by Shaun McDougall, Military Markets Analyst, Forecast International.
The Democrats took control of the U.S. House of Representatives following Tuesday’s midterm elections, setting the stage for what could be a prolonged battle over defense spending and policy. The Pentagon’s topline was already facing cuts recently announced by the Trump administration, but the change in power in the House will give Democrats momentum as they push for increased domestic spending.
Rep. Adam Smith (D-Wash.) is expected to take over as chairman of the powerful House Armed Services Committee. Smith called the $716 billion provided for national security in FY18 too high, arguing that the nation’s massive debt and regular deficits required a reduction in spending. The Department of Defense typically accounts for between 95 and 96 percent of the national security figure.
The Navy could be one target of those cuts. Smith has questioned the service’s goal of eventually building a fleet of 355 ships, arguing that capability matters more than capacity in terms of fleet strength. Building the 355-ship fleet would require larger annual shipbuilding budgets than what Congress has historically provided, meaning any downward pressure on the DoD topline could result in fewer ships over the long term.
Smith has also spoken out against increased spending on certain nuclear weapons programs. For example, he backed a bill that would ban the Pentagon from developing a new low-yield nuclear warhead that was part of the Nuclear Posture Review, saying that the weapon would be a costly endeavor that could trigger an arms race.
The congressman has said he would support another round of base closures as part of an effort to identify savings in the budget, but it can be difficult to garner widespread support on the Hill when it comes to shuttering facilities. As chairman, Smith has said he would also push for increased congressional oversight of military operations. In particular, he backed a measure that would end U.S. support of the military conflict in Yemen.
Trump’s proposal to create a separate Space Force may also face increased resistance, as Smith has questioned the cost-effectiveness of creating an entirely separate branch of the military.
Prior to the election, Trump had already called for the $733 billion budget planned for FY20 to be reduced by $33 billion. On top of that reduction, spending limits under the Budget Control Act will return in FY20 and FY21, requiring lawmakers to reach another bipartisan budget agreement if national security spending is to exceed the BCA limits of $576 billion in FY20 and $590 billion in FY21.
While defense spending is not expected to actually fall to BCA levels, any increases provided by Congress over those levels will likely fall short of the massive plus-up enacted for FY18 and FY19. The debate over that topline figure will be ongoing between Democrats looking for ways to bolster funding for domestic programs, defense hawks trying to maintain a steady increase in military spending, and fiscal hawks that are concerned about mounting deficits in the wake of recent tax cuts and spending hikes for both defense and non-defense programs.
As editor of International Military Markets, North America, Shaun has cultivated a deep understanding of the vast defense markets in the United States and Canada. Further, Shaun played an integral role in the development of Forecast International’s U.S. Defense Budget Forecast product, which offers an unprecedented level of insight into the Pentagon’s acquisition budget.
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