Drastic Defense Cuts Seen in Year-Long Stopgap Spending Bill (1)

U.S. defense spending would dip by $37 billion if the Pentagon doesn’t receive its new fiscal 2022 budget, a key senator warned as the specter of a full-year stopgap measure is rising.

Republicans oppose some of Democrats’ federal spending proposals and insist that the year’s appropriations measures carry anti-abortion policy riders, disagreements that could halt Congress’s ability to pass new appropriations bills for the year.

If that happens, the Pentagon would also have to forgo some $66 billion in spending meant to counter China’s growing influence because “none of the new capabilities” would receive funds in a stopgap measure, Patrick Leahy (D-Vt.), the chairman of the Senate Appropriations Committee, said Thursday.

Lawmakers won’t make any exceptions to a flat defense budget, including to raise pay for members of the military, if Republicans force negotiators to rely on a full-year stopgap spending measure, House Appropriations Chair Rosa DeLauro (D-Conn.) said in a hallway interview. “No, no, zero, zero,” DeLauro said, when asked about funding adjustments that could be made for defense programs.

Among the capabilities that could be knocked off track in the competition with China are hypersonic weapons, the Space Force programs, and the new Columbia-class ballistic missile submarine.

Hypersonic Weapons: Who Has Them and Why It Matters

Defense Cuts

Senate Democrats proposed a 5% percent increase to the Pentagon budget for fiscal 2022, matching the $740 billion that the House and Senate defense authorization measures backed. President Joe Biden proposed $715 billion for the Pentagon.

U.S. House Defies Biden’s Defense Budget with $25 Billion Boost

A full-year continuing resolution—freezing defense spending to fiscal 2021 levels— would reduce defense funding to about $703 billion, or $37 billion lower than the Senate Democrats’ proposal, and would actually cut defense spending further because a stopgap measure offers no flexibility to move money around and apply it to programs that would need it, Leahy said in a statement.

“Certain programs would be over-funded and others would be under-funded,” Leahy said. “The Department of Defense would be unable to shift enough money around within their transfer authority to correct the imbalances, resulting in billions of unspent dollars and even more unmet priorities.”

Under a stopgap measure, the Pentagon generally can’t start new programs or new phases of programs and can’t ramp up production or funding for existing weapons programs. The U.S. government is currently operating under a continuing resolution, or CR, until Dec. 3.

Senate Appropriations Vice Chairman Richard Shelby (R-Ala.) told reporters he expects another continuing resolution to fund the government beyond the Dec. 3 deadline and that a full-year stopgap could be in the works. He made those comments Wednesday after meeting a day earlier with Leahy, DeLauro, and ranking member Rep. Kay Granger (R-Texas).

Policy Riders

Republicans are calling for inclusion of the longstanding Hyde amendment, which bars federal funds to pay for abortions, except in the case of rape, incest, or to save a woman’s life. They also want other years-old abortion limitations such as the Weldon amendment, which bars federal funding for state and local governments that discriminate against health care insurers or professionals that refuse to provide, pay for, or make referrals for abortions.

Republicans also want to prevent the transfer or release of prisoners held at the Guantanamo Bay, Cuba, detention facility.

DeLauro said she doesn’t believe Shelby, who said many Republicans would consider a full-year stopgap a victory.

“I think it’s an empty threat,” DeLauro said. “It hurts everyone.”

A full-year continuing resolution would block any changes to policy riders in the fiscal 2021 deal signed into law by then-President Donald Trump. It would also deny Republicans their desired increase for defense spending, but Shelby indicated they would be willing to accept that outcome.

In addition to the policy riders, Republicans are demanding parity between defense and non-defense spending. The spending plan proposed by Leahy would increase domestic spending by 13%. To meet the GOP’s demands defense spending must increase or domestic spending must drop.

Iron Dome, Defunct War

Israel’s Iron Dome missile defense program, which has wide GOP support, would also suffer under a continuing resolution. The Democrats proposed a $1 billion addition to the program, but under a CR it would only receive $73 million, Leahy said.

The military also wouldn’t have enough money for per- and polyfluoroalkyl substances (PFAS) clean-up, he argued, as his proposal would increase funding by $761 million.

The Pentagon would receive money in its war chest, known as the Overseas Contingency Operations account, even though the fiscal 2022 budget proposal eliminates it because the U.S. military mission is effectively finished in Afghanistan.

Photographer: Sarahbeth Maney/The New York Times/Bloomberg

U.S. Defense Secretary Lloyd Austin testifies at a Senate Armed Services Committee hearing on troop withdrawal in Afghanistan.

“While the U.S. is no longer in Afghanistan, a CR would revive the Overseas Contingency Operations (OCO) account to the tune of $69 billion dollars at DOD,” Leahy said. “This is the account meant to fund wartime activities. It would also provide $3.3 billion to train and arm the now-defunct Afghan security forces.”

The Defense Department may be forced to reduce the overall number of military personnel so that it can afford to pay a 2.7% pay raise that is set to go into effect Jan. 1, 2022, according to Leahy.

“The Pentagon might have to lay off soldiers to find the money for a pay raise under a continuing resolution, while money is tied up on a war we are not fighting. This makes no sense,” Leahy said.

Pentagon Planning

Pentagon officials have adapted to the yearly reality of shorter-term stopgap funding measures and are able to shield major weapons programs from delays, the government’s top watchdog found.

The Defense Department has been funded by temporary appropriations in the fall in all but one year since 2010. The exception was in 2019, when Congress approved regular appropriations by Sept. 30, the end of the federal fiscal year, the Government Accountability Office said in a September report. In that time-frame, the Pentagon hasn’t had to deal with a full-year CR, according to the GAO.

Pentagon Is Managing Stopgap Funding Without Contracting Delays

CRs generally don’t specify an amount for programs and activities and permit agencies to continue at a certain “rate for operations,” the GAO said. Pentagon officials “expressed concerns that the repetitive activities and incremental planning necessary during a CR isn’t an effective or efficient way to operate, but they also noted that activities related to preparing for and operating under CRs have become routine in nature and are an expected part of their annual planning and budget related tasks,” the GAO said.

The military services have figured out ways to adapt to the temporary funding by starting contracts after the first quarter of the fiscal year and postponing non-essential purchases and training until later in the fiscal year, the GAO found.

That tactic becomes impossible under a year-long CR, significantly complicating matters for the Pentagon unless Congress grants exceptions.

To contact the reporters on this story: Roxana Tiron in Washington at rtiron@bgov.com; Jack Fitzpatrick in Washington at jfitzpatrick@bgov.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Robin Meszoly at rmeszoly@bgov.com; Sarah Babbage at sbabbage@bgov.com