An agreement reached in the midst of a short-lived federal government shutdown Friday will let lawmakers move forward on a plan to bust budget caps for a $1.4 trillion, two-year defense budget.
The new agreement, which lifts military spending limits for the next two years, funds the government through a stopgap measure until March 23. By then, lawmakers are hoping to issue a more permanent funding plan.
A two-year budget would usher in a new wave of stability for military spending following a slew of stopgap funding measures in recent years and help trigger a new era of modernization efforts for the armed forces.
“This budget deal finally makes good on our promise to provide for the men and women who so faithfully serve our nation in uniform,” Sen. John McCain, R-Ariz., chairman of the Senate Armed Services Committee, said Friday in a statement. “It lays the groundwork for appropriating the funding level authorized in the National Defense Authorization Act for fiscal year 2018 and provides real growth in fiscal year 2019.”
President Donald Trump signed the budget caps measure into law Friday, about 8 hours into the second government shutdown in three weeks. The shutdown caused disruptions overnight for some Department of Defense workers in the United States and for others in the midst of their workdays overseas.
Efforts to reach a deal ahead of a midnight shutdown deadline were stalled when Sen. Rand Paul, R-Ky., took to the Senate floor for several hours late Thursday to rail against the effort to bust budget caps.
However, by 6 a.m., lawmakers in the Senate and then the House had approved the plan, which was signed into the law a few hours later.
“Now the Defense Department will have the budget certainty it needs to begin the process of rebuilding the military, restoring readiness, and modernizing our forces — all of which are required to maintain America’s military edge over our adversaries in the era of renewed great power competition outlined in the new National Defense Strategy,” said McCain, who helped shepherd the defense strategy through the Senate in recent years but has been home since December battling brain cancer.
In December, Trump signed the $700 billion policy plan known as the National Defense Authorization Act into law for the 2018 fiscal year, which began Oct. 1. The effort sets a spending guide, but doesn’t actually appropriate the money.
The government is still operating off a temporary funding measure known as a continuing resolution, or CR.
“This deal only sets those higher spending levels, it doesn’t actually appropriate funds to match them,” said Molly Reynolds, a governance studies fellow at the liberal-leaning Brookings Institution, a Washington think tank. The deal sets up “another CR that would run for a few weeks until appropriators can actually write the bill pushing the funds out the door for specific purposes.”
More money than thought possible
With Friday’s $1.4 trillion deal, the plan would allow lawmakers to appropriate $700 billion to the Pentagon for fiscal year 2018, which ends in Sept. 30, and another $716 billion for fiscal year 2019, which begins Oct. 1.
“This is the upper limit of what anyone thought was possible,” said Todd Harrison, senior fellow and director of defense budget analysis for Center for Strategic and International Studies, a Washington think tank. “This is a big victory for defense hawks.”
To follow through on this plan, lawmakers will have to issue an appropriations plans by the March 23 deadline of the new temporary stopgap bill.
Reynolds was also surprised at the size of the overall budget caps agreement, which lifts statutory limits for defense and non-defense spending.
“I’m a little surprised at how big the bill got,” she said. “There’s lots in it beyond just the caps.”
Congressional defense hawks and Pentagon leaders have said the funds will jump-start the demands of the new National Defense Strategy, which shows the U.S. military must prepare for the growing great power threats of Russia and China.
The military is now one step closer to following through on its 2018 spending plans if it gets an appropriation plan approved in the coming weeks.
“Sometimes Congress has to make tough choices to get our warfighters the resources they need. For too long our troops have been made hostages for other political agendas,” said Rep. Mac Thornberry, R-Texas, chairman of the House Armed Services Committee. “Now we must make sure that Congress fulfills this promise to our military, that the Pentagon spends this money wisely, and that the era of using troops as leverage for political gain has ended.”
The Pentagon has had to make 2018 and 2019 budget plans without any permanent funding in place. It released its 2018 budget plans nearly a year ago and Monday, the Pentagon is slated to roll out its 2019 budget requests for the military services.
“A two-year deal gives DOD some sense of stability in planning, but coming this late in the year it won’t add much,” said Lauren Fish, a defense strategies research associate for the Center for a New American Security, a Washington think tank. It covers 2018 and 2019, “for which we expect a [Pentagon] budget Monday. So that’s already locked. DOD has had to prepare both those budgets without any sense of if Congress would actually raise the [budget] caps, as they had done in previous years.”
The 2018 National Defense Authorization Act and congressional appropriations efforts gave positive indications, but it wasn’t certain the Pentagon would win funding that exceeded the caps, Fish said.
The Department of Defense “wrote a budget over the …cap hoping Congress finally get its act together and gave them some stability that they could safely write that check,” she said.
Funding helps meet threats
The 2018 National Defense Authorization Act directs for $26.2 billion to purchase 14 new ships, $10.1 billion for 90 Joint Strike Fighters, $5.9 billion for Virginia-class submarines, $5.6 billion for Arleigh Burke-class destroyers, $4.4 billion for aircraft carriers, $3.1 billion for Army helicopters and $1.9 billion for procuring 24 F/A-18 Super Hornets.
But much of those plans have been held up in subsequent congressional budget squabbles, forcing the military to operate off a series of continuing resolutions until lawmakers reached a deal.
“I’m heartened that Congress recognizes the sobering effect of budgetary uncertainty on America’s military and on the men and women who provide for our nation’s defense,” Defense Secretary Jim Mattis said ahead of Friday’s vote during a White House visit this week. The “congressional action will ensure our military can defend our way of life, preserve the promise of prosperity and pass on the freedoms you and I enjoy to the next generation.”
Friday’s deal lifts a $549 billion budget cap for defense spending in 2018 to $629 billion and puts a remaining $71 billion in a war account known as the Overseas Contingency Operations, or OCO, fund, for a total of $700 billion. The 2019 plan lifts a $562 billion budget cap to $647 billion and puts another $69 billion in the war fund for a total of $716 billion.
“You can count on us. We’ll earn your trust on this,” Mattis said of the potential new windfall. “We will spend the money wisely.”
The two-year proposal is similar to defense spending deals reached in 2015 and 2013, but “much larger in magnitude,” Harrison said.
For this year, much of the funding would go directly to the Department of Defense’s operation and maintenance operations, which makes up about two-thirds of the DOD budget, Harrison said.
“We will be almost halfway through the fiscal year,” he estimated of when the funding could kick in. “Some of the money in there has to be obligated by the end of the fiscal year. There is going to be a rush within DOD to execute this money as quickly as they can.”
Mattis warned this week that without an annual budget plan, the military would have seen pay shortages, the inability to recruit thousands of soldiers and airmen, delayed ship maintenance, grounded aircraft, depleted training and delayed vital acquisition efforts.
“Our military has been operating under debilitating continuing resolutions for more than 1,000 days during the last decade,” Mattis said. “I cannot overstate the negative impact to our troops and families’ moral from all this budget uncertainty.”
The budget caps plan faced an uphill battle winning passage Friday.
“This is not a perfect bill by any means. As someone who consistently votes against wasteful government spending, the structure of this legislation made my decision a tough one,” said Sen. Tim Scott, R-S.C., and the newest member of the Senate Armed Services Committee. “However, after years of our military being underfunded, this deal is a unique opportunity to right the wrongs Washington has made in our defense spending over the past eight years. Our men and women in uniform put their lives on the line every single day, and it’s about time they know Washington has their back not just with words, but with actions.”
In the House, members of the fiscally conservative Freedom Caucus and Democrats fighting for a fix to the Deferred Action for Childhood Arrivals, or DACA, program, which faces a March 5 deadline, had threatened to vote against the budget deal.
“Republicans are celebrating the passage of their fifth stopgap, short-term Continuing Resolution on the heels of their second shutdown in a month – continuing government by dysfunction,” said House Minority Leader Rep. Nancy Pelosi, D-Calif., who voted against the plan and earlier staged a record 8-hour floor speech pushing for a DACA fix. “Democrats worked hard to achieve a bipartisan agreement.”
Fish suggested despite the opposition, the budget caps plan offered too many wins for both sides of the aisle, which gave it the momentum needed to pass.
“Everyone gets something they want out of it,” she said.
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