Pentagon’s 2017 Budget is Mardi Gras for Defense Contractors

Mardi Gras is an occasion for gluttony, masks, and general revelry. This week, the Pentagon celebrated Fat Tuesday with the release of its fiscal year 2017 budget request, tossing out a variety of baubles for defense contractors.

Overall the Pentagon requested $582.7 billion in discretionary funding, a $2.4 billion increase from last year’s enacted level of spending. The request includes $58.8 billion for “war spending,” named the overseas contingency operations (OCO) account, and often used as a slush fund for a myriad of programs that have little to nothing to do with our wars. The proposed budget continues a trend of Pentagon spending well above historical norms, with our total national security spending for next year at nearly $1.1 trillion.

This is the first budget since Congress passed the Bipartisan Budget Act of 2015, which increased Pentagon spending caps for the base budget to include $548 billion in fiscal year 2016 (an increase of $25 billion over the spending caps previously mandated by the Budget Control Act) and $551 billion for this year (an increase of $15 billion). And rather than moving towards responsible budgeting by moving spending into the base budget, the bill also set a floor for the OCO account of $58.8 billion for last year and this year.

While all of this means there’s a lot of bad news in the defense budget, there is some good news, as well. The Air Force has temporarily ended its campaign to retire the A-10, admitting that it is too useful against Syria and the Islamic State to mothball just yet. We continue to be concerned, however, by previous Air Force efforts to thwart congressional intent by reducing A-10 readiness and effectiveness. Preserving the A-10 is also insufficient for the future of close air support. Representative Martha McSally (R-AZ) is leading efforts to ensure the Air Force develops a next-generation A-10 before it mothballs additional A-10s. “There is no aircraft, either in the fleet or in development, that can replace the Warthog’s unique capabilities,” McSally wrote, referencing the fact that the F-35 Joint Strike Fighter is insufficient to fulfill the role. “The specific mission set for CAS/[forward air controller-airborne]/[combat search and rescue] requires a specific aircraft, not one that is a jack-of-all-trades but a master of none.”

The Pentagon is also proposing to cut one ship from the Littoral Combat Ship (LCS) program, saving taxpayers $206 million. We have long been concerned with problems with this program, and included pausing the Littoral Combat Ship in our Bakers’ Dozen priorities for Congress. More recently, the Navy is investigating why two of the ships have been sidelined by engine issues. The Pentagon’s testing office also found that in two exercises the LCS struggled to fend off a swarm of small attacking vessels, with the attackers penetrating the “keep-out” zone. These are only a few of the problems prompting the leadership of the Senate Armed Services Committee to question the future of the program and its ability to be effective and survivable in combat.

Unfortunately, from there the budget is more decidedly mixed. The budget includes $46 million for the Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System (JLENS), the Army blimp made infamous when it broke loose this past fall. As we noted before, it’s unclear if anything can actually kill this program, even with its known deficiencies.

The Pentagon also asked Congress to fund 63 F-35s at $10.1 billion, despite the most damning testing report of the F-35 program to date. But there may be two bright spots on the F-35. First, the Pentagon rejected a proposal from the F-35 program office to approve a block buy. Second, the Air Force deferred purchasing five F-35As this year and reduced its procurement by 45 aircraft over the next five years, perhaps because one of the major conclusions of the testing report is that the Air Force is unlikely to be able to declare initial operational capability (IOC) on time for its variant. More likely, though, the decision is the first indicator that the costs of the next Long-Range Strike-Bomber will drive reductions in the F-35 program.

Other “savings” offered, including closing military bases through a Base Realignment and Consolidation (BRAC) process, are dead on arrival to Congress in an election year because it would translate into losing jobs for their districts.

Finally, the Pentagon still refuses to break free from war-spending budget gimmicks. While OCO is supposed to be for emergency spending related to our wars overseas, it has repeatedly been used by both the Pentagon and Congress as a slush fund. The use of this fund allows lawmakers and the Pentagon to avoid the spending caps. As Taxpayers for Common Sense pointed out, if OCO were an agency, its $58.8 billion budget would make it the fifth largest in the federal government. But even before the budget came out, Republicans on the House Armed Services Committee protested that $583 billion for Pentagon spending wasn’t enough and sent a letter to the Budget Committee this week urging an additional $15 to $23 billion for OCO—which could easily compensate for the limited weapons program cuts. While the Pentagon supported the budget deal as a “positive step,” Defense Secretary Ash Carter has suggested he is open to spending more.

During a press conference announcing the budget, Vice Chairman of the Joint Chiefs of Staff General Paul Selva immediately dismissed concerns that Pentagon spending is too low to support our national security needs. “We have the most powerful military in the world,” said General Selva. “We are far from gutted…You have in your joint force today the most powerful army on the planet, the most flexible and determined Air Force on the planet, the most capable Navy on the planet, and a Marine Corps no one can match.”

The proposed budget includes increased funding for readiness, which determines how ready our forces are to fight. Readiness, funded through the operations and maintenance account, has been underfunded by the Pentagon and Congress in the past. But it’s misguided to blame this on spending caps; the real culprit is over-prioritizing weapon systems. Despite complaints from some proponents of increased Pentagon spending that modernization of weapons has been unduly underfunded in previous budgets since the Budget Control Act, a recent AP fact-check found that funding has largely remained stable at about $1.6 trillion. Instead, Congress and the Pentagon have responded to budget caps by cutting training and maintenance. As former Pentagon analyst Chuck Spinney has pointed out, however, robbing readiness to pay for over-priced and over-complicated weapon systems is a “death spiral” regular practice of Congress and the Pentagon, even at the highest budget levels. Without fundamental reforms—far more likely to occur under reduced spending that encourage competition and smarter choices—taxpayers should continue to be concerned about a Pentagon largely unaccountable for wasteful spending and mismanagement.

It’s not uncommon to see a spending spree at the end of an administration, but it doesn’t make it any less disappointing for taxpayers when it happens.