Latest budget showdown worries Pentagon, risks delaying Trump's military buildup

Key Points
  • If a government shutdown is not averted by Friday, federal and civilian workers, including those at the Pentagon, will be affected.
  • The military's top officer complained this week that the "lack of predictability and that lack of stability in the budget" has hurt the Department of Defense.
  • A shutdown also could affect President Trump's 2019 defense budget request and the military buildup he promised, analysts said.
An unarmed Minuteman III intercontinental ballistic missile launches during an operational test.
U.S. Air Force | Reuters

One year after President Donald Trump took office, the possibility of a government shutdown remains, with defense one of the areas that would feel the impact.

It also comes a month before the White House is expected to submit its defense budget request for fiscal 2019. Defense Secretary James Mattis said back in June the budget for fiscal 2019 will start the much-awaited military buildup Trump promised during his campaign, although now it looks more like 2020.

"This is the ninth straight year with a continuing resolution," Marine Corps Gen. Joseph Dunford, chairman of the Joint Chiefs of Staff, said Monday. "This lack of predictability and that lack of stability in the budget has not allowed us to most efficiently plan and use the resources available to us."

There is still a possibility the House and Senate could approve, by midnight Friday, the fourth fiscal 2018 continuing resolution, which would fund the government into mid-February. Indeed, the GOP-controlled House appears to be trying to avoid the shutdown by proposing a stopgap funding measure, but it still would need to be approved by the Senate and get at least nine Democratic votes to pass.

The latest shutdown threat is over a border security deal and DACA, the Obama-era Deferred Action for Childhood Arrivals program. Trump is insisting on funding for the border wall he promised to build. Democrats are demanding that DACA be fixed through legislation, to protect so-called dreamers, undocumented immigrants who were brought to the U.S. as children, from deportation.

Sen. Lindsey Graham, R-S.C., a member of the Senate Armed Services Committee, argued Wednesday that the GOP needs to agree to the immigration deal if it wants more money to be spent on defense.

"For a Republican to believe that we will get all of the defense funding that we desperately want and need, and we'll deal with the Dreamers later, how naive can you be?" Graham told an audience at the American Enterprise Institute, a conservative Washington think tank.

If there is a shutdown, Department of Defense workers — military or civilian — could end up going without paychecks. Experts say this could be detrimental to troop morale and also place a hardship on families of men and women in uniform, especially if the shutdown is long-lasting.

"On a day-to-day basis, (troops) are focused on the mission," said Dunford, the nation's top military officer. "But the budget is very much on their minds."

A prolonged shutdown could also hit other workers, including those providing support services to bases as well as defense contractors and other businesses that rely on the Pentagon for revenue, and ultimately lead to furloughs.

"It's not easy for the Pentagon to make long-term decisions when you're living in a constant state of flux," said Laicie Heeley, a budget analyst at the Stimson Center, a Washington think tank.

"Starting new programs is harder when you're living under the threat of a full-year CR as we have in so many past years," Heeley said. "On the other hand, this is sort of the 'new normal' that we live in."

Jefferies analyst Sheila Kahyaoglu agrees, saying in a research note Wednesday that the Pentagon has become used to operating under the stress of a continuing resolution and also delayed some defense contracts as a result.

"This could also have some impact on the FY'19 budget, which is typically released in February," wrote Kahyaoglu.

Among the programs delayed is the $16 billion T-X Trainer jet, with Boeing, Lockheed Martin and Leonardo DRS vying for the contract for 350 aircraft to replace the Air Force's aging T-38 trainers, which have been around since the 1960s. The award for the Air Force's next-generation trainer jet isn't expected to be decided until July.

On the Navy side, up to six conceptual design contracts could be awarded for the so-called FFG(X), or guided-missile frigate replacement program, by the end of the first quarter, and the service is expected to pick one vendor in 2020. Advanced combatant shipbuilders General Dynamics and Huntington Ingalls are among the companies expected to participate.

Frederico Bartels, a policy analyst for defense budgeting in conservative think tank Heritage Foundation's Center for National Defense, said one of the things he'd like to see in the fiscal 2019 budget is a focus on Army modernization programs.

"With all the cancellations they've had for Army modernization, we're stuck with the same platforms that we had since the 1970s and 1980s," he said. "And there's no replacement in the pipeline, so we might end up with tanks that are as old as the granddads of the service members that are operating them."

Dunford said the reliance on continuing resolutions is harmful to American taxpayers. He also indicated that another CR would mean the DOD would go four months into the new fiscal year at a lower spending level than it had in fiscal 2017.

"We want to be good stewards of the taxpayers' dollars, and in order to do that you have to lay out a plan. And sometimes, when you are forced to spend all of the money in a compressed period of time at the end of the fiscal year, it isn't as efficient a use of the resources as you would want it to be."

Even so, the Pentagon is moving forward to modernize the nation's aging nuclear arsenal.

In August, the Air Force awarded Boeing and Northrop Grumman three-year contracts for the preliminary design phase of the Ground-Based Strategic Deterrent intercontinental ballistic missile weapon system program, essentially to replace America's 1970s-era Minuteman III missiles. The GBSD is one leg of the nation's nuclear triad — land, sea and air-based capabilities.

And, last week it was learned after the leak of a draft of the administration's Nuclear Posture Review by the Huffington Post that new low-yield nuclear warheads launched by submarine are being proposed as a way of "enhancing deterrence." The document also reveals that Russia has a "new intercontinental nuclear-armed undersea autonomous torpedo."

Money for the new low-yield nuclear warheads could be included in the fiscal 2019 or 2020 budget. Many analysts expect growth in the defense budget from fiscal 2018 to fiscal 2019, but they still say it won't represent the big military buildup anticipated in the early days of the administration.

During the campaign, Trump promised more ships, more troops and more aircraft in a military buildup program some experts predicted at the time could add $250 billion or more to U.S. military spending over the next four years. Among other things, Trump's defense plan outlined in September 2016 called for up to 350 surface ships and submarines, up from 280 today and above the Pentagon's recent target of 308 ships over the next 10 years.

"I do think the '19 budget is going to be a critical document for the trajectory that this administration's military buildup is going to take," said Andrew Hunter, director of the defense-industrial initiatives group at the Center for Strategic and International Studies, a defense think tank. "They have really put a lot of expectations on what's coming in the FY'19 budget."

In the end, Hunter said, there will be hard choices that the Pentagon will need to make. "There is always some level of trade-off between force structure, readiness and modernization — even at very high funding levels," he said.

DOD Deputy Secretary Patrick Shanahan last month told reporters that 2019 would be "a step up" but that the big defense buildup would now happen in the fiscal 2020 budget. "This is where many of the bets, in terms of innovation and some of the new technology, will take place," he said.

"Some of this is going to get pushed back, and some of it is likely to disappoint in some categories," said Roman Schweizer, a defense analyst at Cowen. "I think there will be growth in defense spending, but getting to 350 or 355 ships in the Navy is incredibly expensive."