Illinois Senator Everett McKinley Dirksen served 11 years in the U.S. Senate and became more closely identified with that legislative body than any other leader of his time. He is reported to have once said, “a billion here, a billion there, and pretty soon you’re talking about real money.”
When Dirksen left the Senate in 1969 the U.S. defense budget was $85 billion dollars. In 2023, the Senate will consider a budget that will be 10 times that size.
The U.S. Congress oversees the defense budget primarily through two yearly bills: the National Defense Authorization Act (NDAA) determines the agencies responsible for defense, establishes recommended funding levels, and sets the policies under which money will be spent. A separate appropriations bill provides funds.
The 2023 NDAA provides not only the major elements of defense spending but also reveals the Biden administration’s priorities. It also serves to reveal Republican goals as well as the priorities of individual senators and congressmen. Finally, it sends a clear message to American allies and potential adversaries. The FY2023 Budget Proposal clearly acknowledges China as “our key strategic competitor and pacing challenge.” It describes Russia as an “acute threat to the interests of the U.S. and its allies.”
The Biden administration requested $773 billion for defense for fiscal year 2023. If this amount is approved, the United States will not only lead the world in defense spending, but its expenditures will also exceed the next nine countries combined. Five of these countries are American allies. It is estimated, meanwhile, that China will spend $252 billion and Russia $61.7 billion.
On July 14, the House approved a Fiscal Year 2023 National Defense Authorization (NDAA) budget of $839.3 billion. This occurred with a vote of 329-101 with majorities in both parties supporting it. Over 1200 amendments were offered to the bill but only 650 were voted upon. This was done in bloc groups that were adopted by voice votes.
In mid-September, Majority Leader Chuck Schumer announced that he intended to bring the bill to the Senate floor in October, only weeks before the November elections. In response, Senators began filing amendments to the bill. Last year, they introduced 954 amendments, but the two parties agreed to recorded floor votes on only 19 amendments and allowed for only two minutes of debate on each one with 60 votes required to approve an amendment.
But Schumer’s proposal collapsed as several Republican Senators objected to a unanimous consent agreement because some of their top amendments were not included in the 19 scheduled to be voted upon. The Senate Armed Services Committee (SASC) had approved a bill authorizing $45 billion more for defense than the Biden Administration had requested.
Some of the highlights from the SASC committee vote are as follows:
- $817.3 Department of Defense
- $29.8 Department of Energy
- $10.6 billion defense-related activities outside NDAA jurisdiction
- $856.7 billion total for national defense
- $45 billion increase from President Biden's request
The funds earmarked for the Department of Energy apply to the production of new nuclear warheads and the retirement of older systems.
Major elements of the draft NDAA include:
- $25 million for research and development for the sea-launched cruise missile (SLCM-N) and $20 million for the National Nuclear Security Administration to continue research on the W80-4 warhead.
- A 4.6% pay increase for military and civilians
- $800 million for Ukraine Security Assistance Initiative
- Increases the F-35 buy by seven aircraft
- Requires the registration of women for the Selective Service
- Blocks the retirement of F-22 Raptor jets and 25 EA-18G Growler jets
- Permits the retirement 21 A-10 close-air support jets, to be replaced by F-16's
- Adds $5.2 billion to the Biden Administration's military construction request
In the meantime, members in the HASC and SASC will be working to iron out differences between the House and Senate versions. Both chambers recommended increases, but a key difference is the topline. The Senate added $45 billion over the president’s requested budget and the House added $37 billion. As a result, the FY2023 budget appears poised to continue a general trend of rising American defense spending that has prevailed since 2016. Defense spending will have grown in real terms, accounting for inflation, in seven of the past eight years.
But the dramatic growth in inflation will remain a significant issue. The FY 2023 Defense Budget was submitted by the Biden Administration in March of this year. It sought an inflation increase of 2.7% for 2023 and estimated that inflation would remain at that rate thru 2027. But inflation is now 8.5% which translates into a real budget decrease of about 6%. Consequently, Congress will likely vote on an inflation Supplemental Budget later this year. Leaders in the defense industry have already called for an overall budget increase of 3 to 5% above inflation.
The best way to understand the defense budget and potential future challenges is to consider the so-called “Big Four.” This includes the funding for: (1) Military Personnel; (2) Operations and Maintenance; (3) Research, Development, Testing and Evaluation (RDT&E); and (4) Procurement.
Military Personnel costs include salary and benefits for active duty, reserve, and national guard forces as well as DOD civilians. It is about 23% of the latest budget and includes the largest pay raise in 20 years as the services struggle to meet recruiting and retention goals.
Operations and Maintenance costs include the training of military forces and deployment of U.S. forces abroad. It stands at about 40% of the defense budget. Last year’s budget was the first since 2001 that did not include a contingency budget for the deployment of American forces in Iraq and Afghanistan, which stood at roughly $160 billion at the height of the fighting. The budget did include $6.5 billion for Afghan refugees and Ukraine military assistance. It will likely include a supplement for both again.
Procurement of new equipment is 19%, and RDT&E is 17%. A sizable portion of these funds is devoted to multi-year acquisitions. These totaled $276 billion, which is the largest in DOD history. The largest investments will be for advanced air power (F35 fighter, B21 strategic bomber, KC46A tanker, unmanned aircraft, etc.), the construction of nine ships as well as continued funding for Ford-class aircraft carriers and Columbia class ballistic missile submarines, missile defense, and the recapitalization of nuclear forces. This includes ground-based ICBMs and improved command and control.
New domains of warfare such as cyber and space will demand increased resources in the future. The FY2023 NDAA requested $27.6 billion for Space Force, which was created in 2019. Its budget now exceeds requests for Special Operations Forces.
Finally, it is critically important to consider the defense budget in the context of overall government spending. The total Federal Budget proposal for FY2022 was about $6 trillion. This is divided into mandatory spending and discretionary spending. Mandatory spending accounts for two-thirds of the budget and includes things such as Social Security, Medicare, and required interest payments on the federal debt.
Discretionary spending is everything else and amounted to $1.5 trillion in FY 2022. Defense spending comprises 14% of all Federal spending and 50% of all discretionary spending. Conservative lawmakers are likely to point out that defense spending as a percentage of American gross national product (GNP) has drifted downward in the past decade from 4.6% in 2009 to a projected 3.2%. Liberals will argue that defense takes up a greater and greater percentage of discretionary spending, and this is happening as the American population ages, which places renewed stress on Medicare and Social Security.
Economists fear that growing interest rates will cause the percentage paid annually to service the Federal deficit (now over $31 trillion) to explode over the next decade. The Congressional Budget Office projects that annual interest costs will rise from $399 billion in 2022 (7% of Federal spending) to $1.2 trillion in 2032. As a percentage of GDP, those costs would double from 1.6 percent of GDP in 2022 to 3.3 percent in 2032, which would be the highest level ever recorded.
President Dwight Eisenhower warned in his valedictory address to the American people, “We will bankrupt ourselves in the vain search for absolute security.” While military spending will not be a major issue in the upcoming election, it will become a point of debate in Congress. This is especially true as they seek to pass the NDAA, defense appropriations, and part of the remainder of the federal budget during the “lame duck” session. It will also be part of future debates about raising the debt ceiling which occur in early 2023.
Paul Kennedy in his superb book, The Rise and Fall of the Great Powers, described the policy challenge for any nation as threefold: (1) provide military security for its national interests, (2) satisfy the socio-economic needs of its citizenry, and (3) ensure sustained economic growth. Achieving harmony with these three goals during a period of global political and economic turmoil will require incredible foresight and compromise. It remains to be seen if those we elect in November are up to it.
