After increasing the Department of Defense (DoD) budget in real terms during seven of the past eight fiscal years, Congress has now pivoted toward restraining spending by passing the Fiscal Responsibility Act of 2023. Approved in early June as part of the debt ceiling deal, the law imposes a liberating limit on defense. It unshackles defense spending from parity with nondefense spending but still caps military budgets at or near current spending levels for the next two fiscal years while brandishing the threat of a lowered defense cap and potential sequestration if Congress delays in passing full-year appropriations for any budget account.
In Inconsistent Congress, CSBA Senior Fellow and Director of Defense Budget Studies Travis Sharp explores two scenarios facing defense planners during these uncertainties. One, "frozen topline," would involve Congress failing to pass full-year appropriations for both fiscal year (FY) 2024 and FY 2025, triggering two years of sequestration. The other, "abrupt cut," would involve Congress passing full-year appropriations matching the Fiscal Responsibility Act's cap but failing to do so for FY 2025, triggering one year of sequestration. Should either of these scenarios occur, Sharp indicates that sequestration-triggered spending cuts would exceed the savings that could be generated by cutting programs that legislators often identify as likely candidates for cost reduction.
Instead, Sharp analyzes congressional adjustments to the president's defense budget requests dating back to FY 2016. He finds that Congress demonstrates a programmatic orientation towards procurement spending over other purposes, often allocating procurement funds to legacy weapons systems, then assessing the impact of this orientation on innovation and readiness in defense. Moving forward, Sharp provides recommendations for the best path forward for Congress and the Pentagon, looking at both near-term planning and long-term education of defense priorities as they relate to budget.
This report is the 38th in a series of annual budget analyses published since 1983 by CSBA and its predecessor organization, the Defense Budget Project.