WASHINGTON — If the Trump administration had its way, it would cut legacy systems, Army end strength and troops stationed abroad to pay for a major increase in shipbuilding, according to documents released by the Department of Defense and the White House this week.
However, major questions remain about the plan to grow the Navy’s strength, not the least of which is whether the incoming administration of President-elect Joe Biden will follow through or scrap the strategy.
The fiscal 2022 planning framework, released late Thursday alongside the 30-year shipbuilding plan, proposes a $759 billion top line for national defense, including $721.9 billion for the Pentagon, a 2.3 percent increase from the FY21 budget request. Pentagon leaders have repeatedly stated they need 3-5 percent budget increases to have “real” budget increases beyond inflation.
The plan outlines a fleet of more than the current stated goal of 355 ships by the early 2030s by investing in new classes of logistics ships for the Navy and Marine Corps, accelerating production of the newly awarded Constellation-class frigate, and boosting submarine production. The fleet would hit 405 ships by the end of the 30 years, documents showed.
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But experts and analysts who reviewed the plan for Defense News were skeptical of the mechanisms that the White House Office of Management and Budget used to pay for the increases, including assuming a complete withdrawal of U.S. troops in Afghanistan, back office savings and cutting legacy equipment.
“This looks like they are trying to box in the Biden administration when it comes to the shipbuilding plan by showing that they can fund it even in a budget that is flat with inflation,” said Todd Harrison, a defense budget expert with the Center for Strategic and International Studies. “But the savings they tout to pay for this will be difficult to achieve and/or are not realistic, like $35 billion from getting out of so-called endless wars and $6.6 billion from cutting unspecified legacy systems.”
In a call with Defense News, senior Trump administration officials said the long-delayed shipbuilding plan, originally due with the FY21 budget submission in February, was held up by an effort to piece together an affordable approach based on constrained resources.
“We didn’t want to provide it without the context that is going to be on the minds of those policymakers, which is: Is it affordable and is it credible?” the official said. “The work that we’ve done in concert with the nine months of study at DoD has been to answer that question: How do we pay for and what are the necessary resources that are needed to be able to scale in a realistic top-line framework?
“And so what we’ve put forward is planning guidance … with our fiscal assumptions about what we could be looking at. And that’s why, from the standpoint of the overall number, we think it’s very credible. The easiest thing that we could have done was to assume a large increase in the top line to pay for it. We did not do that.”
According to the plan, OMB is looking to pay for the fleet buildup by:
Withdrawing from Iraq and Afghanistan: Officials for the Trump administration have stated that they would like to be entirely out of Afghanistan in the next year. While it’s unclear if that will happen under the Biden administration, the Trump team estimates $35 billion in savings over the Futures Years Defense Program, or FYDP, through “planned drawdowns in Afghanistan, the Middle East, and Africa.” Part of those savings would come through reducing the Afghanistan Security Forces Fund and eliminating the the Counter-ISIS Train and Equip Fund.
Notably, the Trump administration says it would like to eliminate the overseas contingency operations, or OCO, funding stream starting in FY22, with war costs shifted into the base budget.
Mackenzie Eaglen, a defense analyst with the American Enterprise Institute, is skeptical that this would play out the way the Trump administration expects.
“Whether we have 5,000 or 150,000 forces overseas in any given country, so much of the costs are fixed. There’s no savings until the number is essentially zero,” she said. “Even after that happens, while OCO is appropriated through regular order, it is considered supplemental spending — so it’s debt-financed. You don’t save money by putting less spending on your credit card.”
Congress has been reluctant to fund a complete drawdown of troops in Afghanistan, and the lawmaking body has sent its 2021 National Defense Authorization Act to the president’s desk with a veto-proof majority blocking a partial drawdown there. In other words, until Congress has a change of heart, it appears unlikely it will allow a full withdrawal to reap those savings.
Cutting legacy equipment: The document calls for divesting $6.6 billion of legacy systems over the upcoming FYDP in order to put those resources elsewhere. “By discontinuing the use of older and less capable ground systems, surface ships, and aircraft, DoD can more effectively focus resources on modernized platforms and systems that support both high-intensity conflict and operations in highly contested environments,” the document read.
Eaglen pointed out that every year, the department tries to retire equipment, only to be turned back by Congress. She pointed to the recently completed National Defense Authorization Act, which was full of prohibitions on retiring gear such as the Air Force’s Thunderbolt II close-air support aircraft, as evidence that this is “wishful thinking.”
Find internal reforms: Although this section does not come with projected FYDP savings, there have been ongoing series of reform efforts inside the department. The Government Accountability Office has validated $37 billion in reform-driven savings since the start of FY17, while Chief Management Officer Lisa Hershman said she found more than $6 billion in FY21 alone. However, the CMO’s office is set to be disbanded by Congress, which could impact reform.
“The road to defense budget efficiency savings for modernization is paved with the skulls of erring Pentagon officials who believe this fallacy,” Eaglen said, noting luminaries such as Defense Secretary Bob Gates tried and failed for years to find real, meaningful efficiencies.
Cutting Army end strength: Compared to FY21 budget request figures, the plan would cut 900 soldiers from the active-duty component, 500 from the National Guard component, and 300 from the Reserve component — which the document claims would save $2.6 billion over the current FYDP.
“Constraining end strength is one means of protecting the rest of the DoD’s budget to ensure America’s servicemembers have the modernized equipment and weapon systems to defend the Nation and prevail on the battlefield,” the document read.
This is one area where Eaglen thinks cuts are realistic, as the shift toward the Pacific combined with the extreme costs of personnel make the Army a ripe target for cuts.
Realistic changes?
Ultimately, this budget document is more of an exercise than prescriptive, as the Trump team will be replaced Jan. 20 by the Biden administration. It is unlikely the Biden team will follow through with the ambitious shipbuilding increases laid out in the document.
But defense budgets tend to be largely put together by the end of the calendar year, and while a new team at the Pentagon will be able to tinker with the details, a wholescale rewriting of the budget request seems unlikely until it is in the hands of Congress.
Speaking last week, Gen. Mark Milley, the chairman of the Joint Chiefs of Staff, acknowledged the need for realistic budget planning going forward.
“I suspect that, at best, the Pentagon’s budgets will start flattening out. There’s a reasonable prospect that they could actually decline significantly, depending on what happens” with the broader economy, Milley said. “So we have to — we the uniforms, we here at the Pentagon, civilian and military alike — we’ve got to do a quick reality check on the national budget and what is likely to happen in the not too distant future.”
Said Eaglen: “Most of the budget cake is baked, but that’s true every year — not just when one administration hands off a budget to another. The new team will tweak the ’22 [program objective memorandum] and ‘put its stamp on it,’ but I doubt there will be major [tweaks] — aside from shipbuilding.”
At the same time, she does expect at least one similarity to play out between this document and the incoming administration.
“I do think the Biden team will try some of this magical math to balance the defense books, too,” Eaglen said. “These tricks are employed by both parties regularly once those in power see how hard it is to even manage a defense enterprise that doesn’t grow with inflation.”
Ultimately, though, the administration believes the primary threat to U.S. security is a maritime threat from China, and that to combat it effectively under limited budgets, a realignment inside the DoD is necessary.
“The safest assumption is that we’re going to be spending at freeze levels going forward,” the senior administration official told Defense News. “So at that point you’re talking about a reallocation. You can’t really say something’s not affordable if all that is required is trade-offs.
“If there’s a bipartisan commitment to preparing and modernizing for the China threat and providing for the needs necessary in [the Indo-Pacific region].”
David B. Larter was the naval warfare reporter for Defense News.
Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.
