The FY 1997-2001 defense budget

Conclusions * The defense budget has declined by some 40 percent since its Cold War peak and has leveled off for now. * There is little difference between the Administration and the Congressional Republican leadership over total defense spending. * Full recapitalization of the exisiting force structure will require an increase in the procurement account to some $60 billion per year. * Two relatively new concepts are emerging as ways to preserve military capability despite tight budgets: * expanding joint perspectives in the Pentagon's planning, * capitalizing on opportunities offered by technology, especially information technologies. The Budget Debate: How Much Is Enough? The Administration has requested $242.6 billion in budget authority for the Department of Defense for FY 1997, a decrease of $9B from the FY96 authorization. Its five-year projections call for budget authority to increase gradually to $244.9 billion in 2001 in FY 97 dollars. In contrast, the Congressional Republican leadership has proposed a five-year program that holds defense spending roughly constant in FY 1997 and then declines gradually to $240B in FY97 dollars in 2001. As figure 1 indicates, this request signals a leveling out of the post-Cold War decline in defense budgets that began in the mid-1980s. The corresponding reduction in force structure is now essentially complete. The Administration's target for active duty personnel--1.4 million by 2001--will be nearly reached by the end of FY 1997 and the active force structure set by the Bottom-Up Review (BUR) 10 Army divisions, 11 aircraft carriers with associated battle force ships, 13 Air Force fighter wings, and three Marine Corps divisions will also essentially be in place. The Defense Department currently has no plans to alter this force structure. In broad terms, the budget request shows the Administration remains strongly committed to: (1) maintaining the high level of readiness of today's force, (2) raising the quality of life for military personnel, and, (3) assuring significant defense research and development funding. It seeks to pay for these priorities by delaying a significant increase in procurement funding until the later years in the budget submission. These priorities are best indicated by comparing the FY 1997-2001 budget request to previous budgets (see figure 2). Over the last several years, the Defense Department has raised its requests for operations and maintenance funding (key components of readiness), military personnel, and, less dramatically, for research and development. But it has shifted its multi-year requests for procurement downward, in effect moving the year at which it hopes to reach an annual procurement level of about $60 billion--the target that most feel is needed to recapitalize and modernize the force structure--farther into the future. This approach has become the focus of the first serious debate since the end of the Cold War over the character and future of the nation's military power. The Department and Congress: The Tips of Icebergs The initial response of the Republican-led Congress to the Administration's defense budget request has been criticism that it is "too low," a criticism focused primarily on the level of procurement. The request calls for about $40 billion for procurement in FY 1997, increasing to about $60 billion by the end of the five year defense program in FY 2001. All indications are that Congress will attempt to add some $8 billion in procurement funding in the mark-up of the FY 97 budget. In the FY 96 mark-up, Congress appropriated about $7 billion more than the Department requested (80% of that in procurement funding), and, to keep its own multi-year defense plan funded, Congress would have to add about $14 billion to the FY 1997-2001 request this year. The Pentagon did not welcome last year's Congressional addition, however, for much of the added funding went to programs (the B-2, national ballistic missile defenses, and others) it saw as lower priority and unaffordable. …