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1 1 (May 2018)

handle is hein.amenin/aeiaagl0001 and id is 1 raw text is: Key Points * The $700 billion in enacted defense spending for 2018 is a substantive increase over 2017 enacted and 2018 requested spending. However, the $716 billion topline for 2019 just keeps pace with inflation. * The administration's first five-year budget, the Future Years Defense Program, suggests the overall fiscal outlook for defense spending will flatline in 2020 and beyond. * The president's 2019 budget allocates 87 percent of new funding above last year's appropriations to military personnel and operations and maintenance, with most of the remainder going toward research and development. * For the second year in a row, the Trump administration's budget request underfunds procurement in favor of pursuing a capability-centric modernization program, imperil- ing the future health of the force by underresourcing capacity and the recapitalization of legacy systems. * The three-year streak of defense increases was driven largely by Congress. Policymakers should work to ensure a balanced portfolio of investment to match the defense strategy. In May 2017, the Department of Defense (DOD) outlined a three-stage approach to repairing and rebuilding the nation's armed forces. An additional request for $30 billion in appropriations in fiscal year (FY) 2017 followed by an FY18 request for $668 billion in national defense spending would resolve readiness shortfalls. Finally, the FY19 budget would begin to replenish the military's depleted resources after seven years of spending caps under the Budget Control Act.' It is now possible to profile President Donald Trump's defense buildup, and the conclusion is stark: No portion of the president's initial plan survived contact with reality. Trump secured approximately half of the additional appropriations he sought for defense spending in FY17. Conversely, Congress approved a record-breaking two-year budget deal in early 2018, paving the way for $700.9 billion in defense spending in FY18, includ- ing Overseas Contingency Operations (OCO). The FY19 defense topline of $716 billion is higher still, resulting in a three-year defense spending increase of $389 billion above the budgetary caps as they stood before Congress' most recent budget agree- ment and $24 billion above Obama-era plans for FY17-19.2 Nevertheless, the president's budget request for FY19 (PB19) fails in its central objective of adequately rebuilding the armed forces rather than merely repairing them (see Table 1). This conclusion appears paradoxical, considering the ebullient reaction of some senior Pentagon leaders to the president's latest budget for 2019. After initial fears that the budget would not ade- quately reflect the National Defense Strategy because the two documents were developed in parallel, PB19 is now being fated as the child of AMERICAN ENTERPRISE INSTITUTE

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