Train Wreck: The Congress, the Defense Budget, and National Security
The U.S. nearly plunged into its fourth government shutdown in 10 years, a troubling development avoided by a continuing resolution (CR) that passed with just hours to spare. House Speaker Kevin McCarthy had failed to whip his Republican conference and right-wing members into a consistent voting bloc to pass the FY2024 Federal Budget and had to seek support from Democrats to secure a CR. Now he has 45 more days to find a solution, but it is likely the nation will be in the same predicament when the current deal expires. Leaders in the White House and Wall Street had warned that the nation’s economy would suffer from a shutdown, and this may have contributed to action at the eleventh hour. But in the aftermath, right-wing GOP members are preparing to oust McCarthy from leadership and appear uninterested in compromise.
The last shutdown occurred in 2018-19 and ended after more than 35 days. Given the level of acrimony and a potential drawn-out battle for congressional leadership posts, it appears very possible that a shutdown in this Congress could test that record.
But the country’s national security is also at risk. McCarthy and his caucus failed to pass the fiscal 2024 Pentagon spending bill after numerous votes, which clearly has major implications for the country’s defense. One major obstacle for Congress has been aid to Ukraine. The Senate, on a bipartisan basis, proposed sending $6 billion in military aid to Ukraine, but House Republicans made it clear that was a nonstarter. Right-wing members of the House even balked at including $300 million targeted at training Ukrainian soldiers and the purchase of weapons in the CR. While a tiny amount in terms of the overall budget, even that small number was considered a poison pill.
Thus far the U.S. has provided $46 billion in military aid, and the administration is seeking $24 billion more. President Joe Biden made it clear that Ukraine funding remains a top priority to him, and he issued a statement that bluntly pointed the finger at Congress to figure it out.
"We cannot under any circumstances allow American support for Ukraine to be interrupted," he said. "I fully expect the Speaker will keep his commitment to the people of Ukraine and secure passage of the support needed to help Ukraine at this critical moment."
Democrats and Republicans will have to come together to pass further funding for Kyiv. It may take quite a bit of time to get there, however. Congress still needs to figure out how to ensure the Pentagon remains funded for FY2024, and a CR still hinders America’s ability to secure its national security interests.
The CR will not allow for increases in munition production without a waiver, and in the past, this has affected the production lines of the Guided Multiple Launch Rocket System and Patriot missiles, William LaPlante, the Undersecretary of Defense for Acquisition and Sustainment, said last week.
LaPlante also warned that a shutdown would be “horrible” and halt weapon system testing, the government’s ability to accept finished military equipment from manufacturers as well as acquisition/sustainment projects. He noted, glibly, that China’s military does not suffer through continuing resolutions or government shutdowns.
“Can you imagine if the Chinese had something like this, where their government would shut down every few years, and they would freeze their budgets?” he said to a crowd at the Center for Strategic and International Studies. “We would not view that badly. We could teach them how to do that. That would be helpful.”
The crowd laughed in response, but without the passage of the defense budget and the $886 billion that President Joe Biden requested there is real concern that a shutdown will dramatically affect the nation’s security in a variety of ways. Personnel costs, procurement, research and development, maintenance and operations are all at risk. A lack of funding would also negatively affect American prestige abroad and unity with our allies. Not to mention, it raises significant questions about our continued support for Taiwan as well as Ukraine’s counteroffensive. All are intrinsically tied to the nation’s security and its position in the world.
Personnel
If a November shutdown were to occur, obviously the most dramatic effect would be on soldiers, sailors, airmen, and Marines who will not be paid. There are more than 2 million military personnel (roughly 1.3 million active-duty soldiers, plus another 800,000 reservists) who are required to continue to perform their duties and, like in past shutdowns, will receive back pay once it is over. There are also 804,244 DoD civilians. About 45% are deemed “essential” and would continue to work during a shutdown. They as well as those furloughed would receive back pay in the aftermath. Government contractors, however, are not guaranteed back pay.
Many junior military personnel live paycheck to paycheck, and roughly 20% of junior enlisted families live in homes that are food insecure. Consequently, any interruption of pay means thousands of suffering military families who will struggle to buy groceries and pay rent, car payments, mortgages, childcare, etc. In a recent survey, 54% of junior enlisted military families said they would be “greatly affected” by a shutdown. One-third of these families have less than $3,000 in savings. Even grocery stores on military bases, called commissaries, and childcare centers will likely close and elective surgeries and dentistry will pause.
This would also have a negative impact on military recruiting and the retention of highly qualified military personnel. It occurs at a particularly difficult moment as all the services have failed to meet their FY2023 recruiting goals. It is impossible to believe that the failure of Congress to pay the troops will encourage more young Americans to enlist in its aftermath.
Procurement and R&D
LaPlante also warned that a shutdown would cause the country’s military procurement and research and development efforts to grind to a halt. He recalled that as head of Air Force Acquisition during a previous shutdown he had to furlough all employees from the Defense Contracting Management Agency. This group examines new equipment prior to acceptance by the military, and this essentially froze F-35 fighter and munition production lines. We will likely see some manufacturing freezes due to the CR, particularly with respect to any new programs or the expansion of previous programs.
Defense industries are well aware of the significant challenges caused by a shutdown or CR.
Aerospace and major defense companies have more than 2 million employees, and the industry's lead trade group, AIA, said last week that it wants Congress to “act now to fund the federal government…especially for the Department of Defense, as well as the Federal Aviation Administration and NASA.” They cite national security and aviation safety as their major concern, but it obviously has major business implications as well.
If a shutdown continued for an extended period, it would impact these industries. A CR, meanwhile, stops any expansion of manufacturing. Existing major procurements (ships, aircraft, missiles, etc.) are multiyear contracts as is ongoing construction. Consequently, they are unlikely to be affected. But items like the production of munitions, particularly artillery rounds, have been a single-year budget line. Because of the growing demand brought about by the Ukraine war, the U.S. has sought to resurrect its defense industrial base to meet the dramatic demand for ammunition. A shutdown would bring those new production lines to a halt, but a Continuing Resolution effectively does the same.
Beyond the immediate effect, a shutdown and even the CR could further discourage industry from expanding manufacturing lines as promised. As a result, the Pentagon may pursue multi-year contracts to avoid future issues for industry, which is not an approach favored by Congress. Typically, lawmakers on Capitol Hill have sought greater oversight of such contracts because of the impact they have on individual states or constituencies.
In the Air Force alone, there could be major challenges for key modernization initiatives that are still in research and development. For example, the Air Force has a new program to convert F-16s to be compatible with artificial intelligence (AI). The experimental operations unit, which is tasked with testing the new capability as part of Project Venom, is slated to get $72 million in the fiscal 2024 budget. But because it’s a new program, a CR means the program cannot begin until a new budget passes.
Operations and Maintenance
Failure to pass the defense budget will also affect ongoing military operations and training. Military exercises that are not within the current budget may need to be curtailed or canceled. It could also curtail the ability of the U.S. military to perform new support missions along the U.S. border and to maintain equipment and other assets. Ironically, a shutdown, which some hardline Republicans were openly supportive of pursuing, could undermine many things that Freedom Caucus Republicans staunchly claim to defend by draining resources for border security and increasing overall costs.
Whether in a shutdown or under a CR, there will be some waivers for ongoing operations and training. The Pentagon previously announced that it would not pause the training of Ukrainian soldiers in the United during a shutdown, for example, as it falls under one of the excepted activities that can still be pursued. Still, this effort cannot be expanded absent a new budget which could slow the training of Ukrainian pilots to fly the promised F-16 fighters.
A shutdown or a budget freeze also threatens a major multibillion-dollar diplomatic agreement between the U.S. and three key Pacific Island nations that are a cornerstone of the Biden administration’s Indo-Pacific strategy. The administration has stated that the renewal of decades-old “compacts of free association” (COFAs) with the Marshall Islands, Micronesia, and Palau are the “bedrock of the U.S. role in the Pacific.” Consequently, it has sought to respond to growing Chinese influence by expanding U.S. access to military bases and improving diplomatic ties with countries in the region.
Conclusions
This last-minute budget deal is a further indicator of how political battles in Washington undermine America’s national security as well as its international presence and reputation with allies abroad. Unfortunately, there is every reason to believe the nation will be at this same point on November 17th.
Furthermore, both Russian President Vladimir Putin and Chinese President Xi Jinping are enjoying the disarray in the U.S. Congress. Both will likely use this as a clear illustration that democracy is in decline and the superiority of their respective political systems.
Some congressmen attempted to minimize the possibility that Congress might fail to pass the Federal Budget resulting in a government shutdown. Representative Andy Biggs of Arizona claimed during the budget effort that this would “not be a shutdown of government,” but a pause in “out-of-control federal spending related to nonessentials.” This is at best naïve and at worst uninformed. He might well consider the words of our second president, John Adams who said that “facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”
