Just 14 days after receiving the final fiscal
year 2022 appropriations, the White House and federal departments and agencies
submitted the fiscal year 2023 president’s budget to Congress. This budget is
being submitted to Congress in the overall context of a war in Europe, a
40-year high spike in inflation, and a mid-term election in the offing.

There are five initial things to note from a
national security perspective.

First, the budget was not accompanied by an unclassified National Defense Strategy. Instead Secretary of Defense Austin said in a statement that the focus of the defense strategy is the “pacing challenge of China” and “the acute threat of an aggressive Russia.” The Secretary’s statement also noted that the budget reflects strategic priorities related to current threats posed by North Korea, Iran, violent extremist organizations, and climate change. He said the budget “absolutely supports our policy of U.S. global leadership of — and responsibility for — our vast network of alliances and partnerships.”

The Deputy Secretary of Defense described three
approaches to connect strategic means to ends. Called integrated deterrence,
campaigning, and building enduring advantages, these approaches sounded more
like new tag lines for the previously used terms of operations, readiness, and
modernization than real changes to the strategic concepts underlying the budget.
Although the new term of integrated deterrence was identified as underpinning
program and budget decisions, including support for the nuclear triad, it also
seems designed to lower the priority placed on military strength and hard conventional
near-term power.

Second, the top-line funding level requested for
the nation’s defense is $813.3 billion. This figure includes $773 billion for
the Department of Defense, which is an increase of $30 billion, or 4 percent,
above the level recently enacted for fiscal year 2022. The remaining $40.3
billion  is split between atomic energy defense
activities and other defense-related activities. Though this level is higher
than the administration had projected last year ($813 billion vs. $756 billion),
it is difficult to characterize its sufficiency without a strategy and because
of a striking omission noted by the Defense Comptroller: The war in Europe did
not materially change the defense strategy or the budget, both of which were completed
before the invasion began. This omission, the effect of a war in Europe, will
need to be addressed by Congress.

Third is the effect of inflation on the budget,
with particular impact on operating and maintenance costs and pay raises. For
2022, the administration is estimating inflation at 4.7 percent, with FY 2023
inflation estimated at 2.3 percent. The pay raise for the workforce (military and
civilians) is 4.6 percent, which is already a real pay cut given where
inflation is today. Even with the department’s special tools and calculations,
it is hard to figure that current inflation of 7.9 percent won’t hit the
defense workforce harder than DOD indicates or that it will reduce to under 3 percent
in the six months prior to the start of the next fiscal year. The Army will
take the biggest hit here as it receives the smallest budget increase and has
the largest personnel burden. Again, Congress will have to help address the
gaps.

Fourth, priorities within the top line. The department
continues to emphasize preparing for war against China in the 2030s through
increased research and development, rather than preparing for war in the 2020s.
The budget request summary documents emphasize investments in research,
development, test, and evaluation accounts — again the “largest ever” — which
comes at the expense of actually buying and deploying military capability. For
example, the budget proposal would retire 24 ships and buy just nine combat-capable
ships for each of the next three fiscal years, while China continues to expand
the size and capability of its fleet. Given the actual war in Europe today, recent
rumblings from China, and perpetual unpredictability in the Middle East, we can
expect Congress to add billions for the procurement of weapons and munitions.

Fifth, a budget agreement that produces on-time annual
appropriations this fall is more important than ever. In addition to being the
fundamental constitutional responsibility, the role of Congress — and of the administration
and Congress working together — in providing for the common defense, capturing
the full potential of the proposed budget, and fixing the gaps it contains is
the only way the US will be able to field a joint force that is “lethal, resilient, sustainable, survivable,
agile, [and] responsive.”

The budget request is already six weeks late and the justification material needed by Congress will not be ready for several more weeks. Given that the administration neglected many important issues — war in Europe, inflation, and procurement of munitions and weapons — Congress will need to move fast and the military leadership will need to be candid in their assessment of the budget so that Congress can provide our nation with the military forces and capabilities we need in this uncertain environment.

The post 5 quick-hit observations on the FY 2023 defense budget proposal appeared first on American Enterprise Institute – AEI.