Trump-era defense spending is more Obama than Reagan

The Trump administration came into office boldly promising a turnaround, if not an outright boom, in military spending.

Defense hawks remained hopeful for a return to fiscally bold Reagan-era outlays on new hardware and personnel. However, for all its potential, a sea change in Defense Department budgeting looks increasingly unlikely based on fiscal 2017 appropriations and the administration’s fiscal 2018 budget request, which represents a high-water mark for possible defense budget outcomes.

{mosads}The administration seems all but certain to leave hawks who cheered its ambitious plans, such as a 350-ship navy, crestfallen. In fact, when the dust settles on the budget agreement for 2018, the result will likely resemble another year of the Obama administration’s slow growth.

Any new administration would have faced an uphill battle to bump up defense budgets, but the Trump campaign early on set high expectations despite facing long odds for a new way of doing business in DC. Since the introduction of the Budget Control Act (BCA) in 2011, almost every single year has seen enacted defense spending come in below the administration request. Beyond this, dysfunction in Congress caused by internal divisions in the Republican Party combined with Democratic obstruction looked likely to make enacting major change difficult no matter who won the race for the White House.

Given these dynamics, the 2018 fiscal year will likely once begin under a continuing resolution — with lawmakers only dodging sequestration through a deal that raises spending caps slightly without major reforms that would produce long-term budget certainty.

This dysfunction is the status quo and the Trump administration seems unlikely to break with it. Almost every year since fiscal 2010 has seen Congress underfund the Department of Defense relative to the administration’s request. Anything above Trump’s request would break from this trend. Lawmakers used to sweeten an administration’s defense spending request with additional funding for pet programs in their districts, as well as politically popular votes to increase military pay. That still happens, but under a significantly reduced topline.

Beyond the numbers, it’s worth considering the political tug-of-war over the most recent spending request.

Defense hawks are deeply dissatisfied with the Trump administration proposal. Most congressional action so far has been to pass bills with significantly higher toplines for defense spending, but the recently announced Senate Appropriations guidance comes in considerably lower than the White House request (total Defense spending of only $595 billion). This last proposal puts into sharp relief the gap that will need to be bridged for any defense spending deal.

There will be plenty of deals and deadlines to come as Congress seeks to enact funding legislation in the 15 or so days of session remaining prior to the end of the 2017 fiscal year. However, despite the election and unified control of Congress, the basic formula remains the same as it has been for the past few years: Democrats and deficit-averse Republicans are locked in an enduring contest over the government’s largest discretionary account.

Democrats will ask for some amount of additional non-defense spending for any increase in defense spending, which would eliminate the savings in congressional spending proposals from non-defense cuts. At the same time, fiscally conservative Republicans will seek additional savings to offset defense increases and shrink the size of government. This is a recipe for acrimonious dissatisfaction, as well as congressional agreements that only eke out higher defense spending at a rate barely above inflation.

The Trump budget request did little to break with this paradigm. The administration attempted to mollify fiscally-minded Republicans, while ensuring Democratic and moderate Republican opposition. It is hard to see the fundamental math that has bedeviled congressional leadership for the past seven years fundamentally shifting between now and September.

However, meaningful change is not impossible, even in this political climate. One of the drivers could be a sudden increase in military engagement abroad either through a surprise crisis or deliberate policy shifts in Afghanistan or elsewhere.

While Democrats often threaten to oppose higher war funding that supports deployed soldiers, in practice there has been little congressional opposition for these votes. The Trump administration deploying tens of thousands of service men and women would all but certainly lead to higher defense spending. Yet those outlays would support ongoing operations, not address underlying issues of readiness and equipment age.

In addition, simply because the topline is unlikely to increase doesn’t mean that the composition of the request couldn’t change. Congress historically has increased procurement spending at the expense of operations and maintenance in appropriations bills. In fiscal years 2013 through 2016, operations and maintenance accounts were reduced by an average of 4 percent a year, while procurement accounts were only cut by 1.7 percent.

Research development test and evaluation (RDT&E), military construction and family housing have also seen consistent reductions, while personnel costs have barely been touched (an average 1 percent reduction beneath request levels). So while the Trump budget will likely represent the best-case scenario, fierce legislative battles will determine the distribution of funding between titles and within specific programs.

The Trump administration entered office with Reagan-like grand plans to rebuild the military and kick off once-in-a-generation defense investments. However, despite submitting what has become a best-case scenario budget, it is increasingly clear that the White House is unlikely to make good on many of these commitments in 2018 as Congress is certain to leave spending levels trapped in the Obama era. 

Matt Vallone is director of Research & Analysis at Avascent Analytics, a set of quantitative market databases that span military platforms, defense electronics, missile systems, cyber, military and commercial avionics and aircraft sub-systems, and military, commercial and civil space systems. Follow him on Twitter @MattVallone.

 The views expressed by contributors are their own and not the views of The Hill.