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Pentagon’s Budget Will Seek Big Increases for Weapons Buying and R&D

Published 08/03/2023, 16:54
© Bloomberg. The Pentagon budget calls for more F-35 fighter jets.

(Bloomberg) -- The spending plan President Joe Biden will propose Thursday includes what officials say is one of the nation’s largest peacetime defense budgets, with $170 billion for weapons procurement and $145 billion for research and development, both recent records.

The Defense Department “top line” for the year that begins Oct. 1 will exceed $835 billion, up from the $816 billion that Congress appropriated in the current fiscal year, according to one of the officials, who asked not to be identified discussing the budget before it’s formally sent to Congress. A spokesperson for the White House’s Office of Management and Budget declined to comment on the numbers.

Although weapons sent to Ukraine have depleted Pentagon stockpiles, spending to support President Vladimir Zelenskiy’s resistance to Russia’s invasion has been funded through separate supplemental appropriations. The Defense Department’s regular budget is being shaped largely by escalating tensions with China, viewed at the Pentagon as the prime potential challenger to US military leadership.

The Pentagon’s coming weapons modernization request “reflects a budget that is still focused primarily on developing weapons for future wars rather than procuring weapons for near-term wars,” said Mark Cancian, a former Office of Management and Budget defense analyst who’s now with the Center For International and Strategic Studies.  

The $170 billion procurement request is $8 billion more than Congress appropriated for this fiscal year. The R&D request is about $5 billion more than Congress approved.

F-35, Missile

Among the major systems that would benefit from the proposed new budget is Lockheed Martin Corp (NYSE:LMT).’s F-35, the costliest US weapons system. The budget will request $13.5 billion for the fighter jets in procurement, continued development and upgrades.

The Pentagon will request 83 F-35s for the Air Force, Navy and Marine Corps, meeting the services’ objectives. That includes a planned 48 planes for the Air Force and 35 for the Navy and Marines.

The 83 is up from the 61 that the administration requested last year. Congress added back 19 in this year’s final spending bill, for a total of 80.

The budget proposal also includes $4.3 billion, mostly in research and development funds, for Northrop Grumman Corp (NYSE:NOC).’s new intercontinental ballistic missile, or about $700 million more than the Pentagon requested for this fiscal year.

And the budget also requests significant funding of long-range Air Force and Navy munitions that could be used in a potential future conflict with China, one of the officials said.

Signaling Industry

The research and development request would be the highest ever, and procurement would equal the highest levels since the height of the Iraq and Afghanistan wars, Cancian said. Procurement spending in fiscal 2008 was $207 billion in 2022 dollars, according to Pentagon historical records.

“A strong focus on procurement” would send “an important demand signal to industry, the supply chain and the workforce,” said former Pentagon Comptroller Elaine McCusker. “I expect members of Congress would be interested in those topics, as well as what exactly the department is proposing to buy to include quantities and timeliness on when those acquisitions would reach the inventory, the force and the fleet.”

One senior administration official said the request will be the largest in “nominal” dollars unadjusted for inflation. Still, some Pentagon-only budgets in the mid-2000s were higher when updated to fiscal 2022 dollars, the official said.

For perspective, during fiscal years 2008 to 2011, when President George W. Bush’s administration surged US troops and equipment into Iraq, overall Pentagon spending ranged from $832 billion to $858 billion when measured in 2022 dollars.

Congressional Mood

Although some conservative Republicans and liberal Democrats in Congress have called for cutting or restraining defense spending, they have been overwhelmed so far by supporters of increased budgets intended to counter Russia’s invasion of Ukraine and China’s muscle-flexing in the Indo-Pacific region.

“There’s no appetite among Democrats or Republicans, there is no majority appetite for trimming the overall numbers” for the Pentagon budget, Roger Wicker of Mississippi, the top Republican on the Senate Armed Services Committee, said in an interview. “While some people may talk about that, it’s not likely to happen.”

© Bloomberg. The Pentagon budget calls for more F-35 fighter jets.

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