National security and defense issues did not play prominently in the campaign, and when they did the discussion was largely thematic: strong or weak on defense, leading or following against Islamic terrorism, etc. Donald Trump promised to grow the military-most specifically building the Navy to 350 ships-and end mandatory budget caps, but did not address other specific initiatives or how to pay for them. Hillary Clinton did not promise specific initiatives or changes, but focused instead on principles and priorities for security strategy and defense management.
From a policy standpoint Donald Trump's positions are in some ways similar to those of President Obama, with a focus on using alliances, international structures, and non-military tools to pursue U.S. national interests. President-elect Trump's statements during the campaign suggest he will be more likely to use force in response to specific threats, however, compared to President Obama's reticence to quickly commit force.
The most significant and pervasive institutional challenge DoD faces today is the budget caps associated with sequestration. Donald Trump pledged in the campaign to eliminate sequestration. He may be able to find partners for this effort in Congress among Republicans advocating higher defense budgets. It is doubtful, however, the budget caps will be completely eliminated due to concerns of congressional deficit hawks. The budget caps require increases in defense spending to be matched by increases in non-defense spending, budget increases will likely be constrained because defense budget advocates in Congress are often those who also do not want to raise non-defense spending.
More important than current budget caps, however, is the fate of Overseas Contingency Operations (OCO) funding. The Obama administration has been very resistant to using OCO funding to make up for shortfalls created by the budget caps. Republicans in Congress have been increasingly willing to use OCO to cover base budget costs, but were countered by the administration and Senate democrats. There may be more willingness now to use OCO to support growth in military spending and the size of the military under a Trump administration.
That growth in the military is likely to occur by arresting the ongoing drawdown in Army and Marine forces, and increasing the procurement of existing ship, aircraft, and vehicle programs. During the campaign Donald Trump did not address reform in military health care, base closure, or efforts to reduce acquisition program cost growth. It is unlikely initiatives such as TRICARE co-pays or fee increases or BRAC will be pursued by the new administration. It is likely a new DoD leaders will want to contain acquisition cost growth, as did their predecessors, but will rely on traditional approaches such as competition and multi-year procurement to manage costs. Because of a potentially higher risk tolerance regarding acquisition, a Trump administration could be more likely to start new major defense programs than was the Obama administration.
The current DoD leadership has paid much attention to innovation and strategies that use technology to overcome geographic and numerical disadvantages. Their "Third Offset Strategy" relies on unmanned systems, autonomy, information technology, and networks to overcome adversary defenses and project power on behalf of U.S. allies and interests. The Trump administration is likely to continue this effort's intent, particularly in autonomy and networks, but without the level of emphasis that comes from the Secretary of Defense's personal involvement. New Third Offset-related initiatives such as the Defense Innovation Unit–Experimental (DiUX) and the Strategic Capabilities Office will likely be deemphasized or mainstreamed in the new administration to ensure their good ideas are brought into the defense acquisition process and they don't turn into isolated contracting organizations...