President Donald Trump, in his State of the Union address, asked Congress to lift the “sequester cap” on defense spending. That same week, a bipartisan majority in the House, in a symbolic but important act, voted to reaffirm a cap-busting defense level for fiscal 2018. So the expectation is that defense spending will increase this year.
Leave aside for a moment the increasingly embarrassing spectacle of a Congress unable to carry out one of its most basic constitutional tasks — appropriating money to fund the government — and consider what comes next. If the fiscal 2018 defense bill becomes law, how will the additional money be spent?
Under current law, with the sequester caps in place, base defense spending maxes out at $549 billion. But the fiscal 2018 defense bill, approved three times now by the House, would allocate $584 billion for the base budget and accept an increase to $75 billion in Overseas Contingency Operations funding. Add in the emergency missile defense and ship repair money from the continuing resolution passed at the end of December, and that’s a grand total of $664 billion.
In short, the House continues to press for a defense base operating budget that exceeds the sequester cap by about $35 billion. And that’s not all. Estimates for the president’s fiscal 2019 budget request include $716 billion for defense. Even that level has been criticized by defense hawks as too low, falling short of the recommendations of the current National Defense Authorization Act that Trump signed into law last year.
Meanwhile, the Senate has taken no action on the fiscal 2018 defense budget at all, as negotiations on spending levels for defense and nondefense have seemingly stalled.
One hint of the distribution of such defense increases, if ever approved by Congress, comes from the unfunded priority lists, or UPLs, sent to Congress last May. The lists include projects from each military branch that weren’t funded in the president’s budget proposal but that the military believes are essential to its missions.
Those projects amount to $32 billion, close to the $35 billion difference between the sequester cap and the defense bill approved by the House. It is fair, then, to surmise that most of the $35 billion will be spent on items on the UPLs, which are broadly aimed at increasing overall readiness through additional investment in equipment, training, modernization and some acquisition.
This focus on readiness is in line with the summary of the National Defense Strategy recently released by the Department of Defense. “Today, we are emerging from a period of strategic atrophy, aware that our competitive military advantage has been eroding,” Secretary James Mattis wrote.
Congress’ inability to get its appropriations work done on time has contributed to the declining strategic military advantage America has over its potential adversaries. But perhaps the most damaging single congressional action has been to continue to limit defense increases through the ham-handed sequester process. Ironically, many of the same members of Congress who now most ardently argue for large defense increases also voted for the sequester mechanism that limited defense spending in the first place.
In the next eight weeks, Congress faces a monumental task, and it will be especially urgent for those members who care about both defense and deficits. The impact of the tax cut bill, the estimated $81 billion in emergency funds still pending for 2017 hurricane and fire damages, and increases caused by delaying taxes in health care will inevitably lead to deficits approximating $1 trillion in fiscal 2019. We predicted this back in October.
Consider this: Members will face either large increases in defense and nondefense spending that necessarily include large deficit hikes, or a full-year continuing resolution for fiscal 2018 appropriations, a disaster for both defense and nondefense operations.
How will members of the House and Senate react when leadership informs them they must first vote for measures that will likely push deficits to unprecedented highs during an economic recovery, and then vote to deal with the debt limit?
Under these circumstances, no one can predict the final defense spending figure. No one can predict which programs will get more funding or less. And importantly, no one can predict whether it will be too late in the nearly five-month-old fiscal year to use the additional money in a constructive manner.
It seemed so simple to retreat to the sequester regime five years ago, despite the warnings from those who went through that process 30 years earlier. Unfortunately, our national security and our domestic tranquility have paid the price.
Steve Bell is a senior adviser in economic policy at the Bipartisan Policy Center and a former staff director of the Senate Budget Committee.
