Defense Department service leaders on Wednesday warned that a full year Continuing Resolution (CR) for funding would require tens of billions of dollars in reprogramming and prioritize current operations above personnel, acquisition and modernization.
The under secretaries of the Army, Navy and Air Force told reporters Wednesday that they will all have to prioritize current operations, to the detriment of other activities and some acquisition programs.
“As far as why we chose the priorities that we did – you see sailors and Marines across the globe today performing important missions. The Red Sea is an excellent example of how current operations take precedence. We need to be able to perform our mission,” Under Secretary of the Navy Erik Raven said.
“Simply, if we don’t have the resources that we need to execute all of our missions, we have to make tough choices. But between the ability to fight tonight and be ready for all the threats versus preparing for the future and modernizing our forces, it is a tough decision, but we have to lay our chips somewhere and that’s on the ability to perform our missions today,” he continued.
The Navy alone would have $26 billion in misaligned funds if the CR lasts all year, keeping funds at FY ‘23 levels.
Even if the Navy was allowed to move the $26 billion around in its budget for the FY ‘24 needs, “in order to do that we would need reprogramming authority of about $13 billion. That’s about twice what the entire department requests for the entire fiscal year. That’s just for the Department of the Navy needs.”
Raven underscored the challenges in getting reprogramming requests past Congress in a relatively short period.
“Even if we got that reprogramming authority, the process of getting reprogramming through Congress is a lengthy and sometimes challenging one. So our ability to make decisions in real time will be extremely challenged,” he said.
Raven also noted several high profile examples of where that misalignment hits hard, including further delaying maintenance on the long-waiting USS Boise (SSN-764) submarine, shortfalls keeping the America-class amphibious assault ships (LHA) and Virginia-class attack submarine on track and “significant” munitions shortfalls.
He said with a year-long CR, Boise’s maintenance funds would be short by about $600 million “that we simply would not be able to make up,” the LHAs would be $800 million short, and SSNs would be missing $2 billion.
The Navy recently awarded HII a $1.17 billion modification to start performing maintenance on the Boise after it was originally planned to undergo maintenance at a public shipyard in 2016 (Defense Daily, Feb. 26).
Those ships and munitions were “priority areas” the Navy built into the FY ‘24 budget, he said.
Raven also said programs under multi-year procurement, like many munitions, would need additional help from Congress to continue as scheduled under a CR.
“We do also rely on appropriations bills to complete that multi-year authority because [they]are authorized both by the authorization and the appropriations process. So we would have challenges and need to work through that with Congress.”
Under Secretary of the Army Gabe Camarillo said the Army faces a misalignment of funds around $6 billion itself.
He noted the Army hoped Patriot PAC-3 MSE interceptors would be set up for the first year of a multi-year procurement program to be authorized and awarded in FY ‘24.
“We’re short about $1.2 billion in a year-long CR to be able to fund the production increases that are needed to get the economic order quantities on that contract.”
Camarillo said he is also “particularly concerned” about how the full year CR affects the Pentagon’s intent to fund critical munitions at production quantities to send a signal to industry to invest in that production.
He said industry needs the signal to facilitize and invest in the right workforce to improve munitions production to the level needed today.
“We can’t do that if we don’t have appropriations for production.”
Lockheed Martin [LMT] has already invested to increase the PAC-3 MSE line from 550 to 560 missiles per year. The Army has requested funds to continue to ramp up production and the company has said it plans to grow production past 650 missiles annually.
Likewise, Kristyn Jones, Performing the Duties of the Under Secretary of the Air Force, said her service has similar concerns.
The Air Force funds misalignment would stand at over $13 billion, with impacts “particularly challenging in the Space Force, who has seen their budgets rising over the last couple of years,” Jones said,
The Air Force is planning production increases for the Joint Air to Surface Standoff Missile (JASSM), Joint Strike Missile, and F-35A, but the CR would limit those.
“We hear over and over that industry wants that solid demand signal so they know how to invest, support the facilitization. And by having this uncertainty, it really has negative impacts across the defense industrial base. We’ve mapped those out by state, looking at these potential impacts…But it’s not a small impact to the defense industrial base, it’s contractors all across the country who are impacted. “
Raven focused on two other programs impacted by a year-long CR: Standard Missile (SM)-6 production they planned to nearly double funding for and $3.4 billion for the submarine industrial base in the president’s supplemental funding request.
“That’s to put industry on the right plan to produce one Columbia and two Virginia-class [submarines] a year. If that supplemental doesn’t arrive, we simply have to delay on those investments.”
Notably, the Navy is relying on those investments to help boost submarine production to the current demand, called 2+1. The service is also planning to use billions in Australian investment funds on top of that to help make up for planned sales of three to five Virginia-class submarines to Australia in the 2030s.
Camarillo said most commands are prioritizing operations under a CR and they will look at other parts of the operations and maintenance account “where they can potentially take some risks.”
He reiterated Secretary of the Army Christine Wormuth recently said in a full year CR they may have to scale back U.S. participation in some international exercises.
Camarillo underscored that without Congress having passed the supplemental request, current operations are “just burning hotter than we normally would across all of our appropriations accounts.”
Camarillo said while the Army thought the extra costs of operations in Europe and in the Middle East could be funded via the supplemental, current operations are “just burning hotter than we normally would across all of our appropriations accounts.”
For example, $500 million is being spent out of the Army base budget for European operational costs, $100 million for the Central Command area, and $500 million for operations on the U.S. Southwest border, rather than via supplemental appropriations.
Camarillo said U.S. Army Europe and Africa based in Germany expect they will run out of money this summer “in the absence of extraordinary relief, aka as reprogramming.”
Jones added they have to pay the force they have, but agreed a year-long CR would particularly impact things like training exercises beyond items already on a Foreign Military Sales case.
“But all of the replenishment that we’re expecting in the supplemental, is currently impacted. And even things like F-35 training that we’re planning for Ebbing Field [Ark.] with our allies and partners is impacted by not having this funding.”