The Defense Department is prioritizing key Army modernization programs, hypersonics development and space and cyber efforts in the next fiscal year budget even as it fleshes out how to meet current and future mission needs while fitting into President Trump’s requested funding cuts, Deputy Defense Secretary Patrick Shanahan said Nov. 15.
The Pentagon’s number-two civilian didn’t get into details about which specific Army programs or hypersonics R&D efforts would be shielded in the forthcoming budget request, but told Pentagon reporters that space is a “super high priority” and there are certain Army programs “on a critical path” that will be reflected in both budgets. 
Shanahan noted that the department spent about 10 months developing a strategy-driven budget with a $733 billion topline, and is now working to answer Trump’s directive for cabinet officials to trim 5 percent from their FY ’20 budgets, which would add up to about $700 billion for national defense.
Shanahan’s team is meeting with service officials this coming Monday and will receive their input on potential budget cuts and priorities, he said. “We’ll need a couple of days to interpret those inputs. … We’ll sit down with [Defense Secretary Jim Mattis] in the next week or so, … [and] probably the week after, we’ll go back to the president.”
On Wednesday, Sen. Jim Inhofe (R-Okla.), who chairs the Senate Armed Services Committee (SASC), told reporters on Capitol Hill that he considered $733 billion to be the minimum acceptable national defense budget for next fiscal year, setting up a potential standoff between lawmakers and the White House next year.
Shanahan said his goal in building two budget models is to help Trump understand the tradeoffs that come with a reduced budget. “He needs to have an awareness of what that number really translates to, in terms of performance here for the department,” he said.
Shanahan noted that the department is starting the budget process with “a tremendous amount of alignment” with the White House and lawmakers. While there will be areas of disagreement, those are a “much smaller percentage” than there could be, he added. Overall, stakeholders are all aligned in their concern about the increasingly riskier security environment and in prioritizing affordability.
“I think in the end, we’re going to end up in a good spot, but there’s going to be a lot of back and forth and work,” he said.
The services will likely be weighing how to balance end strength levels and unit quantities for planned procurement programs to try and reach Trump’s 5 percent budget cuts, Shanahan said. The Pentagon is also considering salaries and “targeted cuts” to its agencies and field activities that make up the so-called “fourth estate,” he said.