A Sneak Preview of President Obama's Last Defense Budget: Part I, Winners

A Sneak Preview of President Obama's Last Defense Budget: Part I, Winners


Whether or not Secretary of Defense Ashton Carter teases the fiscal year 2017 (FY17) defense budget before its official release on February 9th, the broad parameters and priorities are already clear.

The forthcoming defense budget — the last of this administration — will formally unveil the “Third Offset” strategy and its associated investments. This strategy is intended to regain U.S. military technological superiority and compensate for an inadequately sized U.S. military. As part of this shift in priorities, there will be budget winners and losers.

While Congress and the Pentagon are aligned on the necessity of new investments, the executive and legislative branches remain at odds over the minimum amount of defense spending in FY17. This is because Congressional Republicans and the Obama administration interpret the recent government spending deal differently.

President Obama is set to submit a $610 billion budget that is $10 to 15 billion short of what Republicans interpret as the minimum levels for defense in 2017 set by the budget deal — $625 billion. Republicans will seek to not only see that deficit made whole, but possibly add another $10 billion in supplemental war funding. Pentagon officials have already ruled out further cuts in force structure, leaving a fight between modernization and increased readiness.

Still, the Pentagon could be forced to cut $10 billion in modernization whether or not congressional Republicans succeed in achieving higher spending levels. In last year’s budget, the president requested $573 billion in base spending for FY17. In this year’s budget, Republicans will seek to meet that target by designating a portion of supplemental funding as “base-to-OCO” funding, which would remove the normal restrictions on buying weapons or investing in research with emergency money. The usage of supplemental funding to add armor and more powerful cannons to Army Stryker vehicles last year certainly sets a precedent, but Democrats remain staunchly opposed to loosening restrictions on any supplemental funding at all.

In some places, Congress and the Pentagon agree on the nature of the investments needed, such as the nuclear triad, special forces, and cyber. But because the administration is trying to lowball defense spending and shift priorities within the budget, Capitol Hill is set to push back on a third offset strategy they see as zero-sum in its implementation — much like President Obama’s Pacific “pivot.”

Third offset winners in the 2017 defense budget
Over the long term, the third offset strategy accepts near-term risk by betting on technological breakthroughs instead of investing in increased readiness or a larger military. Here are some of the major investments expected to benefit from the extra $12 to $15 billion in defense spending that Secretary Carter has sought re-program over the five-year budget.

Nuclear triad: A major budget priority in 2017 and beyond will remain the nuclear triad: the Long-Range Strike Bomber, Long-Range Standoff Weapon cruise missile, Ohio Replacement Program submarines, and the Ground-Based Strategic Deterrent intercontinental ballistic missile—all of which will be protected in the 2017 budget. A key question is whether the Air Force seeks to accelerate funding for the bomber program, which suffered significant cutbacks in the 2016 appropriations bill as a result of schedule delays initiated by the contract award protest.

Artificial intelligence: Deputy Secretary of Defense Robert Work has centered the offset strategy around artificial intelligence: learning machines, human-machine collaboration and combat teaming, and autonomous weapons. Experimentation and wargaming, a central tenet of the third offset strategy, will also receive annual multi-billion dollar funding boosts throughout the five-year budget plan.

In practice, this could accelerate funding for the Army’s MQ-1C Grey Eagle surveillance drone and the software and personnel development to allow for manned-unmanned teaming with AH-64 Apache helicopters. Also expect new soldier systems in the Army—including better ballistic protection, integrated communications, lighter loads—and new capabilities such as unmanned ground vehicles for cargo and autonomous aerial vehicles for expeditionary re-supply.

For the Air Force, it likely means investments in advanced automated processing algorithms and next-generation sensors for its RQ-4 Global Hawk drones.

For the Navy, the focus will be on establishing an operational surface and subsurface drone fleet and investing in improved combat networks.

Next-generation programs: Lastly, the 2017 budget will preference developmental programs at the expense of maintaining or upgrading significant amounts of old equipment. Accelerations could be targeted for the following programs:

  • Army’s Improved Turbine Engine Program, which will provide engines for the entire fleet of next-generation helicopters.
  • Air Force’s NextGen JSTARS program, which enjoys significant congressional support.
  • Navy’s Unmanned Carrier-launched Airborne Surveillance and Strike carrier drone — Navy officials have already telegraphed a desire to use the program as a pilot for rapid acquisition.
  • New cyber resiliency and agile electronic warfare programs across the services.

Navy: A number of Navy decisions have leaked already, including an increase in planned purchases of Navy F-35C Joint Strike Fighters, F/A-18E/F Super Hornets and more missiles all around: Tomahawk anti-ship missiles, SM-6 advanced interceptor missiles and more. Destroyers and P-8 antisubmarine aircraft will be upgraded, as will Virginia-class submarines. Also, the Navy plans to reverse its decision to extend the service life of the entire cruiser fleet, according to Inside Defense — meaning that the next-generation large surface combatant program could see accelerated funding.

Air Force: The Air Force now plans to keep the A-10 in service as originally reported by Defense One—and rumblings have begun of an A-X follow-on program. Expect accelerated funding for the Air Force’s airborne laser programs, such as the Airborne Laser follow-on and planned defensive lasers for fighters, drones and larger aircraft.

Army and Marine Corps: The Army has leaked plans to accelerate its Ground Mobility Vehicle program, and other airborne brigade light vehicles could see increased funding, too. Both the Army and Marine Corps are looking at accelerating the procurement of next-generation unmanned aerial vehicles — getting more lethality and intelligence-gathering ability into smaller drones, some of which can take off and land like helicopters.

Overseas operations: The 2017 budget will also include significant increases in supplemental war funding, such as $3 to $4 billion in funding for the European Reassurance Initiative, $1.5 billion to replace munitions dropped against the Islamic State, and a possible expansion of deployments in both Iraq and Afghanistan.

What pays the bill for all these new investments?

Of course, all these shiny toys come at a cost — someone has to pay the bills. In modernization programs, we already know that the Littoral Combat Ship will be cut and the F-35A production schedule will likely be delayed. For more on the losers in the 2017 budget, tune back in this time next week for part two.


This article was written by Mackenzie Eaglen from Forbes and was legally licensed through the NewsCred publisher network.