The Senate Armed Services Committee (SASC) released its version of the Fiscal Year 2023 National Defense Authorization Act (NDAA) on July 18, authorizing $45.7 billion more than requested and $8.8 billion more than the House-approved version of the bill passed by an overwhelming bipartisan majority on July 14. While there are numerous policy issues that must be adjudicated between the two bills, they both send a strong signal that the defense budget request was too low. What follows is a specific analysis of where each chamber added funds. The different approaches can be attributed mainly to plus-ups for inflation and programs. It is feasible that the final NDAA could exceed the $45.7 billion Senate version, if the conference agreement includes the higher inflation and the higher program increases.
The House placed more priority on program-specific increases; the Senate focused on addressing inflation. As Table 1 depicts, the Senate added $21.1 billion, nearly half of the overall increase, for inflation while the House only added $7.1 billion for inflation. Table 2 shows that the Senate also took a more comprehensive approach to inflation, adding funds across all major appropriation accounts, while the House targeted only Military Construction, Military Pay, and Fuel (Operations and Maintenance—O&M) accounts. The Senate version is a more accurate reflection of how inflation will affect the entire defense budget.
The House added $5.2 billion more than the Senate to programs that grow defense capabilities (Table 3). Although the Senate added more funding than the House for military construction and readiness (O&M), the House added $5.8 billion more than the Senate for procurement and $2.7 billion more for research and development (RDTE). Both chambers added funds for nuclear forces and Ukraine assistance, though in slightly different amounts. To best understand the major differences in the procurement and RDTE accounts, it is necessary to look at the adds by service.
As Table 4 shows, the Senate clearly prioritized the Air Force and Space Force. Conversely, the House prioritized the Navy and the Army, with the Navy garnering over one-third of the entire House program-add. Given that the major differences in the program growth between the House and Senate are in the modernization accounts of procurement and RDTE, an examination of these elements by service is useful.
As depicted in Table 5, there are six major differences between the House and Senate program growth for modernization and RDTE. The $1.3 billion difference in Air Force procurement is primarily attributable to the Senate’s $858 million increase for additional F-35 aircraft and $450 million for additional helicopters. Both the House and Senate added $873 million for the compass call aircraft (EC-37B) program. Within Air Force RDTE, the Senate adds $50 million more than the House to refresh the Small Diameter Bomb, as well as $300 million for acceleration of the airborne warning and control system (AWACS E-7) and $256 million for Hypersonic facilities.
The House and Senate differed by $2.1 billion in adds to Army procurement,
but the delta is wider than the amount indicates. For example, while both add
about $1.4 billion for missile procurement, the House added $1 billion of the
$1.4 billion for procuring four additional Patriot firing batteries. The Senate
added funds for precision fires (Hellfire, Javelin, and GMLRS). The House also
added $470 million for remotely piloted aircraft (MQ-1) and $276 million for
various munitions. Finally, while the Senate added $293M million for additional
Abrams Tank Upgrades, the House doubled that to $632 million, while also adding
$619 million for armored vehicles ($400 million for the AMPV and $219 million
for the Stryker).
The difference between the two chambers on Defense-wide
procurement is notable because the Senate added $315 million for standard
missile-3, while the House prioritized additional THAAD interceptors ($213
million) and Medium Fixed Wing Recapitalization ($229 million). Within the
Defense-wide RDTE accounts, the House added $500 million for the Biotechnology
Manufacturing Institutes and $275 million for Central Test and Evaluation
Investment Development. Both chambers added $292 million for increased
Hypersonic Defense.
The largest difference between the two bills is within Navy Procurement, $5.3 billion, as is depicted in Table 6. The House has added $4.4 billion more than the Senate for shipbuilding and $1.5 billion more for aircraft.
The full House and the Senate Armed Services Committees so far
agree that the defense budget request is too low, that inflation must be addressed,
and that additional focus on procurement of military capability is necessary.
While the differences outlined above will need to be ironed out in conference,
once the full Senate approves its version of the NDAA, a powerful, bipartisan,
bicameral signal will have been sent on the level of spending needed for
defense. However, without a budget deal to support enactment of appropriations
on time this September, all this good work will have been just activity without
outcome.
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