Unpacking Trump’s Military Budget

The White House released its budget proposal for Fiscal Year 2021 earlier this week (.pdf), and it is recommending $740.5 bn for national defense. That total includes $636.4 bn for the Pentagon’s base budget, plus another $69 bn for Overseas Contingency Operations (OCO).

Judging from these numbers, the Trump administration believes it can achieve “military dominance in all warfighting domains—air, land, sea, space, and cyberspace” for much less than called by for the National Defense Strategy Commission in late 2018. The panel of experts believed that military spending must rise year‐​over‐​year by 3 to 5 percent above the rate of inflation. The watchdog group Taxpayers for Common Sense did the math, concluding that the commission’s recommendation could produce a defense budget of more than $970 bn by 2024.

In nominal terms, however, Trump’s 2021 DoD budget is actually lower than in 2020; and over the next five years, between 2021 and 2025, defense spending would grow by an average of just 2.2 percent. And then military spending would supposedly stop growing completely – remaining at $808 bn through at least 2030.

There’s reason to be very skeptical of those out‐​year numbers, but here are some of the key takeaways for the coming fiscal year:

• The defense budget technically complies with the Budget Control Act of 2011 caps, in part by continuing to place base spending in the OCO account; OCO spending is not counted against the caps. Since the BCA was put into place, OCO has been consistently used like a slush fund for the DoD to get around the caps. 2021 is the last year in which the BCA, as amended, will be in effect. The Trump administration intends to reduce OCO spending over the next four years, in part by moving money back into the base budget.
• The Navy’s shipbuilding budget would go down by $4 bn, to $19.3 bn for the purchase of “10 new battle force and unmanned ships” (emphasis added). Could the Trump administration be daring Congress to bust the budget caps, or else make unpopular cuts in other defense programs — including by taking money from the Air Force or Army — to make up the difference? Perhaps. Just last week, Sen. Roger Wicker (R‑MS) sponsored legislation directing the Navy to have a plan for getting to “355 battle force ships” but did not stipulate when, beyond a vague “as soon as practicable.” Either way, Trump’s shipbuilding budget doesn’t appear to put the Navy on a trajectory to the 355‐​ship mandate. If the Navy is expected to rapidly accelerate its shipbuilding program, and it cannot raid other parts of the Pentagon’s budget to do it, then it will have to cut back in other areas, including, for example, operations and maintenance.
• The budget appears to privilege things over people, and tomorrow over today. Military end‐​strength (i.e. personnel) will remain essentially flat. The budget also proposes a 3 percent increase in basic pay. Meanwhile, the Pentagon will request $106.6 bn for research, development, testing, and evaluation, $2.3 bn more than they requested last year. The procurement budget calls for $136.9 bn, $6.2 bn below last year’s request.
• Trump is requesting a 19 percent increase for nuclear weapons, including $19.8 bn in the National Nuclear Security Administration (within the Department of Energy). The administration is also calling for $20.3 bn for missile defense. Either of these proposals could elicit a fight. Democrats have favored cutting the nuclear arsenal to comply with existing arms control agreements, or to make new agreements easier to negotiate. But Trump seems determined to increase the number and type of nuclear weapons.
• DoD claims to have achieved over $5 bn in savings within the so‐​called Fourth Estate (administrative functions), while transferring another $2 bn elsewhere. It also promises to save $20 bn over the next five years by “shedding older and less capable aircraft, surface ships, and ground systems” – but it is not immediately apparent what, specifically, would be eliminated.
• Also notable: the Trump administration is requesting $105.0 bn for the Department of Veterans Affairs, a 14 percent increase above the 2020 enacted level; while the proposed budget for the State Department and USAID is $40.8 bn, $11.7 bn (22 percent) less than in the 2020 budget. That latter proposal may be even more controversial that his plans for the nuclear arsenal.

Our national defense strategy must take account of the resources that can be made available to execute it. The ultimate constraint on the Pentagon’s budget is the American people’s unwillingness to spend more on the military, and particularly if such spending is to be funded by new taxes or cuts in popular domestic programs. That demands a different approach to military power. It is unreasonable to expect our soldiers, sailors, airmen, and Marines, to do the same, or more, with less. If U.S. foreign policy was less focused on trying to transform the world in America’s image by force, and more on leading by example, that would allow for a smaller and less costly – but still extremely capable – military. Allocating more attention to the other instruments of U.S. power and influence, meanwhile, would enable Americans to remain globally engaged through trade, diplomacy, and cultural exchange.

Thanks to Cato Research Associate James Knupp for his assistance with this post.