. Not only will he struggle to find the resources to fund this program, but this cannot be achieved until 2030, way beyond the end of a potential second term.
Rather than increasing capacities and capabilities, President Obama tried to modernize the US military to better prepare it for tomorrow’s warfare, placing particular emphasis on research and the development of advanced technologies. Of the $78 billion RDT&E budget, the Air Force and defense-wide spending are allocated the largest share of funds, with 25% earmarked for classified programs. The current Administration prioritized modernizing the US nuclear arsenal and ballistic capabilities in an attempt to deter Russia, China, Iran and North Korea (which the Fiscal Year Defense Program (FYDP) cited as posing the most significant threats to the United States). The RDT&E funds will mainly be used to develop B21s and the Ground Based Strategic Deterrent. According to the FYDP, defense-wide spending should invest $13 billion in development of the missile defense program over the next 5 years. The DoD has also allocated its funds for research in space and space based systems, cyberspace operations, and continued investments in basic science and technology research. What is to become of this modernization plan under Donald Trump is hard to project. While he has advocated for the modernization of the US nuclear arsenal and cyber security, it is difficult to predict the concrete impact of campaign declarations. Trump has also spoken in favor of letting American allies build their own nuclear arsenals to deter regional adversaries. Although this is unlikely to translate into policy, it indicates how Donald Trump’s approach to nuclear weapons may differ from that of his predecessors.
Ultimately there is a significant disconnect between Donald Trump’s grandiose defense plan and the realities he will confront whilst attempting to implement it. The President elect’s intent to increase the defense budget and military should be understood within his greater plan to reassert American global dominance. However, Donald Trump will soon realize that his intentions extend far beyond his reach. Not only will his Administration struggle to find the resources to fund such dramatic increases, but his promised expansions can only be achieved within a timeframe that exceeds his potential two terms in office. Thus, although defense spending may partially increase during Donald Trump’s tenure in office, it will unlikely attain the level he promised.