Defense: FY2017 Budget Request, Authorization, and Appropriations

Summary

The Administration requested $523.9 billion to cover the FY2017 discretionary “base budget” of the Department of Defense (DOD). This request is $2.2 billion, or approximately 1%, higher than the corresponding appropriation for FY2016. In addition to the base budget request, the Administration requested $58.8 billion—including $3.4 billion for the European Reassurance Initiative—in discretionary funding for Overseas Contingency Operations (OCO). The total discretionary funding request of $609.9 billion, combined with $9.6 billion in mandatory spending, brought the Administration’s total FY2017 National Defense budget request to $619.5 billion.

In shaping the FY2017 budget, DOD officials stated that they emphasized innovation and other ways to increase the combat effectiveness of U.S. forces while complying with the budget caps. The request aims to field a force that can deter the most technologically advanced potential adversaries using conventional weapons, without assuming that U.S. forces would match the size of enemy forces, by modernizing its equipment and changing its organization rather than by enlarging their numbers.

Congressional deliberations on the FY2017 defense budget may be influenced, in part, by the broader budget discussions about the binding annual caps on discretionary appropriations (through FY2021) established by the Budget Control Act (BCA) of 2011(P.L. 112-25). One particular issue for Congress is whether the FY2017 allocation for OCO funding provided by the Bipartisan Budget Act (BBA) of 2015 (P.L. 114-74 ) allows for a higher total appropriation for the DOD than the Administration proposed. A second issue—one that may delay work on all FY2017 appropriations bills, including those that fund DOD—is the demand by some members of Congress that the increased non-defense spending allowed by the BBA be offset, in part, by reductions in mandatory spending.

To balance competing priorities within the FY2017 defense budget cap, as amended by the BBA, the Administration requested slightly more funding for Operation and Maintenance, and slightly less for procurement compared with FY2016 base budget DOD appropriations. The request proposes $135.3 billion in base funding for military personnel programs plus another $3.6 billion in OCO, for a total of $138.8 billion. DOD has proposed some compensation changes alongside the FY2017 budget that are intended to generate savings. TRICARE Modernization proposals and amendments to the retirement system are projected to have some initial implementation costs, while savings are expected to accrue in subsequent years.

Army officials emphasized that the service’s FY2017 budget request prioritized readiness over modernization. Within the Army’s modernization budget, helicopter programs were reduced more than new types of ground vehicles and upgrades to some types already in service. The FY2017 budget would fund only one major effort for the Marine Corps to develop a new vehicle intended for front-line combat, seeking $158.7 million to continue development of the Amphibious Combat Vehicle, an 8-wheeled amphibious troop carrier intended to replace AAV-7 tracked amphibious troop carriers. The Army and Marine Corps have a combined $735.4 million procurement request in 2017 for 2,020 Joint Light Tactical Vehicles, and the Army is seeking $184.2 million to complete production of 29 prototype Armored Multi-Purpose Vehicles slated for shakedown testing at government test sites.

The planned size of the Navy, the rate of Navy ship procurement, and the prospective affordability of the Navy’s shipbuilding plans have been matters of concern for the congressional defense committees for the past several years. Concerns over the current and future size and capability of the Navy have intensified with the recent shift in the international security environment to a situation featuring renewed great power competition.

The Navy’s proposed FY2017 budget requests funding for the procurement of seven new ships—two Virginia-class attack submarines, two DDG-51 class destroyers, two Littoral Combat Ships, and one LHA-6 class amphibious assault ship. The Navy’s FY2017-FY2021 five-year shipbuilding plan includes a total of 38 new ships, compared to the five-year plan sent to Congress in 2015, which projected funding of 48 new ships in FY2016-FY2020.

When looking at the various services’ plans for acquiring aviation systems, one theme becomes clear: deferral. The Army and Air Force have chosen to delay their previously-planned aircraft purchases, and the Navy funds only 2 F/A-18 E/F Super Hornets while including 14 more on their Unfunded Requirements List.

The President’s FY2017 budget continues to fund a wide range of programs intended to sustain and modernize U.S. nuclear weapons. The DOD budget includes nearly $4.7 billion in funding to upgrade and replace U.S. nuclear weapons delivery systems. In addition, the Administration requested $9.1 billion to develop and deploy ballistic missile defense capabilities, which is a decrease of about $700 million from the FY2016 enacted level of $9.8 billion. The request includes $7.5 billion for the Missile Defense Agency and the remainder primarily for the Army Patriot missile defense program.

For FY2017 the Administration’s request includes $7.1 billion for Air Force national security space programs, an increase of about $100 million above the FY2016 enacted level. DOD has stated this budget request allows the United States to maintain supremacy in space and provides communications, navigation, missile warning, space situational awareness, and environmental monitoring. Intelligence has remained proportionally constant to defense spending—consistently representing roughly 10-11% of national defense spending—and the FY2017 request of $70.3 billion continues that trend.