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Defense Budget Déjà Vu

The Pentagon’s fiscal year 2016 budget request makes important reforms but ignores fiscal and political realities.

President Barack Obama delivers remarks at the Department of Homeland Security on his fiscal year 2016 budget proposal. (AP/Evan Vucci)
President Barack Obama delivers remarks at the Department of Homeland Security on his fiscal year 2016 budget proposal. (AP/Evan Vucci)

Released on February 2, the Department of Defense’s, or DOD’s, fiscal year 2016 budget request contains a healthy dose of déjà vu. At $585 billion—$534 billion for the base budget and $51 billion for the Overseas Contingency Operations, or OCO, budget—the total request is historically high. It includes investments in technological innovation, takes steps to realign the force for future challenges and threats, and calls for necessary reforms. But it also overinvests in costly new systems and nuclear modernization.

Sequester risks are real

This year’s defense request includes $534 billion in the base Pentagon budget and $561 billion for all national defense accounts, collectively known as Function 050 accounts. At $38 billion more than the 2011 Budget Control Act cap of $523 billion for all defense accounts, the budget forces a showdown between the Obama administration and Congress. The Pentagon’s own request for $534 billion is about $35 billion more than the its expected share of the overall defense spending caps.

To fund the Pentagon at its requested level, the Republican-controlled Congress will have to make—and face the consequences of—either sequester relief or what will be spun as cuts to defense. With deep divides between the defense hawks and the deficit hawks in the Republican caucus—as well as between the two parties when it comes to spending and revenue—full sequester relief for either the Pentagon or domestic spending is unlikely. If Congress appropriates the requested $534 billion for the Pentagon’s base budget, however, it will trigger another sequester.

A sequester would impose automatic cuts on the Pentagon in order to bring the base budget spending below its $499 billion ceiling. By law, these cuts must be applied equally to all DOD accounts, including OCO funding. Military personnel accounts could, at the president’s discretion, be the lone exemption. At approximately $35 billion, a sequester would be slightly less than 6 percent of the Pentagon’s total FY 2016 request.

The war budget looks permanent

The budget request also includes $51 billion in war funding for the OCO accounts, even though the U.S. military’s combat mission in Afghanistan ended in late December 2014 and the FY 2016 U.S. military presence there will average just 5,853 troops.

Of the $51 billion requested for OCO, more than half—about $30 billion—is what DOD terms legacy base budget costs. DOD should put these costs in the base budget to enable Congress and the Pentagon to evaluate the strategic choices and trade-offs inherent in national security budgeting.

Other OCO requests focus on areas of crisis and instability. The Pentagon has asked for $7.7 billion for the train, advise, and assist mission in Afghanistan, as well as $3.8 billion to support the Afghan security forces. It has also asked for $0.7 billion and 4,077 troops to train and equip Iraqi security forces and $0.6 billion to train and equip moderate Syrian rebels. DOD has also requested, with scant details, $2.1 billion for the Counterterrorism Partnerships Fund, introduced last year; this is up from the $1.3 billion given to the fund in FY 2015. DOD has also asked for $0.8 billion for the European Reassurance Initiative, intended to increase U.S. presence, multilateral training, and partner capacity in Europe in response to Russian aggression.

Historically high defense spending but some smart investments

With a FY 2016 budget request of $585 billion, the Pentagon is still assuming that defense spending will return to historically high levels and is planning to spend $145 billion above the sequester caps over the next five years. Although DOD’s five-year spending plans are lower than in the past, U.S. defense spending remains high in historical terms. The postwar drawdown following the wars in Iraq and Afghanistan has been far less steep than those following the ends of World War II, the Korean War, the Vietnam War, or the Cold War.

With $35.9 billion more than last year’s budget, the Pentagon’s hardware, research, and operations accounts may see big investments in costly, future systems such as the Air Force’s F-35 5th generation fighter jet. This year is a pivotal moment for defense hardware spending, as any big procurement bets will lock in budgetary resources for decades. This forthcoming “bow wave” of spending—particularly for the F-35 and the Ohio-class replacement ballistic missile submarine—will peak in the 2020s. DOD should commit to buying fewer of these costly systems; this will allow it to maintain flexibility in the budget to face future threats.

The Pentagon and the Department of Energy have asked for more than $10 billion for nuclear weapons in FY 2016, as part of the beginning of a decades-long modernization of the nation’s nuclear arsenal and the replacement of its nuclear weapons systems. These include the Long-Range Strike Bomber, the Ohio-class replacement ballistic missile submarine, the replacement for the Minuteman III ICBM, and the new Long-Range Standoff Weapon. Reversing the modernization slowdown in last year’s budget is a mistake. At $348 billion over just the next decade, a full-scale modernization of the nuclear arsenal is unaffordable and unnecessary to maintain nuclear deterrence.

The budget request does place some smart bets on investing in innovation efforts that are not tied to specific, costly platforms.Investments in the Aerospace Innovation Initiative; navigation and space, as well as intelligence, surveillance, and reconnaissance capabilities; and new types of weapons, such as the high-energy laser, are necessary to retain our formidable technological edge.

Zombie reforms and realignments

This year’s budget makes a number of sound choices to restructure the force for greater flexibility and orient it toward future threats. Many of them, however, were included in last year’s budget and have already failed to gain traction with Congress. These include:

  • Restructuring the Army’s aviation assets. The Army’s proposal to transfer Apache attack helicopters from the National Guard and Reserve to the active duty force and replace them with utility Black Hawk helicopters met an unenthusiastic Congress.
  • Allowing phased cruiser modernization. Congress shrank the Navy’s plan to modernize its cruiser fleet in stages and to put 11 cruisers on inactive status.
  • Scrapping the A-10. More pitched battles surrounded the proposed divestiture of the A-10 than perhaps any other program. With continued U.S. engagement in Iraq and Syria, supporters of the A-10 will fight hard for this close air support aircraft’s continued place in the force, while the Air Force insists that it needs approximately $2.1 billion in savings to fully fund F-35 procurement.
  • Implementing compensation reforms. Like the FY 2015 budget, this year’s request proposes moderate tweaks to military compensation. The proposals face a deeply skeptical Congress, and the January 29 release of the final report of the Military Compensation and Retirement Modernization Commission added more fuel to the debate. Personnel costs make up about half of the Pentagon’s budget, and experts have long argued that reforms are overdue.
  • Reducing excess infrastructure. While the Pentagon estimates that it has about 20 percent more infrastructure than it needs, its request for another round of base closures still seems politically impossible.

The Pentagon’s FY 2016 budget makes a number of smart choices, including supporting a more adaptable and responsive force, investing in maintaining U.S. technological superiority, and reducing the seemingly inexorable growth of personnel costs. But the Pentagon will be constrained over the long term if it overcommits to costly, exquisite weapons systems and platforms and insists on modernizing the whole nuclear weapons enterprise. Congress, the Obama administration, and the Pentagon need to work together to weigh the strategic choices and trade-offs inherent in providing for our national defense. Based on last year’s track record and this year’s déjà vubudget, this does not look likely.

Lawrence J. Korb is a Senior Fellow at the Center for American Progress. Katherine Blakeley is a Policy Analyst on the National Security and International Policy team at the Center. 

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Lawrence J. Korb

Senior Fellow

Katherine Blakeley

Policy Analyst