Answered: Ten Major Questions about America’s 2024 Defense Budget
The real state of America’s military can be measured via its spending priorities.
Since dollars are policy in U.S. national security, it is not surprising that, given the Russian invasion of Ukraine, the increasingly aggressive Chinese behavior toward Taiwan, and the escalating federal deficit, the Fiscal Year 2024 (FY2024) defense budget proposed by the Biden administration has provoked comments from all parts of the political spectrum. To put these comments in perspective, it is important to analyze at least ten major questions that, as we previously noted, President Joe Biden had to answer in formulating his proposed defense budget.
First, in deciding on the size of his FY2024 defense budget increase, would Biden use the $813 billion he originally proposed for FY2023 as a base? Or would Biden use the $860 billion, which was approved in the National Defense Authorization Act (NDAA) for FY2023?
For FY2024, Biden used the latter—the congressionally approved FY2023 level of $858 billion—as a base and proposed a total budget for FY2024 of $886 billion, an increase of 3.2 percent. Had he used his $813 billion as a base, his budget proposal would have amounted to $47 billion less. Even if Congress does not add to his FY2024 proposal, which appears unlikely, this would mean that, since the Biden administration came into office, the defense budget will have grown by $146 billion, or 20 percent. This is exclusive of the military assistance to Ukraine, which now amounts to over $50 billion, and nearly all of the weapons going to Taiwan. Moreover, it does not include the $100 billion the federal government spends each year amortizing the military retirement system and the approximately $325 billion the Veterans Administration will spend in FY2024. As the Pentagon comptroller noted, the United States is inevitably moving toward a trillion-dollar defense budget.
Second, after deciding on the base, which rate of inflation would the Biden administration use to determine whether to maintain the current spending level in real terms, as he did last year, or potentially provide a real increase, as Congress did previously? The yearly inflation rate in January 2022 was 6 percent, the second highest in forty years. Even with no real growth, a 6 percent increase above the amount Biden requested for FY2023 means an FY2024 budget request of about $870 billion. Using the NDAA level as a base would have resulted in a budget request of approximately $900 billion.
For FY2024, Biden assumed an inflation rate of 6 percent. Using an inflation rate of 6 percent and the Congressionally approved budget for FY2023 as a base would have meant a proposed budget of $912 billion for FY2024. Therefore, in real terms, the FY2024 Defense budget is $26 billion below the FY2023 level.
Third, in addition to deciding on which base and which rate of inflation to use in determining the top line, Biden had to take into account at least three different perspectives from members of Congress. First, that of the members of the House Republican Freedom Caucus, the Democratic Progressive Caucus, and sixty-two religious groups, who want to return the FY2024 defense topline to the FY2022 level of $775 billion. While many see this as an extreme measure, it is important to keep in mind that this figure would be $35 billion, or 5 percent, above the Trump administration’s last budget. It is also more than twice as much as China and Russia combined are spending on defense, and about the same amount Biden himself had projected in his first year in office. While many would argue that the Russian invasion of Ukraine and China’s aggression toward Taiwan have significantly changed the international environment, it is important to remember, as noted above, that U.S. support for Ukraine is funded separately from the regular defense budget and that Taiwan is paying for almost all of the weapons.
A second group consists of those members who rely on the unfunded priorities list. These priorities, which by law must be submitted directly to Congress by the services and the combatant commanders, outline those programs that the Secretary of Defense eliminated from their original budget request. For FY2023, this list contained $21 billion in unfunded priorities, most of which were added to Biden’s FY2023 proposal. For FY2024, the list amounts to “only” $17.1 billion. However, this amount does not include the list from the Cyber Command, the National Guard Bureau, the Strategic Command, and the Missile Defense Agency.
A third group is composed of the defense hawks, who, given the Chinese military build-up want to increase defense spending from its current level of 3 percent of GDP to as much as 5 percent.
Fourth, would the Biden administration finally release its budget in a timely manner? During Biden’s first two years in office, the administration released its budget more than a month later than the normal practice. Such tardiness makes it much more difficult for Congress to pass the budget before the start of the fiscal year. This is particularly difficult for the Department of Defense, since, until a budget for the new fiscal year is passed, the Pentagon can only spend at the previous year’s level and not start any new programs, leading to a significant amount of waste and mismanagement.
Biden released his budget proposal on March 13, which is a month after the due date and makes it likely that Congress will only pass a continuing resolution for at least the first part of the new fiscal year, making it more difficult for the military to spend these funds efficiently and effectively.
Fifth, in addition to deciding on the base and the inflation rate, the president had to decide on the rate to increase military pay. The current basis for raising active-duty pay is the Employment Cost Index (ECI,) which as of September 30, 2022, was 5.2 percent compared to 4.6 percent a year before. This would be the highest raise in thirty years. For retired pay, the average cost of living increased by 8.7 percent from July to September 2022. No administration is bound by law to implement these levels, but most administrations do since they have a large impact on recruiting and retention. Since pay and benefits already consume one-quarter of the total defense budget, how much Biden raised them will have a significant impact on how much is left for investment in current nuclear and conventional procurement and research programs.
Biden proposed a raise that used the September 2022 ECI as the basis and proposed 5.2 percent pay raise for uniformed military and civil servants and 8.7 percent for military retirees. However, some critics, who support a larger raise, have pointed out that, since FY2021, military pay has increased by only 10.7 percent, while inflation has totaled 16 percent, and military housing allowances have dropped from 100 percent of rent and utility costs to 95 percent. These policies have contributed to the crisis in recruiting and retaining a sufficient number of qualified women and men in the active and reserve forces.
Sixth, after deciding on the base, would Biden increase the budget by just enough to keep pace with inflation, or would he accept a real increase of 3 to 5 percent, which some in Congress, including many in his own party, said is necessary to keep up with the growing threats from Russia and China? Increasing the budget by such in real terms, with an inflation rate of 6 percent and using the FY2023 NDAA as a base, would have resulted in an FY2024 defense budget request of about $922 billion—$110 billion more than Biden requested just a year ago, and $136 billion above what he proposed for FY2024.
Seventh, would Biden make any changes in the strategic and tactical nuclear weapons programs now that he has completed his Nuclear Posture Review? In his first two budgets, Biden ignored his own campaign pledges and the Democratic Party 2020 platform, which called for reducing overreliance and excessive dependence on nuclear weapons. Instead, in his first budget, Biden actually embraced the proposal he inherited to rebuild and modernize all three legs of the strategic nuclear triad—at a cost of $1.7 trillion—and provided funding for three new tactical nuclear weapons, including the low-yield nuclear cruise missile. Last year, Biden did try to cancel the low-yield warhead but was overridden by Congress.
The Democratic platform characterized the Trump administration’s nuclear proposal, as unnecessary, wasteful, and indefensible. Moreover, while running for president, Biden himself pledged to dismantle America’s commitment to increasing the role of nuclear weapons. Many of Biden’s supporters had hoped that his pledges would lead to his cutting back or even eliminating the land-based component of the strategic nuclear triad, which will cost $264 billion to maintain and modernize. Biden’s Nuclear Posture Review did not make such a recommendation.
The most likely cuts they suggested would be canceling one or more of the three tactical nuclear weapons programs: a new nuclear-armed cruise missile now in the research phase, a Cold War-era thermonuclear bomb, and a new low-yield warhead that the Trump administration wanted to deploy on attack submarines.
In FY2024, the Biden administration is once again including funding for all three legs of the strategic nuclear triad and two new tactical weapons, but not including any funding for the low-yield nuclear weapon, the SLCM-N.
Eighth, would Biden continue his “divest to invest” strategy for our naval forces, and what will be his goal for the ultimate size and composition of the fleet? In his FY2022 request, Biden proposed decommissioning fifteen ships, including seven cruisers and four littoral combat ships, and building only eight—four fewer than were funded in FY2021. Congress not only authorized an additional four ships that year but limited the ability of the Navy to decommission ships. In his FY2023 budget request, Biden proposed $27.9 billion for the purchase of eight new ships and retiring fifteen. But Congress again added $5 billion for six new ships and prohibited the de-commissioning of twelve of the fifteen.
In light of these changes over the last two years, the Biden administration had to decide whether to increase its goal for expanding the Navy from its present level of 296 ships to 321 by 2030. And if it did, will the administration take the money from the other services or increase the total budget topline?
In the $256 billion FY2024 budget proposed by the Navy, the largest of the five services, it has been allowed to once again repeat its divest-to-invest strategy. It proposes spending $32.8 billion to buy nine new ships, one more than it proposed last year, but two less than Congress approved last year. Moreover, it is once again proposing to retire eleven ships, eight of which have not reached the end of their intended service life, including three land-classed dock-loading ships that it proposed to retire last year but were saved by Congress. Because of its rising costs, which have grown by about 25 percent, Biden proposed in FY2024 to decrease the amphibious fleet below thirty-one, despite a Congressional mandate and an agreement with the Marine Corps on that number. This provoked outrage among the Marines and their supporters on the Hill.
Even in the unlikely event that Congress approves the Navy’s FY2024 request as is, it will mean that over the last five years, the Navy’s procurement budget will have grown by 54 percent and its operations and maintenance budget by 22 percent. However, it is much more likely that Congress will prevent the Navy from retiring many of these ships and will add funds to procure new amphibious ships.
Ninth, would Biden continue to try to slow down the production of the tri-service F-35 aircraft until it fixes its myriad problems? For FY2023, Biden requested sixty-one of these aircraft, down from eighty-fix the previous year, but Congress added eight more to bring the total to sixty-nine.
In the FY2024 proposal, Biden requested eighty-three F-35s—forty-eight for the Air Force and another thirty-five for the Navy and Marine Corps. This is not only fourteen more than Congress approved last year, but twenty-one more than Biden requested a year ago. The administration did this in spite of the fact that the F-35 has not yet fixed most of its problems, including whether it can use a revolutionary but costly new engine that Air Force Secretary Frank Kendall has tried to kill. Moreover, the Air Force did not request any additional F-35s in its unfunded priorities list.
Tenth, the administration had to decide on the number of active duty personnel, it wishes to recruit and maintain. Because of the difficult recruiting environment, it reduced its active force for all the services except the Navy. This resulted in a decline of the force from 1.34 million to 1.308 million FY2023. Adding in the Reserves, the total force for FY2023 was 2,087,334.
In its FY2024 budget proposal, the Pentagon is asking for a Total Force of 2,074,000. This is 13,354 fewer than was authorized in FY2023, but 12,335 more than are currently serving, which, given the current recruiting environment, will be difficult to achieve.
No matter how much the nation spends on defense, it cannot buy perfect security. How Congress and Biden handle these issues will not only have a significant impact on our security and economy but it will also tell us a great deal about our values. As Biden himself said prior to becoming president, “Don't tell me about what you value. Show me your budget and I will tell you what your values are.”
Lawrence Korb is a Senior Fellow at the Center for American Progress and a former Assistant Secretary of Defense.
Image: Shutterstock.