The debt ceiling deal’s $886 billion fiscal 2024 defense cap will heighten congressional scrutiny of military service defense budgets this year and will likely mean congressional leaders will have to cut such requests, if those leaders want to fund items on the services’ unfunded priority lists (UPLs) or restore prior funding cuts.
Having an established defense topline for fiscal 2024 “defines the trade space” within the congressional defense committees, David Berteau, the president of the Professional Services Council (PSC), said in a June 1st telephone interview. PSC represents hundreds of federal government contractors.
“In the end, 85 percent of the defense line items go through unchanged. 10 or 15 percent are gonna be changed so it [having a set topline] defines the trade space much earlier in the process,” Berteau said. “What it [the defense cap] says to me is, there’s no head room for those [UPLs]. You can’t add to cover those service and COCOM [combatant commander UPL] requests,” he said. “One of my big questions is what happens to those [UPLs]?”
Legislators’ questions for the record (QFRs) on UPLs after congressional budget hearings may provide insights on which UPLs Congress will fund.
Another possibility that Republicans in the Senate are broaching is a defense supplemental to get around the $886 billion cap.
The House on May 31 passed the deal–the Fiscal Responsibility Act–negotiated between House Republican leaders and the White House, and the Senate may vote on it before the weekend. The measure, beside capping fiscal 2024 defense spending at the Biden administration’s requested level, caps nondefense at $704 billion–a five percent cut from the White House request–and provides a one percent increase in fiscal 2025 for defense and nondefense (Defense Daily, May 30).
Whether that capped one percent increase for defense spending in fiscal 2025 will change the White House Office of Management and Budget fiscal guidance for defense in that year is an open question but an important one, as congressional appropriators look at out years funding for programs before setting a current fiscal year funding level for such programs to ensure that a military service is planning to sustain program investment.
While the U.S. Army has had to adapt its budget, including providing munitions replenishment, to reflect the service’s significant aid to Ukraine, and the U.S. Navy has struggled with its shipbuilding plan, the U.S. Air Force and Space Force seem to be well positioned for the upcoming congressional scrutiny of their fiscal 2024 requests.
During the congressional budget hearings thus far, Air Force Secretary Frank Kendall “wove together a pretty solid argument of how he had built an integrated Air Force and Space Force budget in FY ’24 that responded to the threat, that was tied to the National Security Strategy and the National Defense Strategy, and, most importantly, laid the groundwork for the entire FYDP,” Berteau said.
Kendall’s “operational imperatives have been a steady, common theme for more than two years,” Berteau said. “There’s no equivalent to that structure in the testimony from the Secretary of the Army or the Secretary of the Navy. If the trade space is smaller, how well timed the request is goes a long way to determining what the final product looks like.”
The House Freedom Caucus and several Senate Republicans have criticized the Fiscal Responsibility Act, which would raise the debt ceiling through fiscal year 2025, for not boosting defense significantly or going far enough on non-defense spending cuts.
While the debt ceiling deal caps fiscal 2024 nondefense spending at $704 billion, the latter is not set out by appropriations subcommittee, agency or cabinet department, and House leaders will likely try to define such limits before House Appropriations Committee mark-ups in the next two weeks. The debt ceiling deal’s established spending caps, the looming congressional arguments over nondefense spending levels and the likelihood that the White House will want a complete defense and nondefense package for fiscal 2024 seem to increase the chances of a fiscal 2024 continuing resolution.